Dr EMERSON (5:40 PM) —I rise to speak on the Tax Laws Amendment (Personal Income Tax Reduction) Bill 2004. The brutal reality is that only one in five Australian families and single people will get an income tax cut from this budget. Moreover, only two in five will get an income tax cut or an increase in family payments. That means the government has forgotten three in five Australian families and single people. These are the forgotten people. These are the people who John Howard forgot. They used to be called the Howard battlers. What happened to the Howard battlers? John Howard has forgotten them. The phrase `the forgotten people' was used by John Howard's hero, Bob Menzies, in a 1942 radio interview when he said of the forgotten people that they `represent the backbone of this country'. So why, more than 60 years later, has John Howard deserted the forgotten people who his hero said constitute the backbone of this country?

We may well ask: `Who are the forgotten people?' They are people such as hairdressers, farmhands, cleaners, shop assistants, receptionists, hospitality workers, office clerks, labourers, factory workers, motor mechanics, enrolled nurses, machine operators, social workers and accounts clerks. I have compiled some calculations that have been verified by the Department of the Parliamentary Library. These calculations indicate the extra tax that will be paid by these forgotten people by 2008 as a result of their omission from any tax cuts in this budget. These are quite disturbing figures, because they reveal where the government is getting the money to fund the income tax cuts for those who are earning more than $52,000 a year. Each of these categories of Australians that I have mentioned earns less than $52,000 a year according to official statistics released by the Australian Bureau of Statistics. I will give some examples. By the end of 2007-08, hairdressers will be paying an extra $28.88 in income tax as a consequence of the fact that they get no tax cut from this budget, farmhands will be paying $30.88 extra, cleaners will be paying $33.14 extra, and so on.

Mr Hockey —This is just rubbish. You guys have got to start telling the truth.

Dr EMERSON —The Minister for Small Business and Tourism does not like this, and it is pretty obvious why. He should have been representing the interests of hairdressers, cleaners, shop assistants, receptionists, hospitality workers, office clerks, social workers and accounts clerks, many of whom are employed in small businesses, but he has failed to do so. He has failed to have any impact whatsoever on the government's thinking. That has meant that a full four in five Australians miss out on any income tax cut because they earn less than $52,000 a year or $1,000 a week.

I have also calculated how much of this extra income tax that will be paid by these particular occupations is bracket creep, and it is a chilling number: 62 per cent of the extra income tax that will be paid by July 2008 will be bracket creep. So that is where the government is getting the money to fund the income tax cuts for those above $52,000. That is where the government is getting the money to fund its outrageous re-election taxpayer-funded advertising campaigns. That is where the government is getting the money to fund its waste and extravagance. It is getting it out of the pockets of the forgotten people of this country.

These forgotten people have received one tax cut alone since 2001, for the amount of $4 a week. Senator Vanstone described it as a milkshake and sandwich tax cut, and so it was. In a rare moment of honesty, she let the cat out of the bag and told all Australians the reality soon after that budget—that is, that their tax cut would be hard-pressed to buy a sandwich and a milkshake. But that is as good as it gets for the forgotten people, because that tax cut in 2003 will, if this government is re-elected, be the only income tax cut they will get in the seven-year period from 2001 to 2008. The Prime Minister of this country is saying the forgotten people deserve no more than a $4 a week tax cut over seven years. In fact, if the government were to be re-elected, it would, based on the promises in this budget, have delivered only three income tax cuts in 11 years.

Mr Hockey —That is not true.

Dr EMERSON —The Minister for Small Business and Tourism claims that is not true. The government would have delivered a tax cut on 1 July 2000, which was GST compensation. It would have delivered a second tax cut last year, the infamous $4 a week sandwich and milkshake tax cut. Then it would deliver the tax cut announced in this budget. That is three announced tax cuts in 11 years. And it certainly is worth asking: where is the money coming from to fund those?

The government promised before the 1996 election that it would honour Labor's co-contribution for superannuation. That was fully budgeted for and fully costed. In 1997 the Howard government broke that pre-election promise. It stole from the Australian people the superannuation co-contribution, held it for a couple of years and then gave it as income tax cuts from 1 July 2000—income tax cuts which were nothing more than GST compensation and some of the bracket creep that the government had been able to collect in the preceding years. It expected the Australian people, hardworking taxpayers, to be grateful for getting an income tax cut—the first one under this government—on 1 July 2000 when, in fact, that was GST compensation. Then people had to wait until last year to get their $4 milkshake and sandwich tax cut. Now in this budget there is another tax cut, but not if you earn less than $52,000 a year. It does not matter how many times the minister for small business and other ministers complain about that; it is a reality. It is in the budget papers.

If it is re-elected, this government will have delivered three tax cuts in 11 years. By contrast, Labor delivered seven tax cuts in 13 years, returning to the Australian people every cent of bracket creep and more. But this government will not be returning bracket creep as a result of this budget. To give some indication of the magnitude of that, it is worth looking at the income tax receipts that are forecast in the budget. Those income tax receipts this year, in 2003-04, are $97 billion. By 2007-08 they are projected at almost $122 billion. So, when this government says it is giving a tax cut, have a look at the detail in the budget. There is a 25 per cent increase in income tax revenue at page 5-20 of Budget Paper No. 1, an increase in income tax receipts of $24 billion. Some of that is as a result of population growth and some of that is as a result of real income growth, but the rest of it is as a result of bracket creep. This government has gone nowhere near returning the bracket creep that it has taken out of the pockets of the Australian people over the last eight years and that it fully expects, and budgets, to take out of their pockets in the next four years if re-elected.

