Mr CIOBO (10:15 AM) —I noted the shadow Treasurer, the member for Fraser, could not even complete the full 30 minutes allocated for his speech on the Taxation Laws Amendment (Personal Income Tax Reduction) Bill 2003. It is of no surprise to me that that is the case. What we had for 25 minutes was a complete and abject failure by the opposition to put forward any policy rationale or financial framework about what they would do. We heard the Labor Party saying this is the worst tax cut, the smallest tax cut ever. You would think this would provide an organisation claiming to be an alternative government with the opportunity to put forward their plan on how they would provide larger tax cuts for the Australian people. But those of us in this chamber heard none of that. What we heard was a disgraceful and absolutely worthless contribution by the shadow Treasurer.

I would like to highlight a couple of points relating to this bill and, more importantly, the financial framework and the economic management the Howard government have put in place. Australia has a strong and stable economy. The reason we have a strong and stable economy is the economic prudence and fiscal responsibility of the Howard government. We have kept interest rates low, we have enabled businesses to claim input tax credits and we have taken the taxes off exporters. The Australian economy is considered by many objective commentators to be the miracle economy. We have weathered the Asian economic crisis. We have weathered the latest downturn in economic growth being experienced around the world. We continue to grow strongly and to provide incentives for people to take entrepreneurial risk, to create employment and to generate wealth. We do that because, as a government, we fundamentally believe these are the rights of the Australian people. The Australian people need a government that takes fiscally responsible decisions, not just popular decisions—which, too often, appear to be the temptation the Labor Party falls for—decisions predicated upon good, sound economic policy.

Despite the testing times over the last 12 to 24 months—we have faced the war on terror, bushfires and the worst drought on record—the Howard government and Treasurer Peter Costello, to their credit, have remained focused on delivering on the important issues and have fundamentally delivered real benefits for all Australians. The last budget delivered another $2.2 billion surplus. You have to compare that with the track record of the Australian Labor Party when they were in power. Who can forget Beazley's black hole—an $8 billion black hole left by the former leader of the opposition?

The Howard government and Treasurer Peter Costello have a strong economic platform in place. This platform means we can repay much of Labor's debt and ensure the Australian people continue to enjoy economic sunshine in the long term. By June this year, the coalition will have repaid $63 billion of Labor's $96 billion debt. That is the reason the shadow Treasurer, the member for Fraser, is absolutely paralysed on points on which to criticise the Howard government when he comes into this chamber. You can see the member for Fraser back in his office, scratching through volumes of economic data, looking for one single scintilla of evidence that might in some way portray the economic policy of this government as having been wrong. I feel very sorry for the member for Fraser. I am sure last night must have been a very late night as he struggled to find one figure that would support his claims.

This is not hubris; this is not pride; this is good economic policy predicated upon an ideology that those on this side of the chamber subscribe to. Australians should have the opportunity to generate wealth and the government should be in the business of providing basic welfare, social and defence services and not be sticking its nose into business left, right and centre. As a result of our repayment of much of Labor's debt, we are now saving $4.9 billion each and every year in interest costs. Taxpayers in Australia are $5 billion better off each and every year because the coalition government has been prudent with expenditure restraint and has been able to drive down our repayments of interest rate costs—costs incurred by the Labor Party when it was in power. We have also restored Australia's triple A credit rating with Moodys and Standard and Poors—something that was lost when the Labor Party was in power.

I heard the shadow Treasurer, as part of his attempt to attack the economic management of the Treasurer Peter Costello, comment about unemployment, and I was dumbstruck. It was a gutsy move because it was not that long ago that unemployment under the Labor Party reached 11 per cent. We now have unemployment down to six per cent—the lowest rate in 10 years—and it is expected to remain at that level in the near future. The coalition government have created more than one million jobs since we were elected in March 1996, which is very different to the record the Australian Labor Party left behind.

In fact, if you look at jobs growth, the Labor Party created 458,800 additional jobs in seasonally adjusted terms between 1990 and March 1996 compared with the coalition's record since 1996 of 1,243,600 additional jobs. And that is a comparison that the shadow Treasurer would like to draw the Australian public's attention to? He is more than welcome. Between 1990 and 1996 there were 569,000 additional casual jobs created while there was a loss—not a gain—of 72,900 permanent jobs. The coalition's record for the period 1996 to 2001 was 276,300 additional casual jobs but a gain of 433,700 additional permanent jobs. What a striking comparison between the benefits that flow from good economic management, as presided over by Treasurer Peter Costello, and the failure of the Labor Party when they were in power.

Under the coalition, inflation has averaged three per cent. Compare that to the average inflation rate under Labor of 5.2 per cent. What about mortgage rates? The shadow Treasurer conveniently left out mortgage rates because of the Labor Party's utter embarrassment about what they did. We currently have mortgage rates of approximately 6.5 per cent—the lowest in 30 years. Compare that track record with mortgage rates under the Labor Party. When Labor left office, they had mortgage rates at 10.5 per cent. So, with 10.5 per cent in comparison with 6.5 per cent, is it any wonder the Australian people can see straight through the false lines of the shadow Treasurer—the member for Fraser—and the opposition? The fact is that now, as a result of these interest rate cuts, Australians are saving around $3,950 each and every year on a $100,000 loan. And let us not forget the fact that, under the Labor Party, mortgage rates reached 17.1 per cent in 1990.

