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senate vote 2018-08-22#1
Edited by
mackay staff
on
2023-06-16 08:40:14
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Title
Bills — Treasury Laws Amendment (Enterprise Tax Plan No. 2) Bill 2017; in Committee- Treasury Laws Amendment (Enterprise Tax Plan No. 2) Bill 2017 - in Committee - Large ADIs
Description
<p class="speaker">Sue Lines</p><p>The committee is considering amendments (1) to (36) on sheet JP186, moved by Senator Cormann.</p>-
- The majority voted against [amendments](https://parlinfo.aph.gov.au/parlInfo/search/display/display.w3p;query=Id:legislation/billhome/display.w3p;query=Id%3A%22legislation%2Famend%2Fr5867_amend_0166d8d6-6259-4564-9cf4-3367aa3dd5a6%22;rec=0) moved by West Australian Senator [Mathias Cormann](https://theyvoteforyou.org.au/people/senate/wa/mathias_cormann) (Liberal), which means they failed.
- The [purpose](https://parlinfo.aph.gov.au/parlInfo/search/display/display.w3p;query=Id:legislation/billhome/display.w3p;query=Id%3A%22legislation%2Fems%2Fr5867_ems_a3380d2d-f5e1-4563-a4d6-219ab5f67932%22;rec=0) of the amendments was to ensure that the corporate tax rate for large authorised deposit-taking institutions' (ADIs) will continue at 30%.
<p class="speaker">David Leyonhjelm</p><p>These amendments moved by the government will essentially make it impossible for the banks to take advantage of the tax cuts. I just wish to speak briefly on my position regarding that. As a general principle, it is not at all good policy to regulate banks or any sectors of the industry via tax policy. The idea that you can discipline the banks or somehow teach them a lesson about their misbehaviour, as exposed in the royal commission, via tax policy is extremely bad policy. It is an extremely bad idea. Nonetheless, it is not quite as bad as the idea that a company with over $500 million in turnover should also be denied the advantage of lower taxes. That policy, which emanated, I gather, from Senator Hinch, is cockeyed—like many ideas that emanate from Senator Hinch—and I certainly can't be supporting that under any circumstances. That would be a tax on success. It would be signalling to companies: 'Don't get too big, otherwise we will punish you.'</p><p>On the other hand, while the idea of exempting the banks from the tax reduction is a bad policy, I am willing to support it. I am willing to support it on the basis that the banks are big enough and capable enough of looking after themselves. The difference between the rate of taxes that the banks pay and the rate that other large businesses pay would only kick in in about 2026. I can envisage a situation where the banks are facing that scenario of paying 30 per cent tax, while all other companies are paying 25 per cent tax, and the banks would say: 'We can't sustain this. This is not acceptable.' So one bank one week would say, 'All right; that's 2,000 people who are now going to be made redundant.' That would gather quite a lot of headlines, and people would say: 'That's pretty bad. Maybe we've made a mistake.' Then a week later another bank might retrench 2,000 people. By that stage, people would be saying, 'That's really quite bad. I don't think we can continue with that.' And, if a third bank then says, 'Okay. We've got 2,000 people who we don't need either because of this high tax rate,' even if it was a Labor government in coalition with the Greens and they were inviting us to celebrate the socialist nirvana, they would find it politically unacceptable to be witnessing redundancies at that sort of rate.</p><p>I guarantee any government would back down and say, 'Okay, you can also have the tax cut.' On the basis that the banks are capable of looking after themselves—and I've just suggested one way in which they could look after themselves—I am prepared to accept that amendment from the government and vote for it. However, I signal that I absolutely will not be supporting the other amendment, which we'll be considering later today, which is to have a threshold for the tax reductions of $500 million in turnover—that is totally unacceptable.</p> <p class="speaker">Peter Whish-Wilson</p><p>I want to get a few comments on record in relation to these amendments. Firstly, the Greens have made it obvious from the start that we will be opposing any corporate tax cuts in this place. We have campaigned very strongly for tax cuts for small business in Australia. We took a policy to the 2013 election for tax cuts for businesses with a turnover of less than $2 million. We were proud to be part of the vote in this chamber that actually saw that happen. We did get tax cuts for hardworking, struggling Australian small businesses. That's something that we led on and we're proud that we actually legislated on. But we've made it very clear that we won't be supporting tax cuts for any business over $10 million, and our position hasn't changed.</p><p>The fact that we have two amendments before us today will not change our position. We will not be voting for either amendment to exclude the banks or to make tax cuts over $500 million, for the simple reason that we won't be doing anything to encourage the passing of these bills through the Senate.</p><p>Let me say on the banks, no-one has worked harder in this place than the Greens to hold the banks in this country to account. We were the ones who started a campaign for a royal commission in 2014. We pushed that hard. It took us a few years, but we got the Labor Party on board going into the 2016 election. We put a parliamentary commission of inquiry bill, which became the Trojan horse in this place, to actually get the numbers to force the Prime Minister's hand. We worked with The Nationals, we worked with One Nation, we worked with the crossbench, I worked with the Katter's Australian Party, I worked with everybody to get this in place, and that royal commission has done a great job so far. There's still a long way to go, and we're hoping for some substantive changes to the banking sector.