Jenny McAllister (NSW, Australian Labor Party, Assistant Minister for Climate Change and Energy) Share this | Link to this | Hansard source

I move:

That these bills be now read a second time.

I seek leave to have the second reading speeches incorporated into Hansard.

Leave granted.

The speeches read as follows—

TREASURY LAWS AMENDMENT (COST OF LIVING TAX CUTS) BILL 2024

I'm proud to introduce the Treasury Laws Amendment (Cost of Living Tax Cuts) Bill 2024.

This Bill implements the Albanese Labor Government's cost of living tax cut for middle Australia.

It means every Australian taxpayer will now get a tax cut, right up and down the income scale.

And 84 percent of taxpayers will get a bigger tax cut and more support.

It means more tax relief for more workers, to help with the costs of living.

It means the steel workers I met with in Launceston, the early educators in Carrum Downs, the health care workers in Meadowbrook, the plumbers and sprinkler fitters in Beenleigh—

The truckies, the nurses, the police officers—

Will get a bigger tax cut.

This is all about supporting the hard work of people who make our economy and our country strong.

It's all about supporting people who work hard so that they can provide for their loved ones and get ahead.

It's all about doing more than just acknowledging people are under pressure and doing something about it.

It's about recognising that aspiration in this country is not, and should not, be limited to people who are already doing pretty well.

Middle Australia is aspirational Australia—where people work hard to give their kids a better chance.

And the best version of our country is one that provides more opportunities for more people, so there's reward for effort right up and down the income scale—

In every suburb and every town.

Our tax cuts are better for workers and families and communities right around Australia, and better for the economy.

We found a better way to deliver cost of living relief and we've done it in a way that is better for bracket creep, better for labour supply, better for women, better for young people—

And in a way that doesn't burden the budget or add to inflationary pressures.

These tax cuts build on our broader plan to ease cost of living pressures and come on top of tens of billions in relief across childcare, energy bills, rents and medicines already rolling out.

These cost of living tax cuts for middle Australia mean every taxpayer will get a tax cut from 1 July.

As I said, 84 per cent of Australian taxpayers will get a bigger tax cut because of our changes.

The workers of our communities and our country need and deserve this extra help.

The average worker will now get a tax cut of more than $1,500 a year.

That's around $29 per week.

And more than double what they were going to receive under the old plan.

Someone earning $100,000 a year, gets a tax cut of around $42 per week, or $2,179 a year.

For a family on an average household income—around $130,000—with one partner earning $80,000 and the other $50,000—

Their combined tax cut will be over $2600—which is about $50 a week, and $1600 more than they would get under the old plan.

Nurses, teachers, and truckies are some of the most likely to benefit, with more than 95 per cent of those taxpayers getting a bigger tax cut.

This is good for workers and good for the economy.

This is not relief or reform; this is relief and reform.

More relief for middle Australia and a better reform for our economy.

We found a better way to give a tax cut to every taxpayer but with a bigger emphasis on middle Australia, by cutting two rates and lifting two thresholds.

By reducing the lowest rate of income tax from 19 to 16 per cent—

Lowering the second tax rate from 32.5 to 30 per cent -

And raising the thresholds of the 37 and 45 per cent tax rates to $135,000 and $190,000 respectively -

We are reforming the tax system, providing cost of living relief across the board and returning bracket creep.

In fact, the 45 per cent threshold will be lifted on July 1st for the first time since Labor was last in office.

And the average tax rate for the average worker will be lower under our plan compared to those opposite, for the next decade.

Our tax plan delivers sustainable relief and substantial reform by:

Maximising cost of living relief for middle Australia—

Without adding to inflationary pressures -

And delivering an economic dividend—by boosting capacity.

The Treasury advice makes these four things clear:

First, we've found a better way to return more bracket creep to more people.

Bracket creep hurts low and middle income earners the most as they experience the fastest growth in their average tax rate as their income increases.

Our approach does more to reduce bracket creep for more taxpayers.

As a result, over the next decade the average worker will pay $21,635 less in tax.

Second, we found a better way to increase incentives to work and boost labour supply.

Treasury estimates our changes will increase labour supply by around 930,000 hours per week.

This is more than double the labour supply impact of the plan from five years ago.

Third, we found a better way to do more for women.

From July 1, 5.8 million women, that is 90 per cent of tax-paying women will receive a bigger tax cut.

Helping parents returning to work, particularly young women with children.

And delivering a bigger benefit to more than 90 per cent of taxpayers in high demand occupations that have a significant percentage of women.

Teachers, nurses, aged carers, disability support and early childhood educators will take home more pay because of our tax plan.

So will younger Australians and those who live in the regions -

With over 90 per cent of those under 35 getting a bigger tax cut.

All this helps to build a larger, more inclusive and more dynamic labour force.

And fourth, we are doing it in a way that does not impact inflation or put extra strain on the budget.

The Treasury advice is clear—our changes are broadly revenue neutral and won't add to inflation.

Tax relief rolls out over the course of the year, not in a single payment so its effect is staggered.

It begins to flow from the middle of year when inflation is expected to moderate further.

The Treasury Secretary and I consulted the RBA ahead of these changes, and Governor Bullock confirmed our tax cuts don't have implications for their inflation forecasts.

Our tax cuts are better for cost of living, better for the workforce, better for bracket creep, better for women and better for the economy.

And they come with additional help via the lifting of the low income Medicare levy thresholds, in the legislation that I will introduce shortly.

That will mean 1.2 million low income earners get additional tax relief on top of the tax cuts we are legislating here.

The Government didn't come to the decision to alter the old stage three tax cuts lightly.

We knew it would be politically contentious and contested to amend the tax changes legislated five years ago—

When the world was a very different place.

Before a once in a 100-year pandemic, persistent inflation, higher interest rates, two conflicts and global uncertainty—

Which put people under more sustained cost of living pressure.

Listening to our communities it became increasingly clear over the summer that we needed to have more cost of living relief, and it needed to be broader, without adding to inflation.

I think Australians understand that when economic circumstances change, the right thing to do is improve and align our economic policy.

The tax changes contained in this Bill are the right thing to do, for the right reasons and at the right time.

We have put people before politics.

We found a better, more responsible way to ensure every taxpayer gets a tax cut, but the workers of middle Australia get a bigger tax cut to help ease the pressure they're under.

Our cost of living tax cuts build on our broader economic strategy.

Helping to ease cost of living pressures without adding to inflation -

Getting the budget in better nick so we can insulate ourselves against uncertainty and provide responsible relief—

And investing in the capacity of our economy through skills, energy and housing.

They are a central part of our broader economic plan—to get wages moving again, bring inflation under control and drive fairer prices for consumers if we can.

Part of our efforts to modernise the economy and maximise our advantages in the defining decade.

So more people are beneficiaries not victims of the big changes underway in our economy and our society.

And despite the weaker global conditions, persistent inflation and uncertainty around the world we are making welcome progress.

Inflation has come off substantially since its peaks in 2022, and our policies are helping, but it's not mission accomplished because people are still under pressure.

Our labour market has been resilient—we've overseen the creation of 650,000 jobs, a record for a first term Government.

We've seen two consecutive quarters of real wages growth, with Treasury expecting annual real wages to grow this year.

This is on the back of delivering the first surplus in 15 years, with a second one in prospect.

That's a $100 billion fiscal turnaround from what we inherited, in one year alone.

We have come a long way in less than two years.

Repairing the budget and investing in the capacity of our economy.

Inflation is slowing.

Real wages are growing.

And from the 1st of July we will see Labor's cost of living tax cuts flowing as well.

This is the parliament's big chance to provide bigger tax cuts for more people to help with the cost of living.

Honourable members should not stand in the way of that.

Full details of the measure are contained in the Explanatory Memorandum.

_____

TREASURY LAWS AMENDMENT (COST OF LIVING—MEDICARE LEVY) BILL 2024

Today I introduce the Treasury Laws Amendment (Cost of Living—Medicare Levy) Bill 2024.

This is another way that the Albanese Labor Government is providing more tax relief to Australians on modest incomes, to help with the costs of living.

It means more help for more people via the tax system, by adjusting the Medicare Levy low income thresholds.

It will ensure people on lower incomes continue to pay less or are exempt from the Medicare levy.

It means 1.2 million Australians get to keep a bit more of what they earn.

Most Australian residents pay the Medicare levy, charged at two per cent of their taxable income.

We are increasing the low income thresholds by 7.1 per cent for singles, families, seniors and pensioners in line with average annual growth in the Consumer Price Index.

This is not an automatic change; it's not indexation -

It requires a Government decision and this legislation.

The increases contained in this Bill mean that those with a taxable income of up to $26,000 will not be liable for the Medicare levy—

That's an increase of almost $2,000.

Seniors and pensioners will now be able to earn up to $41,089 before being liable for the Medicare levy.

Couples and families will now be able to earn up to $43,846.

Families who are eligible for the seniors and pensioners tax offset can now earn up to $57,198.

And the thresholds for couples and families increases by $4,027 for each dependent child or student.

These changes are about ensuring those on the lowest incomes, keep a bit more of their weekly pay packet—

Providing targeted relief to those that are doing it tough and help to ease some of the pressure on Australian families, seniors and young people on modest incomes.

This Bill adds to the cost-of-living relief we are already rolling out for those who need it most.

Our cost of living tax cuts for middle Australia that deliver a tax cut for every Australian taxpayer—

The tens of billions of dollars in cost of living relief across childcare, energy bills and rents we are already rolling out—

And the billions we have invested in strengthening Medicare.

We've tripled the bulk billing incentive, supporting 11.6 million Australians to access a GP with no out of pocket costs.

We've made medicines cheaper, saving Australians $250 million last year and with more savings to come this year.

And we're establishing Medicare urgent care clinics across the country to ease the pressure on emergency departments when care is needed.

It is cost of living relief and health reform, hand in hand.

Our changes to the low income threshold for the Medicare levy for 2023-24 will benefit more than a million Australians.

This is about doing what we responsibly can to help ease some of the pressure being felt by Australians right around the country—

Especially for those on lower incomes, younger people, seniors and women—

And many of the Australians doing it toughest when it comes to managing cost of living pressures.

Across our tax changes, the tens of billions in targeted cost of living relief and now these changes to the Medicare levy -

We are determined to make a positive difference in people's lives; to help where we can.

We are focused on getting the budget in better nick and inflation under control.

As well as, not instead of, supporting Australians through tough times.

Full details of the measures are contained in the Explanatory Memorandum.

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

I rise to speak on the government's Treasury Laws Amendment (Cost of Living Tax Cuts) Bill 2024 and Treasury Laws Amendment (Cost of Living—Medicare Levy) Bill 2024. At the outset let me say that the Treasury Laws Amendment (Cost of Living Tax Cuts) Bill 2024 is perhaps the high-water mark of Prime Minister Anthony Albanese's breach of trust of the Australian people. It represents the culmination of a long, methodical and intentional mistruth told to the Australian people hundreds of times since before the 2022 election. It was finally brought out into the open on 25 January, when the Prime Minister and the Treasurer stepped into the Prime Minister's courtyard and announced that, despite everything that they had said over the last two years, they would be amending the third stage of the tax cuts delivered by the coalition in a previous parliament. This is the bill that finally and completely smashes any semblance of credibility that this Prime Minister had. Who will ever believe this Prime Minister when he makes them a promise again? After telling Australians, 'My word is my bond,' and insisting more than a hundred times, with his Treasurer, that there would be no more changes to the stage 3 tax cuts, the Prime Minister broke his word. Prime Minister Anthony Albanese's word is clearly worthless.

Evidence that the cost-of-living committee has heard from the Treasury demonstrates that the Prime Minister's mistruths are even more egregious. While the Treasury confirmed that it had been tasked with actively examining ways to amend the stage 3 tax cuts on 11 December last year, dozens of times after that point the Prime Minister looked Australians in the eye and said, 'We are not reconsidering that position.' As far as shameless mistruths go, that one should shoot right to the top of the list, but there are plenty more to choose from. Don't forget, 'Energy bills will fall by $275,' and, 'Labor has real and lasting plans for cheaper electricity and cheaper mortgages.' But what about this one, Mr Deputy President: 'I'll say this very clearly. Australians will be better off under a Labor government'? That was Prime Minister Albanese back in April 2022 when he was opposition leader Anthony Albanese.

The fact is, despite the words of the Prime Minister, Australians are really doing it tough, and they have been for a long time; they have been for more than 18 months. Labor's cost-of-living crisis is crushing Australians. As Chair of the Select Committee on the Cost of Living, along with my deputy, who is now sitting in the chair, I have heard regularly from witnesses right across the country and right across the spectrum about just how tough it is out there for ordinary Australians paying their mortgages or rent, paying their gas and electricity bills and paying for groceries at the supermarket, because of Labor's inability to manage the economy. Just recently, in Gladstone, we heard from a local council that younger people were being forced to choose between paying their rent or seeing a GP, because there are no longer any GPs in Gladstone that allow for bulk-billing and those young people's budgets are simply at breaking point. Time and time again—from Port Augusta to Parramatta, from Box Hill to Launceston—we have heard from families with one income, or even two incomes, who are forced to seek charitable assistance because they can't pay their mortgage or put food on the table.

Poor economic conditions and a cost-of-living crisis are not, despite what Labor will tell you, acts of nature. When inflation stays higher for longer, when interest rates stay higher for longer, when your real disposable incomes go backwards at record rates, this is a failure to manage the economy. It's not bad luck; it's bad management.

