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

I like cutting taxes. I think cutting taxes should be the national pastime of Australia. I think cutting taxes should be in the Constitution. I welcome the Labor Party to that moral obligation which is cutting taxes. Cutting taxes is all about handing back to Australians money that they have worked so hard for. It's not the government's money. It's not Canberra's money. It's not the politicians' money. It is the money that belongs to hardworking Australians. So, when you cut taxes, it means hardworking Australians can keep more of their money. They get to decide how their money is spent. So I welcome the Labor Party to the giant jamboree that is the tax-cutting party, the coalition. It is about freedom.

What is disappointing, though, is that we have a Greens party who not only don't want to cut taxes but want to increase taxes on hardworking Australians. Otherwise, how are you going to fund all of their promises? For all of those people thinking about voting for the Greens because they're promising you free dental, free medical and a holiday to the UK every second year, where's that money coming from? That money isn't free. It's not at the bottom of the garden on the money tree that's been grown by the Greens. It's coming from the taxpayers of Australia. Be wary of the Greens and the promises that they make in relation to financial and fiscal rectitude. Remember that the Greens are the party who go around talking about the housing crisis in Brisbane yet, every time someone wishes to develop houses or housing estates in Queensland, are the first to complain about that housing development. The Greens are harbingers of doom when it comes to housing in Queensland, because they don't have any solutions. All that they have are half-baked promises and complaints about other politicians. I wish the Greens would wake up one day to the reality that is modern Australia.

I welcome that the Labor Party have decided to cut some taxes, but what I don't welcome is the manner in which the Prime Minister of this country has dealt with this issue. What we are debating here today may be called the Treasury Laws Amendment (Cost of Living Tax Cuts) Bill 2024, but the subtext of this bill is about the nature, the beliefs and the values of Prime Minister Albanese, someone who looked down the camera at Australians and said, 'My word is my bond.' There are certain unparliamentary phrases that I'm not allowed to use in this place, but it is clear that the Prime Minister was not telling the truth when he made that statement. We have a Prime Minister of this country who has misled the Australian people in relation to the stage 3 tax cuts. We have a Prime Minister of this country who has misled Australians in relation to power bills. We have a Prime Minister in that party who promised 97 times before the election that they would cut power bills by $275. No-one's power bill in this country has gone down by $275. In fact, everyone's power bill in this country has gone up by multiples of $275 because of Labor's mismanagement of the economy and the energy market.

This is what this debate is also about. It is about the cutting of taxes. It is about the calibre of the Prime Minister. But it is also about cost of living—three words that the Labor Party did not mention at all last year. There were questions put to the Labor front bench by the coalition front bench concerning Labor's approach to, or failure to deal with, cost of living. But Labor, sadly, were focused on wasting $450 million on a divisive referendum that left this country in a worse place. It was not until the Dunkley by-election was called that Labor realised that they'd better do something about cost of living, that they'd better do something about those who live in the electorate of Dunkley whose No. 1 issue is cost of living. That is why Labor have moved on these tax cuts. It is a political response; it is not an economic response.

The stage 3 tax cuts were legislated. Labor are proposing to make changes to the stage 3 tax reform agenda. And it's not about economics. It's not about what's good for the economy, with Labor; it's about pure politics. For example, the Treasurer of this country confirmed, several weeks ago—in an interview that can only be politely described as a train wreck—that the government didn't want to wait until after the Dunkley by-election to make these changes. We have a prime minister who, several weeks ago, was calling upon the coalition to vote against these tax changes, because, you see, it's all about politics with the Labor Party. It's not about what is good for Australia. It's not about what is good for the people of Dunkley. It's not about what is good for the long-term economic future of this country. For Labor, it is all about the politics.

Cost of living has suddenly become an issue to them. They've been briefed by Labor headquarters. The secretary of the Labor Party has walked into the caucus room or the cabinet room and briefed them that cost of living is the No. 1 issue and they'd better do something about that. That's why we are dealing with this legislation today. It is a political response to a cost-of-living crisis that, sadly, this party opposite and this government opposite have wilfully ignored for the last 18 months.

Anyone who speaks to the people of Queensland—anyone who goes to the roadhouses, the cafes, the pubs and the small businesses, and anyone who goes to community meetings—will know, before anyone actually opens their mouth, what the No. 1 issue is. And it hasn't just erupted as an issue in the last month or so. It has been consistent for the last 18 months. Consistently, across Queensland, the No. 1 issue is the failure of the federal government to understand the cost-of-living crisis impacting on Queenslanders, whether that's when they're going to the fuel browser to fill up, or when they're at the supermarket and looking at how much groceries cost, or when they're getting their bills for power or insurance. But what we get from the government opposite is a political response, through this proposed legislation, as well as a catastrophic failure to understand how tough it is out there and a version of Marie Antoinette's 'Let them eat cake.' From the Labor Party, we hear, 'You've never had it so good.' Well, I challenge the Labor Party: you go to Warwick, to Inala or to Ipswich, and you tell those people there, 'You've never had it so good,' and you'll get an answer that you may not like.

