Steven Ciobo (Moncrieff, Liberal Party) Share this | Link to this | Hansard source

My question is addressed to the Treasurer. Would the Treasurer inform the House how tax reform has reduced the burden of personal income tax on Australian workers? Is the Treasurer aware of any alternative policies?

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

I thank the honourable member for Moncrieff for his question and for his work on the finance and treasury committee, where he takes a very keen and very good interest in all of these matters. Can I inform him, and through him the House, that an Australian on average wages, $46,240, in 2007-08 will pay tax of $8,371. If this government had indexed thresholds from 1996, that person on $46,240 would be paying $10,238 in tax. The point I make about this is that if this government had indexed tax thresholds over the 11 years since 1996, a person on average wages would be paying $1,867 more than they will be paying in 2007-08—in other words, over and above indexation there has been a tax cut of 18.2 per cent for a person on average wages. I am going to say that again: over and above indexation there has been a tax cut of $1,867, or 18.2 per cent, for a person on average wages of $46,240.

So you will hear from time to time—and I heard this false claim being made as recently as yesterday from the member for Melbourne—that all the government does is hand back bracket creep. If all the government did was hand back bracket creep then a person on average wages would be paying an additional 18 per cent in tax. No, this government has done much, much more than hand back bracket creep over the last 11 years; this government has handed back bracket creep and provided real tax cuts in addition. This is because the government fundamentally reformed the tax system in 2000 and has now cut tax in 2003, 2004, 2005, 2006 and 2007.

We are now in the countdown to ‘Fundamental Injustice Day’. As I informed the House yesterday, ‘Fundamental Injustice Day’ is 30 June. It was proclaimed ‘Fundamental Injustice Day’ by the member for Griffith—the Leader of the Opposition—who, in opposing tax reform in this House, said:

When the history of this parliament, this nation and this century is written—

It is almost Churchillian, isn’t it! It is stentorian!

When the history of this parliament, this nation and this century is written, 30 June 1999 will be recorded as a day of fundamental injustice—an injustice which is real, an injustice which is not simply conjured up by the fleeting rhetoric of politicians. It will be recorded as the day when the social compact that has governed this nation for the last 100 years was torn up.

‘Fundamental Injustice Day’, so proclaimed by the Leader of the Opposition, 30 June 1999, was the day when this government swept away the wholesale sales tax, financial institutions duty, bank account debits tax, stamp duty on shares, stamp duty on marketable securities, bed taxes and cut income tax. This day of absolute fundamental injustice has apparently gone down in history as such a terrible day that, if he gets elected, the Leader of the Opposition proposes to do what about it?

Government Members:

Nothing!

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

Nothing. It was a day so bad that it would be remembered in the history of the 20th century and yet, if he is elected, he intends to do all of nothing about it.

Members of the House will recall that the Luddites were the 19th-century mobs that opposed economic reform and smashed textile machines. Let me come to this century. People will remember that the economic ‘Ruddites’ were the people who opposed tax reform, the balancing of the budget, the paying off of debt, independent monetary policy, industrial relations reform and union control being broken on the waterfront. You do not become an economic conservative with a good advertising agency. The Leader of the Opposition is no economic conservative; he is an economic ‘Ruddite’ who has opposed all of the reforms that got us to where we now are and he has no credibility in directing economic policy for the future.