The CHAIR (09:32): The committee is considering the Social Services Legislation Amendment (Welfare Reform) Bill 2017. The question is that the bill as amended, and subject to requests, be agreed to.

Senator SIEWERT (Western Australia—Australian Greens Whip) (09:32): Just to recap briefly, yesterday the group of amendments we started on was the group on sheet 8254. If senators in the chamber recall, we had just dealt with item (30), which related to schedule 15, which related to the compliance regime. We separated that out because the Labor Party requested that we deal with it separately. I now seek leave to move the rest of the amendments on sheet 8254—that is, items (16) and (17) and items (20) to (23), which relate to schedules 1 and 2 and schedules 5 to 8.

Leave granted.

Senator SIEWERT: The Greens oppose schedules 1, 2, 5, 6, 7 and 8 in the following terms:

(16) Schedule 1, page 5 (line 1) to page 54 (line 9), to be opposed.

(17) Schedule 2, page 55 (line 1) to page 70 (line 6), to be opposed.

(20) Schedule 5, page 117 (line 1) to page 140 (line 12), to be opposed.

(21) Schedule 6, page 141 (line 1) to page 152 (line 33), to be opposed.

(22) Schedule 7, page 153 (line 1) to page 164 (line 16), to be opposed.

(23) Schedule 8, page 165 (lines 1 to 18), to be opposed.

These schedules are: the schedule to create the jobseeker payment; the schedule for the cessation of widow B pension, which is schedule 2; schedule 5, which relates to the cessation of sickness allowance; schedule 6, which is for the cessation of widow allowance; schedule 7, which is for the cessation of partner allowance; and schedule 8, which is the schedule on the minister's rules.

We're seeking to move amendments to the schedules which relate to the jobseeker payment because we're concerned that a lot of these allowances are important allowances and are not actually about jobseeker payments. If you recall, we had a substantive discussion yesterday around the bereavement allowance, which isn't always about jobseeking. So we have concerns around all of those schedules. I raised all of these issues during my contribution in the second reading debate, and again when we've been discussing various schedules of this bill during this debate.

I do have a question for the minister around schedule 6. We've asked a lot of questions already. I'm not going to be asking a lot on these schedules, because we have dealt with some of them already. I want to ask about the widow allowance. How many women who will be on the jobseeker payment immediately before 1 January 2022, and who would have been eligible for widow allowance before 1 January 2018, won't be eligible for the age pension as they won't meet the residency requirements?

Senator CASH (Western Australia—Minister for Jobs and Innovation) (09:35): Thank you, Senator Siewert. In relation to schedule 6, widow allowance, I'll just take you through the information that I have. As you are aware, if the bill goes through it will be closed to new entrants from 1 July 2018 because of the changes in relation to the bill. So people who would have otherwise claimed widow allowance will be exempt from mutual obligation activities if they satisfy the criteria that currently apply to widow allowance—that is, they were born on or before 1 July 1955, ceased to be a member of a couple since turning 40, have no recent workforce experience and are not a member of a couple.

Over the forward estimates, the total population of people who will be on Newstart allowance, so the jobseeker payments that we're now referring to in this schedule, from March 2020 who would otherwise have been granted widow allowance is estimated as 4,818 over five years, so to 2021-22. Existing widow allowance recipients will be unaffected by the closure, remaining on the payment until they reach the age pension age, and then they will transfer to the age pension. From 1 January 2022, widow allowance will cease and around 400 recipients who are over age pension age but who do not meet the age pension residence qualification rules would be transferred to the age pension under one-off transition arrangements.

Senator SIEWERT (Western Australia—Australian Greens Whip) (09:38): Thank you for that information. So are those 400 currently receiving the widow allowance?

Senator CASH (Western Australia—Minister for Jobs and Innovation) (09:38): Yes.

Senator SIEWERT (Western Australia—Australian Greens Whip) (09:38): Have you done a calculation then of how many—oh, it's closed already. That's all right; it's closed already. We're only talking—400 women are very important, but that's the group that you've calculated are going to be affected?

Senator CASH (Western Australia—Minister for Jobs and Innovation) (09:38): Senator Siewert, if you can hold on for one moment, I'm just going to get clarification for you. So in relation to the 400 recipients, they are people who, as of 1 January 2022 when the widow allowance will actually cease, will be over the pension age but do not meet the age pension residence qualification rules. They will be transferred to the age pension under the one-off transition arrangement.

Senator SIEWERT (Western Australia—Australian Greens Whip) (09:39): So are you saying that in the future, when we get to 2022, that whole group, basically, will transfer in a one-off transfer to the age pension if they're over the age pension age?

Senator CASH (Western Australia—Minister for Jobs and Innovation) (09:40): In relation to that 400, yes.

The CHAIR: The question is that the amendments as moved by Senator Siewert to schedules 1, 2 and 5 to 8 stand as printed.

Question agreed to.

Senator SIEWERT (Western Australia—Australian Greens Whip) (09:41): Can I just have it noted that the Greens were the only people that voted no.

The CHAIR: Yes, certainly.

Senator SIEWERT: Can I just take this opportunity to let the chamber know the order I intend to move our amendments. I had a conversation with Senator Birmingham and also Senator Pratt yesterday but I thought that it was fair to let the chamber know. I next intend to move amendments relating to schedule 3, which is on sheet 8243. I then intend to seek leave to move amendments relating to schedule 5 with amendments to schedule 6 on sheet 8243. I will then move further amendments relating to schedule 6 at the end of part 1, which is on sheet 8250. I'll seek leave to move items (1) to (3) together on schedule 13 on sheet 8315. And then I intend to move amendments on sheet 8243 that relate to schedule 4 but I'm not going to move the amendment relating to clause 2, because that has already been dealt with previously by vote on an ALP amendment. Is that okay with everybody?

The CHAIR: I think it's as clear as mud! We shall proceed.

Senator SIEWERT: I move amendments to schedule 3, item 98, on sheet 8243 that relate to overseas portability of the wife pension:

(4) Schedule 3, item 98, page 85 (lines 24 to 26), omit the item, substitute:

(3) Subitem (3A) applies to a woman if, before the commencement of this item:

(a) the woman was receiving wife pension; and

(b) Division 2 of Part 4.2 of the Social Security Act 1991 applied in relation to the payment of wife pension to the woman.

(3A) Despite the amendments made by this Schedule, Parts 2.4 and 4.2 of the Social Security Act 1991, as in force immediately before the commencement of this item, and any other provision of that Act necessary to give effect to those Parts, continue to apply on and after that commencement in relation to the woman as if the amendments made by this Schedule had not been made.

Senator SIEWERT: We've had substantial discussion also around schedule 3 and there's already been rejection of our attempts to oppose schedule 3. Raised at the time of that debate were concerns around the women whose overseas portability of a wife pension will be affected, and this seeks to address this particular issue so that that group of around 200 women will not be affected by these changes. So this is to try to make this particular amendment to the changes to the income support system a bit fairer for those who are affected by the changes in this bill. It relates specifically to the overseas portability of the wife pension.

Senator PRATT (Western Australia) (09:45): Labor is supporting these amendments by the Greens. We made our own attempt to prevent changes to the wife pension yesterday and the day before. Indeed, I take this opportunity to call on One Nation to do the right thing. They've sought to move amendments in relation to bereavement payments but if they truly believe in standing up for people who will be adversely affected by the changes in this legislation, they now have yet another opportunity to come forward and do the right thing.

We do not want to see the women affected by these changes become worse off. We need to remember the fact that people on this payment have been on this payment since 1995. They've been out of the workforce since 1995 and it is extraordinary that we would expect these women to have a reduction in their payments—to be put down to the jobseeker payment would have an extremely negative impact on their household incomes. Labor supports the Greens amendments and, indeed, calls on One Nation to support them.

Senator CASH (Western Australia—Minister for Jobs and Innovation) (09:46): The government will not be supporting these amendments.

Senator SIEWERT (Western Australia—Australian Greens Whip) (09:46): Shocked and surprised! I want to confirm that there are 200 recipients currently living overseas who are not anticipated to transfer to income support payments under this schedule.

Senator CASH (Western Australia—Minister for Jobs and Innovation) (09:47): That is correct.

Senator SIEWERT (Western Australia—Australian Greens Whip) (09:47): Why was it not considered important to grandfather this group of people, as others have been grandfathered, either through the bill itself or through amendments that have been made?

Senator CASH (Western Australia—Minister for Jobs and Innovation) (09:47): I'm instructed that the government did not consider grandfathering these women, as it would create additional complexity which would be contrary to the intent of the welfare reform bill. As you'd be aware, these 200 recipients who are affected have access to other income sources besides their wife pension payments, such as foreign pensions and investment income.

Senator SIEWERT (Western Australia—Australian Greens Whip) (09:48): It begs the question: why then did you grandfather the others? I'm not complaining that others have been grandfathered; I want that clearly on the record. But the fact is that others have been grandfathered, which does make additional complexity. We went through some of that complexity yesterday in the discussions under the bereavement payment. Why was this considered too complex when there are other complex arrangements in place?

Also, have you calculated the dollar impact on these women's incomes of losing access to this payment?

Senator CASH (Western Australia—Minister for Jobs and Innovation) (09:49): I'm instructed that, because these women are actually living overseas, the complexity is due to a number of international agreements that Australia is party to, and it would very much add to or create additional complexity to the system which we're streamlining. It would actually be contrary to the intent of the welfare reform bill.

Senator SIEWERT (Western Australia—Australian Greens Whip) (09:49): I just want to put it on the record that there is complexity in a lot of the other areas we're talking about—it's 200 women. Could you tell me whether you did look into the impact it would have on women? I heard your answer in terms of foreign pensions and things, but those pensions and payments to these women are calculated on the fact that there's a proportionality there. In terms of the payments, have you calculated the impact of the loss of income on these women? Also do you know whether pensions from other countries will increase for those that receive them if they lose this payment, or if they are just directly losing a payment? If so, what impact is that likely to have on their income?

Senator CASH (Western Australia—Minister for Jobs and Innovation) (09:50): In relation to the 200 recipients who are living overseas—the ones who will be no longer eligible for Australian government payments—this equates to a loss, I'm advised, of up to $669.60 per fortnight. In relation to the costings, that has not been undertaken because each international agreement is actually different and, again, it would create additional complexity which would be contrary to the intent of the welfare reform bill.

Senator SIEWERT (Western Australia—Australian Greens Whip) (09:51): Did you say $660 per fortnight?

Senator CASH (Western Australia—Minister for Jobs and Innovation) (09:51): It's up to $669.60 per fortnight, but the estimated average loss is approximately $457.10. So that's probably the better cost in terms of the average: $457.10 per fortnight.

Senator SIEWERT (Western Australia—Australian Greens Whip) (09:51): That's a substantial amount of money that people will be losing. I'll just put on the record that I'm deeply concerned about the welfare of those people or those women. We don't know whether all of them have pensions from other countries. Do we know how many have pensions from other countries?

Senator CASH (Western Australia—Minister for Jobs and Innovation) (09:51): In relation to that question, I am advised that—I think I've previously stated this—the understanding is that these recipients do have access to other income sources besides their wife pension payments, such as foreign pensions and investment income.

Senator SIEWERT (Western Australia—Australian Greens Whip) (09:52): But we don't know, and we don't know if those foreign pensions will in fact increase once those people lose access to an average of $457 a fortnight and up to $669 a fortnight. That is a substantial income if you're living on a small amount of money.

The CHAIR: The question is that the amendment moved by Senator Siewert be agreed to.

Senator SIEWERT (Western Australia—Australian Greens Whip) (09:59): by leave—I move Greens amendment (6) on sheet 8243:

(6) Schedule 5, page 121 (after line 6), after item 17, insert:

17A After subsection 603C(1)

Insert:

(1AA) If:

(a) immediately before the commencement of Part 1 of Schedule 5 to the Social Services Legislation Amendment (Welfare Reform) Act 2017 (the amending Act), sickness allowance is payable to a person; and

(b) sickness allowance would continue to be payable to the person for a period if the amendments to this Act by the amending Act had not been made;

the person is not required to satisfy the activity test in respect of that period and any further periods of incapacity immediately following that period.

and I move:

That the House of Representatives be requested to make the following amendment:

(7) Schedule 6, item 16, page 144 (after line 15), after subsection 43(1C), insert:

(1D) A woman is qualified for an age pension if:

(a) the woman was receiving jobseeker payment immediately before 1 January 2022; and

(b) the woman would qualify for widow allowance if subsection 408AA(2) was not in force; and

(c) the woman is not otherwise qualified for an age pension.