With that, I move:

At the end of the motion, add ", but the Senate notes that:

(a) this government has mismanaged the economy and made a deliberate decision to break promises and raise taxes;

(b) the Coalition is committed to lower, simpler and fairer taxes;

(c) because Australians are hurting from the Government's mismanagement of the economy, the Coalition will not oppose the reduction in the 19c tax rate to 16c;

(d) the Coalition is committed to going to the next election with a tax reform package that is in keeping with the stage 3 tax cuts; and

(e) the Coalition's package will:

(i) deliver lower, simpler, and fairer taxes,

(ii) fight bracket creep and enshrine aspiration in our tax system,

(iii) reward hard work and support a strong economy where every Australian can get ahead, and

(iv) unite, rather than pit Australians against each other".

I note that this government has mismanaged the economy and made a deliberate decision to break promises, to raise taxes and to abandon any genuine reform on personal income taxes. We have a government that is more interested in radical, productivity-sapping industrial relations than in getting productivity moving, and what is the result? Well, productivity is flat and economic growth is non-existent. Based on the most recent data, if it weren't for the massive immigration numbers, we would be in a recession. This per-capita recession that we are now in is what ordinary Australians are feeling every single day. Businesses are folding and it's becoming harder and harder to employ people. Things are not getting better under Labor; they are going backwards. At the same time, we note that the Prime Minister has hired more than 10,000 new public servants in Canberra. But Australians aren't feeling 10,000 people better served by this government. Instead, they're feeling the pinch of the cost-of-living crisis with no plan in sight and no response from this government—simply rhetoric.

The Prime Minister promised in January 2023 that his New Year's resolution was to address the cost of living. In January of this year, in a moment of out-of-character candour, he admitted that 'cost-of-living pressures had lasted much longer than people thought'. What a surprise! And, he said, 'the range of measures that we put in place had not been effective enough'. These are the Prime Minister's words: 'the range of measures that Labor put in place have not been effective'. Well, what on earth have they been doing for the last 18 months?

That brings us to the bills before us, the culmination of this deceit. The facts demonstrate that these bills are simply a political response, a PR response, a quick fix that has little relationship to the cost-of-living pressures that Australians face every day. I'd like to take this opportunity to remind the chamber of something that Minister Gallagher said about the original stage 3 tax cuts in February last year. When asked by Senator McKim which of those three points the stage 3 cuts fit under, Senator Gallagher promptly replied, 'the cost of living'. Go figure!

This was a deceit long in the making that found its moment under the guise of urgent cost-of-living relief. But how does that stack up? The Treasury confirmed that the changes to the Medicare levy were, in fact, provisioned in the 2023-24 MYEFO but they weren't announced. How urgent is this cost-of-living crisis if you provision for a policy, if you make a decision on a policy, but you don't announce it for a couple of months? How urgent can it be? The government was content to make a change and not announce it straightaway as Australians went through a very costly and very uncertain Christmas, because it wanted to bank that political credit.

We saw recently that the government were advertising for PR professionals for the Treasury to be paid around $150,000 to deal with 'suppliers, including creative research and public relations agencies'. When pressed about the timing of the decision and its significance, we heard the Treasurer say it was not taken in the usual course of the budget processes. What did the Treasurer say? He said, 'We had to do this before Dunkley.' Whoops! He said the quiet bit out loud. 'We had to do this before a by-election'. How shamelessly political! Then came the real shocker. The same day that Labor announced $14 million in additional spending for food-relief agencies like Foodbank, who are doing so much of the heavy lifting right now, it was uncovered that they were also going to spend $40 million—not $14 million but $40 million—of taxpayers' money to try to spin their broken promise. They are going to create a $40 million ad campaign to sell tax cuts that you don't need to apply for—you just get them automatically. They're going to spend $40 million of your dollars telling you how lucky you are—outrageous! I know that Australians would feel much more different if that money went to Foodbank rather than marketing.

The coalition will always stand for lower, simpler, fairer taxes, and that's why, in government, we delivered stage 1, stage 2 and stage 3 of our personal income tax plan. Under the former coalition government, we increased the threshold for the lowest tax bracket from $37,000 to $41,000. We also abolished, in the original stage 3, the entire 37 per cent bracket and reduced the 32 per cent bracket to 30 per cent. These reforms meant that more people would pay less tax over time. In fact, anyone earning between $45,000 and $200,000 would pay no more than 30c in the dollar. Well, that has gone. That's been smashed. That would have dealt with the pernicious bracket creep facing ordinary Australians right now. It would have meant you could have gone for that promotion, you could have taken on the extra overtime hours, and you wouldn't have had to pay any more tax to do it. Well, that has been thrown out the window.

We will always stand for lower, simpler and fairer taxes, and we will always stand by our principles. That's the reason we will support taking the 19 per cent bracket down to 16 per cent. But we deeply oppose Labor weaponising the politics of envy, in a cost-of-living crisis, after all the assurances in the last two years from the Prime Minister to Australians who were waiting for a tax cut—Australians who had looked at their budget, looked at the law, heard what the Prime Minister had said and made plans because they trusted their government. That trust has been broken, irrevocably. These are the Australians that the Prime Minister has let down. This is cynical politics, and it's focused on slicing and re-slicing an ever-diminishing pie, not growing the pie so that all Australians benefit.

For this reason, the Leader of the Opposition, the shadow Treasurer and I are all committed to taking to the next election a tax reform package that is in keeping with the original stage 3 tax reforms, committed to fighting bracket creep and enshrining aspiration, because strong leaders keep their promises, even when it's hard to do so. Our package will deliver lower, simpler and fairer taxes. It will fight bracket creep, enshrine aspiration into our system, reward hard work and support a strong economy where every Australian has the chance to get ahead. We will unite Australians, not pit them against each other. Our package will be delivered while providing for Australia's future security and guaranteeing the essential services that all Australians rely upon. The package will be fully costed and it will be ready to implement when we are elected. More importantly, it will be delivered, because we keep our promises.

The coalition's support for a tax cut should never be read as an endorsement of Labor's breach of faith. We will continue to hold this government and the Prime Minister to account for the commitments that they have made but that we know they are secretly planning to back out of. The Treasurer said as recently as this month, with regard to changes to negative gearing, 'Well, that's not something that we're proposing, not something we're considering, not something we are working up.' That sounds familiar, doesn't it? I think that's what we heard about the stage 3 tax cuts just months ago.

On tax settings for the family home, the Prime Minister also expects Australians to believe his denials, but he has shown just how reliable he is with the truth. These bills have been badged 'cost of living'. The coalition has been listening to Australians on the cost of living for more than 12 months, since the Senate established the Select Committee on the Cost of Living to inquire into that very issue. I can safely say that this is a government that has done nothing about it. Instead, it has been distracted on whatever is important to the government, whatever is important to Labor. It has had no plan to deal with the cost of living. It has focused on the wrong priorities—a $450 million failed referendum that anybody could have told you, months in advance, was going to fail. And yet they persisted. That was a promise they were happy to keep. But, unfortunately, the stage 3 tax cuts was one that they were happy to set aside. There has been an additional $209 billion in spending since the government came to government, while the cost-of-living committee has heard over and over again that a key way to reduce inflation is through reducing government spending, sending the right messages to the market so we don't have one foot on the brake and one foot on the accelerator—the Reserve Bank doing one thing and the government doing another.

We will support a tax cut. To those Australians that are struggling to put food on the table, that are struggling to rely on charity and on those breakfast programs at schools, that are asking for energy bill relief, that are going on payment plans, that are entering hardship programs with their banks, that are shutting the doors on their businesses or that are pawning their wedding rings to pay for school supplies: know that the coalition has heard you, that the coalition sees you and that the coalition is on your side. More can be done for you, and more should have been done for you. The opposition will continue to hold this government and this Prime Minister to account for the mistruths they have presented to the Australian people, and we will continue to stand for lower, simpler, fairer taxes for all Australians.

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

I think it would be helpful for folk in this chamber and folk listening to this debate on the Treasury Laws Amendment (Cost of Living Tax Cuts) Bill 2024 and the associated bill to understand how we've come to find ourselves here today. The Morrison government, prior to the last election, brought forward a massive package of tax cuts—including stage 3, which would have seen politicians, CEOs and billionaires get a $9,000-a-year tax cut when people on the minimum wage would have received absolutely nothing. It was $9,000 a year for the CEOs and the politicians, and if you are on the minimum wage, under stage 3, as originally cast by Mr Morrison, you would have received absolutely nothing. And what happened when that legislation came into this place? The Labor Party voted for it. The Labor Party made it law. Make no mistake: if the Labor Party had joined the Greens in opposing those tax cuts, they would not have become law. So the only reason those tax cuts—which gave CEOs and politicians an extra $9,000 a year in their pockets and gave people on the minimum wage absolutely nothing, not a red cent if you are on minimum wage—became law was the Labor Party decided to vote for them. That was a stark reminder of the lack of political courage that is embodied in the modern Labor Party.

Then we had an election, and, despite a significant erosion in its primary vote, Labor fell over the line with enough seats to form a government in the House of Representatives. Then, after repeatedly telling Australians that there were no plans to change the stage 3 tax cuts, Mr Albanese and Mr Chalmers, at the start of this year, revealed that they were planning to change the stage 3 tax cuts—and rightly so, in the view of the Greens, because those tax cuts were never a good idea and should never have been supported by the Labor Party in the first place. Having made the decision to change and recast Mr Morrison's stage 3 tax cuts, which then became Mr Albanese's stage 3 tax cuts, did Labor actually recast them to make our tax system more progressive, as you would expect the Labor Party to do? No, they did not. What they did was recast them to make them slightly less regressive than the massively regressive stage 3 tax cuts that were originally designed by people like Mr Morrison and former senator Cormann.

It beggars belief that this is where we find ourselves today. Today Labor is choosing to give people on over $200,000 a year a $4,500-a-year tax cut, and today Labor is also choosing to give people on income support absolutely nothing. This is how far the modern Labor Party has fallen. This is how far out of sight and out of mind people on income support are for the modern Labor Party. There are Australians who are literally starving because they cannot afford to eat. There are Australians who are homeless because they cannot afford to rent.

And what does the Labor Party do? Instead of looking after these people and raising the woefully inadequate level of income support, the Labor Party has chosen to give politicians and CEOs a $4½-thousand-a-year tax cut. That is the modern Labor Party for you, folks: $320 billion of tax cuts over the next decade, when Labor is claiming it can't afford to put dental into Medicare, that it can't afford to forgive student debt, that it can't afford to make child care more affordable and that it can't afford to raise income support. Labor can't afford to do those things because it has chosen to spend $320 billion on tax cuts, the largest of which go to the highest income earners in this country.

You could put mental health and dental health into Medicare for a third of $320 billion. You could wipe student debt many times over. You could make child care free many times over. You could put billions of dollars into building affordable homes for people to live in—into social and public housing. You could make public transport free. You could put in fast rail between Australia's cities. You could build the renewable energy infrastructure and the storage capacity that we need in order to get to net zero by 2035. But what does the modern Labor Party decide to do? It decides to implement $320 of tax cuts, to give people on over $200,000 a year a $4½-thousand-a-year tax cut. This is an extraordinary abject surrender by the Australian Labor Party to the manoeuvrings of the Morrison government and the LNP. Folks, this is why the country is in such a mess.

Let me explain to you how this happens. The LNP come into government and they lurch this country to the right. They torture refugees, they demonise migrants and they give tax cuts to the wealthy. They lurch this country to the right, and Labor acquiesces to every one of these things, because they are too gutless to stand up and fight for what is right in this country. They leave that to the Greens, and we oppose these things every step of the way. Then when Labor gets into government they move us back about two per cent of the way that the Liberal Party took us, because Labor is too gutless to move this country to where it needs to go. They are too gutless to make the corporations pay their fair share of tax. They're too gutless to put a wealth tax on in this country. They are too gutless to walk away from the $370 billion of the AUKUS submarines. They are too gutless to reverse Mr Morrison's stage 3 tax cuts. And so it goes.

The government in this country is being swapped by a right-wing extremist party in the form of the LNP and a centre-right party in the form of the ALP. That is why this country keeps on lurching to the right. That is why Australians are literally starving on income support. That is why we have a six-figure number of Australians who are homeless, who can't afford to rent a place to live. The neoliberal brainworms have infected both major parties.

It is absolutely critical that we take a stand here today and we make the big corporations and the superwealthy pay their fair share of tax so that we can actually help people with things that matter in their day-to-day lives—like putting dental into Medicare. Last time I looked, your mouth was part of your body. It is extraordinary that we've just had a celebration of an anniversary of Medicare by the Labor Party, and yet, rather than celebrating the anniversary of Medicare by doing something to make it stronger, all we got was the bells and whistles. They could put dental into Medicare and they should put dental into Medicare. They should also put mental health into Medicare, because last time I looked someone's mental health was critical to their overall health and wellbeing.

The Labor Party could do so much for so many people in Australia—and 40 or 50 years ago, it would have done those things. But it is a shadow of its former self—a shell of a political party, hollowed out by careerism and neoliberalism to become a pale imitation of the LNP. That is where we find ourselves today, and that is how we find ourselves today debating these changes to the stage 3 tax cuts.

Labor could have actually used the opportunity of changing its position. That's something they should have done—and something the Greens were calling on them to do, I hasten to add. They should have used that opportunity to make our income tax system more progressive or to do some of these other things that would actually help people, including raising income support. The fact that they didn't again shows a lack of vision and a lack of political courage. The Australian Greens are the only people in this parliament who opposed Mr Morrison's tax cuts from day one. Those tax cuts were supported by many in this place, and, once the Labor Party indicated its support for them, as I said earlier, they became law.

