Duncan Kerr (Denison, Australian Labor Party) Share this | Hansard source

The government seems to be quite thrown by the opposition’s support of these measures in the Tax Laws Amendment (Personal Income Tax Reduction) Bill 2007, but there really ought to be no surprise in relation to our support of these tax cuts because the opposition, for a very long time, has been identifying a failure of this government to address the welfare and economic needs of those who sit in the middle- and low-income bands. There is an old saying—I think it is attributable to Lord Keynes; I may be wrong and I apologise if I am—that taxation is the price paid for civilisation.

We all have to pay tax. We expect our governments to raise revenue, and we expect them to utilise those revenues in the public interest. What has been so particularly galling for the Labor Party, over the last five years in particular, is the squandering of the period of quite unprecedented economic growth that this country has benefited from. It has been a period of worldwide strength in the global economy. The actions of this government have been focused upon benefiting its narrow apex of most elite supporters, forgetting the large national issues that required significant infrastructure investment, and treating those in the middle- and low-income bands in Australia with indifference but expecting them still to give their political fealty to the Howard government. The chickens are coming home to roost.

One of the things that are inherent in politics is praising your own game and damning, either by faint praise or by direct criticism, the strength of your opponents. For the last year or two we have had Peter Costello, a flat track bully, to use cricketing parlance, boasting about how well the Howard government has managed the national economy, against a background of governments, competent and incompetent, across the globe benefiting from an economic circumstance of unprecedented generosity. I thought the Leader of the Opposition put his finger squarely on one of the key failures of the Howard government in his budget reply when he pointed out a very thoughtful remark of the former President of the United States: ‘The time to fix the roof is when the sun is shining.’

What is troubling about this government is that, at a time when the economy has been strong and when managing it has been a doddle, it has given tax cuts to the very apex of Australian society, frittering it away on those who least require the benevolence of the national government. It is forgetting the interests of those on lower and middle incomes and in particular avoiding its long-term responsibilities for investing in the looming challenges of the future: the challenges of climate change and of making certain that our education and health systems are fit for future generations.

The Leader of the Opposition’s remarks in his budget reply put me in mind of, I suppose, a grown-up version of Aesop’s fable The Ant and the Grasshopper. This government has been behaving like the grasshopper—fiddling around, squandering a period of economic growth when the summer sun is high and the corn is lush, and not putting it away into those large national projects that we will need when economic circumstances are not so robust. It has not planned for circumstances we will inevitably face. At some time in the future, we will need independent strength to weather changes in economic circumstances, when the engine rooms of China and the other economies which have given us the resource boom are not dragging us along quite so firmly in their wake. That is where we will truly see the cost of the economic failure to think ahead and plan for a national future. That has been so characteristic of the indolence of the last five years of the Howard-Costello government.

It is not surprising that those who have not been the focus of this government’s largesse over the last five years are feeling pretty damn grumpy about it. I would too, were I in their shoes, but I am not; I happen to be in the band of income earners that has benefited reasonably well from the Howard government’s largesse. I am not right up there at the top. The previous speaker made remarks about those who are paid $33 million or $34 million per annum in executive salaries. Their effective tax treatment has been so generous as to truly be shameful. But I sit in the upper-middle-income band, when you take it against average earners, and I have done okay. But, if you look at the vast majority of those that I represent in my electorate, who earn substantially less than I do, it is not surprising that household debt has increased from 50 per cent of disposable household income in 1996, when the Howard government came into office, to 150 per cent of disposable household income in this current year. It is not surprising that people in those lower and middle-income bands are not responding with huge whoops of joy to a government that has finally, in its hour of electoral need, found it in its stony heart to provide tax cuts to them.

The magnitude of this needs to be put in context. Those tax cuts represent in the order of $31 per week at the highest level. The norm would be in the order of $20 per week. That is less than two packets of cigarettes per week. It represents about the average increase that people are paying in petrol due to higher petrol prices. It goes nowhere near compensating people for the higher interest rates that have occurred in the last two years since this government was elected on its shabby commitment to keep interest rates low. This was projected as a pledge that interest rates would not be increased—another act of political chicanery and trickery, for which this government is duly famous.

As the previous speaker also said, we do not live by bread alone. There is a real sense of moral failure about this government. It is complicit in a range of less than savoury conduct, which undercuts any claim to legitimacy in the eyes of the broader Australian community. Who can forget the distinction between core and non-core promises that started this government’s retreat from the high statements of principle on which it came into office? A range of political circumstances have now led people in the community to look to someone with a higher sense of aspiration and to values which are a little more inspirational than they have had presented to them as being representative of their interests by their government. So many human values have been disregarded by this government. Think of the ‘children overboard’ incident, where the government—knowing the falsehood of its own account—projected it as truth throughout an election campaign. Think of the industrial relations Work Choices legislation, where the government said conditions were protected by law knowing it to be untrue. Now it is forced into retreat and is spending taxpayers’ money to persuade them of its next round of lies. Think now of Abu Ghraib, where the US coalition forces—

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