The PRESIDENT (12:01): I remind senators that the question may be put on any proposal at the request of any senator.

Senator GEORGIOU (Western Australia) (12:01): I rise to set the record straight on behalf of One Nation. Let me be clear: we do not support the proposed company tax cuts nor any of the proposed amendments in the Treasury Laws Amendment (Enterprise Tax Plan No. 2) Bill 2017. One Nation has never received any draft legislation from government with any kind of detail where the big banks would be carved out from company tax cuts. In spite of all this, let me make some further points. The proposed company tax cuts are an indictment of where government values and morals lie, and that is in the deep pockets of big business. This government has not provided any policy or attempted to pay down the multibillion-dollar debt. In fact, this government, along with previous regimes, has left zero fat in the budget to pay down any debt.

Until multinational companies are pursued and forced to pay their fair share of taxes, we will stop allowing oil and gas companies to raid our natural resources without paying adequate royalties. One Nation cannot justify tax cuts beyond the $50 million threshold, which the party was instrumental in securing for small- to medium-sized businesses in this country. One Nation has taken a responsible approach for future generations in this country. If the government has billions of dollars to spend, then I look forward to working with the Treasurer and the finance minister on nation-building projects such as new roads, dams, bridges, railways and vital infrastructure that will benefit all Australians, not just the big end of town.

We've got farmers committing suicide. We've got Australians losing their jobs that are being overtaken by 457 visa holders. We've got industry scaling back so fast. Once this country was the lucky country. Now we're quickly becoming the sellout country. One Nation would like to see the Commonwealth work with state governments to look at ways of reducing payroll tax, which is a bigger impost on businesses across the nation. This will help stimulate jobs across Australia.

Senator CORMANN (Western Australia—Leader of the Government in the Senate, Minister for Finance, Special Minister of State and Vice-President of the Executive Council) (12:03): As a parliament our responsibility is to ensure that Australians today and into the future have the best possible opportunity to succeed, to get ahead. To ensure that happens we need to ensure that the millions of businesses around Australia, who employ nine out of 10 working Australians, have the best opportunity to be successful and to get ahead. Australia is a country with a population of 25 million. We are an open trading economy. We have opportunities to sell more products and services around the world. But we're also globally exposed. We rely on foreign capital to develop our economy, and many parts of our key economic sectors are highly capital intensive. We compete for capital with businesses in other parts of the world, we compete for access to markets overseas and we compete for access to our own markets with businesses overseas. Keeping taxes on business in Australia high when countries around the world have substantially lowered theirs is making it deliberately harder for our businesses to be viable, competitive and successful into the future.

If the Senate votes the Treasury Laws Amendment (Enterprise Tax Plan No. 2) Bill 2017—a proposal for a lower globally-more-competitive business-tax rate—down today the moment will come when this parliament will have to revisit this proposal. This is not only important for Australians today this is also important for future generations of Australians. If we want Australians today and into the future to be able to get a job, to have job security, to have the opportunity to build and develop a career here in Australia and to get wage increases then we need to ensure that the businesses around Australia who create those jobs through their enterprise and who pay those wages have the best possible opportunity to compete with businesses in other parts of the world and have the best possible opportunity to be successful into the future. Australia can only be successful into the future if we ensure that the businesses around Australia have the best possible opportunity to be successful into the future. The businesses that pay taxes on their profits help us fund a world-class health system, a world-class education system and an appropriately generous social safety net.

The opposition leader, at various times, talks about how his priority is jobs. 'Jobs, jobs, jobs', was what he said in one of his Press Club speeches in the past. But the truth is, unlike the coalition, Mr Shorten does not have a plan for jobs. Mr Shorten does not have a plan for jobs and growth. Let me tell you something, jobs don't grow on trees. Jobs are created by successful, profitable businesses. If you make it harder for businesses here in Australia to be successful into the future—guess what?—they will be less successful. I challenge anyone to credibly put forward an argument that a less successful business would hire more people than they otherwise would. A less successful business would hire fewer people. As businesses around Australia find it harder to compete with businesses in other parts of the world that pay substantially less tax and if businesses are hiring fewer people the unemployment rate would go up. That is the consequence of the socialist agenda pursued by Mr Shorten. Less successful businesses will hire fewer people, there will be less competition for workers and wages will go down.

I understand that business tax cuts, which can be described as a tax giveaway to big end of town, are not politically popular, but we don't have a job here in this chamber just to make decisions following the lead of what is popular today. We have a responsibility to make judgements about what is in the best interests of families around Australia into the future. We have a responsibility to make judgements about what is in our national interest into the future, and not just follow the lead of public opinion at one particular point in time.

I was interested to hear Senator Georgiou talk about spending money as we are proposing to lower the corporate tax rate for businesses around Australia. That is not government spending money. That is government taking less of other people's money, so they can invest it in their future success, so they can hire more Australians, so that those Australians who are more successful into the future pay more tax. Do you know what's happened over the 2017-18 financial year? Corporate tax revenue has gone up by about $10 billion compared to what was expected at budget time. That was after we legislated business tax cuts for businesses with a turnover of up to $50 million. Corporate tax revenue has gone up, which helps us pay for the important and essential services provided by government, which Australians expect.

Comments have been made about the big end of town. What we are doing here today, by keeping our taxes on businesses high in Australia, is deliberately making it harder for businesses like Qantas or Thomas Foods International in South Australia, with a turnover of $1.6 billion. I see Senator Storer there. He should have a chat to Thomas Foods International, a meat-processing business in South Australia which competes globally and which will tell you that a higher corporate tax rate in Australia makes it harder for it to be successful, which means it will hire fewer people than it could if only the Senate were to support a lower, globally more competitive business tax rate.

By standing in the way of our global champions out of Australia, by making it harder for the big employers of Australia—our big end of town, supposedly—to be competitive, what we are doing is helping the big end of town overseas. We are helping the big end of town in the US, in France, in Ireland and in the UK—all of these countries where the tax rate is lower. It is 21 per cent in the US. It is going to 17 per cent in the UK. It is going to 25 per cent in France. It is 22 per cent in Sweden. We are helping the big end of town in all of those countries to take business investment and jobs away from Australia, and do you know who is going to be the beneficiary? Workers in all those other countries, at the expense of Australian workers. Do you know who else is going to be the beneficiary? Small and medium-sized businesses in all of those countries, because the bigger businesses in the US, the UK, France and all these countries will not come and procure their products and services from small and medium-sized businesses here in Australia; they will procure their products and services from small and medium-sized businesses in their respective countries.

The Labor Party, of course, used to know all of this, and I would put it to the Senate that the Australian Labor Party still knows today what is in the workers' best interests. They know that a lower, globally more competitive business tax rate is necessary, is in our national interest and is in the best interests of working families around Australia. Bill Shorten has said it many times. I will just use one quote at random:

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.

Mr Bowen has also said it, and this is the one, I guess, that upsets me the most on behalf of working families around Australia. Seven months before we put a proposal for a lower, globally more competitive business tax rate into our budget, a proposal to reduce the corporate tax rate to 25 per cent—not leading the world but putting us into the average of corporate tax rates around the world—this is what Mr Bowen said:

Shadow Treasurer Chris Bowen says Labor accepts that company tax falls hardest on workers rather than wealthy shareholders, and aims for a 25 per cent company tax rate to spur economic growth.

I'm quoting him:

"I would like to see the corporate tax rate come down over time. I have previously said the nation should be aiming for a 25 per cent corporate tax rate," Mr Bowen said, adding that it would not be easy to do.

Of course, because Labor know that it's not easy to do, they have milked this for all it's worth politically. They know what is right for working families around Australia. They know that the future success of working families around Australia depends on the future success of the businesses that employ them. They know that keeping taxes in Australia high by international standards makes it harder for business in Australia to be successful. They know that making it harder for business to be successful leads to negative consequences for working families around Australia.

Yesterday we had a Greens senator, Senator Bartlett, talk about how we needed to fight poverty. I agree. We must fight poverty, and the way to fight poverty is to increase opportunity for people to get ahead. Stronger economic growth creates better opportunity, in particular, for low-income earners to get ahead. That is demonstrably the case. Proportionately speaking, the beneficial impact of stronger growth is most significant at the low-income end. The people that will suffer the most from making it harder for our businesses to be successful into the future are low-income Australians, who will find it harder to get into the workforce, harder to keep their job and harder to get a better job. If we condemn the businesses around Australia to an uncompetitive business tax rate, if we deliberately help businesses in other parts of the world to take business investment and jobs away from our businesses here, we make it harder, in particular, for low-income earners to get ahead.

Obviously part of the politics of all this is that the Labor Party have become quite good at sharpening their populist political message, and so it's all become about, 'This is just a tax giveaway to the big banks,' which of course is not what this is all about. But in order to ensure a lower company tax rate for the businesses around Australia who are exposed to global competition, whose workers are exposed to global competition, the government did propose to One Nation that we would be prepared to carve out the four big banks. We proposed that to others too. I've got to say I'm somewhat intrigued to hear Senator Georgiou say today, 'We never saw the amendments.' Let me tell you: the offer was very, very clear. We were so committed to ensuring that the businesses around Australia—including, in particular, the bigger businesses around Australia who are on the front line of global competition—have the best possible opportunity to be viable, to be competitive and to be successful into the future that we were prepared to carve out the four big banks. At no point were we prepared to put in a $500 million cap, because that would actually be counterproductive. It would damage the economy. It would cost jobs. As none other than Mr Shorten said—and I couldn't have put it better myself:

… lowering the corporate rate for smaller businesses only … 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.

That was a speech from Bill Shorten to ACOSS in Melbourne. Mr Shorten was right then, and he still believes this now. The reason he's arguing a different case is all politics. He is selling out the best interests of working families around Australia on what he perceives to be his ticket to the Lodge. He's very good at running the populist, sharp political lines. But you know what? I'm not here to run sharp political lines. I'm here to stand up for Australian families, to do the right thing by Australian families, today and into the future. That is why we have given this such a red-hot go. The Labor Party, of course, know this too.

A range of other issues were mentioned, like the claim that we needed to do more on multinationals. No government has done more than the Turnbull government to ensure that multinationals pay their fair share of tax. I think this is widely understood. None other than the Commissioner of Taxation, Chris Jordan, has spelt out in some great detail, at various Senate estimates hearings, what a significant impact our measures have had in terms of increased company tax revenue. In recent years we've implemented the multinational anti-avoidance law, the diverted profits tax and tougher penalties against tax avoidance. We've made improvements to transfer pricing laws and in relation to the public disclosure of tax information by large companies. We've pursued measures to implement country-by-country reporting. We've implemented changes to hybrid rules.

We were prepared to do more. We did talk—and it's a matter of public record—to the crossbench, to One Nation and others, about reforming the petroleum resource rent tax arrangements. I see Senator Burston here, a great, honourable man, because he was part of the deal that the government did with One Nation in March. He was there—it's a matter of public record—when we shook hands. You've got to remember that One Nation actually was prepared to back corporate tax cuts for all businesses, when the banks were included. Now Senator Georgiou comes in here and he says, 'I can't vote for this because, yes, the government might have told us that they were prepared to exclude the big four banks, but they never showed us the detailed amendments.' I mean, really? Let me just say that, if the Senate votes against a lower, globally more competitive business tax rate here in Australia, we will be letting down working families around Australia today and into the future. Everybody needs to be very conscious of that.

I will now turn to some of the other issues that were raised, starting with the One Nation suggestion that Senator Hanson made on the record here yesterday. She suggested that we should abolish the petroleum resource rent tax regime and replace it with a royalty regime offshore. We're talking about an industry that has made more than $200 billion worth of capital investment in a particular taxation regime. It is completely ludicrous, and completely reckless and irresponsible, to suggest that, as part of a negotiation for a lower globally more competitive business tax rate, we can make that sort of change to a taxation arrangement.

