Zoe Daniel (Goldstein, Independent) Share this | Hansard source

As soon as it became clear that the government was going to change its mind on the stage 3 tax cuts, I commissioned a survey of the Goldstein community. In a little over 48 hours, the survey attracted close to 2½ thousand responses. We used paid advertising to reach a broad cross-section of the community, and we asked respondents to nominate their marginal tax rate to see whether attitudes to the changes varied depending on their tax liability. I acknowledge that surveys of this kind are not perfect, but they do provide some evidence of what the community is thinking. Fully 77 per cent of respondents agreed that the tax cuts should be adjusted to provide greater benefit to people at the lower end of the income scale, and that's even though more than a quarter of those who responded to the survey—27 per cent, to be precise—reported taxable incomes of $180,000 or above. That is the very cohort who had stood to benefit the most from the coalition's version of stage 3 and now stand to have that benefit reduced.

Here's a small sample of what people had to say in responding to my survey:

"I would be a beneficiary, but don't need it."

"I am concerned about rising costs for others, not myself so much."

"We are seriously concerned with how lower income people are able to cope with rising expenses across the board."

Clearly not everyone in my community will agree, and some, especially those who are on relatively high incomes but also experiencing very high mortgage stress, will be upset, but the survey numbers are a strong indicator of sentiment. They show to me that, in one of the wealthiest communities in the country, attitudes to change can be more nuanced and more sophisticated than the assumption that it's what directly benefits them financially that determines their attitude and, indeed, their vote. I saw at the last election that Goldstein people are good people, many of whom believe in the things that I campaigned on—fairness, equality and prosperity for all—and I'm so very proud to represent that community.

There is no doubt that this version of the tax cuts is fairer than stage 3 mark 1. According to Treasury data, fully 71 per cent of the 77,000 taxpayers in Goldstein will be better off than they would have been had the original version remained in place. These changes mean that the average tax cut in Goldstein will be just over $2,100. And, while the community that I represent is wealthy overall, the electorate includes increasing numbers of lower- and middle- income workers. Many of them are renters rather than mortgage holders. Many of them are women, more than 25,000 of whom work in feminised industries, and almost 9,000 of those are women who work in the care sector. These are among the millions of women I've been talking about repeatedly since I was elected and, indeed, before, at the Jobs and Skills Summit and in conversations with ministers as I've strived to convince them of the need to place a gender lens over all legislation.

Treasury applied the principles of a gender impact statement to these tax changes. It's about time. As I've been saying, all pieces of legislation should have a gender impact statement attached. It's good to see that the government has finally got the message, and let's hope this is not just a one-off. According to Treasury, 5.8 million women, 90 per cent of all female taxpayers, will now get a bigger tax cut, with an average increased benefit of more than $700. Treasury also notes that the changes before us deliver a larger tax cut to taxpayers in what it terms 'in demand occupations', largely dominated by women, including teachers, nurses, aged care and early childhood education staff—as I've said, many of whom live in Goldstein. Treasury modelling also says that the re-engineered tax cuts will increase hours worked and participation by women with lower incomes—that is, those earning between $20,000 and $75,000. Will these tax cuts alone be enough to encourage women to work an extra day or two? We will see. But if Treasury's right, there would be an increase in women's participation of 930,000 hours a week—the equivalent of 25,000 full-time jobs. I do hope it's right, but I have a niggling doubt that's informed by international evidence.

After inflation, productivity is our most significant economic constraint, and has been for years. For too long we've ignored one of the significant steps to its solution—that is, keeping more women in the workforce. Overseas examples are instructive. In Australia and in northern Europe, female workforce participation at the age of 25 is comparable, but at the age of 30, female participation in Australia is 10 per cent lower and remains that way. One of the reasons is that in Scandinavian countries early childhood education and care is largely free. Analysis by the Australia Institute indicates that if we had Scandinavian female participation rates, our economy would be $60 billion, or 3.2 per cent, bigger. Imagine unlocking that. Actually, don't imagine it, just do it! This is one of the pathways to economically empowering half of the population.

I've spent considerable time, as the changes to stage 3 have come forward, talking to the Goldstein community at pop-up offices, at community events and on the street. Some are not impressed by the government saying one thing and doing another. Fair enough. Integrity in political decision-making is critically important. That said, so is being responsive to circumstances. Arguably, the central issue with the change of heart is the lack of foreshadowing and being honest that it may be on the cards rather than the policy change itself.

The world is a vastly different place compared to when the legislation was originally passed. Back then we were blissfully unaware that there was about to be a global pandemic. There was no war in Ukraine nor conflict in the Middle East escalating the price of energy. In turn, no-one was predicting the return of inflation. No-one was predicting a cost-of-living crisis. But that is what we have. And just as those in the corporate world must adjust their plans according to market conditions, so do governments.

Apart from anything else, the debate over stage 3 and Labour's about-face is a reminder of the folly of promising tax cuts fully five years ahead of time. Never should it happen again. Indeed, never need it happen again. Over the years, governments have been happy to reap the consequences of inflation by holding onto the proceeds of bracket creep because it gives them cash to play with. Then, just before an election, we're expected to reward them for handing back some of that bracket creep by announcing a round of tax cuts.

I asked the Parliamentary Budget Office to calculate the impact of introducing tax indexation—that is, adjusting the tax thresholds to account for the impact of inflation to ensure that taxpayers pay no more in real terms year by year. Initial analysis from the PBO, using its SMART online tool, estimates that the immediate introduction of tax indexation would cost the budget $11.3 billion over the forward estimates. That's a significant sum, but it would be even fairer and more equitable than the changes now being proposed in this legislation by the government. It would mean that taxpayers would get the real value of tax cuts year on year, not just in the year of their introduction. It would take the politics out of taxation, and it might even encourage governments to consider real tax reform rather than fiddling at the edges while the tax system becomes less and less fit for purpose.

Just a reminder: it's now a quarter of a century since the last substantial round of tax reform in this country—that is, the introduction of the GST. It's more than a decade since the last comprehensive review of the tax system, chaired by former Treasury secretary Ken Henry, was completed with a range of excellent recommendations and then left to gather dust. As former Public Service Commissioner Andrew Podger notes:

Indexation would … put a stop to much of the politicking about tax, requiring our political leaders to focus on the policy reasons for changes. Indexing the income tax scale might also force current and future Australian Governments to start addressing more fundamental tax reform as the nation needs to … fund increasing public services while still rewarding innovation and effort and productivity.

It's time for that reasoned conversation.

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