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Wednesday, 19 August 2009
Page: 5394

Senator COONAN (2:00 PM) —My question is to the Minister representing the Treasurer, Senator Sherry. Will the minister confirm that in the lead-up to the May budget Treasury modelled an income-tax surcharge on so-called high-income earners?

Senator SHERRY (Assistant Treasurer) —As Senator Coonan would be well aware from her experience as a minister in the former government, Treasury model a great number of options. Ultimately it is the government of the day that determines what options are adopted, if indeed the particular option she is referring to was one. I can confirm that it is longstanding government practice not to comment on matters that may or may not have gone to cabinet or its committees. As the documents make clear, these various options were canvassed in the context of the 2009-10 budget in May and were not adopted.

What we do know, of course, is that the current shadow Treasurer, Mr Hockey, did want to adopt at least one of those options. It is interesting that the Liberal Party, as advanced by the arguments of the shadow Treasurer, Mr Hockey, are the only political party that want to increase taxes in Australia. They are the ones—

Senator Abetz —Mr President, I rise on a point of order. Sessional orders require that a minister’s answer be directly relevant to the question asked. The question asked was very simply whether or not Treasury had modelled an income-tax surcharge on so-called high-income earners. What other people’s policies might be is completely and utterly irrelevant.

Senator Chris Evans —On the point of order, Mr President: Senator Abetz raises a spurious point of order. Senator Sherry was directly responding to the question about whether consideration was given to these issues as part of the determination of the 2009-10 budget. Senator Sherry was directly responding on those issues. I think you ought to rule that he has dealt with it, as he should do, by being relevant to the question.

The PRESIDENT —I do consider that the minister is answering the question, but I point out that I cannot direct the minister to answer the question or respond to it in the particular manner that the person asking the question might wish. Senator Sherry, I do draw your attention to the question. If there is anything further you wish to add to the answer that you have given, you have 49 seconds remaining.

Senator SHERRY —Thank you, Mr President. This Labor government is very, very proud of its tax record. We have delivered on the election commitments and promises we made. The tax cuts we have delivered—not modelling or options but the tax cuts delivered by this government—we are very, very proud of. Let me give a couple of examples. We have doubled the low-income tax offset from $750 in 2007-08 to $1,500 by 1 July. We have increased the 30 per cent threshold from $30,100 to $37,100. We have also reduced the tax rate applying to income over $80,000 from 40 per cent to 38 per cent. Mr Hockey, the shadow Treasurer, is the only one who has talked about— (Time expired)

Senator COONAN —Mr President, I ask a supplementary question. Will the minister confirm that both the Treasurer and the Minister for Finance and Deregulation agree that Australia ‘should have an inheritance tax or some tax of that nature’ and that ‘deemed capital gains tax on death is another option’?

Senator SHERRY (Assistant Treasurer) —I take it that it is a reference to the front page article run by the Australian this Saturday that related to issues around types of taxes. As I have indicated, neither the Henry tax review nor the government has sought such research or proposals. I think I have described it as ‘utter rubbish’. Those were my comments in respect of the report in the Australian. What I would like to know on behalf of the government is: where is the Liberal Party’s secret tax review? The current leader, Mr Turnbull, committed to a review of the tax system— (Time expired)

Senator COONAN —Mr President, I have another supplementary question. I might refer Senator Sherry to page 38 of yesterday’s Hansard, when Mr Swan agreed with a statement made by the Minister for Finance and Deregulation. As the government have refused to rule out tax hikes to pay for their reckless spending, does the minister still stand by the ALP’s previous commitment, repeated before and after the 2007 election, not to increase taxes as a percentage of GDP?

Senator SHERRY (Assistant Treasurer) —The only political party and the only individual who has been talking about increasing taxes has been the Liberal Party as enunciated by Mr Joe Hockey. Much to your embarrassment, Mr Joe Hockey, the shadow Treasurer, some weeks ago—

Senator Coonan —Mr President, I have a point of order. It goes to the requirement in standing orders to be directly relevant. The question asked the minister whether the Labor Party stood by its previous commitment, repeated both before and after the 2007 election, not to increase taxes as a percentage of GDP. It is a perfectly straightforward, clear and unequivocal question that warrants an answer.

The PRESIDENT —Senator Sherry, I draw your attention to the fact that you have 47 seconds. Senator Ludwig on a point of order?

Senator LUDWIG —On the point of order, what are we now having with respect to a point of order being taken is a restatement of the whole question. What Senator Sherry has been doing—

Opposition senators interjecting—

Senator LUDWIG —I am entitled to be heard in silence.


Senator LUDWIG —In respect of the point of order, there is no point of order. Senator Sherry has been answering the question. The question goes to the issue of increasing tax. He is being directly relevant to the question by providing a response in relation to that. He is being directly relevant with that response.

The PRESIDENT —Senator Sherry, I draw your attention to the question. You have 47 seconds remaining to answer that question.

Senator SHERRY —I welcome these questions about tax. In fact, I was starting to feel a little bit left out, given the focus in the House of Representatives. Fire as many questions about tax as you like, because the Labor government is very proud of its record. The government is not going to pre-empt the Henry tax review. The report will be handed to the government at the end of this year. The examination of our tax system is an important issue to promote microeconomic reform. As I indicated earlier, with great flurry and fanfare Mr Turnbull announced the Ergas review into tax and has kept it secret. Where is the alternative government— (Time expired)