But wait, there is more. There is one word I have not mentioned: GST. The government claims that the GST is not a Commonwealth tax. The Auditor-General has ruled that it is a Commonwealth tax, and I was here when this parliament passed legislation implementing the GST as a Commonwealth tax. But the government tries to pretend that it is not a Commonwealth tax. The budget papers reveal that in 2004-05 GST receipts will be $34 billion. That is on top of the income tax receipts. The Treasurer says, `Oh, but that's not fair, because we abolished a number of taxes, such as the bed tax in the Northern Territory.' I am not sure that the Northern Territory bed tax was bringing in anywhere near $34 billion. That would be a lot of people staying in hotels in the Northern Territory.

It is true that some taxes were abolished, but that does not in any way account for the massive increases in income tax revenue and in GST revenue as a result of this government's taxing policy. The consequence of all of that is that this budget maintains the government's record as the highest taxing government in Australia's history. The only competition provided to this government in taxation as a share of GDP is that provided by this government. All you have to do is look at the tax to GDP ratios of each and every year of this government to see that it is a fierce competition. This government competes against itself as the highest taxing government in Australia's history but, compared with other governments, it has won the race by a country mile. That is the reality.

This government has forgotten in its tax cuts four out of five Australian families and single income earners and has forgotten three out of five in its income tax cuts and increased family payments. Queensland is especially disadvantaged because in that state incomes, on average, are lower than in other states.

Mr Hockey —Rubbish.

Dr EMERSON —The minister for small business probably does not visit Queensland very often. The reality, as calculated independently by NATSEM, is that 63 per cent of Queensland families and single people do not gain. So for Queensland it is worse than three in five. More than three in five Queenslanders get nothing out of this budget in income tax cuts and increased family payments.

Mr Hockey —Who wrote this?

Dr EMERSON —I wrote it. I read the budget papers, unlike the minister for small business who has failed to not only read the budget papers but also make any representations at all on behalf of the forgotten people. I would like the minister to be brought to account with the following people: a young married couple with no children, each earning between $28,000 and $44,000 a year—perhaps a hairdresser and an accounts clerk.

Mr Hockey —Each? That much?

Dr EMERSON —The minister has just said, `Oh, that's a lot of money.'

The DEPUTY SPEAKER (Ms Corcoran)—Order! The member for Rankin will not respond to interjections.

Dr EMERSON —Thank you, Madam Deputy Speaker. I ask the minister: what sort of income tax cut would this young married couple, with no children, earning $28,000 and $44,000 a year, get? I invite the minister to guess what sort of income tax cut that family would get. The answer is? Tick, tick, tick. Quick, go and get a staff member! Go to the advisers' box! Get the calculator out! I can save you time: they get nothing—not one red cent.

Mr Hockey —That is complete rubbish.

Dr EMERSON —They get not one red cent. It is a fact.

Mr Hockey —They get a stronger economy.

Dr EMERSON —Now he has conceded. He has changed ground.

The DEPUTY SPEAKER —Order! Minister, no more interjections!

Dr EMERSON —It is a fact that, if this government is re-elected, this couple will have to be content with a $4 a week sandwich and milkshake tax cut as their only income tax cut over the entire seven-year period from 2001 to 2008.

Mr Sidebottom —Thank you, John Howard.

Dr EMERSON —I can tell you that this hairdresser and this accounts clerk, among the hundreds of thousands—the millions—of forgotten people of Australia, will not be thanking John Howard, because they have to be content with only a $4 a week sandwich and milkshake tax cut in the entire period from 2001 to 2008.

I will now move on to another sector of the Australian economy—a sector with which the minister for small business may be faintly acquainted, but one with which the Deputy Prime Minister certainly should be acquainted: Australia's 83,500 farm workers, who on average earn $32,000 a year. I ask the minister: how much will those 83,500 farm workers get in income tax relief over the coming four years? Tick, tick, tick. Answer: zero; absolutely nothing; not a cent.

Mr Hockey —Rubbish.

Dr EMERSON —The minister says rubbish. That just shows that he has not done his work. He should be representing these people. He should be representing the forgotten people—along with the Deputy Prime Minister, who comes from the seat of Gwydir. As a National Party Deputy Prime Minister, he says that he represents the farm workers of Australia. He has allowed the farm workers of Australia to be in a situation where they will get not one cent in income tax cuts between 2004 and 2008 if they ever suffer the misfortune of the re-election of the Howard government.

I will now move on to another category of the forgotten people. A shop assistant, with no children, earning $650 a week would have received a tax cut last year of $4 a week. Plenty of shop assistants work in small businesses, so I ask the minister: how much income tax cut would this shop assistant, who earns $650 a week, get in the coming four years? Tick, tick, tick. Answer: zero—not one cent. It means that, under the government's own projections of wages growth and inflation, after four years the shop assistant will be paying—wait for it—$34 a week more in tax. Why do the minister and the government believe that Australia's 575,000 shop assistants do not deserve any tax cuts at any time in the next four years?

Mr Hockey —Madam Deputy Speaker, I rise on a point of order. The member for Rankin has asked me a number of questions; I am happy to respond. In the first place, that shop worker has a job.

The DEPUTY SPEAKER —There is no point of order. The minister will resume his seat. The member for Rankin will not respond to interjections.

Dr EMERSON —The minister has not realised the plight of the forgotten people: those three in five Australians who get nothing in income tax cuts or increased family payments in this budget and the four in five people who get not one cent in income tax cuts. The minister did not know that when he walked into this chamber. He has revealed yet again that he has no affinity with small business and no affinity with the forgotten people, just like his colleagues on the front bench and just like his colleagues on the back bench who have not stood up for the forgotten people, the people who Bob Menzies more than 60 years ago identified as the backbone of this country—and they are the backbone of this country—the hospitality workers, the receptionists and the shop assistants. These are the people who John Howard forgot. (Time expired)