Gavin Marshall (Victoria, Australian Labor Party) Share this | Link to this | Hansard source

I move:

That the Senate take note of the answers given by the Minister for Indigenous Affairs (Senator Scullion) and the Minister for Finance (Senator Cormann) to questions without notice asked by Opposition senators today relating to income tax

Today I thought, after the first couple of questions, that we were going to go to an election on tax. We saw the government come in and they were agitated, they were excited, and there was a lot of backslapping and self-congratulating going on. I've never seen a question time in recent times start like that. But, of course, it all came to naught. After a couple of questions, they all started nodding off once again. They all had their heads down in their phones, or wherever they could hide from the answers that were being given to the questions, because they know, just like we know, that the tax system they want to introduce over the next six years is an unfair system. They know that it does not stack up to the proposals that the Labor Party is proposing to put before the Australian people. This will be one of the key battlegrounds in the forthcoming election. As I said, I thought that was going to be sooner rather than later but, no, 'sleepy hollow' started again. I think the election is still some time away.

Today we had Minister Cormann trying to justify the fact that the people in Malcolm Turnbull's electorate of Wentworth will be the biggest beneficiaries of the government's tax plan. The people of one of the richest electorates in this country, if not the richest, will gain most from this plan. And this is the other reason I thought we may be looking at an election: they started to throw the word 'aspirational' around; 'aspirations' were coming up again. And I thought, 'Yeah, you can hear an election coming on when the government starts talking about aspirational voters!'

But look at the context in which the term 'aspiration' was used. Minister Cormann was suggesting to us here that the reason the Australian public will accept their tax plan and the fact that the people in Wentworth are the biggest beneficiaries of their tax plan is that everyone's aspirational; everyone wants to be those people. And we're prepared to wait. Australians are prepared to wait until they become some of the richest people in Australia to get the benefits that those rich people are going to be delivered by this government. That's the argument he would have us accept. That is the argument they propose.

Either they think Australians are absolute mugs or they believe their own delusional rubbish. I think it's a mixture of both, to be honest. It's too tricky, it's too shifty and it's absolutely dishonest. It's a con. They know that they've built themselves a hole from which they will desperately try to get out, and they will do things like shifting the debate to a 'goanna's guts' debate. Now, I've never actually heard that term used before but, again, Minister Scullion, when talking about the tax plan, talked about a 'goanna's guts of a tax plan'. I have no idea what that is. It's the same sort of gobbledygook they talk to us about when they're talking about tax reform. It is hopeless. It is shifty. It is distraction.

What they ought to do is start acknowledging that the working people in this country who have average incomes need a tax cut. That's what the Labor Party is prepared to give them. We're prepared to back the first tranche of the government's very modest tax cuts for working people. When we're in government we will double that. But at this time, if that's all the government's prepared to give average income earners in this country, we're prepared to back that in. We're prepared to do that today, but we are not prepared to back in tax cuts over six years—two elections away—that deliver massive tax cuts to those who don't need them, to those at the big end of town, to those in the richest electorates. We're not prepared to do that when we need proper investments in our hospitals, in our schools, in our communities. That's what we want to do. We want to give benefits to average-working-wage Australians. They need a tax cut, and we want to give them that. We want to double what the government wants to give them, and we need to make the investments. If there are to be tax cuts in future for the people at the top end of town, that will be when the economy can afford it. But it will be after our investments in education and in the health system for all working Australians in this country.

Richard Colbeck (Tasmania, Liberal Party) Share this | Link to this | Hansard source

For a moment there I lived in the false hope that Senator Marshall was going to give a serious response to the questions that were answered by government members today, but my hopes have been dashed yet again. That can't be considered as a serious response. Labor may claim to have all the plans that they like, but of course they're not in government, so they actually can't deliver anything. They're not in government. They might aspire to that, if they understand what that 'aspiration' might mean. But they're not in government, so they can't deliver. They can make all the promises they like. In fact, in my home seat, where I live, in Braddon, they're making a whole range of promises at the moment, but they have to win two elections in Braddon before they can deliver on any of those promises. They ought to be focusing on the first one, which probably should have happened in October last year, if the truth be known—if the local member had actually fessed up when she should have fessed up back in October—and we could actually have had that process over and done with already.

The coalition has a comprehensive tax plan to deliver to the country. It was brought down in the budget. As a duly-elected government, I think it's quite reasonable that we aspire to have that legislation passed by the parliament. If the opposition want to put an alternative plan in place, they can win government in their own right. There will be an election sometime next year, and they will have an opportunity to do that.

