Bill Shorten denies hypocrisy, defends Labor backflip on company tax cuts

WELL this is awkward. Bill Shorten 2016 is facing his most furious opponent: Bill Shorten 2011. Here’s how the debate went.

Bill Shorten with Labor frontbencher Kate Ellis. Picture: Jason Edwards

ARE company tax cuts a key driver of jobs and wage growth for average Australian workers, or an unaffordable gift for big business and foreign billionaires?

According to Bill Shorten in 2011, the former. According to Bill Shorten in 2016, the latter.

In 2011, the then-assistant treasurer was spruiking the flow-on impact of cutting the company tax rate, telling parliament it would increase productivity and investment.

“More capital means higher economic activity and higher wages,” Mr Shorten told parliament. He was spruiking an unsuccessful push by the Gillard government to lower the corporate tax rate by one per cent to 29 per cent.

In a video from the same time, circulated by the Coalition, Mr Shorten continued: “As Australia is buffeted by the economic affairs overseas, we understand that lowering corporate tax assists the creation of jobs. And what can be more important in this country than the creation of jobs.”

And, as The Australian reported, in a 2011 speech to the Australian Council of Social Service national conference, Mr Shorten said: “Friends, corporate tax reform helps Australia’s private sector grow and it creates jobs right up and down the income ladder.”

Mr Shorten took a different position on Friday. “There’s no comparison between 2011 and now,” he told reporters. “The truth of the matter is you can only ever do company tax cuts when the nation can afford to do them. That goes for any tax cuts.”

The government plans to reduce the rate of company tax from 30 to 25 per cent over the next decade at a cost of $48 billion. Labor opposes these cuts but supports giving tax relief to small businesses with an annual turnover of $2 million or less.

Labor MPs also faced the job of explaining the Mr Shorten’s change of heart, given many of his senior team have previously argued in favour of company tax cuts.

Writing in The Australian, columnist and broadcaster Peter Van Onselen pointed out that the man who could become treasurer until very recently argued for them.

“It’s a Labor thing to have the ambition of reducing company tax, because it promotes investment, creates jobs and drives growth,” shadow treasurer Chris Bowen wrote in his book Hearts and Minds.

And opposition assistant Treasury spokesman Andrew Leigh told Sky News last year: “We know the company tax rate is a significant drag on growth, largely because capital is more footloose than labour and so there’s potential for us to miss out on high-quality investment if we have too high a company tax rate.”

Similarly, Labor frontbencher and former finance minister Penny Wong argued the line last time Labor was in power.

“We understand that the cut in the corporate tax rate is important to increase productivity, to promote broadbased economic growth and to encourage more investment and jobs across Australia,” she said.

Finance Minister Mathias Cormann says the government is unashamedly prioritising jobs and growth. “The truth is Bill Shorten knows, in his heart of hearts, what is the right thing to do here. He’s just too weak to deliver it,” he said.

Ms Wong insisted Labor’s opposition to the government’s plan to reduce business tax was about priorities. “We just think we’d rather be putting money into Australia’s schools, into protecting Medicare ... than a $50 billion tax break for businesses earning up to $1 billion,” she said.

Opposition finance spokesman Tony Burke pointed out the Liberals and Greens voted against the 2011 measure.

“You don’t get these tax cuts for free. If you give it, it means other things hit the fence on the way through,” he said.

“What Malcolm Turnbull is doing is saying that he then wants to, every year, change the definition of small business,” he said.

Former ALP national president Warren Mundine, who now heads up the prime minister’s indigenous advisory council, fears economic reform will go backwards if Labor wins government.

Talking about the birth of his great-grand-daughter last week, Mr Mundine wrote in The Daily Telegraph: “Labor’s rhetoric will take Australia down a path where her taxes will be higher and her education will be more costly.”

BUSINESS LEADERS ‘GOBSMACKED’

Business Council of Australia head Jennifer Westacott is “gobsmacked” by Labor’s anti-business election campaign, describing it as a dangerous ploy.

But she also believes the coalition government should have been more ambitious on industrial relations during its term in office. Prime Minister Malcolm Turnbull has labelled as “anti-business” Labor’s rejection of his plan to reduce the company tax rate.

But Opposition Leader Bill Shorten is not for moving, insisting it’s a choice between standing up for lower and middle-income families or a handout to companies which “simply don’t need it at this point”.

Ms Westacott is bewildered by Labor’s stance.

“How are we going to grow our economy when 80 per cent of our economic output is dependent on business?” she said on Sunday. “It’s gobsmacking, it’s very dangerous.”

Ms Westacott also wants to see Mr Turnbull talk more about industrial relations during the campaign, especially reintroduction of the Australian Building and Construction Commission, one of the triggers for the July 2 double-dissolution election.

While bringing back the ABCC would be a “huge step” in restoring confidence in the industrial relations system, the government could have done more.

“We would have liked to have seen a more ambitious agenda by the government over the last three years,” Ms Westacott said.

Employment Minister Michaelia Cash believes the government has been active in industrial relations, citing its attempts to restore the ABCC.

She dismissed suggestions that releasing the government’s formal response to the Heydon royal commission into trade union corruption before polling day will be seen as a political stunt.

“Our response is already in play, we will of course respond to the additional recommendations of Heydon over the next few weeks,” Senator Cash said.

The Business Council will be launching its own campaign in the run-up to July 2, promoting how business underpins the wealth of the country.

Ms Westacott is concerned opinion polls are pointing to a tight election outcome, saying Australia will be in a far worse position if there is a hung parliament or another obstructive Senate. She believes Australia is at a turning point.

“A spending plan without a growth plan will just lead to crippling rates of taxation and more and more deficits and a very, very fragile and non-resilient economy.”