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Monday, 24 February 2014
Page: 526

Mr CIOBO (MoncrieffParliamentary Secretary to the Treasurer) (12:44): It is a pleasure to rise to speak on the coalition's delivery of its commitment in relation to this bill, the Tax Bonus for Working Australians Repeal Bill 2013. I must say, as numerous coalition speakers have in this debate, that this bill signifies the difference between the coalition and the previous Labor government. This bill encapsulates the difference of approach between the coalition and what we saw from Labor over the past six years. In many respects this is summed up in the pious amendment put forward by the shadow Treasurer. The amendment he seeks to make includes the words:

That all the words after “That” be omitted with a view to substituting the following words:

“whilst not declining to give the bill a second reading the House is of the opinion that the $900 payments, along with infrastructure investments including in schools, roads and social housing, prevented recession and saved hundreds of thousands of jobs and small businesses following the Global Financial Crisis”.

I am not surprised that Labor still, all these years later, is grasping on to that little sentence. Their line is that they were the visionaries who saved Australia from the GFC. What I hear repeated in talking points, across the length and breadth of this great brown land, is this: if it were not for the Labor Party's strong, decisive action, Australia would have tumbled into recession. The extraordinary thing is they just whitewash the real facts out of Australia's history on an ongoing basis.

The Labor Party does not like being reminded of the real facts. The Labor Party does not like being reminded of the fact that it was under their watch, when they had control of the Treasury benches, that we saw Australia's situation deteriorate from having net assets of billions of dollars—of having money put aside in the higher education fund and the Future Fund, and no net debt—to the Labor Party bequeathing to the next generation of Australians decades of debt in six short years because of their reckless spending. That is the legacy of the Australian Labor Party. We know that right now Australia is on track to reach $500 billion of debt. We know that, over the forward estimates, Labor left behind a forecast of $123 billion of budget deficits. And we know that, if we do nothing and keep to the same trajectory Labor placed this country on, we will reach a peak debt level of $667 billion. So when Labor moves silly, pious amendments like this one, when they pat themselves on the back and say, 'Weren't we great? Weren't we Labor Party visionaries? Look at the vision we had: we chained the next generations of Australians to decades of debt and saved the nation', I do not think the Labor Party's legacy is that great.

Australians see straight through the Australian Labor Party and that is why so many of them decided to support the coalition at the last federal election. Labor can run around all they want in an attempt to whitewash over the history of the last six years and say, 'Look at the Labor Party! We saved Australia from recession,' but they left it to my children and children across the country to pay back not only hundreds of billions of dollars of capital owing but also, probably, $100 billion or more of interest over the next 20 years. So when Labor talks about infrastructure such as investment in schools, investment in roads and investment in hospitals, I ask one simple question: how much more could we as a nation be investing if we did not have to repay $450 billion worth of debt? How much more could we as a nation be investing in roads, hospitals, health and schools if we did not have to pay back over $10 billion a year in interest? That is what Labor left behind.

The bill before the House today—the bill that coalition members have spoken so eloquently about—encapsulates the difference of approach between the coalition and the Labor Party. That difference is this: under us, the reckless spending stops. We will make sure we have turned our back on the failed approach of the Australian Labor Party—an approach that failed not only in this country but in jurisdictions around the world. We have seen the consequences of the approach of those in the Centre Left—the Socialists, the quasi-socialists and social democrats all around the world—as they spent and spent. They said, 'It's okay—we'll keep spending and we'll get there in the end.' But all they succeeded in doing was effectively bankrupting people across the planet. Now, as we see unemployment rates break through 20-plus per cent—despite the fact that those countries were spending and spending, just as Labor would have us do—we know their approach is a failed approach. For that reason, the coalition is very pleased to be implementing this bill to repeal the Tax Bonus for Working Australians Act and to ensure that the Commissioner of Taxation does not make any further tax bonus payments.