Now, I do want to say one other thing about how we find ourselves here. The Greens kept the pressure on Labor. Millions of Australians kept the pressure on Labor. And finally Labor accepted that it needed to make some changes. When the Greens went to the election, we said, 'Give us the balance of power and we will push the next government to go further and faster on a range of things, including addressing economic inequality in this country.' And we have delivered that, repeatedly, in this term of government. We delivered it on climate. We delivered it on the stage 3 tax cuts. Make no mistake: Labor would not have shifted if it hadn't been for the campaigning of the Greens and millions of Australians who rely on us and who join us to build a movement to make this country a fairer place.

That work has a long, long way to go. We need to make the big corporations pay their fair share of tax so that more Australians can lead a life of dignity and wellbeing. We need to make the superwealthy pay their fair share of tax so more Australians can live a life of dignity and wellbeing.

The government can never claim that it can't afford to put dental and mental health into Medicare, or make child care more affordable, or wipe student debt or raise income support, because they could have afforded to do those things if they had only chosen not to proceed with the stage 3 tax cuts. They could have recast these tax cuts to ensure that no-one earning an income of over $200,000 a year got a tax break and that, instead, more was done to help people on the minimum wage and on income support. It is an absolute travesty that Labor chose not to do any of those things and instead give a $4½ thousand a year tax cut to corporate CEOs, billionaires and politicians. That is how far the modern Labor Party has fallen.

I foreshadow my second reading amendment as circulated in the chamber.

Helen Polley (Tasmania, Australian Labor Party) Share this | Link to this | Hansard source

I rise to speak on the Treasury Laws Amendment (Cost of Living Tax Cuts) Bill 2024 and the Treasury Laws Amendment (Cost of Living—Medicare Levy) Bill 2024. But, before I talk about those two bills, there is something I have to put on the public record. I understand that Senator McKim was speaking as he did because there's a state election in Tasmania, but for the Greens to say that the Labor Party is not the party of old—I will say this on the public record. There's one thing about the Greens: they never change. That's why in Tasmania, after this state election, there will never be a deal with the Greens, because we don't want to govern and have this fantasy of utopia, which is what we get from that end of the chamber on every piece of legislation. It's all about utopia and what they would do. One thing we know for sure is that the Greens will never, ever have to balance a budget, because they will never be in government. So they can say to the people whatever they want to say. They can promise the world because they will never, ever have to deliver in government. That's the reality of the circumstances.

Those on that side of the chamber want to make this a really big political issue, and say: 'It's a broken promise by the Prime Minister.' Yes, he did break his promise on the third stage. He did that because of the changed circumstances in the Australian economy and because at the heart of a Labor government is always fairness. These tax cuts will actually deliver a tax cut for all working Australians, not just the top end of town. The reality is that the stage 3 tax cuts proposed by the Morrison government—by the Liberals—would have given people like us in this chamber a huge tax cut. We don't need that. But Middle Australia was being left out. Aspirational taxpayers were neglected by those opposite, who always neglect them. That's because these taxpayers don't vote for them and because they don't live in their electorates. If you go through electorate by electorate in this country, those who would have got the biggest tax cuts are all in Liberal held seats. We don't have to be Einstein to work out why they were looking after those voters, do we?

I want to talk about what this means to the 84 per cent of taxpayers who will get a bigger tax cut. They actually will get more support to combat the cost of living. This plan is a better plan for our country. It's a better plan than those opposite were offering to the Australian people when they were in government. The Albanese government's plan means more tax relief for more workers to help them and their families with cost-of-living expenses. It means that electricians and plumbers living in my home city of Launceston will get a tax cut. It means nurses in St Helens on the east coast of beautiful Tasmania will get a bigger tax cut. It means people working in retail in Hobart will get a bigger tax cut. It means people in Burnie and Devonport working in hospitality and in mining will get a bigger tax cut. People working day in and day out across this country will get bigger tax cuts. This is all about supporting all Australians who are working, to help them benefit from these tax cuts.

These tax cuts build on our broader plan to ease the cost-of-living pressures and to come up with tens of billions of dollars in relief across child care, energy bills, rent, access to free TAFE, and medications, which is already rolling out and benefiting our economy. We have cheaper medicines. We have cheaper child care. These are real benefits to everyday middle Australians. The cost-of-living tax cuts for Middle Australia mean that every taxpayer will get a tax cut from 1 July this year. The average worker will now get more than $1,500 a year. Teachers, nurses, aged-care workers, disability support workers and early childhood educators will take home more pay because of our tax plan. So will young Australians, and so will those Australians living in our regions and rural areas.

The Treasury Laws Amendment (Cost of Living—Medicare Levy) Bill 2024 is also an important piece of legislation which will affect most Australians. This is another way that the Albanese Labor government is providing tax relief to Australians on modest incomes to help with the cost of living. It means more help for more people via the tax system by adjusting the Medicare levy low-income thresholds. It means 1.2 million Australians get to keep a little bit more of what they earn, and that's important. Most Australian residents pay the Medicare levy, charged at two per cent of their taxable income. We're increasing the low-income threshold by 7.1 per cent for singles, families, seniors and pensioners, in line with the average annual growth in the consumer price index.

As I've said in this place many times, within my home community, the state of Tasmania, the Albanese government has tripled the bulk-billing incentives, supporting 11.6 million Australians to access a GP with no out-of-pocket expense. In my home state of Tasmania, that means an awful lot. We're an older population, so getting in to see your GP is so important. It's also important to reward those GPs to allow them to assess and to bulk-bill more people. On top of that, the state Labor opposition are promising to take away payroll tax on GP surgeries. That is going to have a huge impact in my home state of Tasmania. They do it in some other states.

But, as usual, whether it's in this place or in my home state of Tasmania, if there is something sensible that's been brought on by Labor, the Liberals will say no to it, as they have done on that side since they've been in opposition. The word most frequently used by those on that side of the chamber is 'no'. They said no to any increase in aged-care workers' pay. To all Australians getting an increase in their wages and supporting their case, what did they say? No. To our energy bill relief, they said no. And then they come into this chamber during this debate and try and assert that somehow their plan was so much better. How could it be better when the majority of Australians who work would not have been any better off? How can they say that when they were only looking after the big end of town—people on $200,000 and more?

We want to see equity and fairness. If you work hard, you should be able to keep more of your money. We are doing things like reducing the cost of medications, which helps all families to be able to meet those pharmacy costs. We have made child care cheaper so that more women, if they choose, can go back to work, so child care becomes more affordable. We know that by making medicines cheaper in this country the savings to the Australian population over the last year alone were $250 million, spread across Australian households who have saved on their medication. That is amazing. We introduced the 60-day script. I might add that it was recommended in 2018 that those opposite, when they were in government, take that same step to reduce the amount of visits to GPs, to reduce the cost of medication, and they said no. The Pharmacy Guild in this country was so strong that those opposite decided not to proceed with that advice.

Coming into government, we were given that advice to introduce 60-day scripts. We could see the economic changes that had happened throughout the 10 years of inept government from those opposite. And so, despite the campaign they ran against us—and I understand the Pharmacy Guild and pharmacists were concerned about their own income levels. There was a threat that pharmacies would close across the country, across my home state. I'm pleased to say there have been no closures in my home state at all. But what we have seen are fewer visits to GPs for repeat prescriptions. Now, if the doctor chooses and the patient wants to take up that option, they have to see their doctor less frequently. That's the reality of that.

But what did those people opposite do when we brought that in? They voted against it because they always, always look after the strong lobbyists who are lobbying in their own self-interest. So I'm really proud of the fact that, as a Labor government, we stood up to the Pharmacy Guild and we are delivering those savings. And we are allowing GPs to see more patients and making access to GPs much easier than what it has been. Is there still a way to go? Yes, there is. Is there more that needs to be done to get more GPs in rural and regional areas? Of course there is. There's a lot more work to be done.

But while we're doing that and investing in those very important things like education—I'm sure that later this week I'll get to talk about higher education and a report that's just been handed to a minister. We're opening up universities to more students, to those who come from less well-off backgrounds, which is really important. But it's also about how you do those things.

But, like those opposite, the Greens come in here and espouse all these great ideas about spending money but they never, ever have to deliver on them. We had to change things because of the circumstances that our economy was in—interest rates hikes and the cost-of-living pressure that has been brought on from international markets and not just from what's happening here in Australia. We then said we had to change the stage 3 tax cuts for them to go ahead. It was hard to break an election commitment, which we said we wouldn't do, but you cannot, as a responsible, mature government, ignore the economic circumstances of the day. A government will fail the Australian people if it's not prepared to make the changes that are necessary because five years ago, when they were first suggested and the legislation was passed, the economy was different.

We are taking responsibility. We take responsibility in trying to ease the pressure on Australian families and that all Australians are feeling right now, especially those on lower incomes. We have to look after our young people, who are trying to establish themselves, whether they're at uni or in their first job or they're doing an apprenticeship. We also have to look after our seniors. We have to look after women. This will give more women money in their pay packets as well.

The Albanese government is 100 per cent focused on getting the cost of living and inflation under control. What would be really mature is to see everyone in this chamber supporting these two pieces of legislation. If you're really interested in making real changes for every Australian and what they take home in their pay packet and how they're able to deal with this cost-of-living pressure that they're experiencing at the moment—and no-one denies that. No-one denies that. We know that. We feel that. I listen to people in the community. I know how hard it is. I go to the supermarket and I see that people are thinking twice: 'Do I take this and put this in my trolley or don't I?' We are being responsible and addressing the imbalance of the former stage 3 tax cuts. I commend these two pieces of legislation to the chamber and I hope they're supported.

Andrew Bragg (NSW, Liberal Party) Share this | Link to this | Hansard source

The country has a very high level of reliance upon income tax, and we're also a very heavily taxed nation when you look at other countries around the globe. We tax people and companies very heavily. When you look at some of the OECD analysis, you will see that we are making it very hard to support people who want to work hard and be rewarded for their labour, because when you work for a large part of the year for the government it is a disincentive. We want to have a country where people are heavily incentivised to work as much as they would like to do.

This is one of the only reforms of the past decade. You'd have to say, when they write the books about this period of Australian history, it may not be a very exciting book if it's a book about Australian taxation history. Certainly, if there are any monographs, articles or books written about this period of economic policy in Australia, you'd have to say it's a period of very low ambition. The only reform put forward to counter the scourge of bracket creep, which is not a new issue—in fact, if you go back to the 1970s, there were efforts to rein in bracket creep through the indexation of the personal income tax scale. It was an interesting and short-lived idea. This is not a new issue. So, the point of the stage 3 tax cuts—stages 1, 2 and 3—was to address and seriously tame bracket creep. That was the point of it. That was the only serious attempt at any form of personal income tax reform and, frankly, one of the only serious efforts at any economic reform in last decade.

The Treasury Laws Amendment (Cost of Living Tax Cuts) Bill 2024 closes the book on the only effort to make an economic policy reform in our recent history. It is a depressing day for the parliament, because we are already living in a period of very low ambition, and we're passing the buck in a whole range of areas onto younger people. No wonder younger people are so disappointed with their parliamentarians. This is just another example of us giving up on the future by saying: 'Look, it's too hard to address bracket creep, so we're going to reinstate a tax bracket. We're going to reinstate a tax bracket that we removed as a reform. We're going to put in place the 37c in the dollar tax bracket, because it was too hard to sustain a reform for just a few years.' That is why I have to say that I'm miffed that here we are, only a year and a half into this term, where the government has zero economic reform interest, and it is closing the door on one of the only reforms passed in the last few parliaments. In doing so—to make all the general political points—it is, of course, breaking a promise. It was a promise that it made not at one election but two elections.

Why is this all happening? There's a by-election in Victoria in the next few weeks, and the government had a very messy end to last year, and this is in part political management. We all understand that. We all get that. But why is it really happening, other than the day-to-day political management and the need to try and ensure the best possible result for the Prime Minister at the Dunkley by-election? I would say this is partly a consequence of the government having run the country in the interests of a very small group of vested interests for the past 18 months. These are the unions and the major super funds, where the major beneficiaries receive not just policy but also taxpayer funds. We have seen a litany of bills since the parliament commenced after the May 2022 election. The government occupies almost all of its legislative agenda on policy for unions and for super funds. That is all they have time to do. The great economic problem the country has is a very simple problem. When the government is only interested in working for unions and super funds, it has no time to solve the major issues facing Australians—housing and inflation, for example. That is the central problem facing Australians today—that the government are more interested in serving their vested interests, who put them into parliament, fund their campaigns and look after them generally, than in looking at the interests of all the people.

There are 10,000 new public servants here in Canberra, pattern bargaining and laws for super funds to help them lock away your money forever and ever, even if you need it for a rainy day. These are the skewed priorities of the government for vested interests. It all comes home to roost, because of course there is a great cost to this, because you're not thinking about how you can incentivise business to invest more and you're not thinking about how you can solve the great problem facing the under 40s in this country—housing. You're not doing any of those things because all you're doing is shovelling policy and money to your favourite vested interests, who run your preselections, fund your campaigns and the like.

That is why this had to be a recalibration. There was probably a realisation over summer that the government didn't have any economic policies and that it might be a good idea to have something which is a semblance of a policy as they go into a by-election. That is effectively why the stage 3 recalibration was necessary. It was necessary for a political reset for a Prime Minister who has only run the government in favour of vested interests.

Having already needed to recalibrate stage 3 and having needed to break another election commitment—not to tax super—the government now is flagging that it will consider further taxation measures, and there is a real risk that the government will be suckered into taxing the family home or increasing taxes on housing. It could be interested in taxing trusts. This is the cost that all Australians pay. They pay the higher taxes that are necessary to fund things like 10,000 new public servants in Canberra. That is the major issue.