There's a good reason why Labor in government—the Keating government—introduced petroleum resource rent tax arrangements back in the late 1980s and early 1990s. It has actually served Australia well in helping to attract massive capital investment that has helped generate a significant capital-intensive new industry, to the point where we are going to become the biggest exporter of LNG in the next few years. This has generated a massive number of jobs and massive additional income, which helps to pay for our hospitals, our schools, our Defence Force and you name it. The proposition that somehow a country like Australia, which relies on foreign investment, could turn around and abolish the PRRT arrangements and replace them with a royalty regime as part of a negotiation on reform to our corporate tax laws is completely and utterly unrealistic.

People in this debate have made the point, 'Oh, in the US this hasn't really worked.' In an interview with Fran Kelly last week, I made the point that, on the back of the Trump administration corporate tax cuts, the US recorded in excess of four per cent growth on an annualised basis in this most recent quarter; the US unemployment rate had a three in front of it; wages growth was the strongest it's been in a very long time; and massive capital investment had been returned to the country. I also said that the Trump tax cuts had led to stronger investment, stronger growth, a lower unemployment rate and higher wages.

And do you know what? I got a request from The Conversation to 'please substantiate' my assertions as part of a fact-check process. That was more than a week ago. I provided the evidence that in the US they've secured more than four per cent growth on an annualised basis in the most recent quarter; that the unemployment rate was now 3.9 per cent; that wages growth was the strongest it had been in a very long time; and that massive capital investment had been returned to the country. The IMF, the International Monetary Fund—hardly a right-wing conspiratorial organisation—updated their US growth forecast following the passage of the Trump tax cuts. They said:

The U.S. tax policy changes are expected to stimulate activity, with the short-term impact in the United States mostly driven by the investment response to the corporate income tax cuts.

But some people here will argue that black is white and that white is black. The truth is that, if the Senate stands in the way of a lower globally more competitive business tax rate here in Australia, the Senate stands in the way of the opportunity for working families around Australia today and in the future to get ahead. If we maintain one of the highest corporate tax rates in the world, we will attract less investment and we will generate lower growth than we otherwise would, which means that we will see—

Senator Cameron: Why are you talking the country down?

Senator CORMANN: This was actually the Labor Party position. Nobody in Australia believes that you're taking a principled stand on this. Everybody knows that you are putting populist politics ahead of the national interest, and in history you will stand condemned for it. If this goes down today, there is no doubt that the Australian parliament will have to revisit this before long in order to protect our economic security into the future. On that basis, I commend the bill to the Senate.

The PRESIDENT: The question is that the bill be read a second time.

Bill read a second time.

Senator CORMANN (Western Australia—Leader of the Government in the Senate, Minister for Finance, Special Minister of State and Vice-President of the Executive Council) (12:31): I table a supplementary explanatory memorandum relating to the government amendments to be moved to this bill. I seek leave to move government amendments (1) to (37) on sheet JP186 together.

Leave granted.

Senator CORMANN: I move the amendments:

(1) Clause 2, page 2 (after table item 9), insert:

(2) Clause 2, page 3 (table item 17), omit the table item.

(3) Schedule 1, page 8 (after line 4), after item 5, insert:

5A Subsection 3 ( 1 )

   Insert:

   large ADI has the same meaning as in the Income Tax Assessment Act 1997.

Note: For a consolidated group, the head company is the large ADI.

(4) Schedule 1, page 8 (after line 6), after item 6, insert:

6A Subsection 23(1A)

   Omit "section 23A", substitute "sections 23A and 24".

(5) Schedule 1, item 7, page 8 (line 10), omit "section 23A", substitute "sections 23A and 24".

(6) Schedule 1, item 8, page 8 (lines 12 to 14), omit the item, substitute:

8 Paragraph 23 ( 3 ) (b)

   Repeal the paragraph, substitute:

   (b) in respect of the standard component:

      (i) unless subparagraph (ii) applies—27.5%; or

      (ii) if the company is a large ADI for the year of income—30%.

(7) Schedule 1, item 13, page 9 (lines 5 and 6), omit the item, substitute:

13 Paragraph 23A(a)

   Repeal the paragraph, substitute:

   (a) in respect of the ordinary class:

      (i) unless subparagraph (ii) applies—27.5%; or

      (ii) if the company is a large ADI for the year of income—30%; and

(8) Schedule 1, page 9 (after line 6), after item 13, insert:

13A After section 23A

   Insert:

24 Rate of tax payable by large ADIs

      The rate of tax in respect of the taxable income of a company (other than a life insurance company or an RSA provider) that is a large ADI for the year of income is 30%.

(9) Schedule 1, item 15, page 9 (lines 14 to 18), omit the item, substitute:

15 Paragraph 28(a)

   Repeal the paragraph, substitute:

   (a) if paragraph 98(3)(b) of the Assessment Act (about beneficiaries that are companies) applies:

      (i) unless subparagraph (ii) applies—the rate specified in subsection 23(2); or

      (ii) if the beneficiary is a large ADI for the year of income—the rate specified in section 24; and

(10) Schedule 1, item 19, page 10 (line 7), omit "Paragraph 23(3)(b)", substitute "Subparagraph 23(3)(b)(i)".

(11) Schedule 1, item 23, page 10 (line 15), omit "Paragraph 23A(a)", substitute "Subparagraph 23A(a)(i)".

(12) Schedule 1, item 27, page 11 (line 7), omit "Paragraph 23(3)(b)", substitute "Subparagraph 23(3)(b)(i)".

(13) Schedule 1, item 31, page 11 (line 15), omit "Paragraph 23A(a)", substitute "Subparagraph 23A(a)(i)".

(14) Schedule 1, item 35, page 12 (line 7), omit "Paragraph 23(3)(b)", substitute "Subparagraph 23(3)(b)(i)".

(15) Schedule 1, item 39, page 12 (line 15), omit "Paragraph 23A(a)", substitute "Subparagraph 23A(a)(i)".

(16) Schedule 1, page 12 (after line 18), after Part 8, insert:

Part 8A—Amendment of the Income Tax Assessment Act 1997

Income Tax Assessment Act 1997

40A Section 960 ‑265 (at the end of the table)

Add:

40B Subsection 960 ‑270 ( 3 )

   After "item 14", insert "or 15".

40C Subsection 960 ‑275 ( 6 )

   After "item 14", insert "or 15".

40D Subsection 960 ‑280 ( 6 )

   After "item 14", insert "or 15".

40E Section 960 ‑290 (heading)

   Omit "levy threshold for the major bank levy", substitute "thresholds for major bank levy and large ADIs".

40F Subsection 960 ‑290 ( 1 )

   Omit "the amount mentioned in the provision listed at item 14", substitute "an amount mentioned in a provision listed at item 14 or 15".

40G Subsection 995 ‑1 ( 1 )

   Insert:

   applicable reporting standard has the same meaning as in the Major Bank Levy Act 2017.

40H Subsection 995 ‑1 ( 1 ) (paragraph (aa) of the definition of indexation factor )

   Omit "for the amount mentioned in the provision listed at item 14", substitute "for an amount mentioned in a provision listed at item 14 or 15".

40J Subsection 995 ‑1 ( 1 ) (paragraph (b) of the definition of index number )

   Omit "the amount mentioned in the provision listed at item 14", substitute "the amounts mentioned in the provisions listed at items 14 and 15".

40K Subsection 995 ‑1 ( 1 )

   Insert:

   large ADI: an Australian resident company is a large ADI for an income year if:

   (a) disregarding subsection 701‑1(1) (the single entity rule) both of the following apply:

      (i) the company is an *ADI;

      (ii) the amount equal to the total liabilities of the ADI for any *quarter in the income year, as reported under an *applicable reporting standard, exceeds the *large ADI threshold for the quarter; or

(b) the company is the *head company of a *consolidated group and paragraph (a) applies to one or more *subsidiary members of the group for the income year.

Note: The effect of this definition for a consolidated group is that, if paragraph (a) applies to any member, the head company is a large ADI. The head company's status as a large ADI affects the rate of tax payable on the head company's taxable income (worked out on the basis that subsidiary members are part of the head company): see subsection 701‑1(1) (the single entity rule) and the Income Tax Rates Act 1986.

   large ADI threshold: the large ADI threshold for the *quarter starting on 1 July 2017 is $500 billion. The amount is indexed quarterly.

Note: Subdivision 960‑M shows how to index amounts.

(17) Schedule 1, page 13 (after line 25), after subitem 41(8), insert:

   (9) The amendments made by Part 8A of this Schedule apply to the 2023‑24 year of income and later years of income.

   (10) The amendments made by Parts 5 and 8A of this Schedule also apply for the purposes of determining the corporate tax rate for imputation purposes for the 2023‑24 income year.

Note: This ensures the amendments made by Parts 5 and 8A can be applied to the 2022‑23 income year for the purposes of working out the corporate tax rate for imputation purposes for the 2023‑24 income year.

(18) Schedule 2, Part 1, page 14 (line 3) to page 17 (line 20), omit the Part, substitute:

Part 1—Amendments commencing 1 July 2023

Income Tax Assessment Act 1997

1 Subsection 995 ‑1 ( 1 ) (definition of corporate tax rate )

   Repeal the definition, substitute:

   corporate tax rate:

   (a) in relation to a company that is a *large ADI—means the rate of tax in respect of the taxable income of a company covered by section 24 of that Act; or

   (b) in relation to another entity—means the rate of tax in respect of the taxable income of a company covered by subsection 23(2) of that Act.

2 Subsection 995 ‑1 ( 1 ) (definition of corporate tax rate for imputation purposes )

   Repeal the definition, substitute:

   corporate tax rate for imputation purposes, of an entity for an income year, means:

   (a) unless paragraph (b) applies—the rate of tax for the income year in respect of the taxable income of a company covered by subsection 23(2) of the Income Tax Rates Act 1986; or

   (b) if the entity was a *large ADI for the previous income year—the rate of tax for the income year in respect of the taxable income of a company covered by section 24 of that Act.

(19) Schedule 3, item 1, page 19 (lines 5 to 15), omit the item, substitute:

1 Subsection 160AAB ( 1 ) (definition of statutory percentage )

   Repeal the definition, substitute:

   statutory percentage means:

   (a) if the year of income is the 2002‑03 year of income or a later year of income before the 2024‑25 year of income—30%; or

   (b) if the year of income is the 2024‑25 year of income or a later year of income and the policy concerned was issued by a company that is a large ADI (within the meaning of the Income Tax Assessment Act 1997) for the year of income—30%; or

(c) otherwise:

      (i) if the year of income is the 2024‑25 year of income—27.5%; or

      (ii) if the year of income is the 2025‑26 year of income—27%; or

      (iii) if the year of income is the 2026‑27 year of income—26%; or

      (iv) if the year of income is the 2027‑28 year of income or a later year of income—25%.

1A Subsection 177A ( 1 ) (definition of standard corporate tax rate )

   Repeal the definition, substitute:

   standard corporate tax rate means:

   (a) unless paragraph (b) applies—the rate of tax in respect of the taxable income of a company covered by subsection 23(2) of the Income Tax Rates Act 1986; or

   (b) if the relevant taxpayer is a large ADI (within the meaning of the Income Tax Assessment Act 1997) for a year of income in which the DPT tax benefit is obtained, or would be obtained—the rate of tax in respect of the taxable income of a company covered by section 24 of the Income Tax Rates Act 1986.

(20) Schedule 3, item 2, page 19 (line 19), after "Company A", insert "(which is not a large ADI)".

(21) Schedule 3, item 3, page 20 (line 12), after "Company E", insert "(which is not a large ADI)".

(22) Schedule 3, items 6 and 7, page 20 (line 28) to page 21 (line 8), omit the items, substitute:

6 Subsection 65 ‑30 ( 2 )

   Repeal the subsection, substitute:

   (2) However, reduce the *tax offset by the amount worked out by multiplying your *net exempt income by:

   (a) unless paragraph (b) applies—0.275; or

   (b) if you are a *large ADI for the income year—0.3;

if you have a taxable income for the income year.

7 Subsection 65 ‑35(3A)

   Repeal the subsection, substitute:

   (3A) In reducing *net exempt income for an income year under subsection (3):

   (a) unless paragraph (b) applies—each 27.5 cents of *tax offset reduces the net exempt income by $1; or

   (b) if you were a *large ADI for the year—each 30 cents of tax offset reduces the net exempt income by $1.

