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Speech: Treasury Laws Amendment (Personal Income Tax Plan) Bill 2018: Second Reading

Tuesday, 19 June 2018

Senator RHIANNON (New South Wales) (21:48): The Greens stand against this tax cut giveaway to the big end of town because people deserve better. In this debate, members have already heard from a number of my Greens colleagues, and I strongly endorse their comments. We have a very strong position against the Treasury Laws Amendment (Personal Income Tax Plan) Bill 2018. It's a very destructive bill—destructive to the very fabric of Australian society—and it will create greater inequality. It will be a disaster if it comes in. Everyone deserves well-funded essential public services and proper wage rises, but we won't get them from the bill that's before us now.

What do we get from the Turnbull government? You could really say it's just like crumbs from the table. If you vote for these tax cuts and if they come in, the great majority of Australians will be incredibly disadvantaged. What some of them will receive is just, in the end, a few dollars a week. Overall, what will happen to Australia is less money for the essential public services that are so badly needed—less money for the essential services that we need to extend and to get on with the job.

The Turnbull government is choosing to give cash to the rich instead of putting it towards the vital services that we need and the wage rises for people who need it. What we also see—you can really guess how this government operates; we've seen their track record for too long—is that they would really be rubbing salt into the wound. If these tax cuts go through and if the Liberals and Nationals get re-elected, you can bet that it wouldn't be too long before they would be wailing about another budget emergency and out there grinding the axe—this time on public services. How this Liberal-National government works is that it's always looking to run down services and bring advantages to those who are already wealthy. Whose interests does this government serve? It's corporate Australia. That's what's going on here. Who benefits from these tax cuts? It's going to be made out that it's ordinary salary earners, but what we see coming down the track is cuts to company taxes. That's all part of the package. That's what the real intent here is.

It's interesting to look at the messaging that is being run out here. We heard Senator Cormann either yesterday or today—but we also hear it from many of the government ministers—abusing those who oppose these tax cuts, saying that people who oppose what the government is trying to impose are running class warfare. Those who are running class warfare include everybody from Prime Minister Turnbull down to the members of the Liberal-National government. They are waging class warfare because this bill will drive inequality, and inequality is precisely what makes people angry and want to fight back. In this case, corporate Australia—those people who are very rich, the one per cent; those who already have plenty of wealth to lead a very grand lifestyle—want more. Sadly, this government is out there to deliver more money to this section of society.

Let's just look at the amounts that we're talking about here. If this bill were to go through, it would result in a $140 billion three-stage income tax cut over 10 years. That's $140 billion robbed from public services—public services that urgently need to be extended because they've been run down for so long. Then again, remember—I just mentioned them—the company tax cuts that are coming down the pipeline under this government. If the company tax cuts go through at the level this government wants, it would mean a cut-back of $35.6 billion. Those company tax cuts will benefit businesses with turnovers of more than $50 million a year. It's not even good for those companies, because the way the government run this show is that there have been low wage rises now for a long time. It is one of the factors that is having such a big impact on this economy. But the government are so obsessed—they're the ones waging class warfare—that they are not even willing to structure the industrial relations system to how the economy works so that the minimum wage can go up and all workers can get a fair wage rise. This government is so blinded by its ideological obsession that it can't even see what is good for the economy overall. So we do have a really serious problem before us.

It is interesting to analyse why the government works in this way. I'm not saying that they've sat behind closed doors with those big companies that give them donations, and the companies have worked out, 'Well, give us a tax cut and we'll give you a donation.' We never know what goes on behind closed doors and what deals are done, and I'm not suggesting that that was the deal. But what you see is that the Liberals and Nationals in this government know whose interests they serve and, at the same time, they're getting in big money from the different sectors who will benefit from the whole package of tax cuts that the government intends to bring in—particularly the property industry.