In relation to our position on this legislation—this has been well canvassed and flagged—we will not be standing in the way of tax relief for any Australian, because we've always supported lower taxes. But it is important that people are aware of what this tax cut actually is. It's a tax cut today, but it's a tax increase tomorrow, because this locks in permanently higher taxes. It locks in bracket creep. By reintroducing the 37c in the dollar threshold, it guarantees that more Australians will pay higher taxes on a permanent basis. It is unbelievable that we are going to pass a bill that is going to reintroduce a tax bracket which was abolished in the name of eliminating bracket creep, but that is what is going to happen because of this government.

The reality is that, for Australians earning between $135,000 and $190,000, they will now pay a higher tax rate of 25.14 per cent, rather than an average tax rate of 24.66 per cent, because of these changes. And there will be 2.6 million people paying higher taxes by the end of the decade. That is just a taste of bracket creep being baked back into the system—2.6 million people will pay higher taxes because of Labor's broken promise on stage 3. These are the numbers that have been generated by the Parliamentary Budget Office. These are the numbers which I would have thought would have been available when we had Senate estimates only in the last few days. But these were the questions that were put to the Treasury and put to the Labor ministers at the table, and they claimed they didn't know. The PBO, the Parliamentary Budget Office, is able to tell us, based on the Treasury data, that 2.6 million people will pay higher taxes because of the reinsertion of 37c. But the Labor Party are seeking to cover up this fact because they don't want people to know that their tax cuts today are tax increases tomorrow. That is the central problem here. It is a short-term sugar hit to suit a flagging prime minister's political interests ahead of a by-election. So they're now saying that they're going to base the whole tax system around one by-election in one seat in one state and are not going to take the long view and say: 'Yes. We agree that the 37c tax bracket should be gone for all time, because when people work an extra shift or do a longer set of hours at work they should be rewarded and not have to face the scourge of a higher tax bracket in the long term.'

If our ambition today is going to be continued over the medium term, there is no way that the country is ever going to address bracket creep. We will perpetually have a situation where people who are doing extra jobs and extra shifts will be hit with higher taxes. It will also mean that future Commonwealth budget surpluses will be based on the scourge of bracket creep. It might look good for treasurers now and in the future. They might be able to say, 'I've delivered a budget surplus.' But they've only delivered a budget surplus because they're hitting Australians with higher taxes over that medium to long term.

Thankfully, there will be a choice at the next election, where the Liberal and Nationals parties will have a plan for lower taxes and we will have a plan to beat the scourge of bracket creep, because we do believe that Australians are paying too much income tax. We are happy to wave through the lower taxes that are included in this bill, but we're not happy about the reinsertion of 37c. Our plan will be to address bracket creep, particularly for people earning between $135,000 and $190,000, over the medium term, because we believe that, no matter who you are, you should not face disincentives to work harder, do more jobs and take more shifts. We need people to work harder and longer, because we have a long-term structural position in our budget which is not so flash. There are unfunded commitments, which are important commitments to the Australian people, that we want to keep. We will only be able to keep those commitments if there are the right sorts of economic settings that encourage people to work hard. Of course we want to collect taxation from people where it is necessary to pay for services, but we should not be waving the white flag on tax reform. We are doing that today by effectively saying that we are giving up on bracket creep and we are closing the book on the only personal income tax reform of the last decade.

I regret that we are doing this, but it is important that the parliament doesn't stand in the way of a tax cut for people now. It is very important that the people of Australia know that the coalition will have a policy for the next election which will address bracket creep in a meaningful way so that you can do an extra shift, you can work harder, and keep the money for yourself rather than send it off to Canberra for a budget surplus.

Malcolm Roberts (Queensland, Pauline Hanson's One Nation Party) Share this | Link to this | Hansard source

I rise to speak to the Treasury Laws Amendment (Cost of Living Tax Cuts) Bill 2024 and the associated bill. Like most of the words Australians hear out of Liberal and Labor mouths, the title of this bill is a false promise. It's a lie. It's almost a sick joke from the Labor government to even put the words 'cost of living' in this bill. Let's talk about the cost of living. Compared to what was already legislated, these tax changes are $15 a week different for the average Australian. For many that's significant because of Labor's huge cost-of-living increases. In four years, Australians have been slapped with some of the worst declines in economic circumstances in decades internationally.

Australian households suffered the fastest income collapse in the world last financial year, under Labor. Inflation has sent Australian wages—real wages—back to a point not seen since 2009. That means that Australian wages have gone nowhere in real terms for 15 years. The average mortgage has gone up $1,210 a month—a month! Australia's average rent has hit a record $601 a week, up from the August 2022 median of $437 by an astounding 37 per cent. Fifty dollars doesn't get you far at the supermarket anymore. Petrol is now considered a bargain at $1.80. How far we've fallen!

As billions in government coupons and rebates expire, power bills will rise even further. Despite Labor's promises to cut electricity bills by $275, Australians have never paid more to keep the lights on. We've never paid more. We have the highest electricity prices in the world. We used to have the lowest—until Labor and the Greens and teals came along.

What is the government's solution to these skyrocketing costs of living? To fix your problems with groceries, your mortgage or rent, power bills and more, the Albanese government is going to give some Australians—some Australians—$15 a week and expect you to bow down and thank them for it.

Like the governments before it, this Labor government is all spin and no substance. In fact, it's all theft. They will put a fluffy title on a bill, like they have here: 'cost of living tax cuts'. Oh, really! In reality, this won't make a dent in the cost of living most Australians are suffering through. The costs Labor is imposing are far, far higher than the minor changes they've made. This bill is a perfect example of how out of touch this Albanese Labor government really is. Their priorities are in the wrong place. They're more interested in looking good than actually doing good.

In his speech about this bill, Treasurer Jim Chalmers just couldn't help himself. He needed to invoke identity politics and explain that these tax cuts were so much better for women. I checked the Taxation Office website, just to make sure nothing had changed, and it hadn't. Someone might want to let Treasurer Chalmers knows that Australia doesn't charge different tax rates based on what's between our legs. There's no table that says, 'If you earn $60,000, as a man you'll pay, say, 32.5c per dollar, and, if you're a woman, you'll pay 35c.' That's probably lucky, because Labor can't even answer the question: 'What is a woman?' If the Treasurer can't make a speech about tax without invoking gender political correctness, you have to wonder what hope they've got. What hope have we got? Here's a tip for Labor: regardless of what Australians have between our legs, life is tough right now; the economy sucks; and $15 a week will barely make a dent in the extra costs you have imposed in just 18 months.

Now, I'll never oppose Australians getting a tax cut. Yet calling these tax changes 'cost-of-living relief' is like claiming you've fixed a raging bushfire after throwing cup of water on it.

These tax changes won't do anything while government policies make Australia's cost of living even worse—far, far worse. There's energy. They're killing agriculture. There's immigration. They're hiding per capita recessions. There are house prices and rents. The government response to COVID created the inflation problem that has wrecked Australian households. And Labor was all the way with Prime Minister Morrison.

The government's net zero policies are increasing power prices, making it harder for households to keep the lights on and businesses to keep their doors open. That's a fact. Only this week, the government is discussing putting an extra four per cent tax on clothes, to comply with United Nations/World Economic Forum policies—four per cent on clothes, in addition to the 10 per cent GST on clothes. The government will be putting an emissions tax on vehicles, forcing Australians' favourite utes off the road and making any other cars far more expensive. That's from a Labor government. All of the pressures facing Australian households are a result of government policies, and Labor's response is a measly $15 a week.

The Liberals do not get a free pass on this. The only reason we're in this situation is the Liberal Party's gutlessness in parliament. Many will notice that the original tax changes were called 'the third stage'. All three stages were announced by the Liberal coalition government in 2018. Why, then, was stage 3 left until 1 July 2024 to come into effect? I'll tell you why: the truth is the Liberals wanted to leave the stage 3 cuts as a trap for Labor, who have always been opposed to them. If the Liberals were genuine about stage 3, why didn't the changes come into effect five years ago? That didn't happen, because the Liberals wanted to play cynical political games and trap Labor. Neither Liberal nor Labor are interested in genuine tax reform; they'd rather play games with it to get a headline—play games with people's livelihoods, lives and futures.

The crown of destroying Australia sits on the heads of both the Labor Party and the Liberal Party. They both have gutless policy on everything in our country, especially tax. They run away from the real issues facing Australians. The Treasurer and the government claim that these tax changes won't add to inflation. That's shooting themselves in the foot. If that's true then the government is admitting that these changes won't do anything. They're saying it won't make enough of a difference to the amount of money Australians will have to spend to even be measured. Maybe the government is lying, and these changes will make inflation worse. That would be embarrassing to admit, given that Treasurer Chalmers says our No. 1 priority should be 'to finish the fight against inflation'. Labor appears to have put themselves between a rock and a hard place, a situation all of their own making. Australians have got used to this Labor government speaking out of both sides of their mouth. This tax bill is no different.

Now, I'll never oppose tax cuts for Australians. These tax changes, however, are just fiddling around the edges. Instead, we need real tax reform. Real reform is in the amendment I have proposed on sheet 2342. This would index the income tax thresholds to inflation and eliminate bracket creep. This is genuine tax reform. Bracket creep is the government's dirty little secret. Inflation means Labor will quietly pocket tens of billions of dollars in extra taxes by simply doing nothing. As wages increase with inflation, they go into higher tax brackets; you're paying higher tax rates and no one says a thing. We are going to say something. We've been saying something about this ever since this debate started, and we will fix it by putting an amendment in there.

It's a stealth tax. As wages increase, Australians move into higher tax brackets while being able to buy only the same things due to inflation, yet they'll be paying more tax, so they'll effectively have less money to spend on groceries and less disposable income. Bracket creep amounts to a secret tax that the government keep collecting to pay for their pet projects of questionable benefit. If the Liberals and Labor want to increase taxes, they should put in a bill or take it to an election and be honest with Australians, rather than quietly rely on bracket creep to secretly plug their budget holes and ratchet up income tax receipts.

Bracket creep should've been fixed a decade ago. Analysis from the Parliamentary Budget Office shows that Australians have had to pay an extra $44 billion over the last decade because of bracket creep. Shh, don't tell them! Because we didn't take that action and fix this 10 years ago, over just the next four years bracket creep will mean Australians will pay more than $38 billion extra in taxes. You thought you were getting a tax cut. If the government gets inflation under control, fixing bracket creep won't cost the budget anything. Australians don't deserve to pay for inflation twice because of government mistakes, and the budget shouldn't benefit from out-of-control inflation. Here's how you're paying twice: firstly, inflation, because of an out-of-control government—higher prices—and secondly, being put into a higher tax bracket because of the higher wages that come with inflation. You have less real money overall. Now, I note that the Liberals have made many comments about the scourge of bracket creep. This is your opportunity to fix it once and for all, and I urge all senators to stop the taxation increases by stealth and index the tax thresholds—the brackets.

If Labor need any suggestions on areas of spending to fix it so they don't have to keep secretly stealing more money from Australians, they can consult One Nation's extensive work at Senate estimates for a few tips. There are lots of tips in there. We exposed so much: the flawed $65 billion Hunter frigate program they fiddled with and didn't cancel; the NDIS being on track to cost $100 billion every year; and up to $8 billion a year in Medicare fraud. They are all some good places to start.

We support this bill. It's being dishonestly represented by Labor as a tax cut; it's a tax fiddle. We can change that by passing my amendment to remove bracket creep. As a servant to the people of Queensland and Australia, I recommend that, instead of fiddling with the tax system, we fix the tax system. Reform the tax system for the benefit of all Australians, all families, our economy and our grandchildren's economic future and security.

I will just make some comments about tax reform, in connection with this bill. The tax system is complex, wastes enormous resources and is destroying economic productivity. Tax is essentially necessary because it's a cost of government. It has become the cost of unaccountable waste over government needlessly micromanaging and controlling people's lives and destroying economic initiative, hope and security. That's what our tax system has become. It's necessary as a cost of government, but it has now gone overboard. The tax act is immense—thousands of pages, a feast for lawyers and accountants.

In a highly competitive international market, our resources are being wasted. Instead of our best and brightest accountants helping us to be more competitive in facing our international competitors, companies in Korea, Japan, China, America, Indonesia and Asia—instead of facing them and being more competitive by putting our best people to work, we've tied them up in the tax system trying to dodge tax because it's so damn complex and so inefficient. Jim Killaly, the deputy commissioner who was responsible for international matters and large companies, who was second in charge at the Australian Taxation Office and in charge of large companies and international matters, said twice, in 1996 and 2010, that 90 per cent of Australia's large companies are foreign owned and, since 1953, have paid little or no company tax due to the Liberals introducing legislation exempting foreign companies back in 1953.

The tax act enables companies to use tax tricks such as transfer pricing to eliminate book profits and tax being paid in Australia and take it all overseas. In 1987, the Hawke Labor government introduced a petroleum rent resource tax that effectively exempted the world's largest tax evader, Chevron, from paying tax. They steal our gas and export it to other countries, and we don't get much for it at all. The Liberal-Labor party, the uni-party, are working for their global corporate masters. Exempting corporations from paying their fair share of tax means the burden falls on us, the people. To the people in the gallery: you're paying for these uni-party rorts.

Aussies are paying far too much tax already. Former Treasurer Joe Hockey said that typical Aussies work from January to June paying tax. Half of the year paying tax, effectively a 50 per cent tax rate—that's what Joe Hockey said. And then we get to keep the rest from July to December. Industry figures calculate that almost 50 per cent of the price of a house is tax, meaning an effective tax rate of 100 per cent. Brisbane accountant Derek Smith said that 50 per cent of the price of a loaf of bread is tax, meaning the effective tax rate is 100 per cent. Seventy per cent of the price of fuel is tax—or it used to be; the price has gone up even higher now. Essentially, workers have to pay double and they're getting ripped off. They pay income tax, and, with what's left, they pay taxes on everything they buy. We need tax reform urgently.

