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

Just before the budget was delivered, the Treasurer held a press conference in his normal style, full of bluff and bravado, and said that all Australians would pay more tax under the Labor Party. He kept saying it. 'You will pay more,' he said. 'You will pay more under Labor.' In fact, Labor is proposing bigger tax cuts than the government for 10 million Australians. That's the fact of the matter that this government perhaps didn't predict and didn't see coming, but it is a fact of life. In this legislation, at the consideration in detail stage, I will be moving amendments which enable the Treasurer and all members opposite, if they choose to, to vote for tax cuts that are bigger than those in the budget, or they can choose to vote against bigger tax cuts for 10 Australians. The choice is theirs, but they will have the opportunity to do so.

The bill introduces a tax cut scheme which is in three tranches and, likewise, I'll deal with the bill sequentially. Firstly, regarding tax relief on 1 July 2018, as I made clear on budget night in the very first post-budget statements that I made on behalf of the Labor Party, we support the 2018 tax cuts. They should be implemented. The government could pass this legislation through this House today and, as soon as the Senate resumes, could pass it through the other place with our full support. The Greens don't support it; that's a matter for them. But the Labor Party, the National Party and the Liberal Party voting together would give you the numbers in both houses. It can be done. But, to do that, the government should split this bill. It should split it in this House, and it should also split it in the Senate and allow the parliament to take a detailed and considered position on each of the three tranches.

As I said, we are also proposing better and bigger tax cuts in 2019. When the Labor Party comes to office, should we win the next election, everyone earning less than $125,000 will receive a bigger tax cut under Labor's plans—for many of those people, the tax cuts are almost double those being proposed by the government. A teacher on $65,000 a year would receive a tax cut of $982 a year under Labor. A couple earning $90,000 and $50,000 respectively would receive a bigger tax cut than that which the government is proposing. We, on this side of the House, are able to do this, as well as commit to bigger surpluses than the government has projected over the forward estimates from the election in the 2018 budget. We are able to do this because of the big, difficult but well-calibrated decisions this side of the House has been prepared to make for several years, enabling us to deliver bigger surpluses as well as bigger, fairer and better tax cuts.

The government says: 'Maybe the Labor Party's tax cuts are bigger, that might be true, but you can't believe that they'll implement them.' Well, we are prepared to have the House vote on it and we will be voting for those tax cuts in this parliament, in this chamber. If the government's so concerned to ensure that they're implemented, make them the law! We're happy to make them the law. That's our position. The government will vote against those tax cuts, I predict. They might surprise me, but I predict they'll vote against those tax cuts—because they don't actually believe in them. They don't believe in better tax cuts for people on low and middle incomes.

Of course, the government is also proposing further tax cuts in 2022 and 2024. So ordinary are the tax cuts that the government is delivering in 2018 that they are determined to change the focus to 2022 and 2024. All knowing, omnipotent, the government—knowing what the financial situation will be like in 2022, knowing what it will be like economically around the world and in Australia in 2024—says this can be afforded. Normally a parliament votes on things which occur during the course of the parliament. The government wants us to vote on the first day after the budget, to just tick and flick very big tax cuts in 2022 and 2024—because they know exactly what they think they can deliver in those years. I wonder what their track record is on consistency when it comes to tax, five or seven years out. Well, it was just last year that the Treasurer stood at the dispatch box and said all Australians earning more than $21,000 should pay more in income tax. We were told we were irresponsible, obstructionist and even un-Australian—because we wouldn't just immediately agree with that. Now, 12 months later, we're told that everything has changed and we don't need that tax rise—we now need tax cuts. And we're expected to believe that these guys know what they can deliver in 2022 and 2024!

Their other big priority, corporate tax cuts, hit a stumble block. But I will give the government due credit. That's their big priority—at least $80 billion worth of corporate tax cuts. That's the big line in the sand for them, their No. 1 issue. Well, it wasn't that long ago that members opposite were proposing an increase in corporate tax. Some members might have forgotten this. They went to the 2013 election proposing to increase the tax on large corporations to pay for the member for Warringah's paid parental leave scheme. That's what they were doing. They told us: 'We know what's right for Australia. We're going to increase corporate tax to pay for the member for Warringah's pet project.' So just five years ago they said their No. 1 priority was increasing corporate tax, and now their No. 1 priority is reducing corporate tax. But we're meant to believe that they know what they'll think in 2024!

Mr Hawke interjecting—

I'll give the member for Mitchell credit. He opposed that corporate tax rise. It probably did his career development no good at that particular point! But it is probably an investment which paid off for him in the longer term. We'll give him that. At least he stood up for that. But he remembers it very well. He remembers that he was bound by the solidarity of the Liberal Party to support an increase in corporate tax. He had to argue for it in the public sphere even though he argued against it privately. Does the honourable member for Mitchell really expect us to believe that he, who argued against the corporate tax rise in 2013, is now for the corporate tax cut and his colleagues will be able to stick to the plan for seven years? This is a government which can't stick to a plan for seven minutes! We had state income taxes—that didn't last a news cycle!

The Prime Minister had an answer to all Australia's problems. He was going to withdraw all Commonwealth funding from public schools—keep it for private schools but withdraw completely all Commonwealth funding for public schools—and give states the power to levy income tax. That was a particularly dumb idea but he dropped it the next day. The Australian people, unsurprisingly, said, 'No, thank you.' That's the consistency. They can't keep a plan from one day to the next but we're meant to believe that they know what they'll do in 2024.

The Australian people know a con job when they see it—particularly as this Treasurer has been so shifty when it comes to matters of costings and the impact on the budget. We've seen it day after day after day in question time. They're pretty simple questions. They're not trick questions. We can do trick questions from time to time, I do confess. Sometimes we'll ask a particularly clever question. These are just straight questions: what's the cost? Some members would remember: 'Tell them the price, son.' Well, tell them the price of the tax cuts. Tell them the price, son, of the tax cuts year by year. Why is it so important to know the cost year by year? The Treasurer says, 'I've told you over four years, I've told you over 10 years. That's all you need to know. Just vote for it.' That's his position: 'Just vote for it. Put the blindfold on. Trust me. Just vote for it.' The reason that the year-on-year data is so important is precisely because the Treasurer has designed these tax cuts in three tranches, so we need to know the impact of each tranche. That's what we're voting on. We, by and large, know the impact of the 2018 tranches. That's pretty clear, by and large, but the comparative impact by the end of the process, when this scheme is fully implemented, of what each tranche has cost the Australian people is not clear. It's not clear at all. We do not know because the Treasurer will not tell us.

I give the Treasurer this: he's not so incompetent that he does not know. He does know the answer; he just won't tell us. That's probably even worse than not knowing. To know the answer and to refuse to reveal it to the parliament, in sustained questioning from this side of the House, shows that they have something to hide. It is particularly disappointing that the Treasurer just says, 'Vote for it. We won't tell you what it costs and, also, we won't tell you the impact.' There used to be good graphs in the budget paper, honourable members will recall. The distributional impact and the impact of government decisions on families at different income levels. It used to be there for all to see: what do the government decisions mean for families at this income and that income? It disappeared. I don't think it was a savings measure. I don't think it was designed to save Treasury resources—

Ed Husic (Chifley, Australian Labor Party, Shadow Minister for the Digital Economy) Share this | Link to this | Hansard source

It was a face-saving measure.

