Katy Gallagher (ACT, Australian Labor Party, Shadow Minister for Finance) Share this | Hansard source

The opposition opposes items 2 and 4 in schedule 2 in the following terms:

(1) Schedule 2, item 2, page 5 (starting at line 11), to be opposed.

(2) Schedule 2, item 4, page 6 (starting at line 8), to be opposed.

This amendment essentially carves out stage 3 from the government's tax package. I spoke at length in the second reading debate about this. Frankly, we think it is irresponsible to ask the parliament to sign up now, five years ahead of the date of effect, without having any idea what state the budget or the economy will be in at that time. The amount of money that the government is seeking to allocate to this element of the tax package is $95 billion over the medium term. We have five years until they come into effect. As we have consistently said in both houses, we think it is irresponsible to sign up to that element of the tax package.

In an effort to cooperate and conciliate an outcome that was in the interests of all Australians, which was to facilitate the tax cuts flowing as soon as possible through the LMITO, we had asked the government to remove stage 3 from this package. The government arrogantly refused to even consider it. We have attempted to convince the crossbench. As we now know, we have been unable to convince the crossbench of the merits of this approach. But we do remain extremely concerned about the effect of signing up to this sort of expenditure five years out—as that expenditure grows over the medium term to 2029-30 the budget will be forced to find $19 billion that is currently unaccountable for—and the effect it will have in terms of the savings required and the cuts to government programs that will be required to fund that element of the tax package.

The government has consistently failed to answer how they would be funded. We know the physical parameters they put in their pre-election budget outlook, which had growth in government spending extremely low in historical terms at 1.3 per cent. We know they are forecasting bigger surpluses and greater expenditure in terms of tax cuts, plus a limit on a tax cap put in the budget. You are capping your tax growth, you are reducing your government expenditure growth to 1.3 per cent, you are forecasting bigger surpluses and you are having to fund $19 billion. We don't get how that adds up, and the government has failed at every opportunity to explain exactly how that would be done.

So we are putting this amendment. We believe it is important. We wish the government had agreed with us to take this stage out and bring it back as a separate package, but we strongly believe that this amendment delivers the right outcome, which would be not to require the parliament to sign up to tax cuts that have no explanation about how they are being afforded, that don't come in until five years from now and that have no impact in this parliamentary term.