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Thursday, 28 June 2001
Page: 28873

Mr ROSS CAMERON (2:24 PM) —My question is to the Treasurer. Could the Treasurer inform the House how Australian families and businesses are benefiting from the new tax system and how taxes will be further cut from this Sunday, 1 July?

Mr SPEAKER —Before I recognise the Treasurer, I invite the member for Parramatta to repeat that question since his opportunity to be heard was entirely interrupted by the member for Dickson.

Mr ROSS CAMERON —Thank you, Mr Speaker. My question is to the Treasurer. Could the Treasurer inform the House how Australian families and businesses are benefiting from the new tax system—

Mr SPEAKER —I warn the member for Melbourne! The member for Parramatta will continue.

Mr ROSS CAMERON —Could the Treasurer inform the House how Australian families and businesses are benefiting from the new tax system and how taxes will be further cut from this Sunday, 1 July?

Mr COSTELLO (Treasurer) —I thank the honourable member for Parramatta for asking his question, and asking it again, and again. If I may, I will give only one answer; it is the same answer to all three questions. Last year, on 1 July, this government abolished wholesale sales tax and in its place we introduced a goods and services tax, which gives a $3½ billion reduction in tax to Australia's exporters and has pumped more money back into the rural and regional communities of Australia. Last year, on 1 July, this government cut income tax for all income tax payers. For a family on average earnings, if we had not have done that, today their top marginal tax rate would be 43 cents in the dollar; but under the coalition it has fallen to 30 cents in the dollar.

On 1 July last year we put the states on the basis of a revenue stream which today pays for every schoolteacher in every classroom in every school in every state of Australia. And, after it has done that, it pays the wages of every policeman on the beat in all of the states of Australia. Last year we cut company tax from 36 to 34 per cent, and on 1 July this year we cut it further, to 30 per cent. On 1 July this year we abolish the financial institutions duty. On 1 July this year we abolish stamp duties on shares. And from 1 July this year pensioners and other low income earners in Australia can claim back the tax on their dividends from shares if it is in excess of their own personal income.

For an average family on $40,000 a year with three children, one under five, the combination of income tax cuts and increases in family allowance has put them in front by $86 a week. They are getting, in increased payments or in reduced income taxes, $86 a week. And that, of course, helps with the cost of raising children.

The Prime Minister earlier referred to the fact that under the government's new tax system the fortnightly pension has gone up by $30 a fortnight or 8.1 per cent. I would like to also refer members of the House to what Mr Chris Murphy from Econtech said at his Vital Issues seminar on 6 June 2001. Perhaps it did not get the coverage it deserved—6 June 2001 was the day the national accounts came out showing growth at 1.1 per cent. It was also the last time the shadow Treasurer asked me a question in the House. He seemed to go off asking questions after the Australian economy went into growth 10 question times ago. Chris Murphy, who has done modelling for the Labor governments of New South Wales and Queensland and the Tasmanian Labor government—he has done modelling for Dr David Crean, the Labor Treasurer of Tasmania—said that pensioners would be in front. What he actually said was this:

Over the same period of the new tax system, the age pension has increased by $30 a fortnight, or 8.1 per cent. Pensioners are actually around 2 per cent better off, although you wouldn't know that from most media reports on the issue.

We agree with him on both those counts. Then he went on to wages. This is what Chris Murphy said, and I think that this should be tabled at the end of question time:

Someone who is on an average wage, which is around $40,000, 12 months ago under the old tax scale I showed you, they were paying around $10,400 in tax with an after-tax wage of around $29,600. If they have had the average wage increase over the last 12 months of 3.7 per cent, they are now on a wage of around $41,500. However, once you apply the new tax system to the new wage level, even though their wage has gone up, their tax bill has been cut by $1,000, so their after-tax wage is up 8.2 per cent.

Up 8.2 per cent. If the Labor Party had had its way, if the Labor Party had maintained the old tax system, that family on average earnings today would be paying a top marginal rate of 43 cents in the dollar. It was the Liberal-National Party that decided to give average wage earners a go. It decided to cut their marginal tax rate to 30 per cent. It decided to increase family tax assistance. It decided to put in place an economic policy which has kept their interest rates low. It is the Liberal-National Party that had the courage to reform the tax system to make things better for families on average wages—and it is families on average wages which have been the focus of improving their assistance and income tax cuts under the reforms of the Liberal-National Party.