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Wednesday, 19 August 2009
Page: 5410

Senator MARK BISHOP (3:07 PM) —Senator Coonan has moved to take note of the answers to various questions to Senator Sherry on taxation and the like. The proper place to start in this debate on taxation policy is to look at the record of the current government in the area of taxation, not to look at alternatives in the paper, not to look at what might be canvassed in various reviews being conducted by Treasury officials and reported on a regular basis in the press and not to look at what various writers might say in the press on a daily basis about what they think should be the basis of future taxation policy in this country. The appropriate place to start, if one is going to run a critique on the current taxation policy of the current government, is to look and see what that government has said, what its policy prescriptions have been and what it has done over the last 18 or 20 months—the period it has been in power—and has been able to give effect to taxation policy.

Let us be quite clear at the outset that this government is extraordinarily proud of its record in the area of taxation policy and implementation over the last 18 months. We have provided tax cuts, we have provided targeted assistance and we have provided welfare benefits to those most in need. At the same time as providing assistance to all of those people who could have been grossly harmed by the fallout of the global financial crisis, we have also incentivised the system and provided a fair day’s work for a fair day’s pay.

Let us look at some of the measures that the current government has introduced. We have doubled the low-income tax offset from $750 in the financial year 2007-08 to $1,500 from 1 July next year. We are increasing the 30 per cent tax-free threshold from $30,001 to $37,000 and, in addition to those benefits, which particularly assist part-time and casual workers and low-income earners, the government has also reduced the tax rate applying to income over $80,000 from 40 per cent to 38 per cent and has shown its commitment to further tax reductions at this end of the scale with another reduction to 37 per cent from 1 July 2010. So the current government, critiqued by Senator Coonan, has, in its first 18 months in power, done more for low- and middle-income earners than the previous Liberal-National Party coalition government did in its 12 years of power from 1996 through until November 2007.

What will be the net impact of those taxation reductions and those taxation concessions? We say, and the facts are starting to bear it out as economic activity comes through from increasing consumer spending, that the government’s policies are delivering, and will continue to deliver, substantial real increases in disposable income for low- and middle-income earners. These are increases above, in excess of and significantly over the cost of living. By 2010-11, on current plans, current policies and current laws, disposable incomes of, for example, single pensioners will have gone up by 17 per cent in real terms—in a three year period, 17.1 per cent in real terms—overcoming all of the cutbacks and all of the declines in real dollars that welfare recipients and pension beneficiaries suffered under the deliberate policies of the previous government over 12 long years. Not only will welfare and pension recipients profit from government taxation policies but disposable incomes of working families will also rise. For someone on average wages, for example, and someone working one day in three, disposable incomes will be up by over seven per cent and disposable incomes of single persons earning two-thirds of average wages will also be up in excess of seven per cent. Our policies were implemented in an emerging global financial crisis. We legislated tax reform for last year, next financial year and the year after to assist low- and middle-income families and low- and middle-income earners. We did not forget pensioners. We did not forget those in receipt of welfare benefits. (Time expired)