Angus Taylor (Hume, Liberal Party, Shadow Treasurer) Share this | Hansard source

I rise to speak on the Treasury Laws Amendment (Cost of Living Tax Cuts) Bill 2024, and I move:

That all words after "That" be omitted with a view to substituting the following words:

"whilst not declining to give the bill a second reading, the House notes:

(1) this Government has mismanaged the economy and made a deliberate decision to break promises and raise taxes;

(2) the Coalition is committed to lower, simpler and fairer taxes;

(3) because Australians are hurting from the Government's mismanagement of the economy, the Coalition will not oppose the reduction in the 19c tax rate to 16c;

(4) the Coalition is committed to going to the next election with a tax reform package that is in keeping with the stage 3 tax cuts; and

(5) the Coalition's package will:

a. deliver lower, simpler, and fairer taxes;

b. fight bracket creep and enshrine aspiration in our tax system;

c. reward hard work and support a strong economy where every Australian can get ahead; and

d. unite, rather than pit Australians against each other".

It's important understand why this bill is before us today. There is a very simple and important reason for that, which is that Labor has absolutely failed in managing the economy and the result of that is Australians are being hurt on a scale that I haven't seen in my lifetime. In my lifetime!

Since coming to office, this government and this Prime Minister have made the wrong decisions, have been distracted and have consistently broken promises. The Prime Minister spent all of last year dividing Australians based on race; he was distracted by his $450 million failed referendum. Meanwhile, throughout the course of that year, he hadn't noticed that Australians were being smashed. They were seeing their household budgets being hurt in a way that they hadn't anticipated and that he promised would not be the case—he promised he was going to be a Prime Minister who was dealing with the cost of living.

Let's look at the facts of what has happened to household budgets in the 18 months that those opposite have been in government. It's very important to get to the bottom of the numbers. These numbers came out in the national accounts late last year. We on this side know this, because we see it every single day. Whenever I go into an electorate, as much as I can I go to one of the local food banks and I ask them, 'Who are you seeing?' They're seeing people looking for help in a way that they have never seen before. This is a tragedy we're seeing unfolding right around this country as aspiration is being smashed, as people's standards of living is being smashed and as their ability to make ends meet is being smashed. What we saw in the national accounts that came out—

You should listen to this! The numbers behind that came out in December last year. In 18 months, the average Australian household has lost 8.6 per cent of its real disposable income. It's a phenomenal amount, if you think about it. The average Australian has lost $8,000 in 18 months from their disposable income.

They're seeing this coming through in three different ways. First of all, prices have gone up far faster than wages. That means, in technical speak, their real wages are going backwards. What that means in practical terms is that their purchasing power is disappearing from their pay packets. Their purchasing power over the last 18 months has been disappearing from their pay packets. The second thing they saw in the course of that 18 months was 12 interest rate increases. That means that a family with a mortgage—about a third of Australian households have a mortgage—has not lost $8,000 of their real disposable income, it's more like $20,000, or $30,000 or more. And they have to find that $20,000 or $30,000 a year in after-tax income.

Australians are stumbling through this because the government spent all of last year ignoring it. It was distracted and focused on other things, and no-one was more distracted than this Prime Minister. The question so many Australians ask me as I get out and about is: Is this all going to go back to normal some time soon? Is this going to revert back? Am I going to get my $8,000 back? Is this 8.6 per cent hit to my disposable income going to return? Are interest rates going to go back to where they were? Are prices going to go back to where they were? There has been an almost 10 per cent increase in prices—of course far more for some goods and services in the last 18 months. Are they going to go back to where they were? And are the tax increases I've seen going to back where they were?

To put those tax increases in perspective, we saw a 27 per cent increase in personal income taxes being paid in 18 months. I'll hand it to the Labor Party; they are good at one thing: tax collection. They are the masters—27 per cent! How could it be that there's a 27 per cent increase in taxes? Well, it's true that there was record population growth during that time period, but that was only 3½ per cent, so the rest of it was all Australians paying more tax.

