David Leyonhjelm (NSW, Liberal Democratic Party) Share this | Hansard source

I rise to confirm my vote in favour of the bill to implement the government's Personal Income Tax Plan, the Treasury Laws Amendment (Personal Income Tax Plan) Bill 2018. If the bill doesn't pass, those earning $120,000 will pay a whopping $34,432 on their income. If the bill does pass, those earning $120,000 will pay $34,217 next year. This is still, without question, an unwarranted and immoral tax take, but at least it is $215 less tax. And, if the bill passes, those earning $120,000 will pay $32,407 on their income in four years time. This remains an unwarranted and immoral tax take well in excess of the value that such a taxpayer gets from the government, but at least it's $2,025 less tax. So I will support the bill not because it makes tax fair but because it makes tax ever so slightly less unfair—albeit after a painfully long wait. The bill doesn't go anywhere near enough in reducing the excessive tax burden that Australians face every day. According to answers given by the tax office at budget estimates, the top one per cent of income earners in Australia pays 17 per cent of total income taxation. A further 65 per cent of total income tax is paid by those earning between $87,001 and over $180,000. This means that around 82 per cent of income tax in Australia is paid by fewer than three million people.

Our system of taxation creates a disincentive for financially successful Australians to stay in the country or come back from overseas. Our top marginal tax rate is 45 per cent, to which we need to add the two per cent Medicare levy. The top marginal tax rate cuts in at just $180,000—just 2.2 times average full-time earnings. This compares with four times average earnings in Canada and the United Kingdom and eight times average full-time earnings in the United States of America. This is wildly unfair, and what a shame that this bill doesn't address that. The problem is that the government simply does too much. There seems to be no limit to the intrusion of the government into the everyday lives of Australians and the expansion of its powers and authority. The answer to any question, whether posed by the media or posed by a celebrity, is for something to be banned or something to be subsidised, with either option involving the hiring of more and more public servants. It seems that there's a bill for everything and for everything a bill, and a very small minority of Australians are the ones called to settle the account.

The Liberal Democrats believe Australia needs a low-tax future. Continuing to tax at such high rates discourages us from working and saving, discourages our potential entrepreneurs from taking the risk of starting a business, and imposes unnecessary compliance costs on individuals and businesses. High taxation also requires the hiring of thousands of bureaucrats in the ATO. For these bureaucrats, being called a mongrel bunch of bastards should be considered the price of taking such a well-paid but ignoble job. Tax collectors were rightly reviled in biblical times. The onus is on the defenders of the ATO to explain what has changed since then to warrant a change in our assessment. We need to reduce the scope of government and, in turn, the amount the government demands from us in taxation. Progressivity is also not something we should be seeking in a tax system. When someone has double the income, what moral code justifies taking more than double the tax?

The Liberal Democrats have a fully costed and fully funded policy to have a 20 per cent flat tax rate that leaves all taxpayers better off. Even this level of taxation is too high, but at least it would leave us with more of our own earnings in our own pockets, and it would, increasingly, be the citizens who would decide what to do with their earnings, not bureaucrats. Until we get to grips with this basic principle, we are doomed to become a less appealing place in which to do business and for individual successful Australians to remain. I will help pass this bill, but I look forward to the day that I can help pass a bill that ends this disease of excessive taxation.