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The trickle-down tax cuts that just make the rich richer

Speeches in Parliament
Adam Bandt 8 Oct 2020

House of Representatives · 8 October 2020, 12:00pm

Adam Bandt [by video link]: This budget is a trickle-down con, and these bills, which are being rushed through the House right now with, it seems, the support of everyone else in the House, are going to lock in the transfer of hundreds of billions of dollars, being taken away from the public purse and going to line the pockets of big corporations and the super wealthy. Let's be crystal clear about what these bills that are being rushed through by Liberal and Labor will do. They will take hundreds of billions of dollars that could be going to fund schools, hospitals, renewable energy and free education in this country and use it to give tax cuts to millionaires and the super wealthy and to deliver tens of billions of dollars a year to big corporations, which currently already pay no tax, to go and spend as they wish, without any constraint at all.

Let's go through these measures one by one. It's important to understand just how egregious this spending is. I want to place on record that it is extraordinary that, with only a couple of days notice, we are being asked to vote on bills that lock in hundreds of billions of dollars worth of spending. Yes, we are in a crisis. Yes, we have a million people looking for work. But this government came in here and cut JobKeeper and JobSeeker and now turns around and says, 'We want to give millionaires even more money and we want you to rush it through parliament.' Well, no. The Australian people are looking to this place for leadership on how we are going to bring down unemployment—not to six per cent, as the Treasurer wants, but to full employment, where we have two per cent unemployment. We need to ensure that we are spending our money not only quickly but wisely. We need to spend it in a way that is going to generate full employment, tackle the climate crisis and tackle the inequality crisis in this country. Instead the government, with Labor's backing, is rushing through bills that are going to make inequality in this country worse, that are going to fast-track the climate crisis and that are going to help line the pockets of millionaires.

Why do we say that this is a budget that is going to help millionaires but not the million unemployed? It is very, very clear. These tax cuts are a trickle-down con. Under these tax cuts, what many people don't know is that, for middle- to low-income earners, you might get a boost this year of $1,000, but it runs out next year. Someone who is on $60,000 gets zero next year from this so-called tax cuts package, but a millionaire gets 2½ grand, and it stays forever and keeps on rising. Under this bill, millionaires get $2,500, the working poor get $250 and the unemployed get a kick in the teeth. This is a budget for the millionaires, not for the million unemployed, and Liberal and Labor are waving it through. These tax cuts go overwhelmingly to the top. There's a short-term cover for people who are on middle to low incomes, but that runs out after a year, whereas the higher income earners, including millionaires, keep getting it forever. What does that mean? It means that this multibillion dollar package, which is going to take away from money that could have been going to schools and hospitals, is going to be handed out in away that makes the millionaires and billionaires even richer. Next year, under this bill, 96 per cent of the tax cut package goes to the top 30 per cent of income earners, so the bottom 70 per cent of the population gets four per cent of the money.

That is why this budget and these tax cuts are a trickle-down con and why Labor should not be waving them through.

The inequality gets even worse. Next year we know that 69 per cent of the benefits of the tax cuts go to men and only 31 per cent go to women. In a budget that leaves women behind, this bill and these tax cuts make the situation worse. We know the recession has hit women the hardest and women have lost jobs at a higher rate. Women have had to not only bear that high rate of job loss but carry the can in many instances for the increased caring responsibilities that come from people being in lockdown. Plus, many of the industries in which women work and will be looking to get back into as the recovery picks up are the ones that have been the hardest hit and might take longer to get back up. Plus, the government's further attack on education, universities and child care will make it harder for women to find their way back to jobs in those sectors.

And here we have a bill that makes the situation worse. Here we have a bill that's part of a budget that enshrines cuts to JobKeeper and JobSeeker. It will deliver tax cuts to men at more than twice the rate than to women. It gives 96 per cent to the top income earners and four per cent to the bottom 70 per cent. It is being waved through. The cost of this will be enormous because there is less money there for schools, hospitals, free education and public housing.

The Parliamentary Budget Office costed bringing forward by two years these tax cuts, which aren't, as I said, aimed at low- and middle-income earners but deliver the overwhelming majority of the benefit to the top income earners, including millionaires. What did the Parliamentary Budget Office say this would cost? They said that bringing forward the tax cuts in this package by two years would cost $28 billion. If the government used that money to help fund some public investment and borrowed to invest in some infrastructure for Australia, we could build high-speed rail down the east coast and over 300,000 new public housing units. With the amount of money being dished out at the moment we could be giving tens of thousands of people jobs. Instead, Liberal and Labor want to give tax cuts, including to millionaires. This is money that is coming out of the pockets of everyday people and going to the top.

In a recession, when one million people are unemployed, there is no justification for giving tax cuts to millionaires. There can be no justification for giving Clive Palmer and other millionaires a tax cut while there are one million people looking for work. It will not create work. It's not only unfair but bad economic stimulus. People like Clive Palmer and millionaires who have kept their jobs and their wealth throughout this recession will just pocket the extra $2,000 a year they get out of the public purse. If we lifted JobSeeker and invested to give people decent jobs on nation-building, planet-saving projects then people on lower incomes would take the money and spend it.