All the items are important but I'm seeking to deal with them as expeditiously as I can, given the issues.

Amendment (6) provides for recipients of sickness allowance immediately before the commencement of schedule 5 of this bill to continue to be paid sickness allowance for a period without requiring them to satisfy the activity test for that period or further periods of incapacity that immediately follow the first period. We're extremely concerned about the impact of the changes under schedule 5 on those who are currently on sickness allowance, and we seek to ameliorate that impact to a certain extent with this amendment.

Amendment (7) is framed as a request for the House of Representatives. It provides that from 1 January 2022 women who were receiving jobseeker payment immediately before that date and who would have been eligible for the widow allowance before 1 January 2018 are eligible for the age pension, even if not otherwise qualified—that is, where they don't meet the qualifying residence requirements.

Senator CASH (Western Australia—Minister for Jobs and Innovation) (10:03): The government will be opposing these amendments.

Senator SIEWERT (Western Australia—Australian Greens Whip) (10:03): I'm extremely disappointed to hear that answer. These are issues that were raised by members of the community and also by the National Welfare Rights Network, who raised very substantial concerns, particularly about the provision for widows. I was pursuing questions about that earlier. They are also extremely concerned about the impact on recipients of sickness allowance, given that people who have an illness aren't able to work for that reason, which is why we're seeking to ameliorate some of these issues. We did seek, through amendments, to remove this schedule. That was unsuccessful, so we're trying to ameliorate some of the impacts on people who could be significantly affected by this amendment. Hence, I urge the chamber to support these amendments.

Senator PATRICK (South Australia) (10:05): Minister, relating to the cessation of sickness allowance, how many recipients will be affected by the transition to the Newstart payment?

Senator CASH (Western Australia—Minister for Jobs and Innovation) (10:05): I'm advised that approximately 8,400 existing sickness allowance recipients will continue to receive sickness allowance beyond 20 March 2020, until their current medical certificate expires.

Senator PATRICK (South Australia) (10:05): Given the payment is the same as Newstart, how does the government project savings of $6.9 million over the forward estimates?

Senator CASH (Western Australia—Minister for Jobs and Innovation) (10:06): I'm advised that the save is due to the reduction in human service costs for servicing of recipients, including checking whether a person has a job to return to.

Senator SIEWERT (Western Australia—Australian Greens Whip) (10:06): One of the reasons for this amendment is to cement some of the comments that the government has made about how this particular provision will work. As I've said, the item provides for recipients of sickness allowance immediately before the commencement of part 1 of schedule 5 of this bill to continue to be paid sickness allowance for a period without requiring them to satisfy the activity test for that period or further periods of incapacity that immediately follow the first period. My understanding is that government has made comments around how this particular provision will operate, so can I ask the government if my understanding is, in fact, correct? Could you confirm that? That gives us at least a record in the Hansard of how this provision will operate, so that there can be a degree of certainty around that transition period.

Senator CASH (Western Australia—Minister for Jobs and Innovation) (10:07): I've got some information that I'm able to provide to you that will shed light on the issue at hand. The schedule itself, as you are aware, closes the sickness allowance to new entrants on 20 March 2020, and ceases the sickness allowance altogether on 20 September 2020. Just for the benefit of Hansard, sickness allowance is the short-term income support payment for people aged 22 years to under pension age who have a temporary incapacity due to illness or injury and who have a job or study to return to after their recovery. It is paid at the Newstart allowance rate. It is generally granted for the length of a person's medical certificate, up to a period of 13 weeks. If payment is required after 13 weeks, a person must lodge another medical certificate. As I've stated in answer to Senator Patrick's question, around 8,400 existing sickness allowance recipients will continue to receive sickness allowance beyond 20 March 2020 until their current medical certificate expires—so their medical certificate takes them beyond the March 2020 date. Of these existing recipients, it is estimated that around 7,700 will lodge another medical certificate after 20 March 2020 and will be required to transfer to the jobseeker payment. They will be exempt from mutual obligation requirements, if they meet the incapacitated exemption rules. From 20 March 2020, new entrants who would previously have been eligible for sickness allowance will be able to claim assistance through jobseeker payment instead. The new entrants will also be exempt from mutual obligation requirements if they meet, again, the incapacitated exemption rules. That's the information I have to provide to you.

Senator SIEWERT ( Western Australia — Australian Greens Whip ) ( 10:09 ): Can I just clarify: if they've gone past the March 2020 deadli ne, they're still incapacitated and t hey get their medical certificate for the next ro und but they transition into job seeker payment and they' ve got a sickness allowance, does that then match up with the same details of the in capacity requirements under job seeker payment?

Senator CASH ( Western Australia — Minister for Jobs and Innovation ) ( 10:10 ): Yes, the rate of the allowance is the same.

Senator SIEWERT ( Western Australia — Australian Greens Whip ) ( 10:11 ): I obviously didn't giv e enough detail in the question. Th ey've got the medical certificate and they've been on sickness allowance, meeting those requirements. They h ave another medical certificate, but they' ve then hit that wall of the deadlines. They then transfer onto jobseeker allowance. Is that going to enable them to meet the requirements for incapacity under the job seeker payment i n that transition process ? They've got the same illness.

Senator CASH ( Western Australia — Minister for Jobs and Innovation ) ( 10:11 ): Thank you, Senator Siewert. The rationale at the moment is : do you have a job to go to? For t he persons that you are referring to, on 20 March 2020 there will be some who go over that date , and they'll be exempt from mutual obligation requirements if they meet the incapacitated exemption rule. That's the first cohort. Then there are those , obviously , who are new entrants , and they go straight to jobseeker payment , and they also meet the incapacitated exemption rules. In relation to those rules, it is then about incapacity as opposed to : do you have a job to go to?

Senator SIEWERT ( Western Australia — Australian Greens Whip ) ( 10:12 ): Thank you for that clarification. I'm hoping this will be my last question or set of questions. In terms of temporary incapacity under the current proce ss and incapacity under the new job seeker payment , will they be the same? That's a better way of articulating what I was trying to get to earlier.

Senator CASH ( Western Australia — Minister for Jobs and Innovation ) ( 10:12 ): The answer to the question is yes.

The TEMPORARY CHAIR ( Senator Reynolds ): The question is that amendment (6) and request ( 7 ) on sheet 8243 be agreed to .

Question negatived.

Senator SIEWERT ( Western Australia — Australian Greens Whip ) ( 10:13 ): I just want it noted that the Greens were the only people that supported those amendments.

The TEMPORARY CHAIR ( Senator Reynolds ): Thank you , Senator Siewert . A re you seeking the call again?

Senator SIEWERT: Yes, I am. I'm now on sheet 8250, which relates to s chedule 6 at the end of part 1. I t's amendment (1); i n fact , there is only one amendment on this sheet. I move amendment (1):

(1) Schedule 6, Part 1, page 142 (after line 11), at the end of the Part, add:

4A Subsection 729(1)

After "subsection", insert "(1A) or".

4B After subsection 729(1)

Insert:

(1A) The Secretary must determine that a special benefit should be granted to a person for a period if:

(a) the person meets the eligibility requirements for widow allowance in Subdivision A of Division 2 of Part 2.8A; and

(b) the person is not qualified for widows allowance on the basis of subsection 408AA(2); and

(c) the person is not qualified for newstart allowance; and

(d) the person is not qualified for the aged pension.

4C Paragraph 733(1 ) ( b)

Before "the value", insert "subject to subsection (1A),".

4D After subsection 733(1)

Insert:

(1A) If subsection 729(1A) applies to a person, whether the value of the person's assets exceeds the person's assets value limit is to be determined by reference to section 408CE (the assets test applying in relation to widow allowance).

This relates to the cessation of the widow allowance. We are seeking to make this slightly fairer . A gain, we were unsuccessful in removing this particular schedule, so we are trying to make this amendment a bit fairer for those people that are affected on the cessation of the widow allowance.

This relates to inserting a section (1A) in this schedule. It requires the secretary to determine that a special benefit should be granted to a person for a period if the person meets the eligibility requirement for widow allowance in subdivision A of division 2, Part 2.8A—another set of provisions there. It also puts in an amendment that if subsection 729(1A) applies to a person where the value of the person's assets exceeds the person's asset value limit, that is to be determined by reference to another schedule. In other words, it's relating to some of the people that are affected by the cessation of the widow allowance.

We think some of these amendments unfairly impact on people currently receiving allowances but also on people into the future. Again, we urge the Senate to support these amendments that make schedule 6 slightly fairer and make the transition process into the jobseeker payment that much fairer.

Senator PATRICK (South Australia) (10:15): In relation to schedule 2, can the minister outline how many people will be affected by the cessation of widow B pension?

Senator CASH (Western Australia—Minister for Jobs and Innovation) (10:16): I'm advised that from March 2020 all widow B pension recipients, estimated to be approximately 320, will transfer to the age pension.

Senator PATRICK (South Australia) (10:16): Will participants receive any loss of income by transferring to the age pension?

Senator CASH (Western Australia—Minister for Jobs and Innovation) (10:16): I'm advised that there will be no change to their payment rate; no widow B pension recipients will be worse off as a result of this measure.

Senator PATRICK (South Australia) (10:17): In relation to schedule 6, can the minister outline how many people will be affected by the cessation of the widow allowance in 2022?

Senator CASH (Western Australia—Minister for Jobs and Innovation) (10:17): I'm advised that existing recipients will receive widow allowance until 1 January 2022, when the remaining recipients will be transferred to the age pension. Approximately 420 recipients who were granted widow allowance after reaching age pension age but who do not meet residential qualifications will be transferred to the age pension under transitional arrangements.

Women who receive Newstart allowance or jobseeker payment who reach age pension age and who do not meet the age pension residency requirements will be required to claim special benefit instead. This will affect 24 people in 2018-19, 68 in 2019-20, 87 in 2019-21 and one in 2021-22.

Senator PATRICK (South Australia) (10:18): Will participants receive any loss of income by transferring to the age pension?

Senator CASH (Western Australia—Minister for Jobs and Innovation) (10:18): No.

Senator SIEWERT (Western Australia—Australian Greens Whip) (10:18): My question is in terms of this provision and further explanation about why we're trying to move this provision. These amendments to schedule 6 are provisions for women who are over the age pension age, who would have been eligible for the widow allowance if it continued to be open for recipients after 1 January 2018, who are ineligible for Newstart due to their age and ineligible for the age pension due to the residency requirements. We're putting in provisions whereby they would automatically then go onto a special benefit payment with the same means test as the current widow allowance so that their cohort is not worse off than they would otherwise have been. That's why we are seeking to ameliorate some of the provisions of the creation of the jobseeker payment, which rolls a whole lot of allowances into the jobseeker payment. That's the reason for this particular amendment.

The TEMPORARY CHAIR ( Senator Reynolds ): The question is that Australian Greens amendment (1), to schedule 6 at the end of part 1, on sheet 8250 be agreed to.

Question negatived.

Senator SIEWERT (Western Australia—Australian Greens Whip) (10:20): Again, can I articulate that the Greens were the only people who voted to support that particular amendment. By leave—I now move Australian Greens amendments (1) to (3) together on sheet 8315:

(1) Schedule 13, item 2, page 189 (line 14), omit "(1)".

(2) Schedule 13, item 2, page 189 (lines 17 to 20), omit subsection 28C(2).

(3) Schedule 14, item 7, page 193 (line 4), at the end of section 42U, add:

   (4) A determination under subsection 42U(3) does not apply in relation to a person who is a declared program participant.

These relate to schedule 13, which we've had quite a lot of discussion about previously where we've sought to remove these provisions. These are about declared program participants and serious failure determination not to apply to declared program participants. These amendments, as I said, relate to section 13. We're still concerned about some of the impacts, and it's not clear in this provision, on some of the exemptions around declared program participants.

I should say these amendments also relate to schedule 14. So there are amendments to schedule 13, item 2, and schedule 14, item 7. They remove subsection 28C(2), which gives the secretary the power to make provision in the determination made under subsection 21C(1) for the operation of the social security law in relation to people who become or stop being declared program recipients at a particular time, including in relation to things that happen before that time. They also amend schedule 14 to expressly exempt declared program participants.

