Tuesday, 2 July 2019
Treasury Laws Amendment (Tax Relief So Working Australians Keep More Of Their Money) Bill 2019; Second Reading
That this bill be now read a second time.
This Treasury Laws Amendment (Tax Relief So Working Australians Keep More Of Their Money) Bill 2019 lowers taxes for hardworking Australians. It puts more money in their pockets, it strengthens the economy, it rewards aspiration and it should be supported by this parliament.
Our tax plan was carefully developed, and it was detailed comprehensively in this year's budget before being put to the Australian people at the election just six weeks ago. The Australian people were presented with a clear choice between the coalition's $158 billion of tax cuts and Labor's $387 billion of higher taxes on retirees, renters, home owners, superannuants, family businesses and income earners. Faced with this choice the Australian people delivered their verdict loud and clear in favour of our tax cuts, comprehensively rejecting Labor's tax hikes. Values drove our policy—to reward effort and encourage aspiration—with Liberals and Nationals wanting to see Australians earn more and keep more of what they earn.
This bill delivers on that commitment: a further $158 billion of tax relief. Our tax cuts provide both short-term relief and long-term reform. Australians earning up to $126,000 a year will receive up to $1,080, with more than 10 million Australians better off. This means that a couple—say, a teacher and a tradie—each earning $60,000 a year will get $2,160 in their family wallet. This tax relief will boost household incomes and ultimately household consumption, which will be good for the economy.
In 2024-25, the government will reduce the 32.5 per cent tax rate to 30c. This will accompany the abolition of an entire tax bracket, the 37 per cent tax bracket, which we have already legislated. The longer term structural reform will mean hardworking Australians will face a single marginal rate of tax of 30c in the dollar on the taxable income they earn between $45,000 and $200,000. Somebody who moves up the income scale by getting a promotion, working more hours or taking a second job will under these reforms get protection from bracket creep. This will improve the incentives for working Australians and reward effort.
As a result of the government's plan, around 94 per cent of Australian taxpayers are projected to face a marginal tax rate of 30 per cent or less in 2024-25. This compares to just 16 per cent if stages 2 and 3 of our tax package didn't go through. Around 13.3 million taxpayers will pay permanently lower taxes by the time the government's plan is fully implemented. The government's personal income tax measures will increase aggregate household income by around $8 billion each year over the forward estimates period. This will help support consumption growth, and given that household consumption makes up around 60 per cent of the economy the government's plan will help support economic growth. Lower taxes will increase the financial return from work with higher take-home pay, helping to encourage workers to re-enter the workforce or work additional hours if they wish. By tackling bracket creep, it will support those workers who are hit with a higher marginal rate as their wages go up to compensate for inflation.
Our tax relief measures will keep taxes as a share of GDP within the 23.9 per cent cap, ensuring that we don't impose an increasing tax burden on hardworking Australians. Securing future tax cuts now will provide confidence to Australians that they will be rewarded for their hard work and it will help protect their future pay increases from bracket creep. The government is committed to delivering a tax system that rewards effort and aspiration; a tax system that promotes opportunity and drives investment and growth; a tax system that underpins a strong economy and opportunities for all Australians now and into the future; and a tax system where all individuals and businesses pay their fair share so that the government can guarantee the essential services Australians rely on.
The government plan will maintain a progressive tax system. It is projected that in 2024-25, around one-third of all personal income tax will be paid by the top five per cent of taxpayers, a slightly higher proportion than what they currently pay. Schedule 1 to the bill enhances the current low- and middle-income tax offset by increasing the base offset from $200 to $255 and the maximum benefit from $530 to $1,080 for the 2018-19, 2019-20, 2020-21 and 2021-22 income years. Schedule 1 of this bill also increases the amount of the low-income tax offset from $645 to $700 from 2022-23. Schedule 2 of the bill increases the top threshold of the 19 per cent tax bracket from $41,000 to $45,000 from 1 July 2022. It also reduces the 32½ per cent rate to 30 per cent from 1 July 2024.
The government's first legislative priority for the 46th Parliament is consideration of the government's tax plan we took to the election. I call on the parliament to respect the wishes of the Australian people so that tax relief can flow to Australians quickly. I say to the parliament: promptly pass this bill this week and pass it in full, because lower taxes are part of the government's plan for a stronger economy. I commend this bill to the House.
Leave granted for second reading debate to continue immediately.
I rise to speak on the Treasury Laws Amendment (Tax Relief So Working Australians Keep More Of Their Money) Bill 2019. Just hours ago, the Reserve Bank of Australia cut the cash rate by 0.25 per cent. A month earlier, it cut the cash rate by 0.25 per cent. The cash rate is now one per cent. The inflation rate in this country is 1.3 per cent. We actually have negative interest rates. Not only is money free, it's actually better than free. That's how well this government is doing on the national economy. And do you know what the cash rate was at the height of the global financial crisis? It was three per cent. It's been cut to one-third of what it was at the peak of the greatest crisis in the global economy since the 1930s—on their watch. That's in spite of the fact that they have a number of advantages, including commodity prices and what's happened with iron ore in Brazil, in particular, lifting up the price of that commodity.
When interest rates were at three per cent those opposite declared it to be a national emergency. Well, if three per cent is a national emergency, then one per cent is a national crisis, an absolute crisis, on their watch. They are now in their third term and they have no-one else to blame but themselves. When the Reserve Bank made that statement today, they said:
Consumption growth has been subdued, weighed down by a protracted period of low income growth and declining housing prices.
What have they identified? We have low consumption growth. We have economic growth at around 1.8 per cent on an annual basis, which is well below trend. We have wages that are decreasing. We know that that's occurring in real terms. They are stagnating. The Reserve Bank has identified wage stagnation as a major issue in the economy. So, what's the solution? It is to decrease people's wages, as of yesterday. From yesterday, 700,000 Australians will lose their penalty rates: low- and middle-income earners who work in hospitality; people who are building cleaners; and people who work on weekends and late at night to put food on the table for their families, to put petrol in their cars, to pay their school fees and to pay their rates. They copped a cut as a result of this government's contempt—contempt!—for working Australians. So, don't come in here and speak about the rights of working Australians. The Reserve Bank has said that they, and monetary policy, can't do all the heavy lifting—once you hit a one per cent cash rate, there's not far to go. They have said that it is time for all arms of policy to be used together. We agree with the Reserve Bank.
At the moment we have a trifecta from this mob. On top of the pathetic growth figures, we have low wages, weak consumption and weak productivity. At the moment, in their third term there are no economic indicators of which they can be proud. What is Labor's response to that? Our response is to be economically responsible. It is to put the national economic interest before politics.
