Andrew Leigh (Fenner, Australian Labor Party, Shadow Assistant Treasurer) Share this | Hansard source

Indeed, Mr Speaker, and I thank you for your guidance. I am focusing in particular on point 3 of my amendment, which goes to the question as to whether, if the government cannot do something as simple as enacting a bipartisan tax cut, it is really up to running the nation. It is a question which requires a focus on not just the areas contained in this bill but also some of the basic errors which have been made by this government—the areas which go well beyond the issues in this bill and, hence, the reference in the second reading amendment.

This is a bill which makes a change that reflects the fact that the tax brackets are not indexed in Australia. In Australia we have a system where for a brief period of rapid inflation during the 1970s tax brackets were indexed. Now, as a result of those tax brackets being fixed, they must be periodically raised. That is why we on this side of the House have supported the increase in that middle-income tax bracket from $80,000 to $87,000.

But if the government had properly sought advice on this one would expect that it would not have been placed in the position where the secretaries of Treasury and Finance said that the tax cut could not be delivered administratively. The secretaries of Treasury and Finance would have been those providing the advice to the government. If it had asked, you would have thought it would have gotten the same answer that the secretaries gave in the Pre-Election Economic and Fiscal Outlook. It makes one think that either it did not ask—it did not seek advice as to whether the tax cut could be delivered administratively—or, more worrying still, it asked, were told it could not happen and went ahead and made those statements. If that is true, then the Prime Minister misled ABC radio listeners to whom he told Australians would receive the benefits of this tax cut.

This is a tax cut which goes to those around the middle-income distribution. Last time I checked, median full-time wages were in the order of $60,000, so this is for people a little above that. But it certainly kicks in considerably lower than the high-income earner levy, which will come off next year.

Labor will not support the tax cut that the government proposes to deliver to high-income earners because we do not believe that it is right to increase inequality at a time in which the label on that tax change has not been delivered as promised. Do not forget: this was a temporary budget repair levy. But under this government we have seen an increase in the deficit and an increase in Australia's debt—an increase of over $100 billion, representing around $5,000 for every person. So, given that, we do not believe it is appropriate to deliver a personal income tax cut to the top one per cent of Australians while low- and middle-income Australians are slugged with cuts under this government.

We have seen bipartisan support this week for omnibus legislation, and that has involved Labor standing up for those at the bottom. As we do so, we also believe it is not appropriate to make tax changes at the top. It is those tax changes at the top which I believe must be contrasted with other changes that are being made.

So, again, Labor supports this bill. But we wish we had been debating this bill some months ago in order that Australians around middle incomes could have enjoyed the benefits of the tax cut right now rather than having to wait until the end of the financial year.

The catch-up payments will not be made immediately, as we understand it. I would be happy to be corrected if the situation for middle-income Australians is better than this. As I understand it, the tax office proposes that the portion of the tax cuts that would have been paid from July to September will be returned to Australians when they lodge their tax return next year. For example, this would mean that somebody who lodges right up until the end of October might find themselves waiting until November or December of 2017 in order to receive the benefits of tax cuts they should have received in July 2016—a delay of some 16 months in the payments of tax cuts. That 16-month payment may not matter very much to the top end of the income distribution, but it certainly matters for middle-income Australians. On this side of the House, we are concerned that middle-income Australians will have to wait an additional 16 months to receive the benefits of a bipartisan tax cut.

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