Jim Chalmers (Rankin, Australian Labor Party, Shadow Parliamentary Secretary to the Leader of the Opposition) Share this | Link to this | Hansard source

My question is to the Prime Minister. If the deficit levy on high-income earners was necessary when the deficit for the coming year was $2.8 billion, in Joe Hockey's first budget—

Mr Dutton interjecting—

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

The Minister for Immigration and Border Protection is warned. I want the member for Rankin to ask his question without a barrage of interjections so I can hear it. Start again.

Jim Chalmers (Rankin, Australian Labor Party, Shadow Parliamentary Secretary to the Leader of the Opposition) Share this | Link to this | Hansard source

My question is to the Prime Minister. If the deficit levy on high-income earners was necessary when the deficit for the coming year was $2.8 billion, in Joe Hockey's first budget, why isn't it necessary when the deficit for the same year is $29.4 billion, or 10 times bigger, in this budget?

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

I thank the honourable member for his question. When the temporary deficit levy was first proposed, in 2014, honourable members opposite opposed it root and branch. They described it as a 'deceit tax' and said it was a shocking idea. They finally came around and voted for it on the basis that it would expire after three years. And now they are saying that, in this budget, we are abolishing the deficit levy. That is absolutely untrue. The deficit levy had a term of three years, which expires on 30 June this year. So, as a matter of principle, consistency and integrity, the opposition have to recognise that the deficit levy was one they opposed and denounced as a deceit; they then voted for it on the basis that it had a three-year term; and now they want to make it permanent.

The deficit levy raises a little bit over $1 billion a year. It is no substitute for increasing the Medicare levy by half a per cent, which raises, on current numbers, around $4 billion a year. It is not the answer to funding the NDIS, because, simply, there are not enough taxpayers earning over $180,000. Of nine million plus tax filers in Australia, around 700,000 file returns with incomes of $180,000 or more. So the temporary deficit levy, whatever its merits at the time—contested, of course, by the Labor Party—is not the answer to the long-term funding.

I want to make a point about the long-term funding of the National Disability Insurance Scheme, because this is related to the issue of fiscal viability. The Leader of the Opposition tonight will no doubt say that Labor will not proceed with the rest of the Enterprise Tax Plan and claim that that will somehow or other enable them not to increase the Medicare levy. Let us be quite clear about this. Labor has already spent the proceeds of the Enterprise Tax Plan. They have already spent every cent and they were still $16½ billion further in deficit—an important point. The second important point is: does anyone seriously imagine that, in an environment where one country after another is reducing their corporate tax rate, we will be able to have, 10 years from now, a company tax rate at 30 per cent, perhaps double that of the United States? Does the Labor Party seriously want to put every Australian business out of business? The reality is we have to make our tax system competitive. Labor used to understand it— (Time expired)