Bob McMullan (Fraser, Australian Labor Party) Share this | Hansard source

There is no doubt you have to have a special sort of nerve, a particular level of temerity, to come in here as a representative of the Howard government and complain about the level of taxation, because you are a representative of what is now universally accepted as the highest taxing government in Australia’s history. I first made that claim some four or five years ago and it was disputed. We had a debate for about six months as to whether it was correct or not depending upon certain definitional issues. But that debate is over. Everybody knows that the Howard government is the highest taxing government in Australian history.

An Australian Bureau of Statistics survey recently released found that the Commonwealth government take $223 billion in tax. That is the tax problem facing Australians—not the minor issues that the member for Stirling is seeking to divert attention with—a record high 25 per cent of Australia’s GDP. You would expect that a conservative government would argue that you should lower the level of income tax. That is why they introduced this great big, swingeing, new indirect tax—to give people more say over how they spend their money. But, if you exclude the GST, their tax take is going up more and more every year. The double tax slug of more income tax and more indirect taxes, like the GST, is costing Australian taxpayers on average $77 a week. Even after you take into account the tax cuts, the federal government will still pocket an extra $29 billion in increased tax revenue over the next four years.

Ask Australian families what the tax is that is affecting their capacity to, amongst other things, save to buy a house and to pay the mortgage when interest rates are going up, notwithstanding promises to the contrary. They will say it is two things: income tax and the GST. Those are the two things that are hurting Australian families. It is typical of the Howard government that they send people in here to talk about somebody else’s problem in the hope that it will divert attention from their own. The way the income tax burden is falling more and more on middle Australia and reducing their ability to pay their housing costs is much more important.

Let us have a look at the question of the housing market. In Western Australia the housing market is still booming, unlike elsewhere in Australia, and that is essentially a product of supply and demand for housing. It is putting up the price of houses. What is the biggest factor affecting the capacity of families to buy houses? Interest rates. Why are interest rates going up? There is a complex array of factors but every economist will say the problem is that fiscal policy is expansionary in conflict with tight monetary policy and therefore, as ANZ Chief Economist Saul Eslake predicted again recently, it is likely there will be at least one more interest rate increase before the middle of next year.

We had the promise to keep interest rates at record lows. If it had been kept, every Australian family that is paying off a mortgage or trying to buy a house would be incomparably better off than they would be if they were affected by any minor change in state taxes. The big tax grab is going on at the Commonwealth level. The big pressure on the capacity of families to buy houses is going on at the Commonwealth level. That is exacerbated on the supply side by the failure of the Commonwealth to maintain its commitment to supply low-income housing under the Commonwealth-State Housing Agreement. That is where the Commonwealth has a direct impact on the balance between supply and demand for housing.

The latest table I have seen from the Productivity Commission shows that, once you exclude two years of increase for GST compensation, you have had continuing falls in the real value in 2004-05 dollars of Commonwealth-state housing assistance to the states for housing for people in greatest need. I understand there are a lot of people in Stirling who would be a bit more concerned about that than they would be about the issues that the member is raising.

Everybody would like every tax to be lower. We all know that in paying taxes we use dollars we could use for other things in our lives. The biggest slugs on families are the enormous, rapacious, record increases in tax revenue by the Howard-Costello government. Peter Costello is the highest taxing Treasurer in Australian history by a country mile, taking 25 per cent of GDP. No Australian Treasurer has ever taken 25 per cent of GDP in taxes before—none. He is the highest taxing in history. (Time expired)

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