Malcolm Turnbull (Wentworth, Liberal Party, Shadow Treasurer) Share this | Link to this | Hansard source

My question is addressed to the Prime Minister. I refer the Prime Minister to his previous answers today and to table 2 in Budget Paper No. 1. I ask the Prime Minister: isn’t it a fact that the only reason that tax as a percentage of GDP has declined somewhat is that the government has implemented most, but not all, of the coalition’s tax cuts which were set out in the pre-election financial outlook and that, if the government had implemented those tax cuts in full and not imposed $19 billion of new taxes in the budget, tax as a percentage of GDP would be lower still?

Kevin Rudd (Griffith, Australian Labor Party, Prime Minister) Share this | Link to this | Hansard source

I might begin my answer with a continuation of what I thought was a first-class presentation from the finance minister. I will tell you what we were not prepared to commit to in any element of tax reform and that was providing a tax break for those highest income earners in Australia. The minister for finance was absolutely right: how those opposite could have gone to the election last year promising, from memory, $3 billion to $4 billion in tax cuts for those Australians earning north of $180,000 a year strikes me as passing strange.

The honourable member asked this other question about what other tax measures we have introduced to provide tax relief to working families. I tell you what else we are introducing: it is called the education tax refund. For the first time in this country’s history, we are providing—

Malcolm Turnbull (Wentworth, Liberal Party, Shadow Treasurer) Share this | Link to this | Hansard source

Mr Speaker, I rise on a point of order on relevance. It is a very straightforward question, and the Prime Minister should direct himself to it.

Harry Jenkins (Speaker) Share this | Link to this | Hansard source

The Prime Minister will respond to the question.

Kevin Rudd (Griffith, Australian Labor Party, Prime Minister) Share this | Link to this | Hansard source

The question was about tax and what the government has done on tax. We have been absolutely clear cut about honouring our commitments for tax cuts—some $44 billion of them—for low- and middle-income earners.

Secondly, we have been absolutely clear cut that, when it comes to the use of additional public revenues, we do not believe—as those opposite believe—that Porsche drivers need further income tax relief. Those opposite are about to give them a tax break in terms of the luxury car tax. But do those north of 180 grand need an extra $3 billion to $4 billion? I would have thought not. Therefore, what we did with that money—and I say this to the member for Wentworth—is we said to working families, ‘If you are spending money on your kids’ education in primary school and high school, you should keep those receipts and then, at the end of the financial year, we will provide you with a tax refund at different levels for both primary school and secondary school students.’ It is $750 a year for primary school students and $1,500 a year for secondary school students.

That is a measure which, from memory, cost something in the vicinity of $3 billion to $4 billion. We believe that is a very significant measure. For example, if those at home wish to add to the digital revolution occurring in the classrooms of Australia, as a consequence of the policies of the government, by assisting with their kids buying a home computer and getting internet connections at home, that becomes a tax deductible expense for the future. As a consequence of that, we are making it easier for working families to provide for their kids’ education.

On the question of child care, there is the increase in the childcare tax rebate from 30 per cent to 50 per cent. I do not recall those opposite actually saying anything about boosting the childcare tax rebate from 30 per cent to 50 per cent prior to the last election.

So on the education tax refund, Member for Wentworth, you are wrong. On the question of the childcare tax rebate, you are wrong. On the question of your predisposition to provide $4 billion worth of funding for those north of 180 grand—

Malcolm Turnbull (Wentworth, Liberal Party, Shadow Treasurer) Share this | Link to this | Hansard source

Mr Speaker, I rise on a point of order. While the Prime Minister is going through his list, he could at least include a relevant answer to a relevant and important question.

Harry Jenkins (Speaker) Share this | Link to this | Hansard source

Order! That is not a point of order.

Malcolm Turnbull (Wentworth, Liberal Party, Shadow Treasurer) Share this | Link to this | Hansard source

He treats this House with contempt.

Harry Jenkins (Speaker) Share this | Link to this | Hansard source

The member for Wentworth will resume his seat.

Kevin Rudd (Griffith, Australian Labor Party, Prime Minister) Share this | Link to this | Hansard source

On those three measures that I have just referred to, the position of the government on tax is absolutely clear. But I go back to the fundamental premise of the question being advanced by both the member for Wentworth, the plan C for the leadership of the Liberal Party, and the current Leader of the Liberal Party.