Louise Pratt (WA, Australian Labor Party) Share this | Link to this | Hansard source

Our nation does need tax reform, but it doesn't need the kind of tax reform those opposite have prioritised and put forward. The tax package readjustment the Labor government has put forward, in the Treasury Laws Amendment (Cost of Living Tax Cuts) Bill 2024 and the associated bill, will see bigger tax cuts going to those that need them most. A median income earner in the electorate of Canning—and the median income in the electorate of Canning is fairly close to the national average—will now have $1,059 per year in extra income. This can be compared with a tax cut of just $255 under the previous government's plan. That is about a 315 per cent increase: 315 per cent extra income compared with what the coalition offered. Importantly, it is real cost-of-living relief. It equates to about five months worth of petrol for a car with a 37-litre tank, five weeks of groceries for a $200 weekly grocery shop or more than 12 months of an $85-a-month home internet and phone bill.

This is real cost-of-living relief, and it is relief that is very much needed. In the electorate of Canning, households who are renting—some 30 per cent of households—are paying more than 30 per cent of their household income in rent. There are 38 per cent of households renting that pay more than 30 per cent of their household income in rent. The median mortgage repayment is some $1,800 a month, and 13.1 per cent of households pay more than 30 per cent of their household income on paying their mortgage. If you look at this around the state of Western Australia as an example, it shows that this will make a very meaningful difference to Australians.

It is all very well for those opposite to talk about bracket creep, to talk about aspirational politics in terms of people's future incomes. But they seem to forget how far away the median income of working Australians actually is from those upper tax brackets, how far from fair what they offered up to Australia in the form of these stage 3 tax cuts really was.

If things need to be changed in the future, then that's what a good government should do, just as we have done in this case, when Australians are facing increased cost-of-living pressures and knew full well that they were getting a dud deal from those opposite in the tax package that they put forward. It is time for childcare workers, tradies, truckies, teachers, nurses, disability carers and healthcare workers to get the tax cut that they deserve.

Matt O'Sullivan (WA, Liberal Party) Share this | Link to this | Hansard source

I rise to speak on the Treasury Laws Amendment (Cost of Living Tax Cuts) Bill 2024 and the Treasury Laws Amendment (Cost of Living—Medicare Levy) Bill 2024. And I rise here today as a conservative, and as a conservative I support the passage of these bills, because I support tax cuts. I do have some qualifications, though, and some caveats, because there are some things that have been outlined by my colleagues and others here—and I'll do the same—that deeply concern me about the agenda of this government and the way they have approached this issue, and I'll seek to lay that out before you now.

The coalition are committed to lower, simpler and fairer taxes, which is why we will not oppose the reduction in the 19c tax rate to 16c. Tax cuts are a political shibboleth for conservatives. They're an absolute touchstone. After all, it's not the government's money; it's taxpayers' money. It's your money. Regrettably, until the last couple of years, tax cuts had dropped off the political agenda for far too long. It was a bold Morrison government that brought in these tax cuts that were legislated—they are legislated!—and that we're seeking to amend here today.

Now, why are tax cuts important? They are always important, but particularly so during the unprecedented cost-of-living crisis that Australians are facing right now. Australians are facing a cost-of-living crisis right now, and you know it. Keeping more money in the back pockets of Australians has never been more important. And as I said, I acknowledge the former Morrison government for putting tax cuts on the political agenda with its first two stages of tax cuts in our last term of government. Stages, 1, 2 and 3 went together to form our personal income tax plan, and 95 per cent of Australians would have seen a tax cut. This is important.

This bill shines a light on yet another broken election commitment by this government. It erodes yet more integrity of this government, and it only had a shred of it left! When in opposition, the now Prime Minister repeatedly said a Labor government he leads would pass the stage 3 tax cuts in full. On 29 August 2022, in his address to the National Press Club, the now Prime Minister said:

Parliament made a decision to legislate those tax cuts, and we made a decision that we would stand by that legislation rather than relitigate it, and we haven't changed our opinion.

And as late as just a few weeks ago, the Prime Minister was still committed to it. And this is from a prime minister who said, 'My word is my bond'. That's what the Prime Minister said on TV two months after the May 2022 election. Well, some bond.

Integrity matters when it comes to leadership. Integrity matters when you're trying to convince Australians that you've got the best plan for them. And that's what Australians expect of their Prime Minister. So what has changed? What has possibly changed for the Prime Minister to go against his word, which he said was his bond? The only thing that I can really think of is the thing that's in front of us this Saturday. It's the Dunkley by-election. It's political opportunism that has changed. This bill is purely motivated to try to salvage the political standing of the Prime Minister, who, as we're seeing, is lagging in the polls, who can't convince Australians that he has their best interests at heart. So it must be that Labor's internal polling is showing that it's in trouble in the seat of Dunkley. So what is it that this government has come up with? It needed a magic trick to distract the electorate, and this is what the Treasurer's office has come up with.

We said before the election that life won't be easy under Albanese. That, of course, is proving to be true. This government thinks that if it jumps on the tax cut bandwagon no-one will notice that it has broken an election commitment to deliver the stage 3 tax cuts. Well, the Australian public do know. The Australian public know that their real disposable incomes have collapsed by 8.6 per cent in the last 18 months through a combination of price increases outpacing wages, rising mortgage payments and rapid escalation in personal income taxes—27 per cent in 18 months—which is driven by bracket creep and other changes. The Australian public know that this government has failed to deliver cheaper electricity, which it repeatedly said that it would do prior to the last election—yet another broken promise. And the Australian public now know that they're worse off than they were before the 2022 election.

What has this government delivered? That is the question that's now on people's minds. It's got the failed referendum. It failed on that. What has it delivered? All that we can really point to is the negative effects. It's delivered higher cost-of-living pressures, greater trade union control in the workplace and a flatlining national productivity, which is a big problem that I've spoken a lot about in this chamber. This government has been doing everything in its powers to grow trade union control, suppressing productivity and giving people false hope with wage rises not matched with increased productivity.

The Treasurer has been strutting around, thinking the inflation crisis is over and getting his Labor premier mates to put pressure on the RBA to lower interest rates. They all received a rude awakening from the RBA at its most recent board meeting, didn't they? In deciding to keep interest rates on hold, in the board's statement on its February monetary policy decision, it said:

While recent data indicate that inflation is easing, it remains high.

In the February Statement on monetary policy, the bank said:

The Board expects that it will be some time yet before inflation is sustainably in the target range, and the Board remains resolute to return inflation to target in a reasonable timeframe. The path of interest rates that will best ensure this will depend upon the data and the evolving assessment of risks, and a further increase in interest rates cannot be ruled out.

Yet the Treasurer is going around as if it's all over, as if it's finished, as if the pressure is off. But, while the Treasurer is giving his party room colleagues high fives, the RBA has warned that it will still be some time yet before inflation is sustainably in the target range.

Just today, the Fin Review reported:

… inflation analysis showed labour costs made up almost two-thirds of headline CPI in the year to June 30, 2023.

It's the government's own fiscal and wages policy that's supercharging inflation. That's what we're seeing. It means the RBA could be tempted to keep its rates higher for longer. Australians will continue to experience the pain of this government's economic mismanagement for some time yet. The radical industrial relations bill recently rammed through by the Labor and Greens alliance will only add further cost-of-living pressures for struggling families. The cost of running business has to be passed onto consumers. That's just the reality of it. Each time Australians go through the check-out at the supermarket, they know that they are paying more under the Albanese government. You only have to go into your community and talk to people and hear how families are struggling with the high cost-of-living pressures imposed on them by this government to see what I'm saying.

We've been talking a bit about bracket creep here. I commend Senator Bragg on his excellent speech on this point. Indeed, Senator Roberts also spoke about this. President Reagan in May 1985 said, 'Death and taxes may be inevitable, but unjust taxes are not.' Bracket creep and payroll tax are insidious issues that we should be dealing with. Both are unjust and insidious taxes. The first is an aspiration tax, and the second is a job killer tax. What we seem to have in this situation in this country right now is a lack of political courage to deal with these issues. By retaining a fourth tax bracket, this government has failed to grasp the opportunity which stage 3 tax cuts would have delivered. It would have reduced the tax brackets from four to three, addressing that bracket creep problem that we have.

For those watching at home who may be unfamiliar, what is bracket creep, and why is it so hideous? Simply put, bracket creep occurs when rising incomes cause individuals to pay an increasing proportion of their income tax, even though there may not have been changes to tax rates and thresholds. Bracket creep particularly affects taxpayers earning just above a tax threshold. For those on low incomes, it may reduce the incentive to work. It reduces the value of a pay increase and disposable income. Under the coalition's stage 3 tax cuts, the 37 per cent marginal rate would have been abolished for those that earn $135,000 and above. This bracket would be impacted by bracket creep faster as wages rise with inflation.

The government's new tax changes are a war on aspiration. With these new changes, the government has kicked the can down the road to a future government. At some point, this has to be dealt with, and this government has decided to turn its back on its commitments to the Australian people. Before the election, after the election and even for two weeks before this bill was introduced, this wasn't going to happen. But a future government will come under pressure to return future bracket creeps in tax cuts. The Albanese government has gone for short-term political expediency—a sugar hit for the electorate in an election year. The government is only providing a short-term sugar hit and not addressing the long-term insidious consequences of bracket creep. A Labor government has never not liked a tax, so why would they remove a tax bracket? It's little wonder that an article on 25 January in the Australian Financial Review remarked:

The contrast underscores the opportunity cost of using a significant tax scale change for political purposes. Such opportunities rarely occur more than once every few terms of government. They ought to be applied to bedding down structural improvements in the tax system, rather than on fixing short-term political or even business cycle concerns.

So this government is choosing short-term 'sugar hit' political aims rather than tackling the fundamental issues that our economy and Australian households are facing.

In alliance with their left-wing allies, the Australian Greens, the government would tax everything that wasn't fastened down. This bill, undoubtedly, makes the structural problem of bracket creep even worse for Middle Australia. According to the 2023 Intergenerational report, personal income tax receipts were forecast to be 11.7 per cent of GDP in 2023. Listen to this: it's projected to rise under this government due to this bill to 13.5 per cent by 2033-34. When the country needed a serious economic decision on structural tax reform, this government didn't have the stomach for it. It's a problem that this government cannot continue to ignore into the future.

Andrew McLachlan (SA, Deputy-President) Share this | Link to this | Hansard source

Senator Roberts, you have a short statement?

Malcolm Roberts (Queensland, Pauline Hanson's One Nation Party) Share this | Link to this | Hansard source

Thank you, Deputy President. I do want to correct the record. I said in my speech, 'Only this week, the government is discussing putting an extra four per cent tax on clothes.' That was as reported on Friday. That may have been an error because the minister's statement was not clearly specified. It has since been reported as a 4c levy, so there's some confusion about this. We await further clarification. For me, accuracy is important, and I thank the Senate for the opportunity to make that correction.

Mehreen Faruqi (NSW, Australian Greens) Share this | Link to this | Hansard source

Imagine being the government of this wealthy country and seeing that millions living in Australia are suffering through a cost-of-living crisis. Then imagine being presented with a choice of how best to spend $318 billion. What would you do? How would you spend the money in a way that is fair and that improves people's lives? Labor has given us completely the wrong answer. It has failed the test of basic fairness once again. Labor's answer to the cost-of-living crisis is to give 50 per cent of the $300-odd billion in tax cuts to the wealthiest 20 per cent of society and to give just 0.4 per cent of the money to the poorest 20 per cent. That is what Labor's tax plan will do: $150 billion to the wealthiest 20 per cent and just $1 billion to the poorest 20 per cent. What a disgrace! How grossly unfair and insulting to all those who are struggling right now to put food on the table and pay their rent, and those who are being crushed under student debt.

Let's be clear how wrong Prime Minister Albanese is when he says his tax plan means no-one left behind. If you're one of the millions of Australians relying totally on income support or earning less than $18,000 a year, you don't get a cent from this plan. That's called Labor leaving you behind. If you're a middle-income earner under this plan, you get three times less in tax cuts than politicians, CEOs and billionaires. Labor is leaving you behind too. If you're struggling to keep up with the cost of groceries or with increases to rent and mortgage payments, this plan will hardly make a dent in your bills. While the rich get richer, while corporations make megaprofits, again and again Labor is leaving ordinary people to fend for themselves. That's called leaving people behind.

Instead of focusing on helping low- and middle-income earners through this cost-of-living crisis, Labor are giving $80 billion in tax cuts to politicians, CEOs and billionaires. They haven't given any reason for doing this, because there is no good reason; it's simply indefensible. CEOs and people earning the highest incomes don't need a $4½ thousand tax cut. Billionaires like Andrew Forrest and Gina Rinehart, who earn $1.5 million in just one hour, don't need a $4½ thousand tax cut. It makes no sense at all. Just imagine, Mr Deputy President, all the things that we actually could do with $318 billion, which is the price of these tax cuts. We could wipe student debt and make TAFE and uni free. We could put dental into Medicare and provide free and universal early learning and care for all. We could build hundreds of thousands of publicly funded homes and end the waiting list for social housing three times over. We could make public transport free for all and build the clean energy system that our planet needs. These are the universal services that would benefit everyone, services that would help to overcome gender inequity—rather than worsening it, as Labor's tax cuts do, with 42 per cent of the cuts going to women and 58 per cent to men. These universal services would stand the test of time. Instead, this bit of cash will be swallowed up by the landlord's next unfair rent increase—because Labor does back unlimited rent increases.

