Tax Reform

I am not going to take lessons on tax reform from the Labor Party. No-one in their right mind in this country would take lessons on tax reform from a party that has a record of absolute disasters and failures when it comes to reforming our tax system. They were only in government for six years last time, but they presided over failure after failure after failure on tax reform in this country. 

They put up a mining tax—an absolute failure. Only the Labor Party—maybe with the assistance of the Greens; thank you, Senator Whish-Wilson—could design a tax which raised no money in net terms. It raised some small amount of money, but after compliance costs and administrative costs no money was raised. All the hassle, all the rhetoric and all the rigmarole we went through in this country—

Senator Polley: Mr Acting Deputy President, I raise a point of order. I just remind you—through you, Acting Deputy President—

The ACTING DEPUTY PRESIDENT : Please.

Senator Polley: that there has to be some relevance to the matter of public interest before us.

The ACTING DEPUTY PRESIDENT: There is no point of order, Senator Polley.

The matter of public interest is in regard to tax. The MPI is put forward by the Labor Party, suggesting advice on tax to this government. I am making clear that no-one—not just the Liberal Party, not just the National Party; not anyone—in their right mind in this country would take advice on tax reform from a party that presided over the disastrous mining tax. Indeed, it was a tax designed through the mishandled Henry tax review process as well.

That is not how we are going to run this process. We are not going to run it like the Labor Party did last time they were in government. That was an absolute failure. That was a lesson in how not to do tax reform. What they did with the Henry tax review was to rule out lots of options. They did not even let him look at the GST. Mr Ken Henry was the pre-eminent adviser on economic matters.

Senator Lines: Mr Acting Deputy President, I rise on a point of order. The matter of public importance does say, 'the plan to increase the rate of GST', and I have yet to hear that being mentioned by the senator.

The ACTING DEPUTY PRESIDENT : Senator Lines, as I ruled when Senator Canavan took a point of order against Senator Cameron, that was debating point and I will rule the same against you. There is no point of order.

Thank you, because I think this motion does go to what the government is doing with tax reform, with our white paper process, our consultative process. It is important to contrast and to learn indeed from the mistakes of the former government and how they mishandled the tax reform process while they were in government. And they did mishandle it. I do not think anybody could deny that now. They instructed the most pre-eminent adviser on economic matters at the time, the then Secretary to the Treasury, Mr Ken Henry to not even look at the GST. They did not even have the guts to take advice about the GST from their Treasury secretary. That is how scared the Labor Party were of tax reform. Then when they received his report—which had nothing in it about the GST because he was told not to—just before Christmas in 2009, Wayne Swan took it to the beach and read it in between surfing trips. He was so scared by it, he did not release it for four or five months. He kept it under wraps in his office for four or five months. It was not put out to the Australian people for discussion. He was not brave enough and he did not respect the Australian people enough to allow them to look at it and to consider it, to take into account the views of the Australian people.

And what happened? Because the then government's response was developed in a cocoon, without input from the Australian people, without the antiseptic abilities of sunlight, we came up with a disastrous policy option of putting in place a mining tax which very few people could understand, which did not deal with the practical realities of the mining sector or the financial sector and ultimately lead to the destruction, probably, of a Prime Minister or at least played a major role. It was an absolutely disastrous outcome and we will not repeat it.

We are confident that the Australian people can have a mature debate about the tax system. They can have a debate which looks at all elements of the tax system. Of course, the GST is one of the most important parts of the tax system. It raises over $50 billion a year. It is an incredibly important source of funds for our state governments and, of course, it needs to be part of any review into taxes in our nation. Indeed, if you really believe the rhetoric of the other side about the GST, if you took Senator Cameron's contribution to its logical conclusions and if Senator Cameron, through you chair, were serious about the exaggerated and overwrought claims about the impact of the GST, why is the Labor Party not taking a policy to remove the GST? Why is the Labor Party not rolling back the GST? They have tried it before. If you really believe what they are saying about this tax, that it causes devastation across our landmark landscape, that it causes people to go into poverty and not be able to pay their bills, why are they not taking a policy to remove it?

