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

I seek leave to move amendments (1) to (7) and (12) to (23) as circulated in my name together:

Leave granted.

The amendments that I just moved will effectively split this bill. Those elements that start on 1 July this year would remain and those elements that start on 1 July 2022 and 1 July 2024 would be removed. It is, frankly, good governance to allow both houses of parliament, and this House in particular, to vote on each tranche on its own merits. The Treasurer has said that this is a take-it-or-leave-it offer, an all or nothing proposition. It's not. It doesn't have to be. The Treasurer said they're intrinsically linked. They are not. They are quite separate tranches of tax cuts. The Labor Party has made it very clear that we support the government's efforts to have tax cuts on 1 July 2018. That's why we just sat with the government, to support those tax cuts. We also sat with the government to facilitate this amendment to allow us to split out the 2022 and 2024 tax cuts, as any responsible opposition would do, because we want to analyse the proposals. The Treasurer just released new figures on the different tranches. That's good. It would have been better if it had happened earlier. To do it in the summing-up speech of the legislation is a rather novel approach, a rather odd way, an odd order, of doing things—providing the information to the House at the end, not the beginning, of the debate. But, anyway, that's the way the Treasurer's chosen to do it.

The Treasurer and the Prime Minister have been unable and unwilling in question time after question time to answer the Labor Party's questions about the costs of tranches 2 and 3, so it's only appropriate that we separate this bill and vote on the things that we all agree on—at least the government and the opposition agree on. The honourable members on the crossbench do not—that is their right—but the government and the opposition do agree on the need for the tax cuts for low- and middle-income earners to come into force in 2018. Indeed, we think we should go further, but that's a subject for the second amendment, which I'll be moving later in this debate. It should not matter to the government that we split the bill, because we are very clear in our support for the 2018 tax cuts. But we want to carefully deliberate on the other tranches.

I would be surprised to hear the government mount the argument that it is urgent for the 2022 and 2024 tax cuts to be voted on, because it is 2018. We can argue at the edges about what's urgent and what's not urgent, but something that's happening in 2024 is not urgent to vote on in the House in 2018. What is appropriate is for the House to take due consideration, for the Senate to have an inquiry and for the government to release much more data on the impacts of the costs, particularly as Treasury does not know what the financial circumstances will be in 2024. It doesn't know what the fiscal environment will be. I don't know. Mr Deputy Speaker Andrews, with all due respect to your good self, you don't know. No economists knows. We can all make predictions, forecasts and best guesses, but none of us know what the economy will be like in 2024, whether these tax cuts are affordable or whether indeed something larger might be affordable. Something larger might be affordable or something less. We just don't know, so this takes very careful deliberation.

The government wanted us to vote for it sight unseen. The Treasurer wanted us to do it the day after the budget, such was the Treasurer's disregard for the processes of the parliament and for the principles of review by the House of the legislation. The government has, as I said, singularly failed to provide the information that the opposition has asked for. We have made no secret of the fact that we have a high degree of scepticism about the nature of the 2024 tax cuts and their impact on the progressivity of the tax system and the fairness that goes with that. There are elements of the 2022 package that we see we should consider and the House should consider, but we want to consider them.

I say this very clearly to the government: do not hold the 2018 tax cuts hostage to the 2024 tax cuts. Do not say that to the Australian people. Do not be so cynical that you think they will accept that you can hold their 2018 tax cuts hostage until you get tax cuts in 2024 through this parliament, because you don't have to do that. You know you're going to have to blink. You know you're going to have to split the bill, just as you did on corporate tax. You'll have to split this bill. You might as well do it now. You might as well get it done now, because we'll be arguing the same in the other place. Other senators have said they will argue the same. Split the bill. Let the House determine each tranche on its merits, as you should.

Kevin Andrews (Menzies, Liberal Party) Share this | Link to this | Hansard source

Before calling the Treasurer, can I ask the honourable member for McMahon to formally move the amendments.