The opposition asks, 'Why won't you adopt our tax plan?' If you look at the Labor Party's history of tax plans, even the ones that they've announced quite recently, you'd understand quite well why we wouldn't adopt their tax plan. For example, look at their absolutely disastrous retiree tax plan that they released earlier this year—the one that they said was well considered, well thought out and well planned. It would rip out from underneath some retirees up to 30 per cent of their entire income. It lasted two weeks before it was modified. The modifications were allegedly to exempt pensioners from the tax, because Labor's well-thought-out retiree tax would actually impact even pensioners.

After the modifications and a bit more consideration of this disastrous nan-and-pop tax that they were proposing we then found that it didn't even actually exempt all pensioners. There were still some pensioners who would be impacted by this tax that would rip up to 30 per cent of someone's entire income from them. It would strip that away, so someone with a total income of $24,000 a year would lose $5,000. Labor claim that these people are high-income earners. They would have a significant lump of income ripped away from them by this disastrous tax plan, which is, I might add, how Labor propose to pay for their magic tax plan.

They claim that their nan-and-pop tax plan is about fairness, yet they'd rip from nans and pops around this country up to 30 per cent of their income to give tax cuts to other people in the community. I don't know anyone who thinks it's fair that their nan and pop lose up to 30 per cent of their income to pay for their tax cut. I wouldn't want my nan and pop to lose up to 30 per cent of their income so that I can get a tax cut. Yet this is how Labor are intending to pay for the majority of the tax cuts that they've got in the system at the moment.

They trot around asking, 'Why won't you support our tax plan?' I'll tell you why, because I don't believe that the nans and pops of Australia should have up to 30 per cent of their income ripped away to pay for someone else's tax cut. I don't think that that's fair. I think that that demonstrates that the Labor Party and Mr Shorten don't understand what fairness is, just as they don't understand what aspiration is. They don't have a decent plan to manage the economy, as the government have. We can afford the tax cuts that we're proposing because we have managed the economy well and kept the economy strong. We have grown the economy, jobs and wages— (Time expired)

Kimberley Kitching (Victoria, Australian Labor Party) Share this | Link to this | Hansard source

I rise to take note of answers given by Senator Cormann and Senator Scullion. This is a welcome opportunity to demonstrate to the Senate, particularly to crossbench senators, the sharp contrast between the Turnbull government's unfair and divisive tax proposals and Labor's alternative, which was announced today by the Leader of the Opposition and the shadow Treasurer. It won't be news to most people in this chamber that most Australians want a tax system which is fair, efficient and responsible—one which spreads the burden of taxation equitably, one which properly funds our schools and hospitals, and one which allows the country to pay down its debts. Australians don't want a tax system which gives breaks and privileges to those who are already well off, which allows large corporations to pay no tax at all or which shifts the burden of taxation onto those who can least afford it—the 80 per cent of Australians who are middle- and low-income earners.

But let's make no mistake: none of the responses today to any questions actually answered the question that was put. Why? It's because the government's tax plan is a fraud. This is the biggest taxing, biggest spending government, and it has doubled the federal debt. What the government is proposing is the tax plan of economic vandals. They are tearing at the fabric of the Australian consensus between capital and labour that has existed since Federation: that capital could make a decent return and people could live well at the same time. The Treasurer has himself said that slow wages growth is one of the biggest problems that the Australian economy faces, but he has no plan to address that. He has opposed every wage rise ever. He has done nothing to reverse the decision of the Fair Work Commission. He has done nothing other than attack and cut penalty rates.

Today, the Leader of the Opposition gave notice that, next week, he will introduce legislation to stop the Prime Minister's attack on penalty rates. Let's compare the pair. In a final twist of the knife in the heart of working people, this government are refusing to work with Labor to deliver real income tax cuts now. This government can pretend that their never-never land, never-never gonna, six-years-off, fantastical and fanciful tax cuts are real. They are not. They are fooling no-one. If people go back and look at the income tax scale adjustments, it is Labor who has given tax relief. It is Labor who has provided relief to working Australians. It is Labor who has made the tax cuts for working people. It may not come as a surprise to some in this chamber that Paul Keating is a political hero of mine. As a former Treasurer and former Prime Minister, Paul Keating cut the tax scales more than any other Treasurer in Australia's history. The Liberal treasurers have just been pretenders.

