Chris Ketter (Queensland, Australian Labor Party) Share this | Link to this | Hansard source

My question is to the Minister for Finance, Senator Cormann. I refer to the Treasurer's statement last week that bracket creep 'is a job killer, and it's a growth killer'. I also refer to the minister's statement on bracket creep that 'given that wage inflation is comparatively low, that inflation generally is comparatively low, the problem is there but it is not there to the same extent as it might have been in the past'. Who is right—the Treasurer or the minister?

Mathias Cormann (WA, Liberal Party, Minister for Finance) Share this | Link to this | Hansard source

I thank Senator Ketter for that question. Of course, if he had quoted my full quote, he would have seen that the comments made by the Treasurer and me were entirely consistent. What I said in the interview on Radio National was that bracket creep is a problem, it is a drag on growth, and that we would do as much is possible to address it and as much as we can sensibly afford, which I would have thought was an entirely reasonable boundary to set. Indeed, it is a very responsible boundary to set in relation to any policy proposals that will come forward down the track.

The second point I would make is that it is self-evident that the stronger the wages growth and the higher the wages growth across the community the faster people move through individual income tax brackets; and the lower the rate of inflation or the lower the rate of wages growth the more slowly people move through individual income tax brackets.

So the key point is this, and the government are of course of one mind in relation to this: bracket creep is a problem, bracket creep is a drag on growth, bracket creep is something that the government are committed to addressing, and we will address it to the best of our ability. We will do the best possible job to address bracket creep by pursuing personal income tax cuts in a way that is sensibly affordable.

Labor should have a close look at their policy, which is to spend more, borrow too much and then tax more. They are always chasing increased levels of expenditure with more new taxes. Our focus is on strengthening growth and creating more jobs, and part of that focus is to ensure that our tax system is as growth friendly as possible and as efficient as possible, and that we address bracket creep in the best way possible and in a way that is sensibly affordable. (Time expired)

Chris Ketter (Queensland, Australian Labor Party) Share this | Link to this | Hansard source

Mr President, I ask a supplementary question. I refer to the Treasurer's admission as follows:

It was only last September when we started the approach of looking at issues, whether it was superannuation or the GST or other things like that. Those issues were not under consideration before September last year.

Did the Minister for Finance really do nothing on economic reform until Mr Turnbull and Mr Morrison showed up?

Mathias Cormann (WA, Liberal Party, Minister for Finance) Share this | Link to this | Hansard source

It is quite humorous to see Labor playing politics with the Australian economy! They think it is quite humorous. This government, since its election in September 2013, has been working to strengthen growth and to create more jobs. That is why, since our election in 2013, we have focused on improving our international competitiveness, making our tax system more growth friendly and getting rid of Labor's disastrous carbon tax and their disastrous mining tax; that is why we delivered company tax cuts to small business in last year's budget; that is why we pursued an ambitious free-trade agenda; and that is why we pursued an ambitious infrastructure investment program—all focused on delivering stronger growth and more jobs.

It is a matter of public record that since September, when we had a change of leadership, a number of proposals, or a number of options, that previously had been taken off the table were back on the table for consideration. The way we are working through them— (Time expired)

Chris Ketter (Queensland, Australian Labor Party) Share this | Link to this | Hansard source

Mr President, I ask a further supplementary question. With the increase in unemployment, debt and deficit blowing out, and slowing economic growth, does Mr Turnbull's statement last September that the coalition government 'is not successful in providing the economic leadership that we need' remain true?

Mathias Cormann (WA, Liberal Party, Minister for Finance) Share this | Link to this | Hansard source

I completely reject the premise of the question. Employment growth today is much stronger than it was when Labor lost government. In fact, the unemployment rate is below the rate that was anticipated at the time Labor lost government. The economic position today is better than it would have been if we had kept Labor's disastrous mining tax and Labor's disastrous carbon tax, if we had not pursued an ambitious free-trade agenda and if we had not pursued an ambitious infrastructure investment program. Our budget position now is on an improving trajectory—it is on an unbelievably improving trajectory—with the underlying cash balance improving year-on-year in both dollar terms and as a share of GDP.

In any event, when are Labor going to tell us how they are going to pay for more than $50 billion in unfunded promises? Or are you going to increase taxes by another $50 billion, on top of all the tax increases that you have already put on the table?