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

My apologies, Mr Deputy Speaker; I thought I had. I move the amendments:

(1) Clause 2, page 2 (table item 3), omit the table item.

(2) Clause 2, page 2 (table items 5 and 6), omit the table items.

(3) Schedule 1, heading, page 3 (line 2), omit "and Low Income tax offset".

(4) Schedule 1, item 1, page 3 (lines 7 and 8), omit "and Low Income tax offset".

(5) Schedule 1, item 1, page 3 (lines 24 and 25), omit "2018-19, 2019-20, 2020-21 or 2021-22 income year", substitute "2018-19 income year or a later income year".

(6) Schedule 1, item 1, page 4 (lines 5 and 6), omit "2018-19, 2019-20, 2020-21 or 2021-22 income year", substitute "2018-19 income year or a later income year".

(7) Schedule 1, item 1, page 4 (lines 17 and 18), omit the note.

(12) Schedule 1, item 1, page 6 (line 10) to page 8 (line 12), omit sections 61-110 and 61-115.

(13) Schedule 1, page 9 (line 12), omit the heading.

(14) Schedule 1, item 5, page 9 (lines 13 to 18), omit the item.

(15) Schedule 1, item 6, page 9 (lines 20 to 22), omit the item, substitute:

6 Section 13 -1 (table item headed " low income earner " )

Omit:

substitute:

(16) Schedule 1, item 7, page 10 (lines 1 to 4), omit the item.

(17) Schedule 1, page 10 (line 5), omit the heading.

(18) Schedule 1, items 8 and 9, page 10 (lines 6 to 15), omit the items.

(19) Schedule 1, Part 3, page 11 (line 1) to page 12 (line 16), omit the Part.

(20) Schedule 2, Part 1, page 13 (starting at line 2), omit the Part, substitute:

Part 1—Main amendments

Income Tax Rates Act 1986

1 Clause 1 of Part I of Schedule 7 (table item 2, column headed " For the part of the ordinary taxable income of the taxpayer that: " )

Omit "$87,000", substitute "$90,000".

2 Clause 1 of Part I of Schedule 7 (table item 3, column headed " For the part of the ordinary taxable income of the taxpayer that: " )

Omit "$87,000", substitute "$90,000".

3 Clause 1 of Part II of Schedule 7 (table item 1, column headed " For the part of the ordinary taxable income of the taxpayer that: " )

Omit "$87,000", substitute "$90,000".

4 Clause 1 of Part II of Schedule 7 (table item 2, column headed " For the part of the ordinary taxable income of the taxpayer that: " )

Omit "$87,000", substitute "$90,000".

5 Clause 4 of Part II of Schedule 7 (example)

Repeal the example.

6 Clause 1 of Part III of Schedule 7 (table item 2, column headed " For the part of the taxpayer ' s working holiday taxable income that: " )

Omit "$87,000", substitute "$90,000".

7 Clause 1 of Part III of Schedule 7 (table item 3, column headed " For the part of the taxpayer ' s working holiday taxable income that: " )

Omit "$87,000", substitute "$90,000".

8 Application

The amendments made by this Part apply to the 2018-19 year of income and later years of income.

(21) Schedule 2, items 10 to 12, page 18 (lines 3 to 12), omit the items.

(22) Schedule 2, items 15 and 16, page 18 (line 22) to page 19 (line 3), omit the items.

(23) Schedule 2, Part 3, page 20 (line 1) to page 21 (line 12), omit the Part.

Scott Morrison (Cook, Liberal Party, Treasurer) Share this | Link to this | Hansard source

The Labor Party do not agree with the government that 94 per cent of Australians should pay no more than 32½c in the dollar as their marginal rate of tax. They don't agree with that. That's what they've just said. They also don't agree that we should be dealing with bracket creep. That's what these amendments are designed to address. They're designed to say: 'No, we don't support the government's plan to address bracket creep. We want to take that hard-earned money from Australians and keep it and spend it.' And they'll spend it. At the last election, this shadow Treasurer put up $31 billion and more in higher spending. I note—it's interesting—that he says, 'We don't know what's going to happen in 2022-23 and 2024-25,' but he's quite happy to spend money in 2022-23, 2024-25 and in 2050-51. He'll spend money forever, and he's happy to pass bills in this place that spend money, but he's not happy to pass bills that provide for tax relief. That's what they're not prepared to do.

