Second Reading - Addressing Inequality Amendment

Oh, the irony! Labor proposes the Productivity Commission Amendment (Addressing Inequality) Bill 2017 to do what it says will help address inequality in this nation while simultaneously opposing the measures this government has been fighting for. The measures are all about getting people who are doing it tough a much better deal. Labor do it with a straight face, citing the statistics from the partisan Chifley Research Centre, an arm of the Labor movement.

Mr Shorten, peddling the lie that is the heart of envy and division just will not cut it with Australians. It's a sad reflection of how Labor has fallen. In the 1980s, under Hawke and Keating, Labor focused on market based reform to grow Australia's economic pie. But today all that interests Labor is dividing that pie up and tearing others down.

Inequality has become something of an obsession for the current Labor Party. The consultation draft for Labor's national platform mentions the word 'inequality' some 49 times. It mentions inequality more than twice as often as other important themes such as living standards, wages or electricity prices. Under Mr Shorten's leadership, Labor has started singing from the same songbook as Mr Sanders in the United States or Mr Corbyn in the United Kingdom, peddling the politics of division and envy. Mr Shorten has nominated inequality as one of Labor's top economic priorities, should it win office next year, but the logic that underpins this plan is clear and scary. Put simply: it's that the path to making society fairer and more equal is to pull people down rather than lift everyone up. This regressive tax grab is not a positive plan. The outlook that animates this philosophy isn't optimistic; it's decidedly downcast. It's hard to see anything positive about a philosophy that's about punishing success rather than rewarding merit. To my mind, Labor's notion, that the best way we can improve the lot of others in life is through the heavy hand of government redistribution, is incredibly disempowering. When Mr Shorten says that inequality is creating a sense of powerlessness or is killing hope, what he's really saying is that Australians would be better off as dependents of a welfare state.

This bill is about entrenching the victim mentality that inequality in Australia is endemic. Listening to our Labor representatives when they are interviewed or when they speak in the chamber, you'd be forgiven for thinking that life in Australia has never been worse. Maybe all of those people lining up to migrate to Australia should be getting a warning about how bad it is here. Of course, we know that's not true. Australia is one of the best countries in the world to live. Interest in coming and living here from people overseas shows that it is a great place to make home. Often I'm asked by constituents about how I can help bring family members to this country, qualified always with the comment that this is the best country in which to live.

However, our capacity to remain the destination of choice for many people, and for all Australians, is dependent on our capacity to maintain a high standard of living and services that support a First World economy. The challenge for Australia is to maintain a high level of economic growth—growing our gross domestic product and creating jobs in the process. We live in a society that values personal endeavour and entrepreneurialism. It's this feature that leads to a growing economy and job creation.

The reciprocal of inequality, or the flip side of the coin, is equality. But what does it mean, and what is suggested to achieve it without killing off the incentive for personal endeavour? Some people in our society are going to become wealthy, but these people are the serious drivers of wealth creation for everyone. Their ability to identify opportunities and create jobs benefits all of us. It lifts all of us up. And, if some people think that taking money off some and giving it to others works, then they haven't studied a thing about the failures of socialism. Perhaps they need to compare the economic position and the quality of life of those in the former East Germany and West Germany. There's a reason people risked death to escape the east and its socialist paradise: it's because it doesn't work.

Labor seeks to, under Mr Shorten, take from those who create jobs, impose higher taxes and kill off the job-creating capacity of those who would otherwise invest in us. But it's worse than that: this pillaging of income is not restricted to the perceived wealthy. They also have their hand in the pocket of self-funded retirees and ordinary Australian families who have an aspiration to make a life that is better for themselves—to back themselves, to take a risk, to start a small business or to take on a local person as an employee. Once productivity is reduced and the incentive to improve your lot is removed, you'll see growth but it's inequality.

In any market based economy, sure, there will always be differences in what some people have and don't have. But let's get serious about the facts of the situation. What is the real level of inequality in Australia? And let's go to some real data, not the Mickey Mouse statistics cooked up by the intellectual arm of Labor Party and the Chifley centre. The HILDA Survey, the Household, Income and Labour Dynamics in Australia survey, produced by an arm of the respected University of Melbourne, that was released in July 2018 found that relative poverty is at the lowest point in the history of the survey while absolute poverty is close to record lows. From 2001 to 2016, the percentage of Australia's population in absolute poverty decreased not by a little but by approximately 70 per cent—down from 12.6 per cent to 3.6 per cent—while the percentage in relative poverty, with the poverty line set at 50 per cent of median income, fell from 12.6 per cent to 9.4 per cent.

All of the recent data supports the notion that income inequality measures in Australia have stabilised since the GFC. According to the ABS, the Gini coefficient, which many will know is regarded as the most reliable income inequality measurement—it represents the income or wealth distribution among a nation's residents and it's the most commonly cited measure of inequality for people within one country—fell from 0.333 in 2013-14 down a point in the 2015-16 year. The HILDA survey estimates there has been little net change in inequality from 2001 to 2016 with the Gini coefficient remaining stable. In 2016, the Gini coefficient reached its lowest level since 2005.

