Jason Falinski (Mackellar, Liberal Party) Share this | Hansard source

That's it, thank you—that one!

There are some simple questions. Do you believe that this parliament should allow people to keep what they have earned? Do you believe that any tax system should incentivise work and effort and risk? And do you believe in fairness? If you believe in any of those things—much less all of them—then you need to vote for this law. The Labor Party are saying that they will oppose this tax cut because it's not big enough. Well, let's see them vote for a tax cut that isn't for foreign backpackers. Let's see them vote for a tax cut that's for Australians.

Despite claiming to be progressive, Bill Shorten is succumbing to the archaic class warfare of centuries ago. Over the past five years, we've witnessed his efforts to snatch hard-earned money and relocate it to those apparently deemed more deserving. The Leader of the Opposition essentially seeks to align our democracy with redistributive ideologies, threatening our economic equality and wellbeing. However, any reasonable person would see that Labor's plan to further redistribute income is without valid justification. Australia's top 10 per cent today already contribute almost half of the total net tax paid. Moreover, the top one per cent, about 90,000 individuals, are liable for approximately 17 per cent of the government's income tax revenue. There is absolutely no need to propagate this existing inequality. There is also no need to increase income tax for any Australian, regardless of wealth. Our country needs lower, fairer and simpler taxes for every Australian. This bill, which seeks to impose the Personal Income Tax Plan, outlines a threefold strategy to alleviate household budget pressures and provide certainty for most working Australians. The changes strike the right balance between lower tax and equity. Simply put, this bill ensures that the top 10 per cent pay their fair share of tax without compromising their entitlement to lower rates.

We have to remember that this is the money of everyday Australians and not of the government. Taxpayers earn every dollar of income through laborious work and labour. They have the right to spend it as they wish with as little exogenous interference as possible. This seven-year plan allows them to do just that. In addition to lowering taxes, we are providing Australians with the certainty that they will face the same tax rate over the majority of their working lives. Unlike anything proposed by those on your left, Mr Deputy Speaker, this plan is affordable and fiscally responsible. Each dollar spared by taxpayers is not compensated by another increased tax, but also isn't the cause of a budget deficit. In fact, our federal budget is set to return to surplus in less than two years time. Whilst Labor has already announced over $200 billion of taxes in opposition—the housing tax, the savings tax, the family business tax and the retirees tax—we as the government have successfully sought to reduce our taxpayers' burden. At the same time we've put an end to the debt-creating machine initiated by the Rudd government.

As I mentioned earlier, this bill improves the welfare of taxpayers via three steps. Step 1 is to provide tax relief to low- and middle-income earners and thus help ease cost of living pressures. The bill will introduce the low- and middle-income tax offset, a new non-refundable tax offset for the 2018-19 to 2021-22 financial years. This counterbalance will provide a maximum benefit of $530 to 4.4 million taxpayers and assist more than 10 million Australians overall. The maximum $530 benefit will be distributed to those earning between $48,000 and $90,000. The offset will also provide a benefit of up to $200 for taxpayers earning up to $37,000. On the other end it will phase out at a rate of 1½ cents per dollar for those with incomes between $90,000 and $125,000 a year. Step 2 of the personal tax plan combats bracket creep. From 2018-19 the top threshold of the 32½ per cent bracket will be extended from $87,000 to $90,000 per annum, thereby reducing the taxes by up to $135 for those with incomes between these two figures. From 2022-23, the top threshold of the 32½ per cent tax bracket will be further increased from $90,000 to $120,000 while the upper threshold of the 19 per cent bracket will be increased from $37,000 to $41,000. Further, the low-income tax offset will be extended from $445 to $645. Such augmentations guarantee endurance of the benefits outlined in step 1. Finally, the third step proposed in this bill is the simplification and flattening of the tax system. From the 2024 financial year the upper threshold of the 32½ per cent bracket will be further extended from $120,000 to $200,000, consequently removing the 37 per cent tax bracket in its entirety. This results in a greater probability of a person remaining in the same tax bracket for their entire working life. Note that the top marginal rate of 45 per cent will remain, but only for those with incomes exceeding $200,000. As a result of these changes, more than nine in 10 taxpayers are projected to face a marginal rate of 32½ per cent or less in 2024-25. Compare this with the estimated 63 per cent under current settings and you'll notice that our tax plan delivers a utility-maximising equitable scheme for all Australians.

This bill can be summarised as a long-term sustainable plan to reduce income tax payable for nearly every Australian. It puts an end to bracket creep and provides long-lasting certainty in our tax system. The Personal Income Tax Plan is a package. We ask that the complete package, the complete promise, be legislated by this parliament. It is an all-or-nothing deal. If it is passed, taxpayers will be significantly ameliorated. If it is not, parliament will have failed the people it seeks to represent and will deepen it's budget deficit. Australians need this plan. They need lower income tax and stability in the same way that businesses need an equitable corporate tax system with decreased rates.

The Turnbull government has listened to the needs of taxpayers. We are providing relief where relief is needed and stricter policy where severity is due. Through legislation—both niche and expansive—our government is creating a prosperous economic environment. We are fulfilling our purpose as the great enabler not the great enforcer. To see how this is the case one need only look at any of the government's recent propositions.

The Treasury Laws Amendment (Black Economy Taskforce Measures No. 1) Bill, for instance, aims to introduce criminal offences for the production, distribution, possession and use of electronic sales and suppression tools to falsify tax records. It proposes a specific method by which government can knuckle down on the underground economy. Fiscal crime such as sales suppression contributes to a black economy potentially as large as three per cent of GDP. This is $50 billion in unreported income, which results in approximately $4 billion of lost government revenue and abuse of our welfare system. It is thus highly significant that our government is tackling such a perverse market. Instead of targeting the compliant wealthy, we are knuckling down on lost revenue from those who rort the system, manipulate the cash economy, launder money, phoenix companies, commit fraud and underreport income.

In addition to such expansive bills, the government has proposed a number of nitty-gritty policy amendments, such as the Primary Industries Research and Development Amendment Bill. This incoming legislation aims to combat the ghastly cost of the statutory marketing levy by allowing R&D corporations to undertake marketing activities with funds raised by voluntary contributions. For rural industries, this reduced regulatory burden results in more time spent on productivity-enhancing innovation. For individual Australians, the removal of the levy, and thus lower costs, engenders lower prices. For this government, as always, reduced regulation results in more resources being devoted to higher priority areas.

It is not difficult to apply elementary economic theory to government policy. As we have just seen through the examples I have outlined, lower rates and tightened loopholes lead to an equitable taxation system which allows for increased consumption and investment. This is what drives our economy, and this is what drives Australia to a better future.

See this speech in context