Senator HURLEY (2:07 PM) —My question is to the Assistant Treasurer, Senator Sherry. Can the Assistant Treasurer detail to the Senate how the government’s tax reform package will secure a stronger economy for all Australians? In particular, can the Assistant Treasurer outline how the government’s proposed tax reforms will benefit individuals, small businesses and companies by reducing tax rates, providing tax incentives and cutting red tape?

Senator SHERRY (Assistant Treasurer) —I thank Senator Hurley for her question. The government is engaged in a process of major tax reform that will broaden and strengthen the economy for all Australians. This reform package is funded by the resource super profits tax. We are unapologetic about that. It is to fund a major reform of our tax system; it is not to bring the budget into surplus, as is claimed by those opposite. Australia avoided a recession, unlike most other comparable countries in the world. We have a larger economy today than many other countries had two or three years ago before the worst of the global financial and economic crisis. We are bringing our budget back to surplus in three years time, three years ahead of schedule. The resource super profits tax is not for that purpose. It funds tax reform; it does not bring the budget back into surplus.

There is an extensive range of tax cuts and improvements for the benefit of the broader community. I touched on one yesterday. The government is to reduce the company tax rate from 30c to 28c in the dollar and increase instant write-off of assets for small business from $1,000 to $5,000. A further initiative, which will not proceed without the resource super profits tax, is that from 1 July 2012 taxpayers will be able to claim a $500 standard tax deduction for work related expenses. This will increase to $1,000 one year later. There is also a significant reduction in red tape. Some 6.4 million Australians will be net beneficiaries of this new standard tax deduction. It will be introduced via what is known as a tick-and-flick tax return. It is a significant improvement in benefit for over six million Australians, a very significant simplification of our tax system and a reduction in red tape. (Time expired)

Senator HURLEY —Mr President, I ask a supplementary question. Does the Assistant Treasurer have specific examples of the benefits to Australians in various parts of the country of the government’s proposed standard deductions tax plan?

Senator SHERRY (Assistant Treasurer) —As I have said, no resource super profits tax: no standard deduction and no standard simplification at tax time. There is a very significant benefit.

Senator Bernardi interjecting—

Senator SHERRY (Assistant Treasurer) — In Senator Hurley’s home state of South Australia— Senator Bernardi might want to listen to this instead of rudely interjecting all the time—there will be 460,000 South Australians who will be better off under the standard deductions system. They will receive a total of $121 million over two years, Senator Bernardi. In my home state of Tasmania, there will be 140,000 Tasmanians who will be better off by some $35 million as a result of the standard work deduction. In Western Australia, there will be 666,000 people who will be $170 million better off as a result of standard deductions. No-one is worse off. No resource super profits tax: no standard deductions. (Time expired)

Senator HURLEY —Mr President, I ask a further supplementary question. Is the Assistant Treasurer aware of any alternative policies on major tax reform to benefit all Australians? Are there risks to the government’s forward-looking tax reform package aimed at securing our country’s long-term economic wellbeing?

Senator SHERRY (Assistant Treasurer) —The Liberal and National parties have pledged to scrap the system of standard deductions, to which I was referring. They will not introduce it. They will not cut company tax from 30c to 28c. They will not improve the write-off of up to $5,000 for small business. They have committed to scrapping these tax cuts, which are a very significant and massive benefit not just to those companies but also to many small businesses and millions of individual Australians through the standard write-off. Those opposite have one tax policy: to increase company tax. That is the one and only tax policy that the Liberal and National parties have announced. They are going to increase company tax by 1.7 per cent, from 30c to almost 32c in the dollar. That will not assist the Australian economy and jobs. (Time expired)