11 February 2016
In 2005 Peter Costello said of the now Prime Minister:
Well, he didn't actually have a plan, he had 280.
Then he laughed and said:
So, you know, … if you didn't like one, there were 279 that you could look at.
I do not think Peter Costello was much of a Treasurer, but even a stopped Rolex is right twice a day. What Peter Costello nailed the member for Wentworth on was his inability to stick to a solid plan.
The plan that was put forward by the then member for Wentworth included a central proposal. Under that central tax proposal, the member for Wentworth suggested that people earning $1 million should get a tax break of over $100,000 but that an average worker should get a tax break of just $600. In Australia over the last 40 years or so, earnings for the top 10th have risen three times faster than for the bottom 10th. What was the member for Wentworth's answer to that? It was to give a $100,000 tax cut to the top and a $600 tax cut to the middle. He is a real nowhere man.
This economy requires some serious economic leadership. The member for Wentworth was right about that when he took the job of the member for Warringah. We now have unemployment going up, the deficit going up—it has doubled in just the last 12 months—and debt going up. We have confidence going down—consumer confidence is down eight per cent—disposable income is down two per cent, the share market is where it was a decade ago and capital expenditure is down 24 per cent. All the numbers that should be going down are going up and all the numbers that should be going up are coming down.
In that environment, we need economic leadership, but Australia is not getting it. This Liberal government has lost more ministers than it has had coherent tax policies—11 more, to be exact. The Liberals came to office in 2013 promising a tax white paper well within the first term. The member for Warringah said that that would lay out the plan for 'lower, simpler, fairer taxes for higher economic growth and better and more sustained services'.
Almost three years on, the government has certainly spent a lot of money on that tax white paper. More than $1 million has been spent on consultants, advertising and market research to find out what people think about tax. Unfortunately, what we do not have is any idea of what this government will actually do about tax. Yesterday in Senate estimates, the Secretary to the Treasury confirmed he is still 'waiting for direction' from the government about whether the tax white paper will proceed at all and what its tax priorities are. The finance minister called it 'stationary'. It is not clear whether he means a bit of paper you might throw in the bin or something that has stopped—either way, it is pretty clear it is dead as the dodo. This is of concern not just to Australians, who are looking for economic leadership, but to the more than 800 community groups and business groups that spent thousands of hours putting their ideas forward to the government's tax discussion paper.
The government talk about cutting taxes, but they are now running the highest-taxing government since the Howard years. When Labor left office, tax was 21.4 per cent of GDP. By 2018, tax will be 23.4 per cent of GDP. The government talk about boosting growth, but, on their watch, growth has slowed to the lowest level since the global financial crisis. They talk about better services, but they have cut $80 billion out of schools and hospitals funding for the states. Instead of working calmly and methodically through the challenges of the tax system, government ministers and backbenchers have floated thought bubble after thought bubble, running through them like little kids playing with a bubble machine, just watching them splatter on their faces. It might be entertaining for those of us who want to watch governments falling on their faces, but it is not the economic leadership that Australians were promised.
When it comes to multinational tax, we see one of the clearest divides of any area of policy. Labor's carefully costed plan was developed with guidance from the OECD and costed by the Parliamentary Budget Office. It closes legal loopholes that let companies use debt to shift their profits offshore. But the government do not want a bar of it. This is pretty consistent with what they did in opposition. When we brought forward a bill in 2012 that cracked down on companies overvaluing assets in offshore jurisdictions, the Liberals voted against it. When we introduced laws that plugged loopholes in Australia's transfer pricing rules and anti-avoidance rules in 2013, the Liberals voted against it. When we amended the Taxation Administration Act to bring in more tax transparency to make sure that giant companies are held accountable to their contribution to Australia, members opposite voted against it.
What is worse, on the final sitting day of last year, with the connivance of the Greens, the coalition rammed through this House a measure which gutted Australia's tax transparency laws, taking two in three private companies out of the transparency net. They did so after arguing that there was a kidnap risk to companies—an argument described by one tax expert as 'the stupidest argument for nondisclosure' he had ever heard. We had a Senate inquiry in which evidence was brought forward by a so-called astroturf organisation that turned out not to have any members. On winding back tax transparency, as Lenore Taylor put it, 'protecting tax transparency for the uber-rich is a strange thing to take a stand on'. It is the sort of idea that might have been dreamed up after the second cognac at the Melbourne Club. Thanks to Labor's tax transparency laws, we saw last year the information the Liberals did not want you to see. We saw that one in four public companies earning over $100 million pay no tax. But, sadly, thanks to the Liberals