Right at the heart of that was the greatest thief in the night that a big-spending Labor government absolutely adores, and that's bracket creep. Australians see bracket creep in a very clear way. They don't call it bracket creep. To them it just means: why is there so little money in my bank account? Because the hand of big government is pulling it out, and it's doing it through inflation and it loves inflation. It doesn't want that bracket creep to go away. We heard the Prime Minister yesterday demonstrate that he doesn't even understand bracket creep. He's got no idea. But it has resulted, along with other things, in a 27 per cent increase in the personal income taxes being paid by Australians in the period of 18 months. That increase in prices, mortgage payments and personal income taxes is responsible for Australian households seeing a decimation of their income.

We know that Labor's policies are causing this. We heard the Reserve Bank governor tell us that inflation was homegrown. Inflation comes from Canberra. It's not coming from the Ukraine, as the Prime Minister liked to say for a while until he was corrected by the Reserve Bank governor. It is homegrown. This Labor government has been responsible for gross and egregious economic mismanagement in Australia, and every Australian is paying the price. They have botched energy policy. They promised a $275 price reduction, but of course it never arrived. They promised cheaper mortgages, but of course we've seen 12 interest rate increases under this government, and any Australian family with a mortgage is seeing a decimation, a smashing, of their disposable incomes, as I said earlier.

At the heart of this is a government that loves to spend money. In fact there's been $209 billion of extra spending since they came to power. That's over $20,000 of extra spending for every Australian household. But, when you're taxing lots, that's what you do; you spend it all, if you're a Labor government. And they have spent almost every bit of it, despite what the Treasurer likes to say.

A government member interjecting

Well, it's the truth. You've added $20,000 of spending for every Australian household, but the member opposite seems to think this is terribly funny—the plight of Australian households—and it's not. It's a crisis, and this Labor government has exacerbated this crisis in a very significant way.

This is where we stand. We stand in a situation where Australian households are in a dire situation. It's certainly far worse than anything we've seen in my lifetime. Perhaps it was as bad during the Depression, but this is really next level. That's why we are supporting the tax relief in this legislation—because that's what's left. There is nothing else this government is offering. When they fail on economic management, that's what you have to do. We won't get between Australians and lower taxes because we are ultimately the parties of simpler, lower, fairer taxes.

There is a second reason why this legislation is in front of us in this form.

I'll take the interjection. I think I've just answered your question. What we're doing is voting for tax relief that is required because of the Labor government's failed economic management, disastrous economic management and unprecedented economic management. Those opposite should take responsibility for their failures. There's a second reason why this legislation is in front of us in this form today, which includes an egregious broken promise. Those opposite have chosen to fund that tax relief by taxing a group of Australians more. That's $28 billion of bracket creep that they're going to impose on Australians right now.

The Prime Minister fessed up to this last night on 7:30, where he admitted that they had seen options, none of which had been seen by the Australian people or by the opposition, but he reckoned this was the best option. Of course, taxing a group of Australians substantially more is always going to be the best option for a Labor prime minister, particularly one with a background like the Prime Minister. He spent last year dividing Australians based on race. I'm sure he's going to spend this year dividing Australians based on income. He doesn't believe that Australians can get ahead and benefit other Australians in the process by employing them, by making investments, by enhancing productivity and by supporting higher wages. He doesn't believe that. He thinks the only way anyone can get ahead is by taking money from someone else. That is the option this Prime Minister has chosen. It's his choice. He said it last night on 7:30. There were options in front of him, but this was the one he liked. In the process, he broke a promise that he had made not once, not twice, not three times, not four times, not five times—look, I've only got 18 minutes left; I can't keep counting up to over 100, because that's how many times he and the Treasurer made the promise that he would not repeal the stage 3 tax cuts—over 100 times.