(23) Schedule 3, Part 1, page 21 (after line 21), at the end of the Part, add:

8A Subsection 713 ‑545 ( 6 ) (definition of ordinary class tax rate )

   Omit "a life insurance company", substitute "the life insurance company".

(24) Schedule 3, item 9, page 22 (line 5), after "Company A", insert "(which is not a large ADI)".

(25) Schedule 3, item 10, page 22 (line 30), after "Company E", insert "(which is not a large ADI)".

(26) Schedule 3, item 13, page 23 (line 13), omit "Subsection65‑30(2)", substitute "Paragraph 65‑30(2)(a)".

(27) Schedule 3, item 14, page 23 (line 15), omit "Subsection65‑35(3A)", substitute "Paragraph 65‑35(3A)(a)".

(28) Schedule 3, item 16, page 24 (line 5), after "Company A", insert "(which is not a large ADI)".

(29) Schedule 3, item 17, page 24 (line 30), after "Company E", insert "(which is not a large ADI)".

(30) Schedule 3, item 20, page 25 (line 13), omit "Subsection65‑30(2)", substitute "Paragraph 65‑30(2)(a)".

(31) Schedule 3, item 21, page 25 (line 15), omit "Subsection65‑35(3A)", substitute "Paragraph 65‑35(3A)(a)".

(32) Schedule 3, item 23, page 26 (line 5), after "Company A", insert "(which is not a large ADI)".

(33) Schedule 3, item 24, page 26 (line 30), after "Company E", insert "(which is not a large ADI)".

(34) Schedule 3, item 27, page 27 (line 13), omit "Subsection65‑30(2)", substitute "Paragraph 65‑30(2)(a)".

(35) Schedule 3, item 28, page 27 (line 15), omit "Subsection65‑35(3A)", substitute "Paragraph 65‑35(3A)(a)".

(36) Schedule 4, page 28 (lines 3 and 4), omit the heading.

We also oppose schedule 4 in the following terms:

(37) Schedule 4, items 1 and 2, page 28 (lines 5 to 14), to be opposed.

In the interests of a compromise, the government is willing to move these amendments to exclude the large authorised deposit-taking institutions, the big four banks, from accessing the reduced company tax rate. The government has faithfully sought to implement our enterprise tax plan policy. We secured passage of the first stage of company tax cuts in March 2017. In May 2017, we then introduced this further bill to implement the remainder of the enterprise tax plan. We have continued to negotiate, respectfully, with the crossbench over many months.

The opposition, of course, have been running around the country claiming that the reason that they do not support this bill is that it provides a tax cut to the big banks. Well, the Labor Party now has the opportunity to support our amendments, to vote in favour of our amendments and to support opportunity for working families around Australia to get ahead. If you're genuinely concerned about a tax giveaway to the big banks, you now have the opportunity to vote in favour of these amendments to exclude the four big banks, to carve them out, and still protect jobs for working Australians around Australia by helping to ensure that our businesses around Australia can be internationally competitive. If you vote against these amendments, you will be exposed for the absolute hypocrisy of the political attack that you've been running for the last two years. If you genuinely care about working Australians, if you genuinely care about working families, you will help ensure that businesses around Australia who compete with businesses in other parts of the world have the opportunity to be viable, to be competitive and to be successful into the future. If it's all about the big banks, no doubt you will vote in favour of these amendments, and you will then vote in favour of the legislation as a whole.

So here is the proposition. These amendments will reduce the cost of corporate tax cuts for the period to 2027-28 by $7.9 billion. So this corporate tax reform package now costs $7.9 billion less. We've already indicated that we are prepared to pursue reforms to our petroleum resource rent tax arrangements, which would not have an impact over the forward estimates but which should have a positive revenue impact over the medium term and beyond.

Here we are. As a result of the vote by the Senate on the second reading, the Senate now has the opportunity to act in the best interest of working families around Australia for today and into the future. I urge the Senate to take that opportunity. I urge the Senate to support our amendments. If Labor votes against this amendment and this bill then it will be proof that Bill Shorten doesn't care about jobs, he doesn't care about investment into Australia, he doesn't care about economic growth and he's essentially just interested in the politics; he's just interested in doing everything he can to prevent the elected government of Australia from implementing our plan for more jobs and stronger growth.

Senator CAMERON (New South Wales) (12:35): What a pathetic performance that was from Senator Cormann, from a pathetic government that's on the rocks. It is a government that doesn't know what it's doing, a government that doesn't have an economic plan for this country, a government that would sacrifice working families, a government that would put big business before working families. This is not just about the banks; this is about an ideological obsession from this government: if you simply cut tax jobs will be created.

Contrary to what Minister Cormann has just indicated, wages are not growing in the United States. The Canadians have done this on a couple of occasions, and the companies that benefitted from the tax cuts produced fewer jobs than companies that did not benefit from tax cuts. This is an absolute joke. This is trickle-down economics in action. How disgraceful it is that we have One Nation again doing a deal to get us into a position where trickle-down economics is what this is all about. We have seen Senator Cormann stand up here and try, in my view, in vain, to defend trickle-down economics. He put up all these propositions. We don't know what this government is doing from one day to another. We certainly do not understand where this government is going. Whether it's on climate change or on economics, this government cannot be trusted. This is a government in absolute chaos. With this government you don't know who the leader will be from one day to another, because the battle is on within this government as to who is going to be the Prime Minister of this country. The sooner we go to an election and the sooner we get it resolved the better. We need to get to a position where working people can elect a government that truly cares about them and truly looks after them, and the sooner the better.

We've heard Senator Cormann say that this is about stopping an elected government doing what the elected government has promised to do. The elected government promised to hand over $80 billion to the big end of town. We saw their party room panic today, and we just saw Senator Cormann panic on the floor of the Senate when he tried to concede and give in on what they said was something they would not do: apply differential tax rates for different companies in this country. That's exactly what they've done.

Senator Ian Macdonald: That's what you've been advocating. You've been advocating for that.

Senator CAMERON: I'll tell you what we're advocating, Senator Macdonald. We're advocating for fairness and decency in this country. We're advocating for a government that is a stable government. We're advocating for a government that can stand up and deliver for the working class of this country. That is something that you have never done and that the coalition has never done. Cast your mind back to when this government came in. They had their first budget in 2014-15, and their big economic argument then was that they would be increasing the GST. That's what they did. They said, 'We'll increase the GST.' Who suffers from that? It's working families.

Senator Ian Macdonald: Who said that?

Senator CAMERON: Who said it? Go back and have a look, Senator Macdonald. You had propositions going up to increase the GST. Then you had propositions going up to hand taxation back to the states. Both of those propositions did not last very long. They didn't last very long at all. Then, when those failed, what did it become? Trickle-down economics. That's what you've got at the moment. And before you got to them, you had an austerity budget in 2014 that Senator Cormann was right behind—celebrating cutting the pensions with the big, fat Havana cigar. Remember that? That's what we saw: austerity budgets cutting support mechanisms for the working poor in this country. That's what this mob were all about. They cannot be trusted on economic issues, they can't be trusted on the environment and they can't be trusted on power prices. This government are an absolute disgrace. They are a government that in absolute chaos. They are a government that have just not got it.

The sooner we get to an election where the public can once again make a determination on these issues, the better. Remember Senator Cormann during the by-elections recently? That was going to be a test of the government's tax cuts. Well, the people in Longman and the people in Braddon made their point: they did not support this. That test failed. And it was going to be a test of the Prime Minister's leadership. Well, the voters around the country in those five by-elections made a call on that as well and said that this Prime Minister should not be leading the country. So both the Prime Minister's test and Senator Cormann's test, which they set for themselves, failed.

The test this morning is in the party room of the coalition. Malcolm Turnbull nearly failed that test again, and it's only a matter of time before this Prime Minister hits the wall. So instead of going through all the contortions of who's going to be the leader and what changes you are going to make to your policies, take your policies to an election and let's give the public in this country, the citizens of this country, an opportunity to make a determination about this rabble of a government—this government that would cut social services, would cut health and would cut education.

This is a government that no-one trusts. We've got a leader who not even the coalition party room trusts. We've got a leader who is on his last legs, a Prime Minister who, in the first challenge, was almost knocked off. If the other part of this government—the National Party—had been in that party room this morning, we would have had a new Prime Minister this morning. That's exactly what would have happened, because there is huge division in this government. Why any crossbencher would give any succour to this declining, deteriorating, decaying government, I don't know. We need a proposition here that indicates that this government will go to the election and take these issues to the public. That's what we should be doing.

I will quickly ask Senator Cormann: Minister, can you confirm the cost, over the forward estimates and the medium term, of the tax cuts that we are debating today?

Senator CORMANN (Western Australia—Leader of the Government in the Senate, Minister for Finance, Special Minister of State and Vice-President of the Executive Council) (12:44): These numbers have, of course, all been provided in public, and I'll confirm again that the cost of the tax cuts that are in front of the Senate today, as published in the explanatory memorandum, is $35.6 billion in the period to 2027-28, and the fiscal impact of the amendments that I've circulated over the period to 2027-28 is an increase in revenue of $7.9 billion.

As I'm on my feet, let me just deal with some of the comments that have just been made by Senator Cameron. It is so important for our future economic security and prosperity as a nation that we truly get our head around this. When Senator Cameron talks about trickle-down economics, that is a socialist insult to the free market. I happen to have seen the impact that different economic policy models have had on the quality of life of individuals, their families and the communities they live in. I happen to have seen the impact of the socialist model, the income and wealth distribution model where we want to pursue equality of outcome instead of offering equality of opportunity. I've seen the impact of that. It makes people poor. It makes people poor as individuals. It makes people poor as families. It makes communities poor. It leaves them worse off, because it removes the incentive to be the best you can be. It removes the incentive for people who can succeed and lift everybody up to do the best they can.

The reason I'm a Liberal, the reason I'm a proud member of the Liberal Party and of the Turnbull government, and the reason I'm standing here proudly promoting the benefits for Australian families of a lower, globally more competitive business tax rate is that I believe that policies of promoting freedom, free enterprise, reward for effort and encouraging people to risk themselves and take risks deliver the best possible opportunity for a high quality of life for individuals, their families and the communities they live in—yes, with an appropriately generous social safety net. And do you know what? That's what Paul Keating and Bob Hawke used to believe. That's what Bill Shorten and Chris Bowen used to believe when they were in government. That's what Chris Bowen used to believe as recently as 22 September 2015.

There's only one reason the Labor Party have taken the position that they have. It is because, in the lead-up to the 2016 election, Bill Shorten made a political decision that this was going to offer him the best political prospect to differentiate himself from the Turnbull Liberal-National Party government and that he could run an antibusiness populist agenda which would win him votes and help him, ultimately, to secure his political aspiration of becoming Prime Minister. He doesn't believe that he's pursuing the right agenda for Australia. Let me tell you: if we end up with a government that is elected on an antibusiness agenda of the politics of envy, class warfare and equality of outcome, all Australians will end up poorer, because an antibusiness agenda, making it harder for businesses to be successful across Australia, means that we'll have fewer jobs. We'll end up with fewer jobs. And do you know what happens when we create fewer jobs in the economy? There are more people unemployed and, as more people are unemployed, the wages of workers around Australia go down because there's less competition for workers. Less demand and increased supply means lower wages.

If we want to ensure that families around Australia today and into the future have the best possible opportunity to get ahead, we need to ensure that there is incentive for businesses to invest in their future growth. We've got to ensure that business has an incentive to take risks, to pursue opportunities and to sell Australian products and services around the world and here domestically. If we make it harder for Australian businesses to sell Australian products and services overseas and here in Australia, if we make it easier for businesses overseas to take business and investment away from us, we will be sending jobs from Australia overseas, and our children and grandchildren will not thank us for that.

Again, this is something that the Australian Labor Party used to understand. The Australian Labor Party used to understand that, in order to ensure that workers around Australia could succeed, the businesses that employed them had to have the opportunity to succeed. But this has changed under Mr Shorten as opposition leader and Leader of the Labor Party—sadly, supported by the Australian Greens and by a number of others, though not the majority in the Senate so far. A majority in the Senate was clearly prepared to give the government's plan for a lower, globally more competitive business tax rate the benefit of the doubt and is prepared to have this debate in committee, and we thank the Senate for that.

