Helen Coonan (NSW, Liberal Party, Minister for Communications, Information Technology and the Arts) Share this | Hansard source

Senator Ronaldson is dead right that the running of a sound and stable economy is the most important function of any Australian government, and it is indeed a weighty responsibility. If you get it wrong—as our Labor colleagues on the other side of the chamber know only too well—you have record unemployment, you have people losing their homes because they cannot meet crippling interest payments and you have a budget deficit that bankrupts the country and leaves your children and grandchildren up to their eyeballs in debt. If you get it right, as the Howard government has done, you have unemployment at a record 32-year low, you have interest rates in single figures and you have real year-on-year economic growth that sets Australia up for the future and locks in our prosperity. When you run a sound and stable economy, you can return the benefits to the taxpayer. When you are up to your eyeballs in debt, you cannot—as Mr Keating knows.

The new income tax arrangements announced by the Treasurer last night will allow all Australian taxpayers to share in new personal tax cuts worth $31.5 billion. From 1 July 2007, the 30 per cent threshold will increase from $25,000 to $30,000, and the low-income tax offset will increase from $600 to $750 per year and will begin to phase out from $30,000. The increase in the low-income tax offset creates an effective tax-free threshold of $11,000 for low-income earners. From 1 July 2008, the 40 per cent threshold will increase from $75,000 to $80,000 and the 45 per cent threshold will increase from $150,000 to $180,000. The 2007-08 budget tax cuts ensure that over 80 per cent of taxpayers face a top marginal tax rate of 30 per cent or less. A taxpayer will need to earn $134,000 to pay an average tax rate of 30 per cent in 2008-09. Under the Howard government, over 80 per cent of Australians pay no more than 30c in the dollar tax. That means that only two per cent of taxpayers are in the top tax bracket. Back in 1996 under Labor, the highest marginal tax rate—higher than today’s top rate, I might add—applied from just $50,000. From 1 July next year, the top rate will apply from $180,000. This means that taxpayers will not reach the top marginal tax rate until they earn more than 3½ times the average weekly earnings in 2008-09.

Last night’s budget, with its tax cuts and investment in education, skills, road and rail and sharper work incentives, is all about the future. Running the economy for the future is not something that happens on autopilot. You do not trust it to luck and you certainly cannot trust it to Labor. Running the economy is a full-time job. It requires some tough decisions and some real experience, and the instructions are not written in Mandarin. This government stands ready and able to take the tough decisions necessary for further economic growth to lock in Australia’s prosperity. We will continue the strong economic management that the Howard government has delivered for the past 11 years.