If you look at the donations that have come in from the property industry over many years, it's astronomical. From 1988, it's actually $64 million. Let's look at the current figure. In 2014-15, about $2 million came from the property industry in donations to the political parties—certainly not to the Greens—in this country. In 2013-14, it was about $4 million. That's just not a healthy deal. There you have companies making donations and you end up with governments who think: 'These are our mates. These are people we've got to look after.' So it's a really rotten system. I hear Senator Cormann badger people about class warfare. He is the one leading the charge. He's certainly the main person trying to badger the people of Australia with this very shocking tax arrangement.

We know that the public aren't fooled. A very encouraging poll was released in the lead-up to the budget. People were asked what their priorities were. They were asked what they wanted the government to do. They said that they wanted increased spending. This has come through not just in this poll but so many polls of Australians. The majority of people recognise the need for public money to go into public services.

Again what's going on here is this government representing only a very small section of Australian society. In this poll where they were asked where they wanted public money to go 67 per cent named health care as a top priority, 56 per cent named age pensions as a top priority, 55 per cent named education as a top priority and 52 per cent named affordable housing as a top priority. There we have Australians getting it right, recognising what this country's needs and priorities are. What do we get from the Turnbull government? We get a really mean budget that comes forward with this really ugly tax plan, which will drive inequality and cause so much damage on an individual level, on a family level, on a community level and on our economy because it is just so out of kilter with what any economy needs.

In this poll people were asked to rank the most important issues to be addressed in the budget. More interesting is that only 17 per cent nominated income tax cuts. Again you can easily conclude here that people get it. They can see that inequality is increasing in this society. They know that's wrong and they know that we need funding for our public services. People understand that essential services are more important than a few bucks a week—if you're lucky enough to get that in your pocket. They know it's an insult to just get a few crumbs from the table. No matter how Senator Cormann and Mr Turnbull dress it up, that's what's going on here.

It's worth looking at the issue of wage rises. My colleague Senator Peter Whish-Wilson dealt with this in a very important way when he really examined the minimum wage. The Greens are calling for an increase in the minimum wage. If you listen to the government and believe them, you would think that they were serious about wanting to improve people's lives. But, if you dig a bit deeper, you will see that that's not the case. If the government were serious about it, one, they'd stop waging class warfare and, two, they'd ensure that there were real wage rises. It's pretty obvious how this can be achieved. The government is failing in this area. I'd say that this is another example of their class warfare. They still have the mindset of workers and unions—'We mustn't let them get anything. We need to cut back on wages. We need to stall wages. We need to really make it hard for unions to work.'

The government has many levers available to it to ensure that workers are getting a fair deal, that they're getting a good wage. Often the majority of the wage of low-paid workers is going back into the economy. This is where this government gets it wrong. Many of the businesses or companies that support the government—or the government make out they support them—would prefer a bigger turnover in the economy. These are some of the levers any wise government would be using. They'd be protecting penalty rates. They'd lift the ridiculous public sector pay cap. They'd empower workers to organise through unions to demand a better deal. That's part of how society works. Unions are part of helping workers organise on a collective basis so that they can get a decent wage rise. They'd push to raise the minimum wage. The government is totally silent on this. They've done none of it. They've just about, effectively, frozen wages.

The Australia Institute have done some analysis on whether real wage rises or small tax cuts would put more money in people's pockets. I congratulate them and urge everybody to look at this research. Again, it sums up in a nutshell how wrong this government has got the bill presently before us. Just to give you a couple of examples, if your current earnings are about $40,000, under the coalition tax plan what would you get back? It is $290. If there were an annual 3.5 per cent wage increase—not real high; that's pretty average these days—you would get an increase across the year of $4,780. If you are earning $125,000 per year, what would you get under a coalition tax plan? It's $135 in your pocket. What's that? Depending on where you shop, it's a sandwich and a cup of coffee a week. With annual 3.5 per cent wage increases, you get $11,617 in your pocket. That's what would be coming back to you. That, again, reflects how wrong the direction is that the government are taking us in. That's why I keep repeating that we need to ask ourselves why they're doing it. They are doing it because their interest is corporate Australia.

