Mike Freelander (Macarthur, Australian Labor Party) Share this | Hansard source

It is now two weeks since both sides of this house voted for the tax changes referred to in this motion. To the extent that the tax cuts will benefit low- and middle-income earners, they have always been enthusiastically supported by Labor. It was a Labor government that enacted the last round of tax cuts for low- and middle-income earners back in 2013. By contrast, the Abbott, Turnbull and Morrison governments have lived off the proceeds of fiscal drag and bracket creep for the last six years. And it was not that long ago that the then Treasurer, the member for Cook, was proposing to raise the Medicare levy on all Australians taxpayers, rich and poor. That idea only died when Labor refused to support the higher levy being extended to persons on incomes less than $87,000.

The member for Bass also seems to have forgotten that Labor went to the 2019 election supporting larger income tax relief for low- and middle-income earners than the coalition. The member suggests that lowering the 32.5 per cent tax rate to 30 per cent represents structural reform to the taxation scales. Of itself, of course, it doesn't. The structural changes, whether you regard them as welcome or unwelcome, incentivising or merely regressive, lie elsewhere in the tax package. The post 1 July 2024 changes to the tax scales impose a major and possibly unsustainable stricture on the federal budget. They reduce the tax burden on better-off Australians but they don't eliminate bracket creep or fiscal drag for those earning around average weekly earnings or below. To secure the latter, you need to automatically index all and not just some of the income tax scales. Any effect on employment, business activity and economic confidence of the third round of cuts is absolutely problematic and what the Prime Minister might call 'an act of faith'. To suggest that some of those cuts might have been retargeted or brought forward is unremarkable, nor does it call into question the election outcome or defy the will of the people. It's merely prudent.

Perceptions of the economy have changed rapidly since the election. Economic challenges, both short and longer term, are clearly mounting. On the government's estimates, expenditure on aged care, medical services and benefits and income support for seniors has been growing in excess of anticipated revenues from taxation—and that's just to provide levels of service that most regard as barely adequate, particularly in our health system with lengthening waiting lists and longer wait times in emergency departments around the country. The government say that those future demands on the budget won't be prejudiced by their post 2024 tax changes. That is their call—and a big gamble. Only time will tell.

Otherwise, the member for Bass's motion is not much more than a modest exercise in triumphalism, and I can see why. It was a significant election win against what was the prevailing view and was certainly against the polls. But I would like to see a little bit more humility and a little bit less strutting from many on the other side. The motion implies that the government was returned to office on a wave of enthusiasm for tax cuts that don't come into effect for another five years. Really? Is that not drawing the longest of long bows? Well over half the electorate voted for parties and candidates who did not support or fully endorse this government's taxation plan. If you believe the polling—and I say this with some hesitancy—the majority of Australians still generally prefer better government services to tax cuts.

So what of the government's mandate? 'Convincing' would not be the first world that could come to my mind in describing the coalition's election win. It is only one or two unfavourable by-elections or defections away from minority government. The government commands a bare majority in this place and it is in minority in the Senate. It secured only four out of 10 primary votes cast. The May 2019 election result makes it three out of four marginal wins.

In a populist age, public trust might be likened to a door hanging from a single hinge, and I suspect that is what this government is doing. The people's confidence, more than ever, has to be earned and has to be retained issue by issue. Long gone are the days when electoral promissory notes were written with a three-year term or open expiry date. We don't have the tradition of the UK, and it's arguable that our constitutional architecture, with a strong, elected upper house, is unsuited to a gentleman's agreement of, 'Let's just go along with the flow the government wants.' John Howard reportedly described the mandate theory of election victories as an absolute phoney— (Time expired)

See this speech in context