Senator WHISH-WILSON (Tasmania) (13:42): The Treasury Laws Amendment (Tax Relief So Working Australians Keep More Of Their Money) Bill 2019 that we're debating in the Senate today is very likely to be the most significant piece of legislation that we will see in this 46th Parliament. And the bill and the legislation pose a very important question: what is this parliament's vision, and the vision of every senator within this parliament, for the future of Australia? I've said in here often that budgets are the time for a government to show the Australian people very clearly what their vision for the nation is, what their priorities are. And when we legislate budgets we need a very clear understanding of the priorities of the Australian people, the people who elected us here, and of course our individual beliefs in the future of the nation. And this poses a $158 billion question.
Now, a parliament does much to shape the country when it decides how to tax and spend, how to raise the money and where to allocate it based on those important priorities. We know that everything we do in here is a mixture of politics and policy. Sometimes we certainly don't get the balance right. But one thing I did agree with in the Governor-General's speech just a couple of days ago in this chamber was that politics should be a contest of ideas. I don't think there's any senator in here that disagrees that politics is a contest of ideas. We should have robust and healthy debate, especially on a piece of legislation that is going to spend $158 billion of taxpayers' money on a piece of legislation that is looking to completely restructure the Australian tax system. It is the biggest reform in this country for nearly 40 years. We should have robust debate. If politics is a contest of ideas, I can say to you that, from the time I have spent in this chamber this morning, there does not seem to be much of a contest.
Your vote is your voice in this place. If you believe in something fundamentally and if you believe in something philosophically, it's a privilege to be in this job, and your job, in my humble opinion, is to come in here and speak truth to that belief, to that philosophy and to what you believe in and to vote accordingly. I know that my party has been consistent over the last 18 months since this government decided that the only economic idea they had was to give tax cuts to Australians. These are tax cuts that overwhelmingly benefit wealthy Australians. I know my party has been entirely consistent. I ask all senators in here to be totally clear about what the future holds for the Australian people if we legislate these tax cuts today within the context of our economy.
What's happening in the Australian economy at the moment is extraordinary. Without any exaggeration, the economic environment in which we're making this decision is unheralded within the life of the Federation of Australia. Let me explain why these are truly exceptional times. Interest rates are at record lows. Just two days ago, the Reserve Bank cut the cash rate to one per cent. They are talking of going even lower. The yield on 10-year bonds is now down to 1.25 per cent. You would have to go back a long, long way—even in other countries—to see interest rates this low. While I understand that many mortgage holders are pleased with that, by anyone's measure it is not a sign of a healthy economy—far from it.
Wages growth is also if not the lowest it has been since the Second World War then very close to it. Despite the continuing heroic projections by Treasury—I have been there at all of the estimates over recent years, asked questions and heard the government's assumptions—people's wages simply aren't growing. Any relationship between productivity growth and low wages has long since vanished. Inflation is at the lowest level it has ever been using the currently accepted method of measuring inflation. Productivity growth, as we are all aware, is languishing. This is a global phenomenon. It irks me that this government and this parliament, if it passes these tax cuts, have failed to properly respond to the message of the global financial crisis and have failed to overthrow the shackles of neoliberalism.
What is this government's response to the most exceptional of economic circumstances, which in any sane world would signal and flag that troubled times and stormy seas are ahead?
What we have here today is a tax plan cooked up, weeks before an election, on the merest whiff of a surplus, on some very rubbery, very dodgy assumptions that, as most of the country's experienced economic commentators were very quick to point out, will hamstring future governments, and which overwhelmingly will benefit the richest Australians. It will provide an impost on any future government, be it Labor or Liberal or any combination. It will provide shackles.
Grattan recently commented on the highly unusual step of seeking to lock in a series of income tax cuts over the next six years and beyond. We all know why this budget is highly unusual: this was an election budget. It was also highly unusual that the government released a budget and then called an election a week later. This was designed to lock in as many votes for the Liberal Party and National Party as possible not just at this election but into the future. This was an election budget.
For those who believe this government has a mandate for the combined chambers of this parliament to pass this legislation, think again. The government doesn't have a mandate in the Senate. The Australian people made it very clear, with how they voted, that this government did not get a majority in the upper house of the Australian parliament, in the Australian Senate. The government does not have a mandate in the Australian Senate for this legislation. But you wouldn't know that based on the flaccid response we've seen today from the crossbench and from the Labor Party in support of these tax cuts.
