House debates

Tuesday, 13 February 2024


Treasury Laws Amendment (Cost of Living Tax Cuts) Bill 2024, Treasury Laws Amendment (Cost of Living — Medicare Levy) Bill 2024; Second Reading

5:01 pm

Photo of Lisa ChestersLisa Chesters (Bendigo, Australian Labor Party) Share this | Hansard source

I did vote for them, but I was very unhappy to vote for them. Anyone who goes back through Hansard would read that and see that, not just in my speech but also in the many 90-second statements that I made after that. My criticism of the government of the day was that they very much bullied, I believe, the rest of the chamber into supporting them. We tried to split the legislation and we tried to change the legislation so that the stage 3 tax cuts were fairer because we knew, like we know today, that it was unfair that only one group of taxpayers got the bulk benefit of stage 3.

The previous speaker mentioned that stage 1 was legislated. Yes, it was, but it was temporary. If the previous government had been genuine about giving low- to middle-income earners genuine tax relief, they would have made that offset permanent at that time, but they didn't; they made it temporary. They legislated that it was temporary, and then it ran out last year. So, while they try to put the blame on us, they weren't really interested in low- and middle- income earners. They let that lapse. They never legislated it. It was temporary in their reforms. We were left with a situation, and it got through. We tried to amend it in the Senate and we tried to amend it in the House when we had stage 3. Fast forward to where we are today, the economic circumstances have changed. We know that there are cost-of-living pressures, and we know that people are doing it tough. We also know from the data that those on the lowest of incomes are the ones that are struggling. That is why I'm so proud to be part of a Labor Party government that said, 'We need to do what is responsible; we need to amend stage 3 and we need to make sure that everybody gets a tax cut on 1 July.'

What we are saying to those opposite is that not only are you getting a very generous tax cut but your staff are also getting a tax cut. Rather than getting upwards of $9,000, why don't you share it with your electorate office. That's what we're saying because everybody is feeling the cost-of-living pressures. Everybody is feeling those pressures, and that is why we have changed it so every Australian taxpayer gets a tax cut. That is the proposal. That is the core of what this is. It is saying, 'Share the tax cut and the tax relief with everybody.' Can I just address the furphy that has been put out that this does not deal with bracket creep. The previous stage 3 way of dealing with bracket creep was to abolish a bracket. That's not dealing with bracket creep; that's effectively trying to flatten our tax structure. That is about saying that everybody earning from $45,000 to $200,000 pays the same marginal tax rate. That isn't in the spirit of our progressive tax system. That isn't dealing with bracket creep; that abolishes a bracket.

What I respect and applaud in this proposal that is before the House is that it genuinely deals with bracket creep in a fair and transparent way and really supports those on low to middle incomes. It is lowering the tax rate for people earning from $18,200 to $45,000 from 19 per cent to 16 per cent. In the current stage 3 that was legislated by the previous government, they got nothing. Those opposite were saying, 'Oh, you should have done something about it.' Well, we are, in this plan. We are reducing the marginal rate. We're not making it temporary. We're going to permanently reduce their rate from 19 to 16. That is dealing with bracket creep. What we're also doing is lifting the top of the next tier above $45,000. Prior to stage 3 coming in, it was $120,000. We're raising it to $135,000 before you tip into the next bracket. Again, that is dealing with bracket creep—not abolishing the bracket, but doing the sensible and fair thing by lifting the top of that bracket. The next bracket goes from $135,000 up to $190,000. Again, we are lifting the bracket—not abolishing it or collapsing our tax system into virtually a flat system but actually restoring the integrity of the progressive tax system that we have in this country and dealing with bracket creep in a fair way.

Above that is the bracket which we, the parliamentarians in this place, sit in, along with about two per cent of taxpayers. We still get a generous tax cut. I had my local paper say, 'Well, what do you say to the 8,000 people in your electorate who earn more than $180,000 and are not going to get as much?' I said, 'You know, they're still going to get a decent, fair and generous cut.' It's still about $4,500. But I'm asking them to think about the people in their community, including the aged-care workers caring for their parents, the early childhood educators caring for their children, the nurses in the hospitals, and the primary and secondary school teachers. If they're on that kind of income, they're likely to have a cleaner and a gardener. I ask them to think about people cleaning their homes and cutting their lawns. I'm asking those in my community to think of their neighbours and about the person selling them their coffee or their groceries. That is what is so vital about the plan that's before us: it delivers tax relief to all workers, regardless of their occupation. Regardless of what income they are on, everybody gets a benefit from this tax cut.

