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A better tax reform debate

Speeches in Parliament
Richard Di Natale 1 Mar 2016

I think the government's problems on this tax reform debate, indeed the government's problems under its former Prime Minister Tony Abbott, can be sheeted home to the simple proposition that really is its underlying philosophy. That proposition is this: this government, consistent with their philosophy, want to reduce taxes—income taxes, corporate taxes—and the cost of doing that is that we then do not have the revenue to fund essential services, things like health care, education, or to fund vital public infrastructure.

The simple proposition that this government is putting forward to the Australian community is: 'We want to lower taxes. It is a pretty simple equation. The cost of doing that is that we won't be able to afford the current healthcare system and education system you enjoy.'

The government need to use all sorts of language around budget emergencies, how the country is going to rack and ruin and how we are on the same path that Greece is on and so on because, in order to justify that proposition on taxes, they need to ensure that the Australian community is adequately scared into supporting this vision. It is what they tried to do with the 2014 budget. They softened people up. We had a budget emergency. Things were worse than Greece. We needed to take drastic action. So the 2014 budget was handed down, and it reflected those priorities. There have been all sorts of commentaries and analyses about why that budget failed so dismally—that it was poorly sold, it was misunderstood and so on—but they totally miss the point. That budget was very clearly understood by the Australian community. They understood what this government was trying to do—that is, to erode our tax base, and the consequence of that was Medicare co-payments, money ripped out of schools, money ripped out of hospitals, slashing income support for young people who cannot find a job. And do you know what? The Australian community rejected it. They rejected it outright. They said to this government, 'We don't support where you are trying to take us.'

And that is the problem with where this tax reform debate has got to. We have a government that have tied themselves up in knots. We know what they would like to do, but they are simply unable to do it because the Australian community have said very loudly, very clearly: 'We don't like it.' The government do not have the courage to run an argument that says, 'We think that we should lower taxes and we think that the cost of that should be that we do not fund the services that we currently fund in the same way.' That is why we have this nonsense about healthcare spending being unsustainable. Healthcare spending is only unsustainable if you choose it to be. If you pay for it, it is sustainable. If you invest in education, it is sustainable. How is it that you can have a two per cent target for Defence spending, and yet our current spending on health care is unsustainable? It is a nonsense argument.

The problem that this government have is that there is a profound lack of honesty in what they are trying to prosecute when it comes to their debate around tax reform. They need to have a bit of courage. They need to recognise and come clean with the Australian people. Our view around tax reform is very, very simple: yes, we do believe in raising revenue to pay for things like health care and education. One way to do it is to end those unfair tax breaks that exist within the tax scheme. We do think it is important to fund infrastructure—we want to build up Medicare, we want to invest more in public schools—and if the cost of that is ending these are unfair tax breaks, then let us do it.

One of the other objectives of tax reform is to do something around that huge and growing gap between the rich and the poor in this country. That is a real issue. We have growing income inequality in Australia, and it is corrosive in all sorts of ways—not the least of which is that it is a huge drag on the national economy. And by ending those unfair tax breaks within the property market and within the supermarket and so on, we can do something about that growing level of income inequality. Tax reform should be about taxing externalities. That is why we support a price on carbon. In fact, things like an increase in the tobacco excise is also part of that. And of course getting money moving in the right places, boosting productivity. There is nothing productive about parking money in the property market, within super and so on in an effort to minimise the amount of tax that you pay. That is why the Australian Greens have been leading the debate on negative gearing. More than a year ago we put out policies on that front, on superannuation and of course ending huge subsidies for the fossil fuel industry. A bit of courage and vision, that is what you guys need.

Senator LINES

You would be forgiven for thinking the song by the Boomtown Rats might be the PM's favourite song—it is certainly a song that has become synonymous with the kinds of gaffes that he seems to make on Mondays that then continue for the rest of the week. Last Monday's gaffe was on the capital gains tax. Was it in, out, off or on the table? The Prime Minister said in the parliament last Monday:

… increasing capital gains tax is no part of our thinking …

That is what he said last Monday. But, as we all know now, within hours of making that statement it was not the backbenchers this time but the Prime Minister's own office in damage control telling journalists, 'Oh no; the government is still considering the capital gains tax.' Then, if we were in any doubt about what was being considered—what was on or off the table, in or out—that was confirmed later when the talking points on the capital gains tax were leaked from the Prime Minister's office, saying capital gains tax is still being considered. I do not know how you can have your own office contradicting what you say. You would think that if they went into damage control they might back the Prime Minister in, but they did not. They came out and contradicted their own boss. That is extraordinary.