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

A face-saving measure maybe, as the honourable member for Chifley points out—because they didn't like what it said. That was the reason for the withdrawal of those graphs. I don't think they want us to know what the graphs would indicate for the two and three later stages of the government's tax scheme either. The government are really failing the responsibility test because they are asking us to write a cheque today when we do not know whether the funds will be in the account in seven years time to pay for that cheque. They're asking us to vote for a scheme about which they cannot or will not tell us the cost, and they are endangering the sustainability of strong and healthy surpluses as they do so. It's good that the budget is projected to get back to balance in 2019-20 if wages growth comes back to a level we have not seen in this country for a long time and assuming no downturn internationally. That's good, but we need surpluses which are healthy and sustainable. The government, having engaged in the process of trying to avoid attention on the 2018 tax cuts, because they are relatively modest, particularly compared to the Labor Party's, by engaging the 2022 and 2024 tax cuts, are failing the responsibility test and the fairness test. I'll get to the fairness test now.

The government has not been keen to provide information, but where there's a vacuum it shall be filled, and modellers around the country have been filling that vacuum. We've seen that Ben Phillips, a respected modeller from the Australian National University, has estimated that when the government's full plan is in place the highest quintile will receive a 2.2 per cent rise, the middle-income quintile will receive 1.1 per cent and the lowest will receive 0.2 per cent. That's what the ANU modelling indicates. We've also seen NATSEM determine that the government's plan worsens the progressivity of the tax system. That is their conclusion. And of course we had the Grattan Institute find that, when the scheme reaches its maturity—that is, when it is costing, on their calculations, $25 billion—$15 billion of the annual cost will go to the top 20 per cent of income earners. That all makes sense. That's the way the Treasurer has designed it. That's what he meant to do. It's not a mistake, it's not a bug, it's not a kink in the system; it's what he set out to do. But he should own it. He should be honest about it. I'm happy to have a debate with him about it, but instead he refuses to admit that's the case.

So, just as in so many other matters, the government finds that they're being too clever by half. They thought, 'We know what we'll do. We'll have modest tax cuts in 2018. We'll be able to say they're targeted on low- and middle-income earners. The Labor Party won't match them.' In fact, the Labor Party has matched them and exceeded them. We have exceeded them because of our priorities. Our priorities and our values tell us that's the right thing to do—to have bigger tax cuts focused on low- and middle-income earners—because, firstly, they certainly deserve them; and, secondly, these are people that drive the economy through their spending. Low- and middle-income earners, by definition, have to consume a high degree of what they earn to put food on the table, to send kids to school. A tax cut for them will be spent, by and large. That helps drive the economy.

Whatever claim the government had on fiscal responsibility was pretty thin. But, whatever claim they had, they have mortgaged it by refusing to get us to one per cent of GDF surpluses on a realistic and sustainable time frame by writing into the budget now tax cuts in 2022 and 2024 which may or may not be affordable. The revenue may or may not be there to engage sensible, sustainable tax cuts at that time. And their mortgage responsibility is at the exact time that we should be strengthening the budget. As the IMF said:

Decisive action is needed now to strengthen fiscal buffers, taking full advantage of the cyclical upswing in economic activity.

That's the point: there is a global cyclical upswing in activity. It will not last forever. Anybody who thinks it can be built into the budget, baked in to the estimates for the next four or 10 years is wrong.

There are risks in the global economy. Global debt is at record levels, much higher than it was in 2009. We're seeing that reflected in the bond rate and in its impact on the world economy. We don't know what's going happen in the global trade situation. We hope for the best, but the risks are material and the impacts on Australia would be very significant indeed if there was a trade war. And yet the government say, 'Don't worry about that; we know better. We know better than to provision now for sensible tax cuts which can be afforded and to see what can be done down the track in future years as to what could be afforded. And you must take it all; you can't get the tax cuts in 2018 unless you sign on to the tax cuts in 2022 and 2024.' That's what the government's position is. That is an unsustainable position. I say to the government: that is an unsustainable position.

Just as the government said it was all or nothing on corporate tax and they had to give in, so they will have to give in on personal income tax and they will have to split this bill. If they don't, if they actually think that they can stand in the way of personal income tax cuts in 2018 and the Australian people say, 'Yes, we don't want those tax cuts in 2018 because we're holding out for the tax cuts in 2024', they are kidding themselves. I'm going give the government the opportunity to vote for a second reading amendment to split the bill. I think the honourable minister at the table has supported other Labor Party second reading amendments in the past. She can support this one; that wouldn't be a problem.

This is a very sensible amendment which, while not declining to give the bill a second reading, calls on the government to: amend the bill into separate measures which implement personal income tax relief from 1 July 2018 so these measures can be passed by the parliament without delay; introduce new legislation implementing the remainder of the measures in the bill only when further financial information—call us radical, but we want to see the impact on the budget—including year-on-year costs of each step of the government's full seven-year personal income tax scheme is made available to the parliament; and support the opposition's personal income tax plan to deliver bigger, better tax relief to the Australians. 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 calls on the Government to:

(1)amend the bill to separate the measures which implement personal income tax relief from 1 July 2018, so that these measures can be passed by the Parliament without delay;

(2)introduce new legislation implementing the remainder of the measures in the bill only when further financial information, including year-on-year costs of each step of the Government’s full seven-year personal income tax scheme, is made available to the Parliament; and

(3)support the Opposition’s personal income tax plan to deliver bigger, better and fairer tax relief to Australians".

We will then give the government other opportunities when we get to the consideration in detail stage. I flag that I will move amendments to take out the 2022 and 2024 tranches of income tax cuts from this legislation. Bring them back in. Let us have a debate just on those. Let's argue about it. Let's see the data. Let's shine a light upon the government's plans. Let's have a good look at them. I am more than happy for them to be debated, if that's what the government wants. But separate them; don't hold the tax cuts hostage to the 2022 and 2024 tax cuts.

Finally, I will move an amendment to implement Labor's tax plans for 2019. The government talks the talk on lower tax. They keep telling us they're the party of lower tax. They keep telling us they're the party of tax relief for hardworking low- and middle-income Australians. Well, here's an opportunity to vote for it—to vote for better tax cuts for those people who are earning less than $125,000 a year. We'll give the opportunity to the government to vote on those. If they choose to vote against them, their names will be recorded as people who oppose those better, bigger personal income tax cuts for Australians who earn less than $125,000 a year.

These are the amendments that we'll move in the House. In the unlikely and unfortunate event that those amendments aren't carried—if the government doesn't see sense—of course we'll facilitate the passage of this bill through the House to send it to the other place, and the other place will be able, with their different working conditions and different numbers, to pull apart the legislation if they see fit and send it back to the House. If the government isn't able to get the entire package through but can only get the 2018 package through the Senate, we'll be encouraging it to accept the will of the Senate. That's what we'll be doing: encouraging the government to accept the will of the Senate. But we'll facilitate passage of the bill through this House, because I'm a realist about how this vote will end up. We'll send it to the other place and let the other place do its job, and we'll be prosecuting the same case in the other house as we have in this House: better tax cuts, better targeted, and more responsible budgeting for Australia's future, without risking Australia's financial and fiscal stability but delivering real tax relief where it's needed, and delivering it now.

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

Is the amendment seconded?