You would think there is some kind of imperative to get these tax cuts passed this week. I will tell you what the imperative is: it's a political imperative. The government wants a win in the first week of the 46th Parliament, that's it—spending $158 billion. Why are we rolling over and having our tummies tickled in this place? Why did the Senate refuse to send this off, to do its job, and scrutinise the legislation, and, if need be, amend or reject this legislation and send it back to the other place? It is not our job to support the political imperative of the Liberal and National parties in the Australian Senate. It is not our job. Our job as senators, what we were elected to do, is to scrutinise, to improve, to amend or to reject. We're not even having the chance to do that.
What's most dangerous about this legislation—apart from the fact that it locks us in, it locks future governments in to find $158 billion—is the impact it will have on government spending on essential services. Every economist and economic report I have read has pointed out the dire consequences of maintaining budget surpluses and taking $158 billion out of the budget to give to high-income earners in this country. Every economist worth their salt has pointed this out.
The Grattan Institute has said that they expect, on their model, that government expenditure growth will be the lowest it has been since the 1970s once we pass these tax cuts. What that means, in easy translation, is cuts to school, cuts to hospitals and cuts to the social safety net. And believe me, if you think I'm making this up, have a look at this mob's record in the last five years. Remember the zombie budget cuts? At least that Prime Minister got it in the neck. They will do it again. They will have no choice. In fact, I strongly suspect that, according to the neoliberal model that we know the LNP operates on, this is a deliberate design to bleed the carcass so there is no choice in future but to cut government expenditure on the most vulnerable people in this country: the battlers.
Are we, as a chamber, going to allow the short-term, self-interested, dangerous political imperative of this government to go unscrutinised? The Greens will do what we can today to be the opposition in the Australian parliament. We'll continue to fight for our principles and for what the people of Australia elected us to do. The furphy that somehow these tax cuts are going to stimulate an economy running out of puff, very close to going underwater, needs to be thoroughly debunked. I don't dispute that low-income rebates—in other words, rebates for low-income earners in this country—will have an impact on economic growth. We know that low-income Australians have a higher margin or propensity to consume, which means they will spend money that is given to them by the government, especially if they're at the very poor end of the spectrum and on Newstart, which my colleague Senator Siewert made such an impassioned plea to raise. But we know from all of the models that the richest people in this country, the higher income earners, have a lower margin or propensity to consume. They tend to save what they're given, and that means spending more on investment properties, more on other investments and so on and so forth, and that will not stimulate the economy.
It is black and white that 50 per cent of the benefit of these tax cuts will go to the wealthiest 20 per cent of Tasmanians. I want to make this point to my colleague Jacqui Lambie from Tasmania, who seems to be flagging that she will support the tax cuts because she believes they're good for Tasmania. In the Prime Minister's electorate alone, there are more high-income earners on over $180,000—who, as I said, stand to benefit the most from these tax cuts—than there are in the entire state of Tasmania. If we know that these tax cuts are going to benefit the wealthy and that it's questionable they're going to have a stimulatory effect on the economy, why is Senator Lambie supporting a plan, a vision for this country, that is not going to deliver for her home state of Tasmania?
If Senator Lambie wanted to stand up for Tasmanians and for Tasmanian battlers, she would join the Greens and campaign on raising Newstart and she would join the Greens and campaign on taking that $150 billion of public money and investing it in long-term infrastructure, which will create jobs, increase productivity and invest in the future of our children and the future of our nation. That's what we should be spending $150 billion on. But do you know what? There is no debate in this polity, in this country, in the media or in this chamber on how we should spend $150 billion for the betterment of our nation. There is no debate. I've got to say: I am still at a loss for words, as you can tell, as to why we are just waving this through and rolling over.
I understand the Labor battle tank has taken a couple of direct hits in recent times. It's battered and it's tattered. But we need an opposition in this 46th Parliament to this government and their dangerous ideological agenda. The Greens are happy to be the opposition in this building, but we can't beat this government on our own. It seems as though that battle tank is stuck in reverse at the moment. Labor supporters all around this country can hear the grinding of the gears, and it's not a sound they want to hear. They want to see the Labor Party stand up for their principles. Your vote is your voice in this Senate. This afternoon or this evening, however long we are here, the Labor Party will have their chance to vote down the third stage of the tax cuts, and if that fails—if the bill is not split—they can vote down this dangerous tax cuts package and we in this parliament can put forward alternatives for the Australian people.