Again, thinking of the Boomtown Rats and , Monday this week has not got off to a very good start either, because today in the news we had the Prime Minister's own department voting down their enterprise bargaining agreement. Why are they doing that? They have done it overwhelmingly, not once but twice. Twice now they have voted it down, because the public servants in that department, the Prime Minister's department, just like Australian voters, can smell a rat. They have certainly smelt a rat on what is fair and what is not. The agreement that has been voted down seeks to take their rights away, which is what the Turnbull government wants to do to ordinary Australians—make life harder. That is what they are doing, so public servants in the Prime Minister's own department, this Monday, have said, 'We do not like that deal and we voted it down.'

The Turnbull government usually demonises the CPSU—'It's all the union's fault.' We have not heard that yet, but it is very difficult to do that when it is your own department that has voted the agreement down. When the Prime Minister walks through that department maybe he scurries through with his head down, when significant numbers—I think 68 per cent—voted that agreement down. It has been universally knocked off by the PM's own department, so I doubt that we will hear the usual union sledging that goes on that somehow it is the CPSU's fault when in fact, today, public servants in the Prime Minister's own department have voted it down.

That is another bad start to the week. Certainly the Prime Minister's department, those hardworking public servants, like Australian voters, are just looking for a fair deal. They want to see a government that proposes fairness in their system, but that is not going to happen with this government, because it is only interested in the big end of town, not ordinary, hardworking Australians.

Then we have that debacle by the poor old Treasurer, who now, I think, is missing in action. He has not said much out in public recently. There was that appalling National Press Club speech, almost on the eve of his budget, when he should have had a clear idea of what he was going to say, what was on the table and off the table, what was being considered and what was not; except that a few days before that, because of public pressure and pressure from the Labor Party, the GST was finally ruled off the table by Malcolm Turnbull. Remember that day: the Prime Minister said the GST was off the table, then we had one of his own ministers, Senator Cash, saying that actually it was on the table. Again we have a cabinet minister and the boss, the Prime Minister, saying completely different things.

I think the only group you can believe, whether you like their policies are not, are the backbench, because when they say things it seems to work. We seem to have reviews of the Safe Schools programs; we seem to have all sorts of things happening when the backbench speak. I think the Turnbull government is being ruled by the backbench, so let us see what the backbench are saying about tax policy, because that will give us a much clearer idea of what is in and what is out, what is on the table and what is off the table, from the backbench. The backbench is out there today, and I think they were out there even last week, agitating around negative gearing. We know some of the backbenchers, like many of us in this place, have negatively geared properties. I put on the public record last week that that includes me, but I think Labor's policy on negative gearing is a good one. It is a sound one. But what you will hear from those opposite is just a trashing of that policy. They are trying to scaremonger. Despite the Prime Minister saying that three-word slogans were out and we would now have considered debate and somehow consult with the Australian people—the Australian people like Labor's policy on negative gearing, which grandfathers existing properties and looks at new properties into the future, despite what you will hear from those opposite, because they have never, ever let the facts get in the way of a good story.

Mr Morrison, the Treasurer, has now been left with just looking at far more modest measures. That is really how he has to define his budget. When the backbench have finished within, I am sure it will be even more modest, because the backbench, as I understand them, do not want any change, so I doubt that we will have any change, because they are the ones who are accurate.

Mr Turnbull has made many comments. He had that wonderful desire to do something about bracket creep. We have not heard the backbench talk about bracket creep, so I am not quite sure the view of the Turnbull government is, but certainly he was immediately contradicted by the finance minister, who said that bracket creep, apparently, was not the problem that it used to be. Yet it was a signature part of the Treasurer's rhetoric in his conversations until and even at the National Press Club, where I think he mentioned bracket creep, although I would be happy to be corrected.

