Deborah O'Neill (NSW, Australian Labor Party) Share this | Link to this | Hansard source

I inform the Senate that the President received today the following letter from Senator Hume:

Pursuant to standing order 75, I give notice that today I propose to move "That, in the opinion of the Senate, the following is a matter of urgency:

The need for the Senate to reaffirm its commitment to the Coalition's Personal Income Tax Plan that upon full implementation will mean around 95 per cent of taxpayers are expected to face a marginal tax rate of no more than 30 per cent, which Australians need now more than ever thanks to faster bracket creep and greater pressures under Labor's cost of living crisis."

Is the proposal supported?

More than the number of senators required by the standing orders having risen in their places—

I understand that informal arrangements have been made to allocate specific times to each of the speakers in today's debate. With the concurrence of the Senate, I ask the clerks to set the clock accordingly.

Jane Hume (Victoria, Liberal Party, Shadow Minister for the Public Service) Share this | Link to this | Hansard source

I move:

That, in the opinion of the Senate, the following is a matter of urgency:

The need for the Senate to reaffirm its commitment to the Coalition's Personal Income Tax Plan that upon full implementation will mean around 95 per cent of taxpayers are expected to face a marginal tax rate of no more than 30 per cent, which Australians need now more than ever thanks to faster bracket creep and greater pressures under Labor's cost of living crisis.

We hear a lot of debate in this chamber around stage 3 tax cuts, but it is important to understand exactly what this means, because these tax cuts have to be understood in the context of the other two stages that preceded them. The former coalition government passed the personal income tax plan to deliver lower, simpler and fairer taxes for working Australians. These are legislated tax cuts. They are reflected not only in the coalition's budgets but also in Labor's pre-election costings and in the October budget last year.

The final stage of the personal income tax plan will commence in to 2024, on 1 July. At that time, the 37 per cent tax bracket will be abolished entirely, and the 32.5 per cent tax rate will be reduced to 30 per cent. Once fully implemented, this means that 95 per cent of Australian taxpayers are expected to face a marginal tax rate of no more than 30 per cent. This is a significant reform. It's been such a long time coming: lower, simpler, fairer taxes.

Under the Personal Income Tax Plan, an apprentice on $60,000 would pay $1,455 less in tax every year from 1 July 2024, whereas an experienced tradie on, say, $80,000 would pay $1,955 less tax every year from 1 July 2024. More money in the pockets of working Australians is more important than ever, particularly now, as we look down the barrel and buckle under the weight of Labor's cost-of-living crisis—more money to help Australians with their expenses, like mortgage repayments, groceries and energy bills, all of which are going up under this government.

While those opposite would like to talk about just about anything else, this is the No. 1 issue for ordinary Australians right now. Last April, the Treasurer said that this is a full-blown cost-of-living crisis. He used the words 'full-blown cost-of-living crisis'. That was last April. Now, since that time, inflation's at its highest point in 30 years, real wages are going backwards and are forecast to continue to go backwards for the entire term of this parliament, and interest rates are at their highest point in over a decade. However, even with these facts in front of them, the government still will not admit that they are presiding over a real cost-of-living crisis while they are in government.

Last week at the Select Committee on Cost of Living, Woolworths gave evidence that Australians are beginning to change their consumer behaviour and that they are getting increasing demands from their charity partners for up to 20 per cent more in food donations. Customers are beginning to leave things at the checkout rather than putting them into their bags, because their food bills are going up.

At the same time, we know energy prices are going up. Can you name an Australian who hasn't received a bill that has said that their energy prices are going up? Their electricity prices are going up. Their gas prices are going up. Ordinary Australians are feeling the pinch. This is despite a commitment by those opposite to reduce electricity prices by $275—a number they will not even say now that they are in government. They will not repeat the words 'two hundred and seventy-five dollars', and that's because energy bills are skyrocketing under their watch. Just late last year, Prime Minister Albanese promised a $230 reduction in energy prices—again, another promise that has disappeared already. Last week the cost-of-living committee heard from the Australian Energy Regulator that, in fact, investment in energy projects is disappearing entirely, threatening long-term supply, and its massive interventions in the market are actually causing prices to go up, not to go down.

This is a problem for all Australians. But the biggest one, of course, is Labor's addiction to spending, because Labor's addiction to spending—the $23 billion of extra money that was spent in the October budget alone—is one of the reasons why the RBA is being forced to over and over and over again raise interest rates, affecting mortgage holders and other borrowers—ordinary Australians who are feeling this in their pocket every day. We know that inflation and interest rates are both going to go higher under Labor, because Philip Lowe told us that they will. Australians will pay more.

In this environment, the coalition's Personal Income Tax Plan is more important than ever. It is more important for ordinary Australians to keep more of their own money under a simpler, fairer tax system.

