Chris Bowen (Prospect, Australian Labor Party, Shadow Assistant Treasurer) Share this | Hansard source

Labor reduced it from 60 per cent, when John Howard handed over the Treasury to Paul Keating, to 49 per cent—which, at that stage, was close to world’s best practice; it was cutting edge. Of course, the world has moved on and we need to do better but, at that stage, 49 per cent was one of the world’s lowest top marginal tax rates. So let us have none of this nonsense. Let us have none of this selective quoting, where the government gives a very one-sided account of history in question time—which it is able to do in question time because it is the government’s forum. Let us have none of this rewriting of history—that the Labor Party does not propose tax cuts in office; only the government does.

The Labor Party introduced tax reform that was opposed by those who now sit opposite. We introduced tax reform to broaden the base so as to provide tax relief to low- and middle-income earners. We introduced the fringe benefits tax and the capital gains tax to broaden the base so that personal tax rates could be cut across the board. The Prime Minister said, ‘The Labor Party has opposed all our reforms.’ Let us not forget that the Prime Minister’s party opposed some of the great economic reforms introduced by the Hawke and Keating Labor governments that reduced personal tax rates and lifted the burden of high taxation, with a punishing top marginal tax rate of 60 per cent. They opposed base broadening. They opposed the introduction of a fringe benefits tax and a capital gains tax to broaden the base. They opposed the superannuation reforms of the Hawke and Keating governments, which they now wrap themselves in as ‘the best friend superannuation ever had’. Now they come in here and say, ‘We’re the best friend superannuation ever had.’ They opposed it at conception but, now, they pretend to be the ‘best friend’. Let us have none of this nonsense. All of these measures were opposed by the Liberal and National Party opposition. Conversely, the Labor Party stands here today in support of these tax cuts.

The Labor Party stand here today in support of this measure, which goes some way to dealing with the punishingly high effective marginal tax rates suffered by low- and middle-income earners in this country. These tax rates are some of the highest in the world. We stand here in support of economic reform to increase participation rates, to encourage more people into the workforce. We support proper reforms, not punitive and ideologically driven reforms which increase the effective marginal tax rates that are encompassed in the government’s so-called Welfare to Work reforms. We support real reform to reduce the effective marginal tax rates and to increase the incentives for people moving from welfare to work. These tax cuts are welcome because they are good for the economy and good for low- and middle-income earners; however, the real job of reform will fall to the Rudd Labor government should we receive that mandate later this year.

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