</p><p>There's no problem at all with us stinging the banks for more revenue. We campaigned since 2010 for a levy on the big banks. We got a levy on the banks in this government, and I'm proud that another achievement the Greens have been leading on has been passed into law. It wasn't big enough. We'd like to see it at least another 20 basis points to account for the too-big-to-fail implicit and explicit guarantees that we've seen in this country since the GFC to pay the Australian people back for some of the insurance that they've provided to the banks that have allowed the banks to earn super normal profits—excessive returns on capital and massive CEO bonuses. We'd like to see more money given back to the Australian people, and we think it's a consistent approach to increase that bank levy, at least 20 basis points, and raise revenue off the banks. While, in principle, we might support excluding the banks from having tax cuts, we're sticking with raising the bank levy as the best place to go.</p><p>I did mention yesterday very quickly, it does seem incongruous that we have a $500 billion cut-off for a large ADI in this legislation, whereas, in the bank levy legislation, we levied that on the big banks at $100 billion. I'm not quite sure why this arbitrary figure has been chosen at $500 billion. It excludes Macquarie Bank, for example, which is very disappointing. I'd like to see them also forgo their tax cut if that was to come into law.</p><p>On the issue of tax transparency, once again I'm very proud to have been part of a party and a charge that was led by Senator Milne when she was here into tax transparency and tax justice, a very far-reaching Senate inquiry into this issue that we initiated. We worked very hard, once again, across party lines to get legislation passed in this place, including the MAAL bill and a number of things around tax transparency to actually make corporations pay their fair share. I don't think any of us in this building—and I certainly don't think any of the stakeholders we talked to or the Australian Taxation Office, which is still fighting to get money off big corporations—would agree that they're still paying their fair share of tax, because they're not. So how is cutting tax on companies that still aren't paying their fair share of tax a fair thing to do? We should be keeping up the fight. That should be our focus. We've been very clear about that in this debate. Our focus should be on getting money off these corporations in the first place. We'll continue to ask questions at estimates of the ATO about how they're going in their campaign to get tax justice through the courts and other measures. This needs to be the key focus of this chamber.</p><p>We have completely disputed the evidence that somehow a race to the bottom on cutting tax is going to improve our economy. I've heard Senator Cormann talk about this ad nauseam in the last 24 hours. The evidence is not there in the US. There have been a number of people criticise and debate the Treasury modelling that has been put out or other government modelling that the government has shown. I asked Senator Cormann yesterday what would be the cost to the economy of excluding the banks, under the assumption that somehow this tax cut is going to grow revenue and cause economic growth. Of course, that wasn't even in the explanatory memorandum. That modelling hasn't been done. This is a pipedream.</p><p>This country needs to raise revenue. We can actually increase economic activity in other ways. At the last election we as a party put together a comprehensive plan for a government owned infrastructure bank and a financing mechanism to drive an infrastructure revolution in this country, which would create jobs and growth and set this country up for the next century. All this stuff is a blueprint and a plan to press reset for this country. The government have completely ignored that. They have completely squibbed infrastructure spending in this country, just like they have squibbed so many other things.</p><p>I say to Senator Cormann, through you, Chair, that now is not the time to be voting on tax cuts for big corporations. The government are very likely to change in the next week and completely change their focus. Senator Cormann, you can laugh, but history tells us that this is very likely to be the case. This policy has no evidentiary basis. It is built on ideology. It is built on the donations by large corporations to the Liberal Party. We are debating this at this sensitive time because the Liberal Party want to be seen to be in this place fighting for their big backers. That's their lifeline in this place. Without those donations, they can't function effectively and run big election campaigns to continue to get re-elected.</p><p>This tax bill has been dead from the start. It has never had support. Senator Cormann yesterday came in here and said that it's inevitable that this Senate will one day pass big corporate tax cuts. I say to Senator Cormann: there may be situations where I could see that happening—when we don't have a shortage of revenue in this country; when we don't have a government attacking the poor and vulnerable in Australia, trying to take money off those who desperately need it and our social safety net; when we are able to raise Newstart to help those on the poverty line live a better life and actually reinvest that money in our people; when we are not cutting funds to schools and hospitals; and when we don't have the same ideologically driven approach to attacking the vulnerable in this country. That might be a time when we can consider cutting corporate taxes, but now is not the time. There's so much more that we can do to increase economic growth in this country. We have made enough speeches and been on the record. I'll finish by saying that we won't be supporting these amendments.</p><p>The CHAIR: The question is that the amendments moved by Senator Cormann be agreed to.</p><p>The committee divided. [09:48]</p><p>(The Chair—Senator Lines)</p><p>Question negatived.</p> -
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