Jenny McAllister (NSW, Australian Labor Party, Assistant Minister for Climate Change and Energy) Share this | Hansard source

I move:

That these bills be now read a second time.

I seek leave to have the second reading speeches incorporated into Hansard.

Leave granted.

The speeches read as follows—

TREASURY LAWS AMENDMENT (COST OF LIVING TAX CUTS) BILL 2024

I'm proud to introduce the Treasury Laws Amendment (Cost of Living Tax Cuts) Bill 2024.

This Bill implements the Albanese Labor Government's cost of living tax cut for middle Australia.

It means every Australian taxpayer will now get a tax cut, right up and down the income scale.

And 84 percent of taxpayers will get a bigger tax cut and more support.

It means more tax relief for more workers, to help with the costs of living.

It means the steel workers I met with in Launceston, the early educators in Carrum Downs, the health care workers in Meadowbrook, the plumbers and sprinkler fitters in Beenleigh—

The truckies, the nurses, the police officers—

Will get a bigger tax cut.

This is all about supporting the hard work of people who make our economy and our country strong.

It's all about supporting people who work hard so that they can provide for their loved ones and get ahead.

It's all about doing more than just acknowledging people are under pressure and doing something about it.

It's about recognising that aspiration in this country is not, and should not, be limited to people who are already doing pretty well.

Middle Australia is aspirational Australia—where people work hard to give their kids a better chance.

And the best version of our country is one that provides more opportunities for more people, so there's reward for effort right up and down the income scale—

In every suburb and every town.

Our tax cuts are better for workers and families and communities right around Australia, and better for the economy.

We found a better way to deliver cost of living relief and we've done it in a way that is better for bracket creep, better for labour supply, better for women, better for young people—

And in a way that doesn't burden the budget or add to inflationary pressures.

These tax cuts build on our broader plan to ease cost of living pressures and come on top of tens of billions in relief across childcare, energy bills, rents and medicines already rolling out.

These cost of living tax cuts for middle Australia mean every taxpayer will get a tax cut from 1 July.

As I said, 84 per cent of Australian taxpayers will get a bigger tax cut because of our changes.

The workers of our communities and our country need and deserve this extra help.

The average worker will now get a tax cut of more than $1,500 a year.

That's around $29 per week.

And more than double what they were going to receive under the old plan.

Someone earning $100,000 a year, gets a tax cut of around $42 per week, or $2,179 a year.

For a family on an average household income—around $130,000—with one partner earning $80,000 and the other $50,000—

Their combined tax cut will be over $2600—which is about $50 a week, and $1600 more than they would get under the old plan.

Nurses, teachers, and truckies are some of the most likely to benefit, with more than 95 per cent of those taxpayers getting a bigger tax cut.

This is good for workers and good for the economy.

This is not relief or reform; this is relief and reform.

More relief for middle Australia and a better reform for our economy.

We found a better way to give a tax cut to every taxpayer but with a bigger emphasis on middle Australia, by cutting two rates and lifting two thresholds.

By reducing the lowest rate of income tax from 19 to 16 per cent—

Lowering the second tax rate from 32.5 to 30 per cent -

And raising the thresholds of the 37 and 45 per cent tax rates to $135,000 and $190,000 respectively -

We are reforming the tax system, providing cost of living relief across the board and returning bracket creep.

In fact, the 45 per cent threshold will be lifted on July 1st for the first time since Labor was last in office.

And the average tax rate for the average worker will be lower under our plan compared to those opposite, for the next decade.

Our tax plan delivers sustainable relief and substantial reform by:

Maximising cost of living relief for middle Australia—

Without adding to inflationary pressures -

And delivering an economic dividend—by boosting capacity.

The Treasury advice makes these four things clear:

First, we've found a better way to return more bracket creep to more people.

Bracket creep hurts low and middle income earners the most as they experience the fastest growth in their average tax rate as their income increases.

Our approach does more to reduce bracket creep for more taxpayers.

As a result, over the next decade the average worker will pay $21,635 less in tax.

Second, we found a better way to increase incentives to work and boost labour supply.

Treasury estimates our changes will increase labour supply by around 930,000 hours per week.

This is more than double the labour supply impact of the plan from five years ago.

Third, we found a better way to do more for women.

From July 1, 5.8 million women, that is 90 per cent of tax-paying women will receive a bigger tax cut.

Helping parents returning to work, particularly young women with children.

And delivering a bigger benefit to more than 90 per cent of taxpayers in high demand occupations that have a significant percentage of women.

Teachers, nurses, aged carers, disability support and early childhood educators will take home more pay because of our tax plan.

So will younger Australians and those who live in the regions -

With over 90 per cent of those under 35 getting a bigger tax cut.

All this helps to build a larger, more inclusive and more dynamic labour force.

And fourth, we are doing it in a way that does not impact inflation or put extra strain on the budget.

The Treasury advice is clear—our changes are broadly revenue neutral and won't add to inflation.

Tax relief rolls out over the course of the year, not in a single payment so its effect is staggered.

It begins to flow from the middle of year when inflation is expected to moderate further.

The Treasury Secretary and I consulted the RBA ahead of these changes, and Governor Bullock confirmed our tax cuts don't have implications for their inflation forecasts.

Our tax cuts are better for cost of living, better for the workforce, better for bracket creep, better for women and better for the economy.

