Firstly, I thank all the members who have contributed to this debate. This Bill delivers on the remainder of the Government's Enterprise Tax Plan introduced in the 2016-17 Budget.
The first element of that plan, which has been previously legislated for firms earning up to $50 million in turnover each year, was a watershed change for businesses around this country, particularly for small businesses earning between $2 million and $10 million in turnover each year.
Not only does that reduce the tax rate for those businesses but it also provides businesses that have a turnover up to $10 million access to the Small Business Tax incentives: the instant asset write-off, pool depreciation and GST on a cash flow basis.
All of these are important measures that assist genuine small businesses which, this Government believes, are businesses with a turnover of up to $10 million. That is a different view to those who sit opposite.
The Labor Party believe a small business should only be defined as a business earning up to $2 million.
The Henry Review suggested it should have been up to $5 million, and we thought it should go further than that. A business earning up to $10 million can have some 22 employees. It is not Google or Microsoft or any of those sorts of businesses—they're genuine small businesses which we find in all of our electorates.
This Government provided those businesses with the most significant tax relief that those types of businesses have ever seen, because we understand small businesses. We know what a small business is. We know where they are, we know what they need, we know the support they need and we know the recognition they need.
That's why we legislated tax relief—tax cuts—for small businesses, and the Labor Party opposed it. We know, because the Labor Party have said—in relation to these measures and in relation to the $65 billion of estimated revenue impacts over the 10 years, which includes the tax relief to not just businesses earning between $2 million and $10 million but businesses all the way to zero in turnover—that they have factored that into their costings.
They've spent all that money and they still have a deficit which is greater than what the Coalition put forward at the last election. They spent all that and then spent more and then had an even worse fiscal position.
It's clear that the Labor Party, if they are elected at the next election, have factored into their costings the reversal of tax cuts for small and medium-sized businesses. The Bill that's now before the House would see the next cab off the rank—businesses earning between $50 million and $100 million—get a tax cut.
It's bad enough that the Labor Party would deny those businesses that. Again, they're not multinationals or even big domestic companies necessarily but businesses in South Australia, businesses in Tasmania—businesses all around the country—that are modest, growing and hungry businesses that want to put more and more Australians into jobs. I cannot understand how keeping taxes high for these businesses helps them employ more Australians or boost their wages. It doesn't make any sense.
I know there are plenty of critics of the Government's plan that we have consistently held to, that we took to an election and that we won an election on; it was confirmed by the Australian people.
I know that. But what of the question put to the counterfactual? How on earth does keeping business taxes high help one business employ one more Australian or give one more Australian a wage rise or help them invest one more dollar in their business—in plant, in equipment, in technology, in training, in developing new products or in going after new markets?
Keeping business taxes high is a complete numpty of an idea. It doesn't make any sense. Anyone who thinks that's good economic policy has absolutely lost their economic compass and cannot find their way around the economic debate in this country.
We're putting forward the continuation of our plan to continue to drive the jobs and the growth that we are seeing. Last year over 400,000 jobs were created. That was a record year for jobs growth, eclipsing all others since records were first taken for jobs in this country.
It is stronger than the Rudd-Gillard-Rudd Government's best years, stronger than the Howard Government's best years, stronger than the Keating Government's best years, stronger than the Hawke Government's best years, stronger than the Fraser Government's best years and stronger than the Whitlam Government's best years—the strongest jobs growth on record.
It's part of a plan. It's not the whole plan. There's our $75 billion infrastructure investment, which we know is equally, for similar reasons, supporting investment in our economy, supporting growth and supporting the case for strong wage outcomes for Australians. There's our investment and stickability when it comes to the issue of opening up new markets through trade.
That's something the Labor Party used to believe in but, like everything else, have changed their tune on. We stick to things, and we're sticking to this plan. We're sticking to this plan because we know it's in the economic interests of Australians.
It's often said to me, 'It's unpopular with some.' That may cause the Labor Party to lose their faith, to lose their belief and to lose their conviction that these things are good for the economy. But what I do know is popular is this: more and better paid jobs.
As a government you've got to be prepared to do the things that achieve those outcomes and not go to water the first time that someone makes a criticism of your policy. This Government will not relent to that. We stick to our plans, practically, to get the outcomes that we know produce more and better paid jobs.
That's why we're sticking to our plans on innovation. Just this morning we announced further changes, particularly to the early stage venture partnerships, which is part of that innovation agenda that continues to be rolled out by the Government.
The defence industry plan is supporting Australia's advanced manufacturing industry to transition. Our global economy is changing, and we're supporting our advanced manufacturing sector to change with it through the biggest recapitalisation of our defence forces since the Second World War, producing the two great dividends that coalition governments have always delivered—national economic security and national economic growth.
The importance of these reforms cannot be understated. The academic debate about this, I am sure, will continue, but Australians are interested in the results that the Coalition Government is delivering. And it's not just us; around the world, the global economic consensus of sensible governments is that we must reduce the tax burden on businesses that employ our citizens so as to give them the headroom to ensure that they can give our citizens more and better paid jobs.