During the Senate inquiry, issues were raised around the impact of sections 13 and 14 as they relate to declared program participants. We're seeking here to make it clearer about those declared program participants. These relate to those sections around drug and alcohol addiction. I'm not going to traverse those whole arguments again, because we did have substantive discussions on those around our previous amendments, the ALP's amendments and Senator Leyonhjelm's amendments. I'm not going to traverse those again. This is seeking to address some issues where the legislation is a bit grey in those particular areas, specifically as they relate to declared program participants.

Senator CASH (Western Australia—Minister for Jobs and Innovation) (10:23): The government is not supporting these amendments. In relation to section 28C(3), the government is of the opinion that the Greens amendments are not required. It has already circulated amendments that have removed section 28C(3).

Senator SIEWERT (Western Australia—Australian Greens Whip) (10:24): Section 28C as it relates to schedule 13?

Senator CASH (Western Australia—Minister for Jobs and Innovation) (10:24): Yes.

Senator SIEWERT (Western Australia—Australian Greens Whip) (10:24): So is it your belief that the previous amendments actually address the issues that we particularly want to address here?

Senator CASH (Western Australia—Minister for Jobs and Innovation) (10:24): In relation to 28C(3).

Senator SIEWERT (Western Australia—Australian Greens Whip) (10:25): I apologise, I just need to check my notes to see where that fits in.

Senator CASH (Western Australia—Minister for Jobs and Innovation) (10:25): Senator Siewert, perhaps I can provide some clarification. In relation to the Greens' amendment to remove subsection 28C(2), that is still a live issue.

Senator SIEWERT (Western Australia—Australian Greens Whip) (10:25): Thank you. Whilst some of our concerns here have been addressed, others haven't been. I don't think it addresses the substantive issue we have about the grey area in relation to the secretary's power to make provisions directly around the declared program participants. That's what we have concerns about. Our concerns still stand, but I do acknowledge that there have been some changes.

Senator PRATT (Western Australia) (10:26): We will be supporting the Greens' amendments here, noting that we failed in our attempts yesterday in the Senate to have these very same significant issues recognised. We would support the Greens in their attempts to go some way to ameliorating these problems. We're very concerned that the government is failing to recognise the complex nature of substance abuse as a health condition and, indeed, the impact that that has on peoples' lives, including sickness, injury and eviction that can be associated with addiction.

The TEMPORARY CHAIR ( Senator Reynolds ): The question is that amendments (1) to (3) on schedule 13 and schedule 14, item 7, on sheet 8315 be agreed to.

Question negatived.

Senator SIEWERT (Western Australia—Australian Greens Whip) (10:27): Just to inform the chamber, I'm not moving the other amendments that stand under our name to remove certain schedules because there were a number of Labor amendments that were the same as ours. So I'm not going to move those ones again.

Senator CASH (Western Australia—Minister for Jobs and Innovation) (10:28): Could I ask Senator Siewert, just for guidance, what are the amendments that are left?

Senator SIEWERT (Western Australia—Australian Greens Whip) (10:28): My understanding, according to my calculation, is: it is the clause that relates to item (5) on sheet 8243. We dealt with item (2) earlier in the debate, yesterday. I articulated that we would be seeking to move the amendment as it relates to schedule 4, because schedule 4 is now different. It relates to the bereavement allowance. We had a long debate yesterday; I'm not going to go through that debate again. Chair, I don't know if I need to seek leave because I'm actually splitting that amendment.

The TEMPORARY CHAIR ( Senator Gallacher ): Senator Siewert, you don't need to seek leave. My instructions are that you can move amendment (5), which opposes schedule 4.

Senator SIEWERT: The Greens oppose schedule 4 in the following terms:

(5) Schedule 4, page 92 (line 1) to page 116 (line 25), to be opposed.

Specifically I'm focused in this instance on schedule 4 because it changed with amendments yesterday. We had that debate yesterday, particularly as it related to the amendments moved by Senator Hanson. It was made clear then that a number of people will still be significantly affected by this, even with the previous amendments by the government and Senator Hanson, just as a number of people are significantly affected by all the clauses we've been talking about this morning. Having said that, I'll remind people about the debate we had yesterday, which clearly articulated those that would still remain affected. This amendment, while it deals with clause 2, is specifically focused on clause 4, which is in effect a new clause. It's a different vote than the vote that we took I think only two nights ago—it seems like a whole week—in this place on schedule 4. That is my intent and focus with this particular amendment.

Senator PRATT (Western Australia) (10:31): Labor is supporting this amendment to oppose schedule 4. We canvassed these issues yesterday. Minister, can you confirm for me that what people are currently being paid in income support and bereavement payment is the same as what they will get in the bereavement version of the jobseeker allowance under the amended schedule 4?

Senator CASH (Western Australia—Minister for Jobs and Innovation) (10:31): Yes.

Senator PRATT (Western Australia) (10:31): Can you confirm that the future version of the jobseeker allowance for a person who's bereaved, which is paid at the same rate but with an up-front payment, may start to vary from equivalence with the age pension, because those payments are no longer attached to each other?

Senator CASH (Western Australia—Minister for Jobs and Innovation) (10:31): We covered this in quite a lot of detail yesterday, and the response I gave yesterday is the response I'll give today: it is not possible to determine what a future government may or may not do.

Senator PRATT (Western Australia) (10:32): If a Newstart recipient lost their partner today, what would their bereavement payment be?

Senator CASH (Western Australia—Minister for Jobs and Innovation) (10:32): That would depend upon their personal circumstances, and I'd need to take them on notice and get back to you.

Senator PRATT (Western Australia) (10:33): I think the answer would be that if they're a Newstart recipient then they would meet the income eligibility criteria for a bereavement allowance. Would that not be the case?

Senator CASH (Western Australia—Minister for Jobs and Innovation) (10:33): You've now set out a specific circumstance. In relation to that specific circumstance the answer is yes.

Senator PRATT (Western Australia) (10:33): Is that payment currently the equivalent of the age pension?

Senator CASH (Western Australia—Minister for Jobs and Innovation) (10:33): We canvassed this in detail yesterday. The response I gave yesterday was yes, and I give that response again today.

Senator PRATT (Western Australia) (10:33): Can you confirm that under these changes the total payment is currently the same, albeit with an up-front payment that makes up the difference between the age pension and the jobseeker allowance, then on an ongoing basis they will be paid the equivalent of the jobseeker allowance for the 14 weeks of their bereavement or until the conclusion of their pregnancy?

Senator CASH (Western Australia—Minister for Jobs and Innovation) (10:34): Again, we canvassed this issue in detail yesterday. The response I gave in relation to both of those questions I give again today: yes and yes.

Senator PRATT (Western Australia) (10:34): I acknowledge that the amendments made yesterday go some way towards improving the situation for bereaved persons, who will no longer be reduced completely to the jobseeker rate of payment. Again, I say to One Nation: if you truly want to support people who are bereaved then we should go back to the income and assets tests for the age pension, not the income and assets tests for the jobseeker payment.

When One Nation tried to assure the chamber that they had won a great victory for bereaved people, because people would be paid more than they were currently, that was patently false. They were only being paid more relative to the cuts that this government had put on the table, which would have reduced people's payments to the jobseeker rate of payment. All that amendment did was to restore the current rate of payment, but not for everybody who will receive it, because of the change in the income and assets test. If One Nation truly wanted to help people who are on low incomes, who have few assets—who are eligible for the age pension, for example—then they would be supporting the Greens amendment here now.

I ask the minister: if someone is old enough to qualify for a pension and if their assets test is low enough that they would qualify for an age pension but they are otherwise working and they want to go back to that job after they have finished their period of bereavement—so it's a bereavement version—will you pay them the age pension for that period, or will you pay them a jobseeker bereavement allowance?

Senator CASH (Western Australia—Minister for Jobs and Innovation) (10:37): There are a number of qualifying conditions in relation to that, which I'd need to understand: Do they have leave? Do they have other income coming in?

Senator PRATT (Western Australia) (10:37): I said that they would otherwise qualify for income support. For example: I'm 67 years old, I work 30 hours a week casually in a supermarket, I become bereaved, I'd like to go back to that job but I don't have leave and I don't have any other income support; what version of payment would I receive?

Senator CASH (Western Australia—Minister for Jobs and Innovation) (10:37): In relation to the specific circumstances that you've articulated, I'm advised that it is the age pension.

Senator PRATT (Western Australia) (10:38): Thank you. So, in concluding my remarks on this today, I say to the chamber: if someone is bereaved they may be employed and they may need income support just for the period of bereavement. They're not a jobseeker—they're quite capable of returning to the workforce—but they need that income support. I say to the chamber: there is nothing wrong with restoring the previous version of bereavement allowance. The previous version of the bereavement allowance pays it at the rate of the age pension. We can be secure knowing that it will continue to be paid at the rate of the age pension and not attached to a recalculated version of the jobseeker allowance, which we know has not tracked along as well as the age pension has. Historically, that allowance has been much lower than the age pension, and I would much prefer to see this allowance continue to retain its value alongside the age pension.

So I'm calling on Senator Hanson and her colleagues in One Nation: if you truly believe in making people who are bereaved better off in that very difficult time of their life, support the amendment put forward by the Greens.

Senator HANSON (Queensland) (10:40): In response to Labor: it's quite interesting to hear you say that you worry about people. Yesterday, the government said about 30 people will be affected by this—

Senator Watt: Worse off.

Senator HANSON: Thirty people you're saying will be worse off. It is the Labor Party that has just brought in a policy to do with franking credits that will affect at least 610,000 people. It could be up to a million people. Are they worried about it? Here they are in this chamber, screaming like pigs about 30 people, but they want to bring in franking credits that are going to affect 610,000 people. Let's get the figures into order.

Just so that we're clear, under the amendment put forward by One Nation, everyone who qualifies for the bereavement allowance under the jobseeker payment will be no worse off and some people will be better off than under the current arrangements. Payments are targeted to those who need it. Bereavement allowance is paid to people in lieu of work, and this is why it is exempt from normal mutual obligation tests and waiting periods.

Let's clarify a couple of things. Labor sat here last night, as I said, screaming like pigs that people would be left worse off. No, Senator Watt, they won't. One Nation has made the qualification very generous in its approach to the bereavement allowance. Initially, as you said, we voted with the government. We reflected on that with further information. That's why I introduced an amendment in this chamber. Under the government's amendment, if you look at it, as I clarified last night:

567FB Amount of payment

(1) The amount of the person’s payment is worked out using the following formula—

right? It is the 'daily rate of person's youth allowance on the relevant day' times 14 weeks times two by the government. Ours is times seven, which is far better than what the government was putting forward. It is far better for people. It will be income and asset tested, as all welfare money should be. Those people with less than $253,750, not including the family home, will be eligible. That takes out the family home. That is over a quarter of a million dollars. Those people who don't own a home will qualify for the bereavement allowance if they have less than $456,750 in cash and assets. That is not poor people. I don't think we could be fairer. Bereavement will be made available for people earning up to $1,053.34 per fortnight during the bereavement period. In regard to casual workers or people who have no access to leave arrangements, these people will qualify provided they do not earn over the income threshold during their bereavement period or hold assets higher than the amounts I quoted. This is because these people would be with little or no income during this period, during the lack of work.

Through the chair, I'm disgusted by the aspersions that Senator Watt put on me last night in the chamber. They have lied. Labor have lied and Senator Watt has lied about many things with regard to my involvement. They've lied about the penalty rates. In fact, in the federal parliament in 2017 PHON senators voted to restore penalty rates. Further, in the Senate in 2017 Labor stopped PHON, Pauline Hanson's One Nation, from moving an amendment to restore penalty rates that had been removed in deals between union bosses, including Bill Shorten, and multinational companies. There was also the aspersion about asset sales. In fact, I've been the greatest advocate against selling assets. I have been for the last 22 years and I will continue to be. Labor's lies, as they have—

The TEMPORARY CHAIR ( Senator Gallacher ): Senator Hanson, please resume your seat. It is disorderly to refer to things said by the other side of the chamber as lies. Please reflect upon that.

Senator HANSON: The aspersions that have been put upon me are not true, and the verballing that has happened in this chamber is not correct. We're talking about 30 bereaved people that are going to be affected by this. We don't know the numbers of people who will go through bereavement, because death can happen to anyone at any time. Numbers cannot be put on this. The whole fact is that this country is in one hell of a mess when it comes to the welfare payments that are being put out. The welfare payments have to be restored. I have no problem with that, and we stand for those who really need help. But unless we address the expenditure that we pay in welfare payments, we are not going to rein in our debt. There are people who are abusing this.

