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

My question is to the Minister representing the Treasurer, Senator Gallagher. Minister, how much will an average Australian worker earning between $50,000 and $100,000 per year lose to bracket creep over the next four years, inclusive of the latest stage 3 tax cut?

Katy Gallagher (ACT, Australian Labor Party, Minister for the Public Service) Share this | Link to this | Hansard source

They will certainly be getting more in their pay packet than they would have if we had not amended the stage 3 tax cuts. We remember, when we came out with our revised stage 3 tax cuts—what was it? 'Let's go to an election over it! We're going to wind it back, and we're going to go to an election over it.' And we still think that's the position—winding it back. All options are on the table.

By lowering the rate and the thresholds, we have dealt with bracket creep in a more efficient way, and more people on those lower and moderate incomes are getting more money in their pockets. Future governments may decide to do further work in this area, but the revised stage 3 tax cuts that we put in place not only dealt with bracket creep but also importantly ensured that every single working person in this country who is paying tax got a tax cut, as opposed to the heavily weighted tax proposal to those on higher incomes.

So we have more appropriately responded to the issues of bracket creep, and we have more appropriately dealt with the fact that every working person in Australia deserved a tax cut and that those earning under $100,000 deserved a better share of the deal. That was the revised plan that we took. That was the plan that passed this parliament, in fact, but we know that it wouldn't take those opposite too long to put all options on that whiteboard over there—to wipe it off and to put it back in place. We know that's what Senator Hume wants to do. We know that's what Mr Dutton wants to do. They wanted to fight an election over more people getting a better deal on tax. That's the approach the opposition took. It's not the approach this government took. We wanted a better, fairer deal for people that dealt with tax reform at the same time.

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

Senator Sharma, first supplementary?

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

Has Treasury completed any analysis as to the total value of bracket creep to government tax receipts over the next 10 years, and, if so, what may the total value be? Will this be more or less as a result of Labor's changes to the stage 3 tax cuts?

Katy Gallagher (ACT, Australian Labor Party, Minister for the Public Service) Share this | Link to this | Hansard source

(—) (): Treasury provides forecasts in the normal way, as you would expect. Their forecasts across all receipts and expenses are factored into the budget papers, so that information is there, and that reflected at budget time the revised proposal that we put to this parliament, that we argued for to the Australian people and that those opposite want to undo. The tax cuts that we put in place will return bracket creep, and they lower average tax rates for all taxpayers compared to the 2023-24 setting. So, in answer to your question, yes, they will be factored into the forecasts. We are very pleased with how our reformed and revised plans both were supported in the parliament and indeed have been supported by the community. I think the community understands that everyone getting a fairer and better deal was delivered through the revised tax cuts that we championed. (Time expired)

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

Senator Sharma, second supplementary?

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

ABS data has revealed that Australian households have now dedicated a new record of 16.4 per cent of gross household income to personal income tax over the past 12 months. PBO analysis demonstrates that bracket creep will cost the average taxpayer between $1,820 and $2,020 over the next four years. How can you claim Australians will keep more of what they earn when all of the analysis suggests that under Labor they will be worse off?

Katy Gallagher (ACT, Australian Labor Party, Minister for the Public Service) Share this | Link to this | Hansard source

On the decisions this government has taken, we have delivered a tax cut to every working person in Australia. We've returned bracket creep. We've got lower average tax rates. We've got wages moving again, which is something that those opposite were unable or unwilling to do, and all of that feeds into household income.

If Senator Sharma is arguing—and I think this is one of the promises that they've dropped out there—about lowering tax rates, then work that up for the election. Our policies have been clear. We do rely on income tax to support investments in our budget, like Medicare and the TAFE system, and the agreements we have with the states in a range of areas like the NDIS and aged care. I think any government has to raise revenue, and we appreciate the fact that income tax, company tax and other revenue lines support that. (Time expired)