The other furphy out there is this idea that, if you are on a income of less than $180,000, you don't have aspirations. It is such nonsense. It is snobbery. I think about all the very hardworking community sector workers in my electorate, the people who didn't go for a high-flying corporate job—of which there aren't too many in my electorate, I should say—but instead studied social work at university or are working in disability support work. I think about our social workers, the men and women who are working on the front line of our housing crisis or in the community not-for-profit sector. I think about our financial counsellors and the aspirations that they have, not just for their own careers but for our community. I am so relieved, and I can look them in the face now knowing that on 1 July they're going to share in this tax cut and get a decent tax cut too, because they deserve it. They work super hard, full time. They have such a critical job to do at the moment. They deserve a tax cut. Under those opposite, they would have got nil or little. What we're saying to them is: we recognise your worth and the value of your work, and we are giving you support in these tax cuts.

The other part that is so critical about the tax reforms before us is that they relieve a little bit of the pressure off our small businesses. They know that their workers are going to get some tax relief from 1 July. It helps keep their good workers in the jobs they have if they know that they get a little bit of tax relief. They know that their workers are going to get that little bit extra in their pocket every pay cycle coming through. That pressure is being relieved in the workplace, where people, particularly those on low and middle incomes, are a bit worried.

My electorate is a regional electorate, and we've seen from the data that the regional electorates will do overwhelmingly better under this reform. Why? Our incomes are smaller. By population, spread across our region, the average income is less. The other group that we know will do exceptionally well under this reform, and for whom fairness is being returned, is young people—people starting out their careers or working in insecure part-time casual jobs. Whether they're studying at university or building their career, young people are on smaller incomes and will benefit overwhelmingly from our fairer tax plan.

So rural Australia will be better off under this plan, women will be better off under this plan and younger workers will be better off under this plan. The people who hold up our community and work super hard to make sure it continues to function, including our truckies, cleaners, retail workers, hospitality workers, nurses and teachers—all those people who we said were the heroes of the pandemic—will get a fair tax cut under this reform, as will the community sector workers I talked about. There's a reason why during question time we can go to every member of our frontbench and ask them a question about how the workers in their sector will do, because every taxpayer will benefit under this.

I'm not surprised that those opposite are turning their noses up. I'd say it's a little bit of self-interest. Yes, we're asking you to share your tax cut with people in your community—with your own staff, your neighbours, the person who sells you coffee or groceries, the person who cares for your parents in aged care and the person who might care for or teach your children. That's what makes our country stronger. Yes, we acknowledge that the economic circumstances have changed, and that's why we have changed stage 3—and in the nick of time. We need to get this through the parliament so it's in place for 1 July.

This is just one of the many measures that our government is taking to help tackle the cost of living and the pressures people are feeling. What is most important about this reform is that we know from the Reserve Bank that it's not going to have an impact on inflation and is not going to force inflation up. What is also critical about this reform, and where I want to commend the Treasurer and the Prime Minister, is that they've got the timing right, the politics right and the policy right. That's why so many Australians get it.

As to this idea that it's a broken promise, just keep saying that, because out there in the community all people hear is: 'The Prime Minister is going to get less of a tax cut and he's going to share it with me. That's a pretty good bloke. I don't mind that.' That's what we're saying. A responsible Prime Minister and government said: 'The economic circumstances have changed. We need to share this because lots of others need that support.' That is generosity, fairness and the right economic plan, and people out in the community recognise that. That's why they're saying that they agree with this. Regardless of how they vote or their political colour, people across the board recognise that this is a good deal. I know this from the people who've spoken to me in my community, including self-funded retirees saying how great this is for their grandkids and how it's really going to help their grandkids pay for their rent or pay for their car or get themselves up and going. There is concern about how young people get a start. They see this as a real boost for young people. Similarly, for people who are working really hard and saying, 'I just can't work any harder, yet I can't meet my bills,' this will help them get that little bit further.

Knowing that on 1 July everyone in my community is going to get a little bit extra in their pocket to help pay their bills is a good thing. Around 88 per cent of the taxpayers in my electorate will receive a bigger and fairer tax cut because of these changes. The average tax cut across my electorate will be about $1,400 from 1 July. That's around 66,000 taxpayers in my electorate who will receive a tax break. Every single taxpayer in my electorate will get one. That is the power of this change. And not just in my electorate, but in all electorates.

You cannot get past the fact that this delivers for everybody. It is the right thing to do. I'd encourage those opposite to stop being so negative about it. You're voting for it, so embrace it. You're being really disingenuous going back to your electorates and saying: 'Yes; I voted for it. I'm glad you're getting a little bit extra, but I didn't really like it. I didn't really support it. We're going to go back and do more.' Don't. Just be proud to be here in this parliament and support good economic policy that delivers fairness, restores integrity to our tax system and makes sure that every taxpayer gets some tax relief on 1 July.


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