Zoe Daniel (Goldstein, Independent) Share this | Link to this | Hansard source

This week's budget saw the age-old ritual of the government announcing a tax cut with great fanfare to offset the impact of bracket creep. While the top-up tax cut is welcome relief, voters in Goldstein aren't fooled. It is yet another tactical return of bracket creep just before an election, not a sustainable or transparent way to run the tax system. I have been calling for the indexation of income tax brackets for some time. Indexation forces governments to make deliberate, honest decisions about revenue, rather than relying on inflation to quietly grow the size of the tax pie. When I speak to voters in Goldstein they are frustrated with the major parties on this issue. My community tax survey made that crystal clear.

Bracket creep is a stealth tax increase year after year that disproportionately burdens younger Australians, workers and families. It allows the government to fill its coffers through an overreliance on income tax and enables them to kick the can down the road, instead of conducting a meaningful review of our tax system. As our population ages, we must broaden the tax base to ensure the next generation isn't saddled with enormous national debt and the interest payments that come with it. Relying on revenue creeping through the back door is no longer working for the lucky country, and unless we get serious about tax reform, we are going to run out of luck. For too long the major parties have relied on windfalls, whether from resource prices, superannuation taxes or bracket creep, to paper over structural deficits, but that well is running dry. Hoping for budgetary luck or favourable resource prices is not fiscal policy. It leaves the national accounts in structural deficit with no real plan, and there's red out until at least 2035.

Bracket creep is not just bad policy; it's an intergenerational equity issue and a drag on the lives and livelihoods of working Australians, especially young people. Seventeen countries in the OECD already index their income tax brackets. There's no reason Australia should lag behind. We are the lucky country, but luck isn't a policy. If I am re-elected in May I look forward to working constructively with both major parties to restructure our tax system so it is fit for purpose and fit for the future of our children.