Matt Thistlethwaite (Kingsford Smith, Australian Labor Party, Shadow Assistant Minister for Treasury) Share this | Link to this | Hansard source

I second the amendment and reserve my right to speak.

Kelly O'Dwyer (Higgins, Liberal Party, Minister for Revenue and Financial Services) Share this | Link to this | Hansard source

The Treasury Laws Amendment (Personal Income Tax Plan) Bill 2018 will deliver lower, fairer and simpler taxes. We in the Liberal-National coalition believe that the government, after guaranteeing the essentials and living within its means, should keep taxes lower, simpler and fairer. We have to remember that this is the money of every Australian. It is not the government's money. Australians have earned it, they have worked hard for it and they know best how to spend it. By providing tax relief to low- and middle-income earners first, we are helping people manage household budget pressures. By protecting against bracket creep, we are providing rewards for work so that people can get ahead, take on some extra overtime or take a promotion to provide for their families, to pursue their aspirations and to keep more of their hard-earned pay. By simplifying and flattening the tax system, we are providing certainty for most working Australians that they will face the same tax rate over their working life.

This is, of course, a significant structural reform. Ninety-four per cent of taxpayers will pay no more than 32½c in tax in 2024-25. This has the impact of knocking out bracket creep, which has been the bane of many a hardworking Australian. Our tax plan not only lowers their tax burden but also will dampen incentives to find ways to avoid tax. The government's seven-year plan is affordable and fiscally responsible, as outlined in the budget, and it will provide certainty to workers. Those opposite talk about certainty. How can we be certain that this seven-year tax plan will ever eventuate? Well, it's very simple: it is one vote here in the House of Representatives and one vote in the Senate, and then that certainty is delivered.

We on this side believe in tax integrity. Labor, unfortunately, believes in higher taxes. Labor is not for tax relief. They are playing politics—punishment politics, pitting one Australian against another in a zero-sum game of class envy, and fighting over the pie rather than growing the pie. Labor is for higher taxes, full stop. Labor is part of the high-tax club. Labor has already announced more than $200 billion worth of taxes in opposition, and they keep coming. We've had the housing tax, the savings tax and the family business tax, and now we have the retirees tax.

Our Personal Income Tax Plan will provide tax relief for low-and middle-income earners. A family with two working parents on the average full-time wage will receive tax relief of more than $1,000 under our plan for 2018-19. Under Labor's plan middle-income earners will be hit by Labor's policies to abolish negative gearing. As the latest 2015-16 tax data shows, around 62 per cent of individuals who have a net rental loss have taxable income of less than $80,000. From the top 10 occupations that negatively gear, teachers were the second-biggest users of negative gearing. Teachers, despite all of the rhetoric from Mr Shorten, are not the big end of town. Mr Shorten wants to permanently increase—

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

The minister needs to refer to members by their correct titles.

Kelly O'Dwyer (Higgins, Liberal Party, Minister for Revenue and Financial Services) Share this | Link to this | Hansard source

The Leader of the Opposition wants to permanently increase the top tax rate to 45 per cent plus the budget repair levy of two per cent plus the Medicare levy of two per cent, which would lock in the top tax rate at 49 per cent. Yes, 49 per cent—almost half. This is one of the highest tax rates in the OECD, putting a nail in the coffin of aspiration, hard work, enterprise and self-reliance.

The Turnbull government is not continuing the temporary budget repair levy, because we have done the hard work to help repair the budget. As announced by the Treasurer in the budget, the budget is returning to surplus. Again, Labor takes the lazy approach, by making what is a temporary levy permanent. Is Labor seriously suggesting that there will be a permanent budget deficit under Labor? Is it because they are part of the high-tax club? Is it because they can't control their spending? We all know that it is all of the above. The Leader of the Opposition and his Labor Party will take more money out of your pocket and use it for their reckless spending. Don't trust what they say; look at what they do. Who could forget the home insulation program under the Rudd-Gillard-Rudd governments or the $900 cheques to dead people? The list goes on. Labor's retiree tax would reach back into your pocket, taking more of your savings while you are building your nest egg for retirement. Their retiree tax will take more of your savings when you move into retirement.

The government's Personal Income Tax Plan will provide a simpler, flatter tax system. It will provide rewards for work and allow you to get ahead. If the tax system was left unchanged it is projected that 37 per cent of taxpayers would face a marginal tax rate of more than 32½ per cent by 2024-25. Labor believes the government has the first claim on people's hard-earned income. By contrast, we know that it is your money. Their plans on taxes—higher taxes—would cost investment, cost jobs, slow productivity growth and stall wages growth.

The government remains committed to our plan for a stronger economy. The Turnbull government will keep backing business to invest and create more jobs. The Turnbull government is guaranteeing the essential services that Australians rely on. The Turnbull government is keeping Australians safe. The Turnbull government is ensuring that the government lives within its means. And, as demonstrated through this bill, the Turnbull government is providing tax relief to encourage and reward working Australians. Lower, fairer, simpler taxes: that's what we believe in and that is what we are delivering. I commend the bill to the House.

Jim Chalmers (Rankin, Australian Labor Party, Shadow Special Minister of State (House)) Share this | Link to this | Hansard source

Thank you very much, Mr Speaker, for the opportunity to speak on these personal income tax changes proposed by the government in the Treasury Laws Amendment (Personal Income Tax Plan) Bill 2018. I think the first point that I would make is that the government can't be especially proud of what is supposed to be the centrepiece of their budget when they spend the short time that they're speaking about these bills devoted almost exclusively to the Labor Party. I mean, that really is a signal and a symbol of how those opposite go about these sorts of things. When the Minister for Revenue and Financial Services comes to the despatch box, it should be a triumphant moment. If they're actually proud of these tax changes they're proposing, it should be a moment of triumph; they should be prepared to speak about the policies and plans in this legislation that we're debating at the moment. Instead, we get the usual rubbish, frankly, about Labor's plan for tax reform. If they were proud of this package of bills, they wouldn't spend so much time talking about this side of the House.

The reason they don't speak about the merits or otherwise of their own legislation is that they know that the Australian people are onto them. The Australian people know that this government is trying to pull a big swiftie on the Australian people by trying to pretend all of a sudden that they've discovered that low- and middle-income earners in this country are under pressure. The Turnbull government, by proposing this quite modest tax relief for low- and middle-income earners, is hoping that that will buy some amnesia amongst the working people of this country. But the working people of this country know better. They know that the modest tax relief in these bills does not make up for penalty rates being cut, private health insurance going up, energy bills soaring while those opposite have their blues in the party room over the future of energy policy, pensions being cut, the energy supplement being cut and money being slashed from schools and hospitals. The Australian people are onto this government. They know that the modest tax relief being committed to in this legislation will not, does not and cannot make up for the chaos, the carnage and the cuts of the last five years and the four budgets which preceded this one.

If those opposite were truly committed to tax relief for low- and middle-income earners, they'd do what the member for McMahon is proposing in his amendment, which is to split the bill. If they genuinely wanted to help people on low and middle incomes in this country, they would split the bill. We on this side of the House have indicated that we are prepared to immediately support tax relief for working people—the 1 July 2018 changes. We have said for two weeks now—I have lost count the number of times I've said it, the member for McMahon has said it, the Leader of the Opposition has said it and everybody on our side has said it—that we are prepared to support those first stages of the tax relief in this legislation. Our message to those opposite in the government is: stop standing in the way of the tax relief that working Australians need and deserve. Stop holding the working people of this country hostage to your cynical political strategy in this parliament and your trickle-down economics.

