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Janet speaks against corporate tax cuts

Speeches in Parliament
Janet Rice 22 Mar 2018

Janet speaking to the Treasury Laws Amendment (Enterprise Tax Plan No. 2) Bill 2017

Senator RICE (Victoria) (11:06):  I'm really pleased to be rising to speak on the Treasury Laws Amendment (Enterprise Tax Plan No. 2) Bill 2017 today and the Greens' opposition—total and complete opposition—to the prospect of giving over $60 billion in tax cuts to the big end of town, to big business. We have a choice, and this bill is a stark statement of the choice that we have in this parliament. We have a choice. We can either give a $65 billion handout to big business or we can have that $65 billion to spend. We have a choice. We can be working to build a more egalitarian, more equal, society or we can be increasing the inequality in our society by increasing the profits to big business, and not having the money to spend on the services, to spend on parts of Australian society that are desperately in need of investment.

The core things that are concerns, that are problems in Australian society today, aren't because big businesses aren't investing because they think their tax levels are too high. It's not that they are taking their money elsewhere because of the siren call of lower taxes, which is basically the core element of the government's reasoning as to why we need these tax cuts: 'If we don't have tax cuts, businesses are going to take their money and invest elsewhere.' That's not what's going on. Basically, we know there is absolutely zero evidence that giving businesses that $65 billion in tax cuts will mean that there is more investment here. There is absolutely zero evidence that by giving big business $65 billion in tax cuts that it's somehow going to trickle down and improve conditions and improve wages for ordinary Australian workers. We've been waiting for the trickle-down effect for a very long time. That's the core of the government's argument: that you give tax cuts to big business, then somehow eventually the benefits are going to trickle down and raise the conditions for ordinary workers and life is going to improve.

Senator Whish-Wilson interjecting

Senator RICE:  That's right. It just doesn't happen. We have had more than 30 years of neoliberal economics. In every country where trickle-down economics has been pursued, basically ordinary workers are waiting for the small drops to start falling. In fact, they are watching instead the benefits trickle up; they are watching instead things being taken away from them and being put into the pockets of the big end of town.

We know what will improve conditions for business and ordinary Australian people and will be good for our society overall—that is, investment in infrastructure to cope with our growing population; investment in a skilled workforce, in our schools, TAFE sector and universities; and investment in quality social services. If you ask ordinary Australians what needs to change in Australian society, they don't reckon big business need a bit more money in their pockets; they want to see decent schools. They don't want to see rundown schools in the suburbs of Australian cities and towns around our country, or overcrowded schools built in growth areas because we are not keeping up with the investment required to educate our growing population.

They want to see the end of homelessness. They think back to 20 years ago when we did not have people homeless on the streets of our cities. When I was a young adult, you walked through the streets of Melbourne and did not see people struggling, unable to afford a place to live. We can make these choices. We can invest in public and social housing. We can deal with the issue of homelessness and create a situation where everybody in Australia has the chance to thrive. It would help business if their workers could know their children are well cared for in quality childcare services instead of struggling with months-long waiting lists. Women can't return to work because they can't get a childcare place. Businesses need a skilled workforce. We have a desperate skills shortage in some areas of our economy, which is why we are bringing in nurses from the Philippines, because we are not training enough here in Australia. We need to bring in skilled workers because our technical and vocational education system has been stripped to the bone and is no longer providing the necessary services. That is where we need investment in Australia.

We know we have working poor. Again, that is a change in my adult lifetime. It used to be that if you had a job, you could at least afford to live, feed your kids and put shoes on their feet, but in order to survive now in a casualised, contracted-out workforce, so many people work two or three jobs and even then struggle to gather the money to keep home and hearth together. We won't somehow increase wages by hoping for the trickle-down effect of a corporate tax cut. There are many other ways. We could invest in infrastructure and other services and guarantee increases in wages, whether in the public service or the private sector. We can invest in all sorts of other services much more efficient at both creating jobs and creating economic activity in Australia, rather than this wish, hope and prayer that giving away $65 billion to the big end of town will improve conditions here.

This goes to the heart of the sort of Australia we want to have, of our democracy, as to whether the votes of ordinary people hold sway or large companies get what they want because of their continued push. The government tries to sell it to the community and say, 'If we invest in big business, that will have benefits for you,' without any guarantee that's going to happen.

We know that there is no connection between a company tax cut and with wages. We know that company executives get bonuses that are based on cutting wages and worker numbers. We've even seen ads from the Australian Banking Association saying that 80 per cent of their profits go to shareholders—in which case, if you increase their profits, it is highly unlikely that workers are going to see a cent of it. If we are really concerned about wages a much better way of increasing wages is to guarantee wage increases in the public sector rather than having wages flatlining and going backwards because of casualisation and contracting out. If we had a public sector wage rise, that would then force the private sector to follow. The Greens have put forward a policy to increase public sector wages across the board for non-executive workers by four per cent a year for the next five years.

In terms of increasing productivity, increasing the overall benefits to society and improving the conditions that businesses need to thrive in Australia, we need to invest in infrastructure. The cost of congestion in our growing cities is massive. That's what I hear companies talking about: 'Let's get our cities working properly! Why isn't our government investing in the infrastructure that we need so that we get sufficient transport?' It would mean workers don't have to be stuck in traffic for four hours a day and can actually get to work fresh. If the transport system is working well they are better able to get their goods around town. There is only one way that we can improve the infrastructure in our cities today and that's to invest in substantial public transport. That is the only way you can shift the huge volumes of people who are trying to get to work around our cities today.

