Arthur Sinodinos (NSW, Liberal Party, Assistant Treasurer) Share this | Hansard source

Through you, Madam Acting Deputy President: the opposition of some in this chamber to spending measures means taxes are going to be higher than they would otherwise be, because we have budgeted to reduce bracket creep in the years ahead.

The tax cut that we have incorporated into our budget projections will relieve low- and middle-income earners from bracket creep as inflation pushes workers into higher tax brackets. Those higher taxes reduce the incentives to work, to save and invest. While I am on the topic of tax, let me deal with this issue about tax during the Howard years. The tax cuts during the Howard years were not a waste. The tax cuts during the Howard years were all about improving the incentives to work, to save and to invest. And the Treasury, year after year, when those tax cuts were being provided, measured the impact on labour force participation of those reforms. And they were reforms. We took the opportunity to cut tax where we could. I am disappointed, in a sense, that we did not get more opportunity to do that.

When we talk about tax reform and returning bracket creep, we are not talking about the big end of town. We are talking about our fellow Australians, about the people who largely pay tax, who are the wage and salary earners, who are the decent backbone of the country and who may want to work a few more hours, but they realise that over the next few years—as was alluded to in question time by Senator Cormann in response to a question—the average tax rate would be going up over the next few years for middle-income earners. So it is the people up there; it is the people in the gallery. It does not matter about us and the salaries we are on, but it is you up there. You pay the price when there is too much government spending. You know that because your taxes go up. Your taxes are feeding that. We want to cut your taxes—