We learnt in the last couple of days that, miraculously, Treasury was working away on breaking an election promise without instructions from the Treasurer. Does anyone believe that? I did notice that, when this was discussed in the House, the Treasurer was looking down. He didn't really want to look anyone in the eye. He certainly didn't want to look me in the eye when this was going on, because no-one believed him. The truth is that this Treasurer and this Prime Minister have been working away on this for a long time. We know that, and it's time for them to admit that. We don't want to see them misleading the House. That's not a good thing for them to do. They need to fess up. What we do know, regardless, is that this has gone to two elections, that those opposite voted in favour of these tax cuts and that, between the Prime Minister and the Treasurer, they promised it over 100 times.

To take it even further, it is in legislation and there are many Australians who have made commitments, to their detriment, on the back of the assumption that they were going to get what was legislated and had been promised over 100 times. But no promise from those opposite counts for anything. This is a prime minister who said his word was his bond. Tell you what: you want a better bond than that one. That's as hopeless a bond as you're ever going to get. The result is that we're going to see $28 billion of extra taxation in the coming years.

He, of course, claims that no-one is going to be impacted by this. Well, let me tell you something: that tax bracket that he is whacking back in will see three to four million people in that tax bracket in the coming years—it's growing at about eight or nine per cent a year—and they are aspirational Australians who want to get ahead and are fighting to get ahead and who are working hard for their families and for their futures. In the process, they're investing; they're creating jobs; they're taking risks. That is how you grow the economy. Those opposite, of course, are taking us in exactly the opposite direction. I should say that those opposite refuse to accept that we are in a GDP-per-person recession right now. That's where we're at. From an individual point of view, that's a recession; that's the real deal.

We saw the Reserve Bank yesterday, telling us that, actually, it's worse than we'd thought. As they scale down their GDP forecast—

The member opposite should take a look at this. The Reserve Bank has recognised that this government is hopeless when it comes to economic management.

I said that the government was taking from one group of Australians to give to another. It didn't need to be that way. We do support taking the 19 per cent bracket down to 16 per cent. What we don't support is taking it from another group of Australians to achieve that—robbing Peter to pay Paul. That's why we will take to the next election strong tax reforms that are in the spirit of the stage 3 tax cuts, that are in keeping with stage 3 tax cuts.

I'll tell you what: those opposite need to understand how egregious this broken promise is. Before the election, the Prime Minister said:

An Albanese Labor Government will deliver the same legislated tax relief to more than 9 million Australians …

That was at a press conference on 26 July 2021. On Sky News on 29 May 2022, he said:

… I've said on the stage three tax cuts, that they've been legislated, people are entitled to operate on the basis of that certainty.

I'll go on. On Radio 4CA on 20 January 2022, he said, 'Now that they are legislated we do need economic certainty going forward for people, and we make no apologies for that.' That's what he said. Again, in that same interview, he said, 'We're not going to interfere with the legislated tax cuts which are there,' and that his word was his bond. That's what he said. On Sky News, again, on 11 February back in 2015, he said, 'If you make a promise and a commitment, you do have to stick to it or you'll be punished.' That's the Prime Minister: if you make a promise and a commitment, you do have to stick to it or you'll be punished! Gee, that's a doozy!

Worse, since election, the Prime Minister—along with the Treasurer—has gone on to repeat that promise more than a hundred times. In fact, I'll go through an interview from less than two weeks ago:

MACDONALD: You're on ABC Radio Sydney with the Prime Minister Anthony Albanese in the studio. There are calls to stop the Stage Three Tax Cuts coming in this year. Are they definitely, absolutely, going ahead as written and planned?

PRIME MINISTER: Well, of course there will be tax cuts. We'll go ahead in July. We haven't changed our position.

We have not changed our position—a lie repeated over a hundred times by the Prime Minister and the Treasurer is of profound significance to every Australian.

Of course it's not the only time he has misled Australians. He said he wasn't going to touch taxes on superannuation. Well, he's going after those! He's taxing unrealised capital gains. Every small-business person knows that a capital gain that's realised—you might be able to pay some tax on that, but I don't know how you're supposed to pay tax on an unrealised capital gain. But most of those opposite have never been in business, so they wouldn't have a clue! He's increasing taxes on franking credits, he's raising taxes on traditional industries that create enormous wealth for this country and he's ended small-business tax concessions. This is all, as I said, despite the national accounts showing a 27 per cent increase in personal income taxes being paid. But the truth is that we all know higher taxes are in Labor's DNA.

