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Wednesday, 13 May 1987
Page: 3080

Mr HOWARD —I address my question to the Minister for Social Security. I refer the Minister to his claim made in answer to a question by the honourable member for Barker that the Hawke Government has delivered real tax cuts to Australian families. How does the Minister justify that claim against the fact that in March 1983, when the Hawke Government came to power, a single income family with children paid 17.5 per cent of its income, at average weekly earnings, in tax, yet when the so-called Keating tax reforms are completed in July, that same family will pay 20.5 per cent?

Mr KEATING —Prior to the income tax cut of November 1982, a person on average weekly earnings faced an average tax rate of 23.1 per cent. The tax cut of 1982 reduced that to 20.9 per cent. I must add that that tax cut was not paid for or bought with the deficit coming down, it was with the deficit going up.

Mr Carlton —You tried that before.

Mr KEATING —I can understand the honourable member's embarrassment. The tax cut, which was essentially given for an election, was at a cost to the deficit-which, of course, was not published in the out year, as I mentioned yesterday. It went from a projected $1.4 billion to $9.6 billion over the next year. Following the income tax cuts of November 1984, the average tax rate faced by a person on average weekly earnings fell to 19.9 per cent-below the 23.1 per cent prior to November 1982, and lower than the rate after the 1982 cut. The tax cut that this Government delivered in 1984 was not of the Howard variety, where someone on $12,500 would have got about $1.30, and someone on $60,000 would have got about $18. We delivered $7.60 throughout the income range of $12,500 to $28,000. It reduced the 30 per cent rate to 25 per cent for that group. In other words, it was a highly redistributive tax cut. The further reductions in the marginal tax rates in December last year should reduce the average rate to 19.7-something to which my colleague the Minister for Social Security referred earlier. I repeat the points that he made about Medicare and about the social wage-wages as they would be under a coalition government, the social wage in general, Medicare, $1 billion for the first home owners scheme, 200,000 people owning their homes, and about the 780,000 people, who are also members of families, who are now back in jobs. Those are the elements of the social wage. We have achieved that by reducing the Budget deficit, not by blowing it out irresponsibly, as the Opposition did. We understand that the Leader of the Opposition, as Treasurer, squibbed all the big fights and that he could not get anything through the Cabinet, just as he could not get his television policy through his shadow Cabinet yesterday. He has never, ever, been able to deliver. He could not deliver as Treasurer and he cannot deliver as Leader of the Opposition. If we talk about deliverance, I must say that all that he could ever deliver would be another domestic recession, high unemployment and smashed incomes. That is why the people in the country understand where the quality lies, and will continue to support this Government's policies.

Madam SPEAKER —Order! I wish to tell the honourable member for Mackellar (Mr Carlton) that he cannot continue to interject at will.