This bill is quite generous. As I said, people who have assets of $253,750, not including the family home, can claim a bereavement payment. That is there in this. We will go back to it. Look at our amendment. Don't be hypocrites. You actually didn't vote against my amendment; you agreed with it. But you have used this chamber to put your comments across to discredit One Nation and me personally, which I will not stand for. I am a senator representing the people of Queensland and the people of Australia.

Senator HINCH (Victoria) (10:46): I want to say with a heavy heart that I will be supporting the government in this situation. I say 'with a heavy heart' because a lot of the points put forward by the Greens and by Labor are very valid and I agree with a lot of them. But I've come to this decision because we can't throw the baby out with the bathwater, and what has convinced me is the up-front payment to bereaved people. When you have a death in your family, when your partner has died, you need that money up-front. You need it for funeral costs and you need it for immediate expenses. In my mind, that is the overriding issue here, and I will be voting with the government.

Senator WATT (Queensland) (10:47): I'd like to respond to some of the remarks from Senator Hanson on both this proposal and dividend imputation. But, in doing so, I just want to confirm with the minister that what you told the Senate yesterday was that, despite the amendment that One Nation moved that was supported by Labor—and I think pretty much across the parliament—there will still be roughly 30 people a year worse off as a result of the cessation of the bereavement. That's correct, isn't it?

Senator CASH (Western Australia—Minister for Jobs and Innovation) (10:48): I answered this question on numerous occasions yesterday. The answer is: if you do not meet the income and assets test, yes.

Senator WATT (Queensland) (10:48): And is it correct that if this amendment that we're currently debating was passed and was supported by One Nation, those 30 people would no longer be worse off?

Senator CASH (Western Australia—Minister for Jobs and Innovation) (10:48): Senator Watt, I think the whole point of the bill we have before us is actually the simplification of the welfare system, and that is exactly what the bill is doing.

Senator WATT (Queensland) (10:49): With respect, you haven't answered my question. My question is: if this amendment is passed, and if One Nation supports the amendment, am I correct that those 30 people that will be worse off every year will no longer be worse off?

Senator CASH (Western Australia—Minister for Jobs and Innovation) (10:49): I answered that question several times yesterday. The whole point of this bill is to simplify the welfare system.

Senator WATT (Queensland) (10:49): You're clearly not going to answer my question, so I think we'll just have to read into that that these people would be stopped from being worse off, and that's the entire point of this amendment.

Turning to Senator Hanson's remarks, we've heard over and over again that, despite the amendment, which I congratulated them on yesterday—they saw the error of your ways, came back in here and moved an amendment—

Senator Hanson: Oh, don't give me that!

Senator WATT: Oh, you didn't see the error of your ways?

The TEMPORARY CHAIR ( Senator Gallacher ): Senator Watt, please address your comments through the Chair. It's disorderly to address comments across the chamber.

Senator WATT: Senator Hanson and her colleagues saw the error of their ways, came in yesterday and moved an amendment to try to reverse some of the cuts they had voted for twice when they turned up to the chamber on Monday night. It has been stated over and over again by the minister, both yesterday and today, that, despite that amendment, there will still be roughly 30 people per year who will be worse off as a result of the cuts that One Nation has voted for.

This amendment provides the opportunity for One Nation to fully rectify the mistake they made on Monday night. This amendment provides the opportunity to ensure that not one low-income person—mostly low-income women—whose husband dies will be worse off as a result of these changes. One Nation need to understand very clearly that if they vote against this amendment they will be making at least 30 low-income women around Australia worse off every year. They have the opportunity to stop that from happening. So this will be another test of Senator Hanson's rhetoric and claims that she stands up for battlers. Here are 30 low-income women a year who Senator Hanson and her colleagues can protect from these cuts every single year. Labor's going to be doing it. The Greens are going to be doing it. We'll see what the other crossbenchers have got to say. But if Senator Hanson and her colleagues vote with the government, as they do 85 per cent of the time, against this amendment, then they will be making people worse off.

In her remarks, Senator Hanson tried to draw some analogy with Labor's policy about dividend imputation. Every recognised expert in the country—even the Commonwealth Treasury, an arm of the government—recognises that Labor's policies will overwhelmingly affect wealthy retirees. There is a very small number of pensioners who would be affected, and Labor's position has consistently been to stand up for pensioners. So if Senator Hanson on the one hand is going to vote against this amendment and make 30 low-income women a year worse off, and on the other hand is going to oppose Labor's policies on dividend imputation, which overwhelmingly affect wealthy retirees, then Senator Hanson's absolute rubbish about standing up for battlers will be fully exposed. She will be actively taking the side of wealthy retirees in propping up a tax loophole that costs the budget $5 billion per year, and at the same time she'll be voting to hurt and make worse off 30 low-income women every year.

Senator Hanson, I would respectfully say to you that you should be taking the opposite approach. If you're serious about standing up for battlers, you should be voting with Labor on this amendment to protect these 30 low-income women, and you should stand with us in cracking down on a tax loophole that is overwhelmingly used by wealthy retirees. I wouldn't have thought that they are the people who are supporting you. I would be disappointed if what you have decided is that you're going to become a propaganda machine for wealthy retirees, but that seems to be the decision that you're making.

While I'm on my feet, I might also ask Senator Hanson whether overnight she has reflected on the other cuts that she and her colleagues voted for on Monday night. On Monday night, One Nation voted with the government, with the Liberals, to cut the wife pension, to cut the widow allowance and to cut the partner allowance—more cuts to pensions that are currently aimed at low-income people. So far, the only amendment that Senator Hanson has moved to rectify her cuts from the other night relates to the bereavement allowance. Senator Hanson, will you be bringing forward amendments today that reverse the cuts that you voted for on Monday night to the wife pension, the widow allowance and the partner allowance? Or are you going to stand by and see these low-income battlers hurt by your very own cuts?

Senator BURSTON (New South Wales) (10:54): I'm very interested that Senator Watt implies that the Labor Party is in favour of supporting pensioners. Wasn't it the Labor Party that increased the age pension eligibility age from 65 to 67? So much for supporting pensioners!

Senator PRATT (Western Australia) (10:55): I'm sorry, Minister, but I need to traverse some more discussion and questions with you in relation to what is actually paid to recipients. I know we've tried to go through this as thoroughly as we can. I'm clear about who misses out on receipt of the bereavement allowance. What I'm less clear about is the eligibility of people for a lump sum payment. I'm hopeful that the amendments that have been passed by this place substantially improve people's position. My understanding is that the bereavement allowance is typically paid at the rate of the age pension. What I'm less clear about is whether a current Newstart recipient who becomes bereaved continues to be paid at the Newstart rate or is bumped up to a bereavement allowance.

Senator CASH (Western Australia—Minister for Jobs and Innovation) (10:56): To use your term, they will be 'bumped up'.

Senator PRATT (Western Australia) (10:56): That's good news. Are they being bumped up under the existing system?

Senator CASH (Western Australia—Minister for Jobs and Innovation) (10:57): I'm instructed that the answer is yes.

Senator PRATT (Western Australia) (10:57): Thank you for that clarification. I just wanted to be sure that the entitlements remain the same. I was unclear about whether the current Newstart recipients were missing out on getting the equivalent of the age pension. Apparently they're not, and this amendment will make sure that they're not missing out. I was unclear, for example, whether that lump sum payment would be made available to everyone, but, as you've clarified, it currently is.

Senator CASH (Western Australia—Minister for Jobs and Innovation) (10:57): Could you clarify what you mean about the lump sum going to current recipients?

Senator PRATT (Western Australia) (10:58): There is no lump sum for current recipients. It's the equivalent of the age pension over time, and it's the overall payment that is the same—sorry for making that assumption. I wanted to make sure that I understood fully that Newstart recipients are currently receiving the age pension version of the bereavement allowance if they become bereaved. That is, they move from the lower rate to the higher rate in their period of bereavement. I was unclear of whether that was currently the case. Just to be clear, currently, Newstart recipients who become bereaved get paid at the age pension rate of their bereavement allowance. Is that correct?

Senator CASH (Western Australia—Minister for Jobs and Innovation) (10:58): The correct way of saying it is they go on to bereavement allowance, which is paid at the rate of the age pension rate.

Senator HANSON (Queensland) (10:59): Minister, what are the asset and income tests of the 30 who are supposedly going to be worse off under the bereavement payment?

Senator CASH (Western Australia—Minister for Jobs and Innovation) (10:59): I am instructed that to be found ineligible, based on the assets test, a single person needs to be have assets of more than $253,750, not including the family home, if they are a homeowner and $456,750 if they are not a homeowner.

Senator HANSON (Queensland) (11:00): It's considered that these people should be able to care for themselves at the time of bereavement. I feel for people who will go through this stressful time of losing a loved one. But in relation to a lot of people in Australia who are on welfare payments and who are trying to support themselves at this time, this is quite generous—having $253,000 apart from the family home or over $456,000 in cash and assets. This is when a lot of Australians are working extremely hard, paying taxes and trying to keep a roof over their own heads with escalating power prices—which I must say are in line with Labor's policies, renewable energies, plus also to do with the Greens and the escalating costs of power—to try and support themselves.

Senator Watt made reference to the wealthy end of town that are going to be affected by the franking credits. Let's put it into perspective. A lot of the people that were getting the refunds from the ATO with regard to the franking credits were those people who were not on tax returns, and they were under the $18,700. So it is going to affect those pensioners, those self-funded retirees, who are struggling. To sit here and criticise about 30 people who have assets in excess of $253,000 and own their own home is a joke. It is an absolute joke. You have used this platform here in this house, on a sensitive issue like this, to bag out me and One Nation with an amendment that we put forward that is going to assist—and no-one will be worse under this—to put across your political agenda. That is not good enough and you are pathetic in your performance.

The CHAIR: The question is that schedule 4 stand as printed.

The CHAIR (11:09): I understand there are no more amendments, so the next question is that the bill, as amended, be agreed to, subject to requests for amendments. The question now is that the bill, as amended, be agreed to subject to requests for amendments.

The DEPUTY PRESIDENT (11:17): I just inform the Senate that, as the committee has made requests, the third reading of that bill won't be today.

Senator CAMERON (New South Wales) (11:17): I think Labor's position on the Treasury Laws Amendment (Enterprise Tax Plan No. 2) Bill 2017 is clear and unequivocal. We will not support tax cuts of $65 billion for big business while this government continues to attack the poor people in this country.

We've always opposed this significant structural deterioration to the budget. We've had this government argue about budget deficits. Do you ever hear them argue about budget deficits now? This will be a significant structural deterioration, and we will not support it. This is a hit to the budget that shows the rank hypocrisy of a government which lectures the Australian people about the need for budget repair. They used to talk about a debt and deficit disaster and a budget emergency but what's the situation now? The deficit for this year has blown out by eight times. It was $2.8 billion in their first budget and it's now $23.6 billion. Net debt has more than doubled since they took office: $175 billion in September 2013 and $353 billion in January 2018. Gross debt has crashed through the half-trillion dollar mark for the first time and it's set to get to $684 billion in 2027-28. So, given all these statistics, it's ironic to think that what the government has on the table is a $65 billion hit to the budget. The components that we are debating today alone cost $600 million over the forward estimates and $36.5 billion over the medium term.

Now, they claim that there are economic benefits, but we've been clear since the plan was first introduced about highlighting the extremely minimal economic benefits as a result of the full plan, let alone the parts that the government managed to get through: one per cent of economic growth in 20 years time and a $2-a-day increase in wages in 20 years time. We hear all these arguments about the great benefits of these $65 billion tax cuts, but the government's own figures show that it's one per cent economic growth in 20 years and a $2-a-day increase in wages in 20 years time. This is at a time when wage growth is at record lows. Private sector wages growth has flatlined in the last year, being equal to inflation. Australian families are facing a nasty cocktail of rising costs in electricity prices, stalling wages growth and record high underemployment, and this government has nothing to offer—absolutely nothing to offer.

Labor has long held concerns about low wage growth. The dwindling bargaining power of workers and their representatives has played a central role in stagnating wages growth and rising inequality. And what's the government's solution? Cut wages and raise income taxes. The government has also supported penalty rate cuts from 1 July this year, and they seek to raise income taxes on over seven million Australians with incomes between $21,000 and $87,000 from 1 July next year. They're coming after working-class Australians while they want to give massive cuts to the banks and massive cuts to overseas corporations. What is wrong with this government?