However, the purpose of this speech is not to focus on the past, but to highlight the hollow rhetoric we hear coming from the opposition when they claim the tax cuts this bill provides for are miserly. Let the Australian people realise that, when the shadow Treasurer stands in this chamber and says if they were in power they would provide much bigger tax cuts, it is falsely predicated upon the assumption that, if the Labor Party were in power, economic conditions would be as they are today under the coalition. History teaches us that, when the Labor Party is in power, it resorts to high taxing, high spending, high inflation and high interest rates—that is the Labor Party legacy; those are the four pillars of the Labor Party's economic credentials.

When the shadow Treasurer comes into this chamber and says the Labor Party would provide more generous tax cuts and increased expenditure in all manner of areas, whether it be Medicare, the Pharmaceutical Benefits Scheme, defence, employment services, disability services—you name it, the Labor Party will spend more in each and every portfolio—but it will also provide the tax cuts, let the Australian people see the absolute falsity of those claims. Because if the Labor Party had been in power, we would not have weathered the Asian economic crisis and we would not be the miracle economy we are today. We did those things because we had the courage and the strength to make sure our economic policy remained true to the philosophy of those right of centre—and that is about generating economic wealth and economic growth for the Australian people and letting them get on with the business of building businesses and generating wealth. The track record of the Labor Party is clear, and I know there are many people on the Gold Coast, my own turf, that are exceptionally pleased and proud of the fact that the coalition government continues to deliver.

I would like to highlight the major points in the bill before the House today. Before doing so, I must say I am pleased the opposition are supporting the bill. The opposition's support of this bill indicates not all hope is lost and they are prepared, on occasion, to recognise good economic policy when they see it. Turning to the specifics, the bill increases the Medicare levy threshold for senior Australians. The amendments to the tax rebate for low-income aged persons means there is a change in the $21,000 tax threshold to $21,600 and an increase in the low-income tax offset so that seniors pay no tax up to $20,500 for singles and $33,612 for couples. It also increases the threshold at which single seniors begin paying the Medicare levy to $20,500. There is no change to the senior family threshold of $31,729 because it is already sufficient to ensure senior couples do not incur a Medicare levy until they incur an income tax liability.

What have people said about that? The Age in its editorial immediately following the handing down of the budget said this:

It strikes me this quote is in very stark contrast to what we just heard from the shadow Treasurer. The shadow Treasurer came in here preaching his snake oil, as is often the case with the Australian Labor Party when they claim these tax cuts are all about ensuring that we provide increased tax cuts for the rich to the detriment of the less well off. Again, what rubbish. On a prima facie basis, the Labor Party like to trot these lines out because they hope the Australian people do not see through their claims; they hope the Australian people do not recognise the actual truth.

When the Labor Party talk about headline figures of $4 a week for the less well off and $10 a week for high-income earners, they are using the gross terms, the dollar figures. But when you translate them into actual percentage tax cuts it is a very different story. In those terms, the fact is that, under these changes to income tax levels, the bulk of the benefit flows to people on low incomes. That was recognised in the editorial from the Age which I just read. Under this bill—a bill which will benefit nine million Australians by providing tax cuts—we will see low-income earners get tax cuts of around 10 per cent. The Labor Party can say that is $4 a week, but it is a 10 per cent cut in the income tax liability of low-income earners. For average-income earners there is a four per cent cut and, for high-income earners, around a 2½ per cent cut. This bill is equitable and fair, and it provides the bulk of the savings to low- and average-income earners. High-income earners get about a 2½ per cent cut. But the Labor Party do not want the Australian people to know that. They would rather trot out their headlines, engage in political opportunism and mislead the Australian people. They do not recognise the Australian people are very intelligent and recognise the baseless rhetoric from the Australian Labor Party for what it is.

It is appropriate this bill should be before the chamber today, because we have the opportunity to compare the financial management of the Treasurer, Peter Costello, with the likely financial management of a Labor government. I have already spoken in a historical context about what the Australian Labor Party did. I have already indicated the absolute economic mess the Australian Labor Party left the Australian economy in. As a coalition government, we have had the opportunity to correct that mess. And because we have got very strong economic growth the dividends are now flowing back to the Australian people. Because we have taken the hard decisions and done the heavy lifting, we are able to reward the Australian people with income tax cuts.

Let us compare that with the budget handed down by the Queensland Labor government yesterday. The Queensland Labor government, a brother of the federal Labor Party, provide an indication of what is likely to occur should the federal Labor Party come to power. The Queensland Labor government yesterday delivered their third budget deficit in a row. Interestingly, the editorial in today's Courier-Mail said:

being Terry Mackenroth, the Queensland Treasurer—

How very interesting: `traditional Labor fare'. What does `traditional Labor fare' actually mean? Let us have a look at that. We see health spending increased, capital works and disability service expenditure up and an increase in the size of the Public Service and we see economic growth down and unemployment remaining stagnant at seven per cent. This is `traditional Labor fare'—the four pillars of Labor Party economic policy, which, as I have said, are high interest rates, high inflation, high expenditure and high taxation.

If we look at what the Queensland Labor government have done in their last budget, we see that, despite the fact they are enjoying a $600 million windfall from GST and stamp duty, they are still running a budget deficit. What is more, their predicted surplus for next year of $153 million is predicated upon a return rate of 7½ per cent. But what do economic analysts predict it will be? They do not say it will be anywhere near 7½ per cent; they predict it will be closer to three or four per cent. And, for every one per cent cut off that 7½ per cent, there is a $100 million loss to the Queensland budget. In likelihood, next year's Queensland budget will see a fourth budget deficit of, again, several hundred million dollars. This, I contend, is a direct reflection of federal Labor Party economic mismanagement. The bill before this House delivers tax cuts to the Australian people. It is a worthy dividend as a result of strong economic management, and I urge all in the chamber to support the bill. (Time expired)