What he's saying is that someone who's on an average wage today of $84,600 should pay a higher rate of tax in 2022-23 than they do now. They will move into the 37c tax bracket without these changes. In 2024-25 it will get even worse. Someone on an average wage today will be on around $100,000 in 2024-25. In 2022-23, they'll be on about $95,000 and a bit more, and they'll be paying a higher rate of tax. Make no mistake: what the Labor Party are saying here is that they want to bank bracket creep, and they want to spend it all. They just want to spend it all in a big splurge at this election. The reckless spending will be back from the Labor Party. And they'll be seeking to do it by pilfering the hard-earned savings and earnings of Australians.

That's why we won't be supporting these amendments. We believe that you need to deal with these structural problems in the tax system and that you need to lay out a clear plan. That plan has to be fair. That plan has to protect the progressivity of the tax system, which our plan does. And it has to ensure that Australians have some certainty as they put that extra effort in. We're talking about a seven-year plan. They can't even commit to tax relief over seven years, let alone 10, but they will commit to expenditure forever. So what we're learning here is that the Labor Party are for higher taxes.

What they're not agreeing to is the full tax relief of $143.95 billion that is set out in this bill. They're not agreeing to $192.35 billion of tax relief. What they are simply seeking to do is pull one over on the Australian people, pilfer what they earn and pilfer what they save, whether they're retirees or just people going to work honestly every day who want some certainty that the government in the future won't be putting its hands deeply into their pockets and that what they earn they'll be able to keep.

This is a cynical exercise from the Labor Party. The shadow Treasurer himself used to believe in lower taxes. He no longer does. He's become hostage to those who sit on his own front bench, unable to stand up to any of them. It's disappointing. But he makes his bed; he can lie in it. But he shouldn't force Australian taxpayers to lie in a bed of higher taxes, because that's what he wants to do to them. He's going to stop us dealing with bracket creep here in this place and he's going to stop us having a simpler tax system into the future. That's his choice. That's Labor's choice. This is why tax as a share of the economy will let rip under the Labor Party. This is the same shadow Treasurer who said that this government should be held to the standard of ensuring that tax as a share of the economy should rise no higher than 23.7 per cent. We've been achieving that and we've set a tax speed limit to ensure that we stay under that into the future, and that's what this bill does.

By not supporting the full tax plan, what Labor is saying is that they want taxes to go up and up and up, because under Labor they'll spend and spend and spend. You want to know what the proof of that is? At the last election they committed to $31 billion of additional expenditure and they put taxes up by over $15 billion, and they still ended up with a higher deficit after all that was done. Higher taxes, higher spending, higher deficits—that's the form of this shadow Treasurer.

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

Last year the Senate asked the government to split its corporate tax bill. That was the bill that was seeking to reduce corporate taxes for big businesses from 30 per cent to 25 per cent, and the Senate wanted to split that bill and only have a threshold of $50. They would lower the corporate tax rate for businesses with a threshold below $50 million. What did the government do at the time the Senate made that request? The government agreed. The government agreed to split that corporate tax bill at the time and ensure that there was tax relief for businesses under $50 million worth of turnover.

The bills that we're discussing here today come in three phases, and it's clear that there are three phases of this particular plan. On 1 July this year the low- to middle-income tax offset of $530 comes into effect. Labor has said we will agree to this phase of the personal tax plan. But, as to the second and third phases, in 2022 and 2024, which really are a con job to try to hoodwink Australians into voting for the Turnbull government again and again, Labor, many in the Senate and, indeed, the Australian public have requested the year-by-year breakdowns and that this bill be split. We want to be able to guarantee this first phase of these personal income tax cuts, and we can do that. We do that and ensure that this tax relief is provided on 1 July this year.

