Matt Thistlethwaite (Kingsford Smith, Australian Labor Party, Shadow Parliamentary Secretary for Foreign Affairs) Share this | Hansard source

I am pleased to make a contribution to this debate on the Tax Laws Amendment (Temporary Budget Repair Levy) Bill 2014 and supporting bills. This, again, is a broken promise, a broken commitment by the Abbott government to the people of Australia. 'We will be a no surprises, no excuses government,' Mr Abbott said. 'We're about reducing taxes, not increasing taxes,' Mr Abbott said. 'No cuts to health, no cuts to education, no changes to pensions and the GST,' Mr Abbott promised prior to the election. These were definitive election pledges. The Australian people took the Prime Minister and the then opposition members on trust in that election. The Australian people believed that such definitive pre-election pledges could not be broken by an Abbott government. Well, fast forward a few months and look at what we have seen from the new government. As the opposition leader has said, 'The Prime Minister promised time and time again not to introduce this tax increase.' The Prime Minister said, and I quote:

The Coalition will keep the current income tax thresholds …

He said:

What you'll get under us are tax cuts without new taxes.

He also said:

… there should be no new tax collection without an election.

Those were the commitments made by the Prime Minister prior to the election. What we got was the complete opposite—broken commitments to the Australian people in the form of the very increases in taxes that were ruled out prior to the election. Not only tax increases but changes to Medicare, pensions and family tax benefits that will hurt communities across Australia. These income tax increases represent a clear broken promise by the Prime Minister. Before the election Tony Abbott repeatedly promised that he would not raise taxes, but he has. That is a breach of trust and faith of the Australian public. This government has fundamentally breached the trust of the Australian people and not just once but on a range of issues: health, education, pensions and taxes.

They can say whatever they want to try to dodge this responsibility, to try and excuse themselves, to justify the change in policy and to justify some of the measures that have been introduced in this budget. But, at the end of the day, the Prime Minister made a commitment to the Australian people to trust him and his government not to increase taxes, not to touch Medicare, to change pensions or family tax benefits.

Quite simply, that commitment was hollow. This bill proves that. This is an income tax increase and is more damning evidence of the deceit that was perpetrated upon the Australian people at the election. This is the first of many new taxes that this government will be seeking to pass, following its cruel and deceptive budget. The result of these broken promises has been outrage across the community, including from conservative premiers, in particular in my state of New South Wales where Premier Mike Baird has described this budget as 'a kick in the guts for the people of New South Wales'.

Women's groups, multicultural communities, veterans' groups and community organisations have all condemned this budget. There is even evidence beginning to appear already in the Australian economy that this budget will have a damaging effect on our economy in terms of aggregate demand. The Australian economy is in a precarious position at the moment. The economy is volatile, particularly to changes in consumer demand, and consumer confidence has taken a considerable hit in the wake of this government's budget announcements. That has been confirmed in a number of consumer confidence surveys. Quite clearly this is a budget that not only hurts families, pensioners, low-income earners and students but it is also hurting businesses.

Labor has serious concerns about the way many of the provisions in the budget have been put together. They appear to have been rushed, they appear to have been put together in haste and many of them appear to have problems. One particular element of the budget where there is a discrepancy is with fringe benefits tax loopholes and income tax increases. The treatment of fringe benefits tax appears to create a loophole that will allow wealthier taxpayers to avoid this tax increase while surreptitiously including taxpayers who earn less than $180,000 a year. This measure should not fool Australians into thinking that the burden is being shared equally across the community. Quite clearly, those on lower to middle incomes will bear a greater burden.

Last week I received a phone call from a very distressed pensioner in my community, someone who suffers from a chronic form of leukaemia and requires two trips to her GP per month, one consultation with a haematologist, one regular blood test per month and a couple of scripts for medication and one dose of chemotherapy. That pensioner is going to be worse off under this government's budget. She is going to have to worry about getting proper treatment for her illness but is now also going to have to worry about how she is going to fund that treatment. Pensioners, families, students and ordinary Australian people in general do not deserve to be treated in that manner, particularly given the commitments that the Prime Minister made to such people prior to the election. They are the people who bear a greater load when it comes to the heavy lifting of this budget. NATSEM modelling shows that among families with children those in the most affluent fifth will see a 0.3 per cent reduction in disposable incomes while those in the poorest fifth see a five per cent reduction in disposable incomes. Those NATSEM figures quite clearly highlight the discrepancy that is evident in this budget about where the burden of the budget will lie. That will have an overall effect on consumer confidence and aggregate demand, because there is a much greater proportion of the population within those lower quintiles, or fifths, when it comes to income and disposable income in this country.

Despite the fact that inequality has been rising for a generation, this budget redistributes that income from poor to rich. That is why this budget is a breach of trust with the Australian public. Before the election Tony Abbott told the Australian people that he would lead a government that was not about surprises, that had no excuses in government, that would reduce taxes, not increase taxes, that would spare health, education and pensions from the Abbott government axe. Here we have a clear breach of that commitment: a broken promise from the Abbott government that will hurt individuals in our community and will make the most vulnerable in our society pay more. That in my view is unconscionable.

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