Kylea Tink (North Sydney, Independent) | Hansard source

As I rise to speak to the Treasury Laws Amendment (Cost of Living Tax Cuts) Bill 2024, I wonder how this moment will be seen in the future. As the member of North Sydney, I stand here in a unique position, representing the electorate that would have seen the largest amount of money delivered to people in a community under the original stage 3 tax cuts legislation. Indeed, it's not an understatement to say that when I was running for this seat many people were eager to understand where I stood on this issue. Did I believe the tax reform proposed under the prior legislation was the right reform? Would I fight to ensure the reform was delivered, and, ultimately, would I hold the government to account, ensuring that they delivered on what they had promised?

At that time, my answers were pretty straightforward. Yes, I believed the tax reform proposed was the right reform. We had already seen two of three phases executed, with each phase designed to address a specific perceived issue within the then tax frame. I'd spoken with Ken Henry, one of the brightest minds of our time in terms of good tax policy, and I was satisfied the removal of the 37c bracket would be good for a huge portion of the community. Yes, I would fight for tax reform. I believe a broad based review of our tax environment is long overdue and we cannot, as a federal governing entity, continue to rely on taxes generated by those who work. To do so is to risk disincentivising people to strive for greater. And, yes, I would hold the government to account should they not maintain their end of the deal. Yet here I am looking at a significant change that I honestly did not think would happen. Why would I? After all, this government and this Prime Minister had given me absolutely no reason to doubt that they would not follow through on what they had repeatedly identified as an unbreakable promise.

To be clear: under the current government's new plan, overall my electorate of North Sydney will see the largest reduction in personal income tax cuts from the modified stage 3 tax cuts compared to the previous proposal. At the same time, however, while the total amount of money flowing into my own community will be significantly reduced, the actual number of people receiving a tax cut will increase. The fact that both of these things can be true—that seven out of 10 individual taxpayers in the North Sydney electorate will now receive a bigger tax cut than they otherwise would have and that the economy of North Sydney will ultimately receive $77 million less than it otherwise would have—is where the quandary of this situation lies for me as North Sydney's federal member of parliament.

Every time I stand to speak in this place and every time I vote, I am conscious of the responsibility of bringing my community's true voice to this place, and this issue has been particularly vexatious for me. I cannot help but feel that it is absolutely imperative that the message I deliver here today is reflective of my community's desires, not just my personal thoughts. That quandary has driven me to actively seek to gather a full and accurate picture of North Sydney's views towards these changes. In this context, the picture I speak of today has been built up in a number of ways. In the first instance, it has involved me actively listening to hundreds of people. I did this at street meetings, through online surveys and through calls for input via the local media columns and via advertising in local papers. I've read hundreds of emails and digested every morsel of information I could gather from community forums, both in person and online.

Whilst I was getting a feeling that I had a clear picture of where the people of North Sydney stood, I was mindful there may be some whom I simply wasn't reaching. So, following the release of the government's proposed new legislation just over a week ago, I commissioned an independent research agency to conduct a representative survey of the North Sydney electorate. The research shows a strong majority of my community—indeed, over two-thirds, or 68 per cent—support the changes to the stage 3 tax cuts, with just 18 per cent opposing them. But, rather than me paraphrasing them, I'd like you to hear from them directly.

From a person living in Hunters Hill I heard this: 'I'm one of the very high income earners in Hunters Hill and I am so supportive of these tax cuts to help struggling families and support such people who work so hard to put bread on their families' tables.' Another, from a different part of my electorate, told me: 'The proposed changes give bigger cuts to those who need them most. It is not about breaking election promises. It's about sensible financial policy.' Yet another said to me: 'I'm concerned that Australia's inequality of income and wealth is getting worse. The proposed changes will go some way to redressing this matter.' But much of the feedback from those who support these changes can be best typified in the following comment, which I received from someone who lives in North Sydney. This person said to me: 'I am a professional businessperson and earn more than $200,000 a year. The stage 3 tax cuts were never sound tax reform. They favoured high-earning professionals and others, to the detriment of those who most need it—teachers and nurses et cetera.'