A mere $15 extra per week is what Labor is asking middle-income earners to be satisfied with under this plan—an extra $15 a week—while, under Labor's housing and rental crisis, average rents have increased by a hundred dollars a week and average mortgage payments have gone up by nearly $200 a week. This is just not good enough. If Labor were serious about addressing the cost-of-living crisis and the housing and rental crisis, they would tax billionaires and big corporations. If Labor were serious about leaving no-one behind, they would use this money to fund essential services for everyone, not give another whopping advantage to the top end of town. The truth is that Labor don't have the guts to stand up to big corporations and their corporate donors, who continue to pay almost no tax as workers are left to pick up the tab. Take the climate destroyer Santos, for example, which earned a whopping $5.8 billion in profit in 2022 and paid just $16,000 in tax—far less tax than that paid even by an average Australian worker. This is the same company that has donated $1.5 million to the major parties over the last decade and whose climate-wrecking gas mines Labor continues to approve in the middle of a climate emergency, in the middle of a time when the globe is boiling. Labor is totally captured by its corporate donors and continues to do their bidding. What an absolute rort!

Whenever Labor says it's too expensive to lift people out of poverty or to fund critical services, just remember it's because Labor keeps choosing to look after its corporate mates and the superwealthy, rather than people who live here. Whenever Labor says it is too expensive to make TAFE or uni free, or to provide universal and free early learning and care, just remember it's because Labor's tax cuts are for the wealthy and for the corporations, and their subsidies are for the fossil fuel companies—while life gets harder for everyone else.

People are entitled to expect a bit more from Labor than for them to effectively tell us, 'Oh, look: we made the tax cuts a bit less crap than the coalition did.' People are skipping basic essentials. Labor keeps telling us that, but then doing the exact opposite. People are missing out on the care that they need because they simply cannot afford it. So if Labor is going to come back and revise the coalition's tax cuts, they should do something that will actually make a change and a difference to people over the long term.

The Greens are the only ones in here who have, from day one, continuously opposed the coalition's tax cuts for the billionaires and the politicians which the crossbench at that time backed in, and Labor followed. It took years of Greens and community pressure to finally get Labor to shift on the Liberals' stage 3 tax cuts. So, clearly, pressure does work. But Labor could be doing so much more to help people through this cost-of-living crisis. The Greens won't stop pushing them until they put the interests of the people and the planet above those of corporations and billionaires.

Marielle Smith (SA, Australian Labor Party) Share this | Link to this | Hansard source

I also rise today to speak on the Treasury Laws Amendment (Cost of Living Tax Cuts) Bill 2024 and the Treasury Laws Amendment (Cost of Living—Medicare Levy) Bill 2024. These bills are about fairness. They're about delivering more relief to the Australian people in a way that is fiscally responsible and that doesn't add pressure to inflation. And they are about making our tax system fairer, because these are difficult times. A pandemic, global conflict, natural environmental disasters, persistent inflation and higher interest rates have dramatically changed the world around us. When the former government's plan was legislated five years ago, the world was a very different place. It was before that pandemic, before the persistent inflation we've seen, before two conflicts and before the global uncertainty we're currently living with. When circumstances change like this, responsible government should change with them.

The bills before us present the right thing to do. It's the right thing to do for the Australian people, the right thing for middle Australia and the right thing for our economy. These bills will deliver more relief to more people in a way that is fiscally responsible and doesn't further add to inflationary pressures. It's fairer because it delivers a tax cut for all Australians, not just some, and it makes our system fairer too. This bill returns bracket creep for all taxpayers and does more to reduce the impact on those most burdened by it.

In my state of South Australia, these bills will make a meaningful difference. They'll make a meaningful difference in a way that's economically responsible and not inflationary. In South Australia, 100 per cent of taxpayers will get a tax cut, and 89 per cent of taxpayers will get a bigger tax cut because of the Labor government.

Women in South Australia—indeed, all women across our country—will get a tax cut to the tune of $1,600 each year on average. We know that 5.8 million women across our country will get a bigger tax cut than they would have if we were still under the former coalition government. I've spoken many times in this chamber about things like the gender pay gap and structural issues in our economy that have let women down, especially women working in particular industries like early learning, teaching, nursing and disability support. These women will get a significantly bigger tax cut under Labor. Women who would have never got a tax cut under the former government will get one now.

This bill is about delivering reform that is better for the majority of Australians. It delivers more relief to those who really need it. It is the right thing to do.

We know the opposition are going to support this today, but the Australian people should be very, very wary of reading anything into that. Simply, they shouldn't believe in it, because who can forget the words of the Deputy Leader of the Opposition when she said that it was absolutely their position to roll back these changes—to roll back these tax cuts. Deep down, that's what they believe. Those across the aisle initially sought to oppose this bill before they had even read it. They wanted to oppose this policy before they'd understood it. That should tell the Australian people everything it needs to about the opposition's position on tax cuts and who tax cuts should go to.

Our tax cuts are good for the majority of Australians, for the majority of women and for the majority of people in my state, who will benefit from this relief. These are tax cuts which will not be inflationary; these are tax cuts which are economically responsible. They are tax cuts which will make a real difference in the lives of people in my state. This is the right thing to do. It's the fair thing to do. And I wholeheartedly support this bill.

Dave Sharma (NSW, Liberal Party) Share this | Link to this | Hansard source

This is not my first speech. Australia's in a cost-of-living recession right now. Over the past 18 months, we've seen real net disposable income per person fall by 8.6 per cent. This decline in household living standards has never been so dramatic and has never been so rapid. What we've seen in Australia is an average full-time earner on $95,000 a year see their real disposable income fall by over $8,000.

These workers are being hit by a triple tsunami. They're being hit by higher income tax because of bracket creep. Personal income tax collections have increased by 27 per cent since Labor came to office, which means that workers are taking home less of their pay. They're also being hit by higher mortgage repayments, the result of higher interest rates. There have now been 12 increases in the cash rate under this Labor government. In the past two years, we've seen mortgage repayments, on an economy-wide basis, go from $11 billion per quarter to $29 billion per quarter, an increase of $18 billion per quarter. So more of workers' take-home pay, which has already been reduced by bracket creep and growing taxes, has to go to servicing their mortgage. Finally—the third whammy—they're being hit by high inflation. As the RBA has reminded us, this is now a homegrown problem. The headline rate of inflation is too high; it's well above the RBA's target. We've seen food prices up by nine per cent. We've seen electricity prices up by 23 per cent—not $275 a year less, as we were promised by the Labor government. We've seen gas prices up by 29 per cent.

For workers, that means that the pay they are left with, after higher taxes and higher mortgage repayments, buys less—fewer groceries; less food on the table. It means less ability to meet back-to-school bills; less ability to pay for electricity and gas bills, which are going up each quarter; and less ability to fill up the car.

Recent figures from the OECD reveal this decline in living standards here in Australia quite starkly. In the 12 months to September 2023, Australian household incomes have fallen by 6.1 per cent, adjusted for inflation. This is the sharpest fall measured across any of the OECD economies over the same period. Over the same period, we've seen household incomes in the OECD, on average, go up by 1.7 per cent. In the United States, they've gone up by 2.6 per cent. In the United Kingdom, they've gone up by 3.2 per cent. In France, they're up by 0.3 per cent. But in Australia, household incomes, adjusted for inflation, have fallen by 6.1 per cent. That means that Australian real household incomes are now back to 2017 levels. If households are feeling poorer, families are finding it harder to put food on the table and people are worried about how they're going to pay their bills, that's because they are as wealthy or as poor as they were in 2017. People have gone no further ahead in seven years now.

With these amended stage 3 tax cuts in the cost-of-living tax cuts bill, the Treasury Laws Amendment (Cost of Living Tax Cuts) Bill 2024, you would think, listening to some of those opposite, that Labor has fixed the cost-of-living crisis that they've presided over. But, if you look at the sums here, the person on an annual wage is going to receive only an extra $800 a year, or $15 a week, under these amended tax cuts. An average worker on $95,000 a year has lost $8,000 a year, or $150 a week, because of higher inflation, bracket creep and higher mortgage repayments, and all they are getting back from this government is an extra $800 a year, or $15 a week. They've lost $8,000 a year; they're getting back $800 a year.

I think this is my main gripe with this legislation. Labor is seeking to alleviate the symptoms but not to treat the disease—the disease they have made considerably worse and continue to make worse: the disease of high inflation and rising cost of living. The economist Chris Richardson has described these tax cuts as a bandaid and said that higher productivity would be needed to drive better living standards. He's been quoted as saying: 'In Australia these days, we spend our time grabbing bits of pie from each other rather than growing the pie.' The Deloitte Access Economics partner Stephen Smith has said that, while the tax cuts would provide some relief to households, that will not be enough to offset the decline in living standards. He's said:

Households have been dealing with the cost of living challenges that elevated inflation and rising interest rates impose. At the same time, bracket creep is ratcheting up the average rate of tax paid, while aggregate measures of income and economic growth are being driven by population growth, not productivity.

So there are three major problems with this legislation. Firstly, it's insufficient. If you're an average worker, you've lost $8,000 a year in your real disposable household income, or $150 a week, and all you're getting back is an extra $800 a year, or $15 a week. But it's also doing nothing to address the root causes: high inflation and low productivity growth, which are the biggest burden on living standards and how Australian households are feeling right now.

In fact, the government's most important agenda in this parliament has been to alter our industrial relations landscape to make workplaces less flexible and to reduce the scope for enterprise bargaining and for wage rises linked to more productive and flexible workplaces. All these changes do is hurt productivity and contribute to wage price inflation.

These amended stage 3 tax cuts also entrench bracket creep, and bracket creep is at the heart of why Australians have less take-home income. The stage 3 tax cuts, unamended, would have returned significant portions of the proceeds of bracket creep. They would have simplified the tax system. And they would have restored incentive to our personal income tax rates. Under the plan unamended, 95 per cent of taxpayers would have been paying no more than a marginal rate of 30c in a dollar, whilst the plan would have retained the progressive character of our personal income tax system. But instead, with these amended changes, we see, from Treasury's own estimates, that they are expected to increase revenue by $28 billion over the next decade. It's not much of a tax cut if the Treasury is taking $28 billion over the next decade in additional tax revenue compared to the business-as-usual scenario.

Australia relies too much on income tax receipts in our tax system. We need to address that, and these changes today do nothing to address that. All they do is increase our dependence on income tax. Ultimately, it's workers and salary earners, who are often earning income but are quite asset poor, who are bearing more of the burden of our taxation system and having to fund more of the social services that Australians rightly expect.

We need a better balance in our tax system. That is why the coalition—whilst not standing in the way of these tax cuts, because we recognise households are doing it tough—will take a policy proposal to the next election that will simplify our tax system, restore incentive and rebalance our tax system away from our dependence on income tax.

Lastly, this is a broken promise. And this is a question that goes to the heart of personal integrity and the integrity of any government. We know the Labor government voted for these stage 3 tax cuts. They went to the last election saying they would support the stage 3 tax cuts. They confirmed on over 100 separate occasions that they supported these tax cuts. We heard the Prime Minister say he was a man of his word, and that his word was his bond when it came to these things. Whilst they can cite extraordinary circumstances, I think we've seen from this government already that we cannot take them at their word. If they assure us again and again they do not plan to change parts of our tax system, we cannot take those assurances at face value. If they promise us they will do one thing—whether it's to acquire nuclear-powered submarines, not altering negative gearing or not altering the capital gains tax system—we can no longer take them at their word.

This is a prime minister and a government who spoke a lot about integrity in the last parliament; they spoke a lot about restoring trust in politicians and about restoring the public's faith in elected office, and I share those sentiments. I would like to see public faith restored in elected office in our parliament, but this cuts right across that. This is up there with Julia Gillard's promise not to introduce a carbon tax: 'There will be no carbon tax under the government I lead.' It's up there with Paul Keating's abandonment of the 'l-a-w' tax cuts after the 1993 election. In fact, in many respects, it's even more egregious than that. You could argue, with Australia coming out of a recession in 1993-94, that the case for retaining the l-a-w tax cuts was no longer made. You could argue that after the 2010 election, when Julia Gillard had to form government with the Greens, she had to adjust her policies to make sure they were on board. But there are no such exigent circumstances here. This is a broken promise, pure and simple. Whilst the Australian people might be mildly grateful for an extra $15 a week—when they've lost $150 a week because of bracket creep, because of higher interest rates, because of high inflation—they will not forgive a government for so flagrantly breaching their promise, for breaching the commitment they made to the electorate, and for being so bereft of solutions to the broader challenges our economy faces—low productivity, increasingly inflexible workplaces and a government that is more focused on redistributing the pie rather than growing it for everybody.

Jacqui Lambie (Tasmania, Jacqui Lambie Network) Share this | Link to this | Hansard source

I've been thinking about that famous Benjamin Franklin quote, 'In this world, nothing can be said to be certain except death and taxes.' You can also add, 'You can be absolutely certain that our major political parties are very good at arguing about tax and totally not good at doing anything about tax reform.' Since March last year I have been calling for the stage 3 tax cuts to be rejigged so that low- and middle-income earners can get some relief—and that was the right thing to do. If a government or leader gets something wrong, they should fix it. But there are other things that need fixing in our tax system, and it will take real courage.

Do we have the courage do that, or does the government of the day have the courage to do that? I doubt it. Our tax system was written in the 20th century, and that's a problem in itself. I'm not an economist, but most of them will tell you our tax system isn't match fit for the 21st century—and it certainly wasn't written before COVID came around. Australians want and need better services; that's what our tax system is supposed to pay for. But it's everyday Australians that carry most of that burden. Over the next 10 years our governments will have to spend a lot more on the NDIS, aged care, defence and our health system, and all this spending pressure will grow as Australians get older and the climate change weather events keep getting worse.

