Rowan Ramsey (Grey, Liberal Party) Share this | Hansard source

Just as the schoolchildren of the 19th century chanted, the collective pants of this Labor government are on fire. From the first time Mr Albanese and his Treasurer, Jim Chalmers, used the weasel words, 'We have not changed our position,' when pressed on tax cuts, we can assume they had already decided they would. Otherwise, why repeat such an odd phrase in such a stiff, formal way, as we heard it on more than 100 occasions? Since at least 9 October 2022, just 4½ months after they were elected to office, the Prime Minister has studiously repeated the phrase, 'We have not changed our position.' Now, of course, he has. He said, 'We have not changed our position,' but he didn't say, 'We will not change our position.' He didn't say, 'Absolutely we'll be delivering the full package.' He just said, 'We have not changed our position.' And you guessed it—the public guessed it—what he should have added to that phrase was 'yet'. The Prime Minister should have said 'We have not changed our position yet.' Then it would have been much more honest. This means they have been lying to the Australian public from at least that day, if not before. After telling us that his word was his bond and promising to bring back integrity and honesty to Australian politics, Mr Albanese has proved that he is bereft of both those virtues.

It's worth noting now that even the Treasurer is using a similar form of weasel words in connection to negative gearing and capital gains. Last week in this place, Dr Chalmers said in question time, 'I have dealt with these issues previously,' and then quickly went on to bashing the opposition and not making any commitment to leave negative gearing as it is. On the weekend, he was quoted—in the Guardian, no less—as saying that the government is not considering changes to negative gearing and capital gains tax. He said:

That's not something that we're proposing, not something that we are considering, not something that we are working up.

Come on, Mr Treasurer, spit it out. 'The government will not make any alterations to negative gearing and capital gains tax.' It's simple; just spit it out. No, it's not exactly the same phrase as, 'We've not changed our position,' but it's loaded up with all the same ambiguity. For the record, the Treasurer has said multiple times in the past that you can't have genuine tax reform without attacking negative gearing. The Labor Party, the Prime Minister and Dr Chalmers went to the last election promising to leave the stage 3 tax cuts alone, but we know that their word is worth nothing, and clearly they are not to be trusted.

To the legislation, it will be welcomed by some, probably most, who are getting a bigger tax cut than they would have. In an electoral sense, it would be impossible to remove once granted. The government's posturing on this point is no more than a cheap diversion from the duping of the public. It is disingenuous for them to say, 'Put up or shut up. Remove the legislation if you are elected,' because they know full well that no-one would be elected on that basis. As an opposition, it is imperative we focus on the things we can change, not the impossible, regardless of the moral merit. Of course, going to the next election promising to increase taxes as a commitment to reverse Labor's tar-baby tax cuts would ensure failure. To not recognise this reality would be to fail Australia. We always need oppositions to be within reach of government, with the alternative leading to hubris and overreach, and there's every sign that this government has succumbed to those urges already. The most important thing for Australia is that the coalition go to the next election putting pressure on the government.

The Labor Party has chosen to take the path of higher taxes by stealth. It's called bracket creep, and it will slug taxpayers an extra $28 billion over the next 10 years. The government says that 11.5 million workers earning about $146,486 or less will be better off under this plan, but it's only for the first year. Over a decade, a worker earning $130,000 will pay almost $3½ thousand more tax annually under the government's plan, as compared to the original stage 3 tax package, while a worker on $140,000 will pay $12,723 more. It's all short-term benefit and long-term pain, with no courage.

The underlying truth of the legislation is that it leaves the prospect of long-term reform of our taxation system in very dire shape indeed. It has signalled that at least this government has a complete focus on short-termism—whatever it takes for a vote tomorrow, or clearly, in this case, whatever it takes it for a vote in the Dunkley by-election on 2 March. The Treasurer even admitted it on 7.30, saying:

… we didn't want to wait, frankly, until after the Dunkley by-election …

After all, Mr Deputy Speaker, if the tax cut is due in five months, why on earth are we sitting late tonight? How shallow and obvious is that? The government are totally focused on the short-term sugar fix to get them through the month and continue to attack entrepreneurism, endeavour, initiative and enterprise. They are the enemy of aspiration and are focused on rekindling the class war.

When John Howard was in office, personal income tax as a share of tax receipts was just over 40 per cent. The 2023 Intergenerational report tells us that without structural reform personal income tax is set to soar from 50.5 per cent of total tax receipts in 2022-23 to 58.4 per cent in 2062-63, on the back of bracket creep. The stage 3 cuts would have removed the 37 per cent rate and lifted the 47 per cent threshold to $200,000. Mr Albanese's crab walk delivers short-term benefit and long-term strangulation.

Another fact: in the two years from September 2021 the quarterly tax paid by households rose by 40 per cent, or from $65.1 billion to $91 billion, mostly due to bracket creep. And here's the news: because the government has squibbed it for short-term game there is worse to come. The government told us they would be reformist in the mould of the Hawke-Keating governments. Really? What a joke! They could barely be less reformist on this issue if they tried.

We've had a tax system that's far too reliant on income tax and loaded with disincentives to innovation, expansion and success. Far from the abusive rhetoric of the political Left, we have one of the most extravagantly progressive tax systems in the world. High-profile economist Chris Richardson calculates that the top one per cent of income earners pay the equivalent tax contribution of the bottom 77 per cent of adults. That is about as progressive as you can get, you would have to say, Mr Deputy Speaker.

The three tranches of tax cuts which commenced in 2018 were designed to deliver a 31 per cent decrease in tax to those earning $45,000 per year and a 20 per cent decrease to those earning $60,000. For those earning around $200,000 it was 11 per cent. To those who think that favours the top end, I can only say that it becomes increasingly difficult to give a tax cut to someone who pays little or no tax. Also worth considering—and we need to listen to the government's rhetoric on this—is that someone earning $45,000 a year will receive just $804, or 15 bucks a week. I don't know how long it's been since either the Prime Minister or the Treasurer did the family shopping, but if they did they'd find that 15 bucks doesn't go so far, particularly not when you consider that this government, in the last budget, cancelled the low-income tax offset for exactly this group. That was worth $700 a year. So get this: you take $700, give $804 back 12 months later and expect $104 to cover the rising cost of power—remember the $275 promise on electricity?—fuel, food, council rates or insurance. You can take your pick. To those on $45,000 a year: enjoy your extra $104. Mr Albanese has not only broken his word, betrayed the trust of electors who took him at his word and provided a new disincentive to innovation and enterprise but he has made the task for all future tax reform that much more difficult.

This is not sound policy. It lacks any concept of a plan for the future. As a decision in isolation, it is not reversible. Australians need to elect a government with a comprehensive understanding of the taxation system, an understanding of international competition for finance and how other jurisdictions are fashioning their tax systems to respond in a changing world. The current government is demonstrating it is not capable of gauging that far into the future. The last Treasurer to offer relief from bracket creep was Peter Costello, and since that time bracket creep has vacuumed billions of dollars out of taxpayers' pockets. We in the coalition are focused on offering real reform of the taxation system. We are the only team likely to deliver in this area. We will continue to prosecute the case over the next 18 months in the lead up to the next election.

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