Senator Gallagher

Two weeks is a long time.

Senator LINES

Thank you, Senator Gallagher—two weeks is a long time, but I think we can rely on information from the backbench. That is where policies are going. Certainly, the Treasurer has said that investor tax concessions were being looked at very carefully. He said he would not do anything crazy. That is relief—I guess we would all think that was a good thing. So no crazy things, although I am not quite sure what his definition of crazy is, because their first budget after being elected was crazy. That, along with three-word slogans, brought down the Prime Minister.

But again, it is very confusing because apparently we brought down the Prime Minister because he was not really doing the job; yet when we look at the new Prime Minister, Mr Turnbull, he seems to be just lining up with the old policies. I am not quite sure why we changed Prime Minister, because we have got a new Prime Minister who up until last week did not use three-word slogans but he tried that last week in the parliament and failed dismally. He tried to invoke his inner Mr Tony Abbott and it did not really work for him that well, even though he still supports all of those policies. I am not quite sure even where we are up to with the old three-word slogans.

Apparently, the Treasurer said that there were excessive excesses with the GST, and now today we have seen the Prime Minister and the Treasurer not being able to name any. Goodness me, this is shocking. This is tax policy led by the backbench and the media. There is no clear, coherent plan. Those in the know are now saying the only party that has got coherent policy out there around tax is Labor—of course, we have. But we have been our consulting; we have got good policy on the table.

Senator BACK

At some time in the second half of this year, the Australian people will have to make their minds up about who they trust to manage our economy into the future. It is a critically important question at any time, but especially so now as we have the black clouds hanging over the world economy. The next five to six years are going to be very difficult for this country, this region and the world generally. This is the reason why the Turnbull government is consulting widely, taking advice from every sector and not rushing precipitously into decisions.

The contrast is clear, and that contrast is with the alternative: the Labor government of the last six years. It was a government that was not able to carefully consider options and a government that was not able to stand back to consult widely from broad, cross-section of the community before they made their precipitous decisions and set about destroying what was a very, very sound economic circumstance in this country. That was one of no net debt, no deficits and cash in the bank.

Let me just reflect on a couple of those quickly, like the Gillard memorial halls. That, as we know, largely wasted around $16 billion of expenditure. There was a circumstance in Victoria where by the time the money actually came to be spent there was not a need to do it, but they could not claw it back. There was a circumstance in New South Wales where we know there was fast overcharging of poor quality properties, where schools had the situation of classroom blocks being knocked down to put temporary classroom blocks in place that were inferior. We had to—through the exercise of the committee of which I was a member—organise Mr Brad Orgill and his group to do an in-depth evaluation, in which he came up with the failure of what was a precipitously organised program.

I then move to the mining tax, a tax which excluded Mr Martin Ferguson—probably the only person on that side who had any knowledge at all of the resources and energy sector—from a series of negotiations with major miners. They were told by this side and by people in the community generally that the mining tax would earn no net income at all—and it did not. Companies paid millions of dollars to be able to prove they would not be paying the tax. But worse than that, Mr Swan—the then world's best Treasurer—made the estimate as to how much money he would make from this mining tax and then spent it. As time went on, we knew very well that the mining tax would make no money and that it would cost more. Imagine a tax, even from a Labor government, that actually cost more than it brought in. So then we had a circumstance where it had to be reversed. I could go on further: pink batts. I could talk about the vehicle leasing scheme, et cetera.

Now, I turn to the latest of the failed examples of poor planning by an incompetent group, which is now in shadow ministry, and that is negative gearing. The property sector is the largest sector in the nation: it accounts for 11½ per cent of our national wealth and it creates more than 1.1 million jobs in this economy, more than mining and manufacturing combined. Understand that there are some 840,000 Australians with taxable incomes below $80,000 a year who negatively gear property. That includes, let me read them out: 530,800 teachers; 52,000 retail workers; 35,900 nurses and midwives; and 200,600 hospitality workers. But understand that—because I will get to why it is such a poor policy by Mr Shorten and his group—91 per cent of the Australian community who negatively gear have only one or two properties, so we are talking about nine per cent.