With all that said, while most of my community support the changes, some do not, and I do not wish to minimise them or allow them to be pushed aside as 'the greedy few'. Rather, many people have very legitimate reasons for being disappointed with this change in government policy, and some feel they've been blindsided, for, while they may be on what is considered a high income in this discussion, they are also frequently the primary or sole income earners in their families, and many are experiencing significant financial stress, either via increasing mortgage rates or through increased cost-of-living pressures. As an example, one person shared the following with me. They said: 'I earn just over $180,000 a year, and that means my husband, who cannot work for health reasons, is not eligible for government support. We have downsized our rental home twice in the last four years to help adjust our outgoings. The bottom line is, despite my perceived high income, as a single-income household, we do have to live to a tight budget, because $90,000 of my gross income goes on super, Medicare and tax. In terms of the anticipated 9K benefits from stage 3 tax cuts, they are simply no more.' Yet another offered to me: 'While I do support these changes, I just want to say I feel let down. I know that, according to the wider world, I'm considered rich. I earn over $200,000 a year, but I'm a single mum with three older children and I'm trying to help them finish their schooling. I rent a house where all four of us live and I'm trying to cover all of our living expenses, from insurance to groceries. Right now, once all of those costs are covered, I live on $16 a day. I understand that there are others in greater need and I want to be a bigger person, but I also do not want to feel bad about the fact that I'm disappointed.'

We cannot pretend that these tax cut changes will have no negative impact, because they will. There are people in my community who were counting on the promised tax cuts to keep up with mortgage repayments, school fees and rising grocery prices. Understandably, they're frustrated that they were told by this Prime Minister for so long that these changes would go ahead unchanged.

Ultimately, though, I think that it's not the broken promise that my community lament but rather the fact that they feel that they were misled along the way, because, to be clear, the majority of my community believe a strong government is one that does change policies to suit the times. In fact, three in five said that they believe it is acceptable for the government to make changes to the stage 3 tax cuts given the changing economic conditions and pressure on the cost of living, compared to less than a third who believe the changes amount to a broken election promise and undermine trust in government. Ultimately, my community believes this change makes sense for the time.

Looking at it through a local lens, the truth is that more people in my community will be better off under the proposed changes. Through an equity lens, nearly 90 per cent of all taxpayers will get either the same or a larger tax cut under the new plan. The changes proposed will promote greater equity and direct more support to those Australians who are doing it toughest. The Medicare levy adjustment will also go some way to providing relief to lower-earning Australians, but my community would encourage the government to consider providing more cost-of-living relief for those who do not necessarily benefit from these tax cuts—those on JobSeeker, age pensions and disability pensions—for the people of North Sydney believe we must take care of the most vulnerable in our community. Through a gender lens, 90 per cent of female taxpayers will receive a bigger tax cut under these changes. In this way, the government argues these tax cuts will directly benefit taxpayers in high-demand but lower-paid jobs with a high percentage of women, including teachers, nurses, aged and disability carers and childcare workers, all of whom will receive some tax refund under this scenario. And, through a fiscal lens, more than 100 economists and tax experts have called for changes to the stage 3 tax cuts, labelling the original tax cuts economically unaffordable and unfair. This included former ACCC chair Allan Fels AO, who said:

The tax cuts—

in their previous form—

would add to our inflationary woes, are fiscally inappropriate in light of major demands on the public purse, and unfair unless linked with wider tax reforms.

Finally, according to Treasury estimates, these changes will increase labour supply by around 930,000 hours, more than double the labour supply benefit from the previous stage 3 tax cuts.

Looking at it in this way, then, it would appear this changed legislation is better for the times we find ourselves in, and I believe that is why the majority of North Sydney people support the changes. They are fairer, more equitable and more fiscally responsible than what was previously proposed, and these are the principles that my community values.

But I also take this moment to put the government on notice. If you want my community to trust you, you need to be more forthcoming with your thinking. You need to treat my community with respect. We do not expect that all the conversations will be easy, but we do expect to be given an opportunity to contribute to them. We do not want to find ourselves stereotyped as those who have more and therefore can afford to pay more. From the outside, it's always easy to imagine that someone has it easier than someone else, but please do not lose sight of the fact that we are people just like all others, working hard to build a better world for our children and their children. We do not want you to lose sight of the fact that we are also fighting hard to maintain a diverse and cohesive community where essential workers can afford to live near where they work and young people can aspire to raise their own families in the communities in which they grew up. Ultimately, we will welcome this change to deliver bigger tax cuts to more Australians, but please know that the lack of transparency from the government in making these changes has impacted people in a very real way.

The debate around stage 3 tax cuts has highlighted just how overdue this country is for a total and holistic review of our entire tax system. It is clear we need to find other revenue streams and opportunities aside from income tax, like taxing multinational companies, windfall profits and carbon emissions. A much bigger conversation about tax needs to happen in this place, and it is imperative that this change stop being positioned as reform. It is not. It is a change from what was previously promised; it is not significant reform. A conversation about tax reform that is based on clear principles, incentivises the things that we want and disincentivises or taxes the things we do not must take place. We must also, though, always be mindful of encouraging and rewarding ambition and hard work, and we ask you to be mindful that, as the only other Independent to hold this seat, Ted Mack, was renowned for saying:

… the very basis of democracy is that a decision taken by the public as a whole will be right more often than decisions taken by an elite group …

We expect to be part of the conversation, and we welcome the opportunity in the future.

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