It beggars belief for most reasonable-thinking people that this government is insisting that working people can't get tax relief in the near term unless we on this side of the House agree to an election—to a tax cut—

Brian Mitchell (Lyons, Australian Labor Party) Share this | Link to this | Hansard source

A what?

Jim Chalmers (Rankin, Australian Labor Party, Shadow Special Minister of State (House)) Share this | Link to this | Hansard source

I'll happily agree to an election, too! I'll happily agree to an election as well, if we want to agree on that right now. I'm happy to fight an election on these tax changes because what the government is proposing and saying, by holding hostage working people in this country, is that only if we in the Labor Party support tax cuts two elections away which overwhelmingly favour the wealthiest people in this country—unless we support that seven years down the track—they're not prepared to give tax relief to working people. I think that calls into question just how genuine those opposite are about the tax cuts that are being proposed here for people on low and middle incomes. That's how absurd this is.

So I wholeheartedly and enthusiastically support the amendment moved by the member for McMahon because if we split the bills we can vote as one in this place and give working Australians the tax relief they need and deserve. We can do that right now if they split the bill. We call on them to do so, and if they won't do it here—obviously it will get through this place—then we will call on them to split the bill in the Senate as well, after the committee process is complete. Because that's how we can agree on some near-term tax relief for people who've been doing it too hard for too long. It's frustrating, but not especially surprising, if we're honest, that those opposite are playing these games with the household budgets of people who work and struggle in this country.

I won't go through the elements of the bill in any detail, except to say, of course, that there are multiple stages of tax changes being proposed. As I said, we support the 1 July changes; we're not wild about the third wave of changes, which come in seven years down the track, after two more elections; and we will consider the second stage of tax cuts. If we are to consider the middle stages of the tax cuts, it's an imperative that the government tell us how much those middle stages cost. We've asked time and time again from this dispatch box. The Treasurer and the Prime Minister have gone to that dispatch box and not been able to answer a simple question, which is: 'What are the itemised costs of the three stages of tax changes that you're proposing in this legislation?' I don't know about others, but I think it's a bit much to ask somebody to buy something when they don't know what the cost of it is. We're being responsible; we're insisting on knowing how much that middle stage costs before we come to a view on it. Again, I think that most reasonable-thinking, objective people would consider that to be fair enough.

One of the reasons we don't like the final stage of the tax changes in this legislation—and true to form, frankly, from those opposite—is that we know it overwhelmingly, when you take the whole package together, favours the wealthiest Australians. That would be true to form, because we have a government which goes to the wall to defend the biggest tax concessions going to those who need them least, and so this is really of a piece with their behaviour so far. Certainly, the central aspects of their budgeting since that horror 2014 budget have been to take money out of schools, hospitals and the pockets of pensioners and people on low and middle incomes and redistribute it in the wrong direction, towards the people who need it least in our community. That's really what this tax package, taken in its entirety, is all about.

If people don't want to take the Labor Party's word for it, that's fine. Three of the most credible institutions in this country—NATSEM, the ANU and the Grattan Institute—have all had a good look at this package of tax proposals and concluded without any doubt that it overwhelmingly favours the wealthiest people in our community. At a time when we've got record net debt, which has doubled since those opposite came to office—we've got gross debt of over half-a-trillion dollars every year for the next 10 years—it's very unfair to prioritise the top end of town with tax relief. It's also unaffordable and unwise when we've got the budget still in not especially good nick despite terrific global conditions. NATSEM, ANU, the Grattan Institute and others have all made that conclusion, and that is our conclusion too.

When you look at the package in its entirety, especially that final stage, it is very unfair to prioritise people who need tax relief the least. As I said, that is unfortunately of a piece with so much of what those opposite have proposed over the last five years of being in government. I think that's why the community does not support the budget, because it is so out of whack and so out of touch with the nation's values and priorities. Those opposite like to pursue this trickle-down agenda, which didn't work in the eighties and won't work in 2018. It doesn't accord with what people want to see from their national government. They want to see investment in hospitals and schools, the things that we truly value as a community. They want to see, when there is tax relief to be provided, people who work and struggle prioritised. That's what the nation wants to see and that is what Labor wants to see as well.

When we've got a budget delivered in the best global conditions for a decade—we've had $40 billion in extra taxes and charges land at the Treasurer's feet—the Australian people, with some justification, cannot work out why it is that with all that extra money rolling through the door we've still got record debt, twice what they inherited from Labor, and we've still got cuts to hospitals, schools, pensions, the energy supplement, family payments and others. The reason why the budget's not in especially good nick despite all that money rolling in the door is that those opposite continue to insist on defending tax concessions for those who need them least—tax cuts for the top end of town, including $80 billion for multinationals and the four big banks. That, again, does not accord with what the nation wants from its federal government.

The budget and these tax proposals in particular fail the fairness test. They also fail the responsibility test. It's as if those opposite didn't pay any attention when they saw the mistakes of the later Howard and Costello years, when there were those big income tax cuts which were built on the back of a temporary spike in revenue and created a structural problem in the budget. We want to make sure that we don't go down that path again. We've seen that movie before. We don't like how it ends. We don't want to see a sequel to that.

To ask the parliament to support big tax cuts for the wealthiest Australians seven years down the track after two more elections strikes me as a terribly irresponsible thing to do. We don't know what condition the budget will be in in seven years. We don't know what condition global and domestic economies will be in in seven years. And there is no rush to come to a conclusion on those changes, especially when we could split the bill up. We could have a vote. Labor and Liberal would vote together for some tax relief for people on low and middle incomes.

And then Labor, of course, propose to do more for 10 million working Australians with our bigger and fairer plan for tax relief, which the Leader of the Opposition announced from this dispatch box two Thursdays ago. We're in a position to offer that bigger and fairer tax relief for working people because we have prioritised them. We've made them our highest priority in our budget, unlike those opposite, who have made the highest priority $17 billion to the big banks, of which the Commonwealth Bank will get the lion's share. That's their priority over there. Their priority over there is people earning over a couple of hundred thousand dollars a year.

On this side of the House, very proudly—and I know that the member for Bendigo is in this camp too—we are here to represent working people. That is the purpose we come here for. Our reason for being is to represent people who work and struggle in this country. That's why our tax relief plan—the bigger, fairer tax cuts for working people—prioritises them over everybody else. Those opposite can't make the same claim. They always come in here to defend the interests of the top end of town at the expense of middle Australia, and that cannot continue.

We've made the room in our budget by saying we wouldn't give the tax cuts to the biggest businesses. We've made the room in the budget by cracking down on some of those tax loopholes which are growing, eating up a bigger proportion of the budget as the years go on. We've taken some political heat for some of the announcements that we've made. Again, the Minister for Revenue and Financial Services spent almost all of her contribution talking about them rather than the positives of her own plan. But we've done that because we wanted to prioritise people who, more than others, need a bit of relief in the household budget. We've taken those difficult decisions, and I think the Australian people are prepared to accept them.

