Read the full speech below.
Ms BUTLER (Griffith) (12:15): I follow the member for Whitlam, who made a cogent and thoroughly well considered case for why the Major Bank Levy Bill 2017 is either incompetent or insincere. And it is probably a good demonstration of the insincerity of this bill that I follow a Labor member. In fact, there are no coalition members left debating this bill—this bill that they feel so lukewarm about. Where are they? Where are the coalition members who would stand up to talk about this bill and why it is such a good idea? Why, as a Labor member myself, am I following a Labor member in this debate? The answer is pretty clearly that the member for Whitlam was quite correct: the members of this government—each of the members of the Liberal-National Party that are here today or somewhere in the building at least—are very lukewarm about this bill. It is something that they feel they have been dragged here to do.
It is no wonder they are so lukewarm about this bill. The current Treasurer insisted that there was not a revenue problem. I admit he did seem to be a bit confused about what an expenditure problem was or what a spending problem was—he could not work out that expenditure and spending were the same thing. But he was insistent at the outset of his time as Treasurer that we did not have a revenue problem, yet here he is imposing this new tax.
As you know, Labor said and made very clear that we would not oppose this bill. But we have also expressed some significant scepticism about the intention and the seriousness with which this government is pursuing this new levy, this new tax, particularly given that the government remains obstinate in refusing to support public calls for a royal commission into the banks. The government continues to obstinately refuse to support public calls for a royal commission into the banks. They have made all sorts of excuses and reasons and back flips and contortions to explain their opposition to a royal commission into the banks. They have tried to say that a parliamentary committee would be sufficient when it comes to scrutiny and oversight. That is obviously not the case, when a royal commission would have much more substantial powers and rights in relation to the collection of evidence and the hearing of evidence and would have much greater investigatory powers than a parliamentary committee. So this bill is a bit of a smokescreen for the government's unwillingness to take on the big banks, and the Treasurer can claim as much as he likes that he is taking on the banks and claim that Labor are friends of the banks, but the parties' records speak for themselves. We have committed to a royal commission into the banks. Last sitting week, in fact, we sought to bring on a bill for a royal commission into the banks. As you would remember, Mr Deputy Speaker Goodenough, the motion was tied. There was an equality of votes in this chamber to bring on that bill. Unfortunately, on the day it was proposed in the programming motion moved by the Labor side of the House, the casting vote did not allow the bill to be brought on and debated.
If the government were serious about taking on the banks, they would have supported that programming motion to bring on debate and vote in relation to a bill for a royal commission into the banks. If the government were serious about taking on the banks and clearing out some of the problems that we have seen, they would support a royal commission into the banks. But they have not done so and they will not do so. They seek to continue to protect the banks from the level of scrutiny that we might expect to see in a royal commission with a royal commissioner and counsel assisting the inquiry.
Instead we have this levy which is really a fig leaf for the government's refusal to take on the banks. Given the projections that have been made, it is a levy that would raise less than would be given back to the big banks through the government's corporate tax cuts, in the event they can be successful in getting their corporate tax cuts into law. I am speaking there about the $65 billion in corporate tax cuts over a decade. That is a $65 billion tax giveaway at a time when the government claims to be serious about doing something about the budget deficit that is foreshadowed, not just in this year's budget, but across the forward estimates. It also comes at a time when the government is claiming that we do not have enough money to fully fund the Gonski proposals—where they have relented on their $30 billion cut and introduced a $22 billion cut instead. All Australians are supposed to be grateful for the fact that they are only cutting it by $22 billion, not by the full $30 billion.
Why on earth would we have a situation where the government is pursuing a $65 billion tax giveaway at the same time as they are cutting $22 billion from schools funding? Why on earth would we have a $65 billion tax giveaway to big corporations and big banks at the same time as this government is cutting public funding to universities? They are planning for an almost $4 billion cut to university funding over five years on a fiscal basis. That is a lot of money to be ripped out of the university sector right now. It is an absolute travesty because Australia relies on the university sector for one of our key exports—that is, international education exports. To cut public funding and to have the commensurate hit to quality and to jobs in the sector is incredibly reckless and when you think about the fact that they are doing this at the same time as they are continuing to pursue their corporate tax cuts—their $65 billion in tax revenue giveaway—it makes absolutely no sense unless you think about it from an ideological perspective—unless you are a liberal who believes in trickle-down economics.
That is despite all of the evidence to the contrary; despite all of the evidence you have before you over decades of practice around the world that trickle-down economics does not work and despite the fact that you have the Reagan experiment in the US as a historical precedent that can be quite usefully observed to note that corporate tax cuts do not magically transform into the slogan of jobs and growth that was parroted so boringly in last year's federal election.