Cutting taxes is good. It's sad it's so political, like this. (Time expired)

David Pocock (ACT, Independent) Share this | Link to this | Hansard source

People in communities across the country have been calling for the stage 3 tax cuts to be redesigned since before the election. People knew this was a bad idea. And this has only got worse. We've seen a large proportion of people who would have benefited from these stage 3 tax cuts actually now saying, 'This is not the right direction for Australia.' The majority of Australians have a strong sense of fairness and believe in looking after each other. Reflecting what Australians believe and what we've been hearing from our communities, the crossbench have consistently called for a redesign of these cuts. We've been calling for the cuts to be made more equitable since before the government started saying, 'Our position on stage 3 has not changed.' I applaud the government for doing the right thing in the end, and I applaud both the major parties, Labor and the coalition, for capitulating to the crossbench on this issue—for capitulating to Australians on tax reform, on changes that do not make sense for our circumstances and do not make sense for the future that Australians want.

We've seen Independents in this place speaking up on behalf of communities across the country, who expect more from politicians. We've heard much about how the economic conditions in Australia have changed since the original tax package was designed. It's only right that it be redesigned. With high inflation, high interest rates and housing affordability at record-breaking lows, cost-of-living pressures are pushing ordinary Australians to breaking point. The Albanese government had a decision to make: should it do what's right by our community and redesign the cuts, or should it protect its interests as a party and avoid the backlash that we're hearing from the opposition about breaking a promise? This is a promise that shouldn't have been made in the first place, but, because we're in a country where talking about tax reform is taboo and tax reform is seen as a wedge politics issue, we are in this situation.

I acknowledge that when it comes to personal income tax we do need to have a conversation around bracket creep, and I acknowledge Senator Roberts's and Senator Babet's attempts to do that with their amendments. But, as Senator Roberts has said, we need to fix the tax system. Tinkering at the edges won't have a lasting impact, and it isn't what people want and need from politicians. Senator McGrath talked about the burden that Australian taxpayers carry when it comes to tax. I think Australians recognise that paying tax in a country like Australia allows us to have the services we have. Access to health and education—although clearly much more needs be done in those areas—are part of the social contract of being part of a community, being part of a society, being a citizen of a country.

We are so reliant on personal income tax because we're not willing to talk about the other areas that we absolutely should be taxing. I hope that today marks some sort of turning point, the beginning of actually being able to talk about tax reform in this place. To do what's in the best interests of Australians, today and into the future, we need to debate and make informed decisions about things like the petroleum resource rent tax. The last time I checked with Treasury at estimates, offshore LNG projects still hadn't paid a cent of the petroleum resource rent tax, despite them pulling in billions and billions of dollars from selling our gas, from exporting Australians' gas. We are getting totally dudded as a country when it comes to the sale of our resources. Once we sell them and ship them offshore, they are gone. As Richard Dennis pointed out at the Press Club a few weeks ago, we're now in a situation where this year Australia will receive more from HECS than from the petroleum resource rent tax. How can we think that that's acceptable—that we're shipping Australian resources offshore and getting nothing for them?

It doesn't have to be like this. We've seen many countries do it better. People often talk about Norway. They're sitting on a $2 trillion sovereign wealth fund now. They recognised that what lay beneath the North Sea belonged to Norwegians, and they were going to tax it. They were not just going to spend it, but they were going to hold it in trust for the future. Yes, Norway, like Australia, desperately needs to stop exploring and stop opening up new fossil fuel projects, but they've got a legacy from their oil reserves. What do we have here? A couple of big gas companies that seem to have full state capture of this parliament. We see legislation come through here that is basically written by them, for them. We've got to do better for Australians. We've got to do better for Australians today and for Australians in the future, those who aren't even born yet. What kind of legacy are we leaving for them?

The journalist Paul Cleary wrote a great book called TrillionDollar Baby: How Norway Beat the Oil Giants and Won a Lasting Fortune. It's well worth a read. It tells the story of how Norway came to that position. You saw all the usual arguments that get put up here in Australia: 'Investors won't come; sovereign risk; they'll go elsewhere.' All of these things happened there. And they looked them in the eye and said: 'Sure, you can go elsewhere, but, if you want to come and take our resources, you're going to pay Norwegians for those resources. You can still make a profit, but we are going to clip the ticket on our own resources.' It's no surprise that, when the Norwegian government said that—I think it was the Labour government in power at the time—the oil companies went straight to the opposition, to the Conservative Party, and they, to their credit, said: 'We also think this is Norwegians' oil, and we're going to back this in.' And here we are in 2024, and they have a $2 trillion sovereign wealth fund.

And what are we up to here in Australia? Almost a trillion dollars in debt. We have very, very different outcomes, and yet we still aren't hearing the major parties willing to talk about the kind of tax reform that takes the burden off taxpayers. We hear so much about tax cuts. If you want to do that and still have services, you have to tax someone. The money is going to have to come from somewhere for that, for climate adaptation, for disaster relief. Should hardworking Australians also front that up? Will we have to have some sort of disaster levy on hardworking Australians who are struggling just to keep the lights on and food on their table at the moment? Or are we going to have the guts to tax the fossil fuel companies, who are making extraordinary profits?

