Andrew Laming (Bowman, Liberal Party) Share this | Link to this | Hansard source

My question is addressed to the Treasurer. Would the Treasurer inform the House about changes to the tax system that will come into effect on 1 July? Treasurer, are you aware of any alternative policies?

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

I thank the honourable member for Bowman for his question. I can inform him that on 1 July the low-income tax offset will be increased from $600 to $750. It will apply over a greater income range to reduce tax for the lowest income earners in Australia. The lowest marginal tax rate will apply to $30,000, an increase in that threshold where the 30c rate cuts in. As a result of these changes, every Australian taxpayer will receive an income tax cut on 1 July and that is good news.

There is a certain pattern to political life. One of the patterns to political life has been, in recent years, income tax cuts on 1 July. This is a government that cut income tax in 2000, 2003, 2004, 2005, 2006 and 2007. There is a certain pattern to Australian political life. Like the seasons, where we have summer, autumn, winter, spring, and the school year, where we have term 1, term 2, term 3, there is the political year: we have the budget, we have Fundamental Incompetence Day, we have Fundamental Injustice Day and then on 1 July we have an income tax cut. And the seasons move on.

It is an open question as to whether or not the Labor Party is going to have a tax policy at the next election. I say it will not and they say that is a myth, but they cannot actually point to what it is. At the National Press Club, the member for Lilley said this:

If we are going to have something large and complex, it would obviously have to be out earlier rather than later, but I’m not making a commitment one way or the other.

He said: ‘I’m not making a commitment as to whether it is large or small. I’m not making a commitment as to whether it will come out. I’m not making a commitment at all.’ In the Adelaide Advertiser on 7 June, he said:

... we would like to see tax not exceed a fixed percentage of GDP and we’d like to see it a bit below where it is now, if that’s affordable. But I can’t make any commitments on that.

I guess this is the trouble with modern Australian males: they are shy of commitments, and modern shadow Treasurers are commitment shy when it comes to tax. The people of Australia need to know whether Labor stands by their 2005 tax policy, as the member for Lilley said last week, because that is a policy which would increase the thresholds and the rates of taxation in Australia. There can be only one reason that Labor will not put out a tax policy and that is because they know it will not help them win votes. If they thought it would help them win votes, they would not mind putting it out there.

If you go through what frontbenchers of the Labor Party, who would be ministers in a Rudd government, have said about taxes, it is absolutely frightening. This includes the member for Melbourne who advocated higher taxes in this House. Listen to this:

I think our overall tax take at the moment has become too low. I am quite happy to state that I think the total tax take is too low.

I will read the next bit too; you will like this bit. This is the member for Melbourne, who said:

... there should be a return to the 60c in the dollar tax rate for people earning over $75,000.

He wants a 60c tax rate. He is the shadow finance minister in Labor Party. Now the Labor Party has a duty to Australians. Its duty is this: get a policy, announce it so that Australians can have a look at it and let people know what the Labor Party is really about.