Ursula Stephens (NSW, Australian Labor Party, Shadow Parliamentary Secretary for Science and Water) Share this | Hansard source

I rise to make some comments about the Australian Democrats’ proposed amendments on sheet 4951. I listened very attentively to Senator Murray’s arguments. He made some important points, most particularly about the criticism of the budget and the fact that it did not contain the tax reform that industry and businesses expected, and that internationally we do not compare very favourably in terms of our personal tax regime. But Labor has some real concerns about the proposal. The idea of blocking the top tax cut and proposing new scales slightly different to the current bill are another effective measure that Senator Murray has used to argue his case for reducing the bottom tax scale, and the indexation of the bottom tax scale for inflation is a position that we acknowledge is interesting and one that we are interested in. We also acknowledge that the Australian Chamber of Commerce and Industry has been proposing that kind of an approach.

I query, though, why the Australian Democrats proposal, which maintains the top tax rate at its current level of 47 per cent rather than accepting a reduction to 45 per cent, did not include aligning the top rate with the fringe benefits tax rate. If this bill reduces the rate to 45 per cent, by having that difference it would deliver a distortion to the tax system that would not be of any benefit. Again in this instance, Labor cannot support these amendments. While appreciating the sentiment and certainly the extent of the work that Senator Murray and the Democrats have put into modelling the proposals, we will not be supporting the amendments.