Jenny Macklin (Jagajaga, Australian Labor Party, Shadow Minister for Disability and Carers (House)) Share this | Link to this | Hansard source

My question is to the Prime Minister. Treasury has confirmed that the entire third stage of the government's personal income tax scheme goes to the top 20 per cent of income earners, at a cost of $42 billion. How is it fair that under this arrogant and out-of-touch Prime Minister a property developer in Arncliffe earning $1 million will get a tax cut of over $7,000 a year, while a worker in a charcoal chicken shop in the same suburb will only get a tax cut— (Time expired)

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

I'm glad the honourable member is giving the residents of Point Piper a rest today and has decided to have a go at the property developers in Arncliffe.

The fact of the matter is this: under the current tax regime, in 2015-16, for example, the taxpayers earning over $180,000 paid 30 per cent of the total personal tax take to the government, and they represented four per cent of taxpayers. Under our plan, in 2024-25, there will be six per cent of taxpayers earning over $200,000, and they will pay—wait for it—36 per cent of the total tax receipts from personal income tax. Our plan rewards aspiration, encourages investment, encourages employment and is thoroughly progressive. As is the case now, but more so, those on the highest incomes will pay most of the tax.

Lucy Wicks (Robertson, Liberal Party) Share this | Link to this | Hansard source

My question is to the Treasurer. Will the Treasurer outline to the House how the government's plan for lower, fairer and simpler taxes will reward effort and protect aspirational middle-income earners from bracket creep? What would be the impact of opposing the government's plan?

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

I thank the member for Robertson for her question and for her tireless advocacy for low- and middle-income earners in her electorate, because she understands. She is from an electorate that understands aspiration, and she has been championing aspiration all her life and in this place on top of that.

In the budget we announced a comprehensive and responsible plan for personal tax reform. A plan is when you're actually dealing with problems in the tax system. Yes, our personal tax plan goes first to provide relief to low- and middle-income earners, but in steps 2 and 3 of that plan, it begins the work of dealing with problems in our tax system, such as the problem of bracket creep. If you don't deal with bracket creep, as people's incomes creep up, they get taxed more and more and more, and that puts a stymie on aspiration and on their incentive to get ahead. Stage 2 of the plan sees the second threshold go from $37,000 to $41,000—that's hardly a millionaire—and stage 3 go from $90,000 to $120,000—also hardly a millionaire, as I'm sure the residents of Robertson would understand. So it's a plan that deals with problems.

The Labor Party doesn't have a tax plan at all. They don't have a plan. They have no plan. I'll tell you what they've got a plan for, and that's to oppose $70 billion of tax relief for hardworking Australians; as Australians' incomes creep up, Labor will tax them more. What they've announced today is a creep tax. A creep tax is taxing people's income as it creeps up. As incomes creep up, they will tax people more. Labor's plan for low- to middle-income earners is to ensure they stay low- to middle-income earners by not supporting the plans for a stronger economy that we champion.

But as the Prime Minister has already referred to today, we understand why. The member for Sydney has regrettably had to leave the chamber, but she was asked this earlier today:

… [it's] part of a broader plan and it's about ensuring aspiration within the economy as well.

As the Prime Minister reminded us, what did the member for Sydney say? 'W, w, I—honestly this aspiration term, it mystifies me.' That is what she said. I know a lot of things mystify the member for Sydney: government living within its means, economics, finance; even geography is a great challenge to the member for Sydney, who thought Africa was a country! Well, aspiration isn't in a country; aspiration isn't a continent even. But I can tell you what: it can drive a nation forward, and that's why we believe in aspiration. And the Labor Party have turned their backs on aspiration as they turn their backs on Australians. (Time expired)

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

My question is to the Prime Minister. Why won't the Prime Minister support Labor's plan to give 70 per cent of working Australians a bigger, better, fairer tax cut, compared to stages 1, 2 and 3 of the government's scheme?

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

The government's personal income tax plan rewards aspiration. It encourages Australians to get on and have a go. It gets rid of bracket creep across that huge spectrum of incomes between $41,000 and $200,000 as 94 per cent of Australians won't have to pay more than 32.5c in any extra dollar.

I will give three additional reasons why Labor's plan lets down hardworking Australians on middle incomes. A police sergeant in Queensland—could be working in Longman, perhaps—would pay, under Labor's alternative, $1,253 more tax. A school principal in Tasmania—might be in Braddon—would pay an extra $3½ thousand more tax. A police inspector in South Australia—might be working in Mayo—would pay $4,050 more tax.

The Labor Party talks about millionaires and billionaires, paying little attention to the reality that everything they are doing is patronising and seeking to hold back hardworking Australians who want to get ahead. Only the most arrogant and out-of-touch Deputy Leader of the Opposition would say aspiration was a mystery. How out of touch do you have to be to be mystified by aspiration? How smug about your big government salaries do you have to be to say you're mystified by aspiration? I tell you what: we understand aspiration drives the nation forward. It is the powerhouse; it is the ambition that we seek to support and enable, and Labor seeks to hold back.