Gary Hardgrave (Moreton, Liberal Party) Share this | Hansard source

The member for Lilley has spoken for 19 minutes and 40 seconds, and still no tax plan from the alternative Treasurer of this country. The accusations made by the member for Higgins, the Hon. Peter Costello, the nation’s Treasurer, still stand: there is no alternative vision from those opposite. In Queensland we are very used to the member for Lilley. We know the famous expression ‘gilding the lily’, but I do not want to be unparliamentary by suggesting he is ‘the member for gilding the Lilley’. I think we should be greatly concerned that there is no tax plan and no disclosure to the people of Australia about what a potential Labor government would do when it comes to taxes. As I have remarked recently, 30 years ago the late Sir James Killen made the point about Labor in this place that they would ‘favour a tax on brains because they know that every year they would get a refund’.

I am greatly concerned that the hard work, the effort, the hard yards that the people of Australia would expect from those who want to be the government of Australia should produce a tax plan not just at the height of an election campaign that will come at a later point this year. It should be well disclosed, well announced and offered to the people so that there can be full and proper scrutiny. Meanwhile the member for Lilley spent most of his speech, in a juvenile way, suggesting that the Treasurer had stolen his playlunch and had eaten his Jatz crackers. He essentially suggested that Labor might have said something about this a couple of years ago and the ‘nasty Treasurer’ has taken it and done something with it. This is a government that actually does things. We take seriously the responsibility of managing a $1.1 trillion economy. We are a government that say, ‘We trust the people.’ That is what personal income tax cuts, as provided for in the Tax Laws Amendment (Personal Income Tax Reduction) Bill 2007, are all about.

This side of politics says, ‘We trust individual Australians to make the choices that are going to work best for themselves.’ I firmly believe that average Australians know best what to do with their money. They know better than government. I see the member for Melbourne is here. We know the quote from his 1994 speech about the idea of increasing personal income tax. I am sure he will have something to say about that during the debate, probably to distance himself or recant, or perhaps to reinforce the red thread. Nevertheless, it is absolutely important that we put a philosophy underpinning the government action. After all, if you do not have a mission statement, if you do not have logic under-pinning all of your actions, you may fail.

So the government very plainly say that our philosophy, our underpinning, our mission statement is about reinforcing the rights and responsibilities, the role, of individual citizens, trusting the people to do the best they can for themselves, to look after themselves, to spend money according to the priority they set for themselves, to make plans for the future and then, with their own personal ambitions met, with the generosity that we see in Australia today, to provide for those who are less fortunate.

It is nice to see the member for Barker here. The amount of tax people pay in this country is only ever going to be fair, is only ever going to be fully subscribed to if the system is simple enough and encourages personal initiative. If you have a taxation system which is complex, the people cannot understand it. There is a tax here, a tax there, every time you turn a page there is another tax—‘A system where we see a tax on a tax approach with stamp duty on things like insurance and house transfers, and things like tolls’. I see the Minister for Local Government, Territories and Roads is here. He understands this issue very clearly because he has been into my ‘parish’, as Sir James Killen used to call it. He has seen for himself. The Beattie government has a personal income tax imposed on people in my electorate that is not imposed on any other Queenslanders. It is called the toll on the Southern Brisbane Bypass—the best road you could imagine. I know the member for Barker would love to have the quality road that the Logan Motorway and Gateway Motorway represent, with four lanes of traffic. The sad reality is that only three to five per cent of its proper capacity is utilised on any given day. It is empty. It is heavily geared by the Queensland government. For every other road project they do in Queensland they borrow against the Southern Brisbane Bypass. It owes 10 times what it cost to build because it is so heavily geared. For people in my electorate to get access to this road they have to pay a personal tax. And they pay the GST—which the Queensland government receives in record amounts—thrown in on top.

If you go on at Persse Road at Runcorn and you want to travel to work at the wharves or over at the industrial areas on the south side of the river—if you go to the north side, you have to pay another tax on the bridge—the only bitumen that is taxed, that is tolled, is in my electorate. If you go on at Persse Road at Runcorn it is $1.50 each way. One woman said, ‘I’ve got three cars in my household. The most convenient road, other than using local streets, is this road. That is a total of $45 additional tax we pay each week in our house.’

