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Tuesday, 22 May 2018
Page: 4187

Mr THISTLETHWAITE (Kingsford Smith) (18:22): The government's proposal is a con job. Their taxation Treasury laws income tax plan is nothing more than a con job. We know what the government are really interested in. The centrepiece of their tax plan is the corporate tax cut. This is the tax cut for big businesses, including the big banks that have been involved in the scandals and rip-offs of millions of Australians in the financial and banking sector in this country. That is their priority. They want to give big business a corporate tax cut, of which most of the benefit will flow to overseas investors because of the operation of dividend imputation. But the government worked out that their enterprise tax plan was so unpopular and, by the fact that they were actually increasing taxes on Australians with an increase in the Medicare levy, they needed to do something about it. This is what they came up with: a tax plan that gives a rebate to taxpayers, a very small rebate, in the immediate years.

But the bigger impact will be in 2022 and 2024, down the track, and, of course, it's a con. It's a con in asking the Australian public to again vote for Malcolm Turnbull as Prime Minister for another two occasions before there will be any benefit. Labor, of course, sees through this con and has offered a much fairer and more reasonable package of tax reform and tax cuts that would provide more immediate relief, particularly for low- to middle-income workers and families in this country, and would be a larger tax cut for those people. Ours would be about $928 for people in the $50,000 to $90,000 income bracket compared to the government's $530. Ours comes into effect every year.

This income tax plan of the government is really a con job and they're trying to lay off some of the criticism that they're getting from the general public about their corporate tax plan and cutting corporate taxes at a time when most Australians are doing it tough—when pensioners are struggling with the fact that taper rates have been changed by this government and the fact that they're trying to remove the energy supplement, and when workers are facing record low wages growth in this country and are struggling to meet the cost of electricity bills, private health insurance, child care and education costs, which are going up for their families. Yet this government wants to give a corporate tax cut to the wealthiest corporations in this country.

With respect to the bill that we're debating here tonight, the shadow Treasurer has moved an amendment, which I'm of course supporting. It would give effect to the government's Personal Income Tax Plan. Labor's already indicated that we will support the first stage of that tax plan—the tax cuts that take effect on 1 July 2018. A Shorten Labor government, if elected, would deliver bigger tax cuts on 1 July 2019 and ours would be permanent. That's a fairer tax cut for 10 million working Australians. It's clear that, if the government split this bill, as proposed by the shadow Treasurer, we would be able to vote for the 1 July 2018 changes only. It would have our full support and we could pass that right now. We're ready to go. We could provide that income tax relief for many Australians. So, for full tax certainty, the government should consider splitting this bill and the tax cuts scheduled to start on 1 July 2018 so that they can pass without delay.

A plan that costs over $13 billion over the forward estimates and, according to the government, $140 billion over the medium term, does deserve some scrutiny. The shocking track record of this government on key budget measures means that they don't get a leave pass on this issue. Labor will do the job of proper opposition and will scrutinise and ask questions about the actual cost of their proposed plan over the medium term. The Prime Minister and the Treasurer have been hiding specific details of this plan, including the year-by-year costs beyond the forward estimates. They're hiding and Labor is seeking. Our senators have been asking Treasury for more detailed financial information in estimates—the year-by-year breakdown of the tranches and the individual components of the tranches—so that we, the parliament and the Australian people as a whole, can have better information about what the government is proposing and how much it's actually going to cost the Australian economy. That's not an unreasonable ask. In fact, it's incumbent upon good oppositions to ask those questions. That's the purpose of question time: to hold the government to account for the expenditure of public moneys that they are undertaking on behalf of the Australian people. That's what we've been doing in question time and in budget estimates, but we've not been getting answers from the government. We've asked for a breakdown by gender as well and by electorate based information to ensure that we have the best possible information to make a decision on this. The fact is that 2022 is a long way away and 2024 is even further away. For this government to say that they are certain that they can deliver tax cuts in 2024 is a pipe dream, and it's somewhat irresponsible. And 2025 is even further away.