Those opposite are focused on what will happen in 2024-25. I say, the Reserve Bank of Australia says and every economist who knows anything about what is happening in our economy says: the time for action is right now, not in five years time. Now. That is what is required and that is what we are focused on. That's why, under Labor's proposals, put forward constructively in a spirit of cooperation, you will see more tax cuts sooner with the amendments that we will move tonight. And if the government vote against Labor's amendments, they'll be saying that they don't think all Australians are deserving of a tax cut this term.
Those opposite speak about mandate. Look at the Treasurer's speech tonight with its absurdly, frankly, titled bill, which the government should be embarrassed by—that sort of Orwellian behaviour that it engages in. But the fact is it should say 'some tax relief so some workers keep a bit of their money', because not every worker is going to get a tax cut this term in this proposal, far from it.
Those opposite speak about aspiration. Well guess what? The cuts stop at $126,000 for this term under the bill that's just been presented by the Treasurer. If you earn a dollar more than that, you don't get a dollar, not one. You get absolutely nothing. Because it's not actually adjusting the scales—it's through the offset—you will not actually get any flow through. The only people arguing the case for those hard-working Australians who have done well is those on this side of the House, who are putting forward a proposition that would see every single worker get a tax cut, not after the next election, not after the one after that, but right now.
To the arrogance of those opposite: yes, they succeeded on 18 May, but they didn't get elected for life. The truth is that if politics was like an Aussie Rules game and this was Carlton-Hawthorn, then Carlton would be ahead at this stage by 78 to 68. But the thing about politics, unlike Aussie Rules, is that it doesn't end. The siren goes but there's another quarter and, in another three years, there's another one. Guess what? Scoring two goals is pretty easy, so don't get too arrogant, those opposite, because what you are suggesting is that you are prepared to hold up tax cuts today because of something that might happen in 2025. Is that really your position? Because you're the only people who are speaking about holding up tax cuts for Australians.
We on this side of the House are talking about bigger tax cuts sooner. That's our position. We're not talking about holding anything up, and that's why we facilitated debate in this chamber right now. The fact is that the government do have a choice if our amendments are carried. The government can choose national economic policy and the national interest or they can choose politics. But good luck arguing that when people realise that what those opposite are really saying is they'll hold up tax cuts if our amendments are successful in the Senate. We're up for that debate, frankly. We're up for a debate on national economic policy, we are up for a debate about what's required in the economy and we're up for a debate about putting firmly and squarely on the shoulders of those opposite the responsibility they have as a third-term government to deal with the national economic issues which aren't just about tax and a fair tax system but about wage stagnation. The government has no wages policy beyond getting rid of penalty rates. That's about productivity growth. It has no policy for productivity beside cuts to education, more cuts to TAFE, other measures as well, and an infrastructure plan that is also way off in the never-never.
So the amendments that we'll be moving before this House tonight will do two things, essentially. Firstly, they mean we will support—and we did support this before the election—stage 1. That provides, for those who earn up to $126,000, up to $1,080 of benefit. We think that's a good thing, because people, particularly at the lower end of the scale, will spend the money. That creates economic activity and supports jobs.
On stage 2, the Treasurer say it's good in 2022. I ask the Treasurer this: if it's good in 2022, why isn't it good in 2019, right now? It's right now that it's required. Our proposal of bringing forward that change to the 37 per cent marginal rate from $90,000 to $120,000 would mean that, from $90,000, an increase would be more cash in the hand and, up to $120,000, people would receive $1,350. But, because it's a change to the marginal rate, it will be a flat increase beyond that. So, if you are on $150,000, you'd get that $1,350. If you are on $250,000, you'd get it as well—the same amount. A tax cut for every working Australian is what we are proposing here. The government really has to put forward a case of why, if it's good to do that in 2022, it's no good in 2019—because today's alarm bells from the Reserve Bank of Australia indicate that stimulus is required right now.
Second, in terms of economic activity—and this, in part, would deal with some of the productivity growth—would be bringing forward the government's infrastructure investment plan. We're not arguing that the government should see sense and fund Cross River Rail in Brisbane, which is underway, or that Melbourne Metro should be fast-tracked for the economy. We are prepared to not even argue that case, because we know they don't like public transport. But we will say that the government could bring forward now their own proposals they have put forward in their plan for off in the future. They could bring forward now some of the work on the North-South road in Adelaide. They could bring forward the western rail line in Sydney through Badgerys Creek airport. They could bring forward stage 2 of the Mackay Ring Road. They could bring forward stage 5 of the Townsville Ring Road. They could bring forward some of the Perth METRONET projects. They could bring forward the Bridgewater Bridge in Tasmania. They could do that now, not off in the never-never.
I'll give you one example of the fraud that is this government's infrastructure package. During the election campaign, both sides of politics committed to upgrading the Linkfield Road. That's a road across the Bruce Highway. It runs between two marginal seats in which there was a bit of interest during the campaign—the seat of Dickson and the seat of Petrie in the northern suburbs of Queensland. I visited there and it is, indeed, a choke point. The government said that, yes, it would match the commitment that we made many months ago—about a year ago, indeed—to upgrade that particular project. But when the budget came down there were Senate estimates afterwards and we got the timeline for the projects. If you thought the tax cuts for 2024-25 were bad and on the never-never, the Linkfield Road project funding commences in 2026-27. It doesn't finish or open then; they dig a hole in 2026-27! Do you think those people who got the direct mail letters from the member for Petrie and the member for Dickson said: 'Oh, it's great! Peter Dutton is going to dig a hole in 2026'? I reckon they thought he was going to do it this term. We are saying: do it this term. You committed to it, so bring it forward—that's what we're saying.
When the government talk about the infrastructure package, it is way off on the never-never. Indeed, the Reserve Bank have explicitly called for infrastructure investment to be brought forward. They did it last month. They did it this month. They've been doing it for some time. The government has these figures. Even in the Governor-General's speech today, the East West Link was spoken about. That isn't going to happen. The Victorian government says it isn't happening. It's in the contingency fund. There's not a dollar of actual investment against a year, but it made the GG's speech. I mean, for goodness sake, get real. Forget fantasy projects. There are projects that need real funds, with real workers earning real money and producing real productivity benefits, right now. I say bring forward stage 2. Bring forward the infrastructure investment.
Now I come to our other amendment, which is about stage 3, the 2024-25 proposal that's going to help the economy now because in five or six years time someone will get some benefit. That's their proposal. We know in this chamber that, through the House and through the Senate, they've already flattened the tax levels in 2018. That has already happened. The level of 32.5c, down from 41c, to $200,000 has already been done—it's legislated. What's actually before this chamber is decreasing the 32.5c rate to 30c. And that has a cost of $95 billion. It has an annual cost in its first year of $19 billion. Now, think about a household budget. If you said to someone: 'Mr and Mrs Smith of Kooyong, you're going to have to save. You're going to get $95 less in your budget every week,' do you think they'd go: 'Oh, okay. That's okay. That's just $95 less we have,' and that would be it? No, they wouldn't. They'd have to work out what they could no longer buy. They'd have to budget for it.
