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Monday, 18 June 2012
Page: 3515


Senator CORMANN (Western Australia) (21:38): The coalition will not oppose these bills. These bills give effect to various taxation changes that were announced in the 2012-13 budget. Although the coalition may not have introduced many of these changes in government, given the fiscal mess the Australian government is in after 4½ years or so of bad, dysfunctional and incompetent Labor government the coalition will not oppose these changes.

The Tax Laws Amendment (2012 Measures No. 3) Bill 2012 creates a new final withholding tax regime that applies to income derived by non-resident workers participating in the Seasonal Labour Mobility Program. It also makes technical amendments to ensure that the 2011 alternative fuels and clean energy legislation works as intended. It will also remove eligibility for the low-income tax offset on unearned income of minors with some retrospective application. Though claimed to be giving effect to a previously announced measure, it exempts clean energy payments made to recipients of payments received on a variety of government payment schemes and it also implements the government's budget measure so that the taxable component of employee termination payments that takes an individual's total taxable income in a year above $180,000 would be taxed at marginal rates.

The Income Tax (Seasonal Labour Mobility Program Withholding Tax) Bill 2012 provides for the formal imposition of income tax in the establishment of the applicable tax rate to give effect to the final withholding tax regime that would apply to income derived by non-resident workers participating in the Seasonal Labour Mobility Program.

The Tax Laws Amendment (Income Tax Rates) Bill 2012 merges the first two personal marginal tax rates and thresholds for nonresidents into a single threshold and aligns the rate of this new threshold to the second marginal tax rate for residents—32½ per cent from 1 July 2012 and 33 per cent from 1 July 2015.

Some of these measures are just fixes but other measures have a more serious impact. These are measures that are pursued by a government that over the last four years have taken a strong budget position with no government net debt, a $22 billion surplus and $70 billion of past surpluses invested in the Future Fund and turned that around in four short budgets to take us to a position with $174 billion worth of accumulated deficits taking us back to $145 billion worth of government net debt.

This is from the government that told us in the lead-up to the last election that somehow we were on a journey back to an early surplus. As part of this journey back to an early surplus somehow we were meant to believe that this financial year the deficit would be $10 billion. That is what this dishonest Treasurer, Wayne Swan, told us in his economic update in 2010. The deficit was supposed to be $10 billion this financial year. Of course, we know now that we are heading for a deficit this financial year of $44.4 billion. Since the election just shy of two years ago, the budget position this financial year has deteriorated by an absolutely staggering $34.4 billion. But the government is expecting us to believe based on the most heroic revenue assumptions for 2012-13, the most heroic spending-cut assumptions for 2012-13 and the most heroic assumptions of what the government might do in the next financial year that somehow we are going to have this $1½ billion wafer-thin surplus.

Of course, we will not know what the final budget outcome for 2012-13 will be until September 2013, which I suspect was conveniently timed to coincide with the period after the next election. When the Treasurer promised Australians to take the budget back to surplus in 2012-13 he would have known that he was quite safe in the fact that he would never have to be accountable for that promise because there would be two elections between him making that promise and somebody having to be accountable for that promise. I do not think that even our Treasurer, Mr Swan, expects to be around to deliver the final budget outcome for 2012-13 in September 2013. Hopefully the judgment of the Australian people at the next election will be a vote for a return of good government for sound economic and fiscal management with the election of a coalition government under the leadership of Tony Abbott so that we can, yet again, fix up Labor's fiscal mess. That is obviously what all of us on this side of the chamber are working on—a return of good, sound fiscal and economic management under the leadership of Tony Abbott. But even if, against all expectations, Labor was able to scrape in again, which for the sake of all Australians I hope will not happen, there is obviously nobody who expects that Wayne Swan would still be the Treasurer after the next election. It was an easy promise for him to make, one that he knows he will never be held to account for. Looking at Labor's past track record, both over the period of this government and over the period of previous governments, at both the state and federal level, we all know and people across Australia instinctively know that the Labor Party in government always stuffs up our public finances. The Labor Party in government always leaves the budget in a mess and it always comes down to the coalition to fix up the mess that Labor left behind. But because Labor spend too much, because they constantly borrow too much, they are always casting around for more taxes, for more increased charges.

This is a government that has given us more than 20 new or increased taxes in the period it has been in government. It is quite extraordinary that, despite having introduced more than 20 new or increased taxes and despite having the best terms of trade in 140 years, Labor are still not able to balance the books. Despite all of these new taxes, despite having the best terms of trade in 140 years and despite being in, quite frankly, the best region in the world in terms of being able to benefit from our engagement with the rapidly growing economies of China, India and so on, this government, at this very good time in our economic history, has not been able to balance the books. If the government cannot balance the books now, if it cannot deliver a balanced budget now, when will it ever do it?

Of course, a promise of a surplus budget means nothing. Words are very cheap. As I mentioned earlier, in the lead-up to the last election, one month out from the last election, the Treasurer promised the Australian people that the deficit this financial year would be 'only $10 billion'. We know that it is $44.4 billion. So everybody who is a serious analyst or a serious observer of this government's track record and anybody who is a student of how this government is likely to perform in the future would come to the conclusion that there is absolutely no prospect that this government will deliver a surplus budget rather than just promise one.

With those few words, I will again focus on the fact that these bills include a series of measures some of which the coalition clearly would not have pursued in government. However, given the fiscal mess that this government is in after 4½ years or so of Labor administration, the coalition will not oppose these changes. But we reserve the right to revisit some of these issues in government.