Josh Frydenberg (Kooyong, Liberal Party) Share this | Link to this | Hansard source

Last week I received a letter from a constituent, Mr Paul Korczak-Krzeczowski, on behalf of his 10-year-old son, Aaron. In this letter—which was sent to the Minister for Families, Community Services and Indigenous Affairs, Jenny Macklin, and copied to me—Mr Korczak-Krzeczowski makes an impassioned plea for a fairer tax system—one that does not penalise savings and investment and does not abolish, as this government has done, the low-income tax offset for people under the age of 18 with eligible assessable income—namely, unearned income. Specifically, his son, Aaron, was introduced to the idea of share ownership, which saw him choose some blue-chip Australian companies to buy shares in: Origin, Woolworths, Telstra, ANZ, BHP and the Commonwealth Bank. As a result of his investment, in the year 2010-11 Aaron earned $692 in share dividends, bank investment and imputation credits. His parents filed a tax return for him and, as a consequence of the low-income tax offset, his tax payable was reduced. But in the 2011-12 financial year the situation was quite different. This time he was advised that, because Aaron was under the age of 18 and because of the government's legislative changes, he was no longer eligible for the low-income tax offset and has been left with a significant tax bill. Mr Korczak-Krzeczowski rightly says in his letter to Jenny Macklin:

The Australian government has introduced a quite severe disincentive for someone under the age of 18 years to save and invest.

I will tell you why the Gillard government have done this. It is to raise nearly three-quarters of a billion dollars over the forward estimates as part of the Taxation Laws Amendment Bill (No. 4) 2011. It is because they are running up huge amounts of debt based on spending that is out of control—$145 billion of government debt, the four biggest deficits in Australia's history. They are spending $100 billion more than in the last year of the Howard government. They are lifting the debt ceiling from $75 billion to $250 billion to $350 billion. Secondly, it is because in order to feed this spending spree it is increasing taxes—20 at last count, with the mining tax and the carbon tax. It is a figment of their imagination that they will be able to reach a surplus next year. They cannot even balance the books when they have record terms of trade.

Finally, this government has no understanding of what drives our economy: entrepreneurship, small business and investment. At the end of the day, this young man Aaron has done everything right. He has saved and banked the money that he was given for Christmas by his grandparents. He wants to invest it. The Treasurer could learn a thing or two from this young 10-year-old constituent of mine.