Alex Somlyay (Fairfax, Liberal Party) Share this | Link to this | Hansard source

My question is addressed to the Treasurer. Would the Treasurer inform the House how tax cuts applying from the end of next week will help workers in my electorate of Fairfax and across Australia? How has the government consistently supported hardworking Australians?

Peter Costello (Higgins, Liberal Party, Treasurer) Share this | Link to this | Hansard source

I thank the honourable member for Fairfax for his question. The good news is that from 1 July all Australians will have their tax cut. This follows on from the government’s tax cuts in five of the last six budgets. The government cut tax in 2000, 2003, 2004, 2005 and 2006. From 1 July we will be lifting the low-income tax offsets so that you will not pay tax until you reach $10,000 if you are a low-income earner. We will be increasing thresholds so you will stay on the 15 per cent rate to $25,000. We will be cutting the top rates—the 47c rate to 45c and the 42c rate to 40c—and, as a consequence of that, we will be giving much more incentive.

One of the ways in which you can assess the effect of policy is by looking at real disposable income, which is wages and allowances less tax. Let me give the House an example—a single-income family with two children. In 1996 their real disposable income was $38,171. In 2006 it is estimated that their real disposable income will be $52,024, a 36.3 per cent increase. That is because wages have gone up, taxes have come down and family benefits have improved. The government first reduced the family taper from 50 per cent to 30 per cent, and then we reduced it further. We lifted the threshold for the maximum rate of family tax benefit in 2005 to $37,500 and in this budget to $40,000.

The other great improvement to the family tax benefit system was the $600 lump sum payment per child per annum. There were some people who claimed that was not real money. As I was sitting in my cold Canberra flat last night, alone, it was too late for Lateline, so I turned to my favourite reading matter—The Latham Diaries. The Latham Diaries told us:

The night before the policy release, I—

this is Mr Latham—

asked Swan—

that is the member for Lilley—

Anthony Albanese (Grayndler, Australian Labor Party, Deputy Manager of Opposition Business in the House) Share this | Link to this | Hansard source

Mr Speaker, I take a point of order under standing order 104. I know that the Treasurer is obsessed with Mark Latham, but maybe he can keep the obsession private.

David Hawker (Speaker) Share this | Link to this | Hansard source

The member for Grayndler will resume his seat. I call the Treasurer. I am listening carefully to the Treasurer’s answer.

Peter Costello (Higgins, Liberal Party, Treasurer) Share this | Link to this | Hansard source

I was never as obsessed with Mark Latham as the roosters were. When Mr Latham asked Mr Swan how to deal with the $600 annual payment, Mr Swan replied:

‘Just say that it’s not real money ...

Mr Speaker, $600 per child per annum, which is being received by millions of Australians, and we had the member for Lilley saying, ‘It’s not real money.’ I prefer the observations made about this by Ms Gillard, the Manager of Opposition Business. She told the Age on 1 November 2004:

In some of our traditional booths we saw swings against us ...  I think probably the $600 played a role in that. I think we’ve got to be frank and say there were a lot of people who received $1,200 or $1,800 ... in a lump sum and they were pretty keen to keep it, and they identified needing to vote for the Howard Government as the way of keeping it.

They sure did. It was real money. Single-income families, dual-income families and families with children are a lot better off as a consequence of the family policy, the tax policy and the wages policy of this government. The next instalment is on 1 July, and the only way to keep that is to keep a coalition government managing the economy in the interests of average wage earners in Australia.