Terri Butler MP speaking in the Federation Chamber on the 18th October 2017 regarding the Treasury Laws Amendment (Enterprise Tax Plan No.2) Bill 2017 - Second Reading.
Ms BUTLER (Griffith) (11:55): This debate really does expose this government's recklessness when it comes to making decisions about this nation's federal budget. We have a government right now that is, as we speak, trying to cut funding from universities. It is trying to cut almost $4 billion in fiscal terms from university funding. It has legislation before the House to increase student fees and to lower the point at which people, who have been students in the past, have to make additional payments to the government by reducing the HECS threshold. At the same time, they are trying to give a massive, whopping tax cut to Australia's biggest businesses. They are trying to find a whole stack of money, billions of dollars, to give a whopping, massive tax cut to Australia's biggest businesses—so much for being responsible and handling public finances with respect!
This is a measure that really demonstrates the complete lack of respect this government has for its so-called 'jobs and growth' agenda. Remember the 'jobs and growth' slogan from the last federal election? I do—'Jobs and growth, jobs and growth.' Unfortunately for the Prime Minister, saying the same three words over and over again does not actually create any truth to those words. Repeating a slogan does not bring anything into existence other than hot air, and unfortunately we've seen it continue, even this week in parliament with the even less catchy slogan of 'economics and engineering'. You couldn't think of a worse slogan if you were given a million years in which to do it. We had jobs and growth last year at the federal election, and now what do we see? We're not seeing jobs and growth; we're seeing a $65 billion tax cut plan—a plan where the government wants to spend $65 billion on tax cuts for corporations, and not just Australian corporations but for multinational corporations as well.
This government has been hyperventilating about debt and deficit since it came into office in 2013. Of course, it hasn't even met its own tests in that regard, because both have increased over that time. If you purport to believe that we need to reduce debt and reduce the budget deficit, then the last thing you should be doing is worsening the budget bottom line by $65 billion by having this big tax giveaway for corporations. This discussion has been going on for a long time. This measure from the government was first flagged in last year's budget. Then the Treasurer was going on about this idea before this year's budget, but here we are today, in the middle of October, finally debating these bills. We only got to commence debate on them in mid-September.
I want to make it clear that Labor will not support this part of the government's $65 billion tax cut for business. We have always opposed this massive deterioration in the budget bottom line over the medium term. We think that this kind of hit to the budget does expose the hypocrisy of the Turnbull government when it seeks to make other cuts. It wants to cut revenue to pay for its cuts to spending, and when we talk about cuts to spending, it's the public funding of universities that we're talking about. It is also, might I say, the government's current plan to cut the energy supplement to 1.7 million seniors in this country. It will make their lives even harder: it will make it even harder for them to pay for electricity and for the costs of living.
Those are the things that government wants to cut spending on, but it is more than happy to give away $65 billion on tax cuts. So we've got a government that wants to stand up and support big corporations on the one hand while at the same time putting under pressure seniors who are relying on the energy supplements, students who are trying to get a higher education, and universities that are trying to actually create a higher education system that can compete in our region and in our world. We know that universities are an important part of this nation's domestic, internal economy and are also important for us internationally, because international education, together with international tourism, is our most important service export and is in the top rankings of all of our exports, not just service exports.
So this government is taking money out of the budget, by giving away $65 billion, while at the same time asking Australians to accept big, deep cuts to services and big, deep cuts to pensioners through the energy supplement. This is just ridiculous. I don't think people are going to stand for it. I think people are sick and tired of this government standing up for the big end of town and failing to look after the people it's elected to represent, like people in my electorate.
I recently had a gentleman visit me at one of my regular mobile offices. He was absolutely distressed at the thought of the energy supplement being cut. He wants to lead a dignified life. He does not want to see cuts to pensions. He worked hard all of his life and lost his superannuation in the global financial crisis when he was at or near retirement age. He didn't have the luxury of being able to work for another 20 years after the global financial crisis to restore his superannuation. He's reliant on the pension and he didn't expect to be. He is absolutely horrified at the thought of this government's cuts to the energy supplement for seniors—and so he should be, because Australians have a right to expect decency and dignity in retirement. Australians have a right to expect a government that will stand up for them, not for vested interests. Australians have a right to expect that a government will make the right decisions and have the right priorities when it comes to the federal budget.
Having these people, who claim to be deficit hawks and fiscal conservatives, reducing the budget bottom line by $65 billion just seems to be wrong logically, let alone ideologically. Why does the Turnbull government not care about seniors? Why does the Turnbull government not care about students? Why is the Turnbull government's priority to find a way to prepare and propose tax cuts for the big end of town, for big Australian companies and for multinationals?