We've heard the crossbench talk about some sort of windfall profit tax over the last 18 months. The major parties don't want to hear about it. There are resources, and then there is a tax system that shapes the decisions that we make as people, as communities—things like the capital gains tax discount on investment properties, being able to negatively gear investment properties. The whole conversation seems to be: 'You can't touch it. You can either have the system as it is or you scrap the whole thing, and it's a disaster.' Why can't we have the debate about how we can allow people to invest in new housing stock but not in existing stock? How do we start to turn this ship around? What I'm hearing from Australians, from the people I represent, is that it's not working. As with the stage 3 tax cuts, even people who have benefited from it and continue to benefit from it are saying: 'I've got kids, I've got nieces and nephews, I've got grandkids. What kind of future are we leaving them?' So I would urge the major parties to have another look at this and actually talk to the people we are here representing. We've seen the changes proposed, and the modelling. There are tens of billions of dollars of savings, but at the same time there are a lot of people in our community who won't even be touched by these tax cuts who are currently on things like JobSeeker, Austudy and Abstudy. We should be looking at them and investing in our communities with that saving. It's a real opportunity for us as a country.

This multipartisan support for a change to the tax system and to tax bands is an opportunity to continue this conversation. Yes, there are politics in it—we've seen that over the last few weeks—but we're here to represent Australians. We're not here to represent the fossil fuel industry. We should be standing up to them and taxing them, getting a return on our resources so we can potentially give some people relief, as Senator McGrath was talking about. Until we do that, it seems impossible. You have expectation of services when it comes to health and education, and some dire need to invest more in them. On the other hand we have politicians who just want to talk about tax cuts. It's going to have to come from somewhere.

Maria Kovacic (NSW, Liberal Party) Share this | Link to this | Hansard source

I rise to speak today on the Treasury Laws Amendment (Cost of Living Tax Cuts) Bill 2024. I note the comments of Senator Pocock and I think they're important—the tax has to come from somewhere, but it doesn't all have to come from everyday Australians. This bill has been subject to a considerable amount of public debate this year, as it represents the most significant of all of the unfortunate broken promises of Albanese Labor government. There has been a lot of discussion, too, about the opposition's position on this bill. We are supporting this bill not because it represents meaningful reform for our tax system, not because it addresses the extraordinary pressure that Australian households and small businesses have endured under this government, not because of the progressive burden of bracket creep and not because it will seek to address the No. 1 problem in our economy of productivity. This bill does none of that. Yes, this bill does provide Australian families with some short-term tax relief, but this is a political response, not an economic response, from a government, a prime minister and a treasurer who are laser-focused on politics rather than on our economy and on running our country.

We are supporting the bill currently because it would be wrong to deny hardworking Australians out there—particularly those in my Western Sydney community—some tax relief in a few months time. This is despite the fact that this government repeatedly misled the Australian people about keeping all of these tax cuts in place, both before and after the federal election. But rather than keep talking about the consistently broken promises of this government, which are effectively their trademark, I'm going to use my time here to discuss these measures and how, if left in place over the medium and long term, they will end up costing hardworking Australians and Australian small businesses even more.

Australians know that this government has not been honest with us. We also know that these measures will increase the government's revenue by $28 billion over the next decade. This is Treasury's own data. We will all pay more. The 90 per cent of women that are often referenced in this discussion will also end up paying more. This money isn't imaginary. It's real. And that money is being taken out of Australians' pay cheques every fortnight or month or however it is that they receive their pay. That means less money to spend on ever-increasing bills that we all face, making it much harder to save for the special things that we would like to have for ourselves, for our families or for our friends, like buying some Taylor Swift tickets. Not everybody gets to go see that for free. Along with the growing plethora of new and increasing taxes across our economy, we've heard in recent days about the potential cost increase in the average family car, or a ute for a tradie. This government has only one strategy to manage our economy and the cost-of-living crisis that they have perpetuated and mismanaged, and that is to tax Australians more. What will be next? Will it be the family home? But I digress. I want to go back to the $28 billion. It is $28 billion more that will be taken from Australians over the next decade as a result of this bill.

This government is not serious about economic reform. I was going to say that they couldn't care less, but the more I think about it, the more I think it's accurate to say that they actually don't know what to do, in the same way that they have no idea of the devastating effects of their new IR legislation on Australian small businesses. Either way, it's a demonstration of their inability to do the job that the Australian public rightly expects them to do. At the end of the day, this bill serves one particular purpose. It is a political fix for this government at the Dunkley by-election. As a result, young Australians will pay the price. Young Australians will suffer the most from bracket creep as their salaries shift over $135,000. Young Australians are already paying extraordinary prices to rent a home. Young Australians fear that no matter how hard they work they will never be able to afford to buy their own home. Young Australians will carry the burden of the NDIS and the aged-care system into the future in the increasing taxes that they will pay. They will pay more yet again. But this should come as no surprise, because this isn't a reformative approach; it is a political approach.

It is also an opportunity lost to create a systemic improvement to our tax system by addressing bracket creep, which the original stage 3 cuts would have done. There is no-one that does not recognise that bracket creep is a problem, so why didn't this government come up with an idea of its own to address it, rather than simply removing it? Bracket creep will reduce the value of these tax cuts over time. There is no question about that. Treasury confirms it. This is because our tax scales are not indexed to inflation or to wage growth. Indexing thresholds, as an example, is a brave move, perhaps a necessary one, but it requires a government and leadership that has economic nous and budgetary discipline. Unfortunately, those are not the hallmarks of this Prime Minister or this Treasurer. This government keeps kicking the can down the road—someone else's fault and someone else's responsibility.

