Senator FERGUSON —My question is to the Assistant Treasurer, Senator Kemp. Minister, the government's taxation reform package unveiled last year outlines many benefits for average Australian families, including massive income tax relief and increases in family assistance. Would the Assistant Treasurer outline the three major components of the family package in the tax reform proposal, and can he outline how this proposal will benefit average families in my home state of South Australia? Furthermore, could the Assistant Treasurer outline what threats there are to this family tax relief?

Senator KEMP (Assistant Treasurer) —Thank you, Senator, for your question and for the genuine concern you show for Australian families and, in particular, families in South Australia. Senator Ferguson has always had a particular emphasis in his remarks on family policies, so in that sense the question does not surprise me. It is true that families will be big winners from the tax reform package. Today the legislation will be introduced into the parliament to build on the family tax initiative introduced by the government in 1997.

Of the three major components of the family package, the first provides a large increase in assistance for most Australian families. Overall, the package is worth in the order of $2.5 billion. The government will firstly provide new family tax benefits, the equivalent of doubling the extra $1,000 tax free threshold for each dependent child under the FTI, thus providing a 70 per cent increase in assistance.

The second measure provides for the equivalent of doubling the extra $2,500 tax free threshold for one-income families with a child aged under five. This is equivalent to not having to pay tax on the first $15,000 of income. Further, we are increasing the maximum assistance for child care for lower income families by $7.50 a week, or some seven per cent.

Another component in our families package provides a substantial boost for assistance for low to middle income families, where there are tax poverty traps—I think that is well known as a problem with the current tax system—through increasing the level of income at which family allowance begins to be income tested from $24,350 to $28,200 a year and reducing the income test withdrawal rate from 50 per cent to 30 per cent. Combined with the large personal income tax cuts, as promised by this government, this greatly increases the rewards available to low and middle income working families.

Honourable senators interjecting—

The PRESIDENT —Order! There is conversation going on across the chamber which is in breach of the standing orders and disruptive.

Senator KEMP —The third component of the families package is a simplified administrative system of family assistance. The existing complex family assistance system, involving some 12 forms of assistance, will be simplified by reducing the number to just three.

The question also asked me about the major threats to this very important package. Of course the major threat comes from the Labor Party's `oppose for the sake of opposing' attitude. We want to deliver major income tax cuts; we want to deliver a major family package; and, frankly, the Labor Party wants to scuttle it.

I mentioned the other day in the Senate how Mr Neil O'Keefe, the member for Burke, had recently written an article in the Melbourne Age saying, `What you vote for is what you get.' We think that is fair enough. Today I would like to draw the Senate's attention to another comment by a Labor member of parliament. This is what a senator, a Labor frontbencher, said earlier this year—and I thought it made sense:

If you don't like the government, what it's doing, you vote it out at the next election. But once you vote them in, you give them a chance to carry out that mandate.

That Labor frontbencher was Senator Chris Schacht. (Time expired)