Tanya Plibersek (Sydney, Australian Labor Party, Deputy Leader of the Opposition) Share this | Link to this | Hansard source

My question is to the Prime Minister. I refer to the Prime Minister scrapping the deficit levy in this year's budget, and his support for the decision to cut penalty rates. Why is it that, under this Prime Minister, millionaires get a tax cut of more than $16,000, big business gets a tax cut of about $50 billion and workers get a pay cut?

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

By referring to the deficit levy, I assume the honourable member is referring to the two per cent surcharge on the top marginal rate introduced in the 2014 budget which honourable members opposite described as a 'deceit tax' and pledged to oppose to the letter. They condemned it as a broken promise. Is that the one she is referring to? I think it might be. Honourable members opposite will know very well that the deficit levy was imposed for a term of three years. It expires at the end of this financial year of its own force. This was a surcharge which they condemned as an act of deceit and they denounced it from one end of this place to another.

The reality is this: Australia is a highly taxed country. The member for Fenner would agree with this, I am sure. Our personal income tax rates are high. Our top marginal rate is high compared to other comparable developed economies. In addition to that, the threshold at which it cuts in, at about 2.2 times average weekly earnings, is very low compared to the United Kingdom, New Zealand or indeed the United States—and many other countries as well. So Australians are paying high taxes already. What we need to do is ensure that Australians have the incentive to work and invest, and that is what we have done—we have reduced taxes for half a million middle-income Australians in last year's budget, and we are reducing tax for businesses, starting with small and medium businesses, because we know, as Labor once did, that if you reduce tax on companies the beneficiaries are workers through more jobs and higher wages.

Opposition Members:

Opposition members interjecting—

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

The honourable member denounces that—well he may; this was what the Labor Party had in its budget papers only a few years ago. That was the rationale the Leader of the Opposition had only a few years ago. Consistently the Labor Party used to know the commonsense proposition: if you want more of something, reduce the tax on it; if you want more investment, increase the return on investment; if you want less investment, do what Labor wants to do and increase the tax on it—less investment, less jobs, less economic growth, less opportunity. That is what we are about fixing—taxes should be as low as can be afforded, consistent with meeting our obligations. Why? Because we want more investment, more jobs, more opportunities for Australian workers, Australian families, to get ahead. On that note, I ask that further questions be placed on the Notice Paper.