Andrew Leigh (Fenner, Australian Labor Party, Shadow Assistant Treasurer) Share this | Link to this | Hansard source

I move:

That all words after "That" be omitted with a view to substituting the following words: "whilst not declining to give the bill a second reading, the House:

(1)   notes the Treasurer's Budget Night promise of tax cuts from 'July 1 this year' and the Prime Minister's assurance they would be delivered 'administratively';

(2)   notes the Pre-election Economic and Fiscal Outlook later confirmed the tax cuts would not be implemented on July 1; and

(3)   calls on the Government to explain whether, if it cannot do something as simple as enacting a bipartisan tax cut, it is really up to running the nation."

This is a story about a Treasurer who boasted he would deliver an income tax cut to Australians, who are now discovering that they are not going to get it for three extra months. On budget night the Treasurer stood at the dispatch box opposite and said:

From 1 July this year, we will increase the upper limit for the middle-income tax bracket from $80,000 to $87,000 per year.

But the Treasurer has been unable to deliver on that categorical promise—yet another promise made and broken by this Abbott-Turnbull government. Even after the budget had been brought down the Prime Minister was on ABC radio saying:

That is really up to the Labor Party whether it's legislated, but certainly it will be covered administratively after the election, we expect the Parliament to come back and ensure that all of the legislation supporting the Budget measures is passed.

The tax cut enjoys bipartisan support, but this government is so inept and so incompetent that it has been unable to deliver to the Australian people a bipartisan middle-income tax cut on time. As the tax commissioner confirmed in the Pre-election Economic and Fiscal Outlook, the tax cuts would not be flowing from 1 July, as promised by the Treasurer, but instead will only take effect when the legislation passes the parliament. The Pre-election Economic and Fiscal Outlook, as members will know, is prepared by the secretaries of the departments of Treasury and Finance. It says on page 40:

There are a number of tax measures included in the 2016-17 Budget that take effect on or before 1 July 2016. Many of these measures can be legislated at a later time within 2016-17 without materially affecting the estimates. However, the Commissioner has indicated that the Ten Year Enterprise Tax Plan—targeted personal income tax relief measure requires the relevant legislation to be passed before the change will be incorporated into the income tax withholding schedules. As the timing of this is uncertain, there is a risk that some of the revenue cost of this measure will slip from 2016-17 into 2017-18 (improving the 2016-17 bottom line with a commensurate worsening in 2017-18).

These promises made by the Treasurer on budget night have turned out to be false. We do not know whether the Treasurer was deliberately misleading the House, but certainly the effect of the Treasurer's statements were to mislead the Australian people. We are asking the Treasurer to reveal whether or not advice was sought from the tax office before these statements were given. We are calling on the Prime Minister to release any evidence which was given to him before his statements on ABC radio.

Mr Frydenberg interjecting—

The member for Kooyong is crying about this, because what the member for Kooyong knows is that the top income tax cut will come in on time. Oh, yes, when this mob opposite have to deliver a tax cut to the top one per cent—and, let's face it, that is what the tax cut that removes the temporary budget deficit repair levy will do—then that comes on time, but a tax cut which comes to middle-income Australians, a tax cut which comes to those earning over $80,000 a year, they cannot get that one right. With the tax cut for the very top—and we have done some numbers on this tax cut that will flow from 1 July next year—94 per cent of the benefits of that tax cut will go to the top one per cent of Australians.

It has been a pretty good couple of decades for the top one per cent. The top one per cent have doubled their share of national income. The share of national income held by the top one per cent is now getting up towards levels not seen in three-quarters of a century. Yet, when it comes to deciding tax policy, this government's priority is not to look after middle-income Australia, not to show a sense of love for middle-income Australia but to show a sense of love towards the top one per cent. That is their way of conducting public policy. Australians will make their judgement as to what side this government is on. Are they on the side of middle Australia, whose tax cut has been kicked off through the incompetence of the government, or are they on the side of the top one per cent, who get their tax cut square and on time?

Josh Frydenberg (Kooyong, Liberal Party, Minister for the Environment and Energy) Share this | Link to this | Hansard source

The lifters.

Andrew Leigh (Fenner, Australian Labor Party, Shadow Assistant Treasurer) Share this | Link to this | Hansard source

I hear the member for Kooyong going back to that old Menzies-Hockey rhetoric of lifters and leaners, dividing Australians by referring to those who have retired or those who have suffered a disability as 'leaners'. That sort of nasty Australian politics separating Australians into lifters and leaners is so characteristic of this government.

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

The minister, on a point of order.