A worker on $55,000 will pay $275 a year and someone on $80,000 will pay an extra $400 a year. So the battlers in the community out there, who are doing it tough day in day out, are the ones that will get hit by this bill, and the big end of town will walk away with big smiles on their faces. And Senator Cormann can go and crack a Havana cigar with them, because that's what he's doing: giving a gift to the big end of town.

Labor opposes both of these measures. It goes to this government's approach and their misguided priorities that their answer for flat wage growth is a cut to pay and higher income taxes. We hear those who support it saying that it's needed to drive investment. But it was only a few years ago that we had the biggest investment boom Australia has seen, with a headline corporate tax rate of 30 per cent. The United States Congressional Budget Office put out a paper earlier this year saying that the statutory corporate tax rate is only one of the many features of the tax system that influence corporate behaviour, and that:

Because of their broader scope, average and effective corporate tax rates are better indicators of a company's incentives to invest in a particular country than is the statutory corporate tax rate.

The paper points out that at a headline rate of 30 per cent in 2012 the average rate for Australia was 17 per cent and that there was an effective tax rate of 10.4 per cent.

Budgets are all about priorities, and this government quite simply has its priorities wrong. Big business tax cuts are priority No. 1. Priority No. 2: high income earners get a tax cut. The battlers, the working class, get tax increases, and high-income earners get a tax cut. Workers earning above $21,000 will have their tax increased, and penalty rates will be cut. That's what you get from this government.

We've got our priorities—ensuring that we deal with inequality. We want to deal with inequality in this country. That means properly funding our schools, and proper investments in infrastructure. It also means a fairer tax system, further dealing with superannuation tax concessions, levelling the playing field for first home buyers through reforms to negative gearing and capital gains tax, and capping to $3,000 the deductions people can obtain for managing their tax affairs, as well as our plan to impose a minimum 30 per cent tax on discretionary trusts to deal with the issue of income splitting and deal with something that has been in the too-hard basket for too long. And we are proposing reforms to dividend imputation, where Labor is making hard decisions to make sure that essential services are properly funded to improve our schools and hospitals and provide tax relief for middle- and working-class people. Labor is about looking after working people in this country. The coalition have eyes only for the big end of town, only for big business, only for the people who put money into their election funds. We care about ordinary Australians. We care about making sure that people in this country have a decent life—completely the opposite to this government.

We also want to deal with this issue of intergenerational equity, making sure that we've got the policy settings in place for further generations of Australians—their kids and their grandkids. They're the ones we want to look after, because if we don't we won't have the revenue to pay for essential services, such as schools and Medicare; we won't level the playing field for first home buyers through reforms to negative gearing and capital gains tax; we won't properly fund our schools, our TAFEs or our universities; we won't have the money to adequately fund important infrastructure; and we won't have the proper policies to deal with climate change.

There is nothing fair about what this government is proposing. The issues that we believe are important will not be afforded under this government. This government is hopeless in their position on ordinary working-class people. We've got a better alternative. We always hear the government saying that Labor has no policies for growth, nothing for jobs or wages. So let me remind the Senate of what Labor is actually providing. We're investing in human capital. We're investing in the greatest resource we have: the people of this country. We're investing $17 billion extra into Australian schools so that schools are properly funded—not some rort that the government puts together to pretend it's dealing with schools. We will remove cuts to skills and to the TAFE system, which has been ravaged under this government and state governments. We believe that TAFE is important to make sure that working families can get their kids into vocational education and give them a decent job for the future. We'll invest in physical capital. We will have lots of commitments in national and local infrastructure, such as the Gladstone Port Access Road, the Ellenbrook rail, the Townsville Port channel widening project, the Mackay Port Access Road—all policies aimed at economic growth and job creation.

Further to these policies, Labor has announced the Australian Investment Guarantee. This guarantee will kickstart new investment, support jobs and build the long-term capacity of our economy. Unlike the government's company tax cuts, the Australian Investment Guarantee will guarantee that every dollar spent underpins new investment. We are guaranteeing the investment that will create jobs for the future. This is well targeted and affordable. Our policy will allow all businesses to immediately expend 20 per cent of the value of eligible depreciable assets in the first year of all new investments, with the balance depreciated in line with normal depreciation schedules for the first year.

The Australian investment guarantee is a permanent accelerated-depreciation scheme, and it will operate indefinitely. It will apply only to eligible investments valued at over $20,000, with no pooling of assets allowed, to ensure it's well targeted at productivity-enhancing investments. The Australian investment guarantee is a pro-growth, pro-jobs reform that rewards businesses making new investments in Australia. Only companies that make the decision to invest in Australia will benefit from this tax relief, while up to 60 per cent of the government's company tax cut handouts goes directly to foreign shareholders. We want to make sure the incentive is there for Australian businesses to invest, not just to give a boost of profits to overseas investors.

There has been lots of support for this policy. The Chief Executive of the Ai Group, Innes Willox, said:

The Investment Guarantee would provide a significant boost for businesses to invest particularly for longer-lived investments.

The proposed measure comes at a time when business investment, and particularly non-mining investment, has been slow to recover in recent years.

As a measure designed to lift investment, the Investment Guarantee would increase the stock of invested capital, boost the quantity of capital per worker, raise productivity and underwrite an acceleration of real wage growth.

The Chief Executive Officer of the Australian Chamber of Commerce and Industry, James Pearson, said:

Business welcomes this commitment from the Opposition – it’s good policy.

What’s particularly positive is the proposal to make this a permanent feature.

This is important as policy certainty and policy consistency is critical for business.

The Energy Efficiency Council said:

A new Federal Labor policy that gives an immediate tax deduction to businesses that invest in energy saving equipment would help slash energy bills.

The Chief Executive of the Property Council, Ken Morrison, said:

… the Australian Investment Guarantee would be a powerful tool for accelerating energy efficiency gains across different industries, but especially in the built environment.

…   …   …

We welcome Federal Labor's announcement of this policy and the potential it has to help reduce costs for consumers.

The chief executive of COSBOA, the small-business group, Peter Strong, said:

Labor's announcement is a welcome one as it would make it easier for Australian businesses to invest and grow. The fact that this measure is available to all businesses, big and small, is also very positive as it will help small businesses directly as well as encouraging larger businesses to invest in the products sold by small business.

The CEO of the Australian Food and Grocery Council, Tanya Barden, said:

This initiative will go a long way to encouraging investment in high tech and high skilled projects to enhance efficiency and increase scale.

We are particularly supportive of the Australian Investment Guarantee’s inclusiveness across the industry sector. The opportunity to use this Investment Guarantee towards energy saving projects is also very important.”

As I stated before, Labor will not be supporting this bill. It sums up the completely wrong stance that this government is taking of giving away $65 billion on a hope and a prayer that there will be investment. Labor, instead, has a superior policy offering. We've put out a significant policy agenda to date and will have more to say between now and the next election. And if you hear this argument about the credibility of the coalition and their economic policies, just laugh, because Malcolm Turnbull, the current Prime Minister, has no economic credibility. Where have they been on economic issues? They wanted to increase the GST. I think that lasted a week. They wanted to let taxing powers go back to the states. I think that lasted a couple of days. And now they're on the trickle-down approach with $65 billion of tax cuts, much of which will end up overseas. Remember, this is a government that continues to argue to maintain dividend imputation and give tax cuts back to people who are not paying any tax.

We hear the government arguing that this is about pensioners. It's not about pensioners; it's about wealthy self-funded superannuation recipients getting money that no-one else in the community gets. It's an absolute nonsense. When this government first came to power, it wanted to reduce indexation for the pension. We know who the friends of the pensioners are. It's not this government. It's not Malcolm Turnbull. The friends of the pensioners are the Labor Party. We will look after pensioners—real pensioners, not rich people that don't need money given back to them for nothing.

This is a government that wanted to reduce the indexation for pensions and reduce the pension. This is a government that wanted to freeze the asset income tax threshold for pensioners for three years. This is a government that wanted to reset the income test for single pensioners and pensioner couples combined. It wanted to increase the qualifying age for the pension to 70—the highest anywhere in the world. This is a government that wanted to abolish the senior supplement and make the seniors health card harder to achieve. It wanted to cut support for the states and territories for seniors concession cards. It wanted to abolish the mature-age worker tax offset. The government also abolished the pensioner education supplement. And the government will cease paying current aged care payroll tax supplements for aged-care providers. This is a government that doesn't care about pensioners. This is a government that only cares about the big end of town, handing money to the rich and the wealthy at the expense of working class Australians. This is a disgrace of a government; a rabble of a government. The sooner its tenure comes to a finish, the better for Australia and all workers. (Time expired)

Senator WHISH-WILSON (Tasmania) (11:38): The Greens believe that all Australians, no matter who they are, should pay their fair share of tax. We believe it's fundamentally unfair for us in this place to be legislating for a tax cut for big, wealthy, greedy companies, some of the most profitable companies in the world—many of them multinational companies—who currently aren't paying their fair share of tax. If we do legislate for a tax cut for the big end of town, then the burden is going to fall on other Australians to make up the difference, and that's fundamentally unfair.

Let me be completely unambiguous and totally clear. The Greens will not support tax cuts for big, wealthy corporations—not in this government, not ever. It is not in our DNA—unlike the Labor Party, who have come in here today and said that they won't support tax cuts for big corporations by this government but have said very clearly, through Mr Chris Bowen, that they will support tax cuts for big corporations if they form a future government and if the budget allows them to do so. Mr Bowen has made it very clear that his personal philosophy in his book is that he's not against tax cuts for big wealthy corporations. Well the Greens are, and let me tell you why. They don't work, except for returning profits to shareholders and bumping up fat cat CEOs' pay packets. That is all they're good for. There's no evidence that the benefits will trickle down to others in the economy. In fact, we are 100 per cent confident that the burden will fall on the most vulnerable Australians to pick up the slack. And I'm going to give you some really, really good reasons why I believe that is the case.

You will never get tax cuts from the Greens for big wealthy corporations. We were the ones who initiated the first Senate inquiry, which broke a lot of ground in this place four years ago, into multinational tax avoidance. We've got a long way to go but we've managed to achieve a lot already. People don't understand; there's always a lot of spin in politics—I get that—but the only thing we've heard about in this debate is headline tax rates. We haven't talked about effective tax rates, which are tax rates after the various deductions—of which many are very generous and provided by the government for big corporations—or average tax rates. Australia actually has some of the lowest effective and average tax rates in the OECD—not the highest, as Senator Cormann and the government will tell you, but some of the lowest.

Only a few years ago in this place we were told that we had a budget emergency. We used to be told relentlessly that the country was going broke and that we urgently needed cuts to spending, including cuts to the most vulnerable—to single parents, to the unemployed, to students—and here we are just a few years later about to give tens of billions of dollars in essentially handouts in corporate welfare to some of the biggest, wealthiest companies in the world. So the budget emergency apparently is gone. I'll bet you it comes back at some stage in the near future, once this tax cut has gone through.

Let me give reasons why I don't believe that a tax cut for wealthy corporations will benefit Australia and average Australians. Trump's tax cuts have been in this debate ad nauseam and, basically, we're following, as we often do, the US, following one of Trump's key policies here. But what have we seen in the US? We've seen a very clear trend towards big corporations buying back their shares, and increasing payouts to CEOs and to shareholders. Morgan Stanley recently published a survey of some of the biggest companies on the New York Stock Exchange and 44 per cent of them said that they were going to use the funds from their tax cut to support share buybacks and give back money to shareholders.

For those who actually understand finance and how markets work, there's a lot more to this than there seems in this debate. This is not just about the fact that companies are choosing to buy back their own shares or give money to shareholders over workers, which is something I'll get to in a minute, but there are no guarantees at all that we're going to get the much-needed tax cuts going into wage rises in this country. There is no evidence at all that that's going to be the case. The reason companies are doing this, the reason any company buys back its shares or returns money to shareholders, is that they don't have a better return on investment. That's a fundamental principle of finance, which means that they're not going to spend that money by investing that money in their business to get a better return—the best short-term returns being giving the money to shareholders, their own CEOs or buying back their shares.

