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Tuesday, 11 October 2016
Page: 1426

Senator KAKOSCHKE-MOORE (South Australia) (13:39): This is not my first speech. When Treasurer Scott Morrison appeared at the National Press Club to sell the federal government's plan to reduce the tax burden on Australians earning $80,000 or more he told the country it was about tax relief. Hardworking Australians in the middle-income bracket would be better off under the plan, the Treasurer said, and the move would help prevent bracket creep for those moving into higher income brackets. I respect the Treasurer, and NXT has had a constructive working relationship with him, but on this point we do disagree.

What the Treasury Laws Amendment (Income Tax Relief) Bill represents is a misguided initiative from a government that has its priorities wrong and, while we must stress that those who are benefiting from this tax cut are not undeserving of tax relief, our opposition to this bill does not come from a place of hostility or antagonism but one of concern about how this money could be better spent. All told, the measures proposed would cut almost $4 billion in future revenue over the course of the next four years and, in turn, would only deliver a total benefit of $315 a year to the top 20 per cent of income earners. I will say it again: the total saving from this measure would equate to $315 a year or $6 a week for those among the top 20 per cent of income earners. In point of fact, those who are going to benefit do not represent middle income earners. According to the Australian Bureau of Statistics, as of May 2016 the average income of the working Australian was $1,160 a week before tax. This equates to $60,000 a year. Under the proposed change, those who fall into this category will see no relief. Another study published by the Australia Institute counted those who did not file a tax return and found that just 14 per cent of Australians earned $80,000 or more—the bulk of whom are men. As the Age reported yesterday, the proposed cuts will help 28 per cent of male taxpayers but only 13 per cent of female taxpayers—a point which my colleague Senator Peter Whish-Wilson has discussed and with which the Nick Xenophon Team agrees. That same article also broke down who would benefit from the proposed tax cut. One in nine surgeons will benefit, so will eight in 10 mining engineers and seven out of every 10 psychiatrists. Among those who will miss out are 78 per cent of truck drivers and 70 per cent of manufacturing workers. Of those who make our food, some 95 per cent of chefs will not benefit from this tax cut, and 98 per cent of aged care and disabled workers, those who care for our elderly and our vulnerable, will get nothing.

Earlier this year the Evatt Foundation examined wealth distribution across the country and found that the top 10 per cent of Australian households have watched their earnings grow at the expense of the middle 50 per cent of Australian households. That same report also found that the bottom 40 per cent have either no or negative wealth due to high levels of personal debt. The gap between Australians is growing, and it is against this backdrop that the proposed tax cut to the top 20 per cent of income earners is proposed.

If Australia is to be considered a nation that pulls together, that chips in and that cooperates in the pursuit of a better tomorrow, offering this tax cut is going in the wrong direction. I am reminded of something former Treasurer Joe Hockey said once in talking about the Medicare co-payment when he described the $6 federal government plan to charge people to get Medicare advice as 'just the price of two middies of beer'. For those earning over $80,000 or more, the $315 a year they may save on their tax bills is just the cost of a pizza delivered to their home once a month. For the bulk of Australians who fall outside of this income bracket, that money represents a lot more.

This tax cut is not the right priority for the government or the opposition, and the NXT is surprised that the Australian Labor Party has agreed to this measure given what could be done for the most vulnerable Australians or for our manufacturers, given all the other uses to which $4 billion could be put to use. It is not just that this money is not being spent better; the $4 billion that would be lost with this measure could be put to better use helping save Arrium from collapse—an event that would, as Professor John Spoehr has described, constitute a Detroit level economic event. This money could help manufacturing communities across southern Australia facing the spectre of 200,000 job losses with the end of the Australian car industry in 2017 transition to a better future and save tens of thousands of jobs. It is money that could be better spent in our aged-care industry, which has endured $1.8 billion in savage cuts and which supports some of our most vulnerable Australians with complex healthcare needs.

This money could help alleviate the cuts made to parents living in the country's poorest households. These are the parents, as ACOSS described in its submission to the Community Affairs Legislation Committee, who are facing cuts to social security. The cuts mean a sole parent with two children and no private income is now $50 a week worse off. But they do not have to be. We could put this money to work where it is most needed. We, as responsible, elected representatives of the Australian people, should put this money to work where it is most needed, and that is why the Nick Xenophon Team opposes this legislation.