This bill is a response to a problem solely of the government's own making—that is, this Labor government's cost-of-living crisis, where Australians are paying more for just about everything. In Labor's first 18 months, personal income tax has risen by a record 27 per cent. The purchasing power of an Australian earning a gross salary of $85,000 has fallen by more than $7,600 since Labor came to office. Try saving when that's what you have to deal with.

Headline inflation remains more than 1.6 per cent above the midpoint of the RBA's target band, with food, housing, insurance, health and education costs all growing faster than the headline inflation rate. Core inflation measures remain higher than the headline rate, and domestic, non-tradable inflation is at a remarkable 5.4 per cent. The RBA themselves have said they don't expect inflation to return to the midpoint until 2026.

Over the past 18 months, real net disposable income per person has collapsed by 8.6 per cent. For an average income earner, this is a decline in take-home pay of just under $8,000. This is primarily being driven by rising mortgage payments, falling real wages and increasing taxes. Let's drill down on that a little bit. Someone on this annual wage would receive just $804 more under Labor's policy, or $15.46 a week. That is less than one per cent of their annual wage and returns just 10c for every dollar they have lost to cost-of-living pressures during Labor's first 18 months in office. Let me repeat that: it returns 10c for every dollar lost to cost-of-living pressures during this government's first 18 months in office. Every single one of those Australians will be worse off over the next decade. Collectively, we will be $28 billion worse off over the next decade. AMP senior economist Diana Mousina said:

… there is a risk that the tax changes add to inflation in mid-2024 and could challenge our current expectation for rate cuts starting from mid-year …

As I said, this bill is a short-term political sugar hit with one goal in mind: Labor holding Dunkley at the by-election. This is a political agenda rather than an economic strategy. This government has squandered the opportunity to engage in meaningful economic reform. The Treasury had this to say about our tax system:

Australia relies heavily on individuals' and corporate income taxes compared with other developed countries, as well as some regional competitors. Australia's reliance on individuals and corporate income taxes remains much the same as it was in the 1950s, despite the significant change to the economy. This reliance is projected to increase further, largely due to wages growth and individuals paying higher average rates of tax (bracket creep).

They continued:

Bracket creep diminishes progressivity, and exacerbates the other problems in the individuals income tax system, such as reward for effort …

That's from Treasury.

We know that Australians are paying more tax than ever before. Inflation adjusted, the average annual income tax bill per adult in 1990 was $8,220. In September last year it was $15,344. Household disposable income is also plummeting from highs under the coalition back down to the same levels as 2013, when Labor was last in office. The Business Council of Australia said:

Our tax base is eroding and with an unhealthy reliance on taxing incomes as well as a raft of inefficient taxes, especially at state and territory level, we are increasingly ill-equipped to meet our society's needs.

Enter stage left the crisis in the NDIS, in aged care and in housing.

Before the election, this Prime Minister promised a $275 reduction in energy prices, no changes to super taxes, an increase in real wages, no changes to franking credits, cheaper mortgages and no changes to the stage 3 tax cuts. The Prime Minister has broken every single one of these promises. Yet the government have been unable to deliver anything meaningful to address a cost-of-living crisis or to show us that they are capable of delivering some kind of meaningful economic reform—an absolute opportunity lost.

Janet Rice (Victoria, Australian Greens) Share this | Link to this | Hansard source

A bit less crap—that's the bill we are debating tonight. It's a bit less crap than the stage 3 tax cuts—

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

Senator Rice, I'm unsure about using language like that. Can I ask you to perhaps not use language like that, if that's possible, please.

Janet Rice (Victoria, Australian Greens) Share this | Link to this | Hansard source

Slightly less pooey, maybe?

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

I think we should think about the decorum of this place, but I'll leave it up to you as to how you interpret my guidance there.

Janet Rice (Victoria, Australian Greens) Share this | Link to this | Hansard source

This bill, the Treasury Laws Amendment (Cost of Living Tax Cuts) Bill 2024, is this much better—slightly better—than the bill that was first introduced by the Liberal government five years ago. The Australian Greens have been fiercely opposed to the stage 3 tax cuts from the start. We've been the only political party to consistently call on the Liberals and Labor to abandon this unfair and ridiculous policy. And finally, after years of sustained pressure from the Greens and the wider community, Labor is changing the Liberals' tax cuts—the tax cuts that they voted for when the Liberals were in office. It goes to show that pressure works. Despite this bill only being slightly better than the Liberals' version of the stage 3 tax cuts, today's bill is a win for the Greens and for everyone who spoke up for a fairer society. Together, with a united voice, we can push Labor further and faster on the issues that matter.