So what we've got here is that the government is willing to split the corporate tax bill. They're willing to do what the Australian public didn't want in terms of tax cuts but what the Senate wanted in terms of splitting that bill, but they're not willing to do what the parliament now wants in terms of splitting these bills. It says everything about this government's priorities. They are willing to bend over backwards for business but are not willing to do the same to provide tax relief for households and workers. And, of course, we know that the big banks are the big beneficiaries of further tax cuts in the corporate sector and we know their record when it comes to supporting the big banks

Labor will support the first phase of the plans, and the reason we're still considering the second and third phases is that the government won't provide the year-by-year breakdowns of the cost of this proposal for the second and third phases of the tax plan. Given that the proposal doesn't come into effect for another seven years, there's no urgency to phases 2 and 3 of this tax plan. There is in respect of the first phase, and Labor said we would agree to that. We'll agree to that. Given the uncertainty that exists in the global and domestic economy into the medium term—something that's been recognised by Treasury, and something that's been recognised by this Treasurer sitting at the table today—and the fact that Treasury has admitted that the overall cost of this tax plan is $140 billion to the Australian budget, it's entirely reasonable that the Labor Party, as a good opposition, ask questions and get the details of the year-by-year breakdown of what's proposed here. We have tried to do that through several days of questions in the parliament during question time and we've tried to do it through the Senate estimates process, but guess what? The Treasurer and this government aren't forthcoming on this issue. We think that this is a reasonable request.

The IMF, the RBA and many economic commentators have said that this is a time for fiscal consolidation and not fiscal expansion. Given that there's uncertainty in the global economy moving into the second and third phase, it's entirely reasonable for the Labor Party to be asking for those details, and the government will not provide them. That is the reason Labor is still considering those second and third phases, and that is the reason Labor, entirely reasonably, is asking for this bill to be split. It's not inconsiderate, given that the government did that with the corporate tax plan. If they do that, we can provide immediate tax relief for households and workers in this country. So we once again ask that the government act reasonably and in the interests of Australian workers and consider splitting this tax bill.

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

The question is that the amendments moved by the member for McMahon be agreed to.

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

by leave—I move opposition amendments (8) to (11) together:

(8) Schedule 1, item 1, page 4 (line 20) to page 5 (line 2), omit subsection 61-107(1), substitute:

General rule—2018 -2019 income year

(1) The amount of your *tax offset for the 2018-19 income year is set out in the following table in respect of the following income (your relevant income):

(a) if you are an individual—your taxable income for the income year;

(b) if you are a trustee—the amount of the share of *net income referred to in subsection 61-105(2).

(9) Schedule 1, item 1, page 5 (after line 2), after subsection 61-107(1), insert:

General rule—2019 -20 income year and later income years

(1A) The amount of your *tax offset for the 2019-20 income year or a later income year is set out in the following table in respect of the following income (your relevant income):

(a) if you are an individual—your taxable income for the income year;

(b) if you are a trustee—the amount of the share of *net income referred to in subsection 61-105(2).

(10) Schedule 1, item 1, page 5 (line 4), omit "subsection (1)", substitute "subsections (1) and (1A)".

(11) Schedule 1, item 1, page 5 (line 23), omit "subsection (1)", substitute "subsections (1) and (1A)".

This is an opportunity for every member of the House to vote for bigger tax cuts for low- and middle-income earners. We've heard a lot of rhetoric in this debate about one side of the House being the party of lower tax. Well, now they can vote for lower tax. The Leader of the Opposition announced in his budget reply that Labor would deliver bigger and better personal income tax cuts on 1 July 2019. You can imagine, around the country, people thinking, 'Well, that's a good idea.' But you could see the blood drain out of the faces of honourable members opposite, who thought, 'There goes our tax scare campaign.' 'It's a little inconvenient and problematic for our scare campaign,' said the government, 'that the Labor Party now has better and bigger personal income tax cuts for Australians earning up to $125,000 a year.'

