Chris Bowen (McMahon, Australian Labor Party, Shadow Treasurer) Share this | Link to this | Hansard source

My question is to the Treasurer. Treasurer, if the GST is jacked up to 15 per cent, how will compensation be delivered to self-funded retirees?

Scott Morrison (Cook, Liberal Party, Treasurer) Share this | Link to this | Hansard source

As I have said on many occasions, the government has no such proposal and has not put forward any preferred option along these lines. I refer the member to my earlier answers and I refer the member to the experience of the Howard-Costello government, when they put in place changes to the tax system which was the foundation stone of the growth and prosperity and the jobs that came as a result of them taking that very strong action.

I note the comments by the former Labor Premier, John Brumby, who said:

The reality is now that in the 15 years that the GST has been in place… we've seen a shift back to reliance on taxes on income, a significant shift.

The former Labor Premier also said this:

So we need to rebalance the system … and take the weight off bracket creep on ordinary earners.

Fifteen years ago, when the government at that time, the Howard-Costello government, actually changed the tax system for the benefit of the Australian people, for the benefit of Australian business, for the benefit of Australians who were working and saving and investing then—and they are still doing that now—back then, around 80 per cent of taxpayers faced a tax rate of 30 per cent or less. That has now fallen to only around one quarter of taxpayers. That is what has been happening. In the 1950s, a taxpayer had to be earning 19 times average weekly earnings before paying the top marginal rate of tax. Now, a taxpayer only needs to be earning 2.3 times the average weekly wage before being on the top marginal rate, with the Medicare levy of 49 per cent. That is what happening in our tax system. People are out there working, and saving and investing every day, and they expect the tax system to back them and they expect the government to back them, and that is what we are doing.

Tony Smith (Speaker) Share this | Link to this | Hansard source

Has the Treasurer concluded his answer?

Ms Plibersek interjecting—

The member for Sydney will cease interjecting. I have warned her a number of times.