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Monday, 18 August 2003
Page: 18699

Ms LEY (2:29 PM) —My question is addressed to the Treasurer. Would the Treasurer outline the steps the government has taken to reduce the tax paid by Australian households? Is the Treasurer aware of any policy approaches that seek to impose an additional burden?

Mr COSTELLO (Treasurer) —I thank the honourable member for Farrer for her question. As she knows, this government has put in place a number of measures to improve Australia's taxation system. This is the government that took taxes off exports, which is of enormous benefit to the farmers of the Riverina district that she represents; and, of course, this is the government which cut fuel excise for transport, which again was of enormous benefit to the farmers of the Riverina and the area of New South Wales that she represents. By abolishing wholesale sales tax, by abolishing bed tax, by abolishing stamp duty on shares, by abolishing financial institutions duty and replacing them with the goods and services tax this government modernised the tax system. But in addition to that, this is the government which cut company tax from 36c to 30c, this is the government that halved capital gains tax, this is the government which cut income tax on 1 July by reducing the 34 per cent and 43 per cent marginal tax rates to 30 per cent and again cut taxes on 1 July this year with this year's budget.

This is where we come to the interesting part. There are some days when the Labor Party appears to suggest that taxes are too high in Australia. There are some days on which the Labor Party likes to pretend that budget surpluses are too wafer thin in Australia. And there are other days when the Labor Party likes to complain that the Commonwealth is not spending enough. Let us try to reconcile these propositions: you should take less in by way of tax, you should spend more by way of expenditure and you should have more left over at the end of the process. That is the Labor Party plan: tax less, spend more and have more left over at the end of the process. We have already had two questions today complaining that expenditures are not great enough. You are going to hear a campaign from the Australian Labor Party about how the Commonwealth should be spending more on health because a $10 billion increase—a 17 per cent real increase—is not enough; a $42 billion contract is not enough!

Let me try to reconcile these propositions in my mind: spend more and have more left over. What is the real Labor plan on taxes? I will tell you what it is: it is to increase taxes. We heard from the member for Perth, who wanted to increase the Medicare levy earlier on. We have seen how Hawker Britton are pumping out surveys which purportedly show that Australians want higher taxes and want an increase in the Medicare levy. Now we have the ACTU, which is belling the cat, calling a press conference on the weekend saying that Australians want higher taxes. The ACTU just happens to control 50 per cent of the votes at ALP conferences. So we have the ACTU, the member for Perth and Hawker Britton all coming together to demand that the Labor Party increase taxes. We would not mind this proposition if Labor were honest about it. If Labor were honest enough to say, `We want increased spending and we'll pay for it with increased taxes,' that would be a proposition which would be defensible and which we could argue out. But this nonsense that Labor believes taxes are too high, wants to spend more and have more left over at the end of the whole process is a piece of nonsense which ought to be exploded by the press in this country.

When the Labor Party was campaigning against the budget, suggesting that it thought taxes were too high, the chartered accountant newsletter of August 2003 had this to say:

The Labor Party's attack on the government taxation policy sounds hollow, however, when you learn that it admits it has no intention of cutting taxes were it to regain power. `We want to announce new spending plans and no net reduction in taxes,' a Labor spokesman said.

The chartered accountants know it. Everybody who reads Hawker Britton knows it. The ACTU knows it. The only thing is: we want the Labor Party to tell the truth to the Australian public. We want the Labor Party to tell the Australian public that when it goes out and campaigns for increased spending, behind it is an agenda for increased taxes. If the Labor Party does not have the decency to tell the Australian people the truth in relation to that, it cannot be believed on any other issue.