The whole basis of the argument that we've heard from Senator Cormann and the Treasury for the tax cuts, how the simple logic goes—for those students in the gallery today—is: we give companies tax cuts, they take that money and they invest it back in their business; that investment leads to productivity growth and, because they get productivity growth, we get increased wages and more jobs for workers. If you want a clearer signal that that is total and utter rubbish, just look at what CEOs and companies are doing in the US. They are not investing this money back into their business. You invest in your business only when you see, for example, an opportunity to increase demand for your products or lower your costs. Most of these corporations are highly efficient as they stand now. They are in very competitive environments and have their business models locked away.

What are they doing with this handout from governments and the Australian taxpayer? They are buying back their shares and returning the money to shareholders. Apart from the fact that workers are missing out, it also means the entire logic behind this tax cut is a lie. It is a mistruth. It is false. Companies do not agree with the Treasury secretary or Senator Cormann that they'll reinvest this tax cut into their businesses, increasing productivity and ultimately hiring more people—the so-called trickle-down effect. The evidence is simply not there to support this. When you lower tax on a corporation and they buy back shares, it enhances their potential net profits after tax, their returns on assets and ultimately—guess what—the valuations of their shares. This makes sense to anyone who understands finance. Who benefits the most when a share's valuation and therefore the share price improves? Those CEOs who are paid tens of millions of dollars with all their share packages, and shareholders; that's who. This is a rort for big businesses.

Why are big businesses around the world and in Australia arguing for tax cuts? Let me tell the Senate and those students listening in the chamber today how the system is gamed to the advantage of multinational corporations. These companies are called multinational or transnational because they have operations in countries all around the world. Does that make sense? They go into a country and lobby for a tax cut. What happens after that? When one country goes ahead and cuts their corporate tax rate, other countries then say, 'Wait a second, we're going to miss out on investment and business here, because money will flow to where businesses get the best return,'—the same argument that Senator Cormann has been progressing throughout this debate—and then another country cuts their corporate tax rate, and so on and so forth. This is a race to the bottom. The IMF has warned about a race to the bottom on corporate tax cuts. These multinational corporations are gaming the system. They are going around the world and lobbying to get tax cuts in different countries, and then other countries have to do the same thing in order to remain competitive and stay ahead of the curve,. My question to the Senate is: where does it end? We are going to drop our headline corporate rate to 25 per cent, which is in line with the OECD average; Mr Trump is going to drop his to 20 per cent or 15 per cent. Who knows where it stops?

Who benefits? It is companies with operations in different countries, because they will arbitrage and leverage direct foreign investment based on tax rate. They are running this show, this government and many governments around the world. They donate to political systems. We're all aware of the special interest effect, which is so on display in multilateral trade negotiations like the Trans-Pacific Partnership Agreement, where rules are being written for us—our democracies, our parliaments—by multinational corporations through shady negotiations that lack transparency, including allowing corporations to sue us if they don't like the sovereign decisions of parliaments. This is the world we live in. You cannot ignore the reality that this tax cut today has come about because Mr Trump dropped his corporate tax rate, as have other countries in this race to the bottom. Now, to remain competitive, we are doing exactly the same thing. Where will it end? We need corporations to not only pay competitive and fair headline rates but also pay their tax in the first place. Many of these corporations already know how to rig and game the system by not paying tax at all.

So what about wage rises? Will we get any guarantee from the big business lobbies, from Senator Cormann and the Liberal government—or from a Labor government, if they form government—that their big business tax cuts will lead to workers' wages rising? I asked questions of the Treasury secretary and the Treasury officials during estimates, and they gave us a figure of one per cent over time, which works out at $750 a year. Now that is not a step $750 increase every year; that is a level $750 a year. But let me tell you: if—'if'—we ever get to $750, it relies on the economic logic that I've just described, that companies will reinvest the windfalls from a tax cut back into their businesses, increase investment, increase productivity and have more money and more jobs for workers. That's what it relies on, and I'm telling you that that is a false assumption that underpins the model of our Treasury. This is not to mention the fact that when corporations do reinvest back into their own businesses, often it's in labour-saving technology, to cut their costs, and not in giving workers more jobs or giving workers pay rises. That is also not what the evidence bears. So the whole fundamental premise behind us supporting this corporate tax cut to somehow magically, like a magic pudding, create jobs and create higher wages for workers is a false story. It is not the case, and the Senate should not be supporting this.

Since I've been in this place, I've always wanted to be not just oppositional, but to be propositional.

Senator Ian Macdonald interjecting—

Senator WHISH-WILSON: You may laugh, Senator Macdonald, but my record will show that I've contributed a lot more than you have in this place towards economic debate in this country. So let me tell you what the Greens propose. We propose the best way to get wage rises—and even Senator Macdonald doesn't disagree that we have a problem with wage rises in this country. The Treasury secretary has acknowledged it; Senator Cormann has acknowledged it. Wage growth has been sluggish for too long. We've put forward very good policies for stimulating wage rises in this country.

For three years, we've also run with a platform of investing in infrastructure in Australia—exactly what we need to enhance productivity and grow long-term jobs. That is exactly what we need to do. Funnily enough, some of the world's top economists have actually criticised the whole tax cuts debate and said that the best way to enhance productivity and ultimately create more jobs and higher wages is investing in long-term productivity-enhancing infrastructure. I'm proud that my party took to the last election not only a comprehensive package on how much investment is needed in this country in infrastructure and what kinds of infrastructure are needed but also the best way to finance it, including the establishment of an infrastructure bank. As Senator Williams would know, much of that infrastructure is needed in rural and regional Australia. I chaired a select committee into exactly this thing. It went around the country collecting this evidence. So we have a plan for stimulating jobs, sustainable growth and productivity that will help workers. The government's policy is not the right path.

So I've talked a bit about the policy, but what about the politics of this? I'll talk about that in the last four minutes that I've got left. We know that One Nation, behind closed doors, are close to cutting a deal with the government, if they haven't already, to support this. No doubt this has been brought to the chamber because they've already cut a deal. I would hope that One Nation have thought long and hard about what they're going to get in return for supporting what is the key piece of legislation in the economic space for this government in its term of government. It is a bad policy; it is a policy that we shouldn't be supporting. I will say it again: the Greens are the only party in this place who are unambiguously saying, 'We do not support corporate tax cuts for big wealthy corporations.' Labor, as usual, want to have their cake and eat it. Mr Bowen has been out there saying he's not averse to the principle of supporting tax cuts for big corporations. I noticed that, in the last contribution from Senator Cameron on this policy, he was very careful to say that he wouldn't support it from this government while the budget wasn't being balanced, while we had a budget crisis on our hands. But they're not ruling out that Labor will support big tax cuts for big wealthy corporation if they get into government.

So let's be very clear about this. The only party that is ruling it out is the Greens, because we see a different future, a different vision for this country—a vision that runs an inequality lens over every single policy we enact in this parliament. Asking corporations to do less and asking poorer Australians to do more is not going to help inequality in this country. There is so much more we need to do. We can raise revenue by tackling structural problems in our tax system. We can tackle problems of unfairness in our property market by removing negative gearing and capital gains tax concessions. We can fix the rort that is petroleum resource rent tax.

There's so much more we can do, and I'm very proud to say to you, Senator Macdonald—through you, Chair—that the Greens lead on these issues and Labor and sometimes even the Liberals follow. Since I've been in this place, we have consistently put forward good economic policies—not that it's often acknowledged. We've still got our work to do to get that acknowledged, but we have consistently always put forward good economic policies to make Australia a fairer place—I'm very proud of our track record—and we will continue to do so, and I'm not at all bothered if other parties adopt our policies. I see that as our role in this place: to push other parties as a change agent, to get what we need in this country to move towards fairness.

Supporting tax cuts for corporations, the big end of town, who already don't pay their fair share of tax and already get generous tax deduction concessions so they have low effective and average tax rates, is madness. What we should be doing is actually asking them to pay the full amount of tax. We should be cutting down on rorts and reductions that allow them to continually pay no tax. We should be looking at an overhaul of our tax system, and we should be looking at ways of raising revenue that allow us to pay for our social safety net and support our most vulnerable, including our students. We should also be looking at ways to make the country fairer at the same time, and I think that blueprint is out there for everyone to see, but it just takes political courage. It takes political courage to stand in this place and make those decisions. Once again, I'm proud to be part of a party that does have the political courage to come in here and state a very strong position on important matters relating to inequality and fairness in this country. That's why we've been elected to parliament by the people who voted for us.

I look forward to hearing the high level of debate from other senators—including you, Senator Macdonald, up next—on why the evidence suggests we should be cutting tax for some of the world's wealthiest corporations, who are going to use this money to buy back their shares, pump up their valuations and pay their CEOs more money, and have made no guarantee they're going to invest this tax cut back into industry, investment and jobs in this country.

Senator IAN MACDONALD (Queensland) (11:58): This is a debate, so can I start by referring to the previous speaker, and can I say that, in my long years in the Senate, never have I seen a government of the Liberal and National parties ever adopt an economic policy of the Greens political party. At least Senator Rhiannon, who's just been tossed off the Greens ticket, acknowledges this. She is an advocate of the communist philosophy and policy, and I have to say, most of the Greens political party are people who follow the ultra-left-wing socialist approach to economics, and such is their right. But, of course, world history has shown that it simply does not work. Just have a look at Russia and the communist philosophy there. It didn't work. They got rid of it. Have a look at China. It is allegedly still a communist country, but all of their economic policies are pro-market, pro-capital policies, because the socialist policy that the Greens political party always espouse simply does not work.

I will go through and expose a number of the myths that you've just heard from Senator Whish-Wilson—myths that the Greens political party keep trying to propagate and keep trying to scare the schoolchildren with. And you did scare them, Senator Whish-Wilson—they left the chamber!

Those myths are just that—myths—and I intend to expose just those that I have time to do.

First of all, can I set the scene? In Australia—we're a relatively new Western country; we've only been going a couple of hundred years—every investment that has made Australia the great country it is has effectively been a foreign investment, one way or the other. There is money circulating around the world. Companies around the world, people with money, look around the world and say, 'Where can we invest our money?' Fortunately, over the years, particularly in the fifties and sixties under the Menzies Liberal government, a lot of people invested their money in Australia, as a result of which we built new factories, we built dams and we built new businesses, and all of that new activity created jobs and prosperity for Australians. We got to the stage where Australia's standard of living was amongst the highest in the world. We got there because of our economic activity, because of good government in the Menzies years and because people with money overseas, who wanted to invest, invested in Australia, building Australia and creating jobs.

You don't have to be terribly clever to work out that if you've got money to invest in Australia then you look around—you look up all the banks; you perhaps ring your stockbroker or financial adviser—and say, 'Where can I invest my money so that I will get the best return for my money?' Of course you do that. We all do that. Why wouldn't you do that? That's what people with money around the world do; they look around and say, 'Where will we invest our money so that we can get the best return for us?' They say: 'In Australia you pay corporate tax rates of 30 per cent, but if you go to France you can get tax rates of about 20 per cent and falling. If we invested in the United States we'd get tax rates of 15 per cent. So why would we bother investing our hard-earned money in a country which is going to tax us more than anyone else?' It's a matter of simple common sense that people who invest, and invest in productivity, are going to go where they get the best return. The communist philosophy doesn't like that because the communist principle is that all business is bad and capital is bad. But we've seen what's happened with the communist philosophy in the past: it simply does not work. People with money want to invest where they get a return. People don't have a particular penchant for Australia. They will go where they get the best return, and of course that is where the corporate tax rate is the most relevant and the best from their point of view. It's a matter of common sense. I can't understand why people are even concerned about this.

I will quote a prominent Australian—I was going to say 'distinguished', but that's not right—who said this about tax rates:

Cutting the company income tax rate increases domestic productivity and domestic investment. More capital means higher productivity and economic growth and leads to more jobs and higher wages.

That's a quote. Let me ask you, Madam Deputy President: was it perhaps from Malcolm Turnbull? No. You're wrong if you said that. That quote came from Mr Bill Shorten in the House of Representatives on Tuesday, 23 August 2011. I'll repeat it. This was Mr Shorten:

Cutting the company income tax rate increases domestic productivity and domestic investment.

Correct, Mr Shorten! You were once right. He went on to say:

More capital means higher productivity and economic growth and leads to more jobs and higher wages.

Right, Mr Shorten! You were right a second time. I assume that, because of that, Mr Shorten and his team opposite us will be supporting this proposal from the current government, which does exactly what Mr Shorten was advocating.