If we allow ourselves to be dragged down into this rhetoric around trickle-down economics and anti-business class-warfare politics-of-envy rhetoric Australians will end up poorer for it. Low-income Australians will be worse off as a result. We need to vote in support of business creating more jobs and attracting more investment so that the increased competition for workers around Australia drives up wages. As I said in my summing-up speech in the second reading debate, the evidence is very clear that in the United States, as a result of the Trump administration's tax cuts, that is precisely what is happening. That is what we should offer to workers here in Australia. The government, by moving the amendments that I've moved, is removing and carving out the big four banks. Let's take them out, but let's make sure that all of those big employers across Australia competing with big businesses from other parts of the world have the best possible opportunity to successfully compete with them so they can continue to hire millions of Australians and can continue to buy products and services from small and medium-sized businesses here in Australia—instead of helping businesses overseas hire people overseas and buy more products and services from small and medium-sized businesses overseas.

Senator HINCH (Victoria) (12:51): First of all, I don't want to let Senator Cameron off the hook with his Scottish brogue about this rabble of a government, which is his normal speech. What we're forgetting here is that if, or when, a Labor government comes in, they will want to cut the benefits already fought for for small and medium-sized businesses that have a turnover of more than $2 million. We may get them through Senator Wong and we may get them up to $10 million, but we've already legislated, and the government has folded to us and given us a $50 million turnover limit. That was organised last year. Labor wanted $2 million; former senator Jacqui Lambie and I got it to $10 million; and Senator Hanson, through One Nation, and I got it to $50 million. That's where it sits now.

But that makes a joke of Senator Cormann's saying we don't want a two-tier system of taxation. You've got one now. You agreed to it last year. Anybody who has a turnover of $50.1 million doesn't get it. In the same way, I'm pleased to see you're now carving the banks out, because I proposed that on Sky back in March. I'm pleased that you agreed to it. I will vote for your amendment to carve out the banks—the robber banks—who should never have been in there in the first place. At the royal commission, daily, we see what they are doing. Daily, we see the way they've been stealing money from estates. Daily, as I said yesterday, we see they have been doing what Mick Young, the Labor hero, used to say: stealing pennies from dead men's eyes. We see the disgraceful behaviour of the banks, and not just the big four but AMP and other people as well. And we have seen also what their superannuation funds have done. They do not deserve a tax cut. I'm thrilled, Senator Cormann, that you realise finally that the banks deserve to be carved out of this.

But don't give me this rubbish about a two-tier system, because, as I said back in March—and I've got an amendment coming up here in committee shortly—I believe what you should be doing now is taking the threshold from $50 million to $500 million. At the same time, I'd vote for you if you put up an amendment that said, 'I want to advance the tax cuts for the smaller companies from 27½ per cent to 25 per cent,' and that moved the cuts forward by one or two years. I wouldn't mind. I'd vote for that as well, because I believe in company tax cuts. I believe they should be there, but out there in the real world—the voter world—they don't believe you. You proved it in Longman. You made Longman an unofficial plebiscite on company tax cuts. You also made it a popularity contest between Prime Minister Turnbull and Bill Shorten, and that didn't work very well, did it?

I would say to you, think again. Bring in an amendment that says $500 million. You have much vauntedly said, 'We'll take it to the election.' The Treasurer, Scott Morrison, has said, 'We'll take it to the election.' You said in this chamber last week, 'We'll take it to the federal election.' Well, take it to the election. I give you a pledge now that if you take it to the election in April or May—or if you change prime ministers and have one earlier, take it there as your major proposal—and the people of Australia vote you in on it I'll look at it again. In the meantime, the Justice Party has said since March, and we've stood firm despite all the things you've thrown up: 'We will go to $500 million for companies.' That will improve things for the business—and the workers, as you put it—of about 4,000 more companies. You're the one, Senator Cormann, along with Scott Morrison, who said to me that 'compromise' is the buzzword in Canberra and that 70 per cent of something is better than 100 per cent of nothing. Well, a $500 million company limit, giving 4,000 more companies tax cuts, is more than 70 per cent of something, and you should think it through again.

Senator WHISH-WILSON (Tasmania) (12:55): I have a couple of questions, Minister. Firstly, you mentioned, in response to Senator Cameron, what this is going to cost. I'll be a little bit more specific with my question: what is excluding the banks or ADIs over $500 billion going to cost your revenue projections? You said that was all in the explanatory memorandum, but I can't find any dollar figures in the explanatory memorandum at all. And could you explain to the Senate why you've chosen $500 billion as your cut-off point for a large ADI, when, for the purposes of legislation around the bank levy, a large ADI was $100 billion? Why the difference in this legislation versus what we saw in the bank levy?

Senator CORMANN (Western Australia—Leader of the Government in the Senate, Minister for Finance, Special Minister of State and Vice-President of the Executive Council) (12:56): I did actually explain before that, over the medium term to 2027-28, the revenue impact of removing the four big banks is increased revenue of $7.9 billion. Over the forward estimates, there is no impact, and the reason for that is that, under the Ten Year Enterprise Tax Plan, the banks of that size don't actually become eligible for the lower corporate tax rate in that period. You've also got to remember that, while the banks are carved out from the enterprise tax plan altogether, they are still subject to the major bank levy, which is raising more than $2 billion a year from those banks.

In relation to why we have chosen the $500 billion threshold, that is based on advice that that was the appropriate threshold to put in. You've got to remember that the banks below that threshold are involved in putting competitive pressure on the major banks in a domestic context, and a number of them are also involved internationally. The four major banks are the ones that, essentially, have their activities concentrated domestically in Australia and, as such, arguably are less exposed to global competition.

Senator IAN MACDONALD (Queensland) (12:57): I have a couple of questions I'd like to ask the minister, but before that can I just say that I was stuck in the chamber yesterday afternoon and I listened to Senator Hinch when he was talking about the amendment he was proposing. I thought he made some sense, and I'm pleased that his call in relation to the banks has been heeded by the government. I address the same comments to Senator Hanson. I know that Senator Hanson, a fellow senator from my home state of Queensland, has long campaigned, loudly and strongly, against giving the banks anything, for reasons which Senator Hanson and I well understand, coming from Queensland and seeing some of the things the banks have done to the citizens of our state, our constituents, in the past. I can well understand Senator Hanson's call.

Longman has been mentioned in this debate. I stood at the same polling booth in Longman with Senator Hanson's Queensland leader and with a team of Labor workers. At one stage, I seem to recall, both Senator Ketter and Senator Watt turned up to Caboolture East. I have to say it was mainly when their leader came around and the television cameras were around, but, notwithstanding that, they were there. And if I heard it once, I heard it a thousand times that day: the Labor Party—and, I might say, Senator Hanson's party—saying to voters, 'Don't give money to the big banks.' That was their main rhetoric as people walked into the polling booths: 'Here's a how-to-vote card, and don't let the government give money to the big banks.'

I've acknowledged Senator Hinch and Senator Hanson for their campaigns. I should perhaps, in fairness, acknowledge the Labor Party for that campaign too. But here we are today accepting what has been put to us by other parties, and quite frankly by many people within Australia, and yet the Labor Party are still choosing not to support it. I will interpret that—and I will interpret that very loudly back in my home state of Queensland—to mean the Labor Party are not in favour of not helping the banks. If you put that in another form, the Labor Party now seem to be helping the banks that they were so critical of. They weren't talking about other things at the Longman by-election; they were talking about, 'Don't let the government give the money to the big wealthy banks who've been such horrible people.' Here we are. We've listened to that. We're a government that acts in the best interests of people, and a government that listens. We're a government that actually is prepared to change policy where we're convinced that the Australian people are not with us. So here we are doing this and yet we still have opposition from the Labor Party. Forget about the Greens, because we know they'll always vote against the coalition regardless of what.

I would appeal to my Queensland colleague Senator Hanson, and her team, to seriously consider the new regime. I say to them: 'Well done; you've succeeded. I now urge your support for this package, with the banks excluded.' Senator Cameron rabbits on with his rhetoric in his 'broad Scottish brogue', as Senator Hinch said, about looking after the workers. But as I always say in this chamber—I think it's one statement I say that I get universal agreement on—I'm not very bright, but I can work out that companies need to have alternatives, options, on where to invest their money. If they can invest in country A and make a profit of 100, but they only pay 15 per cent tax on that profit, and if they can invest in country B—the same investment, the same return of 100—but they have to pay 25 or 30 per cent tax, then you don't have to be very bright to work out where they will make their investment. And, of course, if you don't have companies making investments in Australia, you don't grow industry and you don't employ people.

The Labor Party are all talking about how they're interested in the welfare of workers. We know they're not. In fact, I came across an article just recently about Senator Wong's favourite union. They're not my favourite union, I have to say, but Senator Wong's a member of CFMMEU. I see that even the CFMMEU has warned the Queensland government that its ambitious 50 per cent renewable energy target is 'not realistic' and that Labor should instead back new 'clean coal' power stations. This article, by Jared Owens, says:

The influential union, which represents workers at coalmines and generators, wrote to the—

Queensland—

government in May cautioning it against rushing to "unreliable and expensive" green energy.

The CFMEU, as I say, not a union I usually quote, go on to say:

The 50 per cent renewable target is not realistic. Whilst you can build solar and wind generation to achieve the target on paper, what do we expect is going to happen at night?

They say to read the advice of Treasury, released under the right to information laws. The quote from that is:

During the summer months it is still very warm into the evening … you will have high demand, no solar and potentially little wind generation.

I do remember the CFMEU. I remember them very fondly from when, as forestry minister back in 2004, I worked with Michael O'Connor, who was then the head of the forestry section of the CFMEU and who's now the boss of the bigger union. I remember how in those days, back in 2004, we worked together because we were interested in the jobs of workers in the forestry industry. And I have to say that, working in very close concert with the forestry section of the CFMEU at the time, we did achieve that. For a while, we saved the jobs of forestry workers. The CFMEU and Michael O'Connor were very courageous in standing up to the Labor Party in those days, because they knew what was best for their workers and for workers across Australia at the time.

Now, as I say, it's a bit of deja vu that I'm onside with the CFMEU in relation to renewable energy and clean coal. I agree with the CFMEU because I have an interest in the coal workers of North Queensland. The mines are not far from where I live. I know the wealth that's there. I know the jobs that are created there, and so do the CFMEU. I'm delighted to see that they are showing the same courage they had in the 2004 forestry debates by now getting stuck into the Labor Party for their stupidity on renewable energy.

I only mention that in this debate because, again, Senator Cameron talked about looking after the workers and looking after the poor people. I don't believe him, and neither does the CFMEU, I have to say, in the two instances I met. But, if Senator Cameron and the Labor Party are correct about not favouring the big banks, as they were talking about at the Longman by-election—I heard them all day; all day they were talking about not giving money to the big banks—if it's a win for them, well, so be it. But here we have a piece of legislation which excludes the big banks.

As I say, I was impressed with Senator Hinch's speech yesterday, and he's more or less repeated that just now. I concede that I'm not always one of those who take much notice of Senator Hinch, and some of the things he talks about we're directly opposed to. But I thought his contribution on this was very important.

As to what the limit is, that's something that Senator Cormann's answered. I will seek from Senator Cormann some additional explanation of that because I'm trying to understand what Senator Hinch is proposing. Dare I repeat, Senator Hinch, that you've had a success on the banks, but I would hope that, regardless of where the government goes on the other issue, you will at least support us in this amended legislation so that we can get it through. I think you accept, Senator Hinch—I think most of the crossbenchers do accept—that you don't relate to the Labor Party's rhetoric about looking after the poor people.

