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Tuesday, 25 November 2003
Page: 22711

Mr BAIRD (2:39 PM) —My question is addressed to the Treasurer. Would the Treasurer inform the House of the importance of keeping income tax rates at competitive levels? Is the Treasurer aware of any alternative policies?

Mr COSTELLO (Treasurer) —I thank the honourable member for Cook for his question. I can tell him that it is very important that we keep a competitive income tax system in this country. It is one of the reasons the government introduced $12 billion per annum of income tax cuts on 1 July 2000 and why we cut income tax by another $2.4 billion per annum commencing on 1 July this year. One of the things that the government proposed as part of its tax plan was to take the threshold for the top marginal rate, which was $50,000, and increase it to $75,000. That was the plan we took to the election, that was the plan we introduced in the parliament and that was the plan which the Labor Party, led by the member for Hotham, opposed on the grounds that they were opposed to giving tax cuts to the so-called rich—as if people earning between $50,000 and $75,000 these days can be considered rich.

If the Labor Party had supported our tax plan, that would be the threshold today. But unfortunately the Labor Party did not support it. So you can imagine how pleased we were to see the member for Werriwa come out recently and endorse the government's position by saying that people earning up to $80,000 a year deserve tax cuts. He had the opportunity to vote for that policy. Not only did he not vote for it, but, along with the member for Hotham, when he had the chance he voted against it. I always say, `Don't listen to what the Labor Party says; look at what the Labor Party does.' The big hero of the tax cut, the member for Werriwa, when he had his golden moment in this parliament, did not have the courage to nail himself to the floor and vote for those tax cuts.

We welcome the conversion of the member for Werriwa to our policy. Unfortunately he seems to be rather lonely in this position. No sooner had he put forward the position that people earning up to $80,000 deserve income tax cuts than colleagues, one after the other, came out to shoot him down. It was like the opening of the duck season. They came out one by one. The member for Grayndler came out and shot him down. The member for Lilley came out on a rooster shoot to shoot the duck, saying that he was sick of the constant drumbeat for changes to the top marginal tax rate. The member for Sydney got into the action, saying that her priorities—Mr Speaker, why are all their heads down at the moment?

The SPEAKER —The Treasurer has the call and will address his remarks through the chair.

Mr COSTELLO —Mr Speaker, it is just that when it falls silent I get very worried. The member for Brand came out next. He said, `You've got to look at what's happening to middle Australia, not upper income earners.' The member for Fremantle, who is the new ALP president—congratulations!—

Mr Hockey —Where is she today?

Honourable members interjecting

Mr COSTELLO —Her mother is sick; fair enough.

Honourable members interjecting

Mrs Crosio —Mr Speaker, I rise on a point of order. I find it offensive that the frontbench of the government question where Carmen Lawrence is. For their information, her mother was critically ill and I gave her leave to go there immediately. I regret to inform you her mother died last night. How dare you!

Mr COSTELLO —We understand completely.

Mr Fitzgibbon —Apologise!

Mr Gavan O'Connor —He should apologise!

The SPEAKER —Let me inform the member for Hunter, the member for Corio and the member for Melbourne that, had they been listening, the Treasurer in fact indicated his regret at the remarks he had made.

Mr COSTELLO —I understand completely. All our sympathies go to the member for Fremantle. Of course they do.

We come to the member for Melbourne. Not only have we had the member for Grayndler, the member for Lilley, the member for Sydney, the member for Brand and the member for Fremantle but yesterday, in scenes which I have never seen before, we had published in the Australianresearch that was commissioned by the member for Melbourne to undermine the shadow Treasurer's endorsement of the government's position. It was given to the Australian, as commissioned from the Parliamentary Library, by the shadow minister for communications, Mr Tanner. After he had given the commissioned research against his own shadow Treasurer to the Australian, Mr Tanner said:

Whatever the merits of tax cuts for high-income earners, it's not a smart political strategy for Labor.

Whose political strategy was it for Labor?

Mr Tanner —Yours.

Mr COSTELLO —Mine? No, it was actually the member for Werriwa's. The member for Werriwa came out and endorsed the government's position. Labor's communications spokesman went out and commissioned research from the Parliamentary Library and leaked it to the Australian.

The SPEAKER —The member for Braddon!

Mr COSTELLO —Apparently the Leader of the Opposition, in the party room today, told his troops—

The SPEAKER —The member for Braddon is defying the chair.

Mr COSTELLO —that they had to—

The SPEAKER —I warn the member for Braddon.

Mr COSTELLO —stop their public disagreements over tax policy. He said that he expected debate with discipline. A frontbencher, Kevin Rudd, came out saying: `We've had a few ragged moments in recent times. I don't think it's right to say it's all been hunky-dory.' That must be the understatement of the case. You will never hear it from us again, but on this one the member for Werriwa is right. People earning up to $80,000 do deserve income tax relief. They deserve that under our tax plan. It would have occurred if the Labor Party had voted for it. We call on the Labor Party to support that tax plan, even at this late hour.