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Monday, 30 May 2005
Page: 51

Mr CIOBO (3:48 PM) —I am pleased to be able to rise to speak to the motion that the member for Brand, the Leader of the Opposition, has put to the House today. I must say how absolutely incredulous I am that the Leader of the Opposition should come into the House today and with this motion attempt to portray—to the 850,000 businesses that will suffer as a consequence of the Australian Labor Party’s positioning on this debate and to those people who will be denied the opportunity to enjoy $22 billion worth of tax cuts—that it is in fact the Treasurer who is causing this problem. The reality is—and the people of Australia know this—that there is only one political party, only one individual in this parliament, responsible for denying Australians the opportunity to enjoy $22 billion worth of tax cuts. That individual is the Leader of the Opposition and that political party is the Australian Labor Party.

The reality is that it is the Australian Labor Party that in 31 days times has the chance, if it chooses to, to deny the Australian people the opportunity to enjoy a tax cut. It is the Australian Labor Party and the Leader of the Opposition who—if they choose to vote against the regulations in the Senate—will deny the Australian people a tax cut. There is only one political party and there is only one man who will bear on his shoulders the responsibility for denying Australians $22 billion worth of tax cuts.

I would like to highlight a couple of other points about this so-called fairer tax package that the Australian Labor Party is calling for. The reality is that it is only the Leader of the Opposition who has, beating in his heart, the need to ensure that Australians get a fairer tax cut, because we on this side of the chamber believe that these tax cuts are fair. The reason they are fair is that the greatest tax cuts go to the low-income earners. The highest percentage of tax cuts flow to the Australian low-income workers. In addition to that, far from playing the politics of envy that the Australian Labor Party plays, we believe in highlighting the clear facts to the Australian people.

But it is not only us—and this is the interesting point. It is not only the Liberal and National parties who are putting this forward; it is also being put forward by every single state Labor premier and state or territory leader who is a member of the Australian Labor Party. Steve Bracks, Peter Beattie, Clare Martin, Geoff Gallop—Labor parliamentarians at a state level, premiers and leaders of territories, have all urged the Australian Labor Party to get behind the Howard government’s tax cuts because they want Australian workers to enjoy those tax cuts, which should flow to them in 31 days time.

Others are also getting behind the government’s position. In an article in the Australian on Wednesday, 25 May, headed ‘Slash top rate, union boss tell Labor’, the Australian Workers Union National Secretary, Bill Shorten—who is touted as a future Labor leader—said:

At some point a government is going to have to bite the bullet and realign the system and move the PAYE tax rate closer to the corporate rate. It’s not a matter of if but when.

He is touted as a future Australian Labor Party leader but he stands with this government on these fair tax cuts, where the largest percentage of the tax cuts will flow to ordinary Australians, and he can see the clarity of this government’s decision.

In the Leader of the Opposition’s charade today—in his so-called call to arms to ordinary Australians—he only told half the story. The Australian Labor Party does not want ordinary Australians to know that not only have real wages increased under this government, that we have record low inflation, record low interest rates and more people in work than has been the case since 1976 but also the family tax benefit ensures that ordinary Australians are in a better position than they have ever been in before, because these tax cuts supplement family tax benefit payments to ordinary Australians.

The coalition government proposes a combination of tax cuts as well as increases in family tax benefits. In the last budget the Howard government and the Treasurer, Peter Costello, increased the income threshold at which the maximum rate of family tax benefit A is paid to $37,500 from 1 July 2006. This ensures that some 400,000 families will be an extra $12 per week better off from family tax benefit payments in addition to tax cuts, with the largest percentage of those tax cuts flowing to those on relatively low levels of income.

The Australian Labor Party likes to wax lyrical about the unfairness of these tax cuts. I have heard the Leader of the Opposition comment so many times about cuts of $6 a week versus $65 a week. The Australian Labor Party—in particular, the member for Brand—would like to have its cake and eat it too. Approximately two-thirds of revenue that is raised by personal income tax is paid by the top one-quarter of income tax payers in Australia, and the bottom 25 per cent of income tax payers in Australia contribute three per cent of revenue—so, two-thirds of revenue from the top one-quarter and three per cent of revenue from the bottom one-quarter. Quite clearly that tells a very simple story: those people who earn more pay more tax. When the Australian Labor Party comes into this chamber and quite deceptively portrays this government as only looking after the wealthy, that should be exposed for what it is—a base attempt to engage in cheapjack, opportunistic politics. The Australian Labor Party, it would seem, is only in favour of progressive taxation when it is about tax increases. On the issue of tax increases, the Australian Labor Party says: ‘Tax increases should be burdened upon those who earn the most. Tax increases should always be at a progressive rate so that those who earn more money pay more tax.’ However, when it comes to tax cuts, it would seem that the Australian Labor Party believes in a flat tax structure—if someone on a top income of $100,000 gets a $60 a week cut then someone on $30,000 should also get a $60 a week tax cut. Labor wants to have its cake and eat it as well. The ideology of the Labor Party is for progressive tax on tax increases but a flat tax rate for reductions in taxation. The reality is that the Australian Labor Party does not have a taxation policy; it is looking for an opportunity to engage in some cheapjack populism.

As a consequence of the good economic management of the Howard government, on 1 July the average tax rate for the average worker in Australia will decline from 24.1 per cent to 23.9 per cent. When the Leader of the Opposition was the minister for finance, he came into this chamber and crowed about how the Australian Labor Party had reduced the top tax rate from 60 per cent to 47 per cent. Yet now, completely bankrupt of any solid policy on this, the Australian Labor Party is engaging in the politics of envy to try to score a few cheap votes from the Australian people.

What does this mean for the Australian public over the next 30 days? It is very clear. Labor have one simple choice to make. They can deny the Australian people a tax cut by voting against the regulation, without passing it off as someone else’s responsibility—it will be the Australian Labor Party’s decision to deny the Australian people $22 billion worth of tax cuts, to play the politics of envy to try to score some additional votes, and thereby increase compliance costs for 850,000 businesses by forcing them to comply with two tax scales. Or they can do the right thing: vote in favour of these tax cuts, do not disallow the regulation and let every ordinary Australian enjoy a hard-earned tax cut that this government is providing for them.