While it's encouraging to see Labor finally accept that the stage 3 tax cuts as they were first put together are unfair, this bill will still make economic inequality in Australia worse. Under these rejigged cuts, politicians and CEOs on incomes more than $200,000 will be given three times the value of tax cuts than the average worker, whilst the lowest 40 per cent of income earners will receive just nine per cent of the benefits. And this bill provides absolutely zero cost-of-living relief for people struggling to survive on income support payments or earning less than $18,000 a year—nothing. Those people who are scraping by on income support, people who are relying on charity, friends, family or neighbours, people who are couch surfing or living in their cars or tents and people who have been evicted from their homes because they can't afford the rent get nothing. People who don't go to see the doctor or fill scripts for their meds or get mental health support because they want to afford their kids going to the doctor to get the health care they need, and people who have given up on the idea of going to the dentist and are living with chronic toothache, eventually having to have their teeth pulled out rather than filled because they've gone too far, get nothing—while I and every other politician in this place get $4½ thousand a year in tax cuts. I and every other politician in this place do not need a $4½-thousand-a-year tax cut while millions of Australians are living on income support and are trapped in poverty. Australia is in a poverty and cost-of-living crisis. People who are on income support and others without permanent work are struggling to put food on the table, to find affordable and safe housing and to pay their medical bills.

Earlier this month the Brotherhood of St Laurence published their Making ends meet report. This report is the culmination of a study to better understand financial stress in the current cost-of-living crisis. The Brotherhood interviewed 43 low- to middle-income people across Victoria in 2022 and heard devastating stories of how people are currently struggling to survive. And if it was bad in 2022, it is worse now. These are the people for whom Labor's so-called cost-of-living tax cuts bill will provide no relief. Here are some of their experiences.

Kerry is a 60-year-old who relies on the disability support pension. She said:

I'm living on a shoestring, and my health is suffering as well. The doctor says to me, 'Your diabetes is high, you've got to eat better.' And I said, 'Well, I can't eat better because there's no money.' If I had the money, of course you can buy better food, better quality food, and I would go to the gym as well, but I can't do that because there's no money. He wanted to send me to a dietician, and I said, 'Well, you're wasting your time. I know what to eat, the problem is I can't.' Instead of buying a steak, you've got to buy potatoes because you can't afford the steak.

She also said:

I am feeling very depressed as there is never enough money to make ends meet. Every time I am almost out of debt something happens and I have to borrow money again.

And:

There is no future, the only future is death. … I'm so limited in everything I can do that sometimes I think well, Lord, give me cancer so I can die because I can't take it anymore.

Paul is a 63-year-old who was made redundant in 2020 at the beginning of the pandemic. He shared:

When I finally went up to Centrelink they said, 'Oh no you've got this [redundancy] payout. We aren't actually [going to] start paying you the JobSeeker until for another six months.' And I looked at them and I said, 'Well, great, I've got $1000 in the bank. … How am I going to live?'

And when Paul finally received JobSeeker, and after selling all of his belongings, he remembered:

I got a bit of a false sense because the first dole payment had all the Covid bonuses. So, it was about $1200. And I thought, oh this is all right, I can live on this … And then it dropped, and it was down to just under $1000, I think. Okay, well you're going to have to pull your head in, but that was all right. But then, I think the one or two payments after that it had dropped back even more.

I was back to the normal JobSeeker, and then I realised, well you're going to have to pull your head in here, and—I did take some super when the government said you could take a bit of extra super and, you know, paid rent in advance and all that sort of stuff.

If it wasn't for that super, I'd be buggered on JobSeeker, alone … With the cost of living going up, JobSeeker doesn't seem to be going up that much.

But what worries me is that unfortunately I'm still a bit over four years now off the Age Pension. And the Age Pension is around $1000, I think a fortnight. I can live on that.

But what does worry me is that if I haven't been able to get a job by the time I retire, there'd be no super in there … because I would have eaten it all while unemployed.

Luke, who worked as a self-employed gardener and relied on the JobSeeker payment as he tried to manage his mental health, said:

Unless I have a steady stream of income, I don't think I'll ever feel safe, but I can't work a standard 40-hour week, or even a 20-hour week, because of my mental health. But then my mental health tanks because I'm stressing about money, or it tanks because I'm working too much, and I can't recuperate like I need to. Damned if I do, damned if I don't.

Bianca, a 39-year-old mother of two, has struggled to find permanent work after being made redundant in 2020. She said:

You can find a casual job, but a casual job is not [going to] give you the financial strength to think of the future, or even the present. The market is hard, and I have given so many interviews so I can get [something] permanent.

She also said:

Not enough groceries at home, freezer is empty. I have asked my landlord if I can pay rent late. I'm tired and feeling anxious about finding full-time work.

Grace is a 29-year-old who was completing an unpaid placement as part of her degree. She said:

I feel like I am coping well, making the best possible outcome out of a difficult situation, but I also believe the situation should be changed so that the best possible outcome is not barely surviving.

Finally, Rodney, a casual worker, shared his frustration at the limits of his financial situation:

From a human point of view, it affects your mental health. There's a lot of things you want to do. And work doesn't allow you to do that either because being casual you just can't take—you take a week off you lose a week's pay …You do go through a lot. Sometimes you feel depressed. Sometimes your mental health's affected. I've learned just to stay positive because, like I said, it's very easy to hit rock bottom sometimes.

These stories are heartbreaking but, sadly, they are all too common. As the cost of living soars, people are finding it increasingly difficult to survive on casual employment, leading many to rightly seek financial support from our social security system. But the current inadequacy of income support payments is leaving so many of these short-term recipients at risk of financial stress and pushing others who are forced to survive on the payment long-term because of illness, disability or other circumstances deeper into poverty.

