Malcolm Turnbull (Wentworth, Liberal Party, Prime Minister) Share this | Hansard source

The honourable member will no doubt favour us with the assumptions that provide the alarmingly high effective marginal tax rate she speaks about. The honourable member should bear in mind too that one of the arguments that were advanced by her party when in government for the increase of 50 basis points, half a per cent, on the Medicare levy to go to the funding of the NDIS was that it was universal and it did not create the effective marginal tax rate problem that introducing an additional threshold in the course of middle incomes would, as is apparently now the recommendation. The government's proposal is consistent, it is fair and it is equitable. As far as the 49½ per cent top marginal rate is concerned, the member for McMahon has again and again in his capacity as shadow Treasurer denounced the idea of increasing the top marginal rate. His hero, Paul Keating, has said it is too high as it is.

The reality is this: honourable members opposite can talk about millionaires as much as they like. What we need is a tax system that provides incentives to invest, to employ and for people to get ahead. Having a top marginal rate where somebody earning somewhat more than two times average weekly full-time earnings is paying half of every additional dollar in tax is hardly an incentive for people to work harder, to invest and to build their business. So it is a question of getting the balance right. We have. Our budget is fair. It provides the security for those vital services the honourable member has always cared about and it provides the incentives and the opportunities to invest and employ. I would remind the honourable member of how often she has said about the importance of employment—

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