Lisa Chesters (Bendigo, Australian Labor Party) Share this | Link to this | Hansard source

My question is to the Treasurer. Kay Ross is a disability pensioner from California Gully in my electorate. Kay buys her groceries from lots of different stores and she checks the prices by walking between them the day before her weekly shop. In a recent shop, Kay spent $11.20 on a litre of milk and three loaves of bread. Can the Treasurer tell Kay how much more she will have to pay for bread and milk if he broadens the GST on fresh food?

Scott Morrison (Cook, Liberal Party, Treasurer) Share this | Link to this | Hansard source

I thank the member for her question. Again, the government has no proposal to do what the member is suggesting. There are many issues that are being canvassed and considered as part of the discussion on tax, and the government has no such proposal. Any issues that might be raised or determined by the government would certainly be put to the Australian people. We would ensure that they would have the opportunity to make a real comparison between those on this side of the House, when it comes to economic management and our plans for jobs and growth and our ability to deliver those plans, and those opposite.

Again, It is a strange occurrence but I agree with former Treasurer and Prime Minister Mr Keating. He is right when he says, 'The penny ought to drop on that side that what we should be doing is cutting spending and that is what the Treasurer has said for some weeks now and, on this point, he is actually right.' The plan of 'tax and spend' is not a plan for jobs and growth, and that is what they are proposing. Let's go over the budget and forward estimates again for the benefit of the member for Fraser. Labor's proposal to increase taxes is $7.6 billion.

Mr Perrett interjecting—

Tony Smith (Speaker) Share this | Link to this | Hansard source

The member for Moreton is warned.

Scott Morrison (Cook, Liberal Party, Treasurer) Share this | Link to this | Hansard source

Their savings proposals on the 2015-16 budget is $1.25 billion. That is it. But there is $57 billion worth of savings that they will reverse, of new expenditure commitments and savings that we are seeking to move through this parliament. There is $1.2 billion in measures they put forward that they will not pass. There is $5.2 billion in savings and revenue measures that we as a government have put forward that they are now blocking. There is spending that Labor says we must restore from bank savings—that is, savings that have passed and that they wish to restore. That is some $30 billion in extra expenditure. There is $1.1 billion in other budget measures that they say they will not support and savings since the 2015-16 budget which we brought down—some $5.6 billion—that they will not support. And their promises on spending is $13.8 billion, and that is just since the budget. And the savings, which are a minuscule amount of the broader budget changes they are proposing because their revenue measures, their increased taxes, some $7.6 billion—even when you put their higher taxes together with their minuscule savings, they still do not even qualify to cover the promises they have made since just May. We saw them do this in government. They have learnt absolutely nothing. The penny should drop on that side that 'tax and spend and borrow' does not generate jobs and growth.

Russell Broadbent (McMillan, Liberal Party) Share this | Link to this | Hansard source

My question is to the Prime Minister. Prime Minister, would you outline the importance of tax reform for growth and jobs?

Malcolm Turnbull (Wentworth, Liberal Party, Prime Minister) Share this | Link to this | Hansard source

I thank the honourable member for his question. I think it may be helpful if I explain for honourable members some of the complexities in this tax debate. Compared with other countries, Australia has in its revenue mix a very large proportion of income tax levied on both individuals and companies; and, of course, average wage earners are moving into higher tax brackets. Those are issues that need to be addressed. Some economists and, indeed, politicians—including the Labor government, in its 2010 budget, and the shadow Treasurer last year—have argued that cutting company tax would boost investment and real wages and ultimately benefit workers. And there is merit in that contention. At the same time, we need to constrain government expenditure. As the Treasurer has just reminded us, there is around $20 billion of savings held up in the Senate by the Labor Party's refusal to assist in cleaning up the fiscal mess they left us.

The only realistic option for very significant income tax cuts is by changing the tax mix, and that is why a number of people have advocated increasing the GST for the purpose. Of course, there are people in the Labor Party—the South Australian Premier and the New South Wales opposition leader—who have argued that the GST should be increased in order to pay for additional government spending in terms of health and education. Indeed, Paul Keating advocated a 2½ per cent increase to do that. Raising the GST and reducing income taxes—

Mr Mitchell interjecting—

Tony Smith (Speaker) Share this | Link to this | Hansard source

The member for McEwen!

Malcolm Turnbull (Wentworth, Liberal Party, Prime Minister) Share this | Link to this | Hansard source

would mean of course that a person who receives an income tax cut and has more money in his or her pocket will also face a higher cost of living, and those people who are entirely dependent on welfare payments would need to be fully compensated, although their pensions would go up with the CPI. Many of Australians—part pensioners, self-funded retirees—have incomes that either are not taxed or are taxed at very low rates, and they would need to be compensated. But compensation is a complex issue, and honourable members opposite understand that; they addressed that with the compensation for the carbon tax.

Now, any changes to the tax system, from our perspective, have to achieve at least three things. Firstly, they have to drive growth and jobs—that is No. 1. Secondly, they have to be fair—that is absolutely critical. And, thirdly, the complexity associated with them has to be justified in terms of a productivity output. The position of the federal Labor Party, on the other hand, in refusing to participate in this debate, means that we are having a national debate in which the alternative government does not play a part. We are seeking to have a considered discussion on tax reform. It is a very big lever affecting the economy. We are determined to ensure that it works effectively.

Chris Bowen (McMahon, Australian Labor Party, Shadow Treasurer) Share this | Link to this | Hansard source

My question is to the Treasurer. The Sydney Morning Herald today reports that Liberal MPs are worried that the Treasurer has already made up his mind to increase the GST to 15 per cent. Has the Treasurer made up his mind? When will we see the Treasurer's plan to increase the GST? Or will we never, ever see it—or at least never, ever until after the next election?

Scott Morrison (Cook, Liberal Party, Treasurer) Share this | Link to this | Hansard source

I refer the member to my earlier answer, where I made it quite clear that the government has not determined its position on this matter; I have not determined my position on this matter. The Prime Minister and the members of the cabinet are yet to consider these matters, because we are working through the very detailed and complex issue that the Prime Minister has I think just set out very well. That is our process. And what I can assure you—

Ms O'Neil interjecting—

Tony Smith (Speaker) Share this | Link to this | Hansard source

The member for Hotham has been warned.

Scott Morrison (Cook, Liberal Party, Treasurer) Share this | Link to this | Hansard source

is that, as we work through this process and as we move towards the next election—

Mr Dreyfus interjecting—

Tony Smith (Speaker) Share this | Link to this | Hansard source

The member for Isaacs is warned.

Scott Morrison (Cook, Liberal Party, Treasurer) Share this | Link to this | Hansard source

we will put forward our plan for jobs and growth, to grow our economy, backing the Australian people as we transition from the mining investment boom to a more diversified economy—an innovative economy, an agile economy, an economy that can embrace the challenging future we face. On this side, as a team, that is something we have experience with and is something we have been able to demonstrate.

On the other side we are not seeing that. We are seeing an opposition that has not learned from the mistakes it made in government, such as abolishing the Australian Building and Construction Commission and seeing, as a result of that, productivity in that sector decline and seeing the average number of days lost as a result shoot up again. Now they continue to resist that very important change that will support growth and jobs in the economy. The only thing we can conclude is that those opposite have learned absolutely nothing from their failures in government.