There's a clear and simple way that the Labor government could help Rodney, Grace, Bianca and everyone whose stories I've shared, and that's by immediately raising the rate of all income support payments to above the poverty line—to $88 a day. But what Labor has elected to do instead is spend a jaw-dropping $318 billion over a decade on tax cuts, the bulk of which will go to the wealthy. Despite Labor's long, rousing rhetoric on helping the disadvantaged, since they have been in government we have seen them overwhelmingly choose policies to keep people in poverty.

At the last budget, Labor ignored the calls of unemployed advocates, social service organisations and their very own Interim Economic Inclusion Advisory Committee to significantly raise the rate of income support. Instead, they opted to raise the rate of JobSeeker and other working-age payments by just $4 a day. Four dollars a day isn't enough for a coffee, and it certainly won't help someone pay rent, buy their groceries or cover medical bills. Let's go back to that $4½-thousand-a-year tax cut that everyone in this place is going to get. That's largesse of $12 a day. That's three times what was given to income support recipients in the last budget.

Labor also continues to publicly support the punitive system of mutual obligations and the privatised model of our employment system. Both are expensive, largely ineffective—and harmful—elements of our social security system. And now we've got Labor pushing through a bill that provides zero cost-of-living support for those who need it most. Labor could have made these tax cuts not apply to people earning over $200,000 a year, which would have freed up billions—billions to invest in things like raising the rate of income support, bringing mental and dental health into Medicare, wiping student debt and raising student allowance, free child care and building the clean energy systems that we need to tackle the climate crisis.

Prime Minister Anthony Albanese often speaks of growing up in public housing and living off his mother's income support payments, yet it seems he is pulling up the ladder behind him as he tinkers around the edges of income support and our tax system. Prime Minister, if you truly cared about people living in poverty, if you truly wanted to leave no-one behind and actually offer cost-of-living relief to those who need it most, you would immediately raise the rate of income support, properly fund essential services and stop giving tax cuts to the wealthy. While you continue to persist with this neoliberal ideology of trickle-down economics, the Greens will continue to call out your hypocrisy. We know that pressure works, and we will continue to fight to ensure a fairer society.

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

I stand here today to talk about these tax cuts. The fact is that the underlying problem for the government is that this proposed legislation, the Treasury Laws Amendment (Cost of Living Tax Cuts) Bill 2024 and the Treasury Laws Amendment (Cost of Living—Medicare Levy) Bill 2024, is based on a broken promise. This legislation is based on a promise that both the Prime Minister and the Treasurer repeated not just once or twice but over and over again, and they broke that promise for a very simple reason. They've admitted it. The Treasurer appeared on 7.30 not long after the announcement and said they had to announce it before the Dunkley by-election.

It's pretty clear why they broke their promise. It was because they wanted a political outcome. These are political tax cuts. And they're political tax cuts at a time when Australian families are suffering. Those of us on this side of the chamber have said that over and over again, and we understand that because we actually get out and about and talk to real Australians, and they are suffering. That is why we will support tax cuts. The Liberal Party always supports people being able to retain more of their hard earned money. But the elephant in the room in the context of broken promises—ahead of a Dunkley by-election—is inflation and the pressure that inflation has put on the small businesses and families of Australia.

There is a mistruth that I think needs to be cleared up in this place. We heard it a lot from the crossbench, we heard it a lot from a small number of leftwing economists, and we heard it a lot from the Australian Greens. This mistruth is that somehow inflation profiteering was driving the inflation rate, that somehow it was actually business's fault. The Treasury analysis of inflation shows very clearly that actually the largest part of the driver of inflation in this country, since early 2022, was in actual fact wage increases, something this government has been jumping up and down loudly about in this place today. But the trouble with wage increases without productivity improvements is that in the end they have a downside. Everyone loves a wage rise. There is absolutely no doubt about that. Everybody loves a wage rise probably more than they love a tax cut. But the trouble of wage rises absent productivity improvements is that in the end they can only lead to one place, and that is longer unemployment queues.

Wage rises without productivity improvements will lead to higher unemployment. And, as we see in these inflation figures, they will also lead to persistent inflation in the economy. And it is persistent inflation in the economy which kills people's standards of living. It absolutely undermines and destroys it over time. It does it to such a degree that a tax cut—no matter how welcome it is and how much people do like to see their tax burden go down—will be gobbled up. It will disappear almost instantaneously. In fact, it is gone before people will even get it because of the destructive nature of inflation in our economy.

People's purchasing power since Labor came to power has declined by around $8,000 for someone on a median income. A small tax cut does not make up for that $8,000. People's mortgage repayments—people who are on an average sized mortgage—have gone up under Labor anywhere from $12,000, $15,000 to $20,000 per annum. A small tax cut does not make up for those increases in their mortgage repayments every month, the increase in their grocery bills, the increase in the cost of putting fuel in their car or the increase in the cost of electricity—another broken promise, I might add.

Yes, the Australian people welcome a tax cut; of course they do. But what they're facing now is a cost-of-living crisis driven onto them by a government that just does not know how to manage the economic settings they have at their disposal. In fact they are egging on the problem, because wage rises without productivity improvements will fuel inflation and will lead to longer unemployment queues. There is no doubt about that. There are external factors that can slow things down or speed things up, but there is no doubt that wages that are above the target band inflation rate will hurt Australian families in the longer term, and no tax cut will make up for that damage. In fact, no tax cut can make up for the damage that has already been done in the first 18 month of this Labor government, in terms of the inflationary effects that we've seen and the interest rate impacts we've seen over that period of time.