A teacher on $65,000 a year will receive a tax cut of $928 under the Labor Party. A couple earning $90,000 and $50,000 respectively will receive a tax cut of $1,855 a year. Will we see this so-called party of lower taxes over there vote for or against these tax cuts? We're giving them the opportunity. Their only argument is to say, 'The Labor Party won't deliver those.' Well, you can make them law right here, right now, tonight. You can make the tax cuts law by legislating them. The reason I suspect they won't is that the government will vote against them. The government will vote against the tax cuts which the Labor Party is proposing and is happy to legislate this evening in this House. The Labor Party is happy to legislate it right now.

The Labor Party can do this because we've made good, difficult but well-calibrated decisions elsewhere in the budget to ensure that this is sensible, sustainable and responsible. The government has done none of those things. They have a modest tax cut on 1 July 2018, which we are happy to support. We just voted for it. That's why we sat with the government to make those tax cuts a reality. We certainly think that they should happen, but we think that they should be the beginning not the end of tax cuts for low- and middle-income earners. We think that, with wages growth at record lows, wages growth hardly keeping up with inflation and cost-of-living pressures on Australians of modest incomes, they deserve a bigger and better tax cut, and the Labor Party will deliver it. We're more than happy to deliver tonight. We're ready to vote for it now, and we will vote for it now, and I look forward to hearing the Treasurer opposing bigger tax cuts for working Australians.

Scott Morrison (Cook, Liberal Party, Treasurer) Share this | Link to this | Hansard source

When it comes to Labor and taxes, they're unbelievable. They really are. We all remember the Paul Keating tax cuts, the L-A-W law tax cuts. We remember those. The Labor Party thinks that the ears of Australians are painted on and that they never hear what it says. But they do hear what it says and they do see what it does, and what it does is make big promises. Labor even promised to put the tax cuts in law. L-A-W was the famous phrase of Paul Keating. But we know they don't believe it, they don't do it and they don't follow through. They are completely unbelievable.

The other thing we've learnt from the Labor Party today is that Labor does not have a plan for personal taxes. They have no plan to deal with bracket creep. They have no plan to make taxes simpler. They have no plan to deal with people who are able to do better over time and ensure that bracket creep is addressed. They've got no plan for that. All we've heard from the Labor Party is some sort of Dutch auction on tax. We're not going to get involved in that, because we have a responsible plan. We have an affordable plan. We have a structured plan to deal with structural problems in the tax system.

What you're hearing from the Labor Party is what you always hear from the Labor Party before an election: 'We'll do this. We'll do that.' And you all know what happens after the election. If they're elected, it all turns to custard, absolute custard. Whether it's with their forecasts of revenue that we heard or the four surpluses announced tonight, none of them ever turn up. This is why they're completely unbelievable when it comes to tax, deficits, surpluses, budgets and debts—all of these things. They are just completely unbelievable when it comes to tax and the economy.

I'll tell you the other thing about this mob. What they're not telling Australians as they put this forward tonight, and what they didn't tell them the other night, is who's paying for this. Who's paying for this at the end of the day? The reason we're not supporting these amendments is that we don't support all of the other taxes that they're putting on Australians to go around and make these big-noting promises. Let's run through what some of those are. What the Leader of the Opposition and the shadow Treasurer say is that they're paying for this by pulling bigger taxes out of big companies, but let's look at what the budget and forward estimates show. What the budget forward estimates show is that, over this period to 2021-22, the biggest tax increase is not reversing the enterprise tax plan at all. It's not that at all.

Honourable Members:

Honourable members interjecting—

Kevin Andrews (Menzies, Liberal Party) Share this | Link to this | Hansard source

Order! There's too much noise.

