Craig Emerson (Rankin, Australian Labor Party) Share this | Hansard source

The Tax Laws Amendment (Repeal of Inoperative Provisions) Bill 2006 removes inoperative provisions from the Income Tax Assessment Act. It is not the inoperative provisions that create the complexity of the Income Tax Assessment Act but the operative provisions, which are unchanged in this legislation. Nevertheless, Labor supports it. The member for Moncrieff is wrong on that account and on a number of other accounts, and I want to take the opportunity to convey to the parliament the number of errors that the member for Moncrieff made when he started talking about matters that were at least tangentially relevant to this legislation. He claimed in his speech just given that this legislation removes 4,100 pages from the income tax law. That is completely untrue. It removes 1,900 pages from the income tax law, and the Treasurer included other legislation—indirect tax laws—in order to bulk it up and get to the 4,100 pages that the member for Moncrieff asserts come out of the income tax law when in fact they do not.

The member for Moncrieff ran out of petrol after about five minutes and went on to make a number of completely erroneous assertions. He was talking about interest rates. He is probably too young to remember that in 1982 the Treasurer of this country, now the Prime Minister, John Howard, presided over 90-day bank bill rates of 22 per cent. That was not fully reflected in home loan mortgage rates because there was an upper limit of 13½ per cent on mortgage rates. In those days, poor people could not get into a home. Fast forward to 2006 and poor people again cannot get into a home, even in a deregulated system. That is because, as the Reserve Bank points out—and the member for Moncrieff is wrong again—housing affordability today is worse than it was many years ago, even when interest rates were very high at periods during the 1980s. But the member for Moncrieff has asserted that housing affordability has never been better. It has never been worse, and that is because of the house price boom—the bubble that has been created through the mismanagement of this government—in combination with rising interest rates.

Interest rates have risen three times already since the 2004 election, when the Prime Minister promised that interest rates would be at record lows. They had already risen four times before that. The last seven changes in interest rates have been upwards. The market is factoring in a 90 per cent probability of a further interest rate rise before the end of this year, and there is also in prospect another interest rate rise before the next election some time next year. We certainly do not need any lectures about interest rate rises or promises about interest rates from the member for Moncrieff.

The member for Moncrieff went on to say that the coalition supported Labor’s reform program. The coalition never supported superannuation. It opposed with every device it possibly could the spreading of superannuation to the working men and women of this country. The coalition never supported the introduction of the fringe benefits tax or the capital gains tax in order to finance reductions in the top marginal rate of income tax and the second-top marginal rate of income tax. Those were very important economic reforms, but the coalition absolutely opposed them. The coalition opposed the introduction of an assets test in 1984, when Labor had already anticipated the problem of the ageing of the population. That was an important reform opposed by the coalition. The coalition opposed the petroleum resource rent tax, which collects a fair share of revenue from the huge increases in oil prices. Oil prices are now above $US70 a barrel. The PRRT was designed to ensure that the community gets a fair share of that. That measure was opposed by the coalition. So let us not hear this rubbish about how the coalition in opposition supported Labor’s reform program.

The member for Moncrieff then went on to say that the government has run budget surpluses but that Labor did not run budget surpluses. I draw his attention to Budget Paper No. 1. If we go to page 13-5, we see that budget surpluses were run by Labor in, for example, 1987-88, 1988-89, 1989-90 and 1990-91. What was significant about two of those? They were 1.7 per cent of GDP. What are the budget surpluses now? They are 1.0 per cent of GDP. The member for Moncrieff is again wrong, but he has taken his tuition from the Treasurer. The Treasurer said in this parliament on 10 May 2000:

First of all, we put the budget into surplus on a headline basis, which the Labor Party never did. Then we say, ‘We ought to put the budget into a surplus on an underlying basis,’ which the Labor Party never did.

That was a completely false statement made in this parliament by the Treasurer. He has given tuition to the member for Moncrieff to continue with these completely false statements. Labor produced headline surpluses in 1987-88, 1988-89, 1989-90 and 1990-91.

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