Luke Hartsuyker (Cowper, National Party) Share this | Hansard source

It was with some amusement that I heard the member for Werriwa trying to claim some reformist zeal with regard to the activities of the Australian Labor Party. He has not been in the House very long. It has only been since the previous Leader of the Australian Labor Party headed off to take up a life as a leading author and write interesting books about the current Labor crop and some of their predecessors. Members opposite claim a reformist zeal, yet in my time in this House every time a reform is proposed, they oppose it. They have opposed everything this government has tried to do to build a stronger Australia. They oppose things this government does to try to return tax to taxpayers.

The Leader of the Labor Party spoke against and voted against our tax cuts. He learnt his lesson because he was marked down very badly. It was an interesting strategy for the Australian Labor Party to vote against tax cuts—it was a very bad strategy. It was a bit like saying that the $600 family payment was not real money—a strategy which had the paws of the member for Lilley all over it—that $600 per child returned to families was of no use, as though you could not buy clothes for children with $600 or that $600 could not assist in providing a holiday for a family. Not much credibility there, just as there is not much credibility with regard to the alleged reformist zeal of the members opposite. (Quorum formed) The members opposite claim reformist zeal. They talk about reform, but they always vote against it.

The Tax Laws Amendment (Personal Tax Reduction and Improved Depreciation Arrangements) Bill 2006, which is before the House today, implements some of the key elements of the coalition’s ongoing tax reform strategy, continuing to focus on the restructuring of the personal income tax system, increasing disposable incomes for all Australians, enhancing incentives for workforce participation and improving Australia’s international competitiveness. It is the view of those on this side of the House that when government can meet its responsibilities to the community then funds available after that should, wherever possible, be returned to the taxpayer. That is what is being implemented through this legislation. This legislation involves cuts to personal income tax through the raising of income tax thresholds and a reduction in rates. It provides other benefits, such as improvements in relation to the low-income tax offset and the conditions of SATO—the Senior Australians Tax Offset.

How is the government able to return money to taxpayers? How is the government able to do that whilst still providing improved services? We can do that because we have been able to keep the economy strong. We have been able to assist families and seniors because we have been keeping the economy strong. We realise that there is a need to support business and to put policies in place that enable business to thrive. That is what this government is all about: getting the settings right, allowing business to flourish, generating incomes and generating wages for families, thereby allowing this government to provide services for all Australians. This government has adopted a policy of a strong surplus and this budget continues that and will deliver a surplus of $10.8 billion in 2006-07.

But what about the performance in the past of the alleged reformers across the chamber? I do not have to look too far back to see their track record. What was the government surplus in 1991-92? I wonder whether the member for Farrer is aware what the government surplus was. I looked for surpluses only to find that there was not a surplus in 1991-92. In fact, there was a deficit—$11.58 billion or 2.8 per cent of GDP. I thought, ‘No luck in 1991-92;  what about 1992-93?’  I looked again—a big daddy deficit of $17 billion or 3.9 per cent of GDP. In 1993-94, there was another $17 billion deficit. Seventeen is a number that really resonates with members opposite. We had a $17 billion deficit, and they delivered 17 per cent mortgage interest rates. It is a number that still haunts them to this day. While this government is able to run a surplus and deliver tax cuts, the opposition were able to deliver deficits and 17 per cent interest rates.

Members opposite were actually out there in the financial market competing with small business and home owners to borrow funds, pushing up interest rates. We had double digit unemployment—10.9 per cent—under the stewardship of the members opposite. If they were to repeat that sort of rate today, we would be looking at around 1.2 million unemployed—a disaster for Australian families. They broke their promises on tax cuts. What happened to the l-a-w law tax cuts? I am glad to say that this government honours its commitments to the Australian people. This government is able to deliver services and cut tax and, as I said, this legislation implements that.

The 15 per cent tax threshold will rise from $21,600 to $25,000. The 30 per cent tax threshold will rise from $63,000 to a maximum of $75,000. The 42 per cent and 47 per cent tax rates dropped to 40 per cent and 45 per cent respectively, and the threshold at which the highest marginal rate cuts in increases from $95,000 to $150,000. That is a huge increase. It reflects the desire of this government to provide incentives for people to work harder and encourage people to make this country more productive. It allows this country to have a higher standard of living, without the government placing a heavy burden on taxpayers. A single income family with two children pays no net tax until the family income exceeds $48,065. This government looks after individual taxpayers and families.

We also encourage seniors to contribute towards their retirement. There have been some welcome measures in this budget with regard to superannuation. We are fully aware of the implications of the Intergenerational reportthe very rapid ageing that is occurring in this country. There is a great need for people to save for retirement and the superannuation changes that have been announced in the budget are, indeed, most welcome. The benefits from a tax fund will now be tax free for people over the age of 60. People will be no longer forced to take their super but will be able to take those benefits when they need them. The current age based contribution limits will be streamlined. This is a great improvement in the area of superannuation. The government also is focused on the needs for people who are dependent on the age pension. The changes to the taper rate for the assets test is a measure welcomed by people dependent on the age pension and who have saved for retirement such that they have substantial assets, assets which are effectively reducing their pension entitlements. The changes to the taper rate, effective from 20 September 2007, will be welcomed by those people.

