Steven Ciobo (Moncrieff, Liberal Party) Share this | Hansard source

A point of order that was only equalled by the contribution by the member for Hunter earlier. Nonetheless, the Reserve Bank governor did make it clear that, provided that the surplus remained between one and 1½ per cent of GDP, there would not be upward pressure on monetary policy. That is exactly what this budget does. It is the Australian coalition—in particular, the Treasurer, Peter Costello—that is able through careful economic management to deliver some $37 billion worth of tax cuts to the Australian people. Irrespective of whether you are a more lowly paid worker in Australia, whether you are a middle-class Australian or whether you earn a higher income in this country, you will enjoy tax cuts as a result of this careful economic management by the Treasurer, Peter Costello, and more broadly by the Howard government.

With respect to other comments that were made, I notice that the member for Hunter said, and I quote him exactly: ‘Labor has broken the back of the inflation bogy.’ How did it do that? How was it that the Australian Labor Party brought the inflation rate down? The answer is quite apparent and quite straightforward: the Australian Labor Party did it by having the ‘recession that we had to have’. You would remember, Mr Deputy Speaker, that at the time the Australian Prime Minister, Paul Keating, who prior to that was the Australian Treasurer—the man responsible for the recession we had to have—broke the back of inflation by throwing one million Australians onto the unemployment scrap heap, by driving interest rates up to 18 per cent, by not delivering tax cuts and by making sure that all Australians were penalised by the incompetence of the former Labor government. That is how the Australian Labor Party broke the back of inflation in this country. I can guarantee one thing: the people of my electorate of Moncrieff, the people of my city of the Gold Coast and the Australian people more broadly will never, ever want to go back to an Australian Labor Party that achieves some kind of success with respect to inflation by throwing a million Australians on the unemployment scrap heap, by driving up interest rates and by making sure that Australians pay a very heavy price indeed for low inflation.

What Australians want is the kind of economic responsibility that Peter Costello as Treasurer has been able to deliver, the kind of responsibility that has seen our unemployment rate down at around five per cent—the lowest level that it has been for decades. They like the fact that the Australian economy is enjoying strong productivity growth, because they know that, with an increase in the participation rate, there is going to be a flattening-out of productivity growth in terms of actual statistics. As you have more people coming into the workforce and more Australians off the unemployment queues, which this government has been able to achieve—and the Australian Labor Party knows this—they know that the reflections of productivity growth will not be large in percentage but that, when spread across that vast bulk of people moving into employment, there is strong productivity growth in the Australian labour force. But, more importantly, it has been conceded as part of this debate that the Australian economy—which is now enjoying, as I said, decades-low levels of unemployment—is being super competitive.

The member for Hunter also made reference to the fact that the taxation system is indeed a barometer for the attractiveness of the Australian economy and the incentive mechanism that it uses. If that is the case, if the taxation system provides some clear indication of the level of incentive in the Australian economy, it is very clear that there is strong incentive. The reason there is strong incentive is the same reason that we have Australians coming back from overseas and working in this country. (Quorum formed)

No wonder the Australian Labor Party languishes in the polls, because the people in the public galleries can see the stunts that the Australian Labor Party is engaging in. They see the fact that the Australian Labor Party has no relevance to ordinary Australians and so it engages in these kinds of stunts on an ongoing basis. I am not surprised that the Australian Labor Party languishes in the polls, because it has no relevance, it has no credibility when it comes to economics and it quite simply has no sense of what is important to the Australian people. There is nothing more important to the Australian people than knowing that they can have a strong family, and a key plank of having a strong family is knowing they have enough money left in their pockets at the end of the working week to provide for their family. The bill before the House does exactly that, and they know that as a consequence of this bill going through the House there will be more money in their pockets come 1 July than there would be if the Australian Labor Party were in government, and they are grateful for it.