Our tax relief also won't come at the cost of our hospitals and schools—again, another claim that those opposite are unable to make. They've pulled so much money out of our local hospitals and our local schools; TAFE's been hollowed out; big money has been taken out of universities—all to shovel in the direction of the biggest businesses and the wealthiest taxpayers in this country. Again, that is terribly out of whack with the nation's priorities and the nation's values. Unlike those opposite, we are prepared to speak about the positives of our plan to give 10 million workers more tax relief by not giving tax relief to those who need it least.

It's very unfortunate, really, that the government can spend so much money in their budget and still not be prepared to defend it from the dispatch box. They want to talk about Labor. We're happy to talk about our policies and plans because we take our responsibilities as the alternative government very seriously. That means being fairer with the budget and more responsible as well. Our approach to tax, which is to support tax cuts for working Australians over everybody else, is fairer and more responsible. If the government could make a claim like that, they would be more in touch with what the nation expects, wants and deserves from them.

Alex Hawke (Mitchell, Liberal Party, Assistant Minister for Home Affairs) Share this | Link to this | Hansard source

The Turnbull government's seven-year personal income tax plan is going to provide that relief and encourage and reward Australians, starting with low- and middle-income workers. The member for Rankin in his presentation wanted to talk about structural budget deficits. It was him and a Labor government that put us in the position where we had a structural deficit, without doubt. One of the great achievements of the budget that we've just had and of the coalition government is the repair of the budget's finances in a way that enables us to use our revenue to pay our expenditure. Put simply—and we don't talk about this a lot, and sometimes it's hard to communicate this in this place—the Commonwealth borrows millions of dollars every single day to fund services. Under the Labor Party, we had to borrow money every day to fund the ordinary operating costs of the government for that very day. That's the state that the Labor Party, in the time of the Rudd-Gillard-Rudd government, left the budget in. We had to borrow money every day to fund the ordinary expenditure and the ordinary services of the government for that same day.

I think everybody in the community would understand that, whether it's your household budget, your mortgage, your life, your business or your family, having to borrow money to fund your expenditure on a day-to-day basis is unsustainable. It's much harder to fix than it is to destroy. The Labor Party destroyed the budget in a way that means we're borrowing every day to fund ordinary services and ordinary service delivery. It is a completely unsustainable model. Do they acknowledge it? Do they say thank you? No. The member for Rankin says that the Howard government was just some accidental cheap trick of a commodity boom and—here we are—we're having it again. He is in complete ignorance of the fact that the reality of the revenue increase that we're having in Australia right now that enables us to put the budget back on a firm footing is because we have one million new taxpayers. That's because, under the coalition government, over a million new jobs have been created in five years. That is the biggest single factor in the increase in the federal government's revenues, and it's because of the policies of this government.

Lowering the company tax rate has been opposed by the Labor Party up hill and down dale. They've opposed the company tax cuts for small Australian businesses, trying to defend the notion that if you've got above $2 million of turnover, if you get $2,000,001 of turnover—not profit—before you've turned a cent of profit for your business, you're somehow a big business. It is complete ignorance of the reality of doing business. They've opposed small Australian family businesses getting a company tax cut, when we know those company tax cuts for small Australian family businesses have meant they've been able to generate jobs. They've been able to increase their part-time and full-time workforces, which has meant one million new jobs in Australia. This, not a commodity boom, has meant an increase in government revenue.

The member for Rankin and the shadow Treasurer are deliberately misleading the House when they say this is all a big commodity surge again. Yes, there has been some modest increase in commodity prices, which has meant some increased revenue. But the bulk of the revenue increases are because more people are in work. Also, we have fewer people on welfare. There has been a substantial drop in welfare. We don't hear a lot of people from the Labor Party saying 'Hear, hear!' to that these days. In fact, they get upset. But the welfare bill is down about $5 billion. For the first time in years the number of people on the disability support pension is falling. The number is actually reducing. It's this government's approach to spending and budgeting that fixes structural deficit. We've done this work in just five short years—in budgetary terms, five years is a relatively short period—to fix and correct the failure of the six-year term where you really had a loose spending approach. Never mind that the member for Rankin was the architect of the four years of budget surpluses that were announced by the former Treasurer, the member for Lilley, which never eventuated. No surplus has been delivered by the Australian Labor Party since 1989.

So what are we to make of the claims today in the debate on this bill that the Labor Party will have bigger tax cuts than us or that somehow they'll do better at delivering tax cuts and budgetary management. I think most people will know that that is a cheap trick from the Labor Party when they bring this into the House. When the Opposition Leader stands up—and you can't trust what this person says to the public—and says, 'We'll do bigger tax cuts than they will,' I don't think it's believable. It's completely unbelievable, if you ask me. The reality is that, while we're resetting the government's finances, getting the budget under control and charting a very credible path to surplus a year earlier than predicted and expected—and we're able to achieve that surplus in a real way—the Labor Party has suddenly started to talk about debt and deficit and tax cuts. But they are not tax cuts for Australian small and medium businesses. In fact, it is still their policy to unwind the tax cuts that the government has already delivered for those Australian small and medium family businesses. They're not staking their whole moral and political fibre on the big end of town; they are attempting to unwind tax reductions to make our businesses internationally competitive, flying in the face of all of the evidence, the data, the productivity increases, the labour hire increases and all of the benefits that have flown through to our economy. They want to unwind and tax small and medium Australian businesses again at a higher rate.

And then we're supposed to believe that on personal income tax they'll deliver a bigger income tax cut. It doesn't add up. It doesn't add up with the notion that they're going to introduce—and we know now but they don't mention the cumulative effect of their tax increases; we know it's $200 billion. That is $200 billion sucked out of the economy, out of people's pockets, out of companies and corporations, out of the investment market in properties. It's $200 billion that they'll be sucking in. That's $200 billion not to be spent in the economy. And then somehow we're to believe that they'll deliver a bigger tax cut than us and that somehow people will be better off when they're sucking in $200 billion of tax. We know that, if you're a retiree, you've worked your whole life, you've funded your own retirement and you've invested and set up what for most is a modest lifestyle—you've worked hard and you've put it aside for your whole life—under the Labor Party you are enemy No. 1 of the state.

You, because you're in the retirement phase, the pension phase, at the end of your life, when, really, government ought to leave you alone and ought to say, say, 'Look, you have worked hard. You do have a bit more than some people, but it's a lifetime of accumulation'—it's not young people versus old people and it's not old people versus young people. Old people have had a lifetime of work, a lifetime of the ability to put aside money and buy property, a lifetime of getting ready for retirement. That does not mean that, just because they have more now, they are against young people who are starting out in life, which we sometimes hear from the Labor Party.

Yes, we have to do more to make it easier for young people to get ahead. Yes, we have to do more to make sure that you have a job, you can buy a house and you can get into the market. But isn't old people versus young people. It isn't retirees versus university graduates. That is the dynamic we hear from the Labor Party more often than not. When we have from the Labor Party the greedy tax grab which borders on theft from people who've earnt their way in life, I think you know that the hit list of 'anyone who has funded their own retirement' will be a reality if Labor comes to government. In these bills we see the makings of this. Self-funded retirees won't benefit from income tax cuts from the Labor Party. They will be materially worse off.

