Julie Owens (Parramatta, Australian Labor Party) Share this | Link to this | Hansard source

My question is to the Assistant Treasurer and Minister Assisting for Deregulation. What has the government done to reduce the tax burden as a proportion of GDP for Australian families and businesses. How does this compare with other policies to raise taxes and cut vital services, and what would be their impact?

David Bradbury (Lindsay, Australian Labor Party, Assistant Treasurer ) Share this | Link to this | Hansard source

I thank the member for Parramatta for her question. She is a very effective voice for the people of western Sydney in this place. As she knows, this government has delivered several rounds of tax cuts because we want to give hard-working families and businesses the chance to get ahead. We have provided $47 billion worth of tax cuts, with the latest round of these tax cuts coming into effect on 1 July this year. And, of course, we have delivered $2 billion worth of tax relief to small businesses, through the instant asset write-off. And we have done all of this at a time that we have been handing down a budget that returns our budget to surplus ahead of every other major advance economy in the world.

Australia's tax-to-GDP ratio was at record high levels when the previous government were in office. The tax-to-GDP ratio, which of course is the amount of tax collected as a proportion of the economy, hit record high levels under the former government. At the moment, it is at 22.1 per cent, which is lower than at any point under the previous government. In fact, if Australians were paying the same rate of tax today as they were when the previous government was in office, they would be paying an extra $24 billion in tax every year.

But of course the Liberals have no interest in genuine tax relief. They have opposed nine tax cuts to families and to small businesses, including a cut in the company tax rate. Not only did they oppose the cut in the company tax rate but they want to increase taxes for companies. Several thousand businesses will be slugged with an increase in tax of 1½ per cent to fund their paid parental leave scheme. In doing so, consumers will all be hit at the checkouts with higher prices.

We see on the weekend that their colleague in New South Wales, Premier O'Farrell, is now talking about jacking up the GST. Of course, this was not an isolated incident; it came in response to an invitation he received from the member for North Sydney. The member for North Sydney in July said:

If you are going to have a discussion about changing the GST the states have to lead the argument because they are the ones that need the revenue.

Premier O'Farrell has responded on cue. He came out on the weekend suggesting that we should increase the GST. We know that will be welcomed by those opposite, but if you want to increase the GST there are only two ways you can do it. You either jack up the rate or you take away the exemptions. We all know the biggest exemption is on fresh food. So they either want to jack up the rate of GST, extending it to fresh food, or have a look at what the other exemptions are. The two other biggest exemptions are health and education services. It is not bad enough they want to rip money away from these services—now they want to hit them with the GST. We all know they believe it should be a tax that applies to everything; now they want to do that. (Time expired)