Jason Wood (La Trobe, Liberal Party) Share this | Link to this | Hansard source

My question is also addressed to the Prime Minister. Would the Prime Minister advise the House how working mothers benefit from the tax cuts contained in the budget?

John Howard (Bennelong, Liberal Party, Prime Minister) Share this | Link to this | Hansard source

I thank the member for La Trobe for his question. It is the case that the tax cuts announced by the Treasurer in the budget are particularly valuable in relative and absolute terms for working mothers in Australia. It is the case, according to the most recent figures from the Australian Bureau of Statistics, that some 62 per cent of all working mothers in Australia earn below $35,000 a year. The reason for that is not that they are poorly paid. The reason is that the great bulk of them work part time. As the House will know, the most typical family formation working-wise at the present time is a full-time male breadwinner with his wife and mother of their children working part time. So a 1½- or a 1¼-income household is the most typical. It is certainly not universal but, according to the latest analysis, that is the most typical household formation so far as working parents are concerned.

What the impact of the tax changes indicates is that, in relative terms, the greatest benefit goes to people earning between $30,000 and $40,000 a year. The budget delivers a tax cut of $21 a week to wage and salary earners on incomes between $30,000 and $40,000 per annum. In 2004-05, 60 per cent of female taxpayers had a taxable income of $35,000 or less. What this indicates is that the Treasurer’s tax cuts have been deliberately designed to provide the maximum benefit to those that need assistance the most. Not only are the tax cuts of benefit to that section of the Australian population but also changes to child-care assistance in the budget will benefit working mothers. Child-care benefit will increase by 10 per cent, on top of annual indexation, which will reduce out-of-pocket child-care costs as a share of disposable income for all families. The payment of the child-care tax rebate, which further reduces out-of-pocket child-care costs, will be brought forward, providing more timely help with child-care costs to all working parents.

I might also observe that since 2004-05, compared with the financial year to start on 1 July 2007, a taxpayer earning $35,000 or less will have enjoyed a tax cut of almost one-half compared with the total tax that that person paid only three years ago. That particular comparison is a measure of the way in which these tax cuts have been designed to assist low- and middle-income earners. They have delivered and they are of particular benefit to the working mothers of Australia.