Matters of Urgency — Budget

Helen Polley

The Senate will now consider the proposal from Senator Bragg under standing order 75, which is also shown at item 12 of today's Order of Business:

That, in the opinion of the Senate, the following is a matter of urgency:

The need for the Albanese Labor Government to explain why it misled Australians before the election by promising not to increase taxes, only to now pursue higher taxes on superannuation, savings, investments and small businesses, proving that Labor's answer to every problem is more tax, more government and less reward for hard work, enterprise and aspiration.

Is consideration of the proposal supported?

More than the number of senators required by the standing orders having risen in their places—

With the concurrence of the Senate, the clerk will set the clock in line with the informal arrangements made by the whips.

Andrew Bragg

I move:

That, in the opinion of the Senate, the following is a matter of urgency:

The need for the Albanese Labor Government to explain why it misled Australians before the election by promising not to increase taxes, only to now pursue higher taxes on superannuation, savings, investments and small businesses, proving that Labor's answer to every problem is more tax, more government and less reward for hard work, enterprise and aspiration.

The reason this motion is being moved is that this has been an absolute dog's breakfast of a tax policy that we've seen over the last month, and I think people are over this. People are—

Helen Polley

Sorry, Senator Bragg, I don't believe your mike's on.

Andrew Bragg

That may be a tragedy for some.

Helen Polley

I think that's better now. Would you mind starting again.

Andrew Bragg

I'll wait for the clock to reset—very good. The whole point of this motion is about really making the point that people have had enough of politics as usual, and I think people have had enough of the incompetence as usual as presented by this government.

This treasurer, Dr Chalmers, as he styles himself, has had two tax policies in four years and both have collapsed. His first policy was to tax unrealised gains, and that collapsed last year. His second policy has been to put in place a 30 per cent tax on everything, ostensibly to improve housing affordability. Now, people are not stupid. They can see through this and they can see that putting a tax on everything else in the economy is not going to help housing. People are aware of the Treasury's own admission in the budget papers that the government will supply 35,000 fewer houses. People are not stupid, and people object to being treated as if they are idiots or children. The way that the Prime Minister and the Treasurer have sought to address the Australian people over this past month or so has been objectionable at best. People are intelligent. We are living through an age where people have more access to information than they've ever had in human history. So people understand that these taxes are stupid. They understand that more tax is not good for Australia. People know this budget is bad for them and is bad for Australia because it increases the tax burden on working people. It increases the risk that we won't have the houses that we need. This 30 per cent CGT is going to be a jobs killer, an investment killer and a nation killer because it will sink our competitive position relative to other jurisdictions, which will be able to attract capital in an age where, of course, labour and capital are mobile.

The deliberate design feature of 35,000 fewer houses is bizarre, but at least it is consistent with a government that has built 30,000 fewer houses each year—just by an $80 billion investment. Who could believe that a government could increase investment to the tune of $80 billion and get fewer things as a result? When we hear these ridiculous motherhood statements from this shocking government about their investment in housing—what matters is the result. Just because you spend more money doesn't mean you get more stuff. When you lose it in corruption and productivity losses, it's gone. And when you fail to address the core problems of the red tape disaster, the CFMEU running the show, the inflated labour costs, the corruption and the crooks, then you end up with fewer things. So more money doesn't mean more stuff. I don't know what he did his PhD in, but it certainly wasn't in anything practical or anything to do with economics or housing.

Then we have this issue of the arbitrage, where the good doc has found a way to help out his bros, the unions. He's got Wayne Swan and the 40 thieves with their hands in the till. They only pay 10 per cent CGT, but everyone else pays 30 per cent. So if you're Cbus super fund and you go and buy some shares, you only pay 10 per cent capital gains. But if you're a poor old punter living somewhere in Australia and you buy the same shares, you'll pay 30 per cent. This is the system that Labor has put in place to protect its mates. It's got a secret good deal for its mates in the super funds and a similar good deal for foreign fund managers who can invest in housing and pay 15 per cent withholding tax when everyone else will pay 30. So these, at the end of the day—the arbitrage, the 30 per cent capital gains tax and, of course, the higher rents—are the consequences that the Australian people will have to live with because this government doesn't like Australian enterprise. It doesn't like the idea that people should be able to get ahead and invest.

Of course, at its fundamental point, it must be recognised that people have already paid tax on this money. We're living in a country with one of the highest pay-as-you-go systems in the world, probably the highest in the English-speaking world. And now you've got the highest capital gains tax system. So you've got more taxes than you can poke a stick at, and you've got a so-called reform, $77 billion in new taxes, which is not a reform. More tax is not reform. There are more holes in it than a piece of Swiss cheese because they're helping out their mates while they smash the battlers.

Lisa Darmanin

I find Senator Bragg's contribution on this issue somewhat curious. He has what is really an obsession with industry super funds—Cbus in particular—when they're working on delivering decent and fair retirement outcomes for all Australians, and I think it is getting in the way of Senator Bragg being able to have a look at what's really in front of us in terms of these tax reforms.

