Jason Wood (La Trobe, Liberal Party) Share this | Link to this | Hansard source

My question is addressed to the Treasurer. Has the Treasurer seen claims that middle-income earners are missing out on tax relief? Have any serious alternative policies been put forward to deal with the tax system?

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

I thank the honourable member for La Trobe for his question. As he knows, from 1 July this financial year further income tax cuts were introduced for Australians, with a cut in the top marginal tax rate, an increase in the thresholds and an increase in the low income tax offset. They have put more money back into the hands of all Australian taxpayers, particularly middle-income earners. I have seen the claim that has been made by none other than the member for Lilley that somehow middle-income earners have missed out.

Wayne Swan (Lilley, Australian Labor Party, Shadow Treasurer) Share this | Link to this | Hansard source

Too right!

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

‘Too right,’ he says. A person on average weekly ordinary time earnings today compared to where they were in 1996 is taking home, after tax, $169 a week more—after tax. Not only have wages increased but, of course, taxes have been cut. That person on average weekly ordinary time earnings would be on a top tax rate of 48½ per cent under Labor’s tax scales, and that person today is on a top tax rate of 30c and does not go on to a higher bracket until $75,000. Right across the income distribution scale, not only have wages gone up but taxes have come down and put more money back into the hands of ordinary taxpayers.

I was also asked whether there were any credible alternatives that were being put forward, and I must say my heart leapt a bit when I read the front page of the Australian today. According to the front page of the Australian today, with an exclusive from the member for Lilley, Labor is considering a radical plan to flatten the personal scales by scrapping the top or the bottom tax rate. Or the bottom! Well, there are only two in between; why not scrap all four, for that matter? But it was either the top or the bottom.

Coming into the House of Representatives today the member for Lilley was asked about this plan: ‘What is the main aim of abolishing the top and the bottom personal tax rates?’ And he said, ‘What we have to do is really deliver some incentive for those people who have missed out so far.’ So it was on the front page of the Australian; it was still alive at nine o’clock this morning. But when 3AW broadcast its news at 1 pm, it broadcast the following: ‘Kim Beazley is ruling out abolishing the top rate of tax for high-income earners.’ So it was alive when the Australian was published; it was alive at nine o’clock. It was dead at 1 pm. I said of a former shadow treasurer that he could not hold a policy from Lateline to lunchtime. This shadow treasurer cannot hold one from breakfast to brunch! The policy which was alive at 9 am was ruled out at 1 pm. No wonder, when he was asked at 9 am, ‘Will you be presenting this to caucus, this plan of yours?’ he replied, ‘No, I’m not even going to present it to caucus.’ No wonder it could not be presented to caucus; it died at 1 pm today; it would not even have made it to 10 o’clock on Tuesday morning.