Speeches

Speech - Matter of Public Importance (Economic Power)

March 30, 2017

HON. WAYNE SWAN MP

FEDERAL MEMBER FOR LILLEY

 

MATTER OF PUBLIC IMPORTANCE (ECONOMIC INEQUALITY)

CANBERRA

THURSDAY 30 MARCH 2017

***CHECK AGAINST DELIVERY***

The politically inspired inequality of the Liberals is poisoning our society, and the power of big money is crowding out our democracy. Exhibit A of that is an unfunded $50 billion corporate tax cut, where the Treasury modelling shows it will not have the power and the influence over jobs and growth that the government claims it will. Common sense tells you that it will not either. Exhibit A here is really tax policy more broadly. Really what the $50 billion corporate tax cut is about is furthering wealth concentration in our society. When you combine their approach on tax with their approach on wages, what you are seeing is that the Liberals will try to shift the profit share up and the wage share down. But what that does is increase inequality. More and more people at the top have more and more wealth and more and more money, and more and more people in the middle and further down have less money and they consume less, and that is a basic Keynesian fact. We have a set of policies in place which are actually going to constrain growth; they are a handbrake on growth.

But we have a Prime Minister who believes that inequality is good for us. The whole range of their policies across tax and industrial relations are designed to make our society more unfair, but they will also make it in the long run less prosperous, because we know you cannot build a prosperous economy and a fair society if a shrinking share of the income in that economy is going to working people. That is why we in the Labor Party argue the point here very strongly. The logical way to grow our economy is not through massive tax cuts which will simply be funnelled back to shareholders and not invested in our economy. Exhibit A here is the $7.4 billion going to the four big banks. Their own economists said in the papers during the week that the money would not be spent on further investment and new jobs.

The effective tax rate paid by companies in Australia is something like 24 per cent or less. If we are not getting the investment with an effective tax rate of 24—six points below the nominal rate—how can we expect to get more investment through a tax cut? If one-third of all companies in the country are paying no tax, what is a tax cut going to do for them? The truth is that people will invest in an economy where there is strong demand, where there are good economic institutions, where innovation is happening and, yes, where it is competitive. But competitiveness is more than tax rates; it is your preparedness to invest in your capital and in your workforce. One of the reasons why our economy is one of the strongest in the world is that over a long period of time we have got the balance right. But now, sadly, we are becoming a much more unequal society and we are becoming that unequal society because of the politically inspired inequality being forced on Australia by those opposite.

We had a perfect example of that. We had seven CEOs out here yesterday making a plea for their self-interest and for the government: 'Please pass this $50 billion unfunded corporate tax cut. By the way, we happen to believe that a deregulated industrial relations system is a good thing and we happen to believe that lower wages are a good thing.' The combined salaries of the CEOs here yesterday totalled $65 million. Is it any wonder that the business community and this government are on the nose with working Australians when these people are standing there, on salaries of $5 million, $7 million and $12 million each, recommending that we cut the guts out of health and education with a $50 billion unfunded corporate tax cut in the name of jobs and growth? It is surely absurd.

We are becoming much more unequal and we are becoming that way because of government policy. The truth is that in Australia we increasingly have an overpaid and overpowered corporate elite. We now have an economy run by the rich for the rich, and the rest can get stuffed. That is actually where this government has got to. We have to have a suite of policies which reward everyone in the economy, labour and capital. If we continue with this trickle-down agenda, we will fracture our society, we will polarise our society and we may preside over the corpse of democracy in this country.

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