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

My question is to the Treasurer. The Treasurer said the government wanted to deliver 'large personal income tax cuts', 'significant personal income tax cuts', 'big income tax cuts', 'very big income tax cuts' and 'bigger income tax cuts'. Treasurer, what happened? Who killed off the Treasurer's passion? And what exactly does the Treasurer stand for?

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

) ( ): There are three ways you can deliver tax cuts.

Opposition Members:

Opposition members interjecting—

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

Members on my left!

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

The first one is that you can fund them out of the surplus, but that is not what those opposite left this government. There was no surplus left to this government by those opposite. Funny that, because when they came into government they were left a whopping surplus. Over their time in government they frittered it away by spend and spend and spend. They set fire to the budget and that is what this side of the House inherited.

Honourable members interjecting —

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

The Treasurer will resume his seat. The level of interjection is far too high. The member for Rankin will cease interjecting, as will the member for Throsby. Members on my right—the member for Mitchell—will cease interjecting. The Leader of the House will cease interjecting.

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

That is the first way. The second way is that you fund them out of nominal GDP growth and, as those opposite should know, nominal GDP growth last year was 1.9 per cent. At other times of fiscal consolidation, when tax cuts were offered, it was growing in excess of five per cent, but that opportunity is not present as we go forward. The third area is that you do tax mixture, and so we on this side of the House we analysed carefully—but dismissed as out of hand by those opposite on political grounds only—that in this economy the best way to be able to go forward is something of that nature. The outcome was that because of the significant compensation, which undoubtedly would have to have been provided at the end of the day, would have added to outlays.

So after careful consideration by this side of the House, we made judgements which we believe were in the best interest of economic management. Those opposite do not follow that path. What they have done—as the architect of the attack on middle Australians with their proposal of negative gearing and increasing the capital gains tax by 50 per cent—is they have rushed out there with no thought of the consequences. Apparently, it is news to them that, if only two out of three buyers turn up at an auction, you are not going to get the same price. It is not news to those on this side of the House—it is common sense. Those opposite are ignoring the most basic principles of the market in pursuing the policies they are doing, because they do not understand that the minute you put the key in the door of a new house under their proposal it turns into an old house. It is like driving a new car off the lot; it depreciates in value because you are dealing with a completely different market. They do not understand that that affects yields, and as a result rents will have to go up. They do not understand that. Apparently, the way you address housing affordability is by stopping people investing in shops and shares and factories and partnerships and vehicles and all these things. This government does not rush out with ill-considered policies—we leave that to those opposite.

Opposition members interjecting—

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

Members on my left! The member for Gorton will cease interjecting. The member for Sydney, again, will cease interjecting.