Jim Chalmers (Rankin, Australian Labor Party, Shadow Parliamentary Secretary to the Leader of the Opposition) Share this | Hansard source

I thank the member for Corio and indeed a whole number of speakers on our side of the parliament who have been absolutely spot on to say that the Medicare Levy Amendment (National Disability Insurance Scheme Funding) Bill 2017 and the cognate bills before the House say it all about a government so desperate to cut taxes on the top end of the town that they're prepared to jack up taxes substantially on people who work and struggle in this country. They want to jack up income taxes on middle Australia so that they can fund this showering of largesse on the top end of town, whether it be through the company tax cuts or through the personal income tax cuts if you make more than $180,000. All of it is funded by this raid, really, on the family budgets of middle Australia. The Australian people know that this government has form when it comes to this kind of behaviour—this kind of damaging and dangerous trickle-down agenda. They know that this is a government of the top end of town, for the top end of town and by the top end of town.

What makes it especially galling is to hear this rubbish from that side of the House that somehow this is about funding the National Disability Insurance Scheme. That is total and absolute rubbish. They should not be using Australians with a disability and the NDIS—which we designed under the member for Jagajaga, the member for Maribyrnong, the member for Lilley and others—in this debate. We care deeply about the NDIS; we fully funded the thing. For Australians with a disability to be told that they are the excuse of those opposite to jack up taxes on middle Australia to fund top-end tax cuts for multinational corporations, the big four banks and people who earn over $180,000 is offensive. And I think a lot of people in the community are angry about that. Australians know better than the lies that they are being told about the funding of the NDIS. They know that the NDIS was funded. They know that Labor cares deeply about it. They know that this is more about taking from those who work and struggle to pay for corporate and high-income earner largesse at the top of the tax system. They know it because this is the government's defining feature—to jack up taxes on middle Australia in order to give big tax breaks to the top end of town.

Time after time in question time, the Treasurer and the Prime Minister say: 'We're the party of lower taxes. The worst thing you can do is jack up taxes; that would be very damaging to the economy.' When they say that, they aren't referring to people across the board; they don't mean people that we represent; they don't mean people on middle incomes in this country. They want lower taxes for people who earn the highest incomes and for multinational corporations and the four big banks, but they want higher income taxes for people on middle incomes.

That's why middle-income earners have the most to fear—not just from these bills, as important as they are, but from the entire approach of those opposite. That middle Australia has the most to fear is no longer just the opinion of people on the Labor side of politics. This is now the view of the independent Parliamentary Budget Office. The PBO released on 11 October some damning statistics about the approach of those opposite. The PBO, which is independent of either side of politics in this place, said that everybody will have their taxes increase over the next four years but especially people on middle incomes. People on middle incomes will bear the brunt of the agenda of those opposite.

Strangely, when you think about our challenges—when you think about wages growth at record lows, cuts to penalty rates, record underemployment and living standards having gone backwards in the last national accounts—it is astounding. It is astonishing that those opposite want to give the biggest tax increases to people who average $46,000 a year in personal income. This is the extraordinary outcome of the trickle-down ideology from that side of the House, which pretends that the only way to grow the economy is to give the biggest tax breaks to those who need them least and to make people who work and struggle pay more income tax.

When they have a government like this, it is no wonder the Australian people want the rules of the economy rewritten. They want the rules of the economy rewritten to support inclusive growth, not as a slogan but as a governing principle. They want the rules of the economy rewritten so there's genuine reward for effort, not cuts to wages for people who work on weekends, and they want the rules rewritten so that there is genuinely a decent social safety net for those left behind and those at risk of being left behind. We say to middle Australia, from this dispatch box, with colleague after colleague making the same point, that we stand with middle Australia. We do not think that people earning under $87,000 a year should cop a tax increase at the same time as those opposite want to give a tax cut to the top end of town—to multinationals and high-income earners. We don't think that's fair, we don't think that's good economic policy and we will not be supporting it. Instead we'll be supporting the amendment moved by the member for McMahon.

As others have said, there are 11 bills in the package that we are debating at the moment. The first 10 give effect to the increase in income tax—the 0.5 percentage point increase in the Medicare levy to 2½ per cent. They change the Medicare levy rate and make all of the consequential changes as well. The net effect, of course, is that people on low and middle incomes who are already struggling with the cost of living—with energy prices, for example, as my colleague at the table, the member for Port Adelaide, knows all too well—will face more acute cost of living pressures if these bills are passed by the parliament this week. Something like seven million Australian workers earning less than $87,000 a year will get that tax hike. It will be imposed on vulnerable Australians earning as little as $21,000 a year. Somebody on $55,000 a year will pay $275 extra a year in tax and somebody on $80,000 will pay an extra $400 in tax. That gives you a sense of the magnitude of what those opposite are trying to pull when it comes to taxes on middle Australia.

