Craig Thomson (Dobell, Australian Labor Party) Share this | Link to this | Hansard source

Mr Speaker, my question is to the Treasurer. Deputy Prime Minister, why is it so important Australian families get the tax relief they need to help with the costs of living?

Wayne Swan (Lilley, Australian Labor Party, Treasurer) Share this | Link to this | Hansard source

I thank the member for Dobell for this very important question because the government is about supporting the living standards of Australian families, particularly when times are tough. Of course, that is why the government moved so swiftly and powerfully when the global recession, through the global financial crisis, had such a dramatic impact on economies around the world and led to such a reduction in demand for our economy. We moved powerfully to support employment. We moved powerfully to support small business. Because nothing is more fundamental to your living standards than the capacity to earn a wage, to have a job, to keep your small business open and operating. That is why the stimulus has been so important.

And, although it is being withdrawn, it is still supporting employment in a whole range of sectors in the Australian economy, because this government understands that not everybody is doing as well as others. And, even though we have a strong economy, and even though we have a low unemployment rate, which is absolutely important to supporting living standards, there are many people in some sectors of the economy who are still doing it tough. There are many people, for example, in non-residential construction who are significant beneficiaries of the stimulus programs that we have put in place, that the Prime Minister has put in place, that the Minister for Housing has put in place. These are very important for keeping the doors of small business open and for keeping many tradies, in particular, in employment. That is one way you can support living standards, particularly when you have uncertain international events in countries such as Greece. It is very important to support living standards, and that is why the government’s action was so important to stimulate our economy.

This was, of course, opposed by those opposite. We know that if they were to have had their way, they would not have supported the stimulus packages. They certainly did not support the bank guarantees. Of course that would have had a dramatic impact on unemployment in this country. The thing about unemployment is that, when it is high and when it is there for a long time, it destroys skills and it destroys capital and it destroys small businesses and it destroys communities. So this government is absolutely up for supporting the living standards of the Australian people.

Now that the global economy is recovering, we have to do more. We understand that many people are still under financial pressure. For many people they still find it pretty tight when the family budget comes down, and it is hard to wrap it around the pay cheque. So a lot of people out there have trouble making ends meet, which is why we have done a number of things since we have been in government. First of all we had the historic increase to the age pension. Single pensioners on the base rate of pension had been living in poverty for a long period of time, but we took the gutsy step to make a fundamental, historic increase in the age pension, which is so important to the living standards of so many people on fixed incomes.

But it is not just what we did in terms of the age pension. It is what we have done with the education tax rebate—so important to families when they are sending their kids back to school, finding it difficult to buy everything that they need, to get the kit for the kids to go to school. The education tax rebate is absolutely important, also what we have done to increase the childcare tax rebate. All of these things have been very important to living standards.

But a very important measure that is continuing is the three sets of tax cuts delivered by this government. We understand that, when you work hard and you do a bit of overtime, you do not want all of that being gobbled up, either in the tax take or in the withdrawal of family payments. That is why the tax cuts which will commence next week are so important. They are not large, but they will help people get by—they will make life a little bit better. A worker on $50,000 will get an extra tax cut of $450 per year from 2010-11. Over the three rounds of tax cuts, for a worker on $50,000 that is a tax cut of $1,750. For a worker on $80,000 it is an extra $300 a year, but for that worker over three rounds of tax cuts that is $1,550. That is what we are doing to support living standards, but it is also important when it comes to the tax system because you reward effort. These tax reforms and these tax cuts are an important part of strengthening the economy by giving people extra incentive to work. That is important as well.

We know that those opposite opposed our stimulus. I do not know where we would be in this country in terms of levels of unemployment had they been in power through last year and the year before. And, of course, they have not supported many of the other initiatives that we have put in place as well. But we do know what would put a wrecking ball through family finances and security if they were in power, and that would be Work Choices. This, more than any other policy, demonstrates how those opposite do not understand the importance of supporting living standards, because when they last were given a chance to support the workers of Australia they attacked them viciously—and they are coming around for Work Choices mark 2.

We on this side of the House are proud of what we have been able to do to support living standards. We know more needs to be done, but at least there is a bit of extra help coming next week.