There is a message in all of this for the Prime Minister and for the Treasurer. After five years of a government twisting and turning on itself and hanging on every poll—all 34 of them for this current Prime Minister—no-one believes you any more. Work with Labor; work with us to pass some immediate tax relief for working people. It is affordable, because we aren't proposing to give tax cuts to big banks and to foreign billionaires. What this government is doing is playing chicken with working Australians' lives—whether those people have a good week or a bad week. The government is playing chicken with the tax relief that working people could have. And that is actually typical of this government, with its reverse Midas touch.

Do you know what happens when Liberal politicians attend their branch meetings? They say they are the government for tax cuts, for no deficits and for limited government, but the truth is they are none of these things. This government has doubled federal government debt—doubled it! They are a government of tax and spend. They voted with the 'all care and no responsibility' of the Greens political party to scrap the debt ceiling. They scrapped the debt ceiling and still claim they are the responsible party of economic management? Please, give us a break. Senator Cormann has proposed tax cuts for large corporations and for foreign billionaires. But I can assure you that, in our first budget, Labor's plans mean we can deliver a winning trifecta in government. As the shadow Treasurer said this morning: bring it on. (Time expired)

Jane Hume (Victoria, Liberal Party) Share this | Link to this | Hansard source

I rise also to take note of answers from Senator Cormann and Senator Scullion. I thank Senator Kitching, in particular, for that Oscar-winning performance. I have never heard such extraordinary dribble in my life. But that's all right—we will move on from there.

As Chair of the Senate Standing Committee on Economics, I was fortunate enough to hear firsthand from witnesses about the great benefits that will flow from legislating all three stages of the Turnbull coalition government's Personal Income Tax Plan. We heard from businesses large and small, from think tanks, from consulting firms and from industry groups. The overwhelming response from witnesses was that the Personal Income Tax Plan provides much-needed relief to low- and middle-income earners, that it protects against bracket creep and that it does so in a way that maintains the central character of progressivity in Australia's tax system.

Everyone has heard what is contained in our tax plan. Many people have heard how we are executing those tax cuts, but there has not been enough discussion of why we are implementing the tax cuts and why they are so important. Why do we want to provide tax relief?

It is because our taxes should be lower; they should be simpler; and they should be fairer. Fairness is one of the key pillars of our Personal Income Tax Plan and arguably the most important, because Australians value nothing more than they value a fair go. That is exactly what the Personal Income Tax Plan delivers.

This bill was met by the Business Council of Australia with the message:

It will deliver a more competitive personal tax system that improves incentives to work and save. It achieves this while maintaining a highly progressive tax and transfer system.

PricewaterhouseCoopers concluded that the government's proposed Personal Income Tax Plan provides much-needed relief to Australian taxpayers from the pressures of bracket creep, and it does so in a way which retains the central character of progressivity in Australia's tax system. COSBOA, the Council of Small Business Organisations Australia, concluded that the big win for COSBOA's constituents, for small businesses, is the removal of the complexity and the fear that people have about moving into new tax brackets. Contrary to the accusations levelled by those opposite, we heard from many, many witnesses that the tax system maintained its progressivity, something which has been denied today.

Madam Deputy President, can I point you to the distributional impacts of the Personal Income Tax Plan. The Grattan Institute highlighted that high-income earners such as those on the top marginal tax rate would continue to pay a similar proportion of overall personal income tax collections under the government's plan to that under the current system. The Grattan Institute confirmed that progressivity does not change significantly under the coalition's Personal Income Tax Plan. PwC suggested the same thing. There were plenty of witnesses that demonstrated conclusively that progressivity does not change under the Personal Income Tax Plan.

Senator Kitching mentioned that the Personal Income Tax Plan takes place over seven years. Why does it take place over seven years? It's fully factored into the budget bottom line. It's entirely affordable. The budget remains in surplus over that time, and the economy will continue to grow. A long-term plan is fiscally responsible. The budget does return to surplus. It's economically effective. There is more money in the pockets of hardworking Australians. Most importantly, it counters the criticism, which is so often levelled against all governments, of political myopia—which affects those opposite, who are addicted to the sugar hit of a tax-and-spend addiction. Certainly that can be seen from Labor's higher tax collection: retiree tax, housing tax, investment tax, higher income tax, family business tax, savings taxes—a plethora of taxes, more than $200 billion. Senator Marshall suggested that he wanted to go to an election based on tax. I say: bring that on. Bring that on.

The Labor Party doesn't get aspiration; it never has, and Tanya Plibersek proved that today: 'This "aspiration" term—it's a mystery to me.' Well, if ignorance is bliss, certainly the member for Sydney must be ecstatic, because Labor is driven by that obsessive preoccupation that redistribution is so much more important than wealth creation.