Here's another quote, if I could just take the time of the Senate:

Lowering the corporate rate for smaller businesses only [as the Greens propose] creates an artificial incentive for Australian businesses to downsize—

that is, go down—

In worse case scenarios some businesses might actually lay people off to get smaller—and the size-based different tax treatment would create a glass ceiling on business workforce growth. Instead we want a level playing field regardless of the size of the company.

Again, I could ask 20 questions: was that Scott Morrison, was it Malcolm Turnbull or was it Senator Cormann who said that? No, you'd be wrong. That was said by none other than the Leader of the Opposition, Mr Bill Shorten, in a speech to ACOSS in Melbourne on 30 March 2011. If you needed any evidence, any argument, those two quotations from Mr Shorten actually sum it all up.

Can I just digress a fraction. I was recently involved in the Senate Select Committee on the Future of Work and Workers. In a one-line explanation, this committee's inquiring into what will happen in Australia in 10, 20 or 30 years time. A lot of the jobs which we currently have in Australia are now done, effectively—this is my terminology, not the technical terminology—by robots. So, what are the rest of us going to do in the not-too-distant future?

I was absolutely blown away by the evidence of Mr Michael Cannon-Brookes, who leads a company called Atlassian. He was talking about other things, but what impressed me about Mr Cannon-Brookes's evidence to the committee was how global we are all are the moment. The jobs in Australia are the jobs anywhere else, and we can do them in Australia, given the right scenario. This is a company which started not long ago with a couple of people—a couple of innovators. They were young people who had an idea and started this business in Australia. Mr Cannon-Brookes said to us that the company manufactures software and helps teams collaborate and communicate better in their workplaces. He said:

We currently have 110,000 enterprise customers in over 160 different countries—

This is an Australian born and bred company, and, remember, a couple of years back they started with just the two of them. He went on:

We employ 2½ thousand staff in 10 different offices, more than a thousand of which are in our Sydney headquarters, and have won 'Best place to work in Australia' two years running

Mr Cannon-Brookes was not particularly talking about tax cuts, but his evidence to the committee indicates just how tough it is to do business in Australia if we have rules and regulations that make us worse off than our competitors.

In this instance he was talking about skilled migration, but the same applies to the tax rate, so I'll just read a couple of words from what Mr Cannon-Brookes said:

So let's talk about skilled immigration. The lack of access to experienced global talent is the single biggest factor constraining the growth of the tech industry in Australia. From my view, we think about skilled immigration completely backwards. We focus on overseas workers taking jobs from Australians, and, in high export industries like mine, it's just not the case. Highly skilled experienced migrants are job multipliers at Atlassian. For every one senior person we import, we can hire many, many more around them. Their experience spreads to tens of other employees close to them in the organisation. It is absolutely invaluable to me.

He then went on to complain about some of the recent changes to the 457 visas, and that's a matter that the government should look at. I know the government's been pushed into 457 arrangements that aren't quite suitable because of demands from the unions and the Labor Party. We haven't got it right. He goes on to say:

Our future success depends on our ability to attract the world’s best tech talent … today. To unlock the huge job-creating potential of tech companies in Australia, we need to change the way we think about skilled migration. The government should be helping local companies attract world-class employees, not close the door in their faces.

As I say, this is not actually germane to this bill but it gives an idea of how an innovative company like this understands that we have to compete with the world and of the sort of rhetoric you get from the Greens political party about immigration taking away Australian jobs. You can see from a guy who's at the coalface that that is simply not the case.

It's the same with corporate tax. Sure, every country in the world would like to tax corporate profits by 50 per cent or perhaps even 100 per cent. But you have to be real. In fact, Senator Whish-Wilson rightly says that Australians ignore reality. I'm afraid he ignores reality. To remain competitive we have to be competitive in the tax rate that we charge corporations. I did want to go through all of the myths that Senator Whish-Wilson and Senator Cameron before him had spoken to the Senate, but I'm going to run out of time. Let me just deal with the first one, which was that Australia cannot afford company tax reform. This is just plain wrong, and contrary to the facts. Our business tax reform is fully costed and it is reflected in the government's budget forecast and projections, which show that the budget will return to surplus in 2021 and will remain in surplus over the medium term.

For members of the Labor Party, and for members of the Greens political party who supported them through those horrible Rudd-Gillard-Rudd years, I should pause a minute to explain what a budget surplus is. Within six years, Labor, supported by the Greens political party, took Australia's bank account from effectively $60 billion in credit—that is what the Howard government left when it left office in 2007—to something like $250 billion in deficit and heading towards $700 billion in deficit. The Labor Party and the Greens' great economic policies—the same as the old communist regime—took Australia from having $60 billion in the bank, in the kitty, to a deficit approaching $700 billion. It was borrowed from foreign lenders, to whom who we had to pay interest equivalent to the cost of a new hospital every day. This is the economic credibility of the Greens political party and the Labor Party!

We are heading towards a surplus. These are Treasury figures, and we know that will happen. The budget is forecast to be in surplus by the time the company rate under this proposal is reduced to 27.5 per cent for companies with a turnover below $250 million, and is projected to have been in surplus for six years before the company tax rate eventually reaches 25 per cent for all companies. In response to the claim by Senator Whish-Wilson and Senator Cameron that Australia can't afford this, these reductions come in over the next five to 10 years. In that time, the surplus will be real. The Australian budget will actually be in surplus so, yes, we can afford it. We're only bringing ours down to 25 per cent at this stage. It's still not competitive with America and France and Britain. In fact, all of the other developed countries of the world and many undeveloped countries of the world have a tax rate that will be even lower than that. But at least it's heading in the right direction, and it will make investors think seriously about investments in Australia.

The opposition, the Labor Party, are proposing to save the cost of the company tax cuts if they are not proceeded with. But they've already committed the entire fiscal cost of those company tax cuts, and more, to increases in expenditure. So Labor say we can't afford these tax cuts, and yet they've already announced that they're going to spend more than those tax cuts would have cost on other expenditure—which socialist governments like the Labor Party and the Greens are always prone to doing. It's easy to give away someone else's money—it's not their money; it's the taxpayers of Australia's money. It is very easy to rock up to some place and say, 'Yeah, we're going to give you a pocketful of money,' and people say, 'Gee, isn't that good.' But someone has to pay for it. And who pays for it? The ordinary taxpayers of Australia—the hard workers who go to work every day, work diligently and pay their tax, which the Labor Party and the Greens then just want to give away for anything that might increase their vote. It's not the way to run a country. It's not the way to run an economy.

It's a matter of record that, at the 2016 election, the Labor Party promised a worse budget bottom line than the coalition over the following seven years, despite locking in a higher tax rate of 30 per cent for all businesses with a turnover of $2 million or more. That, as a matter of logic and simple arithmetic, is just wrong. The opposition cannot simultaneously direct tax cuts towards other priorities on the spending side of the budget and argue that they are unaffordable. That's the illogical argument that you're getting from Senator Cameron, and no doubt other Labor speakers.

There are other myths that have been created by Senator Cameron and Senator Whish-Wilson that I would like to have time to dispel, but I'm sure my colleagues who follow me in this debate will do so. Can I simply conclude by again quoting a prominent Australian on these figures—and I repeat these words because they are so germane and so accurate:

Cutting the company income tax rate increases domestic productivity and domestic investment. More capital means higher productivity and economic growth and leads to more jobs and higher wages.

Would you believe—you do know, because I've said this before, but you'd struggle to believe—that those words came from Mr Bill Shorten, the Leader of the Opposition. I certainly hope that he and his colleagues follow those words now.

(Quorum formed)

Senator PATERSON (Victoria) (12:21): This is a pleasant surprise. I was expecting to speak later in the order but it seems some other senators who were listed in the speaking order have not been able to find their way to the chamber on time to take up their allotted slot in the speaking order, so I've happily stepped into the breach.

The DEPUTY PRESIDENT: I do remind you, Senator Paterson, that the speaking list is a guide only.

Senator PATERSON: Yes, I will take that interjection, Chair—

The DEPUTY PRESIDENT: It's not an interjection; it's just my advice to you.

Senator PATERSON: Thank you for your advice. I'll take your advice. It is a guide that we can normally reply upon and that is normally a very good guide to what happens in the chamber, but this morning, perhaps for some other reason, senators who were scheduled to speak in the normal order have decided not to. As it happens, I was just sitting at my desk in my office writing the speech on company taxes that I was due to deliver here, but, fortunately for me, this is an issue that we have all canvassed very widely in this chamber over the last few months, so I'm sure I'll be able to make a contribution without having a speech here in front of me.

I'm really pleased to have the opportunity to again make the case in this chamber for why Australia's company tax rate must be cut, why it must be reduced. There are many compelling reasons for this, which we will hear throughout this debate, but I want to take this opportunity to address some of the arguments that have been made so far in this debate that I find less compelling. One of them was made earlier in the chamber by Senator Whish-Wilson. He concluded his contribution to this debate by saying that what was lacking in this debate and what was lacking on the part of the government was courage, and if only the government had more courage it would have taken a different approach to company taxes: instead of advocating for a reduction in company tax rates—as the government is—the government would seek to find more revenue from companies, to raise higher tax revenue from companies in this country. I would respond to Senator Whish-Wilson, through you, Chair, by noting that there is nothing courageous at all, politically or otherwise, in bashing big business and saying you're going to take more revenue from them. In fact, it's the least courageous thing you can do in Australian politics, it's the easiest thing you can do in Australian politics, because what you are doing is appealing to the base political instincts and ignorance of some people in the community, and some people who have deliberately sought to whip up ignorance in the community, by portraying big business as somehow evil, as somehow noncontributors to our society and as somehow evading their obligations to pay a fair amount of tax in this country. It's very popular and very easy to make this argument, and that is what the Greens do. I think it lacks political courage, in fact, to make these arguments. So, I don't share Senator Whish-Wilson's view that the courageous thing to do would be to raise more revenue.

The truth is that Senator Whish-Wilson and the Liberal Party and I just bring different philosophical approaches to this issue. The Greens are in favour of big government. They think government knows best and they think that more money here in Canberra would be a good thing and that less money in the pockets of Australians, including Australian businesses, would be a good thing. That is fair enough. We have different philosophical world views. They take their approach and we take ours, but let's not pretend that this is a question, somehow, of courage.

It's almost a year ago that the Senate passed the first part of the government's Ten Year Enterprise Tax Plan. I want to congratulate and thank crossbench senators, who, at that time, did the right thing by supporting tax cuts for small businesses with up to $50 million in revenue. But now the crossbench has a different task, and that is to help the government finish the job—to legislate the rest of the enterprise tax plan. The case for finishing the job of the enterprise tax plan and passing the rest of the tax cuts is even stronger now than it was 12 months ago. All of the same arguments made then about stimulating increased investment and the flow-on benefits that would accrue to employment and wages, of course, remain exactly the same.

Today, there are two significant additional arguments that I hope crossbench senators, in particular, carefully consider. I want to thank them for so far engaging constructively with the government on these issues. In my view, it's to the great credit of senators Leyonhjelm, Anning and Bernardi that they've already agreed to support the government's full package. It's also a credit to the One Nation senators, as well as Senator Hinch and our new colleague from South Australia, Senator Storer, that they remain open-minded and that they are willing to negotiate. But, coming back to these two new pieces of evidence that we have now that we didn't have 12 months ago, I wrote an article for the Financial Review earlier this month remarking on one of these, which is that if the Senate stops now, if the parliament stops now, and leaves in place only the tax cuts legislated for small business, rather than finishing the job and legislating the rest of the tax cuts for all other businesses, then what we will be perhaps inadvertently doing is leaving in place an inefficient and distorting two-tiered company tax system. It will put in place a series of perverse incentives and it will vastly limit the benefits of the tax cut passage.

I understand the political dynamic here. It is much easier to be seen to be supporting tax cuts for small business. After all, who hates small business? Not even the Greens, I believe, hate small business. A different tax rate for larger businesses would effectively create a discriminatory company tax system that will punish businesses for their success. It's not what we should be doing; we should instead be encouraging businesses to grow. It is a very good thing when a small business becomes a large business. A two-tiered company tax system will do the opposite. It will hit companies with a five per cent tax increase as soon as they pass a turnover of $50 million, regardless of how profitable they may be. It will discourage innovation and create a perverse incentive for companies on the margin to limit their growth or to artificially structure their affairs to avoid crossing this threshold and paying more tax. It will inevitably impact business investment, economic growth and job creation. A two-tiered company tax system will seriously dampen the benefits that we could otherwise count on from cutting Australia's company tax rates. The truth is that the biggest bang for buck in economic terms will come from lowering taxes on our largest businesses.