We've asked the government to provide information about two things. The first is the distributional impact—basically, who benefits. They won't provide the information. The member for Melbourne—I won't often say that he's got a point—had a point earlier, because there's no information being given by the government about the distributional impacts that are made. The second thing is that they have to say what the response is. What cuts will be required to health, to schools, to aged care, to child care and to regions? What will the impact be of ripping that much money out of the budget on an annual basis? What's the plan? What's the impact? Where's the modelling?
This is a very significant change being proposed by the government. It is more than half a decade off into the future, and they say, 'We've got to vote on it this week.' I say to them: that's all about politics, not about good, sound economic policy, because if we're reminded of anything that the Reserve Bank did today it's the uncertainty of the economic times in which we live. Since May 2018, they have made a decision to cut interest rates twice in under two months. Did the government go to an election saying, 'Vote for us and we'll get interest rates cut twice in under two months'? What's the impact? They like to talk about people on retirement incomes. I tell you what, sunshine, people who rely upon interest rates to be at a certain level in order to survive and to do well just lost a lot of money. They just had a cut in their incomes today as a result of that Reserve Bank decision.
What we're also concerned about is that what we're dealing with in this legislation is the 2014 budget but in stealth mode, silently going across and bombing the household budgets of Australians. That is what this potentially does: bomb the budgets of Australians like a stealth fighter. That's what they're doing here, silently, not talking about the impact. They won't give us the information. They just say, 'Just vote for it down the track because we've been elected for life'—apparently. According to those opposite, there won't be an election in 2021, 2022 or 2024. They are there forever, according to them!
Mr McCormack interjecting—
The Deputy Prime Minister supports this concept of abolishing democracy! That is consistent with their approach towards debate on these issues. But the truth is this: whether you face north or south in this chamber, those of us who were privileged enough to be sworn in to this chamber—facing this way or that way, and I have done both—have an enormous responsibility. We have a responsibility to those who we represent. We also have a responsibility greater than that. We have a responsibility not just to our electorates but to the national economic interest.
Those opposite have a nonsense debate about aspiration. I understand aspiration. I regard myself as someone who aspired to a lot in life compared to how I began life. Australia provides that opportunity. I stand here, as the leader of the Labor Party, as someone who was born in a council house to a single mum. This country provides that opportunity, but we shouldn't take it for granted and we shouldn't play politics by saying that we know what the economy will look like in 2024-25. That really would be a triumph of hope over economic experience and economic reality. We are better than that, and the parliament needs to be better than that. We cannot just leap into the unknown, which is what the government is asking us to do. That's why we are putting forward responsible amendments in two forms. We would ask for the support of the crossbench, and we want to negotiate with the government. We want to negotiate not by trying to impose our positions but by trying to impose some economic common sense on this debate. At the moment, there hasn't been any of that.
The government suggests that they went out there, with a pamphlet—just show it to me—and by direct mail, and said, 'If you vote for us in 2024-25, we will decrease the rate from 32.5 per cent to 30 per cent.' They didn't do that. What they did was say that Australians would get a tax cut on 1 July, and they have broken that promise. Parliament was due to come back. At that time, they knew—because of what happened with the writs—that that wouldn't occur.
We, on this side of the House, are going to put the national economic interest first. We are not going to play politics. One things I have said is that I don't want to be known as the Leader of the Opposition; I want to be known as the Labor leader. We are being constructive. We're not just saying no. We wouldn't even be having this debate unless we were prepared to facilitate the legislation. Our amendments won't be successful in this House, but we will vote in this House for the legislation so as to facilitate its discussion in the Senate on Thursday. We also will agree that the House and the Senate should stay here, this week, until it gets done. The government have asked for our cooperation on that. We are being cooperative with regard to the procedures. Notwithstanding that, I think the member for Melbourne had a legitimate complaint to put forward.
We have not been intransigent about this. We have changed our position, since the election, about stage 2. We are saying two things. Firstly, when the economy is flatlining like it is and when the Reserve Bank have gone to two interest rate cuts in two months and are saying that they can't continue to do all of the heavy lifting, the bringing forward of stage 2 is a sensible proposition, as is the bringing forward of infrastructure investment. That isn't dealt with in this legislation, but the government has the capacity to do that. Secondly, we are saying that it should be separated out. We can have it through, and we can stop talking in the Senate, really quickly.
If we get through stage 1 and stage 2, you can come back with stage 3 whenever you like. You have many years to do it. There is a bit of time! I'll give you that big tip. You haven't got much of an agenda, so you have to fill in the time with something! This is an idea that I'll put to you, which you wouldn't have heard of before: why don't the government filibuster? We saw them do it in the last term. They actually filibustered in this chamber quite remarkably in order to avoid votes in this chamber. But we are being constructive and economically responsible. You have the opportunity of having more tax cuts sooner under our proposals, and you should be voting for them.
There's a lot of applause for my arrival at the dispatch box, and I know they're all keen to hear my contribution on the Treasury Laws Amendment (Tax Relief So Working Australians Keep More Of Their Money) Bill 2019. What an appropriately named bill it is—how apt, how correct, how appropriate. Those opposite would do well to listen to these words:
The Labor Party has put itself in a perilous position by refusing to back the tax cuts. The coalition placed its tax package front and centre of the election campaign. The government has a mandate to deliver on it.
Who would have said that? Would it be somebody from this side of the House?
I hear the member for Forrest say, 'Maybe'. No. In fact, it was none other than Martin Ferguson, a former senior Labor minister.
Honourable members interjecting—
You may well laugh, but he was a former head of the Australian Council of Trade Unions—the ACTU no less. He's a man who obviously understands the Australian economy and the needs of both workers and businesses. His words should be not only listened to but also heeded. I think the members for Hunter and Wills are perhaps already convinced. They know the validity of the Treasurer's argument. They know the validity of this particular bill—because they've already stated it—more so than Martin Ferguson and so many others who've been quite dismayed that the Labor Party cannot work out exactly what it stands for. Listen to the will of the Australian people. Speaking of will, the member for Wills told The Australian that Labor should 'wave the tax cuts through'. A Labor MP said:
Otherwise, we just become the issue. They have a mandate for the tax cuts.
I say to the member for Wills: 'You are correct. You are absolutely correct.' The Liberal-National government offered a broadscale tax cuts package to get cash into pockets and to improve the household budget, and the Australian people said yes. The Australian people said an emphatic yes.
