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 of the results of the latest OECD Economic Outlook. What is the importance of taxation policy to ongoing economic management?

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

I thank the honourable member for Moncrieff for his question. Again, I pay tribute to the work that he does on the coalition finance and treasury committee. He would be aware that the OECD has released its Economic Outlook, providing an assessment of all its member countries, including Australia, over the weekend. The OECD forecasts that growth will pick up in Australia, particularly as climatic conditions emerge from the drought—we hope—and we see the agricultural sector, which has been detracting so much from growth in Australia recently, come back to production again. In addition, the OECD noted that the recent budget included personal income tax cuts, substantial investment in education and increases in childcare subsidies, which the OECD said will enhance the economy’s supply potential in the longer term.

Certainly, the budget was directed towards improving the supply capacity of the Australian economy in the longer term. One of the things we are finding now, with unemployment at lows which we have not seen for 32 years, is that, rather than having a shortage of jobs for workers, we now have a shortage of workers for jobs. As far as problems go, that is a good problem, but in order to do something about it, we have to increase supply measures.

Our most recent tax cuts have dramatically cut tax for people in the range of middle incomes. For example, three years ago if you were on an income of $30,000 you paid tax of $5,172. On 1 July you will pay tax of $2,850—a cut in tax of 45 per cent on that same wage over a period of three years. Who will that attract back into the workforce? It will be people who are earning in the range of $30,000—a lot of part-time workers. They might be married women who have a couple of children at home and want to do a day, two days or three days a week. They are typically the people who are earning around $30,000 and the tax on an income of $30,000 over the last three budgets will have been reduced by 45 per cent. That is what good tax policy does. We will be very interested to see if the Labor Party has a tax policy at the next election because there seems to be a marked reticence from the Labor Party these days on tax matters.

Tax is just one of the areas where this government has improved work incentives. It has been a coordinated, concerted effort of balancing the budget, repaying debt, having an independent monetary policy, introducing the GST, cutting company tax, cutting capital gains tax, reforming the waterfront and improving industrial relations. All of those measures have put more people in work than ever before in Australia. It has been a good period also to be in the job recruitment business, under all of these reforms. It has been a very good period to be in the job recruitment business. We wish well to those companies that have prospered under coalition economic management. In fact, if it were not for this government, there would not even be a Job Network. It was this government which introduced the Job Network. If it had been for the Labor Party, there would be no Job Network; it would all still be run by the CES. The Labor Party opposed that reform. The Labor Party have opposed all of the substantive reforms, including the establishment of the Job Network, including—

Kim Wilkie (Swan, Australian Labor Party) Share this | Link to this | Hansard source

Where’s the workplace management—

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

Member for Swan!

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

On cue, the member for Brian Burke comes in. On cue, he comes in to claim credit for the Job Network. When we go back through all of the economic reforms that this government has introduced, including the Job Network, including Work for the Dole, including monetary policy, including industrial relations, including tax reform, including tax cuts, including company tax, the Australian Labor Party voted against all of them. There is no trick in politics in being wise in hindsight, seeing in hindsight what needed to be done. The trick in Australian politics is knowing what has to be done prospectively. That is where the coalition has led all the way, and that is where the Labor Party has lagged all the way.