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

I move:

That the Senate take note of the answers given by ministers to all questions without notice asked by the coalition today.

After 18 months of exclusively running the government of Australia in favour of a few vested interests, the government has discovered an economic policy which is a recalibration of a tax policy which the coalition developed in office, and that is a tax policy to try and eliminate the scourge of bracket creep. Bracket creep is an insidious factor. The more people work, the more likely it is that, in doing an extra shift or undertaking some more hours, they will be subject to a higher rate of taxation.

Getting to a flatter tax system has been effectively the only income tax reform undertaken in the last decade. It is true that we are living in a period where there is a very low level of ambition in Australia, particularly in relation to economic policy. When you consider the 18 months of the Labor Party's government so far, it has been exclusive economic policy for the unions, the super funds and the class action law firms, to the point where not only is policy perfectly calibrated to meet their needs but also we see funding decisions and the like taken in their favour.

Of course, people will be very interested in how this promise was broken, and that is something that we will undertake a great investigation into at Senate estimates. This is a tax policy that Labor at the last two elections said that they were committed to. In fact, the Prime Minister said in December last year that they were not reconsidering the package. You have to ask yourself: Why are we here? Why are we at this point? I would suggest that it has a lot to do with the by-election in Victoria and that this policy, the belated economic agenda of the Albanese government, which is a recalibration of a Liberal Party tax policy, was developed at this juncture because the Prime Minister wanted to ensure that his numbers in the House of Representatives are going to be assured and he wanted to take an economic policy—effectively a policy—to this by-election in Victoria.

That is because at the end of last year the government was completely rudderless. It was rudderless because of the central problem this government has, which is an absence of economic policies designed to solve the problems of today. And of course the great challenge for many Australians, particularly those under the age of 40, is housing. It is getting into a house, or it is paying the rent. The failure of the government to address even its own housing targets is a major issue for the government, which is why people are so unhappy. So this policy was concocted in order to give the government some momentum for this upcoming by-election.

But the trick here is that this is a sugar hit. It is a short-term sugar hit, and it locks in bracket creep over the long term. So, you get a tax cut today, but you get higher taxes tomorrow. You get a tax cut in 2024 but higher taxes in 2025, 2026, 2027 and 2028. You get higher taxes over the long term, because the problem with this tax policy is that it is winding back the clock to reinsert a tax bracket that was abolished. So, the only decent tax reform that was undertaken in the last decade is being unwound because of a by-election. We are now going to base the whole personal income tax system around one man's job and around a by-election in Victoria. That is the problem—that we're going to be hitting aspirational people with a higher tax bracket by reinserting the 37c-in-the-dollar bracket, and that is hugely regrettable.

Reversing a tax reform—the only tax reform in the past decade—means that the limited ambition that we have for economic policy, for economic reform, has now gone to a new low. Of course we don't want to stand in the way of a tax cut for any Australian, but the reality is that the reinsertion of this tax bracket is a bad thing for Australia. It's a tax cut today but a higher tax tomorrow.