Steven Ciobo (Moncrieff, Liberal Party) Share this | Link to this | Hansard source

My question is also addressed to the Treasurer. Would the Treasurer inform the House how reform of the Australian tax system has affected Australia’s economic performance? Is the Treasurer aware of any opposition to these reforms?

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

Over the last decade Commonwealth tax to GDP has fallen from 22.8 per cent to 20.7 per cent. In that time the government has cut income tax in 2003, in 2004—

Simon Crean (Hotham, Australian Labor Party, Shadow Minister for Trade and Regional Development) Share this | Link to this | Hansard source

Mr Crean interjecting

David Hawker (Speaker) Share this | Link to this | Hansard source

Order! The member for Hotham!

Simon Crean (Hotham, Australian Labor Party, Shadow Minister for Trade and Regional Development) Share this | Link to this | Hansard source

It’s a sham!

David Hawker (Speaker) Share this | Link to this | Hansard source

Order! The member for Hotham is warned!

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

there goes the sound-effects man again; he is wearing a pink tie today, too, whereas the member for Lilley has a red tie—in 2005, in 2006 and in 2007. And there will be a second instalment in 2008. Let me remind the House—and I think this is instructive—that on 1 July 2000 the proportion of taxpayers who had a marginal tax rate of 30 per cent or less was 30 per cent. Today the proportion of taxpayers who have a marginal tax rate of 30 or less is 80 per cent. Let me say that again: in 2000 the proportion of taxpayers who had a tax rate of 30 per cent or less was 30 per cent; today it is 80 per cent. People will remember the Labor Party’s income tax scales, which had you paying the top marginal tax rate on your first dollar over $50,000. Tax reform commenced in 2000 with the cutting of income tax and the introduction of GST to replace wholesale sales tax, financial institutions duty, bank account debits tax, stamp duty on marketable securities, stamp duty on shares, bed taxes and a host of other taxes, some of which unfortunately the Labor states have still not abolished. I do not think there would be anybody today in Australia who would argue that the GST should be repealed and wholesale sales tax should be reintroduced. It would be like saying: get rid of the modern motorcar and let’s go back to the horse-drawn cab. I do not think anybody would say that.

But the trick of politics is not to be able to see what was right in hindsight; the trick of politics is to be able to see what is right prospectively. That is why it is worth going back and looking at what people said in 1999, when the government made this historic reform. This is what the Leader of the Opposition said, and I am going to read it to the House because it reflects on his ability—his foresight—in relation to economic policy. This is what he said in this place in 1999 when he was opposing the historic tax reform to abolish wholesale sales tax and replace it with GST and to cut income tax:

When the history of this parliament, this nation and this century is written, 30 June 1999 will be recorded as a day of fundamental injustice—an injustice which is real, an injustice which is not simply conjured up by the fleeting rhetoric of politicians. It will be recorded as the day when the social compact that has governed this nation for the last 100 years was torn up.

That is what he said in his opposition to GST:

When the history of this parliament, this nation and this century is written, 30 June 1999 will be recorded as a day of fundamental injustice ...

I will chance my arm on this. In the history books that are written and that will go into Australian schools over the next generation, I think 1901 will be there: Federation. I think 1788 might be there. I think 1939 to 1945 might be there, and I think the 1914-1918 war might be there. I think the September 11 attacks might be there, but I will warrant—and I am taking a big punt—that in the chronology of Australia’s history 30 June 1999 will not be there as the day of fundamental injustice.

Can’t you just see it? 25 April, Anzac Day; 30 September, grand final day; 11 November, the sacking of the Whitlam government—

David Hawker (Speaker) Share this | Link to this | Hansard source

Order! The Treasurer might consider bringing his answer to a conclusion.

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

30 June 1999, ‘Injustice Day’! ‘Injustice Day’, the day that the government reformed taxation! It is all very easy to sit back here in 2007 and say ‘I am an economic conservative’. It is very easy to say that now, but when the hard work was being done reforming this economy in 1999, he was not just off the pace; he was off the planet. He was off the planet with this kind of rhetoric.

The important thing in relation to economic policy is this: it is not what you see with hindsight but what you see in the future.