Saul Eslake, an economist, has noted that the greatest growth in private sector employment in recent years has in fact come from big companies. If we want to see more of some of the record 403,000 jobs created in the last 12 months, it is not going to come by penalising big business. I doubt that any of those 400,000 people, many of whom got jobs in large businesses in the last year, want their employer to be penalised for their success.

ABS surveys on innovation also show that large businesses are the most likely to adopt new and innovative practices. Despite all of the propaganda that you hear about corporate tax avoidance, the reality is that it is big business that pays the overwhelming share of company tax in this country. That means that it's big business who is most likely to respond to the incentive provided by a reduction in the company tax rate.

These are the facts: according to the latest figures from the Australian Taxation Office, Australia's 2,475 biggest companies—that is, the top 0.2 per cent of companies—pay almost 64 per cent of all company tax in Australia. Sixty-four per cent of company tax in Australia is paid by the top tiny proportion of Australia's largest businesses. They are paying their fair share.

The Labor Party has also been running an inherently contradictory argument here. They say that big business pays no tax, or avoids paying the right rate of tax, and therefore we shouldn't cut their rate of tax. But, if a business doesn't pay any tax, then how would it benefit from a reduction in the rate of tax? If they pay zero dollars tax at 30 per cent because they make no net profit, then they will still pay zero dollars tax when that rate is reduced to 25 per cent.

It's the companies who already pay billions of tax that will benefit from a lower tax rate and will respond to a lower tax rate with increased investment. The international capital flows that a lower corporate tax rate is designed to attract overwhelmingly go to big business. If we want to attract more of that investment, we need to ensure that the return on that investment is competitive. It won't be if we continue to fall behind our competitors by having a higher corporate tax rate. One dollar of profit in a jurisdiction with a 25 per cent corporate tax rate is more attractive for an investor than $1 of profit in a jurisdiction with a 30 per cent tax rate.

Economists disagree about the exact share of where the company tax burden falls. Is it on shareholders through lower returns? Is it on employees through lower wages? Or is it on customers through higher prices? They disagree about the proportion of the burden that falls on those three groups but they all agree that it's a shared burden. All of those three groups bear the burden of company taxes and it's a burden which is ultimately borne by people. Ultimately, the cost of company taxes is paid by individuals. It doesn't matter whether they are customers, whether they are employees or whether they are shareholders, they all ultimately pay company taxes. And I think the shareholders, employees and customers of large businesses are no less deserving of being relieved of that burden than small businesses. We all interact with large businesses every single day. Ironically, it was perhaps Leader of the Opposition Bill Shorten who made the most cogent argument against a two-tiered tax system. When he was Assistant Treasurer in 2011, he said:

… lowering the corporate rate for smaller businesses only (as the Greens propose) creates an artificial incentive for Australian businesses to downsize.

In worse case scenarios some businesses might actually lay people off to get smaller—and the size based different tax treatment would create a glass ceiling on business workforce growth.

Instead we want a level playing field regardless of the size of the company.

Senator Whish-Wilson: Oh, come on!

Senator PATERSON: Senator Whish-Wilson objects, but I encourage him to take up his objection with the Leader of the Opposition, Bill Shorten, because I'm only quoting his words. In his view, a differential tax rate between large and small businesses could lead to businesses laying off workers, and I don't think that's what we want to see. I think Bill Shorten was right in 2011 when he said we want to see 'a level playing field regardless of the size of the company'.

Leaving in place a differential rate of company tax also runs the risk that the company tax system will become even more progressive over time. I'm sure that's in fact exactly what the Greens would propose. We could see in this country more thresholds and higher rates imposed on larger businesses to resemble the personal income tax system. This would even further compound the inefficiencies that we already may see from this differential rate. And it is not hard, sadly, to foresee a future government succumbing to this economic populism, but, the truth is, we would all be poorer for it.

Clearly, there is only one way to fix this dilemma. Unless the Senate crossbench and those opposite propose to vote for increasing taxes on small business—and one would hope no-one in their right mind would propose doing that—then the alternative, if we want to see a 'level playing field', if we want to see a consistent tax system, is to help the government finish what it started and pass the rest of the company tax cuts.

I mentioned at the beginning of my speech that there were two new pieces of information we have today that we did not have 12 months ago. The second new piece of information that we have today is of course the success in the United States of President Trump's sweeping tax reforms which passed the US Congress in December. They lowered the US corporate tax rate from 35 per cent to 21 per cent, with a range of other cuts to US taxes to make the system more competitive. In previous debates, I and other senators have talked about the remarkable investments that these changes have encouraged. I have read out the names of dozens and dozens and dozens of companies who have increased the wages of their employees, who have announced new investments in their domestic businesses or who will be delivering higher returns to their shareholders as a result of the passage of the Trump tax cuts. I won't do that again today because we already all know about the positive impact the tax cuts have had on the US economy. I should point out that that's an economy which already had a lower unemployment rate than Australia and a stock market at near record highs—that is before the effects of these tax cuts.

What I do want to talk about is, in fact, the negative impact that the Trump tax cuts could have on the Australian economy. It sounds strange that another country reducing its taxes could in some way harm Australia, but the truth is that it will if we fail to respond. Australia has relied on foreign investment since the First Fleet, and we remain dependent on it today. It has massively enriched our country for over 200 years and, if we continue to attract it, it will continue to do so. Australia would be unimaginable without the foreign investment that we have enjoyed in that time. But there is not a limitless amount of international capital available for that foreign investment here in Australia. It's scarce. There is no guarantee that that investment will come here to Australia. If the returns are better in other countries, that is where the investment will go. We can't force people to come and invest here in Australia.

America is not just a competitor nation in the fight for scarce international capital; it is our No. 1 source of foreign investment. In 2016, Americans invested $860 million in Australia, or 27 per cent of our total foreign investment. But in 2016, when an American investor was contemplating investing either at home in the US or abroad in Australia, they faced a comparative tax rate of 35 per cent in the US and 30 per cent in Australia, so it made quite good sense for an American investor, contemplating investment between those two countries—assuming that the investment was the same—to make that investment in Australia. That investor was going to get a better return on investment only due to the fact that the Australian company tax rate was five per cent lower at that time than the United States rate. But the same investor making that same decision today faces a very different playing field. That investor is contemplating a 21 per cent corporate tax rate at home in the United States or a 30 per cent tax rate here in Australia. What would you do if you were that investor, particularly if you wanted to invest in a large business in Australia, which still faces a 30 per cent tax rate? Would you invest at home—where it's probably, to be clear, going to be more straightforward, simple and easy to do and has a lower corporate tax rate—or would you invest overseas in Australia, where you're going to face a higher tax rate? If the investments were comparable, of course you would invest at home. It's simpler, it's easier and you get a better return on investment.

The only way that you would continue to invest in Australia with our higher corporate tax rate is if the returns in Australia were so much better that they were enough to compensate for that much higher corporate tax rate. I hope that's the case. I hope the returns in Australia are always so generous and so strong that investors choose to disregard our higher corporate tax rate and invest here anyway, or perhaps sentiment will rule the day and they really like our weather or our cuisine and they choose to invest here. But I think all of us can acknowledge that the truth is that that won't continue to happen. We will have investment returns comparable to any other nation, and if we have a tax rate higher than most other nations then that investment will start up to dry up, including from the United States, our largest source of foreign investment.

As we know, the United States is not the only country in the world cutting its corporate tax rate. Our second biggest foreign investor is the United Kingdom. In 2016, they invested $515 million, or 16 per cent of our total foreign investment. Today, the UK corporate tax rate is 19 per cent. They have been cutting their corporate tax rate for a decade. Back in 2010, it was comparable to Australia's at 28 per cent. Incidentally, in their corporate tax reform in the UK, they didn't just reduce the rates of tax paid for all their businesses; they abolished the previous differential rate that they used to have for small business because they recognise, as Bill Shorten does, that it's inefficient to have two different rates of tax depending on the size of the business. So, in lowering their corporate tax rate overall, they abolished their different tax rate for small businesses. Now they just have one tax rate of 19 per cent, significantly lower than Australia's, and it's forecast to continue to fall.

Nations across the world are following suit. Corporate tax rates are continuing to come down. According to the Tax Foundation in Washington, DC, in 2017 the average global corporate tax rate was just 22.96 per cent, a full seven percentage points lower than in Australia. We are now in the handful of top corporate taxing nations in the OECD, and to be honest—let's be clear—the OECD is really a club of high-taxing nations, so it is a particularly bad statistic to be a high-taxing nation within a club of high-taxing nations. The truth is that Australia is increasingly out of step with the rest of the world. Our corporate tax rate is higher than those of the rest of the world now, and it will get higher still if we refuse to act. It would be inefficient for us to leave in place a rate differential between our small businesses and our large businesses. We are falling behind the rest of the world. If we don't act we will pay for this. If we don't act we will all regret this week, when the Senate decided not to support this tax package.

I hope that the crossbench continue their productive conversations with the government. I hope they continue to show an open mind about this plan. I can even hope, perhaps, for a miracle and that those opposite will come to their senses and revert to the view they used to hold only a few years ago, which I suspect the Leader of the Opposition, Mr Shorten, still holds deep down but perhaps doesn't have the confidence to argue for within his caucus. Perhaps a miracle will happen and they will return to the view they all held back in 2011.

Senator Smith: Magic happens!

Senator PATERSON: As Senator Smith says, magic does happen, and perhaps we'll see it here in the Senate this week.

Senator DI NATALE (Victoria—Leader of the Australian Greens) (12:41): As anybody who spends some time in this chamber will know, the Greens have steadfastly opposed the Treasury Laws Amendment (Enterprise Tax Plan No. 2) Bill 2017. There has been absolutely no question about our opposition. Our opposition is not conditional. We haven't been flip-flopping. There's no umming or ahing or sending conflicting messages. It's not our view that company tax cuts are affordable in any environment. Unlike Mr Bowen, who believes that there may be a set of circumstances under which these company tax cuts are justified, we are straight up opposed to tax cuts for big corporations, because they are bad policy. They would be terrible for our country and they would further exacerbate the intergenerational divide that is growing within Australia.

Company tax cuts are just another means of rigging the economy in favour of the big end of town. They're part of the same old, outdated neoliberal agenda that told us that if only we privatised anything that wasn't nailed down, if only we deregulated and attacked unions—if only we did all those things—then wealth would magically trickle down to everybody. Well, it is a failed agenda. The verdict is in: the Australian people just don't buy it. And nor should they buy it. The evidence is everywhere. We're seeing massive inequality, we are seeing wages flatlining, we are seeing skyrocketing corporate profits, we are seeing CEOs cream it with bonuses, and all the while ordinary Australians are being left behind.

We know from recent ABC reporting—the same reporting that the Prime Minister tried to shut down—that hundreds of corporations with an income in excess of $100 million are paying no tax, yet the government is still arguing the case for a tax cut. When it comes to corporations, the problem we have in Australia right now is that they are not paying their fair share. Let's fix that problem before we start a debate about what it means to have an effective corporate tax rate. We think it's time the companies finally paid their fair share so that governments can invest in what we do know is going to boost productivity in this country, so that we can invest money in infrastructure and services that we need—things like quality health and education systems, schools and hospitals, and a world-class National Broadband Network. That's productivity-boosting infrastructure. We need investment in our outdated electricity and transport systems so that we can make the transition to 100 per cent renewable energy, create jobs, ensure we've got reliability and bring down prices for consumers. Instead, what we have is a $65 billion handout—I'll say that again: a $65 billion handout—to the big end of town in some magical hope that they will pass this on to their employees. It is wishful thinking at its worst. We have to stop pretending that corporations are a vehicle for social change. They're not. Corporations exist for one reason only.

Debate interrupted.

Senator SMITH (Western Australia—Deputy Government Whip in the Senate) (12:45): by leave—at the request of the Chair of the Legal and Constitutional Affairs Legislation Committee, I move:

That the Legal and Constitutional Affairs Legislation Committee be authorised to hold a private meeting otherwise than in accordance with standing order 33(1) during the sitting of the Senate today.

Question agreed to.