The government made a commitment to end this waste during the 2013 federal election and this repeal bill delivers on that commitment. Tax bonuses were paid to Australian residents who paid tax in the 2007-08 income year and met certain income tests. The payments were designed to provide stimulus to the Australian economy at the height of the global financial crisis, according to the Australian Labor Party. Eligible taxpayers received: $900 where their taxable income was up to and including $80,000; $600 where their taxable income was between $80,000 and $90,000; and $250 where their taxable income was between $90,000 and $100,000. Most payments were made in 2009 but a number of payments have continued to be made, through either the late banking of cheques or the issuing of an amended assessment for the 2007-08 income year where the taxpayer had an outstanding entitlement to the tax bonus. In fact, more than 430,000 cheques totalling more than $375 million were issued for the financial year following the year in which the stimulus payments were intended to be made. Nearly 24,000 cheques, totalling more than $20 million, were issued nearly two years after the global financial crisis. In fact, in the last financial year, more than 15,000 cheques were issued, totalling nearly $13 million—three years after the stimulus payments were first issued. At the time of introduction, in 2009, the total amount to be spent on tax bonus payments was estimated at around $8 billion.

In 2009, the government opposed the entire economic stimulus package of the then opposition, including the payments authorised by the tax bonus bill, on the grounds that the package was poorly targeted, ineffective in supporting employment and unaffordable. It was no surprise that the member for McMahon—the shadow Treasurer—and other opposition members continually quoted Professor Stiglitz about the stimulus package. After all, Stiglitz co-authored a book with Andrew Charlton, who was Prime Minister Rudd's senior economic adviser when the Rudd government was splashing the cash.

Given that stimulus to the economy is no longer required, this government considers that further payments are not warranted. This represents an opportunity to stop government waste and reckless spending. The ATO has ceased issuing cheques in most circumstances, except where it has been requested by the taxpayer. To ensure that further tax bonus payments cannot be made by the ATO, this bill repeals the tax bonus act. The removal of tax bonus payments will prevent $900 cheques being sent out to people four years after the global financial crisis. The coalition does not support the amendment moved by the opposition, that I outlined earlier, for the reasons I have already discussed. We can no longer afford to borrow money for this type of spending.

Government spending has never returned to the levels it was at prior to the global financial crisis. In the 2008-09 financial year alone, real government spending grew by more than 12 per cent. The government is now spending $100 billion a year more than in the final year of the Howard government. That is why this government is proceeding with a commission of audit, tasked to assess the role and scope of government as well as to ensure that taxpayers' money is spent wisely and in an efficient manner.

The Mid-Year Fiscal and Economic Outlook ruled on Labor's economic record. MYEFO showed what a mountain of debt and what sort of legacy has been left behind. As I said, it projects $123 billion of deficits over the forward estimates to 2016-17, and a peak debt load of $667 billion, or two-thirds of a trillion dollars, within a decade. That is what will occur unless changes are made. That is why the coalition are unapologetic about ending Labor's waste. That is why the coalition are unapologetic about ceasing the kind of reckless spending typified by the $900 cheques. That is why the coalition is unapologetic about refusing to continue down the path that Labor set us on—borrowing hundreds of billions of dollars just to spend frivolously and run around the community saying, 'Look at what we did.' Every time a Labor member stood up at a school assembly and said to Australian kids, 'Aren't we great because we've built this school hall?' the coalition said, 'No, that's not great, because those kids will be paying off that school hall for the next 20 or 30 years.' That is the legacy that Labor left behind, and it is the pinnacle of the reasons why we have brought forward this repeal bill. I commend it to the House.

The DEPUTY SPEAKER ( Mr Vasta ): The original question was that this bill be now read a second time. To this the honourable member for McMahon has moved as an amendment that all words after ‘That’ be omitted with a view to substituting other words. The immediate question is that the amendment be agreed to.

Question negatived.

Original question agreed to.

Bill read a second time.