On Monday 12 February 2024, I made a speech in Federal Parliament about who is benefitting from the revised Stage 3 Tax Cuts and our tax system more generally. You can watch the full speech here or read the transcript below.
Make no mistake: the revised version of these tax cuts still widens the inequality gap. The top 20 per cent of income earners will get 50 per cent of the benefit of these tax cuts; the bottom 20 per cent will get just 0.4 per cent, not even a whole per cent. Brad Banducci, the CEO of Woolworths, is on a tidy $11.7 million salary. He's one of the highest paid CEOs in the country, and he's still taking home a $4½ thousand tax cut. He won't even notice the difference. There's $4½ thousand for everyone earning over $200,000 a year. That includes every politician here and every billionaire in Australia. It's a total of $84 billion, for the top tier of earners, that could instead be used for free dental care, building public homes and fully funding our schools so parents and teachers don't have to plug the gap. These are things that would actually help all Australians, but, no, of course Brad Banducci deserves that $4½ thousand tax cut. Woolworths made almost $2 billion in profit last year, charging record high prices and ripping off the farmers who supply them, and they can also afford to pay their CEO over $10 million. Prices of essentials like cheese have doubled in some cases. They can get away with this because of Australia's entrenched supermarket duopoly preventing new entries into the market, and Labor still chooses to give Brad Banducci a $4½ thousand tax cut. His counterpart, Rob Scott at Wesfarmers, which owns Coles, on a measly $8 million, is also of course getting a $4½ thousand tax cut. And the government has the nerve to call this 'cost-of-living relief'. That's a joke.
Who else is getting a $4½ thousand tax cut? Australia's top three billionaires raked in a jaw-dropping $1.5 million an hour over the past three years. That's $1.5 million an hour. We're in the worst cost-of-living crisis in decades. Three people pocket 27 times more than the median annual Australian income every hour. Labor is allowing billionaires to amass wealth at a mind-boggling rate. They get $1.5 million richer every hour. Meanwhile, one in eight Australians are struggling to put food on the table, pay their rent or afford to go to the doctor. Australia has 141 billionaires. Just three of them have made a staggering combined total of over $65 billion since 2020. The University of Sydney reckons it costs just over $250,000 to build a single social housing dwelling. With $65 billion, we could provide nearly 260,000 homes, ending the waitlist for social housing about three times over. What does the government do instead? Pat themselves on the back for their so-called progressive changes to the stage 3 tax cuts—changes that overwhelmingly benefit the likes of Gina Rinehart and Clive Palmer. Over 50 per cent of the benefits flow right back into their pockets.
The Prime Minister is handing out favours to his corporate mates, with money that should be benefiting everyday Australians. The Labor government have clearly washed their hands of everyday people to pander to the whims of their donors, like Santos. There are many destructive corporations stalking the halls of federal parliament here, but I think, if you wanted to pick the epitome of evil corporations that control our government, Santos would be right up there. Santos—who donated $111,000 to Labor and $59,000 to the Liberal and National parties last year and who has donated almost $1.5 million to the major parties in the last decade. Santos—who has its personnel embedded in the major parties. Queensland Labor senator Anthony Chisholm was a strategist for Santos until he was elected in 2016. Santos—also a regular lobbyist in the Queensland parliament and federal parliament. Santos—who, despite being a climate-wrecking gas corporation, continues to have new gas mines approved. Tanya Plibersek approved a massive expansion of Santos gas wells in Queensland just last year.
There's been a lot of talk about tax lately, and rightly so, but frankly the biggest issue with tax in this country is companies like Santos ripping us off. In the financial year 2021-22, Santos paid only $15,876 in tax. That's less tax than the average Australian worker. And what was Santos's income that year? It was $5.8 billion. Despite making billions each year over the last decade or so, Santos has paid hardly a cent in tax that whole time. Santos claims it's because it's not making a profit. I'm sorry, but I think Australians are too smart to buy that nonsense. Either you're lying or you're very bad at running your business. But perhaps the answer is simple: Santos seems to own the Labor Party and the Liberal and National parties, so it can do what it wants. It rips out our gas, ships it overseas and makes a killing for its wealthy shareholders, and we all pay more for our gas bill. Global warming gets worse. Santos pays no tax. Our schools, hospitals and public housing are all underfunded. What a rort!
If the government were serious about tax reform, they'd also be looking at negative gearing and capital gains tax. Labor and the Liberal and National parties have made it easier to buy your second home or your fifth home than your first. Investors do well; everyday people get screwed. Basically, how it works is like this: Labor and the Liberal and National parties have given huge tax incentives to people who are buying an investment property. This means more people want to buy houses, and it massively drives up the price of housing for everyone. Everyday people buying their first home have to compete with increasingly wealthy investors, but they don't have the existing capital or the tax concessions to compete with them.
What are these tax cuts that Labor and the Liberal and National Parties are handing to investors? The first is negative gearing. That means an investor can claim all of the expenses associated with an investment property as tax deductions from their income. That includes interest payments, maintenance, insurance, body corporate fees and council rates. For those in the top tax bracket in particular, paying 45 per cent on income over 180,000, this is actually a huge saving. Of course, first-home buyers have to cop all those expenses—they don't get to claim them on their tax. This affects how much they can afford to borrow. So instead of this property being some family's first home, it actually becomes a tax write-off for a wealthy investor—sounds bad, doesn't it? But the rort doesn't stop there. There's this thing called capital gains tax. It's what you pay when you make a profit from buying and then selling an asset. Normally, you'd have to pay tax on this profit, just like any other income. But most investors can claim the capital gains tax discount, which reduces CGT by a whopping 50 per cent. That means you pay less tax on asset inflation than you do on wages. That's absurd.
First home buyers don't benefit from this—they haven't sold a home before. As house prices rise because of these government tax breaks, buying houses just to sell to other investors with substantially discounted tax becomes a reason to buy in the first place. Instead of this property being some family's first home, it becomes a speculative commodity for a wealthy investor. Here's an idea: instead of subsidising property investors and making it easy for them to outcompete first home buyers, put that money into affordable and public homes for people who need a place to live. It's truly astounding to hear so many Labor MPs talk about how these tax cut changes leave no one behind. The Prime Minister even said this in his speech to the Press Club. Apparently, people who don't earn enough income to reach the tax-free threshold don't count. Many of these people are doing it toughest right now, and they won't see a cent from these changes.