Wayne Swan (Lilley, Australian Labor Party, Shadow Treasurer) Share this | Hansard source

I withdraw. He quoted me as saying:

I am not anticipating taking forward any significant change to the personal income tax system at this stage.

Conveniently, the Treasurer neglected to mention that I immediately went on to say:

... except to make this point —that many of the disincentives, particularly for second income earners that are still in the system, are punishing a lot of those second income earners when they work a few additional hours and they’re mainly women.

Peter Costello runs probably, when it comes to tax, one of the most discriminating personal income tax systems against part-time working women in the world and that’s not good.

But we’ll take our time to work our way through the area but in terms of personal income tax we’ve finally got into the system now a much fairer outcome than we’ve had for a while and that has some impact on incentives lower down and that’s a good thing. There’s still problems in that area and we’d hope to be able in time to do more.

The moral of the story: never trust the Treasurer’s version of events; they are often inaccurate. Labor will be taking a tax policy to the next election. The Treasurer already knows that in our budget reply we proposed a halving of withholding tax on foreign managed funds in Australia. As an aside, I look forward to the next occasion he talks to the Australian managed funds industry and explains why the nation’s Treasurer does not like foreign investment. As for personal income tax, I have stated on the record that Labor will pay every dollar of the tax cuts in this budget if elected. Further, as I said at the Press Club, we will see what further improvements can be made to improve incentives for middle- and low-income earners, subject to our strict budget rules and other competing priorities for the election.

Even after this budget, many middle-income families with children face steep effective marginal tax rates. These disincentives have, in some cases, been exacerbated by a new overlap that has been created with the taper range for the low-income tax offset, family tax benefit A and the 30c marginal tax rate. In addition, many second-income earners still face effective marginal tax rates in excess of 60 per cent. Better incentives are needed in these areas, but we will only do what is affordable. The Treasurer, on the other hand, confirmed on the weekend that he will only be taking his budget tax cuts to the election. So expect no extra help from the Treasurer, but expect much more desperation and untruths.

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