SYDNEY TOWN HALL
SATURDAY, 13 FEBRUARY 2016
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I acknowledge the traditional owners of the land on which we meet, I pay my respects to elders past and present.
For Labor people, those words of respect always carry a promise – a promise to close the gap and extend equality of opportunity to the first Australians.
Tanya, thank you for the generous introduction and thank you for being such a fantastic deputy leader of the Federal Labor Party.
Friends, delegates, true believers.
It is an honour to stand here before you.
You are all passionate people, deeply committed to the future of this nation and the betterment of Australia.
I want to acknowledge my outstanding Labor team – and my future colleagues, our great candidates.
And no rotten royal commission will stop me the great Australian trade union movement.
You fight for working people and the fair go every day – you always have, you always will.
Friends, it’s true what they say – as goes New South Wales, so goes the nation.
From the great ring of outer metropolitan Sydney, suburbs feeling the pressures of the cost of living, housing prices, unreliable public transport and clogged roads.
To the regions and the central coast, currently denied the voice, respect, advanced manufacturing and NBN they deserve.
The people of New South Wales – and the people of Australia – deserve a government delivering on what matters.
You know the list – it’s a Labor list:
- Good jobs
- Great schools
- Decent healthcare
- Dignity in retirement
- Real action on climate change
An economy that works for everyone - and a tax system where everyone pays their fair share
Instead – we’ve got the current mob.
A Liberal government melting away, and a Prime Minister slowly sinking with them.
Go through the alphabet:
Abbott, Abetz, Andrews.
Bishop, Billson, Briggs, Brough, Hockey.
And just yesterday – the little-known but now infamous Stuart Robert.
How outrageous is the conduct.
It is not the job of Australian government Ministers to provide full valet service around the world to Liberal fat-cat donors.
Sacking Stuart Robert was a decision that should have taken Malcolm Turnbull an exciting minute, it took him a week.
The Turnbull Liberals are falling apart at a time of economic uncertainty.
Flat wages, slow growth, a rising cost of living and a falling stock market.
And every day he is in the job, Mr Turnbull betrays his principles.
Every day he looks more like the paid advocate he is.
A man prepared to mouth the words to produce an image.
But no amount of waffle can hide the party he leads.
Behind the platitudes and the 300-word slogans, this Prime Minister says one thing – indeed he says anything - and does another.
That’s the real politics of today.
There’s nothing ‘agile’ about cutting $50 billion from hospitals.
There’s nothing ‘innovative’ about cutting $30 billion from schools.
Nothing ‘exciting’ about talking down the NDIS, or making Australians with breast cancer and skin cancer pay more for essential scans and tests.
Nothing ‘nimble’ about privatising Medicare.
The only thing ‘agile’ about Mr Turnbull, is the speed at which he can change his convictions.
Friends, two years ago, even the truest believers would have found it hard to credit that by February 2016 we would have:
- Defeated the 2014 Budget
- Defeated Tony Abbott
- Sent Joe Hockey off to Washington…I still can’t believe that.
- And seen off a 15 per cent GST…for now.
But we held out, we prevailed, and we did it together, our team: under-estimated, under-rated, united and undaunted.
In two and a half years, we’ve earned our credentials as a strong Opposition.
Now we face the next test, showing we tick all the boxes as the next government of Australia.
That demands good policies for the future, and our great team are preparing these policies.
Tanya Plibersek and Matt Thistlethwaite – with a vision for Australia as a leader in our region and good citizen in the world.
And I want to congratulate Tanya for making it clear last week that Labor will support the economic development of our newest neighbour, with a fair deal for Timor Leste.
Chris Bowen, Tony Burke and Ed Husic, drawing up Labor’s economic plan for growth and fairness, with people at the centre.
Michelle Rowland and Julie Owens, standing up for small businesses.
Anthony Albanese, driving our new approach to infrastructure including public transport in the cities of Australia.
Joel Fitzgibbon, standing strong for the regions.
Jason Clare, cleaning up the mess Malcolm Turnbull has made of the NBN.
The largest piece of infrastructure and innovation in the nation, and Malcolm Turnbull has made it slower and doubled the cost.
He is replacing tomorrow's fibre with yesterday's copper, remarkable!
Doug Cameron, fighting the privatisation of Medicare.
Sam Dastyari and Deb O’Neill, investing in education.
Stephen Jones finding solutions in health.
Pat Conroy, hunting Liberal waste.
And Sharon Bird – backing apprentices and public TAFE, not dodgy private providers.
In fact, all my New South Wales colleagues: Hayes, Ferguson, Elliot, McAllister, Claydon and Hall.
Each and every person your state sends to Canberra are helping shape the platform and program of a new Labor Government.
None of this is easy - it demands hard choices.
But our decisions are shaped by the evidence – not commentary.
We stood against the Liberals’ lazy, bloated 15 per cent GST because of policy, not politics.
We called it for what it was: a regressive attack on jobs, families, small business and confidence.
And the Treasury report released on Friday confirmed what Labor said all along: increasing the GST would deliver a big fat zero for growth, for jobs, for the economy.
We fought the GP tax, and we will fight the privatisation of Medicare.