And, to the Labor Party's great shame, they do not understand the effect this will have on government. We want people to fund their own retirement. We want people to be off the state as long as possible, because the biggest single item of expenditure in the Commonwealth government is pensions. It is, of course, in the welfare budget and it is pensions, and we have to pay it. Because of the generational arrangements, we have to make sure that people are provided for in their old age, and we do. But, if we don't look at the future with compulsory superannuation, with the nexus of work and the nexus of ageing of our society, and if we say, 'Well, we're going to strip as much as possible off people who've already put aside money to retire on their own bat', it's not the Labor Party that's going to suffer; it's all of the taxpayer base that will pay for people returning to the part-pension and people returning to the pension. So it is completely counterproductive for the Labor Party to rip $200 billion out of our economy, including the retirees tax, which will mean retirees will be worse off and quicker to get back on the government part pension or pension. And, of course, the government's budget will suffer again. It is completely ill thought out from the Labor Party and a great overreach. But we know what their No. 1 target is: it is self-funded retirees. It is older people. It is people who have put aside money. It's people who have worked hard. We stand up for them in the coalition.

These are not wealthy people. These are not people that you would describe as the big end of town or fat cats, and the narrative that we hear from the Leader of the Opposition constantly—the Bernie Sanders rhetoric, the socialist rhetoric—that people who have worked their whole life, put aside and funded their own retirement are somehow rich, greedy fat cats and the big end of town is a complete nonsense of the construct of Australian society. The reality is that most people in Australia live modestly. Most people in Australia work hard and do their best. Under the government's tax plans, when we finish the Personal Income Tax Plan of the Turnbull government that the Treasurer, Scott Morrison, announced on budget night, it will mean that 94 per cent of all taxpayers in Australia will face a marginal tax rate of 32.5c or less. Talk about an egalitarian society. You don't have to look too far to understand that 94 per cent of people are not rich fat cats in this country. I defy the Labor Party to look into it that 94 per cent and tell people who are among it that they are rich, that they are fat cats, that they are greedy and that they are people to be targeted by government.

We have one of the fairest and most egalitarian countries in human history. The Turnbull government understands that 94 per cent of people in this country work hard. They don't deserve to be the target of government tax policy. They don't deserve to have their income stripped away from them. It has been a bipartisan consensus for a long time in Australia that we tax income too heavily. We are one of the nations in the world that have the highest reliance on income tax for their tax bases. We have always talked about it. We've talked about getting the reliance off people's personal income and onto goods and services taxes, broad based taxes and indirect taxes—not direct taxes through income. But the Labor Party has broken with that consensus because they think that, if you are in that 94 per cent that we think shouldn't be paying more than 32c in the dollar, you're somehow rich or a fat cat. I don't agree. The coalition doesn't agree. We understand Australia. We understand middle Australia, who work hard to get ahead. There is no better incentive and no better signal that you could send to Australians than, 'Ninety-four per cent of taxpayers won't pay more than 32.5c in the dollar.' Then those people who work harder, who get ahead further and who are fortunate enough to get a lot of wealth in their lives will pay a substantial amount of their income in tax. But the broad middle of this country—and it is a 94 per cent broad middle; it is hardworking, ordinary people getting ahead—will pay no more than 32.5c in the dollar. But this, Labor says, is unfair.

The modern Labor Party are completely out of touch with the worker of today who works, who gets ahead, who pays taxes and who funds the welfare. We now know that about half of households and individuals receive a form of government payment. The tax base is diminishing. We cannot ask that tax base for more and more of their individual hard work and their day-to-day income and suggest that, somehow, at the same time they are rich fat cats who need to be plundered more by the government. It's a fundamental lack of understanding in 2018 of the way our society is built and what really happens in the real economy. Labor do not understand small business. They do not understand medium Australian family business. They don't understand that most people in Australia work hard to get ahead and earn their way. They already pay a lot of tax. Whether it's income tax or any other sorts of taxes, state and federal, tax is hugely prevalent in all of our lives.

It's the coalition that you can trust to reduce the tax burden on income. We're going to make sure, through our Personal Income Tax Plan, that we are credibly reducing income tax over the next decade so that 94 per cent of Australians will pay no more than 32.5c in the dollar. We will, at the same time, relieve the burden on small and medium business and provide for companies in Australia to be competitive internationally at the higher level. This plan will occur at the same time as restructuring our budget, to make sure we're no longer borrowing money every day to fund the daily expenditure of government. It is the coalition you can trust on economic management. It's the coalition you can trust on budgeting and finances. It's the coalition you can trust on tax. It has never been the Labor Party and it never will be.

Adam Bandt (Melbourne, Australian Greens) Share this | Link to this | Hansard source

'Tax' is not a dirty word. Tax is the price that we pay for a civilised society. So, when legislation comes before this place to deal with a budget and to deal with tax, the No. 1 question that all of us should be asking is: is this going to help make Australia a more equal place? Is this going to defend egalitarianism in Australia? When they say 'tax cuts', I hear 'hospital cuts'. Tax cuts are school cuts. Tax cuts mean less money in the government purse to lift the level of Newstart, which is currently condemning people to poverty.

We have an obligation to defend egalitarianism in this country and to make sure that Australia remains a place where, no matter how much money you've got in your pocket, if you get sick you can go to the hospital or the doctor and you won't be stung with a big Medicare gap fee between what Medicare pays and what the doctor charges. We in this place have an obligation to make sure that our public schools are world standard and that, when you send your kid to a public school, you're not stung with so-called voluntary fees that add up to hundreds of dollars and, in some cases, thousands of dollars that increasingly make a mockery of the idea that we have free universal education in this country. We have an obligation to say to people who are dealing with rising unemployment and underemployment—we have a crisis in this country where nearly one in three young people either doesn't have a job or doesn't have the hours of work that they want—that, while they are looking for a job, we will support them with Newstart at a level that is not so far below the poverty line that it becomes life-crushing and a barrier to even finding work.

We have an obligation to say the priority should be services, not tax cuts. The Greens would rather see a budget that focuses on services, not tax cuts. Instead it seems that this budget and the next election are very quickly becoming about one thing: it's turning into a tax cut arms race. We have a neoliberal macho 'mine's bigger than yours' tax cut contest going on at the moment, which is nothing short of a bribe-fest. For many people it will mean getting maybe $10 a week in their pocket. But that's going to be eaten up very quickly because we're not putting enough money into Medicare, and the cost of going to the doctor is going up and up. Or it's going to be eaten up quickly because your power bills go up because we no longer regulate energy prices in this country. When you ask people whether they would prefer to have a tax cut that gives them a few dollars in their pocket that will disappear almost as soon as it hits or greater investment in services like public schools and our public hospitals and looking after people who fall through the cracks, most would say they would prefer that the money be spent making Australia a more equal place than to have a tax cut that is going to disappear the moment it hits their pocket.

Most people—but not the government—say they want to look after low-income earners. There is a very straightforward way of doing that. Let's lift Newstart and youth allowance so that people aren't stuck in a poverty trap. Let's lift the minimum wage so that we don't grow a class of working poor in this country. It's at the stage now where you can be a full-time worker on a minimum wage and be below the poverty line. We are becoming a US-style society where even a full-time job is no longer a guarantee of security and no longer a guarantee that you won't be in poverty. That's where we're heading as a society. If we wanted to look after low-income earners we'd lift the minimum wage as well as lifting Newstart.

One of the best ways of making sure low-income earners are looked after is by making health care, education and all the other social services that people rely on genuinely free and available to them—no extra little out-of-pocket costs or voluntary costs or gap fees to pay. Make these services universally available. The best way to do that is through publicly funded health care, publicly funded schools and a universal system. That's how you get better bang for your buck and that's how you can ensure fairness.

