Economy on the right track: Speech to Parliament

Tuesday, 6 February 2018

Economy on the right track: Speech to Parliament

Mr BUCHHOLZ (Wright) (19:00): I offer my affirmation and support for the member for Solomon's contribution on cyberbullying. It's a space in which we all have to take responsibility, including parents. I wish the parliament well in its deliberations and hopefully we will land somewhere that addresses that growing issue. In the time dedicated to me tonight, I want to speak about the stark differences between the coalition's economic plan for the future and the alternative position.

The coalition government has a fairly fundamental principle: we support the principle of lower taxes. Those on the other side support and will argue the point that higher taxes are a way of returning the economy to growth. We campaigned at the last election around jobs and growth. I will demonstrate to you in my contribution tonight that we have not only touched our growth forecast but we have exceeded the historic growth forecasts of both Labor and the coalition. It is something the Turnbull government can be truly proud of. It creates a stark difference between what we offer and what the Labor Party does. I will go on and share with the room how those changes came into effect.

The coalition government is heading in the right direction and we are making gains on easing the cost of living pressures, helping ensure jobs and job security, ensuring that we can afford to deliver social services and support those who most need it. The same may not be able to be said by those who sit on the other side. Before I roll into job creation, I want to quickly talk about the debt and deficit. Often, those on the other side will laud the fact that debt has gone up under this government. The very basic principle of deficit and debt is that debt will continue to rise under any government that doesn't bring surpluses back to reality. If we don't stop the spending, the debt position is accumulative. The only way that the debt can go down is to stop the spending. We are stopping the spending in and around welfare entitlements because we're creating opportunities in the workforce. We're taking those burdens off and that has helped the government in its midyear economic forecast, which I'll speak to.

We believe a stronger economy is the key to creating more and better-paying jobs. It's topical at the moment that in Australia we're looking for better wage growth. This is not a problem isolated to Australia; it is a global problem. The Reserve Bank Governor Phillip Lowe has indicated that wage growth is directly linked to inflation itself. In the OECD we all struggle with the same thing, but we are leading the pack in the OECD on growth rates. That is a good thing. Part of that growth rate is down to the economic policy positions we're setting on tax reform.

More than 400,000 jobs were created in 2017. You just need to breathe those numbers in: over 400,000 jobs. It was the strongest calendar year on record. The Australian economy is creating just on 1,100 jobs every single day. If you think that the Australian public are sick of hearing the jobs and growth slogan, we're going to keep on reminding everyone that we've created over 400,000 jobs—1,100 every day—because we are making a difference. The vast majority of those jobs were full time. Don't let anyone tell you that they are just trickery numbers or they're a sleight of hand. They are full-time, real jobs. Do your cross analysis against those who were on welfare, and welfare payments are going down; we have more people in work. The numbers of new jobs created in the last year represent five times the growth rate of the last year of the previous Labor government. I've got those figures here. We're looking to build on a stronger economy with more and better-paying jobs for Australians.

There's a graph in my hand which states that from 2008 to 2013 Labor, in that environment, created just under 150,000 jobs for the year. I think that would have been just around the beginning of the 150-year capital expenditure in the mining sector. The average under the Howard government from 1996 to 2007 was just under 200,000. The average under the coalition in that last year, 2007, was more than 1,000 jobs a day, just over the 400,000. It is a remarkable achievement.

Where did the jobs come from? How is it that a government can come into office and create record positions? We do it because most of us come from a business background. The member for Petrie is well aware of the opportunities created from the small-business sector. They create up to 80 per cent of the employment opportunities here in Australia. We sat down with the small-business sector and said, 'We're going to give 3.2 million small businesses a reduction in their income tax,' which effectively touched 500,000 middle-income Australians. As part of the government's enterprise tax plan, additionally, the company rate for small business has been cut to its lowest rate in 50 years: to 27.5 per cent for businesses with a turnover up to $25 million this year and for businesses with a turnover up to $50 million that kicks in in the year 2018-19.

The principle of that is you keep your tax money, you keep the difference we would normally have taken on the 30 per cent. We believe if you've got that extra bit of money you'll go and invest it more wisely. You'll invest it in plant and equipment. You'll invest it in taking a holiday. You'll invest it in buying a new car. You'll invest it in renovations for the house. You'll invest it in putting on more staff. All of those buttons were ticked because all of those other investment opportunities have a multiplier effect in the economy. If you're going on holiday, you're employing people in the tourism sector. If you're buying a new car, you're employing people in the car sector. The flow-on effect has a multiplier of around four in the Australian economy.

For unincorporated businesses with less than $5 million turnover, we have introduced a tax discount of eight per cent that is capped at $1,000. We need to do more and we will do more, because these changes will benefit 3.2 million businesses employing 6.7 million Australians, helping them to invest and create more jobs. Every year since 2015 the coalition government has provided an instant asset write-off for small businesses with a turnover of less than $10 million. This means small businesses can instantly deduct each and every asset under $20,000. What would have happened in that mindset is that the member for Petrie would have bought himself a new vehicle for his pest control business.

Under the old accounting standards he probably would have depreciated that motor vehicle over four years, depending on the term of the lease he took out on the vehicle. Given that he would have been cashed up he would have paid cash for it anyway. What the instant tax write-off does now is give the member for Petrie and businesses like his the ability to write off that $20,000 in the first year, creating an enormous incentive. They get that money back at the end of the year with that extra coin and they go and put more people on. It's been of great benefit. Those on the other side, when they go and talk to their small businesses, would be supportive of the instant tax write-off. Last year 300,000 small businesses accessed the instant tax write-off to invest in machinery and equipment to help grow their businesses. We will fight Labor's plan for $150 billion in new tax increases on pay packets, homes, electricity and enterprise.

We're also doing some incredible stuff in child care. We talk about cost-of-living pressures. Affordable and accessible child care is critical to supporting parents balancing work and family responsibilities. Most households are probably double-income families trying to make ends meet. Mums and dads are at work and kids are getting pushed off to child care. We are creating an environment that's cheaper for them, to help them cope. From July 2018 we will remove the $7,613 annual rebate cap for families on incomes around $185,000. That's 85 per cent of families using child care. At the next election, there will be a stark difference in our policy of lower taxes. I'll leave the room with the words of Winston Churchill, who spoke about tax reform and suggested that trying to tax an economy into prosperity is like a man standing in a bucket and trying to lift himself up with it.

Video of speech: https://youtu.be/oyScITLxhvI

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