Ross Vasta (Bonner, Liberal Party) Share this | Link to this | Hansard source

My question is addressed to the Treasurer. Would the Treasurer outline to the House the extent of the tax cuts announced in the budget? How will these help families and keep the country competitive?

Peter Costello (Higgins, Liberal Party, Treasurer) Share this | Link to this | Hansard source

I thank the honourable member for Bonner for his question, and I congratulate him on what a great job he is doing as the member for Bonner. This government introduced the largest income tax cuts in Australia’s history in 2000. Since introducing the largest income tax cuts in Australian history in 2000, this government has cut tax in 2003, 2004, 2005 and 2006. As a consequence of those tax cuts, you will now be on a 15c rate between $6,000 and $25,000, you will be on a 30c rate between $25,000 and $70,000, you will be on a 40c rate between $75,000 and $150,000, and you will be on the top rate of 45 per cent only on each dollar over $150,000. Under the Labor Party, between $20,000 and $50,000, you faced rates of 33c, 43c and 47c compared with 30c under this government. Indeed, many of us remember that the last tax cut that the Labor Party promised did not even survive—did I say ‘promise’; no, it was L-A-W—the 1993 election.

As a consequence of this, since 1995-96 reductions in tax and growth in real wages have increased the real disposable income of the average individual earner by 17.8 per cent. That is 17.8 per cent as a consequence of tax cuts and increases in real disposable income. The consequence of that is that average wage earners in Australia are far better off under a coalition government than they ever were under the Labor Party. Not only have real wages gone up but taxes have come down. When you put that together with the increase in family allowances, families are doing even better.

I am very pleased that the member for Grayndler is showing the government his best side—an old tactic but a good one, to stand up and pretend you are not interested when you are getting a barb because your government did not do anything for real wage earners, did not do anything for income tax and stands condemned by the Australian people as a consequence. The moral of this is as follows: the coalition stands for average workers in Australia. It is under a coalition government that their wages have gone up. The coalition government stands for average wage earners when it comes to tax, and average wage earners will always be better off under a coalition government than under a Labor government.