Peter Slipper (Fisher, Liberal Party) Share this | Hansard source

The member opposite ought not to laugh because he would be well aware that this government inherited $96 billion of government debt. Through sound economic management over the last 11 years we have repaid all of that $96 billion. Had we not done so the government of the day would be paying $8½ billion in interest every year. The Labor Party actually spent more on interest than it spent on roads, education and schools. So by repaying $96 billion of debt this government has given the government the economic wherewithal to bring about very important and meaningful positive social outcomes such as the Higher Education Endowment Fund announced by the Treasurer in the budget. That fund will be implemented through legislation introduced by the minister at the table, Minister Bishop. I have spoken to university vice-chancellors and they are strongly supportive of this initiative, because they say that for the first time ever a government is prepared to put the investment in place—a fund which will enable tertiary education in Australia to obtain the world-class standard that we all desire for it.

The budget tax cuts mark a sensible spending decision by a government responsible for an economy that is doing well. The Tax Laws Amendment (Personal Income Tax Reduction) Bill 2007 serves to introduce changes to the Income Tax Act that were announced in the budget by the Treasurer. They will benefit taxpayers this year. Also included are further changes, which will take effect from July next year. Obviously there is always a great deal of deliberation and discussion in the parliament and in the media—and, I suppose you could say, more generally in the Australian community—about the benefits contained in any budget. But most people, regardless of whether they are government supporters, accept that this was a sound budget. In fact, the shadow Treasurer was able to say that he supported what was in the budget. He could not find a fault in the budget. It is good to see the shadow Treasurer agreeing with the Treasurer in this particular area. We ought to recognise that if the Labor Party were elected to government we would go back to what we had before. That, in my view, would be unacceptable. I am hopeful that when the election is held later this year the people of Australia will also find unacceptable a return to the same form of economic mismanagement we saw during those years of Labor, from 1983 to 1996.

As I said, through its formalisation of the income tax cuts this bill benefits taxpayers now and through until mid-2008. The income tax changes outlined in this bill will take effect from July this year and July next year. By increasing the upper level of the 17 per cent tax threshold from $25,000 to $30,000 and likewise the lower level of the 30 per cent tax threshold from $25,001 to $30,000, the government has enabled all taxpayers in these brackets to receive a reduced tax liability while also ensuring that spending patterns do not blow out to create undue pressure on inflation. The modified 17 per cent tax bracket will also be reduced to 15 per cent from July. Under this bill, in July 2008, the upper threshold for the 30 per cent tax bracket and the lower threshold for the 40 per cent tax bracket will be increased from $75,000 to $80,000. The ongoing pattern of sensible economic management since 1996 has enabled the coalition to announce these and future changes with confidence that the economy will support them.

Taxation is a contentious issue. It is necessary, of course, to collect funds to provide the services required by the community. I stress again that it is important that tax levels are not so high as to leave residents unnecessarily short of spending power. It is important to allow people to have the discretion to spend the money they earn. This bill also provides additional benefits. It amends the Income Tax Assessment Act 1936 to increase the maximum amount of the low-income tax offset and also raises the income level threshold at which this offset begins to reduce. It also amends the Medicare Levy Act 1986 to increase the income threshold under which some taxpayers are eligible for a tax rebate. The delivery of tax cuts is a sensible allocation to ordinary Australians by a government that has presided, and continues to preside, over a strong and stable economy.

The honourable member for Prospect mentioned the impact of interest rates and petrol price rises. Nobody likes petrol price rises but, as the member conceded, the price at the bowser is really determined by world fuel prices. Of course, those prices go up and down. A lot of people raise with me their concerns over high petrol prices. I can understand that concern; however, this is really a matter that is not under the control of the Australian government. It is under the control of the market. The honourable member opposite conceded that. He said that he hoped that the government made sure that taxpayers were not paying one cent more in petrol prices than would be desirable. I am quite sure that this is exactly what the government is doing.

He referred to interest rate rises. You have to look at these things in perspective. Under the Labor Party, interest rates were at an extraordinarily high level, and that was because the Labor Party was not running the Australian economy well. You have a situation where, although interest rates have increased to an extent, they are still at historically low levels. Interest rates are actually determined independently now, and not by the government of the day. That means that we have this objectivity with respect to the management of the Australian economy.

This government has made a lot of very substantial and important changes in the area of taxation. We are returning flexibility, and we are returning discretion to the taxpayer. The tax cuts included in the budget are strongly welcomed in my electorate and, I believe, more generally throughout the Australian community. We have been able to give tax cuts while at the same time we have been able to find the money for desirable social objectives. Honourable members would be well aware of the fact that in the budget the government was able to improve childcare assistance. We were able to improve investment in land transport infrastructure. We were able to assist retirees and carers. We were able to benefit our environment. We were able to bring benefits to rural areas. We were able to make our national security and defence an ongoing priority, and we were able to improve health and aged care.

This is a case where there are only winners; there are no losers. The fact that along with the desirable social spending included in the budget we are able to have tax cuts means that this government has got the balance right. I am very pleased to be able to commend the Tax Laws Amendment (Personal Income Tax Reduction) Bill 2007 to the House.

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