I think of it as saying: 'If you've got $65 billion to spend, what would you spend that on? Do you give it to big business—maybe it would trickle down to workers and maybe it would mean that they get a tiny bit more investment in Australia—or would you spend that $65 billion on investing in the infrastructure that would mean we could deal with our congestion problems in our cities today?' The Melbourne Metro, the underground metro system that is now being built in Melbourne, has a price tag of about $10 billion. But we know that that is not even going to touch the sides of what's needed in terms of investment in public transport in Melbourne. There are already plans on the board for Melbourne Metro 2, which, again, is just what's needed to keep up with the growth of the population in Melbourne. That's what we should be saying: 'Yes, federal government money, supported by state government money, should go into those public transport services.' I expect that Melbourne Metro 2 will probably require another $10 billion. But it is absolutely needed.

We could spend the billions of dollars on tax cuts, or we could spend it on infrastructure that is actually going to transform our cities, that is actually going to mean that we have cities that work. Otherwise, 10, 15 or 20 years down the track, with our growing population our cities will be at an absolute standstill. That's what's going to cause businesses to flee. We know why companies like investing in Australia at the moment. It is because our cities basically do work, it is because we have stability, it is because we have social networks that mean we have well-functioning cities. But if you end up with a level of dysfunction through massive population growth that's not being catered for by that investment in infrastructure, that's the sort of thing that is going to turn companies away. They will not build a new facility in Melbourne or Sydney because it's just not working—the workers can't get to work, they are going to be stuck in congestion, and their goods are going to be stuck on tollways for a couple of hours in order to get somewhere.

We could be investing in high-speed rail. If we want to work out how we're going to deal with our growing population, that's the sort of infrastructure investment we need. We are told, no, that's unaffordable—it's too much. It is affordable. We have a choice. We can invest in that sort of city-shaping, country-shaping infrastructure, or we can fritter money away by giving a $65 billion tax cut to big businesses, which is going to have very little impact on the overall direction of our society. The Greens are absolutely firm that this is the wrong way to go. We have been clear throughout—it's basically philosophical for the Greens. We know that what needs to happen is we need to reduce inequality in our society. We need to improve the services and the infrastructure and reduce inequality, not give away tax cuts that are just going to increase that inequality.

The Labor Party have been all over the place. At the moment they are saying they are against these tax cuts. But, as the government has been saying—and others have been very clear—Labor don't know where they're at. The shadow Treasurer, Chris Bowen, has been quoted many times in this debate, and I think it is worth re-quoting him. He actually thinks that corporate tax cuts, in the long term or over time, are a good thing but that now is not the time to do them. In his recent book, he said:

… the nation should be aiming for a 25 per cent corporate tax rate.

So it's very unclear as to where the Labor Party lie—

Senator McAllister interjecting

The ACTING DEPUTY PRESIDENT (Senator Sterle):  Senator Rice, could you resume your seat, please. Senator Whish-Wilson, on a point of order?

Senator Whish-Wilson:  Point of order: there are a number of consistent interjections in the chamber. Could I draw your attention to the fact that other senators are interjecting while Senator Rice is speaking.

The ACTING DEPUTY PRESIDENT:  Senator Whish-Wilson, as you know, this can be a lively chamber at times. I have heard some conversations; very few. There is no point of order. Senator Rice, you have the call.

Senator RICE:  It's all right, I can cope with it—but it does make it rather unparliamentary, I think. I look forward to the Labor Party staying firm on this and I look forward to the Labor Party actually saying that corporate tax cuts are not the way to go, because that is the direction that we need to head in. It would be extremely disappointing if, at some time down the track when we have a Labor government, they suddenly also fall into this myth that corporate tax cuts are going to be good for Australia, good for our economy and good for our society. It's very clear: if you look at countries around the world, at the places where people really want to live, that rate the highest in terms of satisfaction and happiness, they are not the areas that have got low corporate tax rates.

Then we've got the others on the crossbench. I think it's very sad that they have seemingly been bought off. They have been given a few bits of silver for their pet projects and, suddenly, they are all over corporate tax cuts. One Nation say that they are there for the battler, but the benefits of these corporate tax cuts for the battler are next to zero. We don't know what deal has been done with them. This isn't democracy at work; this is just playing various people off and offering them bits that they accept, rather than fundamentally saying what's in the interests of Australia. It's exactly like when Senator Hanson backed the $315 income tax cut for the richest Australians.

It's very clear—we have a choice. Going in the direction of these corporate tax cuts is not the direction that Australia needs to head in. If we want to have a society that functions well, that works well, that reduces inequality, where democracy and what's in the interests of ordinary people are what hold sway, then going in the direction of corporate tax cuts is not the way to go. We have a choice here in this parliament today, and I urge the crossbench to join the Greens in speaking out loudly and voting against this direction of increasing inequality in society. We've got a choice here. We can knock back these corporate tax cuts, and then we can move on towards creating a more equal, more caring and more sustainable economy and society for Australia.

 

 

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