This is what EY's chief economist Cherelle Murphy said about Treasury's analysis:

The Reserve Bank needs labour productivity to improve and wages growth to come down to hit its inflation forecast. If either of those things proves incorrect, then inflation will prove to be too strong.

Labour productivity needs to improve. There is no sign of that. Nothing the government has done is improving labour productivity. The alternative is that wages growth has to come down for the Treasury to be able to meet its inflation targets. At the moment, inflation is still well above the target range of the Reserve Bank in maximising wellbeing in the Australian economy. That is not just some abstract figure. Australian families understand inflation because they feel it every day. They feel it when they go to the grocery store, they feel it when they go to the petrol station and they feel it when they have to buy their kids new supplies for the school year, and the cost has gone up.

Ralph Babet (Victoria, United Australia Party) Share this | Link to this | Hansard source

Even I feel it—it is rough.

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

Every Australian feels it, Senator Babet, because it is real. It is present in the economy, and it is probably the single most negative force in the Australian economy at the present moment. This government has done absolutely nothing to address it. It talks about the cost of living, but it doesn't talk about how it is dealing with inflation. It has left that up to the Reserve Bank. What does that mean? The Reserve Bank has got only one lever at its disposal—just the one. The only thing the Reserve Bank can do is increase interest rates, and that's what they did. The only thing the Reserve Bank can do is increase interest rates. Governments have choices; the Reserve Bank doesn't. The government has choices. The government has numerous levers it can pull if it wishes to impact on the economic settings—the economic parameters—of this country. The Reserve Bank has one very blunt instrument, which it had to use with full force, because it watched and it saw the government doing nothing.

That is the single biggest impact: inflation and interest rate rises that accompany the inflation have been the single biggest destroyer of standards of living in this country. Households have gone backwards a long way in the last 18 months, and that is why the community is rightly sceptical of this approach which bakes in bracket creep. It bakes in tax rises over the longer term through bracket creep—something like $28 billion over the next decade. So calling this bill before us a tax cut is actually a huge misnomer. It's actually a bill to increase taxes in the longer term. It's actually a bill to entrench bracket creep into our tax system over the next decade, and bracket creep is, again, the hidden way that governments try to sneakily deal with the problems they give themselves through not being able to control their own spending and not being able to live within their means. That's why it is important, coming into the next election, that we will have a very clear plan to deal with it. I absolutely endorse that, because bracket creep, again, just undermines the living standards of Australians. Nobody can deny that. Nobody can doubt it. It's been known for decades.

We have a system where, quite frankly, the government's probably quite happy to have a little bit of inflation going on for a little bit longer, destroying standards of living, because it deflates their debt over time; it bumps up wage rises over time. They like that. They like to be able to claim higher wage rises, even though the interplay between wages and inflation is well-known and damaging. Without productivity improvements, wages going up higher than inflation can only be inflationary.

And where will that lead? Senator Scarr, you said it. It has to lead to unemployment. It has to lead to longer unemployment queues. Senator Scarr, I'll put you in the bucket with me, of those of us who remember the 1970s—it's a big bucket, the 1970s—and the destructive impact of the combination of high inflation and high unemployment. It's just something that we do not want to see in this country again. Yet this is where we will head if we get these parameters wrong. If we see an inflation-wage connection where inflation is outside the Reserve Bank band but being driven by wages, we will see unemployment queues lengthening. That shouldn't be something that anyone in this place should be contemplating—and certainly should not be celebrating. It's something we should, each and every day and each and every moment, be putting every single effort into avoiding.

And yet, do we see anything from the other side? No. We see broken promises. We see claims about addressing cost-of-living crises that add up to nothing. We see a massive decline in the standard of living for every Australian. That is something that will be to the eternal shame of this Labor government.

Ralph Babet (Victoria, United Australia Party) Share this | Link to this | Hansard source

Obviously, I rise here today to speak on the Treasury Laws Amendment (Cost of Living Tax Cuts) Bill 2024. How's 15 bucks a week going to affect my cost of living? How's that going to help? I'll tell you what: it's not. It's a drop in the ocean. That's what it is. What does 15 bucks get you, for those playing at home? A coffee and a sandwich? That's about it. A coffee and a sandwich—you're done.

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

A caesar salad.

Ralph Babet (Victoria, United Australia Party) Share this | Link to this | Hansard source

A caesar salad! Thank you, Senator Scarr.

Now, the federal government promised—they promised over 100 times, I think it was—that they would implement the stage 3 tax cuts exactly as they had been agreed. And wouldn't it be good if they'd implemented that stage 3 tax cut? You know what? I'll go one step further. How about we cut even more taxes? We are overtaxed. We are overgoverned. That's what I think. I think tax is theft, at the end of the day. Tax is theft. Cut it back as much as possible. Reduce the size of the federal government. The federal government is far too big. The bureaucracy is far too big. The red tape, the green tape, the black tape—it is too much.

