Tom Venning (Grey, Liberal Party) Share this | Hansard source

Thanks to the member for Kennedy, Bob Katter, for raising this motion on income splitting. Let's talk about fairness—not the kind of fairness that gets you political soundbites but the quiet, everyday fairness that happens, or fails to happen, around the kitchen tables of Australian homes.

Let us consider a simple scenario. Imagine two households living side-by-side in any suburb or regional town in my electorate. In house No. 1 we have a couple. Both are in paid employment. They have no children. Together, they bring home a combined income of $250,000. Under our current tax system, they will pay approximately $67,000 in combined tax. Now look at house No. 2. This family also has a household income of $250,000. But, here, only one parent is in the paid workforce. The other parent is at home doing the vital, exhausting work of raising their children. Because our tax system treats them as isolated individuals rather than as a family unit, this household pays $88,000 in tax. That is over $20,000 more.

While we're on the topic of tax, I'd love governments, no matter their colour, to index the tax brackets. Labor's inflation means that more and more tax is raised each year due to our antiquated tax system. The current approach is punitive. It punishes single-earner families. It ignores the reality that, in a household, income is shared, expenses are shared, and sacrifices are also shared. Should the tax burden not be shared as well? The solution is practical and is already staring us in the face. Income splitting would allow a couple to divide their income before tax is calculated, just as they do in other modern economies.

Income splitting is already a reality for the wealthy. Through family trusts, those in certain professions can legally distribute income to spouses and adult children to ease their tax burden. But a standard wage earner is locked out. Income splitting would democratise this system. It would level the playing field. But this is about more than just economics. This is about our national future. We are facing a declining birth rate. We are increasingly reliant on migration to sustain our growth. If we want young couples to start and grow their families, we must stop penalising them for it. In the year 2025, South Australia grew by approximately 19,500 people, with a natural increase of 2,700. That means migration contributed to 88 per cent of the growth in my great state of South Australia. One of the key issues is child care and regional South Australia—or, should I say, the lack thereof. My electorate of Grey faces a severe childcare shortage that forces secondary earners to stay home instead of working. It's deeply unfair that the system punishes families who simply have no childcare options, while favouring those who do.

Income splitting gives tangible monetary value to the incredible work done by these stay-at-home parents. It incentivises those in this position not only to feel financially comfortable enough to have more children but also to stay in the regions that they otherwise might have to leave to find child care. Critics suggest this reinforces an outdated model or that it removes incentives to enter the workforce. But this makes no sense. This is not about forcing anyone into a specific role. This is about choice. It is about removing the financial penalty for a family that chooses or is forced to have a parent at home when their children are young. We must reform this inflexible system. We must recognise that families are the foundational building blocks of our society, not just individuals to be taxed at the highest possible marginal rate by an aggressive Labor Treasury. It is time to share the burden fairly. It is time to value the sacrifices of parents. It is time to bring some common sense to taxation.

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