They argue that this will create more investment and more jobs. That's the argument that we hear from the government. Unfortunately, this is the same old discredited, trickle-down-economics nonsense that we've heard from conservatives since the days of Thatcher and Reagan. The idea that if you just cut taxation for the top end of town then the benefits will magically flow down to everybody else is just wrong. The Prime Minister has argued that if companies have lower tax rates then there will be this magical reinvestment of their profits in their organisations and that will lead to better productivity and more jobs. Making companies' bottom lines better does not magically and of necessity lead to more investment and better jobs. We know that because that's what's happening at the moment. Company bottom lines are improving. We've seen record earnings by corporate Australia. Where's that money going? It's not going into wages. Wages growth is flat. Wages growth is at its lowest level since we started keeping the wage price index in 1997. Wages growth is not where the big, record corporate earnings are going. It's absolutely not the case. Those earnings are certainly not going, unfortunately—not as much as you might like—into investment into the company itself, into capital deepening, into improving productivity. They're not doing that. There's been an investment strike in Australia in recent years, and that's a problem. It's absolutely a problem. Australian firms need to get more productive—that's very true. Labour productivity growth has been up since the terrible productivity-killing days of Work Choices were put behind us, but multifactor productivity needs to improve, and that's going to require capital deepening and managerial expertise. But we're not seeing the levels of investment in those things from companies that we should be.
Where's the money going? It's going to shareholders. Of course that's where it's going. Earnings per share is an important measure for companies. I'm not criticising them for that—they need to raise capital; they need to be able to demonstrate to potential shareholders that people will get an income stream from their shares. But what about the days of capital gain from shares? What about the days of saying, 'What we want from shares is for companies to improve and for the value of our shares to go up,' and for that to be the key issue for people? I talked to the CEO of a big firm about this very issue last week. He talked to us about the productivity improvements that his staff had driven from the ground up and about the investment that his firm had made across their manufacturing business. I said to him, 'What do your shareholders think about the fact that you're reinvesting your profits into the company?' He said, 'You know what? We've found better shareholders. We've found shareholders who are in it for the long term, who want to see this place improve.' That's the sort of leadership that we want to see from corporate Australia. Instead of you having a handout, with tax cuts, while at the same time urging more so-called flexibility on your workforce—which really just means more ability to change their hours at short notice and to avoid paying them penalty rates, those sorts of changes—how about we see some leadership and you say: 'We want to see the best possible corporate Australia we can. We want to see reinvestment. We want to see investment in the capacity of our managers and our people. We want to see capital deepening'? That's what this country actually needs.
To hear this argument from the government that better corporate profits means better corporate investment and jobs, when it flies in the face of the reality of recent years, just demonstrates how ideological this bill is and how little this bill has to do with practical reality or empirical experience. This bill tells you everything you need to know about the Turnbull government. It tells you that the Turnbull government is a deeply conservative government rooted in the traditions of Thatcher and of Reagan. It tells you that the Prime Minister is not someone who is progressive, is not someone who wants to do the right thing in the interests of seniors who are worried about losing their energy supplement, is not someone who wants to promote greater involvement in higher education and greater quality in our universities. He's happy to make cuts affecting both of those groups. He's happy to make cuts to higher education. He's happy to make cuts to the seniors energy supplement. He is someone who has wholly signed up to old-fashioned Thatcherism and Reaganism, to old-fashioned trickle-down economics arguments—and they've been proven not to work.
What this shows is that the only way to have a government that understands the importance of investment—investment in education, in our people, in making sure that people in their later years have dignity in retirement and a decent standard of living—the only way to get a government that believes in those things and the only way to get a government that doesn't want to see seniors' and students' interests being sacrificed in favour of the interests of the top end of town is to vote for a Labor government at the next election. The only way to get a Treasurer who will act in the interests of the whole nation and not in the interests of vested interests is to vote for a Labor government. The member for Lilley is here in the chamber. The member for Lilley was responsible—together, of course, with the then Prime Minister and the members of the Labor government—for Australia's work during the global financial crisis in fending off a recession. This was the only developed nation in the world to fend off a recession during the global financial crisis. We were so fortunate to have a Labor government during that time because Labor governments understand that the budget has to serve the economy, not just the interests of the government but the interests of the national economy. Labor governments understand that this sort of neoliberal, trickle-down economics nonsense that, unfortunately, the Prime Minister seems to be 100 per cent signed up to just doesn't work. I'm very, very relieved that we had such wonderful leadership during the global financial crisis, and I certainly hope that, in the interests of the nation, we have another Labor government sooner rather than later. I'm very pleased to stand up to oppose this bill because these priorities in this legislation are the wrong priorities for our nation, and this nation should be supporting seniors and students, not the big end of town.