Louise Miller-Frost (Boothby, Australian Labor Party) | Hansard source

The Albanese government started this year with great news for every single taxpayer in Australia: every taxpayer gets a tax cut. All 13.6 million taxpayers will be getting a tax cut as of 1 July. Labor's tax cuts under the Treasury Laws Amendment (Cost of Living Tax Cuts) Bill 2024 deliver more relief to more people in a way that is fiscally responsible and doesn't add to inflationary pressures. These new tax cuts are designed to provide bigger tax cuts for middle Australia to help with the cost of living, while also making our tax system fairer—because it's not only tax relief; it's also tax reform. Our tax cuts are good for Middle Australia, good for Australian families, good for women, good for young people and good for low-income workers. Our tax cuts are good for helping with cost-of-living pressures for every single taxpayer, our tax cuts are good for labour supply, our tax cuts are good for tackling bracket creep and our tax cuts are good for the economy.

It is the job of an Australian government to do the right thing for Australians and for the economy, according to the economic realities of the time, and that is exactly what we're doing. The Albanese Labor government is introducing these changes because it recognises the economic realities of 2024. Australians are under pressure right now, and Australians deserve a tax plan that responds to the challenges they are facing. When the coalition's stage 3 tax plan was legislated five years ago, the world was a very different place. It was before a once-in-100-year pandemic, worldwide persistent inflation, higher interest rates, two overseas conflicts impacting supply chains and prices, and global uncertainty. These things have put Australians under more sustained cost-of-living pressure. When the circumstances change, changing policy is the responsible thing to do.

Our overarching responsibility is to consider what is the best thing for Australians now, and cutting taxes for Middle Australia is a central part of our economic plan, but only one part. It sits alongside getting wages moving again, bringing inflation under control, driving fairer prices for Australian consumers and providing important cost-of-living relief such as energy bill relief, cheaper medicines, higher income support payments and the biggest boost in rental assistance for 30 years.

Labor's tax cuts will make a real difference for the 13.6 million Australian taxpayers who will receive a tax cut. That's every Australian taxpayer, with no taxpayer left behind and no taxpayer ignored. This is 2.9 million more taxpayers than would have benefited from the stage 3 tax plan from five years ago. It means that 11.5 million taxpayers will receive a bigger tax cut. That's 84 per cent of all Australian taxpayers better off under this plan. In my electorate of Boothby, the number is 85 per cent of taxpayers better off under this plan. Ninety per cent of women are better off under the tax plan. Ninety-six per cent of young people under the age of 29 will be better off under this plan. Gen Z are among the biggest beneficiaries of this tax change, because they were ignored under the previous plan of the Liberal and National parties.

Under Labor's tax plan, taxpayers earning less than $45,000 will now receive a tax cut. Previously, they got nothing. This will significantly boost the take-home pay of Australians on modest incomes and people working part time. Under the coalition's plan, taxpayers earning under $45,000 got nothing. An Australian taxpayer earning the average wage, around $73,000, will now get a tax cut of more than $1,500 a year, which is around $29 a week. That's more than double what they would have got under the coalition's plan. That's nurses, teachers, truckies, and so many more Australian workers who are the absolute backbone of our economy and are earning around the average wage. For an Australian family on an average household income of $130,000, with, say, one partner earning $80,000 and the other around $50,000, their combined tax cut will be over $2,600, which is about $50 a week and $1,600 more than they would have got under the Liberal and National parties' plan.

But these are not just short-term gains. Labor's tax plan also meaningfully addresses bracket creep in a way that, as Treasury has modelled, better addresses bracket creep than the opposition's stage 3 tax cuts ever would have. The government's changes deliver a better and more progressive tax system and address bracket creep more evenly. Our plan returns bracket creep for all taxpayers and does more to reduce the impact on those most burdened by it. By dropping two tax rates and lifting two thresholds, we are giving everyone a tax cut, providing $359 billion in help with the cost of living and returning the most bracket creep where we can do the most good for Middle Australia. As a result, the average taxpayer will pay $21,635 less income tax over the next decade.

And of course it's also good for the economy. Labour shortage is one of the issues I heard about from businesses large and small during the last election, and it's something this government is taking seriously. Treasury estimates that our changes will increase labour supply by around 930,000 hours per week. That is more than double the labour supply impact of the former coalition government's plan. This is driven by increases in hours worked and participation of women with taxable income between $20,000 and $75,000. Parents, particularly women with young children, will be meaningfully supported to return to work under the government's changes through increases to their take-home pay.

The really critical consideration in making this change and in all the cost-of-living relief we've provided over the past year is to ensure that what we do is not inflationary. The advice from Treasury is clear that our tax cuts will not add to inflationary pressures, because they are broadly revenue neutral. The most recent inflation figures show a welcome moderation. It's still too high, but it is moderating, and Treasury is clear that our tax plan will not impact their forecasts and timing for inflation to return to the target band. The Albanese government is providing meaningful cost-of-living relief in a responsible way that doesn't add inflationary pressures while laying the foundations for a stronger and more resilient economy.

So, what it is actually going to change? From 1 July this year the government will reduce the 19 per cent tax rate to 16 per cent, reduce the 32.5 per cent tax rate to 30 per cent, increase the threshold above which the 37 per cent tax rate applies from $120,000 to $135,000, and increase the threshold above with the 45 per cent tax rate applies from $180,000 to $119,000. The 45 per cent tax threshold will be lifted on 1 July for the first time since Labor was last in office. All 13.6 million Australian taxpayers will receive a tax cut from 1 July onwards. The government's tax cuts will return bracket creep and lower average tax rates for all Australian taxpayers, and this is a great-news story.

What is the Liberal-National opposition's position on this? Well, the hint is in the name: they oppose it. The deputy opposition leader, prior to even having the detail of the bill, said they would roll the changes back. When asked if the opposition would roll back Labor's tax cuts, she said, 'Well, this is our position; this is absolutely our opposition'—absolutely. This means they will make 11.5 million Australians pay more tax—an interesting position to take, considering that the opposition's seats are some of the biggest winners from this change. But the Liberals and the Nationals have made it clear that they do not want these tax cuts for Middle Australia. I know they voted against every other form of cost-of-living relief as well. But here they are directly against the tax changes that will put more money in the pockets of their own constituents.

Our tax cuts come on top of billions of dollars in targeted and responsible cost-of-living relief that's been rolled out, including electricity bill relief, cheaper child care which resulted in an average 11 per cent drop in childcare fees across Australia, increased rent assistance, tripling of the Medicare bulk-billing incentive which resulted in more bulk-billing GPs, cheaper medicines through the drop in prescription payments and 60 day dispensing, a boost in income support payments, expansion of eligibility criteria for the single-parent payment and the JobSeeker supplement for older workers, fee-free TAFE training, more social and affordable homes, and expanded paid parental leave. We are creating jobs and getting wages moving again.

The Labor government's tax cuts have been very welcome across my electorate. It's a great-news story: 100 per cent of taxpayers will get a tax cut, 85 per cent of Boothby taxpayers will get a bigger tax cut, 90 per cent of women taxpayers will get a bigger tax cut and 96 per cent of young taxpayers will get a bigger tax cut. Labor is the government of higher wages and lower taxes. We want you to earn more, we want you to be paid fairly for the hours you work and we want you to keep more of what you earn in your own pocket. I commend the bill to the House.

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