You understand, as I do—and, as I say, you don't have to be very bright to understand this—that, when companies have money to invest, they're going to invest in a place where they can keep the majority of their profits, and that is in a low-tax country. If we don't get that sort of investment in our country, we're not going to have the growth of industry. We're not going to have the jobs that we need in many of these industries, which these mainly foreign companies invest in. It's so simple. So I'm just begging Senator Hinch and Senator Hanson and her colleague to think in the broader picture. We do need that investment. I think they all accept that. But then we get tied down on where the cut-off should be. I'm going to ask Senator Cormann to again explain to me what exactly Senator Hinch is proposing and why the government isn't looking at it. Until I hear that, heaven knows where I will end up. It might even be that the government should look at it, but I don't fully understand it at this time.

I conclude by again appealing to my Queensland colleague Senator Hanson and her colleagues in One Nation to look at the bigger picture of investment in Australia and, for us, investment in Queensland. Senator Hanson, you and your colleague and Senator Hinch have had a success on the banks' carve-out. The government's gone along with that. I appeal to you because I'm interested in jobs for Queenslanders. I'm even interested, Senator Hinch, in jobs for Victorians. They're going to have a better chance of getting a job if there is investment coming into this country, and there won't be investment if companies can make more money by investing in a country with a lower tax regime. So, Minister, will you again explain, for my simple mind, what the government is proposing on the cut-off, what Senator Hinch is proposing on the cut-off and why one is better than the other?

Senator CORMANN (Western Australia—Leader of the Government in the Senate, Minister for Finance, Special Minister of State and Vice-President of the Executive Council) (13:11): I thank Senator Macdonald for that question. It's a very good question. When we legislated the first three years of our business tax cuts in March 2017 to a threshold of $50 million—which is the threshold that came into effect in the 2018-19 financial year, and that takes us now, in terms of our Ten Year Enterprise Tax Plan, to 30 June 2019—it was always on the basis that we would seek to legislate the entire enterprise tax plan. Being able to make the case for lower, globally more competitive business tax rates for businesses with more than $50 million in turnover is hard enough. If we now lock in a $500 million cap we will never, ever revisit that. It'll be absolutely impossible to go to the Australian people and say, 'We want you to now support a lower, globally more competitive business tax rate just for businesses with a turnover of more than $500 million.' The practical effect of that is that we would be locking in, in a structural sense, on an ongoing basis, a five per cent higher tax rate on profits for businesses with a turnover of more than $500 million. So, as soon as you are a business that goes from $500 million to $500 million plus $1, you would end up getting hit with a five per cent tax increase on 100 per cent of your profits—from your first dollar in profit to, essentially, 100 per cent of your profits.

What that means is that we would be providing a perverse incentive to businesses around Australia who've been somewhat successful to downsize. Any business that is able to generate $500 million worth of turnover has been somewhat successful. They've proven that they've got the entrepreneurial flair, the ideas, the products, the services, the know-how, the workers, the team and the capacity to generate economic activity, generate jobs and pay wages. But, if we say to that business, 'If you have one additional dollar of turnover, we will hit you with a five per cent increase in tax on 100 per cent of your profits,' that is a massive disincentive to further growth. As Mr Shorten used to assertively argue, it provides a perverse incentive to downsize.

The reason we're so committed to lowering the corporate tax rate for all businesses, irrespective of their turnover—carving out the four big banks, but for all other businesses—is that we want to show that, down the track, they will have the benefit of a lower, globally more competitive business tax rate. They're making investment decisions now based on their expectations of future after-tax profitability. If you talk to fund managers around the world, they will tell you that what they consider when making investment decisions is the expected after-tax return on that investment.

Do you know what the biggest source of foreign direct investment into Australia is? The biggest source of foreign direct investment into Australia is the United States. And do you know what has happened in the United States? Their corporate tax rate, earlier this year, went from 35 per cent to 21 per cent. We compete with businesses in the United States for investment into Australia, and in the US, their home market, the corporate tax rate went from 35 per cent to 21 per cent. So how can we here in Australia—with a comparatively small population, a large continent, lots of opportunity, capital intensive industries and significant reliance on foreign capital in order to continue to generate stronger growth and create more opportunities for workers around Australia—say that we're going to tie the arms of our businesses behind their backs and we're going to put rocks into their backpacks to make it harder for them to compete with businesses overseas?

The impact of putting a cap in place that would likely never be able to be shifted would be that we would provide an incentive to bigger businesses to become smaller businesses, when what we should be wanting to do is provide an incentive to smaller businesses across Australia to become bigger businesses. If we say to a smaller business or one approaching the $500 million cap that if they are even that little bit more successful we're going to hit them with a five per cent additional corporate tax rate, the enthusiasm to pursue further growth opportunities will be hampered. And we shouldn't hamper that, because, in the end, who gets hurt when a business is less successful? The people who miss out on getting a job in that business.

The people in the US won't mind if we make it harder for businesses here to compete with businesses over there. We have to remember that the US has a big population and a big domestic capital market, comparatively speaking. The reason they were able to have a 35 per cent corporate tax rate for so long is that, the need for them to have a competitive business tax rate—compared to Australia; in a comparative sense—was actually less urgent. It is much more urgent for a country like Australia—an open trading economy, a globally focused but also globally exposed economy—to have a globally competitive business tax rate so that we can continue to attract capital investment into Australia from other parts of the word and continue to build our businesses here in Australia. People say, 'Big businesses is unpopular.' But, hang on: if big businesses employ more people, where do those people go to shop, to have their coffees, to go to restaurants? The flow-on effect goes throughout the economy.

I see Senator Brockman, from the great state of Western Australia, is here. We are a trading economy in many ways. We are part of a trading nation. We have got some big companies. FMG didn't exist in 2003; today it's a big company. BHP is a big company in Western Australia. They are exposed to changes in commodity prices which we don't influence. We don't have any control over them. We are price takers. When the iron ore price, which is 20 per cent of national export income and a significant proportion of the economic activity in Western Australia, goes from $180 a tonne down to $45 a tonne, forcing iron ore businesses and other businesses to seriously cut their costs in order to remain viable and competitive, what happens in the rest of the economy? It means less opportunity for small and medium-sized business. It means lower job security. It has an impact all the way through the economy. But that is something that is outside our control. Our tax rate is directly under our control. If we keep taxes in Australia high, it is a deliberate decision to make it harder for our businesses in Australia to compete with businesses in other parts of the word. It's a deliberate decision to make it harder for workers in Australia to get a job and pursue a career here in Australia, compared to workers in other parts of the world.

I see Senator Macdonald. Qantas was set up by three people in Longreach in Queensland. It was a small business that started with a mail run. Today they employ 30,000 people, and 3,000 small and medium-sized businesses supply goods and services to them. They operate in a fiercely competitive international industry. If Qantas has less opportunity to be viable, to be competitive, to be profitable and to be successful into the future, it has a direct impact on the job security of people working at Qantas. It has a direct impact on the job security of the many Australians working in small and medium-sized businesses supplying goods and services to Qantas. It has a direct impact on the job security of the many Australians working in cafes, restaurants and shopping centres around Australia, serving the people who work for Qantas and all of their suppliers. In Townsville, I believe there is a business that has secured the contract to paint the Qantas planes. Senator Macdonald is nodding. These are the sorts of things that a successful business can do.

If we here in Australia, as policymakers, make a deliberate decision to make it harder for our global champions—the businesses that have grown from employing three people to employing 30,000 people—and to put them at a competitive disadvantage in the global economy, it will hurt families around Australia, hurt our economy and cost jobs. If we genuinely want the best possible opportunity for Australians today and Australians in the future to get ahead, to get a job, to be able to build a career and to get wage increases, we've got to ensure that our policy settings facilitate business success, because nine out of 10 working Australians work for private sector businesses, and their future job opportunities, job security, career prospects and wage increases depend on the future viability, competitiveness, profitability and success of the businesses that employ them.

That is why I'm urging the Senate to get behind this very important reform. In an absolute sign of good faith and a demonstration of how important we believe this is, we have put forward these amendments to carve out the four big banks, because clearly, in the political debate, that was an issue that was making it harder for people to support otherwise good policy and otherwise important reform. So, given this concession by the government, we really would urge the Senate to reflect on the national interest here and to reflect on all of the things that Mr Shorten, Mr Bowen and Senator Wong have said in the past about how important it is for Australia to have a globally competitive business tax rate.

Senator Hinch is right. He was on the record for a long time. The reason I always heard him say that he wanted to put in the $500 million cap was that he wanted to exclude the big banks. Well, we want to exclude the big banks, but without hurting those businesses employing millions of Australians that are exposed to global competition. That is what we're putting to the Senate. Work with us. We have taken a step towards you—a significant step. Let us come together in the national interest. Let us come together in the interests of working families around Australia whose future job opportunities, job security and wage increases depend on the future success and profitability of businesses around Australia which employ them.

Senator PATRICK ( South Australia ) ( 13:22 ): Centre Alliance will not be supporting these late-landing amendments. These amendments do carve out the banks. Of course, we understand the politics of that. The royal commissioner has found the conduct of not only banks but also other financial institutions to be poor, if not abhorrent. But the best way to deal with that conduct is directly, not indirectly by saying, 'We're going to carve you out of something else.' You need to take that on directly, and that means you need to have much tougher laws and regulations around the banks. You need to have very strong whistleblower laws so that every executive inside a bank understands that someone inside their organisation will call out misconduct and that, when they do so, they will be protected and those protections will be strong. It also includes having good enforcement. That's how you deal with misconduct in the banks: solid, strong enforcement. That includes criminal proceedings against executives that have breached criminal law. It also means stronger regulators—so making sure that ASIC, APRA and the ATO do their jobs properly. That's the way in which you tackle misconduct inside the banks. So that's the reason we won't support this. It's not good policy. You need to take on the banks directly in respect of their conduct.

Senator WATT (Queensland) (13:24): I want to take a couple of moments to bring to the chamber's attention the reason we are now in the in committee stage and why the position Senator Hanson takes at the third reading stage, when we get to it, will be crucial to the outcome of this bill. I know today is a bit of a crazy day in Canberra. There's lots happening. I think as I speak we see Mr Dutton, the next Liberal Party leader, having a press conference to explain his actions. There is all of that craziness within the government. There has also been a bit of confusion about what's happening here on the vote regarding the company tax cuts.

What happened a little while ago was the vote on the second reading. It was lost, from the Labor Party's perspective, 35 to 34, so 35 people voted in favour of the second reading of the bill and 34 voted against it. What was very notable in that vote was the absence of one particular senator—Senator Hanson. My understanding is that she was not paired for that vote. It wasn't as if there were a prearranged situation where she wouldn't vote and someone else would refrain from voting as well. Senator Georgiou did come in here and vote with the opposition against the company tax cuts, but Senator Hanson was missing. As a result of that, the government succeeded in passing this bill at the second reading stage.

The vote was 35 to 34. If Senator Hanson had been here and had voted with Senator Georgiou, as they had indicated publicly they would do to kill off these company tax cuts, then the vote would have been tied at 35 all, which would have meant it would have been lost and we wouldn't be having this debate now. Senator Hanson's failure to vote or her abstention has meant that the government got the legislation through at the second reading stage by one vote, and that's why we're continuing to debate it now.

No-one seems very clear about what Senator Hanson's actions were based on—whether it was deliberate on her part to miss that vote or whether she had some legitimate reason why she was not here to cast her vote. Whether it was accidental or deliberate, her absence from that vote allowed the government to succeed in passing this bill at the second reading stage and has given new life to the possibility of these company tax cuts going through.

Government senators: Hear, hear!

Senator WATT: As I said that, government backbenchers were cheering Senator Hanson on. Their hopes in passing this bill and getting these company tax cuts through rest on Senator Hanson's actions from here on in. If we are to take Senator Hanson at her word and believe her when she says that it was an accidental abstention and that she actually does intend to vote against these company tax cuts, as she has been indicating over the last 24 hours, fortunately for her there is an opportunity for her to come in here and make amends. When we get to the third reading stage of this bill she will have the opportunity to cast her vote and to follow through on her claims to oppose these company tax cuts by voting with the opposition to kill off this bill.