Malcolm Turnbull (Wentworth, Liberal Party, Shadow Treasurer) Share this | Link to this | Hansard source

Answer the question.

Harry Jenkins (Speaker) Share this | Link to this | Hansard source

Order! The member for Wentworth has asked his question.

Kevin Rudd (Griffith, Australian Labor Party, Prime Minister) Share this | Link to this | Hansard source

Is the member for Wentworth seriously suggesting that he is not out there counting numbers at the moment?

Malcolm Turnbull (Wentworth, Liberal Party, Shadow Treasurer) Share this | Link to this | Hansard source

You are a joke. I’m seriously suggesting you’re a joke!

Kevin Rudd (Griffith, Australian Labor Party, Prime Minister) Share this | Link to this | Hansard source

Are you seriously suggesting that you are not out there counting numbers at the moment?

Warren Truss (Wide Bay, National Party, Shadow Minister for Infrastructure and Transport and Local Government) Share this | Link to this | Hansard source

Mr Speaker, I rise on a point of order. The latest comments by the Prime Minister have nothing whatsoever to do with the question, and I ask you to bring him—

Harry Jenkins (Speaker) Share this | Link to this | Hansard source

The Leader of the Nationals will resume his seat. I will listen carefully to the Prime Minister.

Kevin Rudd (Griffith, Australian Labor Party, Prime Minister) Share this | Link to this | Hansard source

Thank you very much, Mr Speaker. My comments have everything to do with the answer to the question because they go to the future of the government’s tax bills in the Senate. If there is a change in the leadership of the Liberal Party, we will wait with interest to see what new posture will be adopted to the passage of those bills—whether it is plan A, plan B, plan Z or plan whatever in terms of the alternative leadership of the Liberal Party. I would say to the member for Wentworth that, given that he is so experienced in counting the numbers, they should probably think about appointing him as Senate whip, because they seem to have a problem with counting numbers in the Senate at the moment, too. If you are harnessing votes generally, Malcolm, I would suggest that your Senate whip needs a bit of help on that score, because it did not go so well last night.

Joe Hockey (North Sydney, Liberal Party, Manager of Opposition Business in the House) Share this | Link to this | Hansard source

You couldn’t even get a quorum this morning.

Kevin Rudd (Griffith, Australian Labor Party, Prime Minister) Share this | Link to this | Hansard source

It is the member for North Sydney volume barometer again: when in big trouble, bellow most loudly.

Harry Jenkins (Speaker) Share this | Link to this | Hansard source

Order! The Prime Minister will ignore the interjections.

Kevin Rudd (Griffith, Australian Labor Party, Prime Minister) Share this | Link to this | Hansard source

I say to the honourable members who have asked this question about tax: the previous Liberal Party government was the highest taxing government in Australia’s history. Why do we say that? We say that because tax as a proportion of GDP reached 24.9 per cent in both 2004-05 and 2005-06. When we took over office it was running at 24.7 per cent. For the benefit of those opposite, get these numbers straight: 24.7 per cent in 2007-08, 24.6 per cent in 2006-06, 24.9 per cent from 2004 through to 2006, 24.5 per cent from 2003 to 2004, 24.6 from 2002 to 2003. The first budget brought down by this Australian Labor government reduces tax as a percentage of GDP to 23.8 per cent. That is the mathematics. You might find it very disconcerting, but that is the mathematics. And if you look to the forward estimates, it remains lower right out to 2010-11.

I would conclude my answer by suggesting that those opposite reflect on this: if we were to sustain in this budget—the one that the Treasurer brought down in March—the same tax to GDP ratio as we inherited from you with the last budget, do you know how much more we would be collecting by way of tax in the period ahead? We would be collecting $30 billion in more tax. If we sustained the Liberal’s tax as a percentage of GDP at 24.7 per cent, as opposed to the 23.8 per cent we had hit, that would be a further $30 billion tax hike on Australian working families.

I would say to those opposite, given their deep addiction to taxation, to do one thing for working families: tell your senators in the Senate to get behind the government’s program on the Medicare levy surcharge, as $1,200 extra a year means something to working families at the moment. If the Reserve Bank can give us an interest rate cut which produces for working families a reduction of $600 in their interest rate bill each year, the Liberal Party should at least not add to that by providing an additional $1,200 tax hike a year, which their current action in the Senate is contemplating.