Scott Morrison (Cook, Liberal Party, Treasurer) Share this | Link to this | Hansard source

That's $6.2 billion, and that is for them reversing tax cuts for small businesses, medium-sized businesses and businesses up to a turnover of around $100 million. There are no big banks there, no big multinationals there, just higher taxes for small businesses and medium-sized businesses. There are higher taxes for those on the highest rate of income tax. There's $5.2 billion in that, but that does not come within a bull's roar of the real target of the Labor Party when it comes to tax, and that's their retirees tax.

The Parliamentary Budget Office estimates that they will take $10.7 billion from the retirees of Australia. This is a Labor Party which sees an older Australian and just sees a tax target.

Ms Rowland interjecting—

Kevin Andrews (Menzies, Liberal Party) Share this | Link to this | Hansard source

Order! The member for Greenway will desist.

Scott Morrison (Cook, Liberal Party, Treasurer) Share this | Link to this | Hansard source

Older Australians have a target on their backs from this Leader of the Opposition, because he knows how to put his hand in their pockets and in their purses. What he knows, if he bothers to listen to Australians, is this: they know. They know that you're coming after them if you get into government.

Dr Leigh interjecting—

Yes, I note the member for Fenner. Older people are humans too, Member for Fenner, and you're after them as well. Those retirees are going to remember every single one of you. There are thousands in your electorates, and they are a quiet army against the election of a Labor government at the next poll. They will remember you, and they will put a 1 in the Liberal box. They'll say to the Leader of the Opposition, 'We've had enough of your big taxes.' Higher taxes, bigger spending, bigger deficits—that is the story of the Labor Party. That's what these amendments say once again. Labor cannot be trusted on tax. They are unbelievable from here to eternity.

Bill Shorten (Maribyrnong, Australian Labor Party, Leader of the Opposition) Share this | Link to this | Hansard source

I rise to support these amendments because 10 million Australians deserve a fair dinkum tax cut next year. We have seen this economy being mismanaged for the last five years. The cost of living goes up and up and up. Private health insurance companies know a soft touch when they see one in the government. The out-of-pocket costs of Medicare are going up and up and up, and wages growth is flatlining. Energy prices—well, that's just far too hard for this government to fix. This is why the government should support a fair dinkum tax cut for 10 million working Australians. The look of stunned surprise on a government not known for its innovation when it heard on budget reply night that Labor was able to support a tax cut almost double that of the government's speaks volumes for the lack of imagination of this government.

What we endure in question time is the Liberal Party and the National Party saying that they will offer lower taxes to Australians. Well, if they vote against this amendment they are wrong, wrong wrong. Only Labor is offering 10 million working Australians almost double the tax cut next year of this government's tax cut this year. Labor supports the plan on 1 July this year—of course we do—but next year we want to do almost double that. Labor can offer lower taxes for 10 million working Australians because we can pay for our promises. Look at the Treasurer. We know he's listening—he's just pretending not to! He wishes that he had thought of our idea. But he can't—because they have already sold the budget to the top end of town. We can afford to pay for our much better tax cuts for 10 million working Australians because we're not giving $80 billion away, most of which goes to the top end of town. Only a government truly arrogant, truly out of touch and truly in the pockets of the big banks—they're giving $17 billion to the big banks—

Mr Sukkar interjecting—

The member for Deakin knows I'm right. Only this government would offer $17 billion to the big end of town and the banks whilst denying working Australians a tax cut of about $20 week.

We can afford to pay for our promise to give 10 million Australians lower taxes because we've made genuine economic reform proposals which we'll put to the people. We will reform negative gearing. We won't be handing out income tax refunds to people who don't pay income tax. We will tidy up the family trust discretionary situation, where the lucky few can income split and the many cannot. But not only, when they vote against our amendments, can they no longer say that they are the party of lower taxes; not only can they not say that Labor can't afford the promise because, in fact, every day they go around the country saying the problem is that Labor has made economic decisions and they are not prepared to give away corporate taxes to the big end of town. They know we have a better tax offer, a better income tax cut, for 10 million Australians. They know we can pay it. But they also know the final fact of the matter: they know we have a better economic plan. This Treasurer's budget on the Tuesday night was so devoid of information. It was a statement of residual accounts of the nation, with their sneaky cuts to hospitals and schools and TAFE baked into it.