The question this raises for every Australian is: what's next? The Prime Minister and the Treasurer were asked yesterday about negative gearing, and I tell you what—they're not ruling it out. There was no effort by either of them to rule it out, because they want the housing stock that's rented out, particularly to younger Australians, pensioners and others across Australia, to be owned by offshore funds and superannuation funds. That's their model of rental housing in this country. That's where they want to go, and getting rid of negative gearing is their way of achieving their great vision of the corporatisation of house ownership in this country.

They're going after small businesses and farming trusts; we know that. They were asked about this again today. They're not going to rule that out. That's the next one on the list—the small-business tax rate. The best way to unionise a workforce is to get rid of the small businesses in that industry, isn't it. We know that. That's why the industrial relations reforms they're pursuing with such passion are all about making sure they can re-unionise workforces. I have worked with good unions over the course of my career, and I've seen enormous value added by sensible work done by unions working with businesses to improve workplaces and improve wage outcomes for workers. But getting rid of small businesses and punishing small businesses because they're not unionised is not the pathway to prosperity in this country.

Then there's capital gains tax on the family home. The Prime Minister gave a very slippery answer on this yesterday: 'No-one would do this.' That means nothing coming from the Prime Minister. There is no doubt he would love to impose capital gains tax on the family home. These tax increases are all on the table. Sadly, the result of all of this is that tax reform, which is one of the crucial ways you deliver a stronger and more prosperous economy, an economy that provides opportunity and aspiration to every Australian—tax reform in this country appears to be dead. Innes Willox of the AI Group has said that abandoning the stage 3 tax cuts 'demonstrates that the government attaches little weight to addressing the problems created by Australia's economic situation'. He continued:

The Government's new tax scales will barely touch the sides on improving incentives to invest, employ and save.

Of course, that's quite right. The only way you return the $8,000 lost to the average Australian in their real disposable incomes is to manage the economy properly with a back-to-basics economic agenda. What does that look like?

There is a better way. There is nothing this great country can't achieve with the right policy framework, and that is lower, simpler and fairer taxes. It is fighting bracket creep and enshrining aspiration in our tax system, not adding $28 billion of thief-in-the-night bracket creep, which takes from every Australian's bank account. It's a tax system that rewards hard work and supports a stronger economy where every Australian can get ahead, a system that unites Australians rather than pitting Australians against each other. But this Prime Minister loves to pit Australians against each other, because it's all politics to him. In fact, the Treasurer admitted that in an interview in recent days, where he said, 'We had to do this before Dunkley.' Well, that just tells you: it is all politics for this government, this Prime Minister and this Treasurer.

A back-to-basics economic agenda extends beyond tax, even though tax reform is obviously enormously important. It's about supporting small business aspiration and entrepreneurship. That's why we've said that the small-business accelerated depreciation concessions should be back where they were, but Labor has scaled them back. I've already gone through how they dislike small business.

We need an economy that rewards and focuses on work, not on more welfare, and that is why we championed from very early on in this term of parliament older Australians being able to work more without being punished for it. You do, if you're go to a back-to-basics agenda, have to contain the growth in government spending, and that is why we opposed $45 billion of spending through this parliament. We opposed it for good reason—$18 billion of interest payments are in the budget. All of these are examples of government overreach. Getting the basics right, knowing where government has a role to play and where it doesn't, making sure you get your competition policy right is not just crony capitalism. Looking after your mates at Qantas, that's not competition policy; that's crony capitalism, but the Prime Minister loves a good bit of crony capitalism.

Government needs to be prepared to pull every lever to fix this crisis and that means sound economic management, ending waste, workplace laws that are sensible and flexible and not putting union officials in charge of our workplace. You have to allow employers and workers to get together and work out how to make the workplace more productive and pay people more in the process. That's how you do it. Back in the eighties, that's what the Labor Party used to believe in but that's all by the wayside now.

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