Here's another uncomfortable or inconvenient fact for those opposite: in 2015-16, 3.6 million Australian households received more in government payments than they contributed. That means 40 per cent of Australian households do not pay any net tax once you take into account the benefits they have received. By contrast, in 2015-16 the top 10 per cent of taxpayers paid 45 per cent of all personal income tax.

So now that we know that the situation is not the fake class war envy picture that's been painted by those opposite, let's get down to the practical stuff. The Coalition has a plan to strengthen our economy, which will continue to improve the quality of life for people who are at the rougher end of the equality spectrum. But it's not about taking from the top. This plan is about creating the right environment to lift everyone up, to help all Australians reach their full potential. Let's talk about some of the features of this plan. Australia has a progressive tax system, a broad social safety net and a welfare system that is one of the most well targeted in the world. It's worth noting that it's also the largest expense our nation's budget faces each year. This need to target our support well is part of the reason why we have reformed our aged pension system to give more to people who are living on the lowest incomes after a lifetime of contributing to our economy. We know that the best way to help Australians to get ahead is to ensure that every Australian who can work is able to get a decent job. That's why all our efforts are directed at growing the economy, getting more Australians into work and tightening the labour market to increase incomes for all right across the country. In contrast, Mr Shorten believes that for some to do better others have to do worse; others have to be punished. He wants to punish the job-creating parts of the economy.

The main thing we're doing to improve income equality is to generate jobs, because nothing helps people quite like going from not having a job to having good, stable work. The fact that 400,000 people have got a job in the last year for the very first time helps a great deal. This has been acknowledged by the Reserve Bank of Australia. A million jobs have been created—more than that—since this government came to office. In contrast, Labor has little to offer. It's abandoned any pretence of fairness or taking any real action to reduce the levels of poverty in Australia in favour of catchy slogans, political expedients and convenience. A party that once claimed to believe in needs based school funding now rejects the implementation of true Gonski based funding models in favour of a sequence of special deals that aren't fair and that cut different terms for different places. The Labor Party has no plan to grow the economy; rather, it wants to tax it to death, introducing new taxes on retirees, housing, investment, income for family businesses and savings. All businesses, small, medium and large, will pay, with the consequence that they won't be able to create as much opportunity for all of us. The Labor Party wrecks and resists, every step of the way, this strong economic plan to repair the budget, grow the economy and create jobs. It was Labor who opposed our tough measures to crack down on multinational tax avoiders when they opposed the 2015 multinational anti-avoidance legislation. Their great shame is to have voted for leaving $2 billion in the pockets of multinationals instead of supporting our efforts to deliver it to the budget bottom line to fund essential services for hardworking Australians. It's Labor who opposed our efforts to boost investment, to increase earnings and to grow the economy by their decision to vote against the Enterprise Tax Plan. It's a crazy thing, because Labor know, deep down in their heart, that all of those good things would be achieved if the enterprise tax plan could be implemented, because they've said it themselves time and time again. Mr Shorten said:

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.

Yet he did all he could to stop that improvement in the standard of living for Australians. How about the member for McMahon? He said:

It's a Labor thing to have the ambition of reducing company tax, because it promotes investment, creates jobs and drives growth.

And yet he too stands in the way of this opportunity-driving plan. The member for Rankin said last year:

Australia would go well out of a lower company rate than it is right now.

And he said:

You're right that Bill said that in the medium term it would be a good aspiration to have a lower company rate.

I could keep going on and on, but I don't think I need to.

The plan, they have made very clear, is one about which we should all be quite disturbed. It's a plan to reverse the legislated tax cuts for small and medium sized businesses and it's a plan to continue to deny the reductions in tax that we know will only deliver more opportunity for Australian people. It's Labor's plan that will involve higher taxes, higher deficits and a huge risk to the growth that has been seen in the economy in recent years. At the 2016 election, the Parliamentary Budget Office confirmed that Labor's election commitments would have resulted in higher deficits to the tune of $16.5 billion. Higher taxes, higher debt and higher deficits are the worst prescription you could write for the Australian economy. Labor are a AAA threat to our AAA credit rating. They do not have a single policy that would help a single business to invest a single dollar or create a single job.

On housing, Labor's plan is only for higher taxes, but we all know higher taxes don't build houses, they don't get young people into work and they don't encourage small business to take on a young person, give someone an apprenticeship or perhaps buy some equipment from a local business. Labor's plan is simply to tax more so that they can dole out more for the many more people who will require welfare because of their failure to grow this country. They've got no plan to address housing supply so that more hardworking Australians can own their home; no plan to help Australians fulfil their aspirations.

Our achievements in implementing a national economic plan stand in stark contrast to those opposite, who show no sign of waking up to the economic challenges facing hardworking Australian families and businesses. This bill needs to be rejected because it would entrench into the work of the Productivity Commission the kind of ideological nonsense that must be fought against, and that is the idea that we must think of Australians perpetually as victims and that we must be focused always on the politics of envy and division in thinking about equality and inequality when the real game is in growing opportunity and providing wealth and choice to all Australians.