We're working to build a stronger economy for regional Australians, and tax cuts are at the heart of what we're doing. More cash in the hand means less stress paying bills. It means more for a restaurant dinner or a much anticipated holiday. They are very significant tax cuts. Already we've legislated a rebate of up to $530 for 2018-19, but in the April budget we doubled the deal. Now there's a rebate of up to $1,080 for the year that's just ended. That's up to $2,160 for two-income families as soon as your tax return is processed, possibly as soon as next week.
Our plan for stronger regions also includes small business. Instant asset write-off is now up to $30,000 for each piece of capital equipment purchased and is now for companies with a turnover of $50 million a year. Small businesses are paying their lowest company tax rate since 1940. That's only possible thanks to a Liberal-National government, because that's what we do. That's more money into the pockets of hardworking businesses and hardworking Australians. We want to employ more Australians, certainly more regional Australians.
Last month I visited the Nationals Victorian seat of Mallee. We've got a fantastic new member for Mallee in Anne Webster. I met truck salesman Anthony Dalfarra. He said in the days following the election his telephone was ringing off the hook. During the election campaign, I have to say, sales slumped. The phone wasn't ringing off the hook because he and his customers feared that Labor might possibly have won the election. That was his great fear. He told me there's much more confidence in the regional market when there's a coalition government than when people are staring down the face of what Labor could potentially offer. More people have more money in their back pockets when we're in government than when those opposite fill the treasury bench. During the campaign the Nationals member for Flynn—I'm glad he's here to listen to this—and I dropped into a good little butchery shop called Fair Dinkum Meats in Emerald. He remembers it. He's nodding. In Queensland we had a chat with butcher Jason O'Loughlin—a good fellow. Jason said that since the Liberals and Nationals came to government six years ago he's been able to employ 20 more staff because of our instant asset write-off scheme and other policies. Twenty more additional staff—that's fantastic. He's also seen an increase in customers since the election, and they all tell him it's because they feel more comfortable spending because the economy is more secure. You could say they're getting in for their chop, Member for Flynn. More cashflow means more confidence. It keeps people on farms and in towns and mines. It brings new residents to the community. Why can't Labor work that out?
The Leader of the Opposition said during the Treasurer's contribution, 'Show me the money.' Well, I will show you the money. There it is; it's in the budget handed down on 2 April. Now, this is a surplus budget. I know those opposite don't know what a surplus budget looks like.
Mr Albanese interjecting—
I'll get on to infrastructure in a minute, Leader of the Opposition! But, Mr Speaker, that is a surplus budget, something that those opposite haven't been able to produce since the late Bob Hawke was Prime Minister.
The Leader of the Opposition, the member for Grayndler, talks about infrastructure, and three times during his contribution he talked about the never-never. Interestingly, the never-never could be described as Australia's outback, and we've put millions upon millions of dollars into the Outback Way. When I was in Laverton in March, in the member for O'Connor's seat, this fellow came up to me—we're funding the Western Australia section to the tune of a considerable amount of money.
Mr Albanese interjecting—
It's tens of millions of dollars.
$76 million for—
Mr Albanese interjecting—
Opposition members interjecting—
If you just listen—a businessman came up to me and he said, 'That section, that 70-kilometre section'—
Ms Butler interjecting—
I know you might think it's funny because you come from Brisbane, but this is really important for regional people. That section of road, that 70-kilometre section of road, is going to save his mining company nine hours of travel time to get its heavy vehicles with mining equipment to the mine, to get its miners from Laverton to the mine. That is a significant saving, and it's also making it certain that they're going to get what they need to them sooner and safer. Talk about the never-never: we're spending $100 billion over the next decade on infrastructure and every electorate, including the member for Griffith's, will benefit from this investment.
Why do Labor play games around the edges of the tax cut package that we're putting to the Australian people? Why are they running around the edges of the tax cut benefits? Why don't they just get on board and do what the Australian people want this parliament to do? The Australian people clearly said on 18 May that they wanted us to do it, by voting for us. It's plain; it's clear: pass the tax cuts now. Look what we're doing: the government have legislated to double the 2018-19 tax rebate to as much as $1,080, and we want to get it done this week. And in 2023 we're raising the low-income tax offset from $445 to $700, and lifting the 19 per cent rate threshold from $37,000 to $45,000. And from 2024-25, 94 per cent of taxpayers will pay a marginal rate of no more than 30c in the dollar.
It's massive tax reform, and on 18 May Australians said, yes, they wanted it. The Liberal-National government are doing what it takes to get the cash onto the kitchen table, and across our villages, towns and big regional cities they have given us an overwhelming tick of endorsement. The drought alone is a huge reason to get cash back into our communities, and it must start with rebates when people lodge their tax returns. Just do it now. I don't know why we just don't do it now.
I'll conclude with the Treasurer's wonderful op-ed in The Australian yesterday. He finished his remarks in his very well written piece in The Australian by saying:
Labor made no secret of its tax policies at the election.
No, they didn't.
Well, now the Australian people have spoken. They want the Coalition's tax package in full.
The message to Labor is clear: don't deny the tax cuts Australians voted for, and if you're going on a listening tour, don't ignore what they say.
As the Leader of the Opposition said a moment ago, this bill does have an absurd title, and it would be more appropriately called the Tax Relief So Working Australians Keep More of Their Money but Not For a Few Years Bill, because that's what the government is proposing in the bill that they're putting forward today: that there be tax relief on the never-never when the economy desperately needs a boost right now. That's why I'm moving the second reading amendment circulated in my name:
That all words after "That" be omitted with a view to substituting the following words:
"whilst not declining to give the bill a second reading, the House calls on the Government to:
(1)amend the bill to remove the measures that begin in the 2024-25 financial year, so that measures that provide relief now can be passed by the Parliament without delay; and
(2)support the economy by adopting the Opposition's plan to provide income tax relief to every Australian worker from the 2019-20 financial year and bring forward infrastructure investment".
Our position on this tax bill is built on three fundamental principles. The first one, as we saw today with the Reserve Bank cutting rates again, is that the economy desperately needs a boost, and we want to give the economy a boost. The second principle is that everybody—every worker in the Australian economy—deserves to have a tax cut from this week in this parliamentary term and not on the never-never. The third principle is that it is irresponsible to sign up to a $95 billion tax cut which doesn't come in until after the next election five years away.
Our position is based on a reasonable, rational, hard-headed assessment of the economic and budgetary conditions under this third-term government. Let's go through where we are at. These are facts; they're not opinions. This is the slowest economic growth since the global financial crisis. Australia is in the longest per capita recession since the 1982 recession. The national economy has fallen from the eighth-fastest-growing in the OECD in 2013 to the 20th-fastest-growing today. We've got stagnant wages which are growing at one-eighth of the pace of profits. We've got rising underemployment and youth unemployment. We've had five years of weak productivity growth. Productivity has actually fallen every quarter for the last four quarters. We've got weak household spending, weak business conditions, a sluggish retail sector and business investment at the lowest level since the 1990s recession. Living standards are growing more slowly under the Liberals than they were under Labor. The Reserve Bank has had to cut interest rates to one-third of what they were in the darkest days of the global financial crisis, and net debt has more than doubled under those opposite.