We have got now more than one million kids in families who have been pushed into poverty as a result of the government's cuts to JobSeeker. How can it be that in this budget there is money for a tax cut for millionaires and Clive Palmer but not enough money to lift JobSeeker and lift children out of poverty? That is what this bill represents. That is this bill that Liberal and Labor are fast-tracking through.

The cost of these tax cuts is going to be felt for generations. In the future years the cost of the tax cuts alone is going to be in the order of $50 billion a year when all of the stages of the tax cuts are baked in, according to the budget papers and according to estimates. That's $50 billion a year! For about half of that increase in debt we could fund 100 cent renewable energy, we could have free child care, we could have free education, we could build half a million new public housing homes and we could lift people out of poverty by giving everyone in this country an income that they could live on. That's what we could do for about half of the $50 billion that these tax cuts are going to start costing the budget every year.

Instead of the government saying: 'We've got the money in the public purse. Let's use it to invest and to create jobs,' like they did after World War II and like the United States did after the Depression to get back to full employment, what is the government doing? It's not lifting public investment and it's not creating jobs; it is just giving it straight to the wealthy, and it's doing it with Labor's support.

This creates a very bad precedent. If we now have a situation where tens of billions of dollars can be funnelled out the door without even the most basic of scrutiny then this parliament is in a very distressing place, because what we are doing here today is going to tie the hands of what future generations are going to be able to do. As they deal with the climate crisis and as they deal with an inequality crisis, they going to be stripped of the ability for government to intervene and lead.

With this money—with these tens of billions of dollars that have been shovelled upwards through this budget—we could fund a green recovery. If you don't believe us, have a look at Boris Johnson over in the United Kingdom, who says that instead of subsidising coal-fired power stations and gas plants—as the government wants to do in this budget—let's have every house in the country powered by wind energy through a great, big, new build of offshore wind. It is possible to follow the lead of the Europeans, who've got their own green deal, or the South Koreans and to say that the way out of the economic crisis that we're in, the way out of the inequality crisis that we're in and the way out of the climate crisis that we're in is through a government-led plan of investment and action that will tackle all of these crises by investing in the industries that will make our climate safer and make our society more equal.

We should not be giving billions of dollars in a 'tax cuts to millionaires' package that's going to disproportionately discriminate against women and that's going to go to the top rather than to everyone else. Instead we should be asking these billionaires and the big corporations to pay their fair share of tax, and we should use that to create jobs through a recovery plan that grows work in our health and our care sectors, that expands our education sector rather than cuts it, that builds 100 per cent renewable energy in this country and that fast tracks high-speed rail right down the east coast.

What is crystal clear from this budget and this bill is that, from now on, neither Liberal nor Labor can ever say to us, 'Where are you going to get the money from to fund things like 100 per cent renewable energy, free child care or free education,' because the money is clearly there. Right now—today—the government and Labor are funnelling tens of billions of dollars out the door, which is going to go to the pockets of big corporations and millionaires. That money would be better spent on a recovery plan that makes our society more equal, that grows our education and care sectors and that gets us to 100 per cent renewable energy while kicking off a manufacturing renaissance in this country by investing in the likes of green steel. That's what we could be doing with these tens of billions of dollars. Instead, the government's plan is basically to outsource the whole of the recovery.

The government is outsourcing the recovery plan to billionaires and big corporations. The investment and the asset write-off that's proposed in this budget is basically premised on a hope and a prayer that, if we allow big corporations to write off everything that they purchase, they will hopefully invest it in things that create jobs. That kind of trickle-down thinking hasn't worked in the past, and there's no reason to think it's going to work again this time, because there's every chance that big corporations will just see the tax write-off coming from the government and go and use it to buy cheap computers from China. There's nothing in this proposal that requires an increase in expenditure that will lead to more jobs or an investment in Australian-made products—no, the government is not doing that. It's just letting big corporations write the rules.

At the moment, one in three of our biggest companies in this country pays no tax, and this government's plan is to increase that to two in three. This bill will allow two in three of our biggest corporations to basically have no tax liability. At a time when the gas industry brings in around $50 billion a year in income but pays zero tax, we should be looking at ways of making the big corporations that have survived this corona crisis in rude financial health—and that have, in fact, increased their wealth through this—pay their fair share of tax to fund our schools, our hospitals and our health care.

Instead, the government, with Labor's support, is saying, 'Let's raid the public purse so that we can give millionaires and big corporations a chop-out and hope that some of it finds its way back down.' This is not the green recovery that we needed. We needed a green recovery, but this budget is all brown and trickle down. We should be standing up to this government. We should be scrutinising this multibillion dollar spend. We should be saying, 'Let's make this money go to the people instead of the billionaires and the big corporations.'

The Greens will fight for the millions, not the millionaires. But the government and Labor, with this bill, are shovelling money upwards at an unprecedented rate, and it will damage us for generations. 

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