Mitch Fifield (Victoria, Liberal Party) Share this | Link to this | Hansard source

My question is to Senator Minchin, the Minister representing the Prime Minister. From 1 July, Australian families will start benefiting from a range of income tax cuts, superannuation tax cuts and other benefit increases being delivered by the government. Will the minister provide detail on how these initiatives will assist the Australian community?

Nick Minchin (SA, Liberal Party, Minister for Finance and Administration) Share this | Link to this | Hansard source

I thank Senator Fifield for that appropriate question. Senator Fifield is quite right: 1 July does mark a very significant date for Australian taxpayers. It is the day when the human dividend of our very strong economic management and our strong budget does flow through to all Australians. In just 10 days time, personal income tax cuts worth $31.5 billion will start flowing through to Australian households, and every single Australian taxpayer will benefit. The 30 per cent threshold is being raised, the low-income tax offset is being increased and from 1 July next year the 40 per cent and 45 per cent thresholds will also be increased. So it is a comprehensive, across-the-board tax cut, putting over $31 billion back into the pockets of taxpayers and, very importantly from our government’s point of view, ensuring that 80 per cent of taxpayers pay no more than 30c in the dollar in tax. In individual terms that means that a taxpayer earning $30,000 to $40,000 a year will receive a tax cut of $1,100 in 10 days time.

If you look at the tax cuts we have delivered over the last three years, you see that the cumulative effect is quite substantial. A taxpayer on $30,000 a year will have had their tax burden reduced by no less than 45 per cent. A taxpayer on $40,000 a year will have had their tax bill reduced by 25 per cent. When you add in the range of assistance payments as well, the position for Australian families is very good. As the ABS reported last week, if you look at all the benefits that families receive from our government, you see that the average Australian family does not pay any net tax. In fact they receive from the government net receipts. So only the top 40 per cent of Australian families pay any net tax at all—a magnificent reform by our government.

The date of 1 July also marks the commencement of our simplified superannuation reforms. Over a period of years superannuation taxation has become very complicated. At the moment, a lump sum superannuation benefit may include up to eight different parts which can be taxed in seven different ways. The virtue of what happens in 10 days time is that all that complexity goes. Australians aged 60 and over who have already paid tax on their superannuation contributions and earnings will not pay tax on their superannuation benefits. So older Australians will be able to better provide for themselves in their retirement and it will provide an incentive for them to continue to work in their transition to retirement.

All of these tax cuts show that all sectors of Australia are sharing in the benefits of our good economic management. That is why we want to keep delivering surpluses: so that we can keep the pressure off interest rates and have the resources available to keep the pressure off taxation, provide better services and invest in infrastructure.

If you look at the Labor alternative, you see that all this can be put at risk. Labor frankly admit that they do not have a tax policy. They say, ‘What they’ve got, we’ll have.’ Apart from having no tax policy, they have no plan to keep the economy strong. As I have said before, they have got two policies. One is to put the unions back in charge of workplace relations; the other is to trash the economy through their CO reduction program. Of course, their claim that productivity is the big problem for Australia has been completely blown away in the last week, including yesterday by the OECD, which exposed their lie about their position on productivity. We have seen with the Labor budgets how utterly irresponsible they are. What you see from Labor state governments with their budgets is what you would get from that mob opposite if they ever got a chance to run this economy. This country should not ever take a risk on this untried, inexperienced opposition that we have opposite.