The acid test is really on Senator Hanson. Whether she actually supports these company tax cuts, whether she's going to vote against them with the opposition or whether she will simply abstain from that vote again and help the government out, Senator Hanson needs to be under no illusions what the consequences of her decision will be. If she does assist the government in passing these company tax cuts, then I think she knows very well what is coming her way. She needs to have a very close look at the results in the Longman by-election to understand what battlers in outer suburban areas and regional Queensland think about these company tax cuts. Let's hope she is telling the truth in having accidentally missed that vote and let's hope that she does make amends and, to make sure that these company tax cuts do not pass, votes with the opposition when we get to the third reading stage.

Senator PATERSON (Victoria) (13:29): I'm very pleased to have an opportunity to contribute to the debate on this very important legislation in the committee stage—the government's enterprise tax plan. I'm very pleased that the government has already been able to secure the first stage of this plan. I'm very pleased about the early results of the success of the first stage of the government's plan. In a moment, Minister, I'll be asking you about some of those results, but I want to take the opportunity, since we are in the committee stage, to revisit some of the issues that we've considered in this debate.

As the minister said in an answer to a previous question, Australia is in a global economy. Although we are an island geographically we are not isolated from the rest of the world. The rate of company tax that we charge our companies here in Australia does have bearing on how much investment we have here in Australia. We can pretend if we like that that's not the case. We can dig our heads in the sand and think that it doesn't matter that the rest of the world is moving on the company tax rate and that company tax rates around the world are falling. But, ultimately, we will see the results of that. Ultimately, we will pay the price of that.

It's not just the United States, as Senator Cormann mentioned, that has dramatically lowered their company tax rates but other major trading partners in similarly arranged economies like the United Kingdom have drastically cut their corporate tax rate. In our region, we are now dangerously uncompetitive with our corporate tax rate. Even in the OECD—not exactly renowned for being a club of low-taxing countries—on the corporate tax rate average, we are getting dangerously out of step and we will soon be one of the highest company taxing countries within the OECD.

Investors don't invest in Australia just because we have great weather, because we have nice beaches and because we have cute animals; they invest in Australia because they can get a good return on investment in Australia. The relative return on investment that they need to justify an investment in Australia is going to be higher for every percentage point higher our company tax rate is. A like-for-like return on investment between New Zealand and Australia, with a lower corporate tax rate in New Zealand, means that dollar of investment is going to go to New Zealand instead of Australia.

The multinational corporations who operate in this country have to justify to their parent companies internationally why they are deserving of investment here in Australia. Why the best return on investment for them will be here domestically. Their task in doing so, their task in convincing head office that Australia is a great place to invest, only becomes harder when our company tax rate becomes dangerously out of step.

Minister, I want to return though to the question that I flagged earlier in my contribution. Of course, the government has already legislated part of the enterprise tax plan for small businesses. I'm interested to know from you what the result of that legislation has been in many aspects, but in particular what the result of that has been in terms of receipts from company taxes for the federal government. The reason why I ask that question, Minister, and why I flag that question to you, is that often it is the case—and I'd be interested to know the data from Australia—that when rates of tax are cut internationally, whether that be company tax or personal income tax, revenue from companies doesn't decrease, as you might intuitively expect it to, but it increases for a range of reasons. Companies are encouraged to invest more, they are encouraged to employ more and they are encouraged to deploy more capital. Their economic activity increases and so their profits increase. And sometimes they even choose to bank more of their profits, if it's an option for them, within a jurisdiction that now has a lower rate of tax. Minister, I'm interested whether you could enlighten the Senate on what the results on company tax revenues have been from the first stage of the company tax cut plan.

Senator CORMANN (Western Australia—Leader of the Government in the Senate, Minister for Finance, Special Minister of State and Vice-President of the Executive Council) (13:33): I thank Senator Paterson for that question. As I said in my summing up speech, in the period since we legislated the first three years of company tax cuts for businesses with a turnover of up to $50 million, economic growth is up, employment growth is up and just under $10 billion in higher company tax receipts have been collected compared to our expectations in the 2017-18 budget. If you look at the 2017-18 budget and you compare that with the actual performance as reported in the monthly financial statements, what you will be able to see is that company tax receipts are actually going up, which is very good news in terms of our objective to put funding for important social services, for health, for education and for national security on a fiscally sustainable foundation trajectory for the future.

In the end, a strong economy is central to everything. It is central to making sure that Australians today and into the future—Australian families today and into the future—have the best possible opportunity to get ahead, to reach their full potential, to have a great quality of life. It is also central to making sure that the government can generate the necessary revenue moving forward. The experience on the back of our plan for stronger growth and more jobs is that, as more jobs have been created, not only have more company tax receipts been collected but also we've had significant increases in personal income tax receipts compared with what was expected.

The good news doesn't end there. We've had significant reductions in expenditure on welfare payments because more people are in jobs than was expected. So we've got more revenue—more revenue from company tax, more revenue from personal income tax—and we've got less expenditure on welfare, because more people are in employment than had been anticipated. I would have thought that would be something everyone in the Senate would and should welcome. In fact, the proportion of working-age Australians on welfare today is at its lowest level in 25 years. That is one of the proud achievements of the Turnbull government. That is why we say that our plan for a stronger economy, our plan for more jobs, our plan to help families around Australia to have the best possible opportunity to get ahead, is the best recipe against poverty.

But, if we make it harder for business to be successful, low-income earners will be hurt the most, because it is low-income earners around Australia who are the most exposed to the negative impact of lower growth, who are the most exposed to the negative impact of lower business growth, because invariably it is at the lower income end that people are trying to break into the jobs market. It is often at the lower-income end that people are most exposed to the variability in hours worked. Stronger growth means a better opportunity for more working hours, a better opportunity for permanent employment instead of casual employment.

These are all things that come from helping to ensure that businesses around Australia have the best possible opportunity to be successful. I say again what I said in my summing-up speech: if we make decisions that make it harder for business to be successful, they will be less successful. And as businesses are less successful they will hire fewer people than they otherwise would have and will invest less in their future growth. As businesses around Australia hire fewer people than they otherwise would have, employment growth will be less, the unemployment rate will be higher, the demand for workers will be less, the supply of workers will be higher, the wages that can be secured by workers will be lower and the revenue for government will be less.

So, it is lose, lose, lose, lose, whereas what we have demonstrated—certainly the data is obvious in our monthly financial statements, and later in September the Treasurer and I will be releasing the final budget outcome for 2017-18. People will be able to see how the Australian economy and Australian businesses have performed in 2017-18 compared with what was estimated in May 2017. And people will be able to see, based on the data that I've already released, that company tax receipts, even in just the one calendar year, are substantially higher than what had been anticipated, to the tune of nearly $10 billion.

To put that into context, the cost of the remaining unlegislated business tax cuts, per the explanatory memorandum that was tabled with the legislation, is $35.6 billion to 2027-28. So, just in 2017-18 we have raised $10 billion more than had been anticipated. The cost for the remaining unlegislated tax cuts to 2027-28 is $35.6 billion. We've put an amendment on the table in relation to the four major banks which, I'm advised, would reduce the cost of corporate cuts to 2027-28 by $7.9 billion. We've already flagged that we are considering reforms to the petroleum resource rent tax arrangements, which would not have an impact over the short term, over the forward estimates, but which also would have a revenue impact over the medium term, further reducing costs.

If you look at the cost of the opportunity to make businesses around Australia internationally competitive, it is actually very low when you put it next to the opportunity to create more jobs, create more personal income tax revenue for government and create more company tax revenue for government on the back of stronger growth, rather than on the back of higher taxes. As certainly as night follows day, the Labor Party agenda—the Labor Party antibusiness, politics of envy, higher taxes agenda—would lead to less investment, lower growth, fewer jobs, higher unemployment and, on the back of higher unemployment, lower wages; whereas our agenda, which is all about encouraging business to invest more by making sure that businesses have the best possible opportunity to sell Australian products and services around the world and in Australia, is all about attracting more investment to deliver stronger growth and more jobs. As more jobs are created and the unemployment rate continues to come down, the increased competition for workers drives up wages. As more people are employed and as wages go up, personal income tax revenue goes up, as does company tax revenue, on the back of more profitable businesses. That is the win-win-win that we believe Australian families deserve and that is the win-win-win that we are asking the Senate to support.

Senator STORER (South Australia) (13:41): This amendment appears to emerge from the public concern surrounding the behaviour of the big banks, uncovered by the royal commission. There is no doubt that many of the practices that have been exposed have been appalling and that many ordinary people have suffered greatly. Many of the senators have spoken about this today and at other times in this place. But I have made it clear that I regard a consideration of the company tax cuts to be distinct and separate from the behaviour of the big banks, and I said as much to the government, and publicly, when I opposed the consideration, in March, of the initial legislation. I have considered the case for and against the company tax cuts thoroughly, on their merits and on the basis of evidence, but I do not believe that the government bringing forward legislation today to exclude the big banks is the appropriate way to prosecute their case, which they have been doing consistently for the past months in which I've been here as a senator.

I spoke yesterday regarding the bill as presented previously, and my focus was on that and on the future of the economy and the future of our families. I am, as a South Australian, a passionate advocate of South Australian businesses—and I note that Senator Cormann referenced a South Australian business today. I do note that business is the backbone of the economy and I will do all that I can to encourage business growth and prosperity. But my review of the evidence to date about the tax cuts legislated already is that they have not delivered the changes in employment and wages, as indicated by the modelling provided to me by Treasury and other sources, upon which this legislation was based. I have consistently noted that I found the legislation too narrowly based and the benefits too small to outweigh the costs. Whilst they've now been reduced from $35.6 billion to perhaps $7.9 billion less, they are still very considerable in terms of the future need for funds to tackle the budget deficit and growing government debt and also the services that Australian people wish to have. I reference the intergenerational reports, which indicate a further and growing need, particularly in aged care and retirement as the populace grows older. So I see the tax cut itself, even with the big banks removed, as not true tax reform. I don't believe that it's in line with the clear principles outlined within the Henry tax and transfer review. There were at least seven principles, of which a company tax cut was one, and Senator Cormann has noted that with me previously. But it was one of seven principal feature reforms that were all to be brought about together.

So I will not be supporting these amendments. I believe that the conduct of the banks should be referenced in another forum—be it the royal commission findings or APRA and other entities set up to do so—and that putting forward a piece of legislation just to remove the big banks in order to gain support is not an appropriate way to move forward. So I remain opposed to the extension of the tax cuts as legislated, even with the removal of the big banks or, under Senator Hinch's proposal, a threshold of $500 million in turnover. The evidence I've seen on the changes from 2015 is that they have not delivered what was indicated, and we have significant gross government debt and future requirements for services that need to be funded.

There are arguments that many foreign investors are looking at Australia in terms of many, many aspects alongside, but outside of, the company tax rate headline figure, which is often quoted by government senators and other advocates of this. It's a misleading argument because, to date, we have gained significant foreign investment into Australia against other economies, even in our region, that have much lower headline company tax rates. Investors come to Australia for a variety of reasons. So to indicate that there's going to be a massive problem with investors choosing not to invest in our country, given our headline tax rate compared to the headline company tax rates of other countries, is slightly misleading.

In summary, I have considered the case for and against these company tax cuts thoughtfully, on their merits and on the basis of evidence, and I remain opposed to any extension of the tax cuts as legislated, even with the changes made today.

Senator IAN MACDONALD (Queensland) (13:47): I am interested in this debate, and I am listening to contributions made by other senators. In relation to the last contribution, as I keep saying, I'm not terribly clever, but you don't have to be clever to work out what companies will do with their investment strategies. If they can get a cheaper tax rate in a similar country to Australia, they're looking at their profits, and so they'll make their investment in a country that gives them and their shareholders the greatest return. That's relatively easy to understand. We are a country that does need investment, particularly foreign investment, but the foreign investors have plenty of options. As Senator Cormann mentioned in answer to a previous question of mine, most of the foreign investment that comes into Australia is from the United States. They are reducing their taxes to a much lower rate, and I'm sure it makes investors in the United States wonder why they should be investing in Australia when they can invest in their own country and return a lot more of their profits to their shareholders.