Why is it such poor policy? That is because what Labor proposes would be to allow negative gearing only on new property. But what happens to that property? Whether it is purchased and built by a homeowner initially or by an investor, immediately once it is sold it ceases to be eligible for negative gearing. Therefore, this great idea of encouraging people to only negatively gear in new properties by its very definition has a very, very short time frame. So what we know will inevitably happen is that we will see a deterioration of prices in that sector, including in all of residential construction.

It was put to me on the weekend—and I do not believe it; I do not think Labor is so cynical—that residential construction, one of the biggest employers in the construction sector, is not unionised. I refuse to believe that Mr Shorten's motive would be to try to bring down a sector simply because it is not unionised. But we know the importance of the supply to construction, the real estate industry, real estate sales industry, property management, strata management, property maintenance industries and property investment itself.

That is why the proposal by Mr Shorten and his group is a poor one. Yes, I negatively gear. Yes, inevitably what happens is that over time—if you invest wisely—your properties end up positively geared. I have two properties positively geared, so they are now net contributors to the Australian tax system. It is not just the negative gearing but the capital gains tax over time that is important. I asked a staff member from my branch office in Esperance—one who I have the pleasure of saying is here in Canberra with me at the moment—what her attitude and position is. With her permission, I will tell you. She is a single young person on a moderate income. She has a teaching qualification. She invested, initially, in a small rental property. I think she invested with another family member. To quote her: 'I considered negative gearing to be my risk insurance. I would probably not have invested in property as a means of wealth creation if I did not have the safety net of negative gearing. The money earned of course has been saved.' She has built equity and she is now in a position to put a deposit down on a home for herself, in Esperance. As she said, 'I would not have built an investment property as it is stressful, time consuming and risky. But having a small, cheap, older home there waiting was easy and it created wealth.' And she in fact is part of that numeric of teachers who have been involved in this process.

I say in conclusion that the people of Australia have got a simple choice in the second half of this year. Do they want a responsible Prime Minister who will consult widely and will use the breadth of his own business expertise over time and that of his colleagues to actually come up with tax policies that will work into the future, that will put us back into a position of surplus again, so that we can meet the black clouds that are over this country. That is who I say the Australian people need to select—not the pattern of the past, that we had a Labor government that followed on from the Keating government, which built-up $95 billion of debt, and now we have about $600 billion of debt.

I finish with the comment by Senator Scott Ludlam today about affordable housing. I join with him, it is a critically important issue we have to solve it.

Senator LAZARUS

The Turnbull government is in a panic at the moment, or should I say paralysis. All they seem to be worried about is how they can game the system to take control of the Senate so they can ram through legislation to force hardworking Australians to dig deeper, while multinational companies make billions of dollars in our country and pay very little or no tax. Malcolm Turnbull is like a sparkler.

The ACTING DEPUTY PRESIDENT

Senator Lazarus, you should refer to the Prime Minister as Mr Turnbull or as Prime Minister.

Senator LAZARUS

Prime Minister Malcolm Turnbull is like a sparkler. He was all fizz and excitement at the beginning of his leadership and now he is burnt out and we are left feeling like we are holding a smouldering stick. The only difference between a sparkler and Mr Malcolm Turnbull is that people like sparklers. Meanwhile, the Turnbull government is in paralysis. My home state of Queensland is still in drought, farmers are still taking their lives, unemployment is at record high levels and jobs are going overseas. We still do not have any water infrastructure solutions, our farms are being sold off to the Chinese; and CSG mining companies are continuing to poison our people, to contaminate our water and to destroy our farmland. There is absolutely no tax policy in sight. There is nothing in sight: no policy, no action, no ideas, no strategy—nothing. There is just a plan to take ownership of the Senate so the big end of town and other countries can take control of our country.

Prime Minister Malcolm Turnbull and Minister Morrison have repeatedly said that 'tax reform is a vital issue for the prosperity of Australian businesses and families', but they have failed to provide any solid proposals. The coalition has already announced that if they could get away with it they would hit families with an increase in the GST to 15 per cent.