The member for Lilley can talk all he likes to try to reclaim a spot in history. In his contribution in this House on Monday, he yearned for a return to the days of the accord where we saw wages crushed and businesses paying more tax in the form of superannuation guarantees, with no dividends being paid to the workers until down the track. The member for Lilley can try to rewrite history all he likes but the Labor Party stand for higher tax for one clear and simple reason: they do not trust the people. They believe government knows best how to spend your money: tax them high, spend it big, make people feel as though they are victims, always relying on the teat of government and never able to fend for themselves; whereas we on this side have a very simple, straightforward philosophy—that is, we trust the people.

We know we are also challenged by the people to deliver. We inherited a $96 billion debt, $10.5 billion in just one year—they overspent by $10½ billion in one year. At the time, spending on roads and education was lower than the amount of interest we were paying on the massive debt which they clocked up, and personal income taxes were higher as a result. Because of the Howard government’s strong economic management and the deliberate strategy of trusting the people, we have found ways in which to return on that trust through our own efforts and the work by average Australians. With more people in work and more people paying tax, it is quite right and reasonable that we secure and deliver a lower personal income tax rate. This is the fifth successive budget, the fifth in a row, where the government has been able to cut taxes and it is only because of our strong economic management.

Look at Labor budgets. I had a chap say to me the other day, ‘We’ve gone away from the old tradition where you tune in on that Tuesday budget night, wondering how much the smokes are going to go up and how much the grog is going to go up.’ Remember the Labor approach of midnight flits to turn up the wholesale sales tax? They did that a couple of times. They went to a couple of elections and said, ‘No new taxes: vote for us.’ Up went the wholesale sales tax from 10 per cent to 11 per cent and from 11 per cent to 12 per cent. That was the reward the people of Australia got after the 1993 election. Is it any wonder they had that famous baseball bat, which the Courier-Mail journalist Dennis Atkins, who was then working for Wayne Goss, used to talk about. He was also working with the member for Griffith. They were all in the same part of the Queensland government at the time they decided against the Wolffdene dam, which has robbed Queenslanders of water today. That baseball bat was out for one reason. Before 1996, the Australian government did not trust the people. It taxed highly, it increased taxes and it spent big.

People are definitely feeling the tax-take pressure in respect of fuel, but fuel taxes under this government are extremely low. This government has stopped the old Labor Party approach of high taxes that increase every year according to inflation. We cut fuel tax and froze it at 38c in the litre, not in the dollar. Some people in my electorate are paying extraordinarily high prices for fuel; I have seen prices of 120c, 125c and even 129.9c a litre. One day last week the price went from $1.15 to $1.29. That is a 14c increase overnight. In spite of that, motorists are still paying only 38c a litre in fuel tax. If this government had followed Labor’s example, motorists would be paying another 15c a litre in tax. That is the way Labor would have had it.

The member for Lilley raised commodity prices and said that some have increased at a much greater rate than inflation. It is the nature of commodity prices to bounce around. If a cyclone hits Queensland, bananas go up in price. I think there was a bit of market exploitation last year, although I have no evidence, Your Honour. I simply make the point that, as soon as the price of bananas went up, Coles and Woolworths decided that the price of every other type of fruit should go up as well. One day perhaps someone will ping them on that. Nevertheless, that is what happens with commodity prices.

Not only has this government cut personal income taxes for the fifth year in a row; it has also ensured that pensioners will receive a pension increase before prices increase. In other words, their pension will be fixed to male total average weekly earnings to ensure not only that it is always 25 per cent of that rate or above but also that it remains at 1.5 per cent above the rate of inflation. Essentially we have guaranteed, as Labor had in their high-taxing regime—the catch-up pay rise always put pensioners behind—that we now have a circumstance where the money is paid ahead and pensioners always stay ahead of inflation. Keeping inflation low means that pensioners are in a better position than they would have been. Personally, I would always like to see pensioners earning more. This government continues its efforts on behalf of people and continues to display its understanding of the people’s trust by trusting them completely. We can work even harder to deliver on that.

The government’s policy is very plain. It is built around trust in people, keeping taxes as low as possible and ensuring that people who are in the tax-paying part of our economy pay their fair share, but not one dollar more. This bill is about cutting tax. It will take effect in two stages—on 1 July 2007 and 1 July 2008. From 1 July 2007, the 30 per cent rate will apply only to income above $30,000, up from the current threshold of $25,000.