The Labor Party have opposed us on this. They want Australia to be stranded on a high-tax island. They want to see jobs, investment, innovation and training—all of these things—go offshore. That's their choice and they must own the consequences for those decisions done on the basis of populism, not on economic policy. They have lost their economic compass in opposing this Bill. We know that they once supported these measures. In government, many years ago, under treasurers and prime ministers, they implemented similar measures. So it is disturbing that we see this shift occurring in the Labor Party when it comes to economic policy and the re-education program that has been put on the Labor Party by the Greens in this country as they move ever closer to the cohabitation on economic policy with the Greens, which we will only see further fused in the upcoming by-election in Batman. It was the Leader of the Opposition, then Assistant Treasurer, who said on 30 March 2011:
… corporate tax reform helps Australia's private sector grow and it creates jobs right up and down the income ladder… lowering the corporate rate for smaller businesses … creates an artificial incentive for Australian businesses to downsize. In worse case scenarios some businesses might actually lay people off to get smaller—and the size based different tax treatment would create a glass ceiling on business workforce growth.
We know that the Labor Party have stood for these sorts of changes before, but today in this place they continue to make excuses as to why they will not vote for their previous convictions. Their convictions have evaporated in the face of having to actually stand for economic common sense.
The Shadow Treasurer joins me at the table—not out of flattery but because he's on duty and he is welcome. With his leader, on 8 June 2016, he said: 'You'd need a microscope to find the impact of the corporate tax cut on economic growth.' But this stands in stark contradiction to what he said in his own book in 2013, where he said:
It is a Labor thing to have the ambition of reducing company tax, because it promotes investment, creates jobs and drives growth.
So Labor says that it can't be done because it cannot be afforded. What I don't understand, then, is what I said before: they reverse the company tax cuts and they end up with a bigger deficit. Explain that one to me. It can't be afforded, but, even when they get rid of them, they end up with a higher deficit. We know that the Shadow Treasurer said in February this year: 'The objection to the corporate tax rate is that this nation, at this point, cannot afford it. It is the biggest single hit on the budget that either side will propose.'
But in 2013 he said: 'The United Kingdom, facing a much tougher fiscal situation than Australia, has cut its company tax rate to 23 per cent in April 2013 to be further reduced to 21 per cent in April 2014.'
We know that the Leader of the Opposition talked about the need for company tax cuts to be part of an agenda for investment and growth when the deficit was at $41.5 billion and rising, back in 2011. In 2012, as Minister for Financial Services and Superannuation, the Leader of the Opposition said, 'Any student of Australian business and economic history since the eighties knows part of Australia's success was derived through the reduction in the company tax rate.' The deficit at that point was $37.1 billion and rising.
The Shadow Treasurer said on 22 September 2015: 'I would like to see the corporate tax rate come down over time'—which is what this Bill proposes, by the way. 'I've previously said that the nation should be aiming for a 25 per cent corporate tax rate'—the deficit at that time was $35.1 billion. The problem is that the Shadow Treasurer aims for this thing but can't hit it, because he's lost his conviction to follow through on the things he once believed in.
The Shadow Minister for Financial Services said on 2 May 2016 that Australia would go better with a lower company tax rate. The deficit at that point was $37.4 billion. Then there's the case regarding inequality. 'Recent trends,' the Shadow Treasurer said in 2017, 'certainly don't inspire optimism when the government tells people to trust them that the tax rate cut for business will magically trickle down.' Yet his own leader said on 30 March 2011, in a speech to ACOSS, 'Reducing the corporate tax rate sees more capital flowing into our domestic economy, which will flow on to workers in the form of higher wages, thereby improving the standard of living.'
Finally, they say you can't have the AAA credit rating and a corporate tax cut. With no help from the opposition, Australia has retained the AAA credit rating from all three ratings agencies—that was confirmed in the last few weeks—and we're one of only 10 countries to do so.
These are excuses for why the Labor Party are not supporting this Bill. As to whether they've changed their mind, never believed it in the first place or have lost their way, I'll let the Australian people decide. When they stand in this place today and vote against a plan that has already demonstrated in its first instalment its support for jobs growth in this country, and go against everything they've previously believed in government to court the chorus of populism, it's a sad day for the Labor Party.
This is the day when in this place they will vote their economic credentials out of existence. This is why they cannot be trusted to manage our $1.8 trillion economy—because they have lost their economic compass. They don't know where they're going. They don't know how to drive growth in the economy. They have no plan to lift wages in this country. They have embarked on their voyage to the other side to cohabit with the Greens, who now write economic policy for the Labor Party. As I said the other day in this place, when it comes to economic policy, if you don't know what you believe, no-one will believe in you, and that's why no-one believes in the Labor Party's economic credentials anymore.