Senator Cormann, in answer to a previous question from me, spoke about Qantas and spoke about it being a Queensland company that started off with three people and now employs tens of thousands right around the world and supports lots of small businesses. That sort of brought it home to me. We tend to talk in the abstract in this place and throw around billions of dollars and use Treasury terminology. It's always very easy to get out of the realm of reality, and this building is very good at doing that.

Again I come back to Senator Hinch's amendment of companies over $500 million turnover being excluded. I've asked the minister's advisers to give me some information, which they have. But I find it difficult to accept that this is what Senator Hinch's amendment would do, because the companies that would not receive the reduced tax, which means they'd be paying more, are companies like Mackay Sugar. The company, self-grown in the Mackay area of my state, just down the road from where I live, owns quite a few sugar mills. It crushes the cane of thousands of farmers in the Mackay region and it employs thousands of workers in its mills. But, under Senator Hinch's amendment, Mackay Sugar would pay more tax than other companies.

The same applies to Sun Metals, a Korean company set up in Townsville to refine zinc. That is a company which made an investment in Australia some years ago, when energy was cheap, I have to say—when electricity was cheap. That's one of the reasons they came to Australia, and I suspect they often regret it nowadays, with the cost of electricity, particularly in North Queensland. But that's a company that can make investments anywhere in the world. Are they going to put more investment into Townsville when they know that a bigger share of any profit they make is going to be taken from them and their shareholders than if they invested their money somewhere else? They have refineries in other parts of the world, so why would they invest in Australia and create more jobs for Australians if they're going to be penalised by paying more tax?

I note in this list of companies—I can't believe it's true, but I'm sure it is if it was given to me by the minister's advisers—is Mantra Group, which owns a lot of hotels around Australia and employs thousands and thousands of Australians. But, under Senator Hinch's amendment, they're going to be paying a penalty tax rate not paid by some of their competitors. JJ Richards & Sons are a waste collection group. I think they're based in Brisbane; they certainly have lots of operations around my home state of Queensland. They fall into the category that would be caught by Senator Hinch's amendment. And I know they're a family company. I've heard presentations they've made before, and they are a home-grown company. But they will be penalised in the tax they pay, if I understand what's being proposed.

Brisbane Airport, another group that, according to my figures, has a turnover of well above the $500 million mark, will be paying more tax than its competitors. The Kilcoy Pastoral Company are an Australian food manufacturing company in Queensland. Senator Hanson would know the Kilcoy Pastoral Company well because it employs a lot of Queenslanders. I dare say, her party having stood at the Longman by-election and seen who took whose card—Kilcoy is, I think, in the Longman electorate. If it's not, certainly the workers at Kilcoy would be living in the electorate of Longman. Kilcoy would pay a penalty rate of tax.

I'm pleased to see Senator Hinch coming back into the chamber. I'm just saying, Senator Hinch, a lot of the companies that would be caught by your amendment about $500 million turnovers—so they'd be getting less of a tax cut—are little companies like the Kilcoy Pastoral Company that Senator Hanson and I know well. I mentioned Brisbane Airport; JJ Richards and Sons; and Sun Metals, the refinery in Townsville. These are all companies that will pay more tax than their competitors. And I repeat, again for your benefit, Senator Hinch—

The TEMPORARY CHAIR ( Senator Reynolds ): Senator Macdonald, I will just remind you to direct your remarks through the chair.

Senator IAN MACDONALD: I beg your pardon, Chair; you're quite right. I just wanted to repeat for other senators' benefit what I'd said earlier. Sun Metals is an international Korean company that came to Townsville a couple of decades ago to refine zinc. They have refineries all around the world, and if they're going to expand, they can make investments anywhere, which means that they won't invest in Australian plants, which means fewer jobs for Australians. A couple of weeks ago I was opening the Mount Isa Rodeo Hall of Fame, and I met Australians who work for Sandvik Mining and Construction, a Swedish company that earns more than $500 million in income and thus will not be eligible for the tax cuts, which means the guys I was talking to at the rodeo may find that their head company in the future invests more in Africa or South America than they do in Mount Isa.

The list goes on. ERM Power, a homegrown Australian electricity supply company, will not be in the same race competitively with tax. Aurizon, a company involved in railway transportation in Queensland, partly owned by the Queensland government, will not get the same tax cuts as other people in the transport industry. Senator Cormann mentioned Qantas in response to my question. Not only Qantas but also Virgin Airlines will not benefit from increased investment, because they're not going to get the tax cut.

I continue with the higher-range turnovers: Wilmar Australia Holdings. In the town that I live in, Wilmar is not always the best name to mention—although they own four or more sugar mills, crush the cane and employ thousands of workers. They're a Singaporean company who can and do invest anywhere in the world. Why would they be interested in increasing investment in Australia when they can invest in other parts of the world and take home more of the profits they earn? Similarly Glencore, which now operates the Mount Isa mines, is a Swiss company. They can invest in Australia, or they can invest in Africa or the Americas. They know that, if they do that, they'll get a better return, because they'll pay less tax, since the Australian tax system is not competitive.

Teys Australia Ltd, a homegrown Rockhampton based meat-processing company with processing facilities in Rockhampton and Biloela, is on this list. They're not going to be eligible for reduced tax. Teys compete against some big multinationals in the meat-processing area. I know Senator Hinch is very keen on processing meat within Australia, and here is an Australian company doing it. With the limit Senator Hinch is proposing, Teys will not have the benefit of reduced taxes, which means their investment will be more circumspect. I go to the bigger companies. Myer employs tens of thousands of Australians in its various operations. This list goes on and on.

Progress reported.

Senator URQUHART (Tasmania—Opposition Whip in the Senate) (15:33): At the request of Senator Watt, I move:

That the following matter be referred to the Community Affairs References Committee for inquiry and report by 28 November 2018:

Support for Australia's thalidomide survivors, with particular reference to:

(a) adequacy of compensation and support;

(b) responsibility for providing support;

(c) provision of financial compensation;

(d) the role of the Australian Government in compensation and support; and

(e) any related matters.

Question agreed to.

Senator URQUHART (Tasmania—Opposition Whip in the Senate) (15:34): I ask that Senator McKim's name also be added to business of the Senate notice of motion No. 2 standing in the name of Senator Collins.

The PRESIDENT: It is so recorded.

Senator URQUHART: At the request of Senator Collins and Senator McKim, I move:

That the Migration (Validation of Port Appointment) Bill 2018 be referred to the Legal and Constitutional Affairs Legislation Committee for inquiry and report by 10 September 2018.

Question agreed to.

Senator URQUHART (Tasmania—Opposition Whip in the Senate) (15:35): At the request of Senator Keneally, I move:

That there be laid on the table by the Minister representing the Minister for the Environment and Energy (Senator Birmingham), by no later than 10 am on 10 September 2018, documents held by the Department of the Environment and Energy that demonstrate that, before the grant of $444 million to the Great Barrier Reef Foundation (the Foundation) was approved:

(a) due diligence was carried out on the Foundation; and

(b) evidence was provided of the capacity of the Foundation to manage a grant of this size and to reduce its administration costs by approximately 50%.

Question agreed to.

Senator HANSON-YOUNG (South Australia) (15:40): I move:

That the Senate:

(a) notes that:

   (i) on 27 June 2018, the Senate agreed to an order for the production of documents (number 908), ordering that there be laid on the table by the Minister representing the Minister for Agriculture and Water Resources (Senator Canavan), by no later than 8 pm on 28 June 2018, documents provided as an incoming brief to the Commonwealth Environmental Water Holder, Ms Jody Swirepik, and

   (ii) on 10 July 2018, Senator Canavan advised the President of the Senate that the Department of Agriculture and Water Resources did not provide an incoming brief to the Commonwealth Environmental Water Holder, Ms Jody Swirepik;

(b) further notes that, in response to questions from Senator Patrick on 25 May 2018 during additional estimates hearings of the Rural and Regional Affairs and Transport Legislation Committee on cross-portfolio Murray-Darling Basin Plan matters, Ms Swirepik confirmed she had received an induction briefing prepared by the Commonwealth Environmental Water Office; and

(c) orders that there be laid on the table by the Minister representing the Minister for Agriculture and Water Resources, by not later than 11am on 23 August 2018, all documents provided to the Commonwealth Environmental Water Holder, Ms Jody Swirepik, as an induction briefing, including its cover brief and all attachments

Question agreed to.

Senator PATRICK (South Australia) (15:40): I move:

That:

(a) the Senate notes that:

   (i) since 2013, the Department of Human Services (the Department) has had a program underway to upgrade its child support system ('Cuba')—the approved budget was $102 million,

   (ii) during the 2015-16 financial year, the total budget was exhausted without the project being completed,

   (iii) since the 2015-16 financial year, funding to complete the system has come from the Department's internal investment fund and ICT BAU budget,

   (iv) in response to questions taken on notice during the inquiry of the Finance and Public Administration References Committee into digital delivery of government services, the Department advised that it was unable to determine how much had been spent on the project,

   (v) in response to questions asked at Budget estimates, the Department could provide no indication of the total spend on the project or provide a target completion date, and

   (vi) in response to a freedom of information request—Department Reference LEX 37339—the Department indicated there are 49 documents in existence that fit within the description of 'final versions of all formal executive briefings submitted to the Secretary, Department of Human Services between 1 July 2017 and 30 June 2018, where the topic of one or all of the executive briefings cover the cost, resource allocation and/or progress of the Child Support System redesign Programme'; and

(b) there be laid on the table by the Minister representing the Minister for Human Services, by no later than 10 am on 10 September 2018, the 49 documents identified by the Department in FOI Department Reference LEX 37339.

Senator McGRATH (Queensland—Assistant Minister to the Prime Minister) (15:40): I seek leave to make a short statement.

The PRESIDENT: Leave is granted for one minute.

Senator McGRATH: The Department of Human Services is continuing to modernise child support business practices and ICT platforms. The government is committed to investing in technology solutions that improve the way that government interacts with Australians. We will continue to develop, enhance and modernise the child support ICT system to ensure we have services fit for future need. Pursuant to the Freedom of Information Act, Senator Patrick is able to enact his right to a review of the decision through a number of avenues that were listed in the decision letter he references in his motion. The parliament is not the appropriate forum to address freedom of information matters.

Senator PATRICK (South Australia) (15:41): I seek leave to make a short statement.

The PRESIDENT: Leave is granted for one minute.

Senator PATRICK: The Centre Alliance has no objection to improvements being made to the child support system. This motion stems, actually, from questions asked in Senate estimates asking for the cost. In fact, it goes back even further, to a Senate inquiry into digital services, where the department were simply unable to answer a question on how much they've spent on the system. I don't mind an upgrade, but it's irresponsible to not understand what resources have been assigned, how much money has been spent and when the system will be completed. In asking questions, and indeed in writing to the minister and getting no response, I've had to ask for an order for production of documents so that I can then inspect the project material myself. So I urge the Senate to support this motion.

The PRESIDENT: The question is that notice of motion No. 982 be agreed to.

Senator WILLIAMS (New South Wales—Nationals Whip in the Senate) (17:31): On behalf of the Parliamentary Standing Committee on Public Works, I present Report 3/2018: referrals made May 2018.

Senator SCULLION (Northern Territory—Minister for Indigenous Affairs and Leader of The Nationals in the Senate) (17:31): I present the government's response to the interim report of the Economics References Committee on its inquiry into non-conforming building products, Interim report: protecting Australians from the threat of asbestos, and seek leave to have the document incorporated in Hansard.

Leave granted.

The document read as follows—

Senate Economics References Committee Inquiry into non-conforming building products

Australian Government response to the interim report: Protecting Australians from the threat of asbestos

AUGUST 2018

Background

On 23 June 2015, the Senate referred an inquiry into non-conforming building products to the Senate Economics References Committee, to examine:

a. the economic impact of non-conforming building products on the Australian building and construction industry;

b. the impact of non-conforming building products on:

i. industry supply chains, including importers, manufacturers and fabricators,

ii. workplace safety and any associated risks,

iii. costs passed on to customers, including any insurance and compliance costs, and

iv. the overall quality of Australian buildings;

c. possible improvements to the current regulatory frameworks for ensuring that building products conform to Australian standards, with particular reference to the effectiveness of:

i. policing and enforcement of existing regulations,

ii. independent verification and assessment systems,

iii. surveillance and screening of imported building products, and

iv. restrictions and penalties imposed on non-conforming building products; and

d. any other related matters.

