Anne Aly (Cowan, Australian Labor Party) Share this | Hansard source

I stand here today as somebody who has been a low-income earner—a very low-income earner—a middle-income earner and, in more recent years, what you might consider to be a high-income earner. And I imagine that that is not unlike many people here in this chamber and many of my colleagues as well. But what I find really confounding is that I paid a higher percentage of tax as a low- and middle-income earner than I do as a high-income earner—because there are more tax subsidies and loopholes available to me as a high-income earner. That is a glaring example of the need for reform to address inequality. We are faced with a challenge here. We have declining real wages, a housing affordability crisis, record underemployment and a skyrocketing cost of living. We need tax policies that are fair, that maintain social cohesion and that support growth. The OECD recognises that this is a dilemma facing many countries. The OECD argues:

Where tax increases are necessary, the most growth-friendly approach would be to reduce tax-induced distortions that harm growth, including closing loopholes, …

But first you have to recognise that something needs fixing—and that something is inequality.

Those on the other side would have you believe inequality does not exist, that it is not a problem. The member for Bowman even put forward the mind-blowingly ludicrous proposition that inequality is staring over a fence and noticing that another guy has a jet ski and you don't have one.

I would humbly suggest that the member for Bowman and his LNP colleagues actually go out and talk to people who are doing it tough—families who are struggling to make ends meet; seniors who cannot afford food and health care; and young people who live on baked beans on toast—not avocado on toast—and then come to me and talk about inequality. I will tell you what it was like to be a casual worker raising two kids. I will tell you what it was like earning a middle income, trying to put two kids through school, pay the bills and afford a mortgage, because, unlike those on the other side, I have not forgotten what that is like. The stark and simple fact is that Australia has a two-tier tax system: one for the low- and middle-income earners, who pay their fair share and have to find the money to pay for school fees, child care, housing, food and electricity, and one for the top one per cent, who have the financial means to access generous deductions and subsidies—some to the point of paying no tax at all.

Let's take the example of discretionary trusts—a word the other side seem to have forgotten today. Trusts are being used to reduce high-income earners' tax liability through income splitting. That means that people with high net worth and high tax rates can reduce their tax by apportioning to people with low tax rates. Somebody can make a million dollars a year and stream some of that income to their non-working adult children, and end up paying little or no tax. Tell me again how this is fair? How is it fair that a nurse or a teacher or a tradie, who pays pay-as-you-go tax on every single dollar they earn above the threshold, does not have access to those kinds of loopholes?

There are now $590 billion of assets in discretionary trusts. That is nearly double the amount of just a decade ago. They have grown exponentially. In fact, they have doubled in the last 20 years. We know that this issue is not new. A range of other academics and tax experts are on the record arguing for reform. But, sadly, nobody on the other side is listening. This government has dithered and dallied and kicked the can down the road on every major issue. They have proven they are ineffective and ineffectual, whilst the Prime Minister spouts empty rhetoric about being agile and being innovative. While this Prime Minister tries desperately to convince Australian voters that he is a strong leader, everything he and this government have done shows a weak and reluctant government with no will, no guts and no plan. They have no plan. But Labor does. Labor will do what needs to be done and we will not rest until the holes in the tax bucket are mended and an equal and fair tax system is delivered— (Time expired)

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