First the Liberals tried to kill Medicare – now they’re trying to sell it.
But Labor will defend Medicare tooth and nail. No compromise, no surrender.
We are not just supporters of Medicare – we are Medicare.
Without Medicare, Australia is not Australia, certainly not the country we know and love.
Delegates, there are five big things we need to do to set Australia up for the future:
- Grow the economy and reduce the deficit
- Invest in health and education
- Secure universal superannuation at 12 per cent
- Deliver true equality for the women of Australia.
- And take real action on climate change, with strong renewables and net zero pollution by 2050
We believe in climate change - just like we believe in marriage equality and we believe in an Australian Republic.
Malcolm Turnbull says he cares about these causes, maybe he really does.
But if he’s not prepared to do anything about it when he holds the highest office in the land, it doesn’t make a difference.
Delegates, we have done more policy work than any Opposition in living memory, and we are not done yet.
But we cannot realise our ambitions for the Australian people, we cannot create confidence in the future, unless the Australian people have confidence in us.
Confidence that we can fund our policies and restore the Budget to a secure foundation.
That’s why we are telling Australians exactly how we will pay for our policies.
Every one. Every time.
We cannot aim for our best, without a strong and sustainable budget.
And our Budget will not be sustainable or strong, until our tax system is fairer and more efficient.
These are Labor’s priorities for tax reform.
- Growing the economy
- Creating jobs
- Improving the sustainability of the budget
- And always with fairness at the heart of what we do
But, right now, parts of our system are failing these tests.
As revenue flows in, our tax system is leaking like a bullet-ridden bucket.
The holes - many from corporate sharpshooters - are costing our country millions of dollars every day.
Young Australians and middle income families are subsidising Australians who don’t need government hand-outs.
Labor’s plans are based on closing loopholes, fixing flaws and stemming the flow.
So we can direct incentives to where are they needed most, and where they will do the most good: for growth, jobs and budget sustainability.
Every dollar of revenue that slips through a tax loophole, is a dollar robbed from our future.
A dollar that will never be invested in childcare, schools, university or TAFE.
We’re not interested in the knee-jerk Liberal response of slugging working and middle class families with a 15 per cent GST, or slashing penalty rates.
These reactions are as predictable as they are unconvincing.
Our priority is a fair tax system supporting a strong budget and growing economy.
But two years ago, fifty-five of Australia's highest earners paid no income tax at all - not even the Medicare Levy.
All 55 earned more than one million dollars, but managed to quietly write their income down to below the tax-free threshold.
40 of these 55 paid their accountants more than $1 million – and then deducted this money from their tax the following year!
None of this is illegal - and there’s your problem.
Our current system is biased in favour of the very fortunate few, who have sufficient wealth to opt out.
Take Multinational Tax.
One in four companies earning more than $100 million dollars a year…paid no tax at all.
Not one dollar.
As we speak, multinational companies are moving profits from their Australian office to offshore havens and disguising it as a loan, or a payment for services.
The Commissioner of Taxation himself has warned tech-giants are gaming us – but the Treasurer is asleep at the wheel.
Only Labor has a plan for tough laws to tackle this kind of jurisdiction-shopping and profit-shifting – and return more than $7 billion that is owed to Australians, to the Budget bottom line.
Only Labor can be trusted to take action on multinational tax – and to keep superannuation strong and fair.
Last year, superannuation concessions cost taxpayers more than $36 billion.
Double what the Commonwealth spends on public hospitals.
And only one out of every $200 taxpayers spend on concessions, goes to the bottom 20 percent of income earners.
Younger Australians and middle class families are paying for the superannuation tax breaks of high income earners.
That’s why Labor has a costed and targeted plan to close the unsustainably generous loopholes in our superannuation system.
Australians should not go to work every day to make very wealthy people, even wealthier.
If you’ve accumulated millions of dollars in retirement savings, good on you, congratulations.
But you don’t need Australian taxpayers to subsidise turning four million dollars into five million dollars in retirement.
It doesn’t stop there.
Let’s be clear: every tax subsidy is government spending, to drive specific behaviours and outcomes.
We need to closely scrutinise where this spending is going and who it is going to.
We will not create the jobs and growth of the future, by clinging on to the entrenched tax subsidies of the past.
Decades ago, negative gearing and capital gains tax subsidies were created to boost housing supply and encourage the building of more new houses.
This year, they will cost the budget over $10 billion.
That’s more than the government spends on higher education, or childcare.
But 93 cents in every dollar of taxpayer-subsidised investment loans go to people purchasing existing housing stock. .
Only 7 cents in every dollar of this taxpayer spending goes to investments in new housing stock.
This doesn’t create jobs or help housing affordability in our cities and suburbs, particularly here in the great city of Sydney.
It’s a lot of taxpayer money for nothing.
The same is true for the discount on Capital Gains Tax that John Howard introduced.
70 per cent of that discount is being used by the top 10 per cent of income earners…the people who don’t need it.
These subsidies are not working as they should.
They are not helping the right people.
Even if our budget could tolerate it back then, we cannot afford it now.
We will not spend taxpayer money where we do not need to.
