Steve Fielding (Victoria, Family First Party) Share this | Hansard source

Ordinary Australian families will be grateful for whatever help they can get from this budget. At a time when they are battling with high petrol prices and an increase in interest rates, everything helps. But the fact is that ordinary Australian families have not got as much help out of this budget as they could have. For example, politicians have fared much better from the tax cuts than the average Australian. I will get a tax cut of about $66 a week. But somebody earning $50,000 or $60,000 will get a tax cut of just $10 a week. The government has also expanded access to the large family supplement. Parents with three children—and that includes my wife, Sue, and I—will now receive an extra $5 a week. But that does not do much to fill the car or pay the mortgage. And the Treasurer has to be kidding if he thinks $5 extra a week will encourage families to have more children.

The government claims this is a budget for families, but the big winners are the high-income earners. Can you believe that a single person earning $100,000 a year with no children gets twice as much as a two-income family on $100,000 with two children? I quote from an article in the Financial Review yesterday entitled ‘At last, it’s a win for the high income earners’. It said:

The changes mean the 2 per cent of taxpayers earning more than $150,000 next financial year and paying the top tax rate will save $6200 a year, or more than 12 times the $510 saving pocketed by average workers.

Another article in the Financial Review reveals:

Even a single person on $70,000 a year will receive $190 a year more in tax cuts than a dual-income family with two children on the same income which starts to lose family tax benefits once income reaches a certain level.

So much for putting families first.

Family First thinks there is a better way. For example, consider a two-income, two-child family. One wage earner is on $60,000 and the other is on $20,000. They have two cars—a Commodore and a Corolla—and they fill up the tanks with petrol once a week. If the government had adopted Family First’s plan to cut the petrol tax by 10c a litre, this family would have saved about $13 a week in its petrol bill alone. This petrol tax cut would have cost the government $3.8 billion. Instead, under the government’s plan, that family will get $16 a week in tax cuts. Yes, that is just $3 more out of the government’s package, but that will cost about $9 billion a year for the next four years. However, under Family First’s proposal, the family could have had the $13 extra a week, plus there would have been more than $5 billion left over for income tax cuts. Clearly, the average Australian family would have been better off under Family First’s plan.

Also, a cut in petrol taxes delivers three times the savings as a proportion of income to the poorest 20 per cent of households compared to the wealthiest 20 per cent. Taxing petrol is both regressive and inefficient. Whacking a tax on petrol penalises people in regional and rural areas in particular because it increases the cost of transport, encouraging people into metropolitan areas and increasing congestion. Some say petrol price rises are good for the environment. It is right to say that petrol prices should rise in response to demand to stimulate new investment in production of fuel alternatives, but petrol tax is not part of the price received by producers. Cutting tax does not affect the price petrol companies get. The petrol tax hits thousands of other prices and operates as an insidious tax on the basic living costs of ordinary families. And, perhaps more importantly, soaring petrol prices risk further interest rate rises.

The Prime Minister has admitted petrol prices are inflationary. But the Treasurer in his statement on tax reform still harks back to 2001—five years ago—which was the last time the government did anything to reduce petrol excise. Family First are disappointed the government still stubbornly refuses to cut petrol taxes, but we know the reason why. The budget confirms the government is drunk on petrol tax. Next financial year the government expects to reap $14 billion in tax from motorists, yet it continues to arrogantly ignore the petrol pain on families and small businesses. Perhaps politicians would be more understanding if they had to fork out for petrol themselves.

Turning to the big issue of child care, Family First is pleased that more families will receive family tax benefit A. But Family First wants the child-care rebate, which only goes to parents of children attending formal child care, to be replaced by an increased family tax benefit payment that goes to all parents with children under five. In other words, the government’s current policy is to only give the child-care rebate to those parents who can afford the high child-care fees and who want to put their children in professional child-care centres or other approved care. Instead, Family First’s proposal would mean that all parents are treated equally, regardless of whether they choose formal child care or have their children looked after by a relative, friend or neighbour. This is also an equity issue. For example, families on $60,000 a year receive $10,000 per child if they use formal child care but less than $2,000 if they use informal care or if they care for their children themselves. Clearly the government has a market-friendly policy, not a family-friendly policy. Parents are in the best position to decide who is best able to care for their children, and Family First’s policy would give them that choice. Families do benefit from this budget and will welcome it. But, for the average Australian family, this budget will not be the bonanza the government would like us all to believe it is.

Debate (on motion by Senator Abetz) adjourned.