Michael Ferguson (Bass, Liberal Party) Share this | Link to this | Hansard source

My question is addressed to the Treasurer. Would the Treasurer inform the House about the steps the government has taken to reform Australia’s tax system? Treasurer, are you aware of any alternative policies?

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

I thank the honourable member for Bass for his question, and I wish him well in the election. I assume that he is running against a union official in the forthcoming election; there is a 70 per cent chance that he will be, and I wish him very well.

Brendan O'Connor (Gorton, Australian Labor Party, Shadow Parliamentary Secretary for Industrial Relations) Share this | Link to this | Hansard source

Mr Brendan O’Connor interjecting

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

The member for Gorton is warned!

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

The member for Bass asked me about steps the government has taken to reform Australia’s tax system. The government has cut tax in the 2003, 2004, 2005, 2006 and 2007 budgets. As a consequence of that, if you are on an annual income of $30,00 today you will be paying a top marginal tax rate of 15 per cent. Under the Labor Party, if you were earning $30,000, you were paying a top marginal tax rate of 34 per cent—which is more than double. If you are on $50,000 today, you will be paying a top marginal tax rate of 30c in the dollar. Under the Labor Party you were paying a top marginal tax rate of 47c in the dollar.

In addition to that, the government introduced GST to abolish wholesale sales tax and nine other state taxes. The government cut company tax. The government halved capital gains tax for individuals. The government cut petrol excise and abolished indexation. The government has introduced the childcare tax rebate, the mature age workers tax offset and the senior Australians tax offset; and the government has abolished all taxes for people over 60 who take superannuation from a taxed fund. This is light years from the tax system that the Labor Party used to run. Strangely enough, we did not implement those tax reforms by setting up a committee. We did not sit around and say we would have a council. What this government actually did was: we took some decisions and we fought for reductions in tax.

When we were fighting to reduce taxes, I did not notice anybody in the Labor Party assisting. In fact, we heard the Leader of the Opposition—with surely one of the more inane speeches ever delivered in this parliament—calling tax reform a day of fundamental injustice which would live in infamy throughout the centenary of the Australian parliament.

Cameron Thompson (Blair, Liberal Party) Share this | Link to this | Hansard source

Is he going to abolish it?

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

That is a very good question, because I have been asked if I am aware of any alternative policies, and the answer is: I am not. Certainly the Labor Party have no tax policy, and judging from what the Deputy Leader of the Opposition was asked on Sunday, and the way she floundered around in answering it, they have still not decided whether or not they will have a tax policy at the next election.

The member for Lilley, who is charged with being Treasurer in a future Labor government, said this to the National Press Club on 16 May:

I am not anticipating taking forward any significant change to the personal income tax system at this stage.

We have a Labor Party which has opposed every tax reform in the last 10 years, we have a Labor Party which has not even made up its mind whether or not to have a tax policy, and we have a Leader of the Opposition who has no economic credentials whatsoever. Let me remind the House that when this government introduced the $600 annual payment for the family tax benefit, the member for Lilley—the shadow Treasurer—went around Australia saying that it was not real money. This payment was paid to every eligible family in Australia and, rather than have to admit that he wanted to abolish it, he walked around Australia saying that it was not real. This is what you get from a political apparatchik: somebody who repeats a rhetorical line over and over again rather than engaging in substance. The people of Australia are interested in substance. They are interested in $600 payments that go into bank accounts and can pay bills for their children. They are interested in getting taxes lower. They are interested in tax reform, they know that the heavy economic lifting in this country has always been done by this government, and they will not trust a policy or a party that does not have any answer whatsoever to that policy.