The 11th bill in the package is a bit different. It's about the Building Australia Fund and the Education Investment Fund. It wants to abolish both of those funds which were set up in 2008 by the former Labor government to invest in university capital and critical national transport and communications infrastructure. These funds hold something like $3.8 billion each. They're making a return for the government. They are there to invest in the things that would actually deliver growth in this economy—human capital and physical capital—to get the productivity that we need to grow the economy. They are being abolished by those opposite, again as part of this absurd claim that it's necessary to fund the NDIS. It says more about their unwillingness to invest in education and infrastructure than it says about the NDIS, so we oppose those measures as well.

The stats that I mentioned before by the Parliamentary Budget Office are the most important considerations before us as we deal with these bills that jack up taxes on middle-income Australians. As I said before, the biggest increase will be for people earning around $46,000 a year, but everyone will get a tax hike over the next four years. Average-income earners will see their tax jacked up by 3.2 percentage points—much higher than the increase of two percentage points that is expected for the highest earners—and tax rates for middle-income earners are expected to hit at least a 20-year high. You can see the sort of damage that these tax cuts will do in middle Australia.

We shouldn't pretend that it's all bracket creep, although those opposite would like to pretend sometimes that this damning analysis from the PBO is all bracket creep. That's an important part of it, but, as the PBO itself said, average tax rates are projected to increase due to policy changes—most notably the policy decision to increase the Medicare levy from 2019-20. The PBO report supports the independent research from the ANU which shows that twice as many households would be worse off under the coalition's plan than under Labor's alternative plan, which is captured by the amendment that the member for McMahon moved.

With the economic situation that I described earlier—record low wages, cuts to penalty rates, record underemployment and declining living standards—it is really quite extraordinary that those opposite would contemplate handouts to the top end of town at the expense of millions of ordinary workers in this economy. That's what they're doing: giving a $65 billion handout to multinationals and the big four banks. The big four banks get something like $10 billion or $11 billion of that $65 billion. That says it all, really, in one number. Even then, they won't get the growth dividend that they claim from that. Their own Treasury says that the dividend from those company tax cuts would be one per cent in 20 years. That is 0.05 per cent a year, which is not enough bang for all of those bucks. There is a $16,400 a year tax cut for somebody making a million dollars in the income tax system at the same time as somebody on $55,000 pays $275 more a year. I could go on, but people understand what's happening here: money out of the pockets of middle Australia, onto the bottom line of multinational corporations. At the same time, we have all these other cuts in the budget: $17 billion out of schools; $3.8 billion out of universities; a $1 billion cut to the pensioner energy supplement; and a $2.2 billion cut to GP, specialist and allied health services. The list, unfortunately for Australians, goes on and on and on and on. So we have these handouts to the top end of town. We have these income tax hikes and cuts which affect people on low and middle incomes in this country.

As I said before, it is shameful that those opposite try to pretend this is somehow about the NDIS. The NDIS was funded. We created it on this side of the House. We are proud of it. We know how important it is to the lives of people with a disability and their families and loved ones. The costs of the NDIS are already built into the budget bottom line. They have been since the 2013 budget. The government has been reporting those costs for the past four years.

Very inconveniently for those opposite, the Productivity Commission came out with a very important report—I think last week—where they said that the issue with the NDIS was not the funding. The costs are not blowing out. The issue is with the implementation, whether it be the IT or the handling of complex cases. The challenge in the NDIS has not been the funding. The funding has evolved as we expected. The challenge has been in the rollout. We want to make sure that it is rolled out effectively. Enough of this rubbish about it not being funded! Enough of this rubbish that the costs are blowing out! The Productivity Commission said that the costs are broadly on track.

The 2013 budget, as others have mentioned in this place—principally the member for Jagajaga, who was such a key architect of the NDIS—set out the 10-year costs in 2013. It set out all the difficult decisions. She worked with other members in here to fund the NDIS. There were issues around changes to the fringe benefits tax, personal income tax offsets, tobacco excise and import processing charges. There were lots of those kinds of savings, difficult decisions that were taken then to make sure that we raised something like $66 billion over 10 years to pay for what we considered to be a very high priority, which was fully funding the NDIS.

We have an alternative when it comes to income tax as well. We believe in budget repair which is fair, but as part of that we want to make sure that the most vulnerable people in the economy and in our society are not asked to carry the can for the budget failures of those opposite. We do not support hiking income taxes for people earning up to $87,000 a year. We'll cop it over $87,000 a year. Our priority has to be people on middle and low incomes in this country.

Our plan is better and fairer. It is better for the budget. Our combination of leaving people under $87,000 alone and maintaining the deficit levy at the top end raises $4 billion more than the government over 10 years, which is important when you consider that we have record net debt for the next two years and record gross debt for as far as the eye can see, and rising. On Friday we had something like $506 billion in gross debt, more than half a trillion dollars, a new record under those opposite.

So we're conscious of those things. We know that we need to be sensible with the budget. We think there are better ways of going about it. We should not be jacking up taxes on people on middle incomes. We should not be shovelling $65 billion in the direction of the biggest companies in this country, including the big banks. We shouldn't be shovelling $16,000 a year towards people who are earning $1 million. We have a better alternative. True to form, it is fairer and more responsible. Those opposite should support it. They should stop pretending that these tax hikes are to fund the NDIS when they're just part of a dangerous and damaging trickle-down agenda.

Debate adjourned.

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