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Swan to counter attack on Labor's family tax -

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(generated from captions) the budget in May. Alright. Michael

Brissenden, for that tonight, thank

you very much, indeed. for the Labor Party is - Well, the question on this issue can they avoid being wedged its huge generosity by a government that can boast about to all Australian families. the prime ministerial attack The job of countering the party's Shadow Treasurer. falls to Labor's Wayne Swan, He joins me now from Brisbane.

Wayne Swan, good evening to you.

With your amendment to family tax

benefit B and how it would be

capped, it does look as if the

Party has handed the Prime Minister capped, it does look as if the Labor

a weapon, as you've heard. He is

saying this is the thin end of the

wedge. I don't believe so. I think

the Prime Minister is ir, rattled

and out of touch. He didn't sound

it. Well, I tell you what, it's

irbecause those people who suffer it. Well, I tell you what, it's very

most in his family payment system

are second income earners who are

mainly women and they face some of

the worst work incentives in the

Western world and another study out

today saying the worst when it

to average tax rates. So he's quite today saying the worst when it comes

happy to have a situation where

second income earners who are going

back to work to pay off the

mortgage, who want to improve their

lives and get ahead, are pay

lives and get ahead, are paying

effective marginal tax rates of 50,

60 and 70 cents in the dollar, that

is after they pay their income tax

and family payments withdrawn, they

can have as little as 30 cent miss

the hand and that's before they

to pay for the cost of going to the hand and that's before they have

and particularly the cost of child to pay for the cost of going to work

care. So this system is not

to women and it is savage on low care. So this system is not friendly

middle income families where there to women and it is savage on low and

is one partner going back to work,

say after the birth of a child,

trying to get ahead, and John

and Peter Costello have their hand trying to get ahead, and John Howard

deeply in their pocket. They've

renewed to reform this system for a

long period of time. OK. You've yet

to outline any detail on how you will address that. On the other

hand, you have said it talked about

capping this family tax benefit B.

First of all, how many families are

going to be affected byior decision?

Well, I think there's something

2,500 families affected. Maxine, Well, I think there's something like

consider this fact: family tax

benefit A cuts out at a maximum of

something like $140,000. So the

Prime Minister already operates a

means test in the family tax

system at around $140,000. So how means test in the family tax benefit

can argue the argument tonight that system at around $140,000. So how he

somehow Labor is anti-aspirational

or doesn't support those people family payment s

family payments is beyond me. He or doesn't support those people with

already operate as means test of

$140,000. Let's go to the figure

u mentioned there yo. U are $140,000. Let's go to the figure you

2500 family also be affected by u mentioned there yo. U are assuming

the cap that Labor is proposing. As 2500 family also be affected by this

the Prime Minister sees it, these

are 2500 families who are raising

children. They are entitled to a

benefit, as he sees it, and he

almost pains this as a national

interest question. Maxine, I don't

believe the great bulk of

Australians would share the Prime

Minister's view that these people

are entitled to a benefit. I

absolutely have the view, that

single income families and sole

parent families, deserve support in

the system. I strongly support them

receiving a benefit like family tax

payment benefit B but I certainly

don't support paying family

to multi-millionaires or people on don't support paying family payments

extraordinarily high incomes and I

particularly don't support that

they operate a system of withdrawal particularly don't support that when

family payment and a tax system

attacks those people when they work family payment and a tax system that

a bit of overtime or do an extra

shift to get ahead. The last time -

you see this in equity terms and

that's fair enough -- I see see

in economic terms, Maxine. Many that's fair enough -- I see see this

people tell you this people aren't

going into the work force because

the system punishes them at and a

time when we are coping with the

problems of the ageing of the

population we must enhance

participation and productivetive in

our economy and all of the business

groups in this country, all of the

think-tanks acknowledge that this

tax grab, the high effective

marginal tax rates, is a drag on

productivity. Everyone but John

Howard and Peter Costello want to

sweep it under the carpet. But you

are talking about taking money away

from 2500 families. The last time

you wanted to take away money from

families is with your private

schools' hit-list. With that you

managed to frighten every family

with a child in a non-Government

school. Maxine, I don't believe

Australians think we ought to be

making family payments to multi

millionaires in this society. I

think they believe that our family

payment system out to be targetted

fairly and squarely at those people

who are in need and particularly

those people who are now the

of attack by the Prime Minister those people who are now the subject his extreme industrial relations of attack by the Prime Minister with

changes, which are going to bring

down wages. We'll knee the family

payment system more than ever as

John Howard has his way with the

wage system and his extreme

industrial relations changes which

will drag down wageser for many

families. If you do the ambitious

things you want to do, though,

change of tax entitlements and the

rest of it, you'll need to save

than $6 million. That's the heart rest of it, you'll need to save more

this argument. He says the cap than $6 million. That's the heart of

this argument. He says the cap won't stop at 250,000 because saving 6

million is nothing. What can you do

with that? We don't pretend that

saving $6 million will solve all of

the problems in the system. First

the problems in the system. First of all, we need to get the Government

to acknowledge there's a massive

problem. Everyone accepts John

Howard and Peter Costello. What we

do need is fundamental reform in

do need is fundamental reform in the income tax system, as well as the

family payment system. That can be

done and it can be implemented in

done and it can be implemented in an affordable and staged way. But the

first thing you need to do is to

acknowledge the financial pressure

that the current system puts on

lower middle income family as then,

secondly, the negative economic

impact of the current system which

is a drag on productivity and a

is a drag on productivity and a drag on economic growth. Let me just ask

you how real that pressure is

because again the Prime Minister

wasable to point tonight to the

extraordinary redistribution

capacity of this government. I mean

family paints have again up

something like $6 billion a year

since 1996. This is an

since 1996. This is an extraordinary level of bounty, isn't it? Well,

certainly we need in this country a

generous level of family payments.

After all, parents are bringing up

the next generation of young

Australians. How whole future is in

their hands. The question here,

however, is the structure of the

family payment system and this is

one that punishes hard work,

punishes those families that do a

bit of overtime or an extra shift.

Whether they are single income

Whether they are single income earns or dual income earners and one that

is absolutely savage of those

married women, flairly, who want to

work a few more hours and hits them

for six if they do it. That's not

good for the country and it's

certainly not good for the balance,

for the financial balances in that