While Senator Bragg has been feeling quite eager to comment on some of those matters and these reforms here in the Senate chamber, he certainly didn't take up the full opportunity to do so during the important inquiry last week, having not attended at least half of it. Senator Bragg was notably absent for much of the detailed scrutiny undertaken by the Senate Economics Legislation Committee during the inquiry and the meetings in the lead-up. It's always easier to complain at the fringes than actually engage with the evidence, but, unsurprisingly, the evidence does really matter.

The first thing the evidence tells us is that Senator Bragg's motion rests on a false premise, because here's the thing: what is before the Senate is not a new tax. What the government is proposing is a reform to the capital gains tax discount, and that distinction matters. For 26 years, Australia has provided a 50 per cent discount on capital gains for assets held for more than 12 months. That concession has become increasingly expensive, increasingly poorly targeted and increasingly difficult to justify. As I mentioned just earlier today, the Parliamentary Budget Office estimates that more than $38 billion in revenue has been forgone through capital gains tax concessions since 2010. Evidence before the inquiry last week estimated the annual revenue cost of existing concessions has been more than $21 billion. Governments must act and respond to impacts on the Australian people, not stand still and wring our hands because it might be too hard to undertake important reform, because Australians deserve better. We are talking about whether taxpayers should continue to subsidise one of the most generous discounts in the tax system, regardless of whether that concession is delivering public benefit.

The evidence before the inquiry was overwhelming. Who is really benefiting? Evidence presented to the committee showed that 82 per cent of the benefits of the capital gains tax discount flow to the top 10 per cent of income earners. Three-quarters flow to the top five per cent. Nearly 60 per cent flow to the top one per cent. That is not a concession primarily helping ordinary working Australians; it is a concession overwhelmingly benefiting those who already hold substantial assets, and it comes at a substantial cost. Billions of dollars in revenue are forgone every year through these arrangements. The alternative being put by Senator Bragg is to preserve billions of dollars in tax concessions flowing overwhelmingly to the wealthiest Australians while opposing tax relief for 13 million working Australians. Labor makes no apology for supporting working people over tax concessions for the already wealthy.

At a time when younger Australians are finding it harder than ever to purchase a home, when wealth inequality is growing and when income from work is often taxed more heavily than income derived from appreciating assets, it is entirely reasonable for governments to ask whether these settings remain fit for purpose. That is exactly what these reforms do. They retain recognition of inflation through indexation, they retain important small-business concessions and they retain incentives for genuine product investment. But they also recognise a simple principle: that a fair tax system should not provide the largest benefits to those who need them least.

Senator Bragg claims Australians are being misled. What is misleading is how Senator Bragg and the rest of those opposite arguing against these reforms have characterised them. Cherrypicking aspects of the reform and manipulating the data just spreads concern and anxiety, which is just incorrect. What is before the Senate is an ambitious reform agenda, and Labor makes no apology for that. We are proud to be putting forward reforms that take on structural inequities in the system—reforms that ask whether longstanding concessions are still delivering in the national interest. It should not mean preserving tax concessions that overwhelmingly benefit those who are already at the top of the income and wealth distribution. These reforms are about fairness, they are about integrity, and they are about ensuring that the Australian tax system delivers for working Australians.

Nick McKim

Australia desperately needs genuinely progressive tax reform. I say to the Australian people: if you are working harder and harder and falling further and further behind, if you're struggling to pay the rent, if you're struggling to pay the mortgage, if you're struggling to get in to the housing market, if you're struggling to see a doctor, if you're struggling to pay your kids' school fees, and you are wondering where all the money's gone, check the bank balances of the billionaires. Check the bank balances of the one per cent because that is where your money is going. While you work harder and harder and pay decent amounts of tax on your income, the wealthiest one per cent of Australians are effectively paying no tax at all as their bank balances go through the roof.

Let's be really clear about something: you cannot work your way to $1 billion, let alone $2 billion, $5 billion, $10 billion or $20 billion. You can't work your way to that kind of money. The only way you can make that kind of money is if you've got a massive amount of capital to start with and you invest that capital—you buy things, you buy property portfolios, you buy shares and you put your money in tax advantaged trusts. Your wealth goes up, and the government doesn't make you pay your fair share of tax on your wealth. Unlike if you go to work as a cleaner, if you go to work in hospitality, if you go to work as a nurse or if you go to work as a carpenter—you are paying your fair share of tax.

Why shouldn't the billionaires pay their fair share of tax? Why shouldn't the one per cent pay their fair share of tax? Why shouldn't the big, price-gouging, polluting corporations pay their fair share of tax? The question actually is: why don't they pay their fair share of tax? I'll tell you why: it's because they've captured the political class in this country from the Liberal Party and the National Party to the Labor Party and now to One Nation. Every single one of you is in the pockets of the one per cent and the big, polluting, price-gouging corporations and is in cahoots with each other to make sure the super wealthy don't pay their fair share of tax and to make sure the big corporations don't pay their fair share of tax. The result is an economy where wealth flows upwards into the pockets of the few while the many work harder and harder and fall further and further behind. Shame on the lot of you!

Long debate text truncated.