Peter Costello (Higgins, Liberal Party, Treasurer) Share this | Hansard source

I thank the honourable member for Fairfax for his question. The good news is that from 1 July all Australians will have their tax cut. This follows on from the government’s tax cuts in five of the last six budgets. The government cut tax in 2000, 2003, 2004, 2005 and 2006. From 1 July we will be lifting the low-income tax offsets so that you will not pay tax until you reach $10,000 if you are a low-income earner. We will be increasing thresholds so you will stay on the 15 per cent rate to $25,000. We will be cutting the top rates—the 47c rate to 45c and the 42c rate to 40c—and, as a consequence of that, we will be giving much more incentive.

One of the ways in which you can assess the effect of policy is by looking at real disposable income, which is wages and allowances less tax. Let me give the House an example—a single-income family with two children. In 1996 their real disposable income was $38,171. In 2006 it is estimated that their real disposable income will be $52,024, a 36.3 per cent increase. That is because wages have gone up, taxes have come down and family benefits have improved. The government first reduced the family taper from 50 per cent to 30 per cent, and then we reduced it further. We lifted the threshold for the maximum rate of family tax benefit in 2005 to $37,500 and in this budget to $40,000.

The other great improvement to the family tax benefit system was the $600 lump sum payment per child per annum. There were some people who claimed that was not real money. As I was sitting in my cold Canberra flat last night, alone, it was too late for Lateline, so I turned to my favourite reading matter—The Latham Diaries. The Latham Diaries told us:

The night before the policy release, I—

this is Mr Latham—

asked Swan—

that is the member for Lilley—

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