Gary Hardgrave (Moreton, Liberal Party) Share this | Hansard source

I thank the member for Prospect for his support on behalf of the opposition of these measures in the Tax Laws Amendment (2007 Budget Measures) Bill 2007. There is no doubt that this year’s budget is all about paying forward a dividend on the government’s strong economic management over the past decade. It is important that, as the Treasurer says, we lock in the gains, do the hard yards, put in the effort in the way in which Australians from many backgrounds and with many different beliefs and experiences have cooperated in such a constructive and proactive way to make a difference for themselves and their families. The rub-off in our society is most pronounced.

It is worth noting that the way this government has introduced the family-friendly measures in this legislation sends a signal to people on the margins. The Welfare to Work reforms have been very much about coercing and coopting people who perhaps because of taxation imposts have believed it is cheaper for them to stay at home rather than go out to work. As the member for Prospect said, this legislation goes beyond making CPI adjustments, which the member for Melbourne in an earlier debate alleged. The government is saying: ‘We want to put your money where our mouth is. If you are on the margins of decision making and under pressure to get back into the workplace, the rewards will be there.’

The government, in dealing with working and non-working family members, understanding the impact of the number of children in a family and adjusting the tax scales according to those differences, recognise that a one-size-fits-all approach does not work and that we simply cannot say that every family has 2.4 kids—we would all like that but the figure is about 1.7 kids per family—and make our laws based on that average. There are plenty of families in my electorate with six or seven kids. Refugee families love receiving the bonuses the government have paid in the past. One Sudanese woman told me that she had seven kids and that she had never before had $4,200 in the bank. This legislation does not seek to impose a one-size-fits-all approach; it recognises the range of differences in each family.

This bill does several things. First, it introduces the dependent spouse tax offset. It addresses the threshold amounts and the phase-in limits, to use the technical jargon that we hire accountants to work their way through. It also deals with families and pensioners who are under the age pension age limit and increases the threshold below which a family member is not required to pay a surcharge on any taxable income. The government is increasing that threshold so that low-income earners do not pay the Medicare levy. The bill does that in part by increasing the threshold from $16,284 to $16,740. Based on the income you, Mr Deputy Speaker, and I earn—and we do earn it—that may seem a modest amount. However, it will make a difference in low-income households.

The level of the family income threshold, which is referred to in various subsections, is being increased from $27,478 to $28,247. The threshold is to be increased by a further $2,594, instead of the previously stated figure, for each dependent child or student. For some large families, this measure may lead to quite a substantial lift in their income threshold and a reduction in the levy payable, if their family income is within a particular range. For individual taxpayers, no levy is payable if their taxable income does not exceed $16,740. For a pensioner, the threshold is $21,637. Obviously, we are making sure that pensioners, and people who earn bits of income while in receipt of a pension, will not pay the Medicare levy out of that income. With respect to families with large numbers of children, if there are six children, no levy is payable if the family income does not exceed $48,811. For families with two children, the threshold is $33,435.

It is worth noting that the government is not trying to impose a one-size-fits-all measure. It understands that there are a variety of family sizes in this country. Equally, the phase-in—or phase-out, depending on how you look at it—aspect means that a reduced levy applies to those on incomes between $16,741 and $19,694. For individual taxpayers, an ordinary rate of levy is payable once they get past that amount of $19,694. For a large family, one with, say, six children, the ordinary rate of levy is not paid until they reach an income level of $51,542 or, in the case of a more moderate sized family, one with two children, $39,335—up from $35,159.

I make the point yet again that we are not adopting a one-size-fits-all approach. We understand that individual families and the decisions they make can be built around some of these cost pressures. Hand-in-glove with that, as a result of the extra personal tax cuts announced in the budget, there is an $11,000 effective tax-free threshold for low-income earners through the low-income tax offset.

All in all, the range of measures contained in this bill, and those contained in the budget as a whole, ensure that people are paying less tax. The dependent spouse tax offset increases from $1,655, with effect from 1 July, to $2,100. It is an offset that is available to resident taxpayers who contribute to the maintenance of a resident spouse whose separate net income does not exceed $282. For those who make the decision to stay at home and raise children, this will provide a greater sharing of the tax responsibility across both spouses. The measure will increase the level of separate net income at which the tax offset is completely phased out from $6,901 to $8,681. This provides further assistance for people who enter the workforce on a part-time basis. They will not have to be afraid that a dollar earned will somehow be robbed by way of a dollar taxed, or that they will literally be working just for the taxman.

The government is putting the money where its mouth is on these issues. We are saying to people who are prepared to take up the challenge and engage themselves back in the workforce, ‘We will back you as well through the taxation measures that we are introducing.’

I want to speak for a moment about the Medicare levy. As we all know, the Medicare levy does not fully pay for Medicare services in this country. The Medicare levy is a contribution by taxpayers. This legislation increases the income threshold before people have to pay the Medicare levy—$16,740 for individuals and $28,247 for families. This year, with additional government expenditure factored in on top of the Medicare levy, taken in the form of tax by those who are earning a wage or income, we will see a lot more work being done for Australians, particularly those with lower incomes.

I refer to the additional $378 million for greater access to private dental services. Patients under a GP treatment plan can receive up to $2,125 per year in Medicare rebates. If there is a health related problem as a consequence of poor dental work, they are able to seek support through the Medicare system for that work to be done.

I often remark that the Queensland government run their own free dental service, but generally the waiting list is five, six, seven or eight years long before you get access to it. A number of people have come to me over the years who are upset about the fact that, even though there is a dental service at the PA hospital and at the QEII hospital, it takes forever to get access to it. They talk about the genuine hurt that they have felt over the years.

I know there has been a lot of pressure on the government to look at ways of putting a dental scheme in place. I think we have hit the mark in this regard, because this measure will prioritise those with the greatest need, based on their health requirements, and puts those people first in the queue. It will allow them to avoid what seems, to my mind, to be a very lethargic state-run system in Queensland. It is a system that is often held up in this place as an example of the way in which a national dental health plan could work, but I say to members from other states: don’t look at the Queensland dental health system as an example of what you would want Australia wide. There is nothing that you could sink your teeth into. It has a lot of genuine problems and it seems that it is always those who are in the greatest pain who are the last to get through the door. It seems that you have to know somebody. That certainly has been my experience over the last decade.

From my point of view, using the Medicare rebate in this way to allow GPs to arbitrate exactly who should get priority when it comes to dental health services for lower income people makes good sense. I am pleased that those who will be advanced by the measures contained in this legislation, who will be making a contribution to Medicare—indeed, those who will not be making a contribution, as in paying the full levy, parts of the levy or even no levy—will be the sorts of people who will be able, if they have no other means and the GP signs off on it, to get access to that.

As well, we want the state governments to match the $103 million type 2 diabetes program. It is not so much that we are saying that we will only do half. When you have a hospital system that is operated by state governments and a private hospital system that is mainly subsidised through things such as the up-to-40 per cent rebate on private health insurance by the Australian government, it is really important to have a buy-in. You challenge the states to buy in, and they take ownership of the program and its success. Nothing will guarantee a passion and commitment towards the success of a program more than buying in to that program. In that regard, we want the states to match the $103 million type 2 diabetes program, and I am sure they will because it is important. We will run after the Treasurer tomorrow—perhaps, around the building—because it is important that we consider type 2 diabetes.

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