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Wednesday, 23 May 2018
Page: 4316


Mr IRONS (Swan) (12:45): I rise to talk about the cornerstone of this government's great budget and the Treasury Laws Amendment (Personal Income Tax Plan) Bill 2018. This obviously comes on the back of the announcement we made about the million jobs that have been created since 2013, one of the promises that we've kept.

Opposition members interjecting

Mr IRONS: I hear a bit of noise from the other side. They were very good at keeping promises, weren't they? There was Grocery Watch and all those sort of things, which they seem to have forgotten about. An old adage comes to mind when we talk about taxes: there is no certainty in life except death and taxes. Taxes are necessary in a civil society to fund essential government services. But we should never lose sight of where this money actually comes from. It's not the government's money; it is money from hardworking Australians. We have an obligation to those hardworking Australians to ensure that we spend within our means, take as little as we possibly can and avoid the wasteful spending that those on the opposite side thrive on.

Our tax system needs reform; anyone who thinks it doesn't has blinkers on. This bill is just one part of our reform of the tax system. This bill will deliver lower, fairer and simpler taxes. We have to remember that this money, as I said before, is the money of every Australian. It is not the government's money. Australians have earned it, they have worked hard for it, they know how to spend it and they should have the right to spend it. No-one knows better how to spend money than those who have earned it. We have heard that from some very famous people and we have heard it from many on this side as well. But those opposite, like every other left-leaning political party around the world, seem to believe they know what is best for you. This is quite a paternalistic view; but, then again, those opposite have never trusted the Australian people with personal responsibility.

There are 71,736 taxpayers in my electorate of Swan and they stand to benefit from the upcoming low- and middle-income tax relief in 2018-19. There are 99,248 constituents on the electoral role in Swan. Of that number, 71,736 people are going to be better off under our personal income tax plan. That sounds pretty good to me.

This bill contains a number of changes that strike the right balance between improving the system for all Australians and ensuring that the top earners pay their fair share. We are helping people manage household budget pressures. Those opposite, whenever they are on the government benches, completely disregard the budgetary pressures on Australian families. This government, through this bill, is providing certainty for most working Australians that they will face the same tax rate over their working life. The coalition government's seven-year plan is affordable and fiscally responsible, as outlined in the budget. It will provide certainty to workers and, unlike the plans of those opposite, it will ensure that, if you make more money, if you work overtime or happen to come into share dividends or spend more time working on a weekend, you won't be penalised by a higher tax rate.

Labor has already announced more than $200 billion of taxes whilst in opposition. There is the housing tax, the savings tax, the family business tax and now we have the retirees tax. And we could probably see the introduction of a death tax under the opposition—obviously something the Australian people don't like. Those opposite, under the current Labor leader, are for higher taxes. Liberals are for lower taxes.

Opposition members interjecting

Mr IRONS: Perhaps they want to follow the advice of Bernie Sanders and mention the paradise of Venezuela under Maduro—because that seems to be where they have lifted their tax plan from. I heard the member for Mackellar speaking here about Venezuela and letting the member for Fenner know what the actual problems are with a high-taxing government and why people cross the borders to spend their money and purchase products because they can't afford to buy them in their own country, where the taxes are so high. Those opposite don't like self-funded retirees—we know that—or anyone who has taken a bit of a risk in their lives. We know those opposite have sold out any credentials to say they care about business.

This bill has three parts and is extended over seven years. Step 1 of this bill is providing tax relief to low- and middle-income earners to help ease the cost of living pressures. This bill will start permanent tax relief by introducing the low- and middle-income tax offset, a new non-refundable tax offset for the 2018-19, 2019-20, 2020-21 and 2021-22 income years. This offset will assist over 10 million Australians, with a maximum benefit of $530 being provided to around 4.4 million taxpayers. Taxpayers earning between $48,000 and $90,000 will receive the maximum benefit of $530. For some reason, those opposite seem to think that $530 isn't much to anyone. For context, for a uni student that difference will mean whether or not they can cover two years of the compulsory student union fees those opposite rammed through the parliament when they last sat on these benches. This offset will provide a benefit of up to $200 for taxpayers with taxable incomes up to $37,000. From $37,000 it will increase at a rate of three cents per dollar to a maximum benefit of $530 for taxable incomes of $48,000. The offset will phase out at a rate of 1.5 cents per dollar between the taxable incomes of $90,000 and $125,333.

Step 2 of this bill will be to combat bracket creep, something that people of our age and, I'm sure, the member for Moreton have lived under for many years. Many Australians have enormous disdain for it. This is something that the coalition want to get rid of, but those opposite seem to care about that as much as they care about small business. From 2018-19 the top threshold for 32.5 per cent income tax bracket will be increased from $87,000 to $90,000, reducing taxes by up to $135 for taxpayers earning above $87,000. This will help many in my electorate, considering that in the great state of Western Australia the average salary is already around $88,000. But, according to the member for McMahon, if they earn $3,000 or $4,000 more they are rich. From 2022-23 the top threshold of the 32.5 per cent bracket will be further increased from $90,000 to $120,000, and the top threshold of the 19 per cent bracket will be increased from $37,000 to $41,000. The low- and middle-income tax offset will be replaced by increasing the low income tax offset from $445 to $645. The increased LITO and the increase in the top threshold of the 19 per cent bracket guarantee the benefits of step 1.

