House debates

Wednesday, 21 June 2017

Matters of Public Importance

Workplace Relations

3:39 pm

Photo of David ColemanDavid Coleman (Banks, Liberal Party) Share this | Hansard source

But, as the member for Goldstein rightly interjects, it is a cash-grab policy, because how does increasing the tax by 50 per cent on someone who invests in a farm outside Mudgee address housing affordability in the major capital cities? How does increasing capital gains tax by 50 per cent on someone who invests in a cafe have anything to do with housing affordability or indeed somebody who invests in a factory? What about all those situations in Australia at the moment where factory workers get together and buy the business to keep it going? If they do that in the future under Labor, they will pay 50 per cent more tax. That is a policy that kills investment and kills jobs. It is an extremely bad idea.

They also want to have an extremely high marginal rate of tax for people who earn over $87,000 because they say, in relation to funding the NDIS, that people who are earning over $87,000 are rich, that they can afford to contribute to the funding of the NDIS and so they pay a hugely disproportionate burden.

At the $87,000 rate, your marginal rate of tax, including the Medicare levy, should be about 39 per cent. Under the policy of those opposite, as soon as you hit $87,000, you pay the Medicare levy of $400 plus. So what that means is: if you are earning $90,000, your effective rate of tax over $87,000 is actually 54 per cent. If you are earning $92,000, your effective rate of tax above $87,000 is 48 per cent; $95,000, 45 per cent; and $100,000, 43 per cent. That is creating a very substantial disincentive for those people who are not wealthy, certainly, in my electorate, where the median house price is well over a million dollars. Someone who is earning $87,000 is far from wealthy, but those opposite say: 'Let's tax them at an effectively higher marginal rate of tax than they would otherwise pay.'

They talk about the big end of town and millionaires and billionaires, but their definition of that is a small business that turns over $2 million—it probably makes a five per cent profit, so really it is making $100,000 a year—or somebody who earns over $87,000 a year, which in metropolitan Australia is by no means a large amount of money. They oppose sensible measures to crack down on multinational tax avoidance and have been very successful and have already raised over $2 million. Those opposite: they are about higher taxes. They do not understand what it takes to run an economy; this side does, and we have much stronger policies on tax.

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