Andrew Bragg (NSW, Liberal Party) Share this | Hansard source

The central issue here is that, when you have a government which is solely focused upon the interests of just a few organisations—namely, trade unions and super funds—it means you run out of time to find solutions to the problems of today and today's economy. That is the main problem that the government and the country have. It's that there hasn't been sufficient time given to the interests of Australians.

After over 18 months of this government, this is the first economic policy the government has come up with, and it has done so on the back of a torrid year. This is a recalibration of a Liberal Party tax policy that the decision has been made to release now in light of the Dunkley by-election. So we are now driving the nation's income tax policy around preserving the job of one person in the House of Representatives to ensure that the government has some momentum. This is a short-term sugar hit which locks in bracket creep over the long term. This is really a hugely regrettable position for the country to be in—to have unwound a significant tax reform of the past decade. As has been lamented, the country has very low ambition when it comes to reform. People are afraid to put big ideas on the table, and one of the big ideas was having a tax system which was going to be simpler and which would reward aspiration. The reintroduction of a tax bracket is something that I would never have imagined I would see in my time here, but that is what we now have.

The reality is that, yes, for many Australians there will be a tax cut today, but tomorrow and every other year there'll be a tax increase. The reason I say that is that, even on the government's own modelling, they have admitted that they are reintroducing a tax bracket which was abolished. The government is reintroducing a tax bracket which was abolished by this parliament and which was voted for with good reason. As a result of reintroducing that tax bracket, the Treasury will receive an additional $28 billion. If Treasury is receiving an extra $28 billion, that is $28 billion of the people's money in higher taxes that the people are not able to spend on themselves. The central difference between the coalition and the Labor Party is that we understand that the government has no money of its own and that the money the government has is raised from the people. In this particular case, this is a long-term locking-in of a higher rate of income tax.

People should not be fooled about what this particular measure is going to do. Yes, it will provide a short-term sugar hit which is designed to improve the political fortunes of a flagging government with no other economic policies. But, in the long run, it will lock in a tax bracket which was abolished. What that means is that Australians will have to face a long future of doing an extra shift or doing an extra job and facing the prospect of being pushed into the 37c threshold. The 37c threshold does not exist today in Australian law as of 1 July. It will be reintroduced, which is an admission that the Labor Party was not able to address bracket creep in a sustainable way.

Ultimately, it is a very regrettable situation. It's a short-term sugar hit today to support Mr Albanese but a long-term problem the country has to face, which is that bracket creep will eat away at people's salaries and wages only because the government was so craven in breaking its own election commitment to save Mr Albanese's neck.