Jess Walsh (Victoria, Australian Labor Party) Share this | Link to this | Hansard source

I too rise to speak on this urgency motion before the Senate today, submitted by Senator Hume, on tax and the cost of living. First, let me say that our priority when it comes to tax reform is ensuring that multinationals pay their fair share of tax here in Australia. Multinational corporations will pay an extra $1 billion in tax as we clamp down on excessive deductions and profit shifting to other countries. Cracking down on multinational tax avoidance is absolutely key to our government's revenue agenda.

So too, of course, is cracking down on the waste and the rorts that have contributed to a trillion dollars of debt left to us by those opposite without any economic dividend to show for it. It is the waste and the rorts of those opposite that we are setting about fixing. It is the waste and the rorts of those opposite that have left a hole in the budget that has been left to us to repair. The sports rorts, the car park rorts, the airport land rorts—remember those? They are the rorts of a former government that spent taxpayer money like it was a Liberal Party slush fund.

Stop to imagine where we'd be today if those opposite had actually thought about how to invest in the Australian people and in the Australian economy instead of in their own failed re-election plans. Imagine if they had invested in any forward-looking plans to address any of the structural economic causes of the cost-of-living crisis today: if they had invested, for example, in renewable energy generation and transmission; if they had invested in manufacturing and securing our supply chains; if they had invested in the security of Australian women and their ability to participate fully in our economy. Imagine, if those opposite had spent 10 years investing in social and affordable housing, where we would be today in the cost-of-living crisis affecting Australians. Imagine if they had invested in the skills crisis that is holding business back right now, today, and holding Australians back from achieving their full potential.

The former government was asleep at the wheel. They were asleep on climate and energy. They were asleep on jobs and skills. They were asleep on securing manufacturing supply chains. They were asleep on understanding how gender equality drives economic growth. They were asleep on housing supply—absolutely asleep at the wheel. So much could have been done to strengthen our economy for the future in the last decade. So much should have been done. The fact that so little was done to position our country not just fort the challenges ahead but for the opportunities too is a complete dereliction of responsibility. You trashed any notion of good government. You trashed any notion of good economic management. It is Australians who are paying the price now nor a decade of missed opportunities and messed up priorities under the former government.

What we are doing is getting on with delivering the meaningful investments that Australians need, which maximise our economic impact and which meet the needs of the community today. We understand that the cost of living is hitting Australians hard, and so our economic plan is a direct and deliberate response to the challenges facing the economy and that you left behind. That's why one of the very first acts of this government was to successfully argue for an increase to the minimum wage to keep pace with inflation. We are proud to be getting wages moving once again in this country after a decade of flat wages brought by those opposite. Our October budget focused on cost-of-living relief and didn't put extra pressure on inflation, and that's the most important thing. Tackling inflation is our top priority.

That, of course, has been noted by the rating agencies, reaffirming our AAA credit rating, pointing to our responsible economic management. We are delivering the economy that Australians need. We are getting wages moving and we are dealing with the cost-of-living pressures that you left behind.

Nick McKim (Tasmania, Australian Greens) Share this | Link to this | Hansard source

Here we are, in the middle of a cost-of-living crisis. Food, petrol, medicine, transport, rent, electricity, insurance, mortgage repayments—you name it; the price of everything is going up. However, while workers, students, mortgage holders and small businesses are all getting smashed, corporations are making record profits. Real wages are going backwards, but company profits are at record highs. Inequality is increasing before our very eyes, and yet here we are today—here are the Liberals today—asking the Senate to endorse a $9,000-a-year tax cut for billionaires. How out of touch can you get! They are tax cuts for the super-rich that will further fuel inflation, further fuel inequality, and make the cost-of-living crisis worse for everyone except for those who are already very wealthy.

That's what you expect from the Liberals, but the real issue here is the Australian Labor Party, once the party of the workers but now just another political party for the asset-owning class. Labor senators know that the stage 3 tax cuts are bad policy. Labor has actually never once run the argument that stage 3 tax cuts are good policy—never once—because they know that they're not. They only supported the stage 3 tax cuts for the very wealthy to neutralise the issue so as to give themselves the best chance of winning the election. Make no mistake about it, Labor's policy on the stage 3 tax cuts boils down to this: they're not going to do the right thing, because they promised to do the wrong thing. That's Labor's policy. They would rather turbocharge inequality—and, for that matter, gender inequality—than change their position. It's a quarter of a trillion dollars in tax cuts, three-quarters of which goes to the top 20 per cent of income earners. And twice as much of the benefit goes to men as goes to women.

If Labor had the political will, they could 'unlegislate' the legislated tax cuts. The numbers are there in this parliament—in this Senate and in the House—if Labor is prepared to do the right thing by this country, but they're not. That's why the stage 3 tax cuts are no longer the Liberals' stage 3 tax cuts. They are Labor's stage 3 tax cuts, because if they're not prepared to ditch them then they're going to have to own them.