According to the OECD, Australia is a low-taxing nation compared to similar countries. We tax the pay packets of everyday Australians, but we let multinationals dodge millions of dollars of tax every year. Every year they keep dodging tax—why wouldn't they?—because the companies throw their hands in the air and say that they will have to leave. That's what they say: 'We will have to leave.' What a load of rubbish! Won't don't you play them at their game and say: 'Good—leave. Go find somewhere else to dig your iron ore.' Go on, tell them: 'Leave. If you don't want to pay your tax here properly, and you don't want to support this country, then get out of it.' No-one seems to have the courage. The Nationals and the major parties do not have the courage to hold them responsible and to make them pay their fair share. Many Australians out there, millions of them, are getting really sick of this. They've had enough. They're sick of picking up the burden when the multinationals are not.

Do you know the government gets more from young Australians out there paying back their HECS than they do from the oil and gas companies who operate here in this country? That in itself is shameful. You're prepared to rip off our kids instead of taking from the multinationals. That's where we are today in 2024. On top of that—not only is that bad enough—we also give the oil and gas companies $11 billion in subsidies. That's right, Australians. So we give them subsidies, and we don't tax them properly, but, don't worry, we'll pick on our young people out there, who don't have a big enough voice and enough cash in their pockets and can't make enough political donations, and we'll take the money off them. It is frightening.

The Australian Taxation Office's eighth Corporate tax transparency report looked at over 2,000 companies. Guess what? I know, Australians, this won't surprise you, but over a third of them didn't pay tax at all. They didn't pay tax. I guess, when you're paying no tax, that's an accountant's invoice that is worth paying, isn't it? Yes, it is. If you're an Australian earning good money, you can access lots of tax discounts like capital gains tax, negative gearing and family trust arrangements. The list goes on and on. These are available to all Australians but are accessed most by older and richer Australians. A substantial review of the tax system by former Treasury boss Ken Henry in 2009 made more than 100 recommendations. You wouldn't guess it out there, but guess what? Most of them have not been implemented. That's right; they haven't been implemented. There's nothing on you having independent inquiries, Senate inquiries, and House inquiries. Great! You make these recommendations, and they go back on the shelf. I wish we could give every dollar away for all those recommendations that are not put back out there and not spoken about again because of the lack of courage in this place.

Whenever there is talk of fixing these tax breaks, the media and politicians start talking about winners and losers. Scare campaigns pop up everywhere, especially at election time, and then it deteriorates into nastiness either about the top end of town or the so-called welfare cheats. That's where we're at—the blame game. We have to be adults about this, and we're a long way from it. We're like a bunch of two-year-olds, running around still in the cot, instead of saying: 'Something needs to be fixed. Let's fix it.' Because that's what a leader does; they fix it. We have to talk about tax reform, and we have to act on it. Fixing the stage 3 tax cuts doesn't count as reform. It's not even close. To be grown-ups and make the changes the experts recommend will require political courage, like I said, and that will mean both major parties leaving their donors and vested interests at the door. Just for once, I ask you to put this country before anything else. If you put this country, this nation before your donors and anything else, my goodness, the leaps and bounds that economically we could make in this country would be astounding. It would be absolutely astounding.

Here's something the government could fix now. They could fix the dodgy GST deal the Morrison government did with Western Australia in 2018. I say this to Tasmanians especially, because you are set to lose $900 million in GST revenue very shortly. When this deal was done, the government told Australians that it was because the price of iron ore was expected to fall. Anyway, the price of iron ore didn't fall, and prices went up, and they have stayed up. The Prime Minister at the time, Scott Morrison, promised that other states and territories wouldn't be worse off and would be topped up. This top-up was supposed to cost about $2.3 billion. Guess what it's projected to cost today? It's $30 billion. Do you think the Labor Party over there is going to top up Tasmania with the money that was taken off by this side over here? I doubt it. Once again, this shows a lack of courage. We'll keep reminding them of the lack of courage as we're going into elections, no doubt. But, seriously, for that $900 million—or more now—to come out of Tasmania: whoa! I tell you what, the Treasurer has agreed to keep the top-up deal to Tasmania going, and that's a good thing, but fixing this dodgy deal would be better. As Saul Eslake, economist and proud Tasmanian, told the Sydney Morning Herald, 'the smaller states, like Tasmania, South Australia and the NT, are going to face a fiscal cliff when that part of the deal ends'. He also made the excellent point that fixing the GST isn't about numbers; it's about votes. How about that? He said:

"The GST deal isn't Chalmers' fault, but no party is going to abandon it because of the politics of WA. Something is going to have to change because it can't continue."

Once again, I'm just one of millions that know it doesn't come down to GST; it comes down to whether or not we have power and how many seats we can win. Those are not the best interests of the nation, never will be and never have been. I don't know where we lost that way, to be honest. In both these chambers we lost the way to put the nation first. And we have seriously lost our way. We need courage and we need political courage—the courage to talk about tax reform, the courage to listen to the experts and the courage to reform our tax system so that it's fair. Our young people out there have to stop coughing up most of it. It is shameful, like I've said before. We're supposed to be the land of the fair go. That's part of our values. Just a reminder in here, but we sure don't see that in our tax system.

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

I want to be clear that Labor want you to earn more and keep more of what you earn. The Liberal and National parties want you to work longer for less. The first chance they get, they'll walk away from hardworking regional Australians who absolutely deserve a tax cut. Labor's cost-of-living tax cuts deliver more relief for Australians, allowing to them keep more of what they earn. On 1 July every Australian taxpayer will get a tax cut. That's 13.6 million Australians. That's 2.9 million more Australians than under the previous plan. The changes that Labor are attempting to push through this Senate today will also mean that more Australians get an even bigger tax cut than that which was promised before.

The Labor Party gets it, and this compares starkly with the reaction of the Liberal and National parties. They've had more positions than a game of Twister. At first they claimed not to know what it was, but decided they were against it; next, they said they didn't have a position; and, finally, they decided, actually, it's a good idea, but through gritted teeth they have articulated a very slow and reluctant 'yes' to this legislation, the Treasury Laws Amendment (Cost of Living Tax Cuts) Bill 2024 and the associated bill. What we see in the Senate today is the continuing whingefest that Labor would dare to make sure that you earn more and keep more of what you earn.

I'm proud to be the representative for Farrer over here in this Senate, on this side of the parliament. In Farrer, if you're a shop assistant working in Albury on $32,000, you're going to get a tax cut under the Albanese government of $414. I know that that's going to make a difference to you. The local member doesn't seem to understand that. In fact, if they're in Farrer, they should look around: 76,000 people in their seat are going to get a bigger tax cut because of Labor.

I'm proud to represent the seat of Lyne, on the Mid North Coast, a beautiful part of the coastline of our great state of New South Wales. If you're a nurse working in Lyne earning $76,000, you'll receive a tax cut of $1,579, and 57,000 of the people around you in the community are going to be better off under Labor than they would have been under the previous government.

If you're a truckie in the great seat of Hume—which I'm very proud to represent in this chamber—earning $77,000, you're going to get a tax cut of $1,604, and 70,000 people in your community are going to get that tax cut.

If you're in the Riverina, a beautiful part of this state, working as a primary school teacher—and I've met many of you down there—and earning $80,000, you'll get a tax cut of $1,679, and 67,000 people in your electorate will get additional benefit because of Labor's efforts to make sure that you earn more and keep more of what you earn.

If you're from the electorate of Parkes, which is the beautiful north-western part of New South Wales—for those who are from other states in this great country—and you're a police officer earning $110,000, you will get a $2,429 tax cut, and 62,000 people in the community living around you will also get the benefit of that great Labor tax cut.

In Calare electorate, 71,000 people are going to be advantaged. If you have a job that earns you $40,000, you're going to get a tax cut of $654. But under the Nationals, who claim to represent you in this place, you would have got zero.

Labor understands that there are real benefits for Australians in making sure that you earn more and keep more of what you earn. The truth is that most of the benefits of the tax cuts that will go through this chamber today, with begrudging support from the Nationals, who oppose them, will go to regional Australia. I'm really proud to represent the people of Farrer here, because they have certainly found their member in the other chamber wanting—in fact, if we take her at her word, at the first chance she gets she is going to tax her community more.

Gerard Rennick (Queensland, Liberal Party) Share this | Link to this | Hansard source

'Tax cuts'—they are words that ring a very happy tune in my brain. It was actually tax that drove me to run for politics—in particular, lower and fairer taxes for all Australians.

I sit here and listen to the other side of the chamber making a big song and dance about making minor amendments to the tax act, after having been in office for two years in which we have seen the cost of living rip through the heart of hardworking Australian families. Let's do the calculations, Mr Acting Deputy President. I don't want to come in here with just bombastic rhetoric; I'll back it up with hard numbers. Say the average person on $80,000 needs, if they're lucky, $60,000 a year to live on. They earn $80,000, they pay 20,000 in tax and they've got $60,000 left over. Let's not forget that the Labor Party are going to take 12 per cent of that income, so you're almost down to $50,000. Let's settle on $50,000 a year that you need, as an individual, to live on. The inflation rate has been running at five per cent for the last two years, so now we've got an inflation rate of 10 per cent over $50,000, which means the cost of living has gone up by at least $5,000 for an individual. That is for someone who is living very frugally, I might add. Anyone with a family and a couple of children probably needs $100,000 to live on; their cost of living has gone up by $10,000. Let's just settle on $8,000 being the rise in the cost of living for the average working family. What's Anthony Albanese and the Labor Party going to return to them on an annual basis? Eight hundred dollars, $16 a week or only 10 per cent to offset the cost of living. That is an utter disgrace.

The Labor Party have had two years to deal with this. They could have kept the low- to middle-income tax offset going, the LMITO, which was worth $1,500 for people on $96,000 a year if they were really serious about helping low- to middle-income tax earners. But they didn't because Labor saved the $11 billion by withdrawing that low- to middle-income tax offset so they could get back in the black, so that Mr Chalmers, the Treasurer, could skite about getting the budget back into black. So, while the federal government's running a surplus, hardworking Australian families are at home going broke.

And it's not only the cost of living. The cost of living goes up, so does the GST. The GST is applied to most goods and services as well, so GST collections have risen. The fuel excise has risen. The alcohol excise has risen. The cigarette excise has risen. Those of you still having the odd darb every now and then—that was a long time ago; you don't see many of them anymore, and that's just as well. But let's not forget the cost of living is through the roof, and that is the key issue here. In the six months between when the Prime Minister announced the changes to the tax cuts and 30 June the cost of living will have risen by more than what this tax offset will provide. So don't be fooled by the Labor Party saying: 'Look at us. Look at this hand. We're giving you $800.' Behind their back in this other hand is somewhere between a $5,000 to $10,000 increase in the cost of living. That is the key issue here.

And what is the No. 1 driver of cost of living in this country? It has been the reckless immigration rate that went from zero throughout the COVID era back to 500,000 people a year. The Australian workforce and Australian families were recovering from the government overreach throughout COVID. Many people were locked down, locked out et cetera. They had bills to pay because they got forced to stay in a hotel for two weeks, a $10,000 bill for merely wanting to go to a wedding or to go and see one of their loved ones if those loved ones had passed away. Many families were already doing it tough, and the Labor Party somehow thinks, 'We've got to keep the economy going because the economists in the Treasury need to show that we're still growing on a growth basis.' But on a per capita basis we're getting poorer, people. And we're getting poorer because of Labor's bad economic management.

I've spoken many times before about the history of the Labor Party in the eighties and nineties and how they brought in this three-step policy. They brought in fascism in 1985 when they let the foreign banks rip. They destroyed our manufacturing sector, smashing our patriots who love to get on the tools, like any true patriot does. They introduced Marxism in 1990 when they said every child can go to university and come out brainwashed and broke and feeling sorry for themselves. And they introduced the communism piece de resistance in 1992 with superannuation, centralising $3 trillion in capital into the hands of a few industry funds, BlackRock and Vanguard. Not very democratic, and that has had a long-term impact on the productivity in this country because our secondary industries are struggling. And when our secondary industries struggle, we cannot add value to our raw materials.

And when we did open up to the capital markets in 1985, with no restraints whatsoever, foreign debt rose from $8 billion in the four major banks to $800 billion in foreign debt by 2008. That drove house prices from four times earnings to 13 times earnings; it drove two parents back to work; it drove our kids into child care; it drove our children's rankings in world education standards down the world league ladders. I've spoken to many teachers from the seventies and eighties—a great era, when I went to school—and it was well-known that Australia was world class. It had a world-class education system that has been eroded by the Marxists that have infiltrated our universities and our school sectors. And that's a shame because most teachers do a fantastic job.

But I digress. We are talking about tax cuts here and about the need to protect the individual. Of course, the Labor Party love it. As I said, this is nothing but a great big distraction from a Prime Minister who does not know how to deal with the cost of living. We know that because, straightaway after he did the tax cuts, he turned up on the weekend going to Tay Tay in Sydney. Then he got on his jet aeroplane and sprayed out a heap more carbon dioxide emissions as he flew down to see Katy Perry and Richard Pratt. 'Oh gee, it's great! I really care about the battlers as I'm flying around Australia and the world, emitting all this CO2!' The humanity of it all. The temperature has probably risen another half-degree just since he hopped on the plane over the weekend! But that is what he's doing. He has no substance, this man. He has no substance, the Prime Minister.