The coalition will always be a government of aspiration. It will always be a government of opportunity, of having a go, of taking risks, of reward for effort. We will proudly be the flag-bearers for aspirational Australians every single time. The coalition's Personal Income Tax Plan is clear and concise, pragmatic and— (Time expired)

Kristina Keneally (NSW, Australian Labor Party) Share this | Link to this | Hansard source

I rise to participate in this debate to take note of answers provided today by Ministers Scullion and Cormann. I'd like to start with the questions asked of Minister Scullion by Senator Ketter, where Senator Ketter highlighted that the Turnbull government's Personal Income Tax Plan reveals that the electorates of Hinkler, Wide Bay, Lyne and Cowper, all held by Nationals MPs, are amongst the 10 worst-off electorates. The senator asked Minister Scullion if he'd sought any advice on the inequitable distribution of the Turnbull government's income tax plan and its impact on regional communities. What was the minister's response? The minister's response was to reject the premise of the question.

This is not a point where you get to pick alternative facts, Minister Scullion. These are facts. This is the reality of the Turnbull government's Personal Income Tax Plan. The regional communities are going to be hit hard. They are going to be amongst the worst-off electorates. For example, in my home state of New South Wales that I represent here in this chamber, if you look at the electorate of Lyne and the electorate of Cowper, the second question that was asked to Minister Scullion was: have the members for those areas, Mr Gillespie and Mr Hartsuyker, lobbied the government, raised concerns, picked up the phone and tried to speak to someone about the disproportionate impact on their communities? Well, we didn't hear that. We didn't hear that they have done that. They haven't picked up the phone. Apparently they haven't said a peep about how their communities are being affected unfairly by their Liberal counterparts, their coalition partners in government, and the tax plan that they're seeking to implement. Apparently these National Party members in these electorates in the state of New South Wales are quite happy that another electorate in the state of New South Wales, that of Wentworth, is going to be amongst the best off. What a surprise! Malcolm Turnbull's own electorate is going to be amongst the best off in Malcolm Turnbull's Personal Income Tax Plan.

Sue Lines (WA, Deputy-President) Share this | Link to this | Hansard source

Senator Keneally, I just remind you to refer to those in the other place by their correct titles.

Kristina Keneally (NSW, Australian Labor Party) Share this | Link to this | Hansard source

Thank you very much. We know that, under Labor's bigger, better, fairer income tax plan, 72 per cent of the people of Lyne, or 52,000 people, will be at least $928 better off. Of the people of Cowper, 73 per cent, or 60,000 of them, will be at least $928 better off.

I turn to the questions asked to Minister Cormann, first by Senator Bilyk. She posed to him some facts that we now know as a result of analysis done not only by the Parliamentary Budget Office, which I will come to in a moment, but also by NATSEM. The analysis says that, particularly when it comes to stage 3 of Prime Minister Malcolm Turnbull's Personal Income Tax Plan, there will be higher income inequality; the rich will get more tax cuts than the poor. We know the electorate of Wentworth will be best off under this income tax plan proposed by the Turnbull government. We know that this Turnbull government would like to see tax cuts for multinationals and millionaires and penalty rate cuts for working people.

We also know that, in my home state of New South Wales, in the electorate of Reid 110,000 people would be better off under Labor's income tax plan. They would be better off the tune of up to $928 a year. We know particularly that the financial benefits of stage 3 overwhelmingly flow to the well-off in the community, but we also know from analysis released today by the Parliamentary Budget Office that stage 3 of the Turnbull government's income tax plan will cost $10.4 billion a year by 2028, and it will grow at 12 per cent a year. We know that Minister Cormann and Treasury have done year-on-year analysis of the Turnbull government's Personal Income Tax Plan and they're not releasing it. They told us in Senate estimates that they had that year-on-year analysis but they're not releasing it. They're asking the Senate—they're asking the crossbench in particular—to vote blindly, it would seem, without that type of information.

One thing we also know as a result of Parliamentary Budget Office analysis is that overwhelmingly the financial benefits of stage 3 flow to men over women at a ratio of three to one. Thirty billion dollars of the $41 billion of stage 3 flows to men—not surprising from a government that doesn't believe that we should axe the tampon tax. They are apparently quite happy to see the benefits of their Personal Income Tax Plan flow overwhelmingly to men. The gender bias deserves to be— (Time expired)

Question agreed to.