Hollie Hughes (NSW, Liberal Party, Shadow Assistant Minister for Climate Change and Energy) Share this | Link to this | Hansard source

The last six months have been interesting and embarrassing at times, but I really do think that today we've seen a new low bar set. It is just extraordinary to hear question time answers and other contributions made by those now in government where they are almost in denial of a cost-of-living crisis. The Assistant Treasurer has now declared that the RBA is going to stop raising interest rates, so the crisis is over—no need to look here! There's constant blaming, whining, carry-on, looking back to the past and passing the buck as Australians feel the pinch more and more every single day.

I think it is really time for those opposite to grow up and understand they're in government, and that that means actually making decisions that are going to be better for Australians, not worse. Obviously that memo got missed, because every single Australian, since the Albanese government has come to power, is now worse off. Stage 3 of the tax cuts that were legislated are almost at 'Voldemort status'—like the $275, 'the number that shall not be named'. They're not quite at Voldemort status but they are getting very, very close. We were told 97 times that power bills were going to go down by $275, but we know that they're going to go up, and they're probably going to go up by more than $275. So the stage 3 tax cuts are going to be required. All those tradies who are going to see, on an income of $80,000, almost $2,000 back in their pocket each year are going to need it, because their mortgages have gone up eight times since this Labor government came to power. You can compare that to the last Liberal government, when there was one increase.

We now have interest rates and a cash rate at the highest they've been in 10 years, but we're not seeing this government pull any policy levers that are moving towards reducing inflation. Every step they take, every move they make, they are making a bad situation worse—

Paul Scarr (Queensland, Liberal Party) Share this | Link to this | Hansard source

The Police!

Hollie Hughes (NSW, Liberal Party, Shadow Assistant Minister for Climate Change and Energy) Share this | Link to this | Hansard source

I think I was a bit of a lyricist there, Senator Scarr! Every time they make a decision they make the situation worse. We've got this Frankenstein energy legislation that came in last year, about which everyone, including the ACCC, has said time and time again, 'This is going to push up power prices.' Guess what, guys? That contributes to inflationary pressures, which then leads to the RBA taking action on interest rates. There is actually some rhyme and reason to why these things occur. They do follow suit.

We know the Labor Party is just obsessed with a carbon tax and it is now proposing one at three times the level that the Gillard government tried to legislate and put into place. I am just amazed that those in government are completely unaware of the impact that is going to have on businesses and on manufacturing. Look around this building. We are all sitting in a building here. It has an awful lot of concrete in it. Concrete uses a product called clinker to be produced. It is all about to go offshore because, if this carbon tax comes into play, there will be no Australian cement manufacturers. That would mean we would lose our sovereignty. We would put ourselves at risk. It's one of the most common products. It's used in every building and every road. How are you going to get over a river? That was put to me yesterday when we were looking at some of this stuff. How will you build a bridge? We know that they don't want to build some of that stuff if it's in a Liberal seat or in Mayo, but others will still want to build things. They are about to implement a carbon tax that will send all this manufacturing offshore. We are talking about hundreds of jobs that will be lost. It is going to increase the cost of absolutely everything. And that's just one industry.

We also know that this new gas supply issue is seeing investments go offshore, and there is a high likelihood we will see blackouts this year. This is something that's going to have ramifications for decades as investment is leaving this country. It is going elsewhere because those in the resources sector know that this government cannot be trusted to put policy settings in place that will allow them to safely invest in Australia and continue to grow our nation.

Deborah O'Neill (NSW, Australian Labor Party) Share this | Link to this | Hansard source

I am somewhat taken aback by the rhetoric of those who find themselves now in opposition. It is an urgency motion, but I note that they had a decade in office which can only be described as a decade of wasted opportunities and warped priorities that left Australians who now this opposition seem to think they should stand up for with falling real wages, cost-of-living pressures and $1 trillion of debt without an economic dividend to show for it. So any claim that they make in this argument about being good managers of money and good with the economy has to be absolutely seen for what it is: an attempt to continue the con of the last 10 years.

I rise, in particular, to speak to the motion put forward by Senator Hume. Let me just say for the record that, despite the great confusion that's trying to be created and drummed up by those in opposition, our policy position hasn't changed since we arrived in government. We support responsible cost-of-living relief because Australians need that, and they need us, as their government, to respond to them.

We will focus on multinational tax avoidance in order to improve the budget bottom line and improve the outcomes for Australia, for our national economy and for the benefit of all Australians. We'll do this in a calm, measured and considered way. That is the way in which the Treasurer, Mr Chalmers, has been talking to the Australian people. By his careful action, his careful words and his considered governance—not the chaos, panic, deception and lies that have been the hallmark over the last 10 years—Treasurer Chalmers has taken action to ensure that we have maintained our AAA credit rating. The rating agencies acknowledge that Labor's budget, the first one in October last year, did not add to inflation.

