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Tuesday, 11 October 2016
Page: 1423

Senator DI NATALE (VictoriaLeader of the Australian Greens) (13:26): I rise today to speak against the Treasury Laws Amendment (Income Tax Relief) Bill 2016. Our political debate is often defined by where the parties stand when they oppose each other, when they have competing views on different pieces of legislation. But, actually, you get a lot more insight into Australian politics when the two parties that form the government and opposition in this place agree.

What we see are the Liberal Party and the Labor Party always agreeing to give tax cuts to the wealthy. We see them agreeing on areas of public policy like the brutal treatment of asylum seekers; the overreach in the approach to counterterrorism; going to war without parliament approving the committing of Australian troops; and, of course, on donations reform, where they both get a huge benefit.

Now, it is no surprise that the Liberal government are keen to give a tax cut to the wealthy. They represent themselves as the party of big business—as the party for the big end of town. So it is hardly surprising that the Liberal party, who have for many years now decried the state of revenue within the budget, would put a lie to their claim that we have a budget emergency and argue for a huge tax cut to the wealthy. We expect that from the Liberal Party.

But what makes this united support more interesting is that we have the Labor Party supporting it. When you consider the words of the shadow Treasurer, who has, indeed, begun to make a big deal out of the issue of rising inequality and the failure of trickle-down economics, it makes their support for this legislation much more interesting.

What it does is indicate that those words are just hollow words—that they are used in some political positioning opportunity to position the ALP as a party that is committed to fairness. Instead, the actions of the Labor Party now in supporting this government legislation prove that they are just hollow words.

You need to look at this piece of legislation against the recent omnibus bill from the last sitting weeks to show the bipartisan consensus between the Coles and Woolies of politics—the Labor and the Liberal parties—to support the big end of town and people on high incomes at the cost of the most vulnerable people in the Australian community. So let us remember that the omnibus bill that this party approved only a few weeks ago—indeed, during our last sitting week—cut billions of dollars from renewable energy, from families and from carers. It was a real attack on some of the most vulnerable people in the Australian community.

The impact of this bill is that 383,000 families with a household income of $80,000 lose around $730 per child. With the passage of this legislation, if you are a family earning $200,000 to $300,000 a year you will get a boost of about $630 each year. So just consider that. The omnibus legislation that took the knife to a whole lot of really critical family support payments and, indeed, other social supports and that passed in last week of parliament with the support of the Labor and Liberal parties means that families earning $80,000 are going to be worse off—383,000 families worse off to the tune of $730. With the passage of this legislation, if you are earning $200,000 or $300,000—that is, those of us in this chamber; many of us are earning well above the average wage—you will get a boost of $630 a year. We do not need it. Those families that are struggling and on the margins need the support more than we do.

So this is the government and the opposition—the Coles and Woolies of politics—working together over the last few weeks to grow the gap between the rich and poor at a time when rising inequality is something that the shadow Treasurer espouses is one of the great challenges before us as a nation. I simply do not understand the point of $6 billion of spending cuts on renewables and on carers when, in the next week, you wipe out those savings with $4 billion of tax cuts for the top 20 per cent. These are cuts to the people who need it most and a huge pay cheque for those of us who do not.

Shadow Treasurer Bowen made a speech recently. I will quote him because I agree with him. I think he was absolutely right. The case for the middle class was the speech. The sentiment was this:

… middle income earners are facing increased job insecurity as a result of the rise of technology and automation.

And together with increasing income inequality they are deciding that the system is no longer working for them.

Well, of course it is not when you have the two parties in this place ensuring that we provide tax cuts for the wealthy and cut services for those at the bottom. Of course, Labor will claim that this is targeted at everyday income earners. Let us actually have a look at that claim in more detail. Last week, the RBA released data that the average salary is $60,372. That is about $20,000 away from where this tax cut is targeted. The average wage is just over 60 grand. This tax cut kicks in for people earning over $80,000. So the tax data shows us that these tax cuts will go to the top 20 per cent of income earners. Let us again make that really clear: 80 per cent of people miss out; the top 20 per cent of income earners will benefit from this tax cut. Every single one of those banking executives that the Labor Party stood before the recent banking committee—those executives on multimillion dollar pays—are going to get a tax cut from this. Every one of us in this chamber will get a tax cut from this. Those top 20 per cent of income earners will get a tax cut, while real middle-class, ordinary, average Australians will miss out. That is the impact of this legislation that has the support of both the Labor Party and the government.

The ostensible reason for the bill that has been given is that we have to assist people who are approaching $80,000 a year not to be in the second highest tax bracket—addressing so-called bracket creep. Yes, it is true: bracket creep can be a problem. We do not dispute that it needs to be mitigated where necessary. But, as Deloitte said in its submission, the group most adversely affected by bracket creep are people approaching $37,000 a year. Where is a solution for them? Rather than providing a solution, we saw the parliament a couple weeks ago make life harder for them. The government is looking in the wrong place. We expect this from the coalition; we expect this from the Liberal Party. But given the recent words of the shadow Treasurer, to have bipartisan support for tax cuts that go to the top 20 per cent of income earners is most disappointing.

So it does mean nothing for the average worker. This is a tax cut that provides little or no relief for the average worker. Based on the RBA's average income, what we do know is that the everyday worker—people on that average wage—will not be eligible for these tax cuts for the next 15 years. If you assume that wages growth hovers at about two per cent, it will be 2031 when the average worker starts to enjoy a small benefit from this legislation that we are passing today. For the richest 20 per cent of workers, who already earn over that 80k, the tax benefit is pretty instantaneous. This is bad policy because it drives the gap between the rich and poor faster and harder. At a time when we are looking to cut vital social services, what we should be doing is ensuring that our revenue base increases rather than shrinks.

One opportunity that was open to both the government and the opposition, if they were serious about addressing bracket creep and if they saw that this was the only option available to them, was to ensure that the $4 billion cost of this bill—let's remember this is $4 billion in lost revenue at a time when we are being told that we cannot afford to fund healthcare, we cannot afford to fund our schools and we cannot afford to fund vital social services—would not add to inequality. But this is $4 billion at a time when our budget is facing so-called structural challenges.

Rather than taking money out of the pockets of the most vulnerable and giving it to those people on high incomes, there are other solutions. If both the government and the opposition are intent on addressing bracket creep through this measure, why not recoup the $4 billion from the top three per cent of income earners in the top marginal rate by making the temporary two per cent levy on incomes over $180,000 permanent? Why not make it permanent and at least offset the $4 billion price tag that comes with this tax cut for the people who need it least? That is a policy that we Greens took to the election and one that Labor adopted. Here is an opportunity to take a stand and say to the government: if you want this, you have to make that two per cent levy on people with incomes of over $180,000 permanent. My colleague here Senator Whish-Wilson wrote to the shadow Treasurer seeking cooperation on this matter, but he refused. He was all the time citing increasing income inequality as a problem for the Australian community while refusing to work with the Greens on a measure that we know would address the issue of income inequality in a much fairer and more sustainable way.

So we Greens will not support this Treasury Laws Amendment (Income Tax Relief) Bill. We do not support it because it makes income inequality worse at a time when it is one of the great challenges that lies before us as a nation. We will not support it because that $4 billion could be spent on making Medicare more sustainable over the long term. That $4 billion could make a contribution to Gonski funding so that we can provide an education on the basis of need rather than who can afford to send their child to a wealthy private school. We will not support it because we believe that carers and people on single incomes, particularly sole parents, need support rather than having it stripped away. It is the Greens in this chamber who will continue to advocate for a much fairer and more caring agenda. This bill works in precisely the opposite direction to that agenda.