The government has examined the low-income tax offset, which assists people at the lower end of the earning scale and means that a larger number of people pay no tax. The offset will increase from $600 to $750 and will not begin to phase out until earnings reach $30,000. That means low-income earners who are eligible for the offset will pay no tax at all on their income up to $11,000. You and I, Mr Deputy Speaker, start to pay tax at $6,000. Admittedly, we are paying tax at a lower rate than ever before at 15c in the dollar. But, because of the offset, low-income earners will not begin to pay tax until they earn above $11,000. Many pensioners with a little bit of income and self-funded retirees who have set aside money for a rainy day—that is an unfortunate metaphor because we have not had much rain—know that in their retirement years they can draw on those savings without suffering the impost of additional tax burdens.

I believe these changes will continue the journey this government started in 1996 when it made the hard economic decisions to undo the mess Labor left us. We have delivered, and the country is strong and prosperous and people are encouraged and confident. I made some remarks in the House earlier this week about the real estate industry in my electorate, but it is still worth putting it on the record in this debate. We have seen record quarterly sales of real estate across the south side of Brisbane, which is evidence not only of all the Victorians flooding north of the Tweed but also that there is an enormous amount of confidence in the community in south-east Queensland. They understand very clearly about the Australian government’s strong economic management and the signals it is sending to them about being confident and knowing that we trust them to do what they can with their money, that they know best how to spend it. This has materialised in house purchases and investments. An extraordinary number of real estate agents have spoken to me about this issue, and that is a positive sign about where things are at.

The government also wants to encourage people at the lower end of the income scale to improve themselves. These personal tax changes will provide greater incentives for part-time workers to take on the extra shift because they will keep more of what they earn rather than pay it to the government and will also generate incentives for people to improve their skills. With better skills and experience, under the Australian government’s Workplace Relations Act they will be able to say to their employer, ‘I have skills, ability and experience; now pay me more.’ Employers who do not look after their staff in the current environment do not deserve to keep them. As long as staff and employers are involved in one-on-one discussions, that should continue.

The last thing anyone in my electorate wants to see is union bosses again involved in those negotiations, demanding but not offering, standing by the till in every small business deciding what goods and services will be sold, when the business will open and close and who should be hired and fired. That is the lack of trust that the Labor Party and the unions want returned in Australia. Who could forget the strikes held 20 years ago about tomato sauce not being available in restaurants? Who could forget the dim sim allowance? Workers at Darling Harbour went on strike because of the fumes wafting from Sussex Street. I am not talking about the fumes from the Labor Party headquarters but from the Chinese restaurants. We witnessed that sort of stupidity at a time of high personal tax and a time of lowering circumstance in the economy.

The government’s tax measures that are contained in this bill will, from 1 July next year, see the income thresholds for the 40 per cent and 45 per cent rates rising to $80,000 and $180,000 respectively. To put it another way, it will not be until you earn $80,000 a year that you will pay tax at the rate of 40c in the dollar. These figures were not imaginable under the previous government; they were never even thought about by the previous government. This government is saying, ‘Go and earn more money; go and back yourselves; go and back your ambitions; keep more of the money you earn and pay less in tax.’

It will ensure that 80 per cent of taxpayers have a marginal tax rate of no more than just 30c in the dollar, with only two per cent having the top marginal rate of 45c in the dollar, which occurs after you earn $180,000 in income. So if you are earning $50,000, three years ago you were paying $11,172 in tax; now you are paying just $9,600. That is a cut of 14 per cent. If you are earning $40,000, your tax has been cut by 24 per cent. If you are earning $30,000, your tax has been cut by 45 per cent. If you are earning $25,000, the reduction is 41 per cent; on $20,000 it is 37 per cent; and on $15,000 it is 54 per cent. These are the sorts of tax cut percentages that have been delivered over the last few years by this government. For 2007-08, taxpayers will not reach the highest tax rate until they earn more than 3½ times average weekly earnings. Next year, relative to the average wage, Australia’s top tax threshold will be the eighth highest in the OECD; three years ago, it was the 20th highest.

We have managed the economy in an effective way that has paid off debt, delivered dividends and made sure that those on fixed wages are supported, while those who are out there earning money are able to earn the money and keep it. That is because a sense of trust has now been returned to Australia. The last thing we want to see is a return to the lack-of-trust approach that the Labor Party always seems so proud of wanting to tout when it is in office. No more high-taxing governments; no more big-spending governments: this is very much about letting individuals in Australia take up the challenge to do it for themselves, and do it for Australia as well.

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