Helen Coonan (NSW, Liberal Party, Shadow Minister for Finance, Competition Policy and Deregulation) Share this | Hansard source

I move:

That the Senate take note of the answer given by the Assistant Treasurer (Senator Sherry) to a question without notice asked by Senator Coonan today relating to taxation.

For a minister who claimed to welcome questions on tax, Senator Sherry had a very strange way of responding to them. He is clearly incapable of giving a straight answer. Let us go back to what he has done in relation to the questions that I asked him. Firstly, he has failed to rule out that Australians will be slugged with a special tax surcharge on so-called high-income earners. He has also failed to deny that both the Treasurer and the Minister for Finance and Deregulation agree that Australia should have an inheritance tax and that a deemed capital gains tax on death is yet another option being advocated by the Minister for Finance and Deregulation. From answers given in the House of Representatives yesterday, it is clear that both the Treasurer and the Prime Minister have failed to rule out a tax on the family home.

The Labor government is undertaking a review, the Henry review, and what is abundantly clear is that it is going to hike up taxes to pay for its reckless spending. As night follows day, this reckless spending has to be paid for. There is no doubt that the Labor government has tax hikes in prospect. Australians are going to have to pay for the massive debt and deficit run up by the Rudd Labor government. They have splashed $80 billion around on low-value make-work projects and botched programs.

We saw just yesterday that a billion dollars has gone overseas to purchase pink batts. It went to support the Chinese economy rather than being used as a direct stimulus to the Australian economy. When asked about this this morning on Agenda, the Minister for Finance and Deregulation said, in response to a question from Ashleigh Gillon, ‘So what?’ She asked, ‘Hasn’t a billion dollars gone to purchase pink batts in China to support the Chinese economy?’ Mr Tanner’s best defence was to say, ‘So what?’ We have a situation here in which the Rudd Labor government is clearly searching around for everything that they can find—even everything that is nailed to the floor—to pay for this waste and mismanagement.

These senior economic ministers, who are the engineers of the government’s economic policy, are now reverting to type. It is interesting to look at the views of Mr Tanner on tax that are recorded in Hansard. He said:

We should abolish negative gearing and modify the capital gains tax exemption by, for example, applying that exemption only to the unimproved value of houses purchased. In that way, there will be bias in the tax system which impels people to invest in extensions and the like.

I hope no-one listening to this wants to renovate their kitchen, because Mr Tanner is going to be after them through advocating, as he clearly does, that renovations not be included in the home base that is exempt from capital gains. He also said:

We should have an inheritance tax or some tax of that nature. Deemed capital gains tax on death is another option in that regard.

These are the words not of somebody who does not take a close interest in the economic development of policy but of the Minister for Finance and Deregulation. When asked yesterday whether he agreed with the words of Mr Tanner, Mr Swan said, ‘Yes, Mr Tanner was absolutely correct.’

We have a situation here where Mr Rudd has refused to rule out hiking up taxes across all areas of government apart from the GST. In other words, the family home and family inheritance are at risk and subject to a big fat Labor tax. It is very clear that the Rudd Labor government is now facing up to the unpleasant consequences of its reckless spending. The economy is in recovery, but what is Labor doing? It is simply continuing to stimulate the economy while at the same time the Reserve Bank is saying, ‘Put the brakes on.’ Australian taxpayers will pay. (Time expired)