Josh Frydenberg (Kooyong, Liberal Party, Minister for the Environment and Energy) Share this | Link to this | Hansard source

Yes, a point of order, Mr Speaker. The member for Fenner knows Sir Robert Menzies was a giant in this place and 'lifters' is talking about a better—

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

The minister will resume his seat. That is not a point of view. The member for Fenner has the call.

Andrew Leigh (Fenner, Australian Labor Party, Shadow Assistant Treasurer) Share this | Link to this | Hansard source

As the member for Kooyong knows, the Menzies era was the salad days of Australian economic policy in which little got done, in which Australia sat back and cosseted itself from the world behind the tariff walls and in which this divisive rhetoric began to grow and grow. We have seen it in other countries, too. In Britain, they talk about the 'strivers' and the 'skivers'. It is an attempt to suggest that the social welfare state is not a form of insurance but a form of simple redistribution. The very fact is, though, that if we look at the statistics over the course of a lifetime the majority of Australians benefit from the social safety net. That is why the Treasurer's rhetoric and the rhetoric of his predecessor, Treasurer Hockey, is so out of touch with the economic reality that our social safety net is there for all of us—for the moment in which the firm that we are working in shuts down and we lose our job, for the moment in which we suffer a horrendous accident and find ourselves disabled and for those old age pensioners who have worked hard all their lives until their bodies give out. Let's face it: the pension is the largest portion of the social safety net, so the rhetoric of lifters and leaners is a rhetoric squarely directed against older Australians, as economic journalist Peter Martin has pointed out.

With this bill we see the House finally putting effect to a bipartisan tax change, but we should not have been debating this bill now. We should have been in this House before 1 July debating this bill. If that had happened then Australians earning over $80,000 a year would be getting this tax cut right now; but, instead, the Prime Minister put his political interests ahead of the interests of Australians earning $80,000 and more. The consequence of that is that, if you are on $81,000 a year, you are not seeing the benefits of a bipartisan tax, and that is disappointing to those of us on this side of the House. We do not believe that the narrow interests of political parties should be put ahead of the interests of middle Australia. We would have been happy to debate this bill in the 44th Parliament to make sure that Australians got the bipartisan tax cut.

So, I ask again, as I was doing so before the member for Kooyong got a little over excited about his Menzian hero: will the Prime Minister, will the Treasurer, reveal the evidence that was given to them that this this tax cut could be implemented administratively rather than legislatively? This is another piece of evidence of the ineptitude of this government. This is a government which has lost control of parliament—the first government to lose control of the parliament in 60 years. Not since 1962 has a majority government lost a vote on the floor of the House.

Ms Henderson interjecting—

I hear the member opposite referring to the parliament of 2010 to 2013. As the member opposite would well know, that was a minority government and it certainly did a lot better in maintaining control of the parliament than this so-called majority government, which has to station staffers at the eight exits to the parliament because its members are so desperate to get out of the parliament, to leave their jobs, that they are happy to walk out of the parliament before the day is even finished. The members opposite talk about hard work, but when it comes to really doing the hard work they will knock off early. They look at their watches: 'Oh, 4.30', they say. 'Well, I am supposed to be here to five o'clock, but I guess I will knock off early.' So much for that rhetoric about hard work. I guess hard work is for someone else—

Mr Frydenberg interjecting—

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

The minister will cease interjecting.

Andrew Leigh (Fenner, Australian Labor Party, Shadow Assistant Treasurer) Share this | Link to this | Hansard source

as we saw on Thursday of the last sittings. We have seen other errors from this inept government. When it introduced its omnibus legislation—

Mr Frydenberg interjecting—

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

The minister will cease interjecting.

Andrew Leigh (Fenner, Australian Labor Party, Shadow Assistant Treasurer) Share this | Link to this | Hansard source

it claimed that there would be more than $6 billion in savings. In fact, we discovered the savings were less than $6 billion because they had made a basic mathematical error. Was it long division, I hear you ask? Was it multiplication?

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

The member for Fenner will resume his seat. As the member for Fenner well knows, because it has been raised with him previously, he needs to confine his remarks to the bill, in this case his amendment. He knows that well. I am going to pull him up if he continues to do it.

Josh Frydenberg (Kooyong, Liberal Party, Minister for the Environment and Energy) Share this | Link to this | Hansard source

He is a repeat offender.

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

The minister will cease interjecting. I do not need his assistance.

Andrew Leigh (Fenner, Australian Labor Party, Shadow Assistant Treasurer) Share this | Link to this | Hansard source

I thank you for your guidance, Mr Speaker. I do, as the second reading amendment points out, question whether, if the government cannot do something as simple as enacting a bipartisan tax cut, it is really up to running the nation. The question of being able to do simple things is at the heart here.

