DR CHALMERS (Rankin) (13:01): We on the Labor side enthusiastically support tax breaks for small business. We enthusiastically support what's being proposed in this Treasury Laws Amendment (Lower Taxes for Small and Medium Businesses) Bill 2018, because it means that 99 per cent of Australian businesses will get the same amount of tax relief under either side of this parliament. But in the event that Labor is elected, under a Shorten Labor government they will also get access to the Australian Investment Guarantee. When the small business people of Australia go to the polls at some point in the next six to eight months, they will do so knowing that Labor has a superior offering on small business than that of the Liberal Party, the so-called friends of small business.
When the shadow Treasurer and the Leader of the Opposition announced that Labor intended to support this bill on Friday, I happened to be at a local small business in my electorate: Rose Patisserie run by Abbas and Fatima. I was there with the state minister for state development, my friend the member for Woodridge, Cameron Dick. When we visited Rose Patisserie, at the same time as we were announcing our position, we could tell Abbas and Fatima that we are enthusiastic supporters of small business. We do understand that small business has the potential to create a number of jobs, not just in my community but, indeed, in all of the communities around Australia. If they have the potential—if they are properly supported, not just by government but by local people buying from local small and medium-sized businesses—then they have the potential to transform communities and to make an amazing contribution to the community in which they work, and in which they operate and run their businesses.
This bill will bring forward the reduction of the company tax rate for companies with income of less than $50 million. The rate will be reduced from 27½ per cent to 26 per cent, and then to 25 per cent for the year 2021-22 and ongoing. This will benefit something like 3.3 million businesses employing 6.6 million Australians. It will cost $3.2 billion over the forward estimates, and the difference over the medium term is about $10 billion.
I do think it says it all about the sorry state of those opposite that, when we announced Labor's intention on Friday to support the legislation that the government is putting forward today—having announced our intention to vote for these bills—the Treasurer's first inclination, his first reaction, was to bag the Labor Party. I think that after two months of this Treasurer and this new Prime Minister they do have a lot of form; they are obsessed with Labor and obsessed with what Labor is doing. You would think that on this occasion, having indicated our support for the small business tax breaks they're proposing, they would take a break from their usual practice of bagging the Labor Party. But they are incapable of focusing on anything other than the political ploys of the day. In that respect, small business is in many ways an afterthought for those opposite. When you read the newspapers around those couple of days where this was being announced, on the Thursday and Friday of last week and into the weekend, there were all these anonymous sources from the Liberal Party saying that what this is all about is wedging the Labor Party. It's not about looking after those 3.3 million small and medium-sized businesses. This is about wedging the Labor Party. It's all about creating a difference between the parties to take to the election. It was really quite extraordinary that creating a political difference seemed to be the highest priority of those opposite.
We are not in that caper. When this was proposed on the Thursday—when the government substantially shifted their position on the Thursday—within 24 hours we indicated our support. We convened the relevant meetings, we had the relevant consultations and discussions in our show and, within 24 hours, the Leader of the Opposition and the Shadow Treasurer were able to stand up and say that we enthusiastically support what is being proposed here. I think the small-business people of Australia do understand as well. In addition to the political ploy that was attempted by those opposite, I think people in small business also understand that, if the Liberal Party had their way, this money, this $3.2 billion, would be flowing instead to big business in this country, to the big banks and the foreign multinationals.
Mr Wallace: That's absolute rubbish.
Dr CHALMERS: That was their policy. Those opposite say that's rubbish. It was actually their policy. It was the policy in the budget. It's in the budget papers. Mathias Cormann actually said on Insiders that plan A was to give a big-business tax cut. It's only just dawning on those opposite that their policy for some time was to give a tax cut to big business in this country. Anyone who's wondering about the state of those opposite need only listen to this commentary from up the back. 'Nobody told us we had a big-business tax cut in the budget'. Weren't you listening? It's just absolutely incredible.
On Sunday Mathias Cormann, the finance minister, actually said that everybody knows what their plan A was. Plan A, of course, was that big-business tax cut, which would have seen $85 billion flow to the biggest businesses in this country, including $17 billion to the four big banks alone. We opposed that. We proudly opposed those tax cuts for big business and we prevailed. On this side of the House we're making a habit of winning the economic arguments. We're making a habit of winning the arguments over fairness and over responsibility. We know and the Australian people know that plan A, plan B and plan C of those opposite are to always give the biggest tax breaks to those who need them least. The difference between the two sides is that we have actually always said that, when you've got a budget in bad nick, as it is now, where debt has doubled under the life of the Liberal government, you need to be responsible with public dollars and you need to give tax breaks where they can do the most good. We've actually said that all along. We've always prioritised small business over big business, and those opposite cannot make the same claim.
As I said, within 24 hours of the government substantially shifting their position, we hadn't just said that we would support what's being proposed; we said how we would pay for it. We would make room in our alternative budget by shifting our Australian Investment Guarantee back a year so that we could afford to pay for what is being proposed here. We're now into the sixth day since the government announced this change of policy and we still haven't heard how those opposite intend to pay for it. We've been treated to this ridiculous spectacle of the finance minister of this country trying to pretend that the money for these tax breaks for small and medium-sized businesses doesn't come at a cost to the budget. It is an absurd proposition when we know it costs $3.2 billion.
I'm at great risk now because I'm about to admit to having been an avid watcher of the Pyne & Marles show—as everyone was! I was watching Pyne & Marles on Friday—we all were—and Christopher Pyne, the member for Sturt, actually said, 'Well, it costs us $3.2 billion and it's money well spent' at the same time as the finance minister was saying, 'It's not a spend; it doesn't come as a cost to the budget because it's tax forgone.' Is it any wonder that the Prime Minister of this country describes his own government as a muppet show when they can't even agree whether $3.2 billion for small and medium-sized businesses comes at a cost to the budget?
I know that's outed me as an avid watcher of Pyne & Marles, but that's what the member for Sturt said on his own show on Friday.
If on that side of the House they can't even agree as to whether this comes at a cost to the budget, is it any wonder that national debt has skyrocketed on their watch? When those opposite came to government, gross debt was $280 billion. It's now $541 billion. When they came to office, net debt was $175 billion. It's now twice that. With good global conditions, favourable economic conditions and moneys rolling through the door, they've still got debt that has doubled on their watch. When you see this bizarre spectacle, this argument about whether or not these tax breaks come at a cost to the budget, you can understand more.
As I said, small business and medium-sized business will get the same tax cuts under Labor and Liberal. Under Labor they'll also get the Australian Investment Guarantee, and under Labor those tax cuts for small and medium-sized businesses will not come at the expense of our schools and hospitals and will not see skyrocketing debt skyrocket even further. That's because our approach, for some years now, has consistently been to do three things: to make the tax system fairer, to pay down debt and to make room for the things that we, as a society, should truly value—things like preschool for three-year-olds and four-year-olds; things like proper, needs based funding for our schools; things like proper investment in the hospitals of this country. That is our approach to the budget: to make room for those things that we, as a society, truly value.
Because we've taken that responsible approach, because we've struck the best balance between fairness and responsibility, we have the capacity to give small and medium-sized businesses the tax breaks they need and deserve. We have done the work—and it's a tribute to the member for McMahon, the Leader of the Opposition and others—to make it possible for us to invest in small business; to invest in our schools, hospitals and preschools; and to do the right thing by the Australian people. Those opposite can't make the same claim.