Chris Bowen (Prospect, Australian Labor Party, Assistant Treasurer) Share this | Hansard source

I am more than happy to give as concise an answer as I can to the honourable member, who is, I must say, somewhat of an expert in taxation matters given his previous professional experience. The honourable member asked me a range of questions. He asked me about fairness, and of course it is important that everybody pays their fair share of tax. The government has given the ATO full support in their measures, such as Operation Wickenby, which are all handled at arm’s length and are not interfered with by the government, but the ATO certainly keeps me very regularly updated on progress and in terms of resources. The government has increased the resources to the compliance section of the Australian Taxation Office, which we believe will provide a substantial dividend as well. In relation to fairness, I note the honourable member’s comments on the low-income tax offset, which of course I endorse. This budget increases the low-income tax offset from $750 to $1,200 and it continues to phase out up until $30,000. I think one of the great problems in Australia is the high effective marginal tax rates for the lower and middle income areas of the spectrum. We hear a lot about high marginal tax rates at the upper end of the spectrum and that is fair. But we have very punishing effective marginal tax rates for people transitioning from welfare to work. This was one of the major focuses of the Henry review of the taxation system. If we can achieve reform in that area, it will be a major advance for Australia.

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