The government sees these figures—the same figures that we see, that I've just run through—and they say: 'Look, everything's fine. It can be business as usual.' If you walk down the main street of any of our communities—any of your communities—people will tell you they're worried about the slowing economy, they're worried about stagnant wages, they're worried they won't be able to pay their mortgage and they're worried they won't be able to pay their bills. And, with a record like this, you've got to ask the obvious question. A record like the Treasurer's begs the obvious question: why does he always look so pleased with himself with a record like that? And why does he spend all of his time talking about the Labor Party? Why doesn't he do his actual job in this economy?
You can imagine the Treasurer's day. He rocks into the office at probably about 9.30 or so after a couple of hours in front of the mirror. I know a bit about that office; I've knocked around that office a bit myself over the years. He rocks in and he hands over the overcoat and the briefcase. He wanders into his office and he calls out to his offsider, 'Fetch me my slippers. Fetch me my big stack of Labor transcripts. Fetch me my little yellow highlighter,' and off he disappears, poring over our transcripts and all the things that we've been saying in earlier years. He calls out again and says, 'Look, cancel all of my meetings; I'm going to make a day of this.' And so he spends the day in there, huddled over our transcripts with the little yellow highlighter, and at the end of the day he emerges.
And what does he emerge with? He doesn't emerge with a plan to turn around the floundering economy, a plan for wages or a plan to get things moving again in the Australian economy. He emerges with an opinion piece. In that opinion piece, we had to read and witness that pathetic spectacle of a Treasurer who spends all of his time writing a 42-paragraph opinion piece in which he mentioned Labor in 31 of the paragraphs. What a pathetic spectacle. No wonder this Treasurer has only ever presided over below-trend growth. He is the chief architect of below-average growth from a below-average government. There has never been a bigger, more yawning gap between a treasurer's regard for himself and his actual performance in the economy. If those opposite were doing a good job managing the economy, the Reserve Bank wouldn't have to cut rates again today. There couldn't be a worse time for a government which has no idea and no plan to turn things around. There couldn't be a worse time for this government's approach to the economy.
As the Leader of the Opposition said, we are prepared to do our bit in this place to help the government turn around this floundering economy. We do want to play a constructive and a responsible role in getting things moving again. We do recognise that the economy has deteriorated even since the election. We've seen those national accounts. We've seen those two interest rate cuts. What we're saying is, 'Let's pass stage 1, get them into the economy as soon as possible. Let's pass stage 2 and bring forward some of the benefits of stage 2, so that they can begin to flow this week and not after the next election.' What this would mean is if you earn up to $126,000 you get a tax cut of up to $1,080. If you earn over $90,000 you get a tax cut of up to $1,350 extra brought forward under our plan. What that would do is get more money into the hands of more workers sooner and circulating in an economy which desperately needs a boost after the weak outcomes of the last few years.
Ours is the only plan which gets every worker a tax cut in this parliamentary term. We can do it in a responsible and measured way, which doesn't jeopardise the surpluses that the government has forecast. If they, the so-called party of lower taxes, don't vote for our amendment in a few moments time they will be voting against tax relief for every worker this term. What they will be doing is holding stages 1 and 2 of their own tax policy hostage to a tax cut which doesn't come in for another five years. They are saying to everybody in this parliament, and in the country beyond, that they won't let the parliament commit to a tax cut this week unless we also sign up to a tax cut in 261 weeks time. That is the essence of the position that they are taking. They are prepared to jeopardise tax cuts this term by prioritising the next term when the economy needs a boost now and not in five years time. The government has routinely and regularly got the economy wrong but they want to pretend that they know what it will look like in 2024-25. They haven't said how they'll pay for stage 3. It assumes no downturn. It compromises our ability to deal with a downturn if we commit that $95 billion today to a tax cut in five years time.
Our message for the government is: enough of the finger pointing, the blame shifting and pretending it is somebody else's fault. It is a third-term government now—six years in office. It is long past time to take responsibility for the economy that you have so badly mismanaged. If they spent as much time focused on the economy as they spend focused on us, maybe the economy wouldn't be growing at its slowest rate for a decade.
Today is their opportunity to do the right and responsible thing by the budget and by the economy. Today is their big chance to give every single Australian worker a tax cut this term, to get money flowing into an economy which desperately needs it. If they don't do that they will have to explain to the Australian people why they held tax cuts hostage this week to a tax cut which won't come in for another five years. That's what this debate boils down to tonight in the parliament.
We will move detailed amendments shortly in the other stage, the consideration in detail stage. We call on the government to pick up what is a responsible, sensible and rational proposal that we've made in good faith to try and get the economy going. Growth is not thick on the ground in this economy on their watch and so we need to do what we can to make sure the Reserve Bank isn't doing all the heavy lifting on their own, that they are getting some help from this building and from this government.
To read into the record the second reading amendment, I move:
That all words after "That" be omitted with a view to substituting the following words:
"whilst not declining to give the bill a second reading, the House calls on the Government to:
(1) amend the bill to remove the measures that begin in the 2024–25 financial year, so that measures that provide relief now can be passed by the Parliament without delay; and
(2) support the economy by adopting the Opposition's plan to provide income tax relief to every Australian worker from the 2019–20 financial year and bring forward infrastructure investment".
I urge the House to support our sensible amendments now and in the consideration in detail stage. We can work together to get every Australian worker a tax cut flowing from this week, not five years down the track. If the party of lower taxes were serious about that they would support our sensible amendments. They would do something for once about an economy which has slowed substantially on their watch.
I second the amendment. This is a really important debate for this parliament. The fact that the government somehow thinks that it has a mandate to completely overrule the processes of this parliament is simply ridiculous. It is the job of this parliament to put legislation under scrutiny, and it is particularly important that we put this legislation, the Treasury Laws Amendment (Tax Relief So Working Australians Keep More Of Their Money) Bill 2019, under scrutiny, because it is a $95 billion proposal on the budget at a time when our economy is absolutely flatlining. The government seems to be completely oblivious to what is actually happening with the economy. Today we had the Reserve Bank, for the second time, lower interest rates. It has lowered interest rates below what they were during the global financial crisis, a crisis that, if it had not been for the intervention of the government of the day, would have left thousands of Australians out of work. That is what a good government does. It looks at the economic circumstances and it makes policy accordingly.