Senator LINES: It does.

Senator Lines, if you think it does those things, it would be an incumbent on you to take to the Australian people a policy to get rid of the tax completely but you are not doing that. It did not do that while you were in government. So your claims right now are exposed as the complete political rhetoric they are. They are not based on what you really believe impacts people. They are based on a political argument which you are seeking to have to focus on cost-of-living issues will.

The irony is that, on this side of the chamber, we are having a mature debate about what our tax system should look like and about how we can promote economic growth; on that side of the chamber they are proposing a massive tax which is going to hit poor people in this country. They are the ones proposing this tax. They are going to do it through another carbon tax. Just last week we saw the Leader of the Opposition, Mr Shorten, put forward a 45 per cent cut in our carbon emissions by 2030, almost halving our carbon emissions by 2030. The only way they are going to do that is through a new carbon tax or a new emissions trading scheme, which is another word for a tax. They are going to put another tax on the Australian people if they get back in power and guess who is going to be paying this tax? Guess who will be most exposed to paying Labor's carbon tax version 2.0? It will be the poorer households in our nation, just as it was last time.

The Australian people rejected the tax last time but the Labor Party are coming back for a sequel. We know it will hit the poorest people because the Labor Party did modelling on this when they were in government. They commissioned economic modelling from the Treasury when they were in government into this type of reduction, into a reduction of around 45 per cent in carbon taxes—44 per cent, to be precise. We know from that modelling, from the experts, from the Australian Treasury, what would be the impact of such a tax. The impact would be that income per person would be $4,900 lower by 2030 if we were to implement such a policy.

No-one is asking us to do this policy. It is beyond the proposals coming from other countries in Paris right now, yet the Australian Labor Party—the party which once represented workers, the party which was formed under a tree in Barcaldine to represent shearers of our nation—are putting forward a tax which will reduce the income of the average person by $5,000 a year, which will hit those industries which employ workers in this country, particularly in our steel, in our aluminium and in our power production sectors. Indeed under the Labor Party modelling on the carbon tax, all 37 coal-fired power stations in this nation would close—all of them.

I know Senator Whish-Wilson and Senator Rice will be licking their lips at the prospect that 37 coal-fired power stations would be out of action but it is not the stated view of the Labor Party. The Labor Party do not believe in shutting down our coal-fired power stations; yet they are pushing a policy which should have that very effect. What are they going to say to the people of the Hunter Valley, what are they going to say to the people of the La Trobe finally, what are they going to say to the people of Central Queensland who lose their jobs because they are pushing a policy which is are ideologically driven and will not deliver a practical result for the environment and will make us economically poorer? From that modelling we know that the coal, oil and gas industries would be around 23 per cent lower than they otherwise would be in 2030, that the coal mining output would be 42 per cent lower and the aluminium industry would halve under their model

These are their figures. They are not my figures, they are not Senator McGrath's figures, they are not any government minister's figures. They are the Australian Labor Party's figures from when they were in government about this particular policy option. It is complete madness. It is madness on stilts to be proposing such a tax, which would hit the poorest Australians the most. We would not be able to afford compensation either, because this policy actually reduces their economic growth.

We on this side are focused on tax reform ideas that will promote economic growth and job creation. Yes, that might mean some change to the mix of our tax system, but that is how we are going to afford a bigger pie which we can share among all Australians to fund all the public services we expect and to make sure every one of us will be better off as a result of that change, as was done with the GST. The way you do not do tax reform is to put taxes on individual sectors of our economy—wealth-producing ones like coal, aluminium and steel—which would lower economic growth, shrink the economic pie and make it harder to make sure every Australian can have a better day tomorrow than they have today.

That is what we are focused on. We are focused on making a brighter and stronger economy for tomorrow than we have today, and we will do that through considered, well thought-through and consultative tax reform. We will not impose massive new taxes on individual sectors of our economy that seek to divide our community, lower our economic growth and make us all poorer.

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