Essential public services from this Turnbull government are now under threat. They're under threat at the moment because this legislation could go through. They are also already under threat because the government is ideologically opposed to collectively funded services that everyone can use. As we know, these tax cuts would make it worse. The $140 billion that will be given away is money that will be not spent on essential public services. That's why the Greens are fighting these tax cuts so strongly.

There are four areas I will name that would really cop it if this bill goes through. There is housing, one of the most essential areas for people's wellbeing. There is education—public education would be smashed. You can't take $140 billion out of the system without there being serious consequences. Then there's health and the essential infrastructure of public transport. How can we even consider such a giveaway when we're got queues in our public hospitals, overcrowded public schools and public housing waiting lists that have blown out over 10 years and so many people are not even being able to get a home? It is a deeply shocking system.

Housing is one area that is really set to get worse, because we already have a system in Australia where housing has become a commodity. It's worth remembering how the system works. Since the late 1990s, much of housing investment has been driven by speculation on future price gains, not to serve the needs of communities. That is because housing has become a commodity. It's like another form of money. It's a way people can increase their own profits. The purchase prices have become untethered from other housing fundamentals. This situation is so serious that the number of homeless people in Australia is just disgraceful for a rich country like Australia. In 2016-17, 288,000 people were assisted by official homelessness services. This is a really tragic figure. Every day last year, 261 people were turned away because of a lack of capacity for the services to assist them. Then we have 1.5 million households under housing stress. That is where they are paying more than 30 per cent of their income on various housing costs. Housing stress means that you're one disaster away, possibly, from being on the slippery slope to being homeless. One disaster like the kids get sick, you're injured at work or you're out of work. These are the sorts of things that can happen to people very quickly and turn their lives around.

Why I'm speaking about this is to underline why we need to be injecting public money into a strong public housing system in this country. Other nations have it. Other nations have a very good system. I'm not talking about wiping out the private housing market—those ridiculous insults that people from the coalition parties often bring out when we get to this point in discussing the housing needs of this country. The European example is quite fascinating on this. In Norway, they have a scheme called Housing First where, believe it or not—and it's probably hard to believe it when you come from a country like Australia—if you're homeless you're given a home. In many cases, they find it saves money. It saves money because the people get their lives on track. The kids can go to school. They've got security of tenure. People's health improves when they've got a secure home. This is a really fine way to go. In many other countries in Europe—Denmark, Sweden and Austria—20 to 30 per cent of the housing stock is public and social housing, universal housing, where anybody can apply. The housing is awarded according to need.

Again, you need a government that is committed to having a progressive taxation system, a taxation system that ensures that we have that revenue stream coming into the public purse so these essential public services can be paid for. They're so urgently needed. That money is so urgently needed to remain in the public purse, because right now in this country we have a housing crisis that is set to worsen. As I said, in how this government views it, housing isn't seen as a human right, which it is actually recognised as internationally; it's become a form of how you make more money. But how housing should work is in a system where there's universal access, there's stability through guaranteed tenancy and it's affordable, and where the rents are capped and any repayments are capped at no more than 30 per cent of the income. That's an accepted standard of how housing should be provided, and that's why I'm giving strong emphasis to the need for a universal housing scheme.

This is a responsible way to go, and it's very relevant to the debate that we're having here now about the taxation system of the future. It would be a disaster if this bill were passed. It would rob billions of dollars from the public purse for the public services that you've heard many of my Greens colleagues talk about—public services in the education sector, transport, other sections of infrastructure and our health sector, and I've added housing to that. We have a housing crisis. If this bill goes through, it's one of the many areas that will deteriorate, put a greater burden on so many Australians and drive greater inequality. As to the class warfare that Senator Cormann tries to abuse people with, they will be creating it because they're the ones who are driving class warfare with this bill before us.

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