Trent Zimmerman (North Sydney, Liberal Party) Share this | Hansard source

Unlike the member for Makin, I'm delighted to speak in support of the Treasury Laws Amendment (Personal Income Tax Plan) Bill 2018 because it will deliver fairer, simpler and lower taxes for ordinary Australians. This bill is an important part of the Turnbull government's plan for a strong economy which will provide more jobs and opportunities. It's a central part of the 2018 budget. I want to reflect on the fact that our responsible economic management has allowed us to deliver the trifecta of lower taxes, an earlier return to surplus, and an increased funding for essential services and infrastructure that I know are critical to the nation's future. We have been able to do this both because of increasing revenue and because of our discipline in containing the growth of government expenditure.

Our tax reforms are part of our broader plan for a stronger economy which is already delivering for Australians. This is reflected in the fact that Australia is in its 27th year of economic growth, a record virtually unmatched in the international community. Business conditions are at the highest levels since the global financial crisis, and the Australian economy is generating a thousand jobs a day, on average. The Turnbull government have met the promise we made to the Australian people to create over a million jobs, and we have done it earlier than we predicted. Importantly, in the last year, the overwhelming majority of those jobs have been full-time.

Momentum is building in the Australian economy but if there is one thing we know, it is that governments cannot rest on their laurels. We cannot take this strong economy for granted. That's why the government are sticking to the economic plan that we outlined to the Australian people, which has a number of key elements. These include our commitment to record infrastructure spending and the 10-year infrastructure pipeline we announced. For Sydney, this includes our investment in better public transport, which will benefit my own electorate. For example, in North Sydney, the $1.6 billion we are providing to the New South Wales government to assist in the construction of the Sydney metro will be a game changer for my area as it will for the entire rail network across our city. This new metro rail line from Chatswood to Bankstown via the CBD will include new stations in my electorate at Crows Nest and North Sydney, and will alleviate congestion on the North Shore line. We're supporting a rail link to the new Western Sydney Airport. That airport will be the centre of a new powerhouse in economic activity for tour state.

Our plan includes our commitment to diversify the economy. This includes support for the innovation sector, which is thriving in North Sydney and has even greater potential. I see this from participants in the North Sydney innovation network I established following my election, which is bringing together some of the leaders in the sector working on the Lower North Shore. Similarly, our commitment to free trade is opening new opportunities for our service sectors and agriculture alike.

I welcome today's announcement that the EU will commence negotiations on a free trade agreement with Australia, which comes on the back of our success in negotiating the TPP and other high-quality free trade agreements. We are better supporting small business, which plays a vital role across Australia and in our local communities. This year's budget extends the instant write-off provisions, allowing small businesses to invest more in their own capital needs. Well over a thousand local businesses in my electorate have benefited from this measure in recent years. Some 31,000 local businesses with turnovers of up to $350 million will benefit from the company tax reductions we have already legislated.

A key part of our plan is tax reform. This has two components. The Ten Year Enterprise Tax Plan is essential to improving the competitiveness of our economy in a global environment in which many of our direct competitors are or have already reduced their company tax rates. The case for the company tax reductions is as strong today as it was when the Leader of the Opposition and the shadow Treasurer argued the case for lower company tax cuts just a few years ago. Their hypocrisy in now opposing those reduction has not gone unnoticed by the Australian community. In fact, the case is now even stronger in a world where we have moved from having among the lowest company tax rates to amongst the highest in the OECD. In this year's budget, we have outlined a plan to reform personal tax to lower taxes for hardworking Australians. Our plan will build a personal tax system that encourages aspirational Australians to get ahead, while also being fiscally responsible. It is a very direct way of reducing cost-of-living pressures for millions of Australians. The plan will provide immediate tax relief for low-income and middle-income earners, protect Australians against bracket creep and, in the medium term, make personal taxes simpler and flatter.

The first step of our plan will provide up to an additional $530 through the tax offset to low- and middle-income earners in each of the next four years. Ten million Australians stand to benefit and 4.4 million people will receive the full $530 benefit in the next financial year. The second step is to expand tax relief to help protect middle-income earners from bracket creep. From 1 July this year, the government will increase the top threshold of the 32.5 per cent tax bracket from $87,000 to $90,000. This will provide a tax cut to around three million Australians. In my own electorate, some 67,300 taxpayers stand to benefit in the next financial year from these changes. From 1 July 2022, these bracket creep measures will be expanded by increasing the top threshold of the 19 per cent tax bracket from $37,000 to $41,000 and increasing the low-tax offset from $445 to $645. From 2022, the top threshold of the 32.5 per cent tax bracket will be increased from $90,000 to $120,000. The third step of our plan will deliver the final stage of our personal income tax reforms. From 1 July 2024, the government will remove the 37 per cent tax bracket completely. This will be achieved by increasing the top threshold of the 32.5 per cent tax bracket from $120,000 to $200,000. These reforms will fundamentally reshape our personal income tax system because it is vital that workers are rewarded rather than penalised for their efforts.

I want to make a few general remarks about the broader context of the government's economic plan and the reforms outlined in this bill. First, one of the frequent criticisms of past government policies has been that they are not part of a long-term strategy. On occasions, budgets have been seen as being tailored for the three-year political cycle rather than the future interests of our nation. It's one of the reasons why in my first speech I argued that it was time to move to four-year parliamentary terms. This government is demonstrating that it is thinking beyond simply the electoral cycle. We see this in many areas, be it in our 10-year plan for school funding, in our 10-year pipeline for infrastructure, in our enterprise tax plan, which I've spoken about, or in the seven-year plan we have outlined for personal income tax reform in this bill. By planning for the future, we can ensure our economy continues to grow and that both individuals and businesses have greater certainty about the economic environment in which they will be operating. The challenges faced by our nation will not be solved by the short-termism and political fixes we so evidently saw in the Leader of the Opposition's budget reply speech. A political grab is not a plan for the future of our nation.

Second, if you believe the politics of envy those in the Labor Party and their compatriots in the Australian Greens seek to stoke, you would think that our tax system penalises those on lower incomes and disproportionately benefits those in higher income tax brackets in an unfair way. The reality is, of course, something entirely different. I want to thank the Treasurer for so clearly debunking these myths in his address to the Australian business economists in late April. I want to reiterate some of the points the Treasurer made in that speech. For example, he pointed out that 17 per cent of personal income tax revenue in 2015-16 came from the top one per cent of taxpayers. The top 10 per cent of taxpayers pay 45 per cent of personal income tax. The 2.4 million Australians in the top two tax brackets—around one-quarter of taxpayers—actually pay 65 per cent of personal income tax in this country. As the Treasurer commented, the burden is carried by the few and not the many, as is often claimed by the high-tax club.

Finally, I want to remark on a narrative that I've heard time and again from those sitting opposite in the Australian Labor Party. In relation to our tax reforms, be it those for companies or the personal income tax reductions in this bill, we've heard the cry from Labor that these are somehow tax giveaways, as if the incomes of Australians and Australian businesses belong to government. The claims reveal something fundamental about Labor's approach to tax. It's no surprise that their response to the budget and their own proposals rely so heavily on funding their increased spending by increasing taxes on those older Australians who've relied on dividend imputation.

We in the coalition believe in something quite different. We see tax reductions as giving back to Australians what they have earned themselves through their own endeavours and hard work. Labor's approach is not one that I could ever support. It is not an approach that will encourage the aspirations of those who strive for themselves and their own families. It is not an approach that will strengthen our economy by encouraging those who want to achieve and get ahead. The strength of our nation lies in the endeavours of our people. This bill seeks to recognise that fact, and I commend the bill to the House.

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