SPEECH - MATTER OF PUBLIC IMPORTANCE - Cost of Living - House of Representatives - 4 February 2025

Well, they've been out to lunch for three years, and now they want taxpayers to pay for the bosses' lunches. A good economic policy should boost growth, boost fairness and put downward pressure on inflation. But this policy announced by the opposition does none of those things.

We should have got a bit of a hint of the Leader of the Opposition's economic capacity when he ran to roll Malcolm Turnbull back in 2018. It's been a little forgotten since then, but he had a big policy idea then, and that was to smash a big hole in the GST. It was a policy so bad that it was described by Scott Morrison as an 'absolute budget blower' and by Malcolm Turnbull as ‘very expensive’. The Leader of the Opposition's economic chops have been summed up in Lech Blaine's Quarterly Essay, where he wrote as follows:

Dutton is the paperback version of Howard: the same message but less weight. Economics is not his emotional priority, beyond a tribal allegiance to tax loopholes for the rich; penalties for the poor; and hostility to trade unions. This is why he spends most of the time fighting culture wars. His grievances are well practised and sincerely held. But the moment he moves off his preferred turf, Dutton becomes clumsy and unconvincing.

Lech Blaine went on to interview former prime minister Malcolm Turnbull, who said of the Leader of the Opposition:

"Peter is not an original thinker … I cannot recall him ever having a positive idea in the times when I was with him in government."

If you thought it's just former prime ministers who have that view of the Leader of the Opposition, I would note the words also quoted in that Quarterly Essay by the member for Bass:

"When I go to Canberra and sit in the party room with Peter Dutton, Tony Pasin and Alex Antic, I think: who are these people?"

She goes on to say:

"The Liberal Party has become One Nation lite."

This policy that is being proposed by the opposition makes Tony Abbott's knights and dames look visionary. It makes Billy Snedden look strong. It makes Alexander Downer look like a policy wonk. What it does is wind back one of the great tax reforms of the past couple of generations, the introduction of fringe benefits taxation, closing a tax loophole, back in 1985. As the late, great economic commentator Tim Colebatch noted, after the fringe benefits tax was introduced in 1985, activity at restaurants actually grew. He said:

A tax rort ended with no pain.

And Tim Colebatch reminded us:

Remember: those who pay for tax breaks are other taxpayers.

And that is why the cost of this policy is so substantial.

We've waited a couple of weeks for the opposition to release the costings around their signature economic policy—taxpayer funded long lunches for bosses—and we've waited in vain. So, with some regret, the Treasurer has been forced to ask Treasury to cost the policy. Treasury has done so on a conservative basis. There are four million small businesses with a turnover under $10 million. Of those four million, around 2.6 million are actively trading. For their calculation, Treasury assumed not every business would claim the maximum $20,000. Their costing starts off by assuming that actively trading businesses would claim just one-eighth of the cap, $2,500 a year. That would produce a cost of $1.6 billion—not $1.6 billion over the forwards; $1.6 billion per year. But the cost could get higher still. If all those four million actively trading businesses were to access the maximum $20,000 and get the tax benefit of 25 per cent, then the cost would balloon to $10 billion per year.

Ten billion dollars is a significant sum—bigger than any of us have had in our bank accounts—so let me give that in more precise terms. The maximum potential cost of the coalition's $10 billion policy of taxpayer funded long lunches for bosses equates to $1,000 for each and every Australian household. Each and every Australian household would be on the hook to the tune of $1,000 to subsidise long lunches for bosses, undoing the fringe benefits tax reform of 1985. And that's why experts are having none of it. Saul Eslake said the policy would go on his list of 'the dumbest tax policy decisions of the last 30 years'. Chris Richardson said:

… creating loopholes for small businesses to have a bit of fun at the expense of taxpayers heads in the exact opposite direction of what the federal budget needs …

The fact is that occasionally we will have targeted tax breaks for small businesses, but those targeted tax breaks are aimed at boosting productivity. Think of the technology investment incentive or the skills and training incentives—time limited tax deductions which ensured that small businesses invested in things that made a difference for the Australian people. But this policy does none of that. It simply blows a hole in the budget, somewhere between $1.6 billion and $10 billion a year, paid for by taxpayers.

This is, perhaps, no surprise. After all, this is coming from a leader of the opposition who was voted the worst health minister in Australian history by Australian doctors, a leader of the opposition who poisoned relations with our Pacific Island neighbours by joking about rising sea levels and a leader of the opposition who has consistently shown no interest in policy and turned to culture wars at every possibility. And his nuclear plan would see Australia trade out from renewables, where we're the leader in solar PV, towards the most expensive form of electricity, which wouldn't be delivered until 2040. No wonder the former prime minister Malcolm Turnbull has described the policy as 'bonkers' and has said that the claim that it would complement renewable energy was 'gaslighting, quite frankly'.

We have, from the Leader of the Opposition, a culture war being played and an attack yet again on the public service. His plan to cut 36,000 public service jobs wouldn't just affect great cities like Canberra. It would affect all of those who rely on public services. It could lead to delayed payments and waiting times for government services or for veterans affairs. It could undermine tax avoidance crackdowns. It could affect biosecurity or disability services. Cuts to the 4,000 jobs in Defence, Home Affairs or the Australian Federal Police would pose a threat to national security. Let's not forget that under the former government we had a shadow public service workforce of some 54,000 consultants and contractors. It is likely that the opposition's policy would lead to that situation being returned. We've already reduced wait times for veterans to have their claims processed. The Leader of the Opposition's policies would see those blow out again.

Every election is a choice. If those opposite had had their way, Australian households would be $7,200 worse off. Since coming to office we have delivered energy bill relief to every Australian household and a tax cut to every Australian taxpayer. We've ensured that Australians get a fair deal at the check-out, and we've ensured that farmers get a fairer price for the great goods that they sell to our supermarkets, through a mandatory food and grocery code, voted against by those opposite, who didn't want to see supermarkets face multimillion dollar penalties. We've delivered cheaper medicines, again over the opposition of those opposite, allowing millions of Australians to buy two months’ worth of medicines for the price of a single prescription. Over the period that policy has been in force, we've seen the number of pharmacies in Australia increase, contrary to the fear campaigns of those opposite.

We've got wages moving, including a third consecutive pay rise for 2.6 million minimum-wage workers. We've delivered two back-to-back surpluses—something those opposite never managed. They printed the mugs, but they never delivered the surpluses. We've increased Commonwealth Rent Assistance by over 40 per cent, extended the single parenting payment and provided 30,000 families with access to free broadband. Labor has delivered on inflation and equity. The coalition are a risk to household budgets and a risk to the Australian economy.


Cnr Gungahlin Pl and Efkarpidis Street, Gungahlin ACT 2912 | 02 6247 4396 | [email protected] | Authorised by A. Leigh MP, Australian Labor Party (ACT Branch), Canberra.