Brian Mitchell (Lyons, Australian Labor Party) Share this | Hansard source

I'm pleased to have the opportunity to speak on the Treasury Laws Amendment (2021 Measures No. 4) Bill 2021. This bill contains several Treasury measures. I won't go into the detail of each, but I do want to speak on the most substantial measure, which of course is the one-year extension of the low and middle income tax offset for the 2021-22 income year, a measure that provides a tax offset of up to $1,080 for incomes of up to $126,000. To be clear, Labor supports and has always supported tax relief for low- and middle-income earners and will facilitate the passage of this bill. But it has to be said that this Liberal government has once again delivered a bill that looks great on paper but fails the pub test.

I'm sure it is just a happy coincidence for the government that the extension of the measure for another year means that the government can avoid the question of when to cut the measure until after the next federal election. When the Treasurer announced the extension of this measure he made it very clear that Australians should not expect it to become a permanent feature of the tax system. He emphasised, in fact, that it was 'a stimulus measure to support the recovery of our economy'. I want to be very clear about what the Treasurer is saying. He is saying that tax relief for our low- and middle-income earners is temporary, that it does not last. It's been extended for just long enough to see the government through the next election, after which many millions of Australian workers will pay more in tax than they do today. But the government has said that the vast bulk of the tax relief coming into the budget over the next few years is permanent. Isn't it funny that the vast bulk of permanent tax relief just happens to benefit the highest income earners in Australia?

Why doesn't the government flip it? If it really wants to look after low- and middle-income earners, why not make this tax offset permanent and make the tax cut for high-income earners temporary? Why not make that dependent on the future economic performance of the economy? Why not say to high-income earners—the people in this place, the judges and others who are on hundreds of thousands of dollars a year—'Look, we'd like to give you a tax cut, but maybe the economy can't quite afford it. How about we give you a temporary tax cut for now, because we want to make sure that the low- and middle-income-earning Australians in this country get a permanent tax cut'? Wouldn't that be a better solution? I think it would be. But they can't help themselves on that side. Just to reiterate: tax relief for low- and middle-income earners is temporary; tax cuts for high-income earners are permanent. That's the message from this government: we look after our mates and make sure high-income earners stay on top.

If you're a low- or middle-income earner this government is happy to provide relief—temporary relief—on the proviso of re-election. It's further proof that this government's most recent budget is about getting through an election rather than helping people with the cost of living and setting up the economy for the long term. Wages are stagnant. Real wages are going backwards; the Treasurer has told us as much. Even before that, we had the former finance minister, Mathias Cormann, telling us low wages were a deliberate feature of the government's economic architecture.

While Labor supports this bill it must be noted that, while tax relief for low- and middle-income earners is temporary, the vast bulk of incoming tax relief will overwhelmingly benefit high-income earners and that will be permanent. It can't be stressed enough. It has to be stressed that they're only looking after low- and middle-income earners on a temporary basis but they're looking after the wealthy on a permanent basis. It must be understood that Australians on an income below $88,000 a year will be worse off under the Prime Minister's stage 3 tax cuts compared to what they are under with the low and middle income tax offset. Wage earners will be worse off—cleaners, clerks, teachers, paramedics, aged-care workers and nurses will all be worse off. Some of the people who have done the heavy-lifting through the COVID-19 pandemic will be worse off after next year while high-income earners will pocket thousands extra on a permanent basis. Seven in every 10 Australian workers will be paying more tax than they do today—and all from a coalition that trumpets sound economic management as a key strength. What an absolute joke!

It's hurting people in my state the most. In my electorate, workers earn the lowest average income in the country. Tasmanians earn the least among all states and territories. That means even more of my constituents will be hit by the Morrison government's tax grab when this tax offset goes away. Isn't it bad enough that we are already facing a housing crisis, stagnant infrastructure funding and a shortage of general practitioners in regional Tasmania? Now low- and middle-income earners in Tasmania, after the next financial year, face the prospect of higher taxes. We've got thousands on the government emergency housing list, a healthcare sector in disarray and parts of our east coast cut off by a mismanaged highway closure. My state is doing it tough. So how can the Morrison government justify tax policies that will harm our most vulnerable in the long term?

Labor supports this bill because it provides support, albeit temporary, to the Australians who need it most. We've always supported putting more money in the pockets of workers and we always will. Labor has said all along that the priority for tax relief is that it should be going to the people who need it most and who are most likely to spend it in the economy. Tax breaks for middle-income-earning Australians and low-income earners are a good thing. These are the people who spend money going to the beach on the weekend with their families. These are the people who buy a pie and a drink at the footie on a Friday night. They buy new cars and, when they can afford it, do a reno on their house. They spend money in their local economies; they keep the money churning around. It's not the same when you give tax breaks to high-income earners; the money is not spent in the same way. It gets invested, sometimes offshore. It doesn't benefit the local economy in the way that putting more money into the pockets of low-income earners does. It doesn't have the same benefit to the economy at all.

Low- and middle-income earners are the people who, by spending money on themselves and their families, reinvigorate our economy—and nowhere more than in regional communities. These are the people this government is going to tax more when this tax offset ends after 2021-22. It beggars belief. The Morrison government is committing tens of billions of dollars in tax cuts for the highest-income earners while offering limited support for the average Australian family to get them through the election. Not only has this government racked up $1 trillion in debt with precious little to show for it in terms of long-term economic reform; they are prioritising high-income earners with long-term tax relief while taking the average Australian income earner for a ride.

It has to be said, this is not just related to the bill before the House. The shadow minister mentioned before what's going on in the other place, right now, with superannuation and how that's going to hurt Australian workers as they head into retirement. This deal the government has done with One Nation beggars belief. It's absolutely appalling for Australian workers who are nearing retirement. Judas Iscariot got 30 pieces of silver for betraying Jesus at Gethsemane. Senator Hanson's getting 30,000—

See this speech in context