The Inquiry lapsed following the dissolution of the Senate (44th Parliament) on 9 May 2016, for the general election on 2 July 2016.

On 11 October 2016, the Senate agreed to the Committee's recommendation that the Inquiry be re-adopted in the 45th Parliament.

On 13 October 2016, as part of its broader Inquiry into non-conforming building products, the Committee adopted additional terms of reference seeking submissions regarding the unlawful importation of products containing asbestos, and their impact on the health and safety of the Australian community.

Submissions to the Inquiry closed on 18 January 2017.

Following the Grenfell Tower fire in London, on 21 June 2017, the then Assistant Minister for Industry, Innovation and Science, the Hon Craig Laundy MP, wrote to the Chair of the Committee, Senator Chris Ketter, to request the Inquiry be used to conduct a public hearing to specifically examine the non-compliant use of cladding products in Australia.

The Committee agreed to prepare an additional interim report on the implications of the use of non-compliant external cladding materials in Australia as a priority. That report was released on 6 September 2017 and the Government's response was tabled on 14 February 2018.

The reporting date for the interim report on asbestos was 22 November 2017 and the reporting date for the final Inquiry report is 16 August 2018.

The Australian Government has given consideration to the findings and recommendations presented in the Committee's interim report on asbestos, and tables the following response for the Committee's consideration ahead of the final Inquiry report.

Government Response

The Australian Government acknowledges the significant impact on the health and safety of the Australian community that may arise from exposure to asbestos. The Government supports the decision of the Committee to examine the issue of unlawfully imported goods containing asbestos as part of its broader Inquiry into non-conforming building products.

The Committee's interim report on asbestos includes 26 recommendations, with many directed at matters the Government has addressed or is considering. This includes:

the coordinated, strategic approach to enforce Australia's strict asbestos prohibition at the border

the whole of government coordination of activities to address unlawful asbestos imports

strengthened asbestos-related regulations, including increased penalty levels

the provision of increased funding for the Asbestos Safety and Eradication Agency (ASEA).

Commonwealth, state, territory and local governments are responsible for managing asbestos within their jurisdictions. This includes work health and safety (WHS), public health, consumer safety and environmental regulation. Australian governments work closely together to develop consistent regulatory and policy frameworks.

The Australian Government, through ASEA, works with governments at all levels to ensure there is a coordinated national approach to dealing with asbestos. The Government more than doubled ASEA's ongoing level of funding from 2018–19.

The Government shares the community's concerns over incidents of goods containing asbestos unlawfully imported into Australia and is committed to maintaining effective border control.

In September 2016, the Department of Jobs and Small Business (formerly the Department of Employment) and the Department of Home Affairs (formerly the Department of Immigration and Border Protection) established the Asbestos Inter-Departmental Committee (Asbestos IDC) to provide strategic direction to enable effective policy and regulatory coordination across Commonwealth agencies in managing asbestos issues across the supply chain.

The Government has progressed a range of initiatives to improve supply chain management and assurance pre, at and post border. The Australian Border Force (ABF) is managing goods that pose a risk of containing asbestos through a substantial increase in the targeting and testing of goods at the border.

Government agencies are also actively working with importers and industry to ensure they understand the requirements and their responsibilities under import laws. This includes the need to put in place assurance measures across the supply chain to ensure that asbestos does not reach Australia in the first place.

Australian Government agencies are also working together with state and territory WHS regulators to address incidents of unlawfully imported asbestos being installed in a workplace. Consideration is being given to the powers of inspectors to require the removal of the asbestos in this circumstance.

Commonwealth, state and territory governments have also established mechanisms to respond rapidly to the identification of unlawful asbestos importations, to prevent these goods from posing a risk to the community. A Rapid Response Protocol ensures that relevant government agencies share information and facilitate communication to the community about the safe handling and disposal of imported goods containing asbestos.

The Government recognises the importance of maintaining a strict prohibition on the import and use of asbestos and will continue to work collaboratively with all levels of government, industry and the community to address this issue.

Response to the Recommendations

Recommendation 1

Through the Council of Australian Governments, the Australian Government pursue a coordinated and consistent whole of government approach to strengthen federal and state legislation and regulations to address the illegal importation of asbestos.

Response — Noted

The Government notes this recommendation.

The existing coordinated and consistent approach to addressing the unlawful importation of asbestos and appropriate mechanisms has strong support from all levels of government in Australia.

The responsibilities of Commonwealth, state and territory agencies are clear in relation to the prevention, detection and management of imports, which unlawfully contain asbestos. There is an effective regulatory framework in place, underpinned by a range of laws across the import supply chain at the Commonwealth, state and territory levels in the areas of public health, environment, WHS, importation, building regulation and consumer law.

The Government has established a range of policy and regulatory coordination mechanisms at ministerial and senior executive levels to ensure a coordinated and systematic approach across this framework. Commonwealth, state and territory ministers and senior officials responsible for WHS regularly meet to progress WHS issues, including asbestos-related issues.

The Asbestos IDC, which the Department of Jobs and Small Business and the Department of Home Affairs established in September 2016, provides strategic direction to enable effective policy and regulatory coordination across Commonwealth agencies in managing asbestos issues across the supply chain. The Asbestos IDC brings together Commonwealth agencies responsible for WHS, border protection, trade, environmental protection, public health and consumer safety. ASEA is also on the Asbestos IDC. The work of the Asbestos IDC has involved clarifying roles and responsibilities and identifying opportunities to strengthen the legislative framework. The Asbestos IDC undertakes consultation with employers and unions.

The Heads of Workplace Safety Authorities' (HWSA) Imported Materials with Asbestos Working Group also meets to discuss asbestos management issues. The working group includes representatives from the ABF, the Departments of Home Affairs and Jobs and Small Business, Safe Work Australia (SWA), ASEA, the Australian Competition and Consumer Commission (ACCC), all WHS regulators from the commonwealth, states, territories and New Zealand responsible for asbestos matters. The Working Group has established a Rapid Response Protocol to address instances of unlawfully imported asbestos, with communication channels to enable a swift response to contain and appropriately deal with those instances within Australia.

SWA, the national agency on work health and safety policy, also supports a coordinated and consistent approach to the regulation of asbestos in the workplace. SWA comprises membership from the Commonwealth, all states and territories, employers and unions. The model WHS laws, for which SWA is responsible, deal comprehensively with asbestos in the workplace, including through the implementation of a domestic ban on its use.

Australia has had a ban on the unauthorised manufacture, use, reuse, import, transport, storage or sale of all forms of asbestos and asbestos-containing materials since 31 December 2003. The ban was introduced under Commonwealth, state and territory work health and safety legislation and is complemented by import and export prohibitions under the Customs (Prohibited Imports) Regulations 1956 (Cth) and the Customs (Prohibited Exports) Regulations 1958 (Cth).

Regulation 4C of the Customs (Prohibited Imports) Regulations 1956 (Cth) prohibits the importation of asbestos, or goods containing asbestos, except in very limited circumstances, such as where the Minister administering the Work Health and Safety Act 2011 (Cth)has provided permission to import asbestos for the purpose of research, analysis or display. Regulation 4 of the Customs (Prohibited Exports) Regulations 1958 (Cth) prohibits the exportation of asbestos, or certain goods containing asbestos, from Australia unless a permission or exemption has been granted or a lawful exception applies.

As noted in the response to Recommendation 15, the Department of Home Affairs is developing advice to government on changes to the offences and penalties for the unlawful import/export of asbestos detailed in customs legislation.

The Departments of Jobs and Small Business and Home Affairs are also considering amendments to the Customs (Prohibited Imports) Regulations 1956 (Cth) and Customs (Prohibited Exports) Regulations 1956 (Cth) at the recommendation of the Asbestos IDC. The proposed changes would improve consistency of the regulations with the model WHS laws and make other necessary updates.

As noted in the response to Recommendation 20, SWA is currently reviewing the power of regulators to deal with the removal and disposal of asbestos that has been unlawfully imported and then used in workplaces.

The comprehensive and coordinated approach the Government is taking to the enforcement and management of Australia's strict import/export prohibition and workplace ban on asbestos means that additional work through the Council of Australian Governments (COAG) is unnecessary.

Recommendation 2

The Australian Government adequately fund the Asbestos Safety and Eradication Agency so it is able to deliver the next National Strategic Plan for Asbestos Management and Awareness and to carry out its other functions, both current functions and new functions set out in recommendations in the report.

Response — Supported

The Government supports this recommendation.

The Government provided ASEA with additional ongoing funding of $1.7 million per annum, commencing in 2018–19, in the 2017 Mid-Year Economic and Fiscal Outlook (MYEFO). This more than doubles ASEA's base level of funding, from $1.6 million, to $3.3 million per annum.

The additional funding ensures ASEA can work effectively with state, territory and Commonwealth WHS regulators to implement the National Strategic Plan for Asbestos Management and Awareness to protect workers and the community from Australia's deadly asbestos legacy, as well as achieving an end to asbestos-related disease.

The funding will ensure that ASEA is well placed to coordinate the implementation of phase two of the National Strategic Plan with Comcare, the states and territories. The funding ensures the Agency can maintain an appropriate level of staffing and conduct research in priority areas to support effective policy and programs that reduce exposure to asbestos.

Recommendation 3

The Department of Immigration and Border Protection and Australian Border Force undertake an external review of their industry consultation arrangements with a view to strengthen and formalise the contribution from stakeholders. Ideally, these should be through formal meetings on a regular basis with those who are on the front line who are adversely impacted by illegal asbestos importation.

Response — Noted

The Government notes this recommendation.

An independent review of border processes for asbestos concluded in 2016. This review examined industry engagement undertaken at the time, and it identified opportunities for organisational and technical improvements. Following the review, there has been an increased focus on formalised consultation and engagement.

The Department of Home Affairs continues to enhance and update the information it publishes with respect to asbestos, and it engages directly with key stakeholders via a number of internal and external consultation fora, including through:

the Trade and Goods Compliance Advisory Group

the Building Ministers' Forum

peak border industry bodies, such as the Customs Brokers and Forwarders Council of Australia (CBFCA), the Freight and Trade Alliance, the Australian Peak Shippers Association, and other industry representative bodies

trade union groups through the Asbestos IDC.

The Department of Home Affairs' efforts complement those of other agencies, including through ASEA's work in driving a national focus on health and safety issues on asbestos. ASEA has broad stakeholder reach, including with state and territory regulators, unions, industry associations and asbestos support groups.

The Asbestos IDC coordinates a whole-of-government approach to the consultation and engagement that occurs with relevant stakeholders. The recommended external review of industry consultation arrangements would likely result in a duplication of effort given the current work of the Asbestos IDC and ASEA, and the 2016 independent review already undertaken.

Recommendation 4

The Australian Government continue to strongly advocate for the listing of chrysotile asbestos in Annex III of the Rotterdam Convention and support a change in the voting rules if required for this to be achieved.

Response — Supported

The Government supports this recommendation.

The Government will continue to advocate strongly for the listing of chrysotile asbestos in Annex III of the Rotterdam Convention. The Government is supportive of examining all mechanisms and implications of improving the effectiveness of the Convention, including changes to voting rules if required. The whole-of-government position for the Conference of the Parties planned for 2019 will be developed in advance of the Conference.

Recommendation 5

In the event that the Australian Government is unsuccessful in listing of chrysotile asbestos in Annex III at the 2019 Rotterdam Convention, the Australian Government should consider pursuing bilateral or multilateral asbestos treaties with importation disclosure requirements equivalent to an Annex III listing.

Response — Noted

The Government notes this recommendation.

Should the listing of chrysotile asbestos in Annex III of the Rotterdam Convention be unsuccessful at the ninth meeting of the Conference of the Parties to the Rotterdam Convention planned for 2019, the Government will consider alternative approaches.

Recommendation 6

The Australian Government in its course of the regular review of free trade agreements with other countries, include in the review provisions regarding asbestos containing materials.