Mr ANDREWS (2:46 PM) —My question is addressed to the Treasurer. Would the Treasurer advise the House of any recent independent analysis regarding family incomes? How do the incomes of families today compare with those in previous years?

Mr COSTELLO (Treasurer) —I thank the honourable member for Menzies for his question, and I acknowledge his long-time interest in tax arrangements for helping families and children. When this government was first elected, in 1997 it introduced a family tax initiative which was an increase in the tax-free threshold for families of $1,000 for each child. That gave families with children additional income by way of tax cuts or, if they preferred, through the payments system. In addition to that, we introduced for a single income family an increase of $2,500 in the tax-free threshold, which gave the single income family additional help. When we reintroduced further tax reform on 1 July last year, we introduced additional benefits for families which increased family assistance in this country by $2.4 billion. The family tax initiative doubled the tax-free threshold for children and for single families, and we gave families an opportunity to take that either by way of tax cuts or through the payments system.

On the weekend some of the newspapers reported modelling which had been done by NATSEM, the National Centre for Social and Economic Modelling. NATSEM has not always been a friend of the government. In fact, during the tax debate, as I recall it, work done by NATSEM was relied upon by people who were opposing the government in its policies. So, when you find an institution which has not been particularly friendly to the government which reports information like this, it is especially significant.

NATSEM did an analysis which compared the situation of families between 1996, when this government was elected, and 2001 after the introduction of the new tax system. It found that a single income, two-parent family with two children on average weekly earnings gained $88 per week, largely as a result of family assistance. It also found that a sole parent—you will hear the Labor Party claim from time to time that the government has been hard on sole parents—two-child family totally reliant on government assistance gained $59 a week over the last five years. Those families are $59 a week better off. That is very interesting when you actually compare what happened to that same group of families between 1982 and 1995. Remember, under this government, the single income family got an $88 a week increase and the sole parent family got a $59 increase. What happened between 1982 and 1995? NATSEM concluded:

So under 13 years of Labor, the disposable income of single income families declined by four per cent. After five years of coalition government single income, two-parent families are up $88 a week and sole parent families are up $59 a week. This is the side of the House which has always supported families with children.

Then you add into that the following: interest rates for families were 10½ per cent when the government was elected and they are 6.8 per cent now. Compare that with the interest rates under Labor. Compare also the abolition of the financial institutions duty, another cut for families, and this government's record of achievement in relation to tax reform has made families better off and redressed some of the policies of the Labor Party which did, and were designed to, make them worse off during the period from 1982 to 1995.