Here are a few examples to see what it means for people in my electorate. An accountant, say, on $87,000 in Swan will have an extra $530 in his or her pocket from the budget year onwards. That means an extra $3,740 in their pocket over the first seven years of the tax plan. A shop assistant on $45,000 in Swan will have an extra $440 in their pocket from the budget year onwards. That means an extra $3,380 in their pocket over the first seven years of the tax plan as the tax relief increases. A hairdresser on $50,000 in Swan will have an extra $530 in their pocket from the budget year onwards, with an extra $3,740 in their pocket over the first seven years of the tax plan as the tax relief increases.

Mr Perrett: It's a tax refund.

Mr IRONS: Why don't you like hairdressers in Swan? I hear the member for Moreton having a go at hairdressers in Swan. Why don't you like hairdressers in Swan?

Mr Perrett interjecting

Mr IRONS: Have a look at yours! A high school teacher on $75,000 in Swan—

Mr Perrett interjecting

Mr IRONS: They always go to the man when they haven't got any substance to their argument. They always go to the man. A high school teacher on $75,000 in Swan will have an extra $530 in their pocket from the budget year onwards, with an extra $3,740 in their pocket over the first seven years of the tax plan.

Step 3 of this bill will simplify and flatten the tax system to ensure aspiration and that Australians who strive for their dreams are not disincentivised from earning more money. From the 2024-25 income year the top threshold of the 32.5 per cent tax bracket will be further increased from $120,000 to $200,000, completely removing the 37 per cent tax bracket and simplifying the personal income tax system. This means that people will stay in the same tax bracket over their working life. The top marginal rate of 45 per cent will remain, but only after their incomes reach more than $200,000. These changes will mean that around 94 per cent of taxpayers are projected to face a marginal tax rate of 32.5 per cent or less in 2024-25. This compares with a projected 63 per cent of taxpayers in 2024-25 under the current settings. Under this bill bracket creep will be practically nonexistent. True to form, the Labor Party has twisted the words and started their usual scare campaign, claiming we're only helping the rich. I thought the Prime Minister explained it well when he said:

Now under our long-term plan, when it’s fully set up, fully completed in seven years, someone earning $205,000 will make obviously five times as much as someone on $41,000 but they will pay 13 times as much tax. So they’ll earn five times as much but they’ll pay 13 times as much tax. So the idea that we are dismantling the progressive tax system is simply absurd.

It's clear the Australian people are smarter than Labor and its petty scare campaigns give them credit for being. People will be better off under our tax system. Those opposite like to denigrate the idea of thinking past an election cycle or two because they've never looked further than an election cycle. Perhaps that might mean those opposite standing by their principles and not changing their policy when the wind blows in a different direction to yesterday. To give some context, the government's tax plan means that 73 per cent of my electorate of 98,000 people will benefit from these changes. This tax plan nurtures the Australian dream, supports aspiration and will ensure those who earn more pay a fair share and do not get bumped up to a higher rate for earning just a few dollars more. I heard the member for Melbourne yesterday calling this plan a flat tax, similar to what former Speaker of the US Congress Newt Gingrich attempted to bring in during the 1990s. While the member for Melbourne has a silk tie on his neck and continues to bash his drum, funnily enough, from 1 March under the new EBA of the members he represented in the ETU A-grade class 4 electricians on service maintenance installation will actually earn more than $90,000 over a year. Are these electricians the rich the member from Melbourne wants to stoke class warfare against? It seems crazy.

This is bill is part of an approach the government is taking to ensure a stronger economy for all Australians. Those opposite seem to forget that this House doesn't create jobs or projects. It is hardworking Australians in small and medium businesses that employ people and keep this country going—and they are also the major employers of Australians. Our commitment to ensuring government gets out of the way and allows people the opportunity to forge their own path through life and to nurture individualism and aspiration will mean nothing but a greater Australia and innovation. Gone are the days of economic rationalisation from those opposite. Gone are the days of caring about the middle class and caring about Australia. We on this side of the chamber, unlike those opposite, have an incredible plan to surplus—not saying one thing to the people of Longman and another thing to the people of Fremantle. Labor say they'll tax more, spend more and come back to a surplus sooner, all while giving bigger tax cuts. It is a policy dilemma if ever I've heard one. The only thing the Australian public needs to remember is: watch what Labor do; don't listen to what they say. Those opposite said the mining tax wouldn't hurt WA, and they lied on that. They also said in 2007, when they got elected, that they'd give WA a $100 million infrastructure fund. It never happened. As I said before, watch what they do; don't listen to what they say. Those opposite, under the stewardship of the former member for Griffith and member for Lilley, would bring us to surplus and work to fix GST in Western Australia as well. They delivered nothing on the GST, not $1. Instead, they gave us the pink batts scandal and no plan for surplus.

Australians cannot trust Labor. They'll say anything to get their hands on the keys to the Lodge. I reflect on the famous 'The Forgotten People' speech by the great Sir Robert Menzies, our longest serving Prime Minister, when he spoke on the impact of taxes:

We have talked of income from savings as if it possessed a somewhat discreditable character. We have taxed it more and more heavily. We have spoken slightingly of the earning of interest at the very moment when we have advocated new pensions and social schemes. I have myself heard a minister of power and influence declare that no deprivation is suffered by a man if he still has the means to fill his stomach, clothe his body and keep a roof over his head. And yet the truth is, as I have endeavoured to show, that frugal people who strive for and obtain the margin above these materially necessary things are the whole foundation of a really active and developing national life.

I encourage those opposite to reconsider their approach to this bill. It will effectively deliver lower, fairer and simpler taxes for hardworking Australians, just as we have delivered a million jobs in the last five years.