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Monday, 23 May 2005
Page: 25

Mr CIOBO (2:06 PM) —My question is addressed to the Treasurer. Would the Treasurer inform the House how hardworking Australians will be rewarded with a tax cut after 1 July? How will the government meet its obligations and promises to cut tax?

Mr COSTELLO (Treasurer) —I thank the honourable member for Moncrieff for his question. I can inform the House that one of the great differences between the two sides of politics represented in this House is that this side of the House believes that Australians ought to have tax cuts on 1 July and the other side of the House opposes them.

We ought to be very clear about this: the Australian Labor Party believes that no tax cuts should be brought in from 1 July 2005. Can I also say that, in addition, this side of the House believes that senior Australians should get tax cuts and the Labor Party believes they should not. By opposing a reduction in the lowest tax rate from 17c to 15c—and I do not think this has occurred yet to the Leader of the Opposition—he opposes senior Australians getting a tax cut under the last budget that this government brought down.

In addition to that, the Leader of the Opposition talks about equity. And what is his equity? His equity is that if you are a low-income earner over 65 you should get no tax cut. That is his equity. This side of the House stands up for senior Australians while the so-called tax plan of the Australian Labor Party would cheat them out of any tax cut at all. I say to senior Australians who qualify for the senior Australians tax offset: look very carefully at the fine print of what the Australian Labor Party was talking about when it was in this House giving its budget reply.

I can go on. In addition to tax cuts, which we say should take place on 1 July and which the Labor Party say should not, this government has also increased the family tax benefit. Under the budget, which I announced, the family tax benefit part A threshold increases from $33,361 to $37,500, providing 400,000 low-income families with an additional $12.55 a week. That is, again, something that the Labor Party have not even agreed to at this stage. And let me say that family tax benefit A is real money—$600 goes into a bank account, comes out of a bank account and can buy goods and services. It is the same $600 which the Australian Labor Party promised to abolish if they were elected at the last election for all of those low-income Australian families the Leader of the Opposition heartlessly had no concern for in the last election. These changes mean that a single-income couple with one child under five and two dependent children have had a 29.5 per cent increase in their real disposable income since 1996 and, with the family tax benefit cashouts, effectively pay no net tax until they earn $46,000.

I am asked: ‘What is it that would ensure that the government could meet its tax promises?’ I will tell you what it is: the cessation of this useless blocking activity which the Leader of the Opposition is trying to put in place. The schedules that employers need to apply these tax cuts on 1 July 2005 are being prepared by the taxation commissioner. They can be disallowed by either house of the parliament. If they are disallowed in the Senate on the votes of the Australian Labor Party then 850,000 Australian employers will be thrown into confusion and Australians will not get their tax cut on 1 July 2005. Let me make this clear to the House: Labor will not block tax cuts. The very most that this useless blocking activity can accomplish is confusion for employers and a delay in those tax cuts. This side of the House stands for tax cuts on 1 July 2005, and we call on the Australian Labor Party to get out of the way and let Australians have them.