Robert Oakeshott (Lyne, Independent) Share this | Link to this | Hansard source

My question is to the Treasurer. Treasurer, comprehensive tax reform advocates like New South Wales Treasurer Mike Baird, Ken Henry, and myself and many other MPs, have been repeatedly making the point that only 10 taxes in Australia do 90 per cent of the work of raising revenue to fund government services, while the other 115 taxes only do 10 per cent of the work. Treasurer, do you accept this basic point and what are you doing to reduce the number of inefficient taxes in Australia?

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

I thank the member for Lyne for his very important question. It goes to the heart of the sustainability of our tax system and the future prosperity of our economy. This government has already delivered three rounds of personal income tax reforms—or cuts, if you like—and we did put in place a comprehensive review of the tax system, encompassing both federal and state matters. So all of that is on the public record. And one of the first recommendations of that report in terms of priorities was putting in place a resource rent tax, which we have done and which we have passed through the parliament. But the revenue from that is also funding further tax reform—for example, the $6,500 instant asset write-off is being funded from that fundamental tax reform.

The government has also embraced loss carry-back, a fundamental reform, particularly for many small businesses which are facing structural pressures in our economy. We have also boosted our national savings, which I think is very important not only as a part of tax reform but also in ensuring that we have national savings to buttress our prosperity into the future. Most fundamentally, we have tripled the tax-free threshold. You do not pay a dollar of tax until you earn something like $18,200. The other thing we have done is to keep tax as a share of GDP below the level that we have inherited. Tax is 22.1 per cent of GDP—well below the 23.7 per cent of GDP that we inherited. In fact, if we were taxing like those opposite were taxing, revenue would be up by well over an additional $20 billion.

But we understand that there is a need to continue with tax reform, and the member would be very familiar with the tax forum that we held last year—a very constructive process. And coming out of that, we have put in place the Business Tax Working Group, which is looking very seriously at how we progress tax reform in the company tax area. We also have the superannuation roundtable going, which is looking, in particular, at ways to target and deliver concessions within the superannuation system, as well as the Not-for-profit Sector Tax Concession Working Group.

As the member would also be aware we have the GST review, which is having a look at how the GST distributions impact on state tax reform. Finally, we have the work which is being done by Mr Baird and Mr Snelling—having a look at how we harmonise state taxation and how we reinforce state taxation bases. I am looking forward to seeing a report from them in the not-too-distant future about what the states intend to do in all of those areas.

This is a pretty fundamental agenda. We have gone a long way down the road for tax reform but, as the member has indicated, we have got some way to go. Of course there is a very stark contrast with those opposite, who are proposing to put up company tax— (Time expired)

Robert Oakeshott (Lyne, Independent) Share this | Link to this | Hansard source

Treasurer, if I have read your answer correctly, you are accepting the point that it is your job to increase the use of efficient taxes and decrease the use of the inefficient ones. Can you name an inefficient tax you have removed or are removing, can you name an efficient one you are promoting and wanting to seek work harder and, most importantly, can you name an agreement reached with a state government on tax reform anywhere in Australia? (Time expired)

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

Madam Deputy Speaker, on a point of order: the Independents are entitled to one supplementary question each week. I point out to you that the member for Denison had one yesterday and therefore it is not in order for the member for Lyne to have a supplementary question today.

Ms Anna Burke (Chisholm, Deputy-Speaker) Share this | Link to this | Hansard source

The issue of supplementaries has not been bedded down in the standing orders—it is by agreement. I will allow the supplementary. I think it was last week that the member for Denison asked a supplementary. It was last week—it was on Thursday. And the member for Denison was rather put on the spot for that supplementary. The Treasurer has the call.

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

I am certainly looking forward to the recommendations which will come forward from the state Treasurers when it comes to their inefficient state taxes—certainly that is a process which is in place. What we have put in place is the MRRT, which I think is a very important reform, which achieves all of the objectives that the member opposite has outlined and of course is opposed by those opposite who want to give a very big tax cut to Gina Rinehart and Clive Palmer. That is one of the most fundamental reforms. But let us have a look at the $6,500 instant asset write-off—which replaces a complex set of systems, a complex set of paperwork, going right down the line—that was recommended to us by the tax review.

Mr Hockey interjecting—

Here we go again—a bit sensitive about tax, are we?

Joe Hockey (North Sydney, Liberal Party, Shadow Treasurer) Share this | Link to this | Hansard source

Madam Deputy Speaker, on a point of order: I am endeavouring to help my colleague and friend the member for Lyne, who asked the Treasurer to be relevant. Name one inefficient tax that you have abolished.

Ms Anna Burke (Chisholm, Deputy-Speaker) Share this | Link to this | Hansard source

The member for North Sydney will resume his seat. Points of order are not opportunities for debate. The Treasurer has the call.

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

Very simply, the write-off rules which apply to capital items purchased by small businesses have been replaced by the $6,500 instant asset write-off, pumping $1 billion into the economy to increase the cash flow of small business—something we are all very proud of and something that was opposed by those opposite.