It comes as no surprise that this government, which takes its riding instructions from big business and from the top end of town, marches in here and says: 'Here in this bill we want to end the progressive taxation system in Australia once and for all. We want to get to a stage where someone who is earning less than the minimum wage pays the same tax rate as a CEO on $200,000.' That's what this bill will do. This bill will say, 'By the time that phase 3 of the tax cuts kicks in, someone who's earning the minimum wage, or even less than the minimum wage, gets hit with the same tax rate as someone who's on $200,000.' We have a tradition in this country that says the more you earn the higher your tax rate is, because you can afford to give a bit more, because that helps make Australia more equal. That is under direct challenge from this government.

The fact that this bill would give a $7,000 tax benefit to a millionaire tells you everything that you need to know about this bill. This bill is about delivering for the top end. If you want to know why the cost of going to the doctor keeps going up or those so-called voluntary school fees keep going up, part of the reason is that the Liberal government wants to give a $7,000 tax break to a millionaire. That's ultimately why the government is hitting the poor: so that it can hand that money over to the rich. That's why the Greens have said consistently: 'We will not engage in this move that will increase inequality in society. We will not support the government in this endeavour. We want services over tax cuts, and we will not support you in this move.'

But it hasn't taken all that long, after the government came out, fired the starting gun and started talking about tax cuts, for the opposition to be cowed into submission and to join them in this tax cuts arms race. One of the most distressing things is that straight out of the blocks the opposition said, 'We'll wave through phase 1 of this.'

Mr Brian Mitchell interjecting—

I hear an interjection saying this is about low-income earners. I don't know what definition you're using, but I find it hard to believe that someone on $110,000 or $120,000 counts as a low-income earner. That's what the opposition has said it's prepared to wave through straightaway: 'Let's take money that could be going to schools and hospitals and use it to help out people on $110,000 or $120,000.' That's not a good use of money. If the opposition were serious about looking after low-income earners, as I've said, the best way to do it is to use the money that they want to give to people on $110,000 or $120,000 and instead put that into reducing the cost of going to see the doctor or any fees that you might face if you end up in hospital, or helping lift people who are on Newstart. That would be a way of making Australia more equal.

But it gets worse because, although they came straight out of the blocks and said that, they then said that today—potentially the vote comes on today—they're also now open to the option of waving through phase 2 of the government's tax cuts. For those who don't know what that means or what that would involve, let us be absolutely clear: we are talking about tax cuts for MPs to the extent of $2,000 a year. We are talking about tax cuts for people who are CEOs and tax cuts for millionaires, because by changing the tax rates and waving through phase 2 you're giving $2,000 to everyone who earns, like us, $200,000 and over.

That is not what an opposition should be doing. The Greens will stand up to this government and say, 'We are not having a bar of it, because you, the government, are threatening the very foundations of egalitarianism in this country.' But it would be nice to have a bit of help from the opposition. The clue's in the name. It's in your job title: oppose. When the government stands up and says, 'We want to give tax cuts to people who are on $200,000,' maybe it's a good idea to say, 'No, there are better ways of spending the money.'

I don't believe that we can sit here in good conscience and vote for a tax cut for MPs and people who earn more than us at the same time as the cost of going to the doctor keeps going up or the cost of sending your kids to school keeps going up or while there are people living in poverty even when they're working full time. That would be a shame. That would be a stain on everyone who votes for this bill today. They are prepared to wave through a tax cut for people on $200,000, either here or in the other place, while we have people who are living below the poverty line, even while they're working full time—people who can't afford to put a roof over their head.

What is at stake here is the principle of the welfare state as we know it. This is about saying, 'We do not want to go down the US road of dog eat dog and everyone being left by themselves, where you can work a full-time job or perhaps even work two or three jobs and still find yourself without enough money to make ends meet. We don't want to become a US style society where, if you get sick, they check your credit card before they check your Medicare card. We do not want to become a US style society where the quality of the education you get depends largely on how much money you've got.' To ensure that Australia remains egalitarian and ensure that we reduce inequality at a time when inequality is at a 70-year high, we are going to need to stand up to the powerful. We are going to need to stand up to those who are able to use lawyers to minimise their tax. We're going to need to stand up to the big corporations, but we're especially going to need to say, 'Progressive taxation must remain a foundation of the Australian tax system.' And we must say with a crystal clear voice, 'In this parliament, we want services over tax cuts.' That means voting against this bill and it means coming clean about what everyone is going to do on phase 2 and phase 3.

We could go to an election very soon, and I sincerely hope that this rotten government are turfed out. But what we've got to be clear about is what we're going to replace them with. Are we going to replace this rotten government with another mob who also want to give tax cuts to people on $200,000 and also want to give tax cuts to millionaires? Now is the time to stand up to this government. Instead of joining in a tax-cut arms race, say proudly, 'No. In Australia we value the welfare state, and social democracy means that sometimes it is better not to have a tax cut and, instead, put that money into services.' Every time that we join in the race and say that we want to have tax cuts for people who are earning over $200,000, we eat away at the basis of the welfare state.

I won't be supporting this bill. I want to see services, not tax cuts. Let's change the debate and get back to a basic principle: tax is not a dirty word. The question is: what do we spend our tax on? And, if we can spend our tax on universal schools, health care and making sure that people are not out of pocket when they send their kids to schools or when they go to the GP, the Australian people will thank us for it. It's a much better use of money than putting $10 in people's pockets, only for them to find it disappears the moment that it is put there.

Ted O'Brien (Fairfax, Liberal Party) Share this | Link to this | Hansard source

If the member for Melbourne were in any way economically literate, I would genuinely pay him the courtesy of a response, but what we've just heard over the last 10 or 15 minutes is typical pixie Greens, bottom-of-the-garden stuff with absolutely no understanding of how the economy works. I don't think there's a person in this House, including the Greens and my dear friends who are trying to interject on the other side in the Labor Party, who disagrees on the importance of vital services, whether it be health services, education services or services of welfare. Now, that might be the endgame, but there is a means to the ends, and the means to those ends is the economy—a strong economy. Without a strong economy you do not have the means by which you can provide vital services to the Australian community—a point the Greens fail to understand time and time again.

Also the Australian Labor Party have shown yet again, as they have done for over 50 years, that they are utterly incapable of managing Australia's national economy.

Mr Brian Mitchell interjecting—

They interject, saying it's only been 25 years that they've been clueless. Actually, I disagree. I think it's a full 50 years, not just 25. Labor, without exception, across the three opportunities it has had to govern in those 50 years, has shown that it cannot successfully balance spending against income. With Labor, spending always has and always will win, and that means the losers always have been and always will be Australia and Australians in the short term, the medium term and the long term because it always takes so long to fix Labor's mess.

The only reason Gough Whitlam, the first of the five great Labor wreckers—if you count Kevin Rudd twice, that is—did not leave a deficit at the time of his departure is that he was gone before the impact of his reckless spending could show in the budget papers. What Whitlam left was a time bomb. In just two years and 11 months, he quadrupled outlays on health and education. In his 1974 budget alone, spending across the board rose by a staggering 46.9 per cent, by almost half in a single year on top of a 20 per cent increase in the 1973 budget.