The Labor Party, including the member for Hunter, as I said, have also said that the tax system is the driver of incentive. So the Labor Party say the tax system is the driver of incentive and yet they voted against tax cuts. In the previous budget we saw tax cuts being delivered to the Australian people. We had a lecture from the member for Hunter, and no doubt the member for Rankin will also lecture us about economic policy. So we have these people from the Australian Labor Party talking about how the tax system is the driver of incentive in the Australian economy and yet, despite this fact, the Australian Labor Party voted against tax cuts.

The inescapable conclusion is that Labor prefers taxes to be higher. Indeed, we see the member for Hunter talking about this in direct conflict with the member for Lilley. We heard the member for Hunter asking why it is that growth in deductions is rapidly outgrowing growth in revenue and how this growth in deductions is of concern, yet the member for Lilley earlier on in this debate came into the chamber and spoke at length about how he thought that this government was one of the biggest taxing governments in Australia’s history. So on the one hand the ALP member for Hunter says, ‘We’re concerned that the growth in deductions is outpacing the growth in revenue,’ and the member for Lilley, on the other hand, says, ‘We’ve got so much revenue growth under this government that we should be holding them to account.’ So once again, as we saw previously, there is the flip and the flop of the Australian Labor Party. With one breath they say one thing and with the next breath they say something else. The simple reality is that the Australian Labor Party will say anything, will do anything, in some attempt to deceive the Australian people into voting for them so that they can end up back on the government benches.

There was another question that the member for Hunter raised. He spoke about why it is that company revenues are up 18 per cent yet company profits are only up 12 per cent. He said that, if the Treasurer was able to indicate that this was a consequence of investment in plant and equipment, a growing of capacity in the Australian economy, he would be comfortable with it. That is a very large part of what is driving these numbers. There is no doubt about it. We have seen capacity growth in business capital investment across the Australian economy expanding rapidly.

But there is another point which should be mentioned, and that is the fact that Australia today is a much more competitive marketplace, so you can get increased revenue growth in companies by having increased volume but lower margins, which of course will help to reduce profits. So the reality is that we are still getting strong profit growth in the corporate sector. We are still getting strong corporate growth, but Australians are benefiting from a more open, more competitive economy, and that is also part of the reason why we see company revenues growing by 18 per cent but company profits growing by only 12 per cent. That is not a bad set of numbers at all, and it is one that all Australians will enjoy the benefits of.

In drawing to a close—given the few minutes I have because the Labor Party called two quorums—I would like to touch on a couple of other aspects. The Gold Coast, the area and the wonderful city that I have the pleasure of representing, is the small business capital of Australia. On a per capita basis, we have the highest concentration of small businesses in this country. I am very pleased by and proud of the entrepreneurial spirit that residents of my electorate have. I am pleased they are willing to roll up their sleeves and go out there and make a buck, and I support them at every opportunity. I was very pleased and delighted that this year the National Franchise and Small Business Convention gave me the federal politician of the year award. I will continue to be a strong advocate for small businesses in my electorate and a strong advocate in making sure that they can continue to make a buck. I am proud to be part of a government that makes it easier for businesses to make a dollar. In this respect, I am also pleased that, as a result of the increased depreciation rates that the government announced in this year’s budget, businesses will enjoy increased cash flow. What’s more, we can expect some of the personal tax cuts in this year’s budget to flow through the economy and into the tills of Australian businesses.

Turning to those tax cuts, this bill will see the government increase the thresholds so that the 15 per cent rate of taxation will apply up to $25,000 of income, the 30 per cent rate will apply up to $75,000 of income, the 40 per cent rate will apply up to $150,000 of income and the 45 per cent rate will apply to income above that level. In summary, it ensures that Australians will enjoy, in relative terms and by international comparison, low levels of income taxation which will put us on a par with the OECD average. It means that Australians can keep in their pockets more of what they work hard for to pay off debt, purchase something they need for their home and provide for their family. This government’s track record is strong, and I am pleased to highlight it for the benefit of all Australians as we continue to manage this economy well—and we do not need lectures from a failed Australian Labor Party.

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