With these amendments, we are putting forward a proposal, a sensible proposal, that stimulates the economy now. It makes sure that every single Australian worker receives a tax cut in this term, because we know we need to put money into the economy now in order to stimulate growth. When the economy is flatlining, do you know who it hits first? It hits low-skilled workers first. It hits workers in our regions. Our regions are the canaries in the coalmine when it comes to our economy. They are where we are seeing, and will see, hits to the economy—in seats like the member for Flynn's, which has such huge unemployment, and in areas like Gladstone, where unemployment is way too high. We should be doing better. That is what happens when your economy is flatlining. But this government does not have a plan to deal with what is happening to the economy now.
Labor is sensibly proposing that we bring forward part of the stage 2 tax cuts. I say to all of those opposite, but particularly to the new members, who are working their way through how this place works and what amendments are doing: if you new members of parliament vote against the amendments we are putting forward you will be voting against a tax cut in this term for every working Australian—that is, for every working Australian in your electorates, particularly those that have substantially high unemployment rates and that need that economic stimulus now.
Also, part of our proposal is to bring forward infrastructure, absolutely critical infrastructure that puts real money, real jobs and real projects into economies today. There are hundreds of shovel-ready projects across the country, many of which the government has promised. We heard the Leader of the Opposition talk about when they have promised them—the Linkfield Road is in 2026. I went to seats all around the country and I don't remember when the government was saying, 'We're going to build this new road, this new train station, a new roundabout or a new tunnel' that, somehow or other, those projects would not be delivered until 2026. That's the reality—or the farce—behind this government's infrastructure spending. We have said that stimulus needs to be in the economy now. We want to work with the government on bringing those projects forward. We know some of them take a long time. We understand that. But we want to bring them forward so we can get that stimulus into the economy now.
The proposals before this parliament are in the national economic interest. What this government is trying to do is completely—and foolishly, frankly—decide that it cannot move, that it cannot meet the times that we're in. Without the government sensibly working with Labor to actually look at what infrastructure projects we can bring forward, we know what's going to happen. The economy is flatlining, and our regions are already suffering. If the government does not accept these proposals, it will be voting against putting money into the pockets of every single working Australian, against stimulating the economy now and against making sure that we don't see the sort of crisis we were going to face under the global financial crisis, where thousands of Australians would have been unemployed or in insecure and low-paid work because of the actions of or the failure of a government. It is on this government's head if that's what occurs.
The original question was that this bill be now read a second time. To this the honourable member for Rankin has moved an amendment that all words after 'That' be omitted, with a view to substituting other words. The question now is that the amendment be agreed to.
We don't agree with this amendment because there's a big difference between this so-called plan that the shadow Treasurer and opposition leader have come up with and our plan—we took our plan to an election. The members opposite seem to have forgotten that, six weeks ago, the Australian people repudiated the outrageous taxes that this shadow Treasurer was intimately involved with. This shadow Treasurer wants to wash his hands of $387 billion of proposed higher taxes. We all remember the very presidential-looking photos of the economic team. We see that, rightly, every member of that economic team has been demoted in one form or another except for the shadow Treasurer, who somehow got promoted through all of this. We see the shadow Treasurer talking about the urgent need for stimulus, but when, just six weeks ago, he was very, very freely using terms like 'top end of town'—I didn't notice 'top end of town' in his speech this time—he was arguing to rip $387 billion out of the economy that he apparently now believes needs so much stimulus.
So the Labor Party have learnt nothing. The man who was at the centre of every single hopeless economic decision that they made in opposition has been promoted. He should have been punted down the end of the bench or to the back bench, because we all remember that the shadow Treasurer is really most famous for being Wayne Swan's brain. It's not a compliment to be referred to in that way. We all remember the line that he very famously drafted for then Treasurer Swan—'The four surpluses that we deliver tonight.' How many of those surpluses eventuated? Zero. Anyone who's been in this House knows what happened to those surpluses. So we are not going to take lectures from the shadow Treasurer. We are not going to agree here to amendments hastily thought up in the panic in between Sky News interviews and the opposition's caucus meetings, because our plan was taken to an election. Our plan was endorsed by the Australian people.
To give credit to the shadow Treasurer, he has fronted up today. He is showing a brave face. We know that, as the co-architect of the disastrous economic policies that the opposition took to the election, he should be hanging his head in shame, but he's got more chutzpah than anybody in this House. So, no, we are not going to be taking any lectures from the shadow Treasurer on the plan that we took to the election, the plan that's been endorsed by the Australian people.
What is that plan? That plan, in the end, will mean that 94 per cent of taxpayers won't pay more than 30c in the dollar. That means, most importantly for this week, 10 million Australian taxpayers will receive up to $1,080. For couples, it will be $2,160. I'm very pleased that the Labor Party are on board. I'm very pleased that they are supporting that part of the plan. But what they don't understand is that, in long-term tax policy, everything hangs together. You cannot cherrypick parts of a plan that you like. You can't then come up with hasty plans in between panicked meetings of the leadership and in between caucus meetings and Sky News interviews. No, we have a well-thought-through plan developed by our Treasurer, an outstanding Treasurer, somebody who is delivering for the Australian people and who next week will be delivering to 10 million Australian people, which is more than this hopeless shadow Treasurer could ever claim or ever be able to put on his CV.
So the answer to the Labor Party today, which will be echoed by all of the speakers—and I'm going to keep my contribution short to allow those on our side to get an opportunity to speak—is, 'No, we won't agree to your amendments because the difference between your plan and ours is we took ours to an election; and the difference between this Treasurer and this shadow Treasurer, who was the co-architect of the disaster of the Labor Party, is stark; and the Australian people put much more faith in this Treasurer.'
The best way to put more money in people's pockets is to lift wages, which are flat lining, and to make education and health free, so that people don't pay more to go and see the doctor when they get sick or to go to university or TAFE. If we keep going down this road of a tax cuts arms race, we are going to run out of revenue that the government needs to fund the services that people expect. Without revenue to fund services, inequality grows. Inequality in Australia is at a 70-year high. To suggest that the answer to our current situation—where underemployment, especially amongst young people, is at crisis levels and the Reserve Bank is starting to ring the alarm bells—is to engage in this tax cuts arms race, where each side is saying, 'Ours are bigger than yours; ours will come sooner than yours.' It is setting us up for more inequality and economic failure.