Prime Minister Albanese is famous for a quote. He said, 'My word is my bond.' Is it really, Mr Albanese? Is it really, Prime Minister? He then went on and did the exact opposite of what he had promised. I'm shocked—the opposite! He attempted to justify his breach of faith. with the Australian public by insisting that he was focused on helping middle Australians with cost-of-living relief. That's what happened there. It's clear that Prime Minister Albanese sees himself as some kind of modern-day Robin Hood, but it seems to me like it's a false dichotomy. You can keep your promise to voters, or you can help Middle Australia. Why must you choose between two worthy things? Why not do both? Mr Prime Minister, just do both.

I'm going to suggest a third way—a way that keeps integrity intact, if you can call it that, and a way that helps more Australians with the cost of living. I have circulated, or will circulate shortly, a Committee of the Whole amendment to this bill, which will likely be moved later this week. If supported—and that's a big 'if'—my amendment will go a long way to honouring the government's promise to the Australian people. On a side note, I'd like to see all politicians stop breaking promises that they make to the Australian people. The Australian people dislike politicians, in my opinion, and there's a good reason why. It's because promises are always broken, and that's not right. It needs to stop. Stick to your promises.

The abolition of the 37 per cent tax bracket was at the very heart of the original stage 3 reforms. It had bipartisan support. It became law. It was promised repeatedly by both major parties at the recent federal election. Obviously, I'm not going to stand in the way of the government's revised tax cuts bill. I won't stand in the way of any tax cuts, because, like I said before, I hate all taxes. It's theft. Tax cuts are a good thing. But what I will do is stand firm and ask the government to honour its word.

My amendment would allow the government's proposal to pass in full without a fuss from me, but it would also ensure that the government honours its promise. My proposal is that we abolish the 37 per cent tax bracket in two years time, which is pragmatic and fair, and I think it's a reasonable compromise. It would allow sufficient time for budgets to adjust, but it would give great hope to the Australian people. How long have we been waiting for these tax cuts now? Five years or so? What's another two more years, right? For five years or so we've been waiting.

If the government were to support my amendment, everyone would win, and maybe once again Prime Minister Albanese's word would be his bond. But let's see if the Prime Minister supports it. I doubt he will. Do you know why? Because socialism is an expensive business. That's why. You need ever-increasing amounts of other people's money. The government could boast that they went above and beyond to address the cost of living, and all of us could be saved from the growing cynicism of a public which, frankly, is sick of broken promises.

If the Liberals were to support my amendment, they would be acting like Liberals who truly believe in minimising burdensome taxes. They could once again work towards a 'lean government that minimises interference in our daily lives and maximises individual and private sector initiative'. If you believe their website—and I just quoted that from their website—this is what they believe in. To my crossbench colleagues: I ask that you stand with me to support my amendments, which will ensure that the government honours its repeated promise to the Australian people.

For too long, unfortunately, our nation has been hamstrung by high-taxing, high-regulating and overbearing government from both sides—from both the Left and the Right, unfortunately. We must allow people to keep more of their money; we just have to do it. We must force our government, whichever government that is, the government of the day, to live within its means. To quote the great Ronald Reagan: 'The problem is not that people are taxed too little; the problem is that the government spends too much.' Like I said before, taxation is theft. Reduce the size of the federal government. Reduce the size of the bureaucracy. Cut red and green tape. Grab the legislative books, cut them in half and put them in the bin; we don't need them. What we need is to unleash the free market. That's what we need—more free markets, less regulation and less government.

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

I've some basic principles with respect to how one should conduct themselves in public life, and one of those principles is: if you promise to do something before an election, if you make a commitment to the people before an election—especially in a highly contested area such as taxation policy—and then the people vote on the basis of your commitment, of your promise, before the election, then you should actually do what you said you were going to do before the election after the election. That's a pretty fundamental principle.

With the proposal of these bills, the Treasury Laws Amendment (Cost of Living Tax Cuts) Bill 2024 and the Treasury Laws Amendment (Cost of Living—Medicare Levy) Bill 2024, the Labor government, the Prime Minister and the Treasurer are breaking that fundamental principle. But it wasn't just broken before the election; it was broken after the election. As Senator Babet said, the Prime Minister said, 'My word is my bond.' As soon as December last year, Treasury was commissioned to do the work to reverse the stage 3 tax cuts. When the Prime Minister was asked, at the same time Treasury was doing the work to unwind the stage 3 tax cuts, whether or not the government's position was changing, he said, 'We're not reconsidering that position', when Treasury was, at that time, doing the work to change the position. How can you actually look the Australian people in the eye and say that, when you know Treasury, in the background, is doing the work to change the position that you're saying you're not reconsidering? It is just disgraceful.

Senator Hume, in her contribution, as the first speaker on these bills in the Senate on behalf of the opposition, described the cost-of-living committee's inquiries in Gladstone, in my home state and Acting Deputy President McGrath's home state of Queensland. It really touched me that she said that representatives from the local council of Gladstone—these aren't federal politicians or state politicians—were saying:

… 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.

What a shameful state of affairs.

It's the same in my region, the greater Ipswich region, where my office is located. Through 2023, the number of bulk-billing medical practices in the greater Ipswich region fell from 25 to 16—a fall of 36 per cent in 12 months in my region, the greater Ipswich region, where my office is located. That is a shameful result—the fall in GP medical practices offering bulk-billing in the greater Ipswich region from 25 to 16. And people in Ipswich are choosing whether to pay the rent or go to the doctor under this Labor government.

Debate interrupted.