Steve Hutchins (NSW, Australian Labor Party) Share this | Link to this | Hansard source

My question is to the Minister for Small Business, Senator Sherry. Can the minister outline to the Senate how the government’s tax package will build a stronger economy and a fairer, simpler tax system? What role will the minerals resource rent tax play in delivering the benefits of the mining boom to all Australians through higher superannuation for individuals and lower taxes for small businesses?

Nick Sherry (Tasmania, Australian Labor Party, Minister Assisting the Minister for Tourism) Share this | Link to this | Hansard source

Thank you, Senator Hutchins. I am very pleased to outline the benefits that will flow from the range of tax cuts that we are introducing as a consequence of the revenue of the minerals resource rent tax. We have announced a package of tax reform measures. The first is the superannuation guarantee. That will be increasing from nine per cent to 12 per cent. That provides a significant increased benefit to all those Australian workers who have superannuation. Secondly, we will be abolishing the superannuation contributions tax that low- and middle-income earners pay as part of their superannuation. Well over three million Australians will see the removal of the contributions tax from their superannuation contributions.

We will be extending the $50,000 superannuation cap for those over 50 with balances below half a million dollars. We will be extending, for the first time, the age cap on the superannuation guarantee. Currently, if you are aged over 70 you cannot receive compulsory superannuation. We will be extending that to age 75. We will be introducing a standard deduction, which will radically simplify the tax affairs of over 6.4 million Australians who will be able to claim a standard tax deduction. This will radically simplify the tax system. We will be cutting the tax on savings through a 50 per cent discount on up to $1,000 of interest income. We will be reducing company tax for small business from 30 to 29 per cent. We will be introducing a new and more generous accelerated depreciation arrangement for small businesses through a $5,000 write-off measure. We will be boosting banking competition by slashing interest withholding tax. (Time expired)

Steve Hutchins (NSW, Australian Labor Party) Share this | Link to this | Hansard source

Mr President, I ask a supplementary question. In addition to tax reform, can the minister outline what other key policy reforms that seek to deliver sustained economic growth and expand economic capacity will be funded by the minerals resource rent tax?

Nick Sherry (Tasmania, Australian Labor Party, Minister Assisting the Minister for Tourism) Share this | Link to this | Hansard source

I thank the senator for his question. I outlined some nine areas of major tax reform, either reduction or abolition, that flow as a consequence of the minerals resource rent tax. Of course, we know those opposite are very proud to boast that they oppose the minerals resource rent tax. As a consequence, the reduction or abolition of those nine taxes that I have outlined would not go ahead under a Liberal-Nationals government.

A further important area of benefit as a consequence of the resource rent tax is infrastructure investment. It is a key policy priority, long an area neglected by the Liberal-Nationals. We will be reinvesting in our regions through a $6 billion Regional Infrastructure Fund. This is an important part of the government’s Regional Development Australia Fund. So, if we took the Liberal-Nationals point of view and perspective, there would be no investment in infrastructure and no reduction in nine taxes. (Time expired)

Steve Hutchins (NSW, Australian Labor Party) Share this | Link to this | Hansard source

Mr President, I ask a further supplementary question. Is the minister aware of any alternative policies to the government’s tax package? And could Australians miss out on these essential economic reforms?

Nick Sherry (Tasmania, Australian Labor Party, Minister Assisting the Minister for Tourism) Share this | Link to this | Hansard source

The minerals resource rent tax announcement of 2 July 2010 will provide a fairer return on Australia’s resources and allow us to cut taxes, and abolish taxes, in the areas that I have outlined. It will cut tax for small business. It will cut tax on superannuation. It will simplify personal tax and it will also lead to investment in infrastructure. All of those tax cuts and investments the Liberal-Nationals oppose. They oppose investment in superannuation. They oppose cuts in taxes for small business. They oppose improved depreciation arrangements for small business. They oppose company tax cuts for small business. They oppose, they oppose, they oppose—because they will not support the minerals resource rent tax. That is their only approach to improving this economy: to oppose, oppose, oppose. (Time expired)