We can assure Australians that we have a winning trifecta for the middle class and working class of this country. We can afford to this pay down our national debt faster because of our genuine economic reforms. We can afford to properly fund our schools, reverse the $17 billion cuts that these Luddites are inflicting on the children of the future, properly fund TAFE with 100,000 places that the upfront fees pay for and provide 200,000 more university places. We can do the trifecta of better income tax, better deals for hospitals, schools, TAFE and universities and pay down the national debt—because we have a plan. I say to the government: if you vote against these income tax cuts tonight, we will remind you every day between now and whenever the by-elections are and whenever the election is. The next election will decide the future of this country. It will decide what sort of society and what sort of direction we want. It will decide whether we want trickle-down economics, from the representatives of big business, or fair go economics where Labor puts 10 million Australians first, second and third.

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

There is a reason the government ran out of speeches on this debate. There is a reason the Treasurer had no-one behind him. It's because this government is, deep down, ashamed of the package they have. They're ashamed that we on this side of the House are offering tax cuts which are better, bigger and fairer than theirs. On budget night, the Treasurer cunningly put together two sets of tax cuts—a set that comes in in about six weeks time and a set that comes in in about six years time. The set that come in in about six weeks time would, according to the Grattan Institute, make the tax system more progressive. That's why Labor is happy to support those tax cuts due to take effect in six weeks time. In fact, we won't just back them. We'll do better. We will offer an average Australian an additional $400 a week compared to those opposite.

But then there's the tranche that come in in six years' time, and those tax cuts will make the system markedly less progressive. I can see them leaving the chamber, 'SloMo' and 'No Show', chatting away together. According to the Australian National University, middle-income earning Australian households would see an extra $913—about one per cent of their disposal income—while the top fifth of Australians in 2024 would get $4,900—2.2 per cent. When we look across Australian suburbs, in the 2024 tax cut, according to NATSEM, Toorak would get three times as much as St Albans. A household in Bellevue Hill would get three times as much as a household in Lakemba. That's what the government's 2024 tax cuts would deliver. So the tax cuts in six weeks' time, they're fair. The tax cuts in six years' time, they're deeply unfair.

The Australian Institute has looked at the gender composition of where the money goes in 2024. As the Leader of the Opposition says, we're not talking to the frontbench because, this week, when the Minister for Revenue and Financial Services stood up, the frontbench had no other women on it. The Australia Institute estimates that for every dollar that goes to women in 2024, $2 goes to men.

This idea that we're going to start off with a small tax cut to the middle class, back ended by a big tax cut to the top one per cent, well, that's got a long playbook. If there's one thing that I detest more than ideologues, it is unimaginative ideologues who are borrowing their playbook from overseas. These tax cuts are so similar to the 2003 Bush tax cuts—a small, flat-rate stimulus to all Americans and then a back-ended tax cut, half of which went to the top one per cent. They bear more than a passing similarity to President Trump's tax cuts—passed through, short-term impact, looking fairly equitable—but the long-term impact of the Trump's tax cuts sees the bottom 50 per cent get nothing and multimillionaires get a tax cut of $700,000.

There is a more than a passing similarity to the 2014 budget, where we had permanent benefit cuts to low-income Australians, but the only short-term hit was the increase to the debt levy, which went up from July 2014 to June 2017 and was then taken off despite the fact that this mob opposite have doubled net debt. They have sent gross debt through the half-a-trillion dollar barrier for the first time in Australian history, and they hate it. When the shadow Treasurer stands up and says we won't just match you on debt reduction; we will beat you on debt reduction, we can do that because we can make the tough decisions on trusts, because we'll take on tax havens, because we will close unsustainable tax loopholes. We will not only tackle housing affordability but we'll close tax loopholes that your own predecessor, the member for North Sydney, said he would close but those opposite were too gutless to close.

