Janelle Saffin (Page, Australian Labor Party) Share this | Link to this | Hansard source

My question is to the Minister for Health and Ageing. Will the minister please explain why changes to the Medicare levy surcharge thresholds are necessary?

Nicola Roxon (Gellibrand, Australian Labor Party, Minister for Health and Ageing) Share this | Link to this | Hansard source

I thank the member for her question. This is an important issue for us on this side of the House. In the Senate very soon we are going to see a vote on the Tax Laws Amendment (Medicare Levy Surcharge Thresholds) Bill 2008. As many people would be aware, this is a bill designed to deliver relief to working families, particularly those who are struggling with their household budgets. The purpose of this budget measure was to provide relief to working families and to adjust a threshold which had not been changed or 10 years. The tax, as the member for Higgins would know, was originally meant to apply to high-income earners but now slugs many hundreds of thousands of working families earning less than the average wage. We remain determined to deliver relief to working families. It is true that there has been some opposition to this measure. We have listened to what has been said and we have consulted extensively. I would like to share with the House some comments made in the other place. Here is what Liberal Senator Colbeck said about this measure:

If they are talking about indexation … then indexation of this measure would have put the threshold at about $75,000 or $76,000.

Then Western Australian Liberal Senator Mathias Cormann, the Leader of the Opposition’s new shadow parliamentary secretary for health administration and, I might note, the former head of a private health insurance fund, said—

Christopher Pyne (Sturt, Liberal Party, Shadow Minister for Education, Apprenticeships and Training) Share this | Link to this | Hansard source

He actually knows what he is talking about!

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

Order! The member for Sturt!

Nicola Roxon (Gellibrand, Australian Labor Party, Minister for Health and Ageing) Share this | Link to this | Hansard source

It is interesting that he knows what he is talking about, because I think the member will be very interested when he hears the rest of this answer. It may be that the Leader of the Opposition might like to take the advice of the rest of the frontbench. But let me read the quote first—we will get to that:

… would it be more appropriate, instead of doubling it and probably overshooting the mark, to look at what the figure would be if it had been indexed? I am talking about approximately $75,000 per annum.

The Private Hospitals Association said it would be more equitable to use thresholds of $76,000 and $152,000 to be indexed thereafter. Access Economics, in a report for the AMA, said the thresholds of $70,000 and $140,000 would have restored the system to previous real levels if that was the goal. Even Terry Barnes, former senior adviser to the former Minister for Health and Ageing, Tony Abbott, suggested that the new thresholds might be more appropriate at, for example, $80,000 or $160,000. Senator Xenophon has suggested that the threshold should be lower than we originally proposed, while the Greens have asked for indexation. Having consulted and having listened, we are prepared to take a sensible approach to this matter and to the wishes of the Senate, because we are determined to provide much-needed tax relief for working families.

In the other place this afternoon we will propose new thresholds of $75,000 for singles, while retaining our original proposal for couples at $150,000. If I take the interjections earlier to be any indication, I would ask the Leader of the Opposition to stand up and affirm that the Liberals will now support these new thresholds. This measure will deliver immediate tax relief to 330,000 Australians—a significant number of working families who need this break. True, it is not as many as we would have liked to have delivered relief to, but the position of the Liberals and of the Senate means that, if this proposal were accepted, 330,000 families would nevertheless be beneficiaries of this measure. It is a pragmatic response following a Senate inquiry and much consultation. For two average income earners, each earning about $60,000, this will deliver an immediate saving of $1,200 to those families in the first year. Just as importantly, we propose that this threshold be indexed each year to reflect wages growth. This will ensure that it will remain relevant into the future rather than ever threatening to become the tax trap that was delivered courtesy of the previous government.

There has been a lot of talk, as I have said, in the last few days about the Leader of the Opposition wanting a bipartisan approach to economic responsibility. This is his first test, or his first opportunity. If the opposition truly want to pursue a bipartisan approach to economic responsibility, then this is their chance. The Leader of the Opposition should stand up now or after question time and indicate that he will support this new proposal, which has widespread support, particularly within his own party. He says he is a real leader and he wants a bipartisan approach. This is his chance to stand up and say so.

Christopher Pyne (Sturt, Liberal Party, Shadow Minister for Education, Apprenticeships and Training) Share this | Link to this | Hansard source

Mr Speaker, I rise on a point of order. Under standing order 98, ministers are actually not allowed to announce government policy in question time. I would ask you, therefore, to ask the minister to draw to a close her answer, which we have put up with for the last five minutes, even though she should not have been asked in the first place.

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

The minister has concluded. But, on the point of order by the member for Sturt, if the question had actually asked for the announcement of policy, it would have been out of order.