Helen Coonan (NSW, Liberal Party, Shadow Minister for Human Services) Share this | Hansard source

I rise today to support the Tax Laws Amendment (Personal Income Tax Reduction) Bill 2008. Not surprisingly, the coalition support this bill because it closely mirrors our tax policy that we took to the last election. The coalition support the bill because the coalition parties have a strong record on personal income tax reduction, combined with a strong commitment to the philosophy that Australians should pay less tax. Labor, of course, are trying very desperately to spin this bill as their tax cut, because it is becoming increasingly obvious that they do not know what they are doing when it comes to running the Australian economy. What is alarming is that the tax cuts are being undermined by a confused and a contradictory approach to the budget and the economy more broadly.

Of course, we are getting all the spin and rhetoric about the budget being all about productivity and dealing with inflation. The reality, unfortunately, is that Labor have delivered a very old-style, big-taxing, big-spending budget that will increase pressure on inflation and see up to 134,000 Australians lose their jobs in the current year. This is a budget that proposes to increase expenditure by $34 billion over the next five years, to cut expenditure by $16 billion and to jack up taxes by $19 billion. So much for the fight against inflation! What we will see over the next five years is the Rudd Labor government proposing to spend more money, not less.

It is clear that what is emerging is that the Labor government have no clear strategy to keep the economy growing, to keep jobs secure, to keep inflation in check and, importantly, to keep petrol and grocery prices from rising. The government intend to raise taxes, with blatant disregard for the negative effects that this has on the economy and the Australian people, particularly working Australians. It is becoming increasingly obvious that the Labor government have no strategic framework that can give business confidence to invest and they have no clue about how the economic levers work.

Labor have not sought to engage in policies that will grow the economy; they have resorted to increasing taxes in a desperate attempt to haul in billions of dollars of extra revenue. Labor have not sought to build productivity or to effectively fight inflation; they have instead introduced new taxes that will put upward pressure on prices, inflation and interest rates. If the Rudd Labor government were serious about fighting inflation, they would be embarking on a series of policies that will actually make prices go down—not up. Instead, Labor have announced that they intend to raise taxes on a number of consumer products and to change policies, which will put further upward pressure on prices. Because of this budget, Australians will suffer the double whammy of increased taxes along with increased prices—and, of course, the consequent upward pressure on inflation.

The increase in taxes on so-called alcopops has nothing to do with binge drinking and everything to do with binge taxation. Labor’s assumption that consumption will basically stay at current levels really bells the cat when you look at the papers. Labor will get $3.1 billion in extra revenue, while those who binge will simply move to cheaper substitutes, as we all know. This is not an attempt to stop binge drinking; it is a measure designed to increase taxes and raise revenue to cover Labor’s spending splurge in the budget.

Labor’s increased tax on luxury vehicles suffers from the same attention deficit. It has not occurred to the Labor Party that prices on all motor vehicles will rise as a result of the $550 million tax increase. Of course, while the politics of envy and the desire to ping Porsche drivers may have been the motivation, families with a number of children to transport will have Labor to thank for slugging them with thousands of extra dollars in tax just to acquire a vehicle, such as a people-mover, large enough to transport them safely. Once again, Labor seem to have trouble walking the walk after they have talked and talked and talked.

And who can forget Labor’s promises to keep petrol prices and grocery prices down? But what do they do? They increase the excise on diesel fuel. Labor have made moves to increase the diesel fuel excise on the transport industry by 1.37c per litre and to raise trucking registration fees. Under their plan, Labor will index the diesel taxes at a rate which is greater than inflation. An increase in diesel taxes will simply raise trucking and transport costs, especially for the transport of food.