Carol Brown (Tasmania, Australian Labor Party) Share this | Hansard source

I rise to also contribute to the debate on the Tax Laws Amendment (Medicare Levy Surcharge Thresholds) Bill (No. 2) 2008. In his contribution, Senator Cormann talked about the initiatives that were put in place by the Howard government and he described a system totally out of balance. When he talked about the Medicare levy surcharge, he said that it was introduced then ‘as it exists today’. Well, that is the point: it is as it exists today. When the Medicare levy surcharge was implemented the stated aim was that it was intended for high-income earners. I do not agree with Senator Cormann on many issues but I do agree that it is exactly as it exists today. I am glad he has pointed that out because he is right; it is completely out of balance. It was implemented for high-income earners; that was the stated aim, whether it was true or not. But as it exists today it is completely out of whack.

This is the second time this initiative has been put before us in this place, and it has come here again in an amended form. However, the primary purpose of the bill remains the same: to deliver some long overdue yet ever so timely tax relief to average Australian families, who are currently feeling the pinch. Indeed, as we saw yesterday with the announcement of the government’s $10.4 billion Economic Security Strategy to strengthen the Australian economy and support families during the global financial crisis, times are tough and any measures, such as those contained in this bill, that are designed to put money in the back pockets of Australian families should be supported.

When announcing the original measure as part of the May budget, the government said its aim was to restore the application of the levy to the levels at which they were first intended, and to remove the tax trap that had been created by the Liberals, who failed to raise the threshold since its inception. This bill remains true to those aims. It does so by raising the Medicare levy thresholds from $50,000 to $75,000 for individuals and from $100,000 to $150,000 for couples and families.

However, while the aim of this measure was and remains relatively simple, it seems to have been somewhat buried under the weight of the debate that has arisen since the measure was first announced by the Treasurer in May. The aim of this measure, as pointed out, was quite simply to provide average income earners in Australia with some long overdue relief by returning the threshold levels to the approximate position that was intended when the levy was first introduced in 1997. As I have said before, what appears to have been a relatively straightforward proposition has been severely compromised by the opposition, who have made it their job to vandalise this year’s budget by blocking the passage of this and several other key budget measures.