The second Labor government of the postwar period, the Hawke-Keating combination, was even more disastrous from the perspective of debt. The net debt Keating left to the Australian taxpayers and to the incoming Howard government in 1996 was $96 billion. In today's money, that is $160 billion.

Then, of course, after the Howard government had paid back Keating's debt and returned Australia to a surplus, we had the mother of all Labor governments of the past half century: the Rudd-Gillard-Rudd disaster. The scale of the disaster wreaked on this country and its citizens in that period is obscene. It's record-breaking. It was worse than Whitlam and certainly worse than Keating. Between 2008-09 and 2012-13 Labor delivered budget deficits adding up to $191 billion, although, according to the member for Lilley, at some stage of the budget cycle each of those budgets was projected to be in surplus. The scale of Labor's mismanagement in those years is staggering, and all those complicit in the catastrophe should hang their heads in shame, with today's Leader of the Opposition front and centre among them.

Border protection costs were out of control, being $11 million out of whack, because Labor wouldn't stop the boats and detention centres were flooded with 50,000 illegal arrivals, leaving an appalling legacy of 1,200 people drowned at sea and thousands of children in detention. When it was all over, Treasury told the incoming Abbott coalition government in 2013 that, based in large part on committed outlays embedded by the previous Gillard budget, the debt would balloon to almost $700 billion—$667 billion over a decade—unless it was addressed.

Since 2013 the coalition has been charged with cleaning up Labor's third great mess. This bill, reflecting a cornerstone of the 2018 budget, is part of that ongoing and disciplined process. The fact that it contains affordable income tax relief for low- to middle-income earners in the first instance, extending through the tax scales over time, reflects the advances that have already been made under this coalition. Job creation is now at its highest level in our history, and confidence is returning. Over 400,000 jobs were created last year. That's over 1,100 new jobs every single day.

This bill, offering immediate and long-term carefully calibrated tax relief for low- and middle-income earners, will provide an annual tax benefit of up to $530 to 10 million Australian workers next year. In my region of the Sunshine Coast alone, over 126,000 low- and middle-income earners are set to receive income tax relief next financial year thanks to this bill. The threshold of the 32½ per cent tax bracket will also go up on 1 July, from $87,000 to $90,000, providing up to $135 a year for around 3 million taxpayers. That move extends the benefit for people in this bracket that was contained in the 2016-17 budget, which increased the threshold from the then $80,000 to the current $87,000. The next step, effective from 1 July 2022, is to see that same threshold go to $120,000, to benefit around 3.9 million taxpayers by as much as $1,350 per annum. The final step in this plan to make the income tax system simpler, lower and fairer comes when, from July 2024, the 32½ per cent threshold is extended from $120,000 to $200,000, with the 37 per cent rate abolished entirely. These reforms will largely take bracket creep out of our tax system while at the same time providing a meaningful mechanism to lift productivity, by curtailing structural disincentives to hard work and enterprise. Now, that, Deputy Speaker, is major reform.

Needless to say, Labor, of course, is baulking. Labor like the tax cuts at the lower end of the scale, but, in the world of neo-Marxist class envy that mainstream Labor have so clearly and completely regressed to under mounting pressure from the former speaker of the Greens, the member for Melbourne; the unions, of course—let's not forget the unions—and their own increasingly resurgent socialist left, they reject the rest of the package. People on $80,000-plus are clearly bourgeois to the extreme left, which now totally dominates the agenda of the members opposite—and they're proud of it. The bourgeois should either be paying way more tax or tossed on the cart and rattled off to the guillotine, you would think.

The fact is that the very people that the members opposite regard as undeserving members of the bourgeois—excluding, of course, all the inner-city yuppies on six-figure salaries that constitute today's latte left—are indeed paying a very significant portion of income tax, and will continue to do so under the coalition plan. In 2015-16, the top one per cent of taxpayers paid around 17 per cent of the $186 billion raised through personal income tax. The top 10 per cent, which would include much of the Green-Labor left, actually paid 45 per cent of that $186 billion. The detail of Labor's alternative income tax plan is, needless to say, somewhat murky, and that's the way they like it—keep it secret and keep it murky—and I suggest, Deputy Speaker, that's how Labor will keep it all the way up until the next election.

We do know that Labor's plan will involve massive tax increases approaching $220 billion—and growing. That's growing whether it's in plain sight of the electorate or on the sly. And we do know from the of the oft-repeated but sparsely detailed undertakings from the opposition that there will be increased spending basically across the board. Spending alone for its own sake seems to work like a tonic on the Labor Party. It seems to perk them up as it does in the House now. Labor loves to spend. It's an addiction, and these guys are fully hooked. Where the dollars go and what they actually achieve with that spend—that's back-of-the-drink-coaster stuff, and to them it matters not.

The choice for the Australian people between this budget, which details the Turnbull government's plan for a strong economy, and the alternative from Labor has never been more stark. Ultimately, it's about trust and it's about what sort of country we want to have, what sort of country Australia will be. Labor has very clearly and in ways that are troubling to a majority of Australians drifted enormously to the left. Labor's relentless leftward slide has been driven in large measure by the emergence of the Greens as the 21st-century hipster equivalent of the old Labor comrades of years ago, and recently by a resurgence of the militant Left within the Labor Party that seeks to out-Green the Greens, as absurd as that notion might be.

Opposition members interjecting—

Of course, the members opposite complain because I haven't given due credit to the unions, and indeed they're right. Those left-wing unions are, indeed, the principal drivers. Driven perhaps by their memories of being so tricked and so sidelined during the Hawke-Keating era and totally ignored during the Kevin Rudd prime ministership, now they want their revenge on the right of their own party and on the Australian public. And such is the authority that the unions now wield across the machinery of the Labor Party that the parliamentary leadership has also meekly fallen into line. It is hard to know whether the current opposition leader actually believes the neo-Marxist class warfare claptrap, the rhetoric that has become his stock and trade, or whether, just like Julia Gillard before him, he is simply genuflecting in order to keep his job while doing all manner of deals on the side.

There are some things that even the Leader of the Opposition understands will take him so far to the left that he is unelectable unless he can do some of those shady deals ahead of Labor's national conference in July. More than anything, he knows that he cannot afford to allow the boats to start up. And I believe this is the reason, in order to maintain some semblance of immigration policy, that they are giving everything away to the far Left when it comes to the economy. It is why the Labor Party is refusing to support the full measures in this bill that is put to this House that will do what we always do on this side: strengthen the Australian economy.

Matt Keogh (Burt, Australian Labor Party) Share this | Link to this | Hansard source

We've already heard in this debate particularly from the member for Melbourne, who has demonstrated why you can never trust the Greens on the economy or, in fact, to do anything really for the benefit of ordinary Australians. But then we heard from the member for Fairfax, who was railing against neo-Marxism when the irony is that the main proponent of Marxist ideology in this parliament sits behind him. The member for Warringah is proposing the nationalisation of the means of production, wanting the government to buy a coal-fired power station that is actually going to close. Not only does he want to own the asset; he wants to own assets that will be worthless. And the member for Fairfax can't even take it. He's walked out of the chamber because he can't accept that the only proponents of Marxism in this house are actually on that side of the chamber. The hypocrisy that we have coming out of here is amazing.

Rob Mitchell (McEwen, Australian Labor Party) Share this | Link to this | Hansard source

The debate is interrupted in accordance with standing order 43. The debate will be resumed at a later hour.