This is a bill which is belatedly delivering an income tax cut to middle Australia. This is a government which is able to do things on time when it comes to the top one per cent but which gets its homework in late when it comes to middle Australia. It is true in other areas of income tax as well. We are debating here a critical matter of income tax. One of the questions, when it comes to income tax, is the deductions that are applied to that income tax. We now know that the Treasurer and the Prime Minister were rolled in cabinet by the backers of the member for Warringah on their attempt to reform income tax deductions in the form of negative gearing. They took changes to negative gearing—

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

The member for Fenner is now straying again—

Ms Henderson interjecting—

The member for Corangamite will not interject when I am addressing the House. I do not need her assistance or the minister's assistance. The member for Fenner is straying again from the substance of his own amendment. He will not range widely over a number of topics. It is not an open-ended debate. It is not a matter of public importance. It is not a censure motion or a suspension motion. The member will confine himself to his own amendment that he is moving.

Andrew Leigh (Fenner, Australian Labor Party, Shadow Assistant Treasurer) Share this | Link to this | Hansard source

Indeed, Mr Speaker, and I thank you for your guidance. I am focusing in particular on point 3 of my amendment, which goes to the question as to whether, if the government cannot do something as simple as enacting a bipartisan tax cut, it is really up to running the nation. It is a question which requires a focus on not just the areas contained in this bill but also some of the basic errors which have been made by this government—the areas which go well beyond the issues in this bill and, hence, the reference in the second reading amendment.

This is a bill which makes a change that reflects the fact that the tax brackets are not indexed in Australia. In Australia we have a system where for a brief period of rapid inflation during the 1970s tax brackets were indexed. Now, as a result of those tax brackets being fixed, they must be periodically raised. That is why we on this side of the House have supported the increase in that middle-income tax bracket from $80,000 to $87,000.

But if the government had properly sought advice on this one would expect that it would not have been placed in the position where the secretaries of Treasury and Finance said that the tax cut could not be delivered administratively. The secretaries of Treasury and Finance would have been those providing the advice to the government. If it had asked, you would have thought it would have gotten the same answer that the secretaries gave in the Pre-Election Economic and Fiscal Outlook. It makes one think that either it did not ask—it did not seek advice as to whether the tax cut could be delivered administratively—or, more worrying still, it asked, were told it could not happen and went ahead and made those statements. If that is true, then the Prime Minister misled ABC radio listeners to whom he told Australians would receive the benefits of this tax cut.

This is a tax cut which goes to those around the middle-income distribution. Last time I checked, median full-time wages were in the order of $60,000, so this is for people a little above that. But it certainly kicks in considerably lower than the high-income earner levy, which will come off next year.

Labor will not support the tax cut that the government proposes to deliver to high-income earners because we do not believe that it is right to increase inequality at a time in which the label on that tax change has not been delivered as promised. Do not forget: this was a temporary budget repair levy. But under this government we have seen an increase in the deficit and an increase in Australia's debt—an increase of over $100 billion, representing around $5,000 for every person. So, given that, we do not believe it is appropriate to deliver a personal income tax cut to the top one per cent of Australians while low- and middle-income Australians are slugged with cuts under this government.

We have seen bipartisan support this week for omnibus legislation, and that has involved Labor standing up for those at the bottom. As we do so, we also believe it is not appropriate to make tax changes at the top. It is those tax changes at the top which I believe must be contrasted with other changes that are being made.

So, again, Labor supports this bill. But we wish we had been debating this bill some months ago in order that Australians around middle incomes could have enjoyed the benefits of the tax cut right now rather than having to wait until the end of the financial year.

The catch-up payments will not be made immediately, as we understand it. I would be happy to be corrected if the situation for middle-income Australians is better than this. As I understand it, the tax office proposes that the portion of the tax cuts that would have been paid from July to September will be returned to Australians when they lodge their tax return next year. For example, this would mean that somebody who lodges right up until the end of October might find themselves waiting until November or December of 2017 in order to receive the benefits of tax cuts they should have received in July 2016—a delay of some 16 months in the payments of tax cuts. That 16-month payment may not matter very much to the top end of the income distribution, but it certainly matters for middle-income Australians. On this side of the House, we are concerned that middle-income Australians will have to wait an additional 16 months to receive the benefits of a bipartisan tax cut.

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

Is the amendment seconded?

Amanda Rishworth (Kingston, Australian Labor Party, Shadow Parliamentary Secretary for Health) Share this | Link to this | Hansard source

I second the amendment.

Debate adjourned.