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

This government's budget and the Treasury Laws Amendment (Personal Income Tax Plan) Bill 2018 are the end of progressive taxation as we know it. When you come into this chamber and say you want to set up a taxation system in a few years' time, where someone who is earning less than the minimum wage pays the same rate of tax as a CEO on $200,000, that's a direct attack on egalitarianism in this country. The reason that we have a progressive tax system in this country is there is an ingrained belief that the majority of the population share that, if you earn more, you can contribute a bit more. The reason we ask people to contribute a bit more is that, if that money goes to fund universal health care and universal public education, we then stay an egalitarian country. People understand that, in order to have a world-class public education system and to be able to do things like get rid of so-called voluntary fees that are costing people sometimes thousands but in many case hundreds of dollars a year to send their kids to public schools, we need to have a secure revenue stream. That is why this bill needs to be voted against. It is a direct attack on progressive taxation.

When you ask people, 'Which would you rather: a tax cut of $10 or even maybe $20 a week; that the government invests to make sure that every time you go to the doctor you don't have to put your own hand in your pocket to pay for it; or that when you send your kid to school you don't also have to fork out for voluntary fees?' most will say, 'Provided that the government spends it on making sure Australia remains an egalitarian society and provided it goes on universal services, I would probably rather you spent it on those than gave out a tax cut of $10 or $20 a week that's probably going to disappear because no-one's going to regulate electricity prices, and they're going through the roof, or that's probably going to disappear because schools are underfunded and we're asked to pay for that.'

But, if there's one thing that the appalling budget and this bill have done, it's successfully fired the starting gun for the next election, turning it into a tax cuts arms race. It is very disappointing that we are here not debating how we can make Australia a more equal society but instead having this competition about who can have the bigger tax cuts. There are much better ways of looking after people who are doing it tough and who are on low incomes. Let's raise the minimum wage and let's have a discussion about those people on Newstart, who are living in poverty and aren't going to benefit one iota from a tax cut if they're solely reliant on Newstart. Let's look at ways of lifting those people up and making them more equal.

Dr Leigh interjecting—

I hear interjections from the opposition, saying, 'What about low-wage workers?' I would say the best way to support low-wage workers is to lift the minimum wage and ensure they get a wage rise, because I think a wage rise is better than a tax cut. I also say to the opposition: whatever you think, I don't think someone earning $125,000 classifies as being on a low income. When you've got housing prices going through the roof and a rise in insecure employment, there are, it is true, many people in my electorate who are earning at the top end of the income scale but still finding it hard to make ends meet because most of their money goes on the mortgage because we've failed to get house prices under control. But no matter how you squint at it and how you twist, you can't say that someone earning $100,000, $110,000 or $120,000 is on a low income. So the question that we have to ask is: is money best spent giving people on $100,000 an extra $1,000, as this amendment proposes, or is money best spent by saying, 'If you're earning $100,000, then perhaps let's have the discussion about putting money into health care, schools and lifting Newstart so that we can make Australia a more equal society.' I know that, instead of having a $900 bribe, most of the people I talk to in Melbourne who are on decent incomes would rather have that money go to people who are doing it tough on Newstart. They would rather that money go to funding public schools so that people don't have to pay out-of-pocket voluntary fees. They would rather that money go into the public health system to make sure it doesn't cost you an arm and a leg to go and see the GP. It is a sad day when we're having a 'my tax cut is bigger than yours' arms race instead of focusing on making sure Australia is an egalitarian society.

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

The question is that amendments (8) to (11) moved by the member for McMahon be agreed to.

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

The question now is that this bill be agreed to.

A division having been called and the bells having been rung—

As there are fewer than five members on the side for the noes in this division, I declare the question resolved in the affirmative in accordance with standing order 127. The names of those members who are in the minority will be recorded in the Votes and Proceedings.

Question agreed to, Mr Bandt, Ms McGowan and Mr Wilkie voting no.

Bill agreed to.