(Rankin) (12:48): Thank you for the opportunity to speak on the Major Bank Levy Bill, also known as the bank tax, and not just to offer the support of this side of the House for the bill in principle but also to talk about some of the things which are concerning when it comes to the way the government has gone about devising and trying to implement this bill.
We make it clear from the outset that we support the cognate bills; we support the measure. But our job on this side of the House is to hold the government to account on the implementation of the policy, and there are a range of reasons why we are a bit concerned about the way the government has gone about what should be a good initiative. Given the state of the budget, the state of the books, we should be looking for ways to repair the budget in a way that does not ask the most vulnerable people to carry the can, but there are still concerns about how the government has gone about implementing this bank tax.
The banks themselves have claimed that there is something like a $2 billion hole in the government's costings. Obviously that would be a very troubling development if it were true. We have sought assurance from the government that that is not the case, but unfortunately the Treasurer's answers have made us more worried about the costing of this initiative rather than less worried. That is not an uncommon thing when it comes to the Treasurer, but it remains the case that we have been given no confidence that the costing of the bank tax is appropriate and is right.
We have also been given no assurance around the passing of the bank tax on to consumers. Those opposite say they have funded the ACCC to do that task, but it has been funded for only a year—I think $1 million in total—which is insufficient to do that important policing task. The banks themselves say they will pass it on, and nobody on that side of the House has given the people I represent, the people we represent, the assurance they need that this will not be just another pressure on household budgets. Another concern: unfortunately in the comments by the member for Mallee I thought there was a bit of a sense that this somehow excuses those opposite for the protection racket they are running on the royal commission we should have into our financial system, to get to the bottom of some of this injustice and poor treatment of customers. We need to get to the bottom of it so we can have confidence in our system, which is otherwise strong but has fallen down badly when it comes to the treatment of ordinary Australians in this country.
The fourth main thing that concerns us about the bank tax is that at the same time as they want a pat on the back and want this kudos for instituting a bank levy they are giving something like $10 billion out of the $65 billion company tax to just four companies—the four big banks. They want us to say, 'Oh, well done; you're taxing the big banks and recognising their power in the market by instituting a bank levy,' but at the same time they are giving them, with the other hand, something like $10 billion over the medium term. It is pretty extraordinary to think that almost a sixth of that really big company tax cut will go to just four companies, and they will be the four big banks.
So I think what we have seen here is a rushed policy. I think what happened was that it got quite late in the budget process and the government had run out of options, so they put this on the table. They had not done enough of the thinking or enough of the work to make sure they got it right—again. Unfortunately, that is a characteristic of this Treasurer in particular but indeed of the whole government. That is why we on this side call the Treasurer 'Butterfingers'.
Ms Rishworth: That is not the only thing!
DR CHALMERS: No, that is not the only thing, as the member for Kingston reminds me. But 'Butterfingers' is really just a summary: with all of these things that the Treasurer has been called to do, he generally makes a mess of them. Even with something that seems as simple as instituting a bank levy on five companies in the economy, the Treasurer has managed to make a mess of it. And when we look more broadly across the Treasury portfolio it should not surprise us to see the Treasurer make a mess of the bank tax. He has made a mess of the whole 'jobs and growth' agenda in the budget that was handed down a few weeks ago from that dispatch box. We had a budget that anticipates, for example, 95,000 fewer jobs in the economy than were anticipated just a year ago, in the budget before. We have wages growth at record lows, but the budget miraculously assumes we will get back to wages growth not at 1.9 per cent—which is where it is now, which is a real wages cut—but at 3.75 per cent by the end of the forwards.
This is the sort of incompetence, the sort of unreliability that we get from this Treasurer when it comes to jobs and growth. On jobs, we have record high underemployment. People do not get the hours they need at work. We have those low wages, with real wages going backwards—all of these things. And really that is just the broader context for this particular stuff-up on the bank levy: generally, right across the portfolio, we have big problems under this Treasurer's watch.
Fiscally, we have had a bit to say today, and there will be a bit to say tomorrow, as well, about the fact that these sorts of measures are necessary because the budget has deteriorated quite substantially on the watch of those opposite. And this is not an opinion; the numbers in the government's own budget papers show that we have had an extraordinary blowout in deficits, that we have had an extraordinary blowout in debt, whether you measure that in net terms or gross terms.