The government is pushing this for ideological reasons. The government does not want to fund universal services. The government does not want to see free education or universal healthcare. We know that. Part of its agenda is to cut the amount of revenue that comes in to the government's public purse and could then go to fund universal public services. We saw an inkling of it on the eve of the election when the government said that part of the way they were going to fund their election promises was by cutting the Public Service. That came out at the last minute: 'We're going to take $1.5 billion out of the Public Service.' If that's what they need to do to fund their election promises, that is a drop in the ocean, because this package is going to cost $158 billion. That's $158 billion less in the kitty to spend on schools, to spend on hospitals, to spend on education. Faced with such a fundamental fork-in-the-road approach about how we are going to deal with tax, revenue and services, we should have enough time to debate this bill. We haven't, and I've dealt with that before. What we do need to do is not be scared by the ideological rhetoric coming from the government but, instead, start having a debate about the kind of society we want, and use this as an opportunity not to worry about a political point or two being scored but to have a debate about what kind of society we want.
If what we were doing was just talking about the low-income tax offset and working out ways of getting targeted support to low-income earners that didn't change all the tax brackets so it flowed on to high-income earners, stage 1 of the bill might be worth having a debate about. With respect to stage 2, both the government and the opposition, seem to be saying, 'All of this is about low- and middle-income earners.' It's not. It changes the tax brackets. The people who will get the full benefit of stage 2, and for the life of me I don't understand why the Labor Party is saying it's got to be fast-tracked, will be the top 10 per cent of income earners, because it changes the tax brackets. It's not about helping low- and middle-income earners; it's about changing the tax brackets so that everyone at the top are the ones who will get the full benefit. That's where a great big whack of this goes. Stage 3 ends the progressive tax system itself. I move an amendment to the motion moved by the shadow Treasurer:
That all words after "whilst" be omitted with a view to substituting the following words:
"supporting greater assistance to low income working Australians, the House:
1. urges the Government to introduce legislation that provides greater assistance to low income earners; and
2. declines to give this bill a second reading until such assistance is legislated for low income earners".
There are better ways to support people on low incomes than by reducing equality and cutting taxes, because tax cuts hamper the government's ability to reduce inequality and to help people who are doing it tough.
I wish there had been a different result from the election as far as who's the government is concerned. That's clear. I understand that, from the Labor Party's point of view, they've now got to make decisions from opposition, whereas I'd hoped that there would have been a change of government, and we haven't got that. But, at this point, what we've got to do is work out whether we're going to have a parliament where, every time the government say they want to do something on tax, on national security or whatever, the response is, 'Well, we'll see you and raise you,' or we're going to turn this into a place where we have debates about different visions of what Australia should be like.
From the perspective of the Greens, we will oppose this government and its right-wing, deregulatory, neoliberal agenda. We would hope that sense prevails, especially as it comes to the Senate, and that, instead of helping this government create a more dog-eat-dog Australia, others in this parliament will choose to work with us to say: 'No, sometimes it's better not to vote for a tax cut, especially not a tax cut that changes the tax brackets to give the most support to people who are in the higher tax brackets and on the higher incomes. Instead, let's put that money into making education free; making healthcare universal; and lifting some people out of poverty who currently haven't got a job because of the high underemployment rates that this government has presided over.' That's the debate that we should be having. I hope there's a change of heart by the time this goes to the Senate. Until then, we will be fighting this tooth and nail, because this is the kind of approach that eats away at the government's ability to reduce inequality.
The original question was that this bill be now read a second time. To this, the honourable member for Rankin has moved an amendment that all words after 'That' be omitted with a view to substituting words. To this, the honourable member for Melbourne has moved an amendment to the amendment. If it suits the House, I will state the form still in the question that the amendment be agreed to. The question now is that the amendment be agreed to.
Speaker, it's an opposition policy zone as empty as space and as relevant as Swannie. It wants to be the middle ground between tax rises and cuts, and it lies between the pit of Australia's hip pockets and the ballot box. This is the dimension of absurdity. It is an area we call the Albanese opposition zone.
Thank you, Deputy Speaker. As the member for Goldstein, I say: this is about trust. This is a debate about recognition of and respect for what Australians voted for. At the last election, they faced a choice. The coalition put forward a plan to improve Australia. The Labor opposition put forward a radical plan to change Australia. What we know is that Australians endorsed this government's plan to cut taxes, to put more money in people's hip pockets, to reward effort and to encourage investment in the Australian economy, because we know that average Australians living out their lives make better decisions about their interests than we do.
Their alternative was not to cut taxes, which is apparently their new narrative. Their alternative was to impose $387 billion, under the shadow Treasurer and the Leader of the Opposition, onto just about everybody in the Australian community. It didn't seem to matter who you were, whether you were retirees, investors or workers; everybody was going to get hit. When you went through the list of the Australians who were ignored by their policy platform to hit people with more taxes, there was virtually no-one left. In fact, it probably almost filled the opposition benches.
The Treasury Laws Amendment (Tax Relief So Working Australians Keep More Of Their Money) Bill 2019 before the parliament now is about honouring the trust we took to the Australian people. It's about recognising and understanding that we want to cut taxes because we want to create, exactly as the member for Melbourne outlined that we should be calling this parliament to do, the type of country we want to be—the type of country where we recognise that the benefits of this package aren't just for the 10 million Australians who will get tax relief today if this bill is passed. It is about the 25 million Australians who aspire to better who will get benefits through other types of tax cuts or through the jobs, growth and opportunity that sits at the heart of this piece of legislation.
What we now have from the opposition is complete confusion about their policy agenda. We don't know what they stand for and we don't know what they seek to achieve. They seem to want to bring certain tax cuts forward with scant regard for things like the budget surplus and without any proper consideration of the impact. Our plan is balanced. Our plan is managed. Our plan is designed to make sure that we deliver sustainable outcomes for the Australian community by introducing tax cuts today and continuing them on as we need to pull the levers to make sure that Australia's economy can go from strength to strength.
The choice and the focus now for the opposition is quite straightforward: it's what they want to vote for. I realise they had big debates within the Australian Labor Party that they had to have. They had to decide what it was that led them to lose the election. They had to decide whether their tax agenda was such a significant hindrance to their capacity to go on and form government and was why people didn't vote for them. I understand that the Leader of the Opposition wants to keep this discussion live because it helps him avoid having those conversations and the division that will follow as a consequence. So they have a choice: they can vote for themselves or they can vote for the Australian people.
That's what this tax package is focused on: how we can make sure that, yes, we give to low- and middle-income earners in last year's financial year when people are sitting around this weekend doing their tax returns $1,080 off if they are a single or more than $2,000 off if they're a couple. It's about whether Australians can plan a future for their investment and their time and energy to get future tax cuts if they work hard and save. That is the choice, and it is about time the opposition honoured the commitment that the Australian people gave to us, including the people in their electorates who voted against them—because we should never forget those people as well. Let's face it: there is all this confusion in the policy agendas that the Labor Party now seem to be running. They are now in favour of taxes, but they were against them. They now seem to want what they used to call 'the top end of town' to have higher tax cuts as well. I apologise to Dinah Washington for butchering her song, but what a difference an election makes.