You cannot just talk about jobs and growth and think that is enough. It is not enough to just say the words 'jobs and growth' over and over and over and over and over again until you want to vomit. That is not what delivers jobs and growth. Trickle-down economics does not deliver jobs and growth. Do you know what delivers jobs and growth? Investing in education delivers jobs and growth. Do you know what else it delivers, Mr Deputy Speaker? Alongside delivering growth, it delivers less inequality. We have had more than a quarter of a century of continuous economic growth, which is a remarkable achievement, but if you go out and ask people whether they feel they benefited from that quarter of a century of economic growth, not everyone will say yes. A lot of people will say no, because over that period of 25 years, we have also seen an increase in inequality; we have also seen an increase in the distance between those on the bottom 10 per cent and the top 10 per cent of income distribution. We have also seen the continued increase in profit share of national income obviously at the expense of the wage share of national income. So not everyone feels as though they have benefited fairly from our more than a quarter of a century of economic growth. That is particularly the case now. In the last quarter we have had a situation where the wages price index grew less slowly than the CPI. We have had a situation in the last quarter where people suffered a real cut to wages—not just slow growth but a real cut to wages. So you wonder why people feel like they are not getting the benefit of more than a quarter of a century of economic growth. They are not feeling it because they are under pressure—as house prices continue to go up, as this government continues to load up debt on graduates, to under resource schools and to do things like freezing Medicare benefit schedule payments, which effectively ushered in the Medicare co-payment that people so strongly opposed a couple of years ago.
When this government continues to do those things people do not just feel under pressure; people are under pressure. House prices are up; wages growth is down; freezes on Medicare; cuts to education; and new, bigger debts for students—vocational students, higher education students—and lower thresholds for repaying those debts. This government is bringing down the threshold for repayment to $42,000, barely above the minimum wage. So it is no wonder people feel under pressure; they are under pressure.
When you talk about what actually delivers jobs and growth, you also have to talk about what delivers the benefits of those jobs and that growth for the great majority of the population, not the people that the Liberal Party members meet at the country club, not the people they meet when they visit one of the well-heeled sorts of clubs in the centre of Brisbane, the centre of Melbourne or the centre of Sydney, or your home city of Perth, Deputy Speaker Goodenough—or even Adelaide, member for Sturt. It is not the sort of people that you meet in those well-heeled clubs that you may frequent in Adelaide, member for Sturt; it is people who are outside working hard every day to put food on the table and to pay their rent, because a mortgage is so completely out of the realms of possibility for them. They are worried about what will happen if three of their kids get sick at once. How do they go to the doctor for that? They are worried about their elderly grandparents or elderly parents and about the effect of pension cuts. This is a government that, right at this very moment, is trying to get rid of a payment to pensioners—the energy supplement—which is an utterly ridiculous thing to be doing, given that wholesale power prices have doubled under this government's watch. People are worried about that. That is what people are talking about outside the country clubs, outside the polo club, and that is why they are concerned.
If we want to see jobs and growth and if we want to see the great mass of our population—not the top 10 per cent of the income distribution but everyone else—actually enjoy the benefits of jobs and growth, and share in the benefits of this jobs and growth slogan, first we have to have growth-creating policies. Your trickle-down nonsense is not going to cut it when it comes to jobs and growth. We need genuine growth-engendering policies and we also need policies that simultaneously deliver on doing something about the massive inequality that we are facing. It is not just a problem here in Australia; of course it is a problem around the world. The head of the IMF, Christine Lagarde, has been making speeches now for a number of years about the fact that extreme inequality is a drag on growth. So these issues are symbiotic.
We need policies that engender growth and we need policies that engender less inequality in our societies. If we can do that then we have some chance of doing something about the challenges of the future, not just the low wages growth now and the pressures on families now but getting the skills that we need so that people can do the jobs of the future and found the businesses of the future. We need people to get the skills so that they can have proper democratic participation and be able to look upon the democratic and political debate with a critical eye and also to engage in it. These are the things that we need and they are urgent. A $65 billion tax giveaway to big corporations and the big banks will do nothing to address these issues. It is interesting: this government claims that simply by cutting corporate taxes, we will start to see more jobs and growth. Let us actually be real about that.
This has been a record year for corporate earnings in Australia. What has been happening with jobs and growth? Let us have a think about what has been happening with private capital expenditure. It has been falling through the floor at the same time as hours worked have been trending downwards. Unemployment is high. There are 1.1 million people underemployed—they have some work but they would really like to have more. That is a record level of underemployment for my lifetime, as I mention the low wages growth.
Where are these recordbreaking earnings going that corporate Australia is making? They are not going into reinvestment into capital expenditure and capital deepening. They are not going into wages. They are not going into creating more jobs. Where is the money going?
There was another record this year—that is, dividends to shareholders. The money that is being generated is going into shareholders' pockets. Of course there is nothing wrong with shareholders making money—although I think it would be preferable if we had a focus on capital gains, rather than dividends, as the main benefit of shares —but if that is happening at the expense of jobs, at the expense of growth, at the expense of capital deepening, at the expense of growing businesses and at the expense of wages then that is a significant problem.
It is just not enough to reduce corporate taxes and hope that that will trickle into the pockets of the working people of Australia, because it will trickle into the pockets of shareholders, and a lot of those shareholders will be foreign shareholders. A lot of the benefits of the $65 billion in corporate tax giveaways will go to foreign shareholders, and I think that is a very grave shame.