Tomorrow, unfortunately, for the very first time in our history, Australia will break through half a trillion dollars in gross debt. Under those opposite, we have record net debt as well. In this budget, the deficit for the coming year is more than 10 times bigger than it was projected to be in Joe Hockey's first budget. That is an extraordinary blow-out. That then flows through to the debt figures. It is worth reminding the House that, when those opposite say that they are the party that will pay down debt and deficit, they are accumulating debt in this country at a faster pace per month than happened under Labor—and Labor had a global financial crisis to deal with. This Treasurer has relatively rosy economic conditions, at least globally, and he is accumulating debt at a faster rate than Labor did. Labor had to deal with the sharpest synchronised downturn in the global economy since the Great Depression. That gives you a bit of a sense of the situation.
There are those people who say, 'There is good and bad debt' and all of those sorts of things, and people will make good arguments about the level of sustainable debt in this country. But the one thing that those opposite cannot explain is why they have failed the test that they set for themselves. Paying down debt was supposed to be their reason for being—not just under the former regime, under the member for Warringah's government, but under the member for Wentworth's government. We get all this rubbish about how they are superior economic managers: 'We are going to pay down the debt.' Debt is blowing out at a faster rate now than it was under the Labor government during the global financial crisis. That is a pretty stunning thing. And we have got all of these blow-outs. That is why the government finds it necessary to try to implement the bank tax that we are talking about right now.
The first bill, the Major Bank Levy Bill 2017, gives effect to the budget measure. It applies to the big four banks, as I said, but also to the Macquarie Bank. It sets out the rate that entities with more than $100 billion in total liabilities have to pay—0.015 per cent of applicable liabilities per quarter, which is 0.06 per cent annually. It also sets out what liabilities are applicable for the purposes of the levy. The second bill, the Treasury Laws Amendment (Major Bank Levy) Bill 2017, makes a series of consequential amendments to legislation in connection with the introduction of the bank levy.
As I have already said, we will not stand in the way, but nor will we be silent when it comes to the committee process of getting to the bottom of some of these implementation issues around the costing and around the pass-through. Also, of course, we will take every opportunity to say that action on the banks will never be complete unless it includes a royal commission, which the Australian people desperately want to see so that they can have confidence in their banks and in the way they treat their customers.
The government want the Australian people to think that the centrepiece of the budget was the bank tax. They want us to think: 'We have changed; we have learnt. We know that you were not really keen on the approach we have been taking for the past three years, so we are going to be like a leopard which can change its spots, and all of a sudden we're for the little guy.' That is designed to camouflage the real centrepiece of this budget: the way that all the benefits get showered on the top end of town at the expense of people who work and people who struggle. Whether that is the tax cut for millionaires, which comes in on the same weekend as the pay cuts for people who work and get penalty rates, or whether it is the $65 billion tax cut for the biggest businesses in this country, we see these really warped priorities. No bank tax will properly camouflage or obscure a government which governs every day for the top end of town at the expense of people who work and struggle.
The Australian people are not fooled. The truth of it is that they are quite keen on a bank levy, but they know that that does not best symbolise what this government is about, which is that it goes after the most vulnerable people in our community, taking money out of schools and hospitals and out of the pockets of vulnerable people and giving it to the most powerful people in our economy. That is why the government has fallen so far in the esteem of the Australian people—and that is before we get to some of the things that it will not do. It will not crack down on tax breaks for wealthy property speculators. It will not crack down on capital gains tax concessions. It will not take real action on multinational tax avoidance. These are all the sorts of things that the Australian people need and deserve if they want their budget to be improved in a way that is fair, which is what we are all on about.
We do have concerns about the bill. We do not oppose it in principle and we will not stand in its way, but we will take every opportunity to point out the deficiencies in the way the government have gone about it, the deficiencies in their broader approach to tax, their warped priorities in the budget more generally and the causes and consequences of what will be half a trillion dollars in gross debt, which we will see tomorrow, which is a shameful figure from a government who pretend to be superior economic managers.