I say to you: what is the Labor Party going to do about increasing productivity in this country? If you want to actually increase productivity in this country, we need to empower the individuals and the families. We do that by constantly decreasing the income tax rate and starting to increase the withholding tax rate on profits sent offshore. What people don't realise is that when Paul Keating let the foreign banks come into this country in 1985, with no restrictions whatsoever on how they lent that money, the interest that we pay to those foreign banks offshore was not taxed. That's right, peeps: it is not taxed. If you look at your large tax expenditure statement, you will see that there is an exemption for withholding tax; it was worth $2.8 billion last year and it's worth $2.2 billion this year. I'm talking about section 128F and the public offer test in the 1936 Income Tax Assessment Act. We need to start taxing profits that go offshore. We need to lift the rate of tax on profits that go offshore and we need to lower the taxes on the profits that are earnt here in Australia, because there is no greater way to control your country and increase the equity in your own country than retaining your own earnings.

Paul Keating let those foreign banks in in 1985 and decided that, with the Button plan, he'd let manufacturing rip. Well, that was great! What happened with the Button plan in 1985 was that it destroyed manufacturing. Look at Victoria, once the jewel in the crown of the Liberal Party. It used to be a strong manufacturing state. It's now the jewel in the crown of the Labor Party because it's driven by universities and superannuation funds, the Marxists and the communists. There's barely a patriot left alive in Victoria. I tell you what: if the Marxism and the communism didn't get to them, thanks to those reckless policies of the Labor Party in the eighties and nineties, Dan Andrews just about beat them out of the state throughout COVID. What a disgrace!

But I digress again. We've got to come back to reforming the tax act—

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

They've moved to Queensland!

Gerard Rennick (Queensland, Liberal Party) Share this | Link to this | Hansard source

Yes, they've moved to Queensland. Heaven knows why, under Labor, but we won't go there. I haven't got time to talk about that. We've got to get back to reforming the tax act. To do that, and to reform the economy, we need lower taxes on the people that get out of bed every day and go to work, and we need lower taxes on productive income—the people who actually get on the tools. Some students can still go to universities; we still need our doctors and our engineers. I'm not saying every university degree isn't a good idea, but we need more of our children back into TAFE and back on the tools, adding value to our raw materials. I was speaking to a member of the Liberal Party last week who has seen the light. He originally thought privatising infrastructure was a good thing. He said to me: 'When it was first happening, I thought it was a good thing. But one of the things I didn't realise was that when they did that, they stopped training electricians and people with other important skills through government programs when the infrastructure was publicly owned.'

That's the other thing we need to do if we want to lower taxes—increase the productive output of this country. As anyone who has ridden a bike knows, the lower the gear, the faster the cadence. So, if we can have lower taxes, we can increase the output in the country. We also want to lower the cost of doing business. How do we do that? We build more dams, more power stations, better roads, better railways, better ports and better communication infrastructure. I'm not against the retail arm of telecommunications being private, because it's high-speed, fast-moving goods, but we have to control our infrastructure. Of course, that was the piece de resistance of communism and Marxism—selling all our infrastructure. But if we can increase the production of goods and services then we can actually lower the tax rate. A greater volume multiplied by a lower tax rate will equal the same tax takings. So, if we want to lower taxes, we need to take other measures to get rid of the red tape, green tape, black tape and blue tape.

I should also add that we need to close some loopholes in the tax act, such as for the education sector. Why don't universities have to pay for the income they earn from foreign students? Why do foreigners not have to pay capital gains tax on the sale of water rights? Why do they not have to pay capital gains tax on the sale of assets that are a non-portfolio asset? Why is it that foreign superannuation funds and sovereign wealth funds don't have to pay tax in Australia? That's a nice little switcheroo. When the Future Fund here invests in foreign offshore assets, they don't have to pay tax. Likewise, when foreign superannuation funds and sovereign wealth funds invest here, they don't have to pay tax. Of course, the argument is that it's a false economy because then they don't have to pay their bureaucrats as much when you pay them their defined benefits scheme. That's a rort if ever I've seen one. We ought to means test that one as well, which is a lazy $300 billion for about 130,000 retired bureaucrats down here, which works out at something like $1 million to $1½ million for every retired bureaucrat. That's not a bad gig if you can get it.

But, long story short, why is it that we have all these loopholes in the tax act for the elites and foreigners? Who picks up the tab? I'll tell you who picks up the tab: it's hardworking Australians, when they get out of bed and put their nose to the grindstone, through bracket creep when they pay their income taxes. If we want to lower income tax, we need to reform the tax act. You can come and give me a call, Labor Party; I'll help you do that. We need to build more infrastructure. We need to put the Australian working families first. We need to get our manufacturing industry up and running again. To do that, we've got to get our children back on the tools. I'm not against some children going to university, but not everyone needs to go to university to have a happy life. We need to get back on the tools, people. We need to learn how to sweat, work hard and understand what it's like to work on a factory floor again.

Larissa Waters (Queensland, Australian Greens) Share this | Link to this | Hansard source

I rise to speak on the Treasury Laws Amendment (Cost of Living Tax Cuts) Bill 2024. The Greens have fought the unfair stage 3 tax cuts for billionaires, CEOs and politicians ever since they were introduced by Mr Scott Morrison and agreed to by Labor. I'm very pleased that Labor has finally heeded the calls from the Greens, from economists and from ordinary people that billionaires don't need an extra $9,000 every year. But, unfortunately, they are still only tinkering at the edges. In the middle of a cost-of-living crisis, Labor's revised solution is to give every politician and billionaire $4½ thousand a year whilst giving middle-income earners just $15 a week. Three times as much is still going to those at the top as to those in the middle, and those at the bottom get nothing. Labor can find $4½ thousand a year for politicians but only $15 a week for people whose rent has gone up by $100 or whose mortgage has gone up by $200. It does not add up. Under Labor's package, the wealthiest 20 per cent of people will get half the $318 billion that these stage 3 revised tax cuts will cost the public purse. The poorest 20 per cent of people will get 0.4 per cent of that money. And that's Labor's idea of fairness? That's your idea of leaving no-one behind?

Labor has audaciously packaged their reforms to the stage 3 tax cuts as a win for women, when in reality they will still exacerbate the gender pay gap. The previous stage 3 tax cuts had twice the benefit going to men as to women. Under these revised stage 3 tax cuts, 58 per cent will go to men, with just 41½ per cent going to women. So these tax cuts are still skewed towards men—and wealthy men, at that—even though there has been a slight improvement on those figures when compared with Mr Morrison's version.

At the Press Club, when announcing the revised stage 3 tax cuts, the Prime Minister said, 'no-one held back and no-one left behind'. I think the Prime Minister must have forgotten about all those people who earn below the $18,000 tax-free threshold. I think he must have forgotten about those people who are out of the workforce because of caring responsibilities. He definitely forgot about people on income support. Those people get nothing to deal with this most pernicious cost-of-living crisis. Those people who need the help the most, who are struggling the most, are getting absolutely nothing out of this $318 billion spend of public money.

Instead of funding tax cuts, Labor could have put that money into services that would benefit everyone and that would actually lower the cost of living for everyone: building more public homes, getting dental and mental health care into Medicare, freezing rents and mortgages, wiping student debt, fully funding the NDIS, and making child care free. That's the sort of investment that $318 billion of public money could have actually delivered in benefits to ordinary people—universal services. The revised stage 3 tax cuts will starve the budget by that jaw-dropping $318 billion over the decade. So, whenever the Treasurer says, 'We can't afford things like putting superannuation onto paid parental leave,' it is because the cost of these tax cuts makes everything unaffordable.

What a farce. Labor has shifted on the stage 3 tax cuts because they finally could not deny anymore that they were unfair. When circumstances change, so should a policy position. Well, the housing crisis has changed, too. If Labor can shift on the stage 3 tax cuts, they should shift on negative gearing and on the massive tax handouts that go to property investors. All those property investor tax handouts do—those billions of dollars of public money every year—is to push house prices further out of reach for renters and first home buyers. They should be scrapped. We've seen that pressure works, and the Greens will keep applying the pressure on the government to scrap those property investor tax handouts to the wealthy that are making the housing crisis worse and making unaffordability very, very real for more and more people.

The LNP and the media want to talk about broken promises on the stage 3 tax cuts. Well, the broken promise that should be being talked about is the one Mr Albanese made when he said no-one would be left behind. The revised stage 3 tax cuts are still leaving far too many people behind: $4½ thousand a year for politicians but only $15 a week for middle income earners, whose rent has gone up by 100 bucks or whose mortgage has gone up by 200. That's not fairness. That's asking people to continue to suffer through a cost-of-living crisis. That's ignoring the most needy and wasting billions on the rich, who don't need a tax cut, when that money could be used to fund universal services that could help everyone: things like making university free again, making early childhood education genuinely free for all, scrapping the student debt that hangs over so many students' heads and often gets worse every year because of compound interest, spending money building more public homes so we can finally address the housing crisis in this country, and putting dental and mental care into Medicare. There are so many things that $318 billion—particularly the portion that's allocated to those who earn over $200,000, who don't need the help—could be spent on that would genuinely help people and provide those universal services to everyone who needs them. Yet this government, because they lack courage, have made the smallest of tweaks and are now trying to pour glory on themselves because they've made this small change.

This is a welcome change, but they should have scrapped these tax cuts entirely and funded universal services. So much for 'no-one left behind'. I foreshadow that I'll be moving a second reading amendment in relation to the conduct of this bill.

James McGrath (Queensland, Liberal National Party, Shadow Assistant Minister to the Leader of the Opposition) Share this | Link to this | Hansard source

I will be speaking on the Treasury Laws Amendment (Cost of Living Tax Cuts) Bill 2024 on behalf of the taxpayers of Australia and particularly the taxpayers of Queensland. And it's always nice to hear contributions from members of the Greens party, who have an approach to economics which could only be described as confetti economics, which is that they waltz and skip and dance around the highways and byways of our country with their confetti guns, flicking out bits of paper and making outrageous promises and wanting to spend all sorts of money—

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

Recycled paper?

James McGrath (Queensland, Liberal National Party, Shadow Assistant Minister to the Leader of the Opposition) Share this | Link to this | Hansard source

It would not be recycled paper. It would be coloured paper, probably imported from overseas. What the Greens and those on the left of Australian politics fail to realise is that, with all these promises they want to make—to make them feel good and to enable them to do lots of virtue-signalling—someone's got to pay for it, and it's the taxpayers of Australia who have got to pay for it. I, as a senator for Queensland, and the Liberal and National parties are on the side of the taxpayers, because we believe that taxpayers know best how their money should be spent. We believe in lowering taxes because we believe that the taxpayers, with that money in their pocket, their purse, their wallet or their hand, are better judges of how that money should be spent than bureaucrats or politicians in Canberra.

I will always support the lowering of taxes. We should lower taxes because it's good for the economy. It's good for families. It's good for jobs. But what disappoints me is that we have a prime minister in this country who has knowingly and repeatedly misled the Australian people in relation to the stage 3 tax cuts. What this debate on the Treasury Laws Amendment (Cost of Living Tax Cuts) Bill 2024 and the associated legislation comes down to, in a way, is not the tax cuts themselves, as important as they are; it goes to the virtue of the Prime Minister of this country. The Prime Minister of this country promised Australians they could trust him. He said, 'My word is my bond.' That is what he said. He broke that bond. He broke that promise. That's not the only promise he has broken. We may recall that the Prime Minister and members of the Labor Party promised 97 times before the last election that they would cut your electricity bills by $275. Put your hands up if your power bill has gone down by $275. No-one is putting their hand up because power bills have not gone down by $275; they've gone up by 10, 15 or 20 per cent since Labor came into power.

What we've seen with this Prime Minister, whether it's the broken promise over power bills or the broken promise over stage 3 tax cuts, is a preparedness to do anything and say anything to save his political skin. These stage 3 tax cuts have not come ahead because Prime Minister Albanese, after spending almost 30 years in this place, has decided that he believes in lowering taxes and has joined the IPA or the HR Nicholls Society and decided that economic reform is something that would be great for Australians. What has happened is that there's a by-election being held in Victoria in the seat of Dunkley.

Dean Smith (WA, Liberal Party, Shadow Assistant Minister for Competition, Charities and Treasury) Share this | Link to this | Hansard source

Politics!

James McGrath (Queensland, Liberal National Party, Shadow Assistant Minister to the Leader of the Opposition) Share this | Link to this | Hansard source

Politics.

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

The polling wasn't good.

James McGrath (Queensland, Liberal National Party, Shadow Assistant Minister to the Leader of the Opposition) Share this | Link to this | Hansard source

The polling wasn't good, Senator Scarr, and, as Senator Smith said, politics has come into this. The stage 3 tax cuts have come in because Labor have suddenly realised there's a cost-of-living crisis in this country. This cost-of-living crisis is hurting Australian families, hurting Australian businesses and hurting Australians, but we have a prime minister who's very happy to go to concerts or the tennis and to flit around this country like a social butterfly but was not prepared to understand the impacts of this cost-of-living crisis until the Labor Party went to him with some research and said, 'Prime Minister, mate, you've got to do something about this cost-of-living crisis because we've got a by-election coming up and we are in danger of losing this by-election.' Hence, they've brought forward the changes to the stage 3 tax reforms. Hence, the Prime Minister has again broken his word to the Australian people. He will do everything and say anything to keep his feet in the Lodge.

Matt O'Sullivan (WA, Liberal Party) Share this | Link to this | Hansard source

Senator McGrath, I regret that I have to interrupt you.

James McGrath (Queensland, Liberal National Party, Shadow Assistant Minister to the Leader of the Opposition) Share this | Link to this | Hansard source

That is a shame.

Matt O'Sullivan (WA, Liberal Party) Share this | Link to this | Hansard source

You will be in continuance when we return to this debate. I now call on senators' statements.