I rise in support of the Treasury Laws Amendment (Tax Relief So Working Australians Keep More Of Their Money) Bill 2019 this evening. It is a very appropriately named bill. Labor are absolutely all at sea when it comes to whether they want to support this bill. There are some sensible members opposite—although not enough—such as the member for Wills and the member for Hunter. They seem to be the only ones who understand the lesson that Labor should have learned at the last federal election, that federal election that was only six weeks ago. But Labor just don't get it.
The member for Rankin, the shadow Treasurer, was the co-architect of Labor's $387 billion worth of planned additional taxes. Who could forget Labor's planned elimination of negative gearing? Who could forget Labor's plan to abolish franking credits or to halve the capital gains tax discount? The shadow Treasurer was the co-architect of $387 billion worth of planned additional taxes. Bear in mind that the member for Rankin, who is now, as I said, the shadow Treasurer, was the chief of staff of that economic giant the then member for Lilley. That was during the heyday of the Rudd-Gillard years, when the now member for Rankin advised the then member for Lilley on all things related to finance. He was the shadow finance minister in the lead-up to the election. He had his footprints and his fingerprints all over Labor's finance plan in the lead-up to the election. The Assistant Treasurer remarked that a sensible leader would have punted him to the back bench, yet those opposite actually promoted him—go figure!
The member for Rankin, the shadow Treasurer, says that Labor has a plan. The problem is that he didn't say which plan he was talking about, because Labor has had a few plans on this particular bill. You can look at the various positions that they have had in just the last few days. They said that they don't support these tax cuts because it will benefit the top end of town. The reality is that these tax cuts are targeted towards low- to middle-income earners. They are the sort of constituents that those members opposite purport to represent. Those opposite then said they won't support the tax cuts. Those opposite argue that they shouldn't be asked to commit to a tax cut in the medium term, but they have absolutely no problem in saddling up the Australian people to long-term spending commitments. They have absolutely no problem doing that whatsoever. Labor have no problem with any type of long-term spending plans, yet they won't commit to long-term tax cuts.
Labor suggest that the Australian economy can't afford these tax cuts. The hypocrisy from those opposite is absolutely breathtaking. Six weeks ago they were arguing to the Australian people that they wanted an increase, which was $387 billion worth of additional taxes. That was just six weeks ago. The co-architect of that plan is now coming in here and saying, 'No, no. All Australians should be getting a tax cut.' You can't have it both ways.
No, you can't have it both ways. Australians know that they can't trust Labor. We all know that. They know that they should look at what Labor do, not at what they say. In the lead-up to the last election, they showed their true colours. They showed that they were a high-taxing, high-spending party that believes in anything but private enterprise. They come in here, six weeks later—they have had their road to Damascus moment—and now say, 'Everybody should get a tax cut,' without any way of showing how they are going to fund that. They say that everybody should get it. Everybody should get a tax cut now, according to those opposite. The hypocrisy of those opposite is absolutely breathtaking. Labor's approach to taxation, and its approach to whether it will or will not support this bill, is like Melbourne's weather: if you don't like it, wait it minute. It will change just as quickly.
The government, on the other hand, took its tax policy to the people just six weeks ago. It was one of our principal policies. We know that the Australian people know that. The member for Rankin, the shadow Treasurer, has no clue. After his so-called listening tour, he tried to argue that the government doesn't have a mandate to introduce this bill. He said, 'The government didn't really prosecute its tax agenda during the election.' Mr Deputy Speaker Vasta, I don't know about you, but we couldn't have made it any clearer during the last election that we were taking this tax agenda to the last election. But, according to the shadow Treasurer, it wasn't really that important—we don't have a mandate. If that's a listening tour, I just can't believe it. Maybe he had the radio on the whole time, because he certainly wasn't listening to the punters in Queensland, that's for sure.
The government wants to ensure that Australians keep more of their money. That's why this bill is very, very appropriately named. It wants to provide immediate tax relief to low- and middle-income earners of up to $1,080 for singles and $2,160 for dual income couples. The government is delivering structural changes to the system that'll reduce the 32½c in the dollar tax rate to 30c in the dollar. When implemented, it will mean 94 per cent of Australians will pay no more than 30c in the dollar. This will improve incentives for hardworking Australians who, when they look at Labor, know that they will look at what they do and not at what they say. I commend the bill to the House.
In their pitch to the Australian people, the government's signature policy was to promise tax cuts to Australians across the income spectrum. Stage 1, as we all know, provides temporary relief for low- to upper-middle-income earners. It will not only provide a welcome boost for their own incomes but also provide a much needed fiscal stimulus to Australia's slowing economy. The multiplier effect will bring economic and social benefit to many Australians, and the parliament would appear to unanimously support them. Stage 2 of the tax cuts is also targeted at low- to upper-middle-income earners. It helps to compensate for the removal of the temporary relief in stage 1 and will not come into effect until 2022.
I and my Centre Alliance colleagues support both stage 1 and 2 of the government's tax cut agenda. We believe they are necessary, affordable and sufficiently prudent. Stage 3 has been more problematic for Centre Alliance and, indeed, the parliament to reach agreement upon. However, two aspects should be noted. Firstly, 60 per cent of the income tax paid will be contributed by the top 20 per cent of Australia's income earners. Secondly, should the economy slow, the implementation of stage 3 can and should be reversed either in this parliament or in a future parliament. That would be the responsible measure to take.
This parliament is faced with a dilemma as the government is refusing to break up the bill. It is an all-or-nothing bill. This weighs on my mind: there are many hardworking Australians who are waiting for this money and waiting to put in their tax return. The Australian economy needs the urgent stimulus from stage 1. With this bill I believe the government can argue it possesses a good deal of democratic legitimacy in seeking to deliver the one signature policy it presented to the Australian people at the recent election. Let us be clear: this was the only major policy the government campaigned on and it was outlined in the budget. I recognise the government was up front with their plan and the Australian community voted them back in.
Centre Alliance's approach to the government's tax plan has been to seek to maximise its benefit to Australian families, workers and small businesses. Centre Alliance went to the election with a promise to reduce energy prices. We are concerned that the value of the tax cuts package will be wiped out for low- and middle-income earners unless there is action on energy prices. We also want to ensure that there is relief in energy prices in sight for pensioners and people on Newstart and very low incomes.
In 2013, Australians were paying $3 to $4 per gigajoule for gas. With the addition of six LNG trains in Gladstone in Queensland the production of gas in Australia has tripled and exports have surged. Yet, in 2019 we are now paying $9 per gigajoule on the spot market in Australia for Australian gas, whereas customers buying Australian gas in the Asian market are paying $7 per gigajoule. Australian consumers, I believe, are being taken for mugs