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Monday, 31 October 2011
Page: 12129


Ms OWENS (Parramatta) (21:23): I cannot blame the member for Lyne for being optimistic. I think those of us who were actually at the tax forum walked away with some optimism. It was a genuinely pleasant experience in many ways. It was good to be in a room with so many informed, intelligent people who were genuinely talking about the future and putting aside, at least for those few days, their self-interest to consider the future of the country. It is something that we do not get to do often enough in this place. We get instead the level of debate we have now, which is more negativity and sniping rather than discussing what should be the tax future of Australia for the benefit of its future citizens.

I do want to talk about the government's history of tax reform. Contrary to the member for Wannon's contribution, it is quite substantial. In the 2008 budget we delivered the first of three rounds of personal income tax cuts, and that was the budget in which we commissioned the Australia's Future Tax System Review. In the 2009 budget, a year later, we announced the secure and sustainable pension reforms which delivered a historic increase in the rate of the pension. It also introduced a new pension work bonus to reward pensioners who do more work, a gradual increase in the age pension from 65 to 67 and strengthened the indexation arrangement so that pensioners are now well over $100 a week better off.

In the following budget, in 2010, we announced the Stronger, Fairer, Simpler package of reforms to get a fairer return on our renewable resources. We also announced then business tax cuts for struggling firms, including a $1 billion small business tax break and a boost to national savings through fairer and more superannuation, and new investments in resource infrastructure. Most recently, our Clean Energy Future package included major reforms which triple the tax-free threshold from $6,000 to $18,000, taking around one million extra Australians out of the tax system and providing greater incentives to return to work.

And we have not exactly been sitting on our hands. In addition to those, we have increased the childcare rebate from 30 per cent to 50 per cent, introduced paid parental leave, increased family tax benefit for teenagers, cut the income test withdrawal rate for single parents with school-age kids by 20 per cent, introduced a more generous youth allowance income test, introduced a $5,000 motor vehicle write-off for small business, improved assistance for R&D through the new R&D tax offset, improved tax treatment for infrastructure investments and replaced the entrepreneurs tax offset with more effective support, such as the instant write-off.

All of this we have managed to do while keeping tax as a share of GDP below the level we inherited. Tax is currently 21.8 per cent of GDP this year, well below the 23.5 per cent we inherited in 2007-08 and the all-time record for the Liberal government of 24.1 per cent set in 2004-05 and 2005-06. So, when the member for Wannon claims that we are the high-taxing government, he should consider that, as a share of GDP, under Labor it is currently close to three per cent less than it was at their high in 2004-05 and 2005-06.

The tax forum discussed the next steps in the tax agenda, and it was a very productive discussion that recognised the patchwork economy and the ageing of the population and looked well into the future at the needs of Australians. We heard a consensus around targeted business tax measures to respond to those pressures. So we have announced a collaborative process to work them up, along with how to fund them from within the business tax system not the personal tax system.

There was also extraordinary progress on state taxes—a very productive discussion in the states session, with the state treasurers committing to develop a plan for state tax reform that provides a time line for harmonisation and the next steps for reform. It was an incredibly productive session.

We also announced that our first priority in personal tax is to go further and not just triple the tax-free threshold but to increase it all the way up to $21,000 as fiscal circumstances allow. We also flagged a number of other issues for early attention, including expanding the options available in the draw-down phase for superannuation and reforming not-for-profit concessions. It was a wonderful place to be for those few days— (Time expired)