The Albanese government has already passed a series of measures to improve the household budgets of everyday Australians, who expect their government to respond. And that's what we've done. We've focused on responsible cost-of-living relief, and that's the kind of relief that doesn't put extra pressure on inflation. That's a really important thing. We understand that that is a critical economic indicator that we have to pay really close attention to.

The Albanese government is delivering, and will deliver, on critical things that impact people's lives in a way that will assist them to manage their budgets. There will be cheaper child care. That's happening under the Albanese government and is a cost-of-living measure that is responsible. There will be expanded paid parental leave, promised as part of our commitment leading into the election, and cheaper medicines—the most significant change in the cost of medicines in 75 years and which changes the pressure on families. We know that that's sensible assistance.

Of course, more affordable housing is also happening. My colleague Minister Collins, in the other place, is introducing legislation to fulfil our commitments on housing, because that is a massive problem that was created by 10 years of inaction by those opposite. And, of course, wage growth is happening. We're just starting to hear now that companies that refused to negotiate with unions around this country, refused to negotiate on wages, are actually coming back to the table to bargain, and wage growth will begin for Australian people.

These things matter, and they don't occur in a vacuum. Inflation is a global issue. The war in Ukraine, started by the brutal kleptocrat Vladimir Putin, has impacted supply chains right across the globe, particularly in relation to energy and food. Australians understand that we did not create those challenges but Australians also elected us to responsibly take on those challenges and address them as they present, and we are addressing those challenges.

So I stand here very proud of a sensible government committed to addressing multinational tax avoidance to improve the bottom line for Australians and to provide them with non-inflationary, best-possible help to manage their cost-of-living challenges.

Slade Brockman (WA, Liberal Party) Share this | Link to this | Hansard source

I, too, rise to make a contribution in this debate on cost of living and the legislated tax cuts. I'll start from that position. These are legislated tax cuts. These are tax cuts that are in place at the moment. People are expecting them to be delivered no matter who's in power. People are expecting to keep more of their own hard-earned money no matter who is in power, and people are expecting—they're hoping—for a government that actually knows how to manage the economy and how to tackle the inflationary crisis, not one that keeps blaming solely the war in Ukraine for something that is much deeper and much more significant and embedded in the Australian economy than that.

We are currently seeing an annualised CPI of around 7.8 per cent. In my home state in the last quarter of last year, that reflected a CPI rate of 3.6 per cent in one quarter. Annualised, it's very easy to see that that's not 7.8 per cent; it's well in excess of 14 per cent. So we are in a situation where the average families out there, average mums and dads, are facing an extraordinary level of pressure on the family budget in terms of increasing petrol prices, with a 2.2 per cent rise in the December quarter, and increasing electricity prices, with an 8.6 per cent rise in the December quarter and forecast further increases this year. Health services are also going up, at 4.2 per cent per annum.

That is just the start of the pressure Australian families and Australian households are facing. That's just the start, because we've also seen the fastest cash rate rise in history. We've seen cash rates and mortgage interest rates rise at a faster rate under this government than we've ever seen before.

The track record on interest rates from the respective parties of government is pretty clear. I went through this last night, and I'll just go back to some of the key points again. Since the RBA has been publishing data, since 1990—so that's a 32-year period; that's a decent sample size, I think you'd all agree—we've seen a data set that shows us that the Labor Party has delivered the highest interest rate in that period, of 17.5 per cent compared with the coalition's highest rate of 7½ per cent. We've seen the coalition deliver average cash rates—this is not mortgage rates; this is cash rates, so add two or three per cent for your mortgage—of 3.7 per cent, whereas under Labor the average rate has been 6.2. That's 6.2 versus 3.7 over a 32-year period.

This is not just some statistical anomaly. This is not just some blip. This is the comparison of two parties of government. This is the coalition, the Liberal Party, which knows how to handle money, which knows how to manage the economy, which knows how to balance the needs of growth with the needs of what society demands of government, compared with the Labor Party, who simply does not. They're demonstrating that again now. The things they cite in this place as examples of how they're providing relief to households are quite frankly very small, help a very limited number of households and simply do not go to what people need.

People need to see a government with a plan to actually tackle the inflationary crisis that we're currently under. These are not sustainable levels of inflation, and they are actually undermining the wages of Australians. Real wage growth is plummeting. Have you noticed that those opposite never talk about real wage growth anymore? It's because they know, with inflation where it is today, we won't see real wage rises for many, many years.

Sue Lines (President) Share this | Link to this | Hansard source

The question is that the urgency motion, as moved by Senator Hume, be agreed to.