That is why at this conference, I announce the most important structural budget reform in a decade.
A decision that will help fund health and education, make housing more affordable and secure our nation’s future.
Under a Shorten Labor Government, from July 2017, negative gearing will only be available on newly constructed homes.
Thirty years ago houses cost around 3.2 times average income, today it’s 6.5 times average income.
Labor will help level the playing field for first-home buyers, competing with investors.
We will put the great Australian dream back within reach of working and middle class Australians, who have been priced out of the market for too long.
Importantly, there will be no change for existing negatively geared properties.
We will grandfather existing arrangements for those properties, so investors currently accessing negative gearing will be no worse off.
Let me repeat that: mum and dad investors who have an apartment or a house that is negatively geared, right now, will keep the deductibility.
But after the first of July 2017, negative gearing can only be accessed for new houses.
And – to improve the efficiency and fairness of our tax system…
We will reduce the subsidy on Capital Gains Tax from 50 per cent to 25 per cent.
Let me explain what that means.
It has become a national sport in Australia for the very wealthy to turn their income into capital.
The very wealthy live in a different tax system to you and I.
The very wealthy pay only a small amount of income tax.
Instead, they pay tax on their assets and the capital gains from that.
This is because most of their income – they say - comes not just from their wages and salaries, but from converting their wealth and assets into capital.
So in many cases instead of paying the top marginal rate on this income (47 cents in the dollar) they pay 23.5 cents on the capital.
They’re paying half the rate of income tax most people pay.
How is it fair that someone with millions of dollars can pay the same effective tax rate as a policeman, nurse, teacher or mechanic?
If you earned $10 million in wages and salaries – and paid the full rate, that would be about $4.5 million dollars tax.
But if you made the same amount by selling assets, the Capital Gains Tax subsidy would cut your tax to $2.2 million.
Let me be clear – there should be incentives for encouraging investment and for supporting capital accumulation…
But if you want Australia to have jobs, growth and productivity – your policies must prioritise and support the dynamic production of income.
Something millions of Australians, our people, do every day.
But with the Capital Gains Tax subsidy at 50 per cent, the whole system is excessively distorted and overly generous in favour of income from capital instead of income from earnings.
Labor will not support a system trowelling it on like Peter Costello did for the lucky few.
Again, I emphasise, we are not proposing to change the rules on existing assets and personal superannuation.
Our changes are prospective – not retrospective
And the family home will always be 100 per cent capital gains tax free.
The two reforms we announce today will save $32.1 billion dollars and help put fairness back into the housing market.
Analysis by the McKell Institute suggests our changes to negative gearing may create up to 25,000 new jobs in construction.
- Encouraging the building of thousands of new homes every year
- Increasing housing supply
- And moderating rental costs over time.
Our changes will help return the Commonwealth budget to a sustainable foundation.
Underwriting a secure future for health and education and delivering greater fairness for people entering the property market.
And when the Liberals rush out to give the same tired criticisms of this policy, any minute now.
Ask them what they have done to help first-home buyers.
Well they said: “Get a good job that pays good money.”
Thanks for that, we can’t all get a gig in Washington.
And they sold-off a $39 million mansion in Point Piper to free up supply.
Only the Liberal party could live in a world where mansions in Point Piper are considered a ‘nice’ first home, a little renovator’s delight.
And only the Liberals could think a $39 million mansion was ‘affordable’ housing.
Delegates, the country needs leadership from the political system – and it is only ever the Labor Party that makes the hard decisions.
This is the unfinished business of the Hawke-Keating era, real reforms for a better Australia.
We will make these overdue, sensible changes.
Friends, we’re only six weeks into this election year.
Anyone who tells you they know what’s going to happen – is either lying to you, or kidding themselves.
But what we do know is this: Australians want stable, united, progressive government.
And the Liberals of today can never deliver that.
We saw that this week, we will see it next week.
And if you don't think this Prime Minister will crumble when the pressure is on - you don't know Malcolm Turnbull.
If you don't think this Government can fall apart through personality politics - you don't know Scott Morrison.
If you think the Liberals aren’t stupid enough to make this election a referendum on Medicare, or penalty rates - you haven't met their back bench.
And if you imagine the conservatives are in touch with the ideas and ideals of middle Australia, let me introduce you to Deputy Prime Minister Barnaby Joyce.
Delegates, we’ve got a tough fight ahead of us.
But we didn’t join the Labor Party to be good losers.
My team and I are not running for an honourable loss.
A two-term or two-stage strategy is just another way of trying to live with defeat.
We are a great movement.
Our opponents are strong.
They are powerful, they have money, they have vested interests on their side.
But what we have, what you’ve got money can’t buy.
We’ve never had an existential crisis about which party to join.
We know where we stand, we know what we stand for.
And we’ve got the positive plan to deliver
- Good jobs
- Great schools
- Decent hospitals
- The equal treatment of women in our society
- Real action on climate change
- An economy delivering for everyone and a tax system where everyone pays their fair share.
We will be a government that puts people first.
We will be a Labor Government, for all Australians.
ENDS
MEDIA CONTACT: LEADER’S OFFICE MEDIA UNIT – 02 6277 4053
