Joanne Ryan (Lalor, Australian Labor Party) Share this | Link to this | Hansard source

My question is to the Prime Minister. How is it fair that in this budget an early childhood teacher in Werribee, in my electorate, who is earning $60,000 a year gets a $300 tax increase while a millionaire gets a $16,400 tax cut?

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

I thank the honourable member for her question. The honourable member will be well aware that what her party is proposing, what her leader is proposing, is going to provide an effective marginal tax rate for people on middle incomes—someone who earns $1 more than $87,000; this is not millionaires—such that they will have a 43,539.5 per cent effective marginal tax rate. Basically, what Labor is proposing to do—and the honourable member should reflect on this—is provide a massive disincentive for people to do an hour's extra work. They could find themselves, by force of circumstance—no choice of their own—earning $1 more and losing all of that and hundreds of dollars more in tax. That is what the Labor Party is doing. So, they can go on about their millionaires as much as they like. The reality is that Labor is punishing middle-income earners, middle-income Australians—the very Australians we are protecting and did protect with the tax cut delivered in last year's budget.

I had reason today to read the speech of the Leader of the Opposition to CEDA. There are some very familiar lines in it. He says: 'Our challenge is, what is the luck we make ourselves? How do we benefit from the Asian century? How do we make sure we do not fall behind, to stay at the front of the pack?' That is a good question—a very good question. But this is what his answer is: uncompetitive tax rates, increasing the tax on Australian companies, making Australian companies pay more tax than all the other countries benefiting from the Asian century. What he wants to do, at the same time as he poses these rhetorical questions, is provide answers that guarantee that Australia will not only not stay at the front of the pack but fall right off the back of it.

That is the problem with Labor: they do not have a policy for jobs, they do not have a policy for investment, they do not have a policy for productivity. And if you do not have a policy that supports investment then you are letting down Australians today and for generations to come. Just as they have heedlessly imposed a massive disincentive for people on middle incomes to do a bit more work, so, too—for pure politics and the talk about millionaires and the politics of envy—they are putting a handbrake on growth and a handbrake on jobs.