Australians are giving up on this Liberal-National government when it comes to providing transparency and accountability in some of their policies and how much they'll cost. The government, led by the Liberals, have no vision for the future of their party, let alone the future of our nation. We're taking time to consider our position on these proposed tax cuts because we need that information to make an informed decision. At Senate estimates, as well as at a separate Senate inquiry on this bill, we will ask the necessary questions to hopefully be given the information that the government, quite frankly, are unable to give us.

Labor's already announced our personal income tax policy for the next term, and that's what governments and oppositions should be doing instead of playing silly games about what we might do in the foreseeable circumstances in 2024. Most people aren't sure what the international economy's going to look like in 2024, and the Treasurer doesn't know either. Maybe the Liberals' self-appointed asset trader, the member for Warringah, who wants to buy and sell power stations on the government's book, has a better idea of what global markets are going to look like in 2024, but I must say it's not likely.

The fact is the government's income tax plan is fiscally reckless. Now is the time to be strengthening our fiscal buffers and building Australia's resilience to a shock. This is something that's been recognised by international agencies that work in the economic space, most notably the International Monetary Fund, which just last month said:

Decisive action is needed now to strengthen fiscal buffers, taking full advantage of the cyclical upswing in economic activity.

Yet here we have a government committing billions of dollars on the back of temporary global economic upswing conditions, and we've seen how this plays out before. The government is locking in policy commitments that don't come into effect for seven years, and it won't provide the information about how much it will cost over that period. That is irresponsible. That is a reckless fiscal approach to budgeting in this country, despite the government's own budget papers stating very clearly:

While … risks appear more balanced in the short term … In the longer term, the global economy faces … challenges.

For the first time in his own budget papers, the Treasurer has acknowledged there are snags with the medium-term forecasts. The Treasurer is now saying that there are 'drawbacks' with his medium-term forecasts, but he wants us to sign up to tax cuts in seven years—not likely. We know that wages growth is stubbornly low, stuck at around that two per cent figure on the wage price index, and that real incomes for many Australians are going backwards, and the assumptions that have been built into the budget and the forward estimates about wages growth are now looking shockingly unreliable. They are looking overly ambitious and will not deliver the revenue that the government says they will, and this is something that's beginning to be recognised by many economic commentators.

The responsible thing to do is to provide the information about how you're going to fund this tax plan in the immediate term but also in the five- and seven-year period that you claim. A Shorten Labor government, if we are elected at the next election, will make sure that we provide that information but also that more working Australians get a tax refund. Under our plan, every person earning less than $125,000 a year will receive a bigger tax cut under Labor than under the Liberals. That's more than four million people who will be better off by $398 a year compared to the Liberals. With Labor's tax refund, a teacher on $65,000 a year would receive a tax cut of $928 a year. A couple earning $90,000 and $50,000 respectively would receive a tax cut of $1,855 a year. Again, that choice is clear. Yet we've still heard from government members, dutifully reading from their talking points, about how their tax plan makes things fair. When you compare it to what Labor is proposing, it's not fair at all. As I mentioned at the beginning, it's no more than a con job to hide and try to smooth over the fact that their real intent is to provide a large tax cut for big corporations.

In conclusion, this proposal that we're debating here today is a ruse. It provides a tax cut as a shadow for what is really their main intent, and that is the corporate tax cuts to provide a big handout to some of the biggest businesses in the country, including the big banks. They won't provide the necessary information for this parliament and the Labor Party to make an informed choice about the costs of their tax cuts going into the future, particularly at the five- and seven-year period. Without that information it's incumbent upon us to ensure that we do all we can through budget estimates and questions in the parliament to deliver that information for the Australian people, so that they can make an informed choice.

In the meantime, people have a clear choice, under Labor, of paying down more of the debt and deficit, ensuring that we're investing in services like Medicare and TAFE, putting $17 billion back into the school system, reversing the cuts to hospitals, investing in infrastructure and at the same time delivering fairer and larger tax cuts for middle-income earners. I urge all members of parliament to support the very sensible amendment that's been moved by the shadow Treasurer.