And they come with additional help via the lifting of the low income Medicare levy thresholds, in the legislation that I will introduce shortly.

That will mean 1.2 million low income earners get additional tax relief on top of the tax cuts we are legislating here.

The Government didn't come to the decision to alter the old stage three tax cuts lightly.

We knew it would be politically contentious and contested to amend the tax changes legislated five years ago—

When the world was a very different place.

Before a once in a 100-year pandemic, persistent inflation, higher interest rates, two conflicts and global uncertainty—

Which put people under more sustained cost of living pressure.

Listening to our communities it became increasingly clear over the summer that we needed to have more cost of living relief, and it needed to be broader, without adding to inflation.

I think Australians understand that when economic circumstances change, the right thing to do is improve and align our economic policy.

The tax changes contained in this Bill are the right thing to do, for the right reasons and at the right time.

We have put people before politics.

We found a better, more responsible way to ensure every taxpayer gets a tax cut, but the workers of middle Australia get a bigger tax cut to help ease the pressure they're under.

Our cost of living tax cuts build on our broader economic strategy.

Helping to ease cost of living pressures without adding to inflation -

Getting the budget in better nick so we can insulate ourselves against uncertainty and provide responsible relief—

And investing in the capacity of our economy through skills, energy and housing.

They are a central part of our broader economic plan—to get wages moving again, bring inflation under control and drive fairer prices for consumers if we can.

Part of our efforts to modernise the economy and maximise our advantages in the defining decade.

So more people are beneficiaries not victims of the big changes underway in our economy and our society.

And despite the weaker global conditions, persistent inflation and uncertainty around the world we are making welcome progress.

Inflation has come off substantially since its peaks in 2022, and our policies are helping, but it's not mission accomplished because people are still under pressure.

Our labour market has been resilient—we've overseen the creation of 650,000 jobs, a record for a first term Government.

We've seen two consecutive quarters of real wages growth, with Treasury expecting annual real wages to grow this year.

This is on the back of delivering the first surplus in 15 years, with a second one in prospect.

That's a $100 billion fiscal turnaround from what we inherited, in one year alone.

We have come a long way in less than two years.

Repairing the budget and investing in the capacity of our economy.

Inflation is slowing.

Real wages are growing.

And from the 1st of July we will see Labor's cost of living tax cuts flowing as well.

This is the parliament's big chance to provide bigger tax cuts for more people to help with the cost of living.

Honourable members should not stand in the way of that.

Full details of the measure are contained in the Explanatory Memorandum.

_____

TREASURY LAWS AMENDMENT (COST OF LIVING—MEDICARE LEVY) BILL 2024

Today I introduce the Treasury Laws Amendment (Cost of Living—Medicare Levy) Bill 2024.

This is another way that the Albanese Labor Government is providing more tax relief to Australians on modest incomes, to help with the costs of living.

It means more help for more people via the tax system, by adjusting the Medicare Levy low income thresholds.

It will ensure people on lower incomes continue to pay less or are exempt from the Medicare levy.

It means 1.2 million Australians get to keep a bit more of what they earn.

Most Australian residents pay the Medicare levy, charged at two per cent of their taxable income.

We are increasing the low income thresholds by 7.1 per cent for singles, families, seniors and pensioners in line with average annual growth in the Consumer Price Index.

This is not an automatic change; it's not indexation -

It requires a Government decision and this legislation.

The increases contained in this Bill mean that those with a taxable income of up to $26,000 will not be liable for the Medicare levy—

That's an increase of almost $2,000.

Seniors and pensioners will now be able to earn up to $41,089 before being liable for the Medicare levy.

Couples and families will now be able to earn up to $43,846.

Families who are eligible for the seniors and pensioners tax offset can now earn up to $57,198.

And the thresholds for couples and families increases by $4,027 for each dependent child or student.

These changes are about ensuring those on the lowest incomes, keep a bit more of their weekly pay packet—

Providing targeted relief to those that are doing it tough and help to ease some of the pressure on Australian families, seniors and young people on modest incomes.

This Bill adds to the cost-of-living relief we are already rolling out for those who need it most.

Our cost of living tax cuts for middle Australia that deliver a tax cut for every Australian taxpayer—

The tens of billions of dollars in cost of living relief across childcare, energy bills and rents we are already rolling out—

And the billions we have invested in strengthening Medicare.

We've tripled the bulk billing incentive, supporting 11.6 million Australians to access a GP with no out of pocket costs.

We've made medicines cheaper, saving Australians $250 million last year and with more savings to come this year.

And we're establishing Medicare urgent care clinics across the country to ease the pressure on emergency departments when care is needed.

It is cost of living relief and health reform, hand in hand.

Our changes to the low income threshold for the Medicare levy for 2023-24 will benefit more than a million Australians.

This is about doing what we responsibly can to help ease some of the pressure being felt by Australians right around the country—

Especially for those on lower incomes, younger people, seniors and women—

And many of the Australians doing it toughest when it comes to managing cost of living pressures.

Across our tax changes, the tens of billions in targeted cost of living relief and now these changes to the Medicare levy -

We are determined to make a positive difference in people's lives; to help where we can.

We are focused on getting the budget in better nick and inflation under control.

As well as, not instead of, supporting Australians through tough times.

Full details of the measures are contained in the Explanatory Memorandum.