Small business is very much the subject of this budget. This government realises the importance that small business plays in the economy. Some 1.2 million small businesses drive our economic growth. They drive job creation and this government recognises that. We have made some very welcome changes in the area of depreciation, giving businesses incentives to invest in plant and equipment. Under this legislation there will be an increase in the diminishing value rate used for calculating depreciation of eligible assets from 150 per cent to 200 per cent. This means that you can write-off the cost of plant and equipment more quickly. One of the most vital elements to small business is cash flow. One thing that these depreciation changes do is improve the cash flow position of small business, enabling them to reinvest in their business and generate more jobs. I offer an example of a Coffs Harbour banana farmer who buys a new four-wheel drive which is used on a farm. It costs him $50,000 and he will depreciate that asset over its useful life. If the annual depreciation rate were $10,000, that would be increased by a substantial amount.

The improvement in the cash flow position for business is a very important element very much focused on by this government. We are also halving the incorporations fee from $800 to $400, saving businesses some $216 million over four years. We are increasing the simplified tax system average turnover threshold from $1 million to $2 million, and this will assist 65,000 small businesses. The increase in the net assets threshold for capital gains tax for small business concessions will be increased from $5 million to $6 million. There are additional funds for research and development. There are more funds for the National Skills Shortages Strategy. But I think improved depreciation is a major benefit offered to small business—a major benefit which will be welcomed by businesses generally to improve their cash flow, to improve their ability to offer employment and to allow them to be more productive.

The changes to family tax benefit will certainly be welcomed in my electorate. The maximum rate of assistance per child has increased some 75 per cent from $2,400 in 1996 up to $4,200 in 2006. From 1 July 2006, families will be able to earn $40,000—up from $33,361 in 2005-06—without having their entitlement to family tax benefit reduced. This measure will provide a substantial improvement to the wellbeing of families and provide $9.62 per week for eligible families. I also commend the budget’s extension of the large family supplement of $248 from families with four children to families with three children. As I have said, this government likes to support families. This government believes we have a strong responsibility to support families, and this government does that through a range of measures. The improvements to the family tax benefit regime and the extension of the large family supplement are important elements of that.

The budget also provided substantial investment in infrastructure. Infrastructure is a matter very dear to the hearts of people in regional and rural Australia. This government realises that without strong infrastructure regional Australia cannot flourish. This government realises that infrastructure is the backbone of driving rural and regional Australia. Improved telecommunications have been very much a focus of this government. The Connect Australia package is very much welcomed by people in regional and rural areas. We see quality telecommunications as a major driver of employment right across regional Australia, but physical infrastructure is also important. Better roads, better rail and better physical infrastructure are vital to Australia.

That is why this budget has included a substantial increase in funding for infrastructure. I would like to particularly note the $160 million being contributed by this government for the upgrade of the Pacific Highway—a vital road link between Sydney and Brisbane—which is being matched by the New South Wales state government, meaning that there is some $1.3 billion committed to the Pacific Highway up to the year 2008-09. Tragically, there has been a substantial number of deaths on the Pacific Highway. These road improvements aim to mitigate that terrible toll. These road improvements will make travel between Sydney and Brisbane more efficient and safer. It is something that will be welcomed by all members of this House.

But there is no point in upgrading road unless you upgrade rail. The investment in AusLink, as previously announced—the $450 million funding for upgrade between Brisbane and Sydney and the additional $270 million for rail upgrades between Melbourne and Brisbane—is vital. This work will aim to get more freight off road and onto rail. That is absolutely paramount. If we are going to stop our roads from clogging up and if we are going to maintain a smooth system of freight transport in this country, it is vital that rail does its share of the heavy lifting. The initial AusLink package of $450 million aimed to take 120,000 containers a year off road onto rail by 2011 through providing a new, revised signalling system, reducing grades, reducing curve radius and providing a general track upgrade. The additional $270 million provided in this budget will further enhance that package.

It is interesting to note that the New South Wales government also makes a substantial saving in maintenance by the federal government taking over responsibility for the Sydney to Brisbane rail link. By the federal government maintaining that rail line through the ARTC, the New South Wales government enjoys significant savings in operating costs in its budget. It does not mention that too often—in fact, I do not think I have heard those words pass its lips—but it is a contribution that this federal government makes to supporting New South Wales and the New South Wales government. It is a contribution that the New South Wales government is loath to mention too often.

This budget sets in place a range of measures that are going to build a stronger Australia. This is a budget that returns tax to taxpayers. This is a budget that supports families. This is a budget that supports infrastructure. These measures are vital to the future of this nation, and I commend the bill to the House.

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