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PARLIAMENT OF AUSTRALIA HOUSE OF REPRESENTATIVES Australia is the only developed economy in the world to have recorded no annual recessions during the past 23 years, placing it alongside high-growth economies such as China and India. Australian government debt is one of the lowest in the world. In October 2014 the IMF estimated the Australian government’s net debt would be 16.6 per cent of GDP in 2015, well below the 74.1 per cent forecast for advanced economies. Actually, Australia’s debt is only around 14 per cent of GDP, less than the 40 per cent under Bob Menzies’ government, which many Liberals would say was a highlight of Australian administration. Australia’s pool of funds under management is the third largest in the world and the largest in the Asian region. Growth in productivity is outpacing labour costs. Australia has enjoyed a sustained period of labour productivity growth, exceeding the growth in real wages. Over 23 years, with Australia’s compound annual growth rate of 1.8 per cent, real unit labour costs have fallen by 0.5 per cent each year. There has been strong labour productivity growth of 1.9 per cent in 2012-13 and 2.6 per cent in 2013-14. Real unit labour costs have broadly remained stable, and the effective cost of labour has remained in line with productivity improvements. You would not believe that if you heard the rhetoric that goes on in this place. Australia is No. 1 in the world in tertiary education entry rates. Australia’s entry rate into tertiary education is at 102 per cent, including international students. This is well above the OECD average of 58 per cent, the USA at 71 per cent and the UK at 68 per cent. Australia’s tertiary education rate is also much higher than South Korea, at 69 per cent. Japan is 52 per cent and China is 18 per cent. High rates of tertiary education underpin Australia’s position as the No. 1 developed country in terms of real GDP growth over the last 24 years. Australia is one of the most culturally diverse countries in the OECD. The availability of multilingual, culturally diverse and highly skilled personnel means Australia has access to a workforce well equipped with cultural understanding and language capabilities to service international business in their own images. Australia has the second-largest stock market in the Asian region, and the eighth largest in the world. With total capital exceeding US$1.12 trillion, Australia’s market capitalisation is greater than China’s, at US$1.06 trillion, and double Hong Kong’s, at US$528 billion. It is around four times the capitalisation of the Singapore market. Australia’s $1.6 trillion superannuation system is the fourth largest in the world and is a major driver behind Australia’s globally significant funds management industry. The pool of assets is expected to grow to $7.6 trillion, or 180 per cent of GDP, over the next two decades. We should not tamper with the pension—we do not need to. Our superannuation pool is strong—Australians provide for their long-term retirement through their own efforts. This budget is flawed. Reducing company tax by 1.5 per cent for small business will not stimulate the economy. Companies and small businesses have to make a profit before they pay tax. With such low-level demand in the economy, companies are not making a profit. Small businesses are not making a profit so tax is not relevant to them. Profit comes before you pay tax. With low demand and limited money supply, small businesses are losing profitability. We must create demand by increasing the money supply. People have to have money to buy goods and services for companies to make a profit before paying tax. Projected company tax receipts for 2015 exceed $70 billion. Instead of companies paying tax before they make a profit, the $70 billion should be left in enterprises’ hands for 12 months to boost the economy. Australians can spend it better than government. This would create real demand and massive job growth, wipe out deficits and make our economy stronger—$70 billion spent by individual taxpayers gets the government 10 per cent GST each time the money is spent. We could have better hospitals, better schools and better services from our government. Money should be circulating in the economy, creating jobs and family enterprises. At the end of the year the government gets the $70 billion tax as well. If money circulates four times a year before government gets it, we get an extra $28 billion. It will cost around two per cent, at current interest rates—about $850 million—to implement such a change to provide an extra $30 billion or more in government revenue. This budget had the opportunity—but failed—to stimulate our construction sector. We need to make the first $10,000 paid on a home loan each year tax deductible. Australia needs to again have the dream of homeownership. We can boost the construction industry and increase homeownership to satisfy demand and increase revenue for the The Last Sentry at the Gate: Clive Palmer & the 44th Parliament of Australia 109


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