Now, we have seen them flip and flop on the capital gains tax and that they are out to help homeowners, but preferably those with five homes or more. What we need in Australia is help for hard-working Australians and a policy to stop the sell-off of our country. The Turnbull government needs to stop going after people who are struggling and start going after the big end of town. We are repeatedly hearing from the Turnbull government that big companies produce jobs, wealthy investors need assistance more than the average Australian and that we need to trim the fat by going after pensioners, students, and low income earners.

What I would like to see is the Prime Minister and Treasurer stop fighting over their own lack of a strategy and stop blaming their lack of effective governance on the crossbench. The Turnbull government should get its own house in order, stop attacking Australian families and go after the multi-billion-dollar companies paying less tax than the average income earner. And, Malcolm Turnbull, you need to come up to the Queensland gas fields as you promised.

The ACTING DEPUTY PRESIDENT

Order! Senator Lazarus, as I mentioned you should refer to members in the other place by their appropriate titles.

Senator McEWEN

I am pleased to be able to speak to this motion moved by Senator Moore about the Prime Minister, Mr Turnbull, and his government and their collective failure to be up-front about tax plans that are going to affect every Australian. In the lead-up to an election, you would have thought they would have something a bit more coherent and a bit more concrete when it comes to the taxation system in Australia, but so far we are yet to see it.

I was pleased to note that earlier today in the chamber we did pass a tax bill in this place. That was a bit of a novelty. That was passed with bipartisan support and was intended to provide some certainty—in particular, to small business, because as we know it is small business, which is the biggest employer in Australia and has the biggest share of the economic pie, that is most at risk from the failure of this government to develop any coherent economic or tax policy.

Since Mr Turnbull seized the prime ministership from Mr Abbott, Australians have been told repeatedly that everything is on the table with regard to tax. But it is a pretty untidy table because we have not been told what exactly is on the table. We have not been told how long anything that has been put on the table is going to stay on the table and we have not been told when there is going to be a real tax policy put on the table. Is anything that is proposed in the tax sphere by this government going to remain on the table for longer than the next Press Club statement or longer than the time until the next question time when we hear conflicting responses from government ministers, or will it be there until the next faux pas from some coalition frontbencher criticising or contradicting other government ministers.

The Prime Minister and the Treasurer, who you would have thought would have been intimately involved in this process of developing a tax policy for this country, have not been able to come to a coherent plan on tax. They have offered nothing but conflicting messages and poor salesmanship, and now they have resorted to the Abbott strategy of scaremongering about Labor's impressive tax policy that we are rolling out, in particular with regard to negative gearing and capital gains tax, taxing multinationals as they should be taxed and all the other things that we have put on the table and are leaving on the table so that the Australian people know what Labor stand for when it comes to tax. What we stand for is a fair tax system. We would not have a clue what this government stands for when it comes to tax, except looking after the big end of town.

I was talking about Mr Turnbull and Mr Morrison. Now it seems that they are barely able to talk to each other. The Prime Minister and the Treasurer in the lead-up to a federal election need to have a tax policy, but where is Mr Morrison? After the catastrophic slideshow at the National Press Club earlier in the month, Mr Morrison seems to have disappeared from the scene. We hear that the Prime Minister has outsourced development of tax policy for his government to his head of department. You would have thought by now the government would have a tax policy, but no. We hear—and it has been affirmed by some backbenchers—that there is a review of tax policy underway by Mr Parkinson. It is disturbing in the lead-up to an election that we are at this stage of developing a tax policy. But we are used to this flip-flopping.

I think I heard a senator speaking previously talking about that with regard to tax, because of course there was the whole GST saga. At one point there was going to be an increase in the GST. Then there was not going to be an increase in the GST. Then there was maybe going to be an increase in the GST. Then there was a definite no about an increase in the GST. Then Minister Cash from this place through a curveball when she appeared on Sky News and contradicted the Prime Minister by saying that the government could not rule out an increase in the GST. Well, that was not very comforting for small business or Australians, I can tell you. We had the same thing with regard to negative gearing from the Assistant Treasurer just last week, contradicting her Prime Minister. These things do not instil confidence in the people of Australia.

We need a coherent tax policy. Labor have one. I am proud of it. We will be rolling out more of it, too. The difference between Labor and this government is that we know what needs to be done for Australia. We need a fair tax system. That is what I and my Labor colleagues will be working towards.

Senator SMITH

This afternoon I also rise to join in on this matter of public importance submitted by Senator Claire Moore from Queensland. You have to hand it to the Australian Labor Party. When it comes to pure shamelessness, they are second to none. Labor senators have brought a motion to this parliament which accuses someone else of not being up-front about tax plans. You could not make this up if you wanted to. The party of Julia 'there will be no carbon tax under a government I lead' Gillard now comes into this chamber and complains that other people are not being up-front about their tax plans. I suppose you have to concede, though, that what the Australian Labor Party lacks in credibility on these issues it sure makes up for in pure hide.

Let's go through some of the facts. Firstly, quite contrary to claims in this motion, the government has made it entirely clear what it doing in relation to tax. The government is carefully and methodically working through the elements of the tax system and making an assessment about what changes will be most effective in providing greater incentives for Australians to work, save and invest. Once that work is complete, the government will make an announcement. That announcement will be made before the next election. That is as proper, methodical and careful as it needs to be. The people of Australia will have the opportunity to make their decision based on policy choices that are clear and that will be well known. That is the responsible approach to take.

I understand that it is an approach which is entirely foreign to the members of the Australian Labor Party, as the traumatic experience of the Rudd-Gillard government and its litany of policy disasters amply demonstrates. There is a reason the government are taking this approach. It is that experience has taught us that our approach works and that the approach of those opposite does not.

As senators will be aware, this week marks the 20th anniversary of the election of the Howard government in 1996. In its first term, that government embarked upon what the then Prime Minister described as 'the great tax adventure'. Mr. Howard said that the government would be careful and methodical in reviewing the tax system. He said that any changes would have to pass a number of basic tests. Mr Howard said that the changes must generate more employment, help boost exports and generate higher living standards. He said the tax changes must encourage risk taking and provide greater economic incentives. All of that sounds very much to me like what the current Prime Minister has been saying for the past week—that the government is committed to tax reform measures that 'will both be fair and provide greater incentives to work, save and invest'.

As we all recall, the Howard government undertook that detailed work over the course of its first term, just as this coalition government has been doing. On 13 August 1998, John Howard and Peter Costello announced a significant tax reform package. Just over two weeks later, on 30 August 1998, John Howard called a federal election for 3 October of the same year. It is a campaign I recall well, having had the privilege of being on his staff at the time. So, for all the hysteria we hear from the Labor Party in this place, it turns out that, in fact, this government is following a well-established precedent.

The coalition makes no apology for taking its time to get the detail right, because the damage that can be done by the alternative approach is one that was on full display over the six Labor years when those opposite were in government. The Rudd-Gillard government made a good many promises on taxation, just as they made a good many promises about delivering budget surpluses. In neither case did Labor's good intentions amount to anything.

The last Labor government introduced tax increases and also abandoned income tax cuts it had promised prior to the election. That stands in marked contrast to the record of the Howard government, which announced tax cuts in 1998, again announced tax cuts in 2003, again announced tax cuts in 2004 and 2005 and again announced tax cuts in 2006 and 2007, all the while delivering surplus budgets and paying off the $96 billion in debt that had been inherited from the previous Keating Labor government.

This coalition government is now being criticised by the people who spent $80 million on a wide-scale review of the tax system, known as the Henry tax review, and then proceeded to ignore the bulk of what that review found. The Prime Minister and the Treasurer of the day, still the member for Lilley, fought between themselves over the release of that tax report—as many of us recalled when watching on ABC TV last year. If Labor's last term in office is going to be remembered for anything aside from its horrific legacy of debt, then it surely will be for the endeavours, or lack of endeavours as it turned out, in the field of tax.

Let us just turn specifically to two tax initiatives of the previous Labor government and why they demonstrate more clearly than anything else the reason Labor cannot be trusted on the issue of tax and tax reform. Remember the mining tax? People in my home state of Western Australia certainly do. It was a tax that was designed to slug an industry that is absolutely crucial to the economic growth of Western Australia. It was introduced by a Labor government because it had blown the budget surplus and had to find some means of plugging that budget hole. As if Labor's motivation was not bad enough, its methods were even worse. Remember when the mining tax was first proposed under Kevin Rudd, in his first iteration as Prime Minister, it was projected to raise around $50 billion in revenue. The version of the tax that Julia Gillard cobbled together saw a significant write-down of that projection to $26.5 billion—a notable reduction but still a significant amount of revenue. The problem was not that first downwards revision of projected revenue to be raised by the mining tax but that the reductions kept coming and coming and coming.

In February 2012, the member for Lilley, still the Treasurer, was forced to concede that in the first six months of its operation Labor's mining tax had raised just $126 million, falling ridiculously short of the suggested tens of billions originally projected. It then emerged that only around 20 mining companies had actually been required to pay the Minerals Resource Rent Tax but that another 145 had been required to go through the process of compliance—that is, enduring the time and expense of employing accountants, lawyers and other various advisers and submitting reams of paperwork—all for a tax they were not actually required to pay. This, apparently, was the Labor Party's idea of good economic policy. Ultimately, Labor's mining tax raised around $400 million in total over Labor's period in office—$26.5 billion was projected to be raised and a paltry $400 million was, in fact, raised.

We also had tax debacle number 2, the carbon tax, the tragic history of which time does not permit me to repeat in great detail this afternoon. Suffice to say that the carbon tax was also so poorly designed that it too brought in significantly less revenue than the Gillard government projected it would. Anger over the carbon tax and the deceptive way the former Labor government introduced it is a major reason why Labor is in opposition today. But have we heard an apology? Have we heard an apology for the carbon tax? Have we heard an apology for the Minerals Resource Rent Tax? Far from it.

Senator Bilyk interjecting—

Senator SMITH

I know why Senator Bilyk wants to interrupt me. Indeed, what we know from media reports last year is that there is now a significant push from within the Labor Party to bring back the carbon tax if Labor wins the next election. In fact, the proposal is for a twin carbon tax. Apparently, the problem was not the carbon tax, the problem was that there should have been two of them: one for the electricity industry and one for everyone else. I know Mr Shorten rushed to deny these reports but his denials are not emphatic enough. They are not convincing. There are those in the Labor Party who are determined to bring back this tax and Australians know that Mr Shorten is not strong enough to stand up to them.

Just this month we had another example of Labor's tendency to fudge the numbers when it comes to tax. This time it is regarding Labor's announcement of its plan to increase tobacco taxes. In we learned:

… budget experts have challenged Labor's policy, saying it makes the mistake of using what will ultimately be a diminishing revenue source to fund—

 

Senator LAMBIE

Everyone agrees that the Australian tax system needs to be reformed. And everyone knows that the next federal election will be a referendum on an increase to the GST. Despite the fact there are many better ways to reform Australia's tax plans, if the Liberals win and achieve a majority in this Senate then they will force on the Australian public an increase to the GST. No matter what promises are made by Liberal members of parliament, the people of Australia know that they cannot trust the Liberals with the GST. If their lips are moving then they are lying.

My network, the JLN, has proposed three simple tax reform policies, which have been costed by The Australia Institute. They do not take from Australia's poorest and they ensure that our top earners contribute their fair share of tax. In ten years these three taxes would raise an extra $94 billion for budget repair. The first is a super-rich death tax, which would raise $5 billion a year and would only affect 0.8 per cent of the Australian population. The second is a capping of the capital gains tax exemption to houses worth less than $2 million, which would raise $3 billion a year—0.56 per cent of the revenue raised by capping capital gains tax on homes would come from Australia's top 10 per cent of earners. The third is a financial transaction tax of between 0.1 per cent and 0.01 per cent on each of the high-frequency share trades by the six    Australian companies that rort our financial markets by using supercomputers, which will raise more than $1.4 billion a year.

These are three simple taxes: death, capital gains and financial transactions taxes that will not take from Australia's poorest but will make the rich pay a fair share and will raise an extra $9.4 billion a year or $94 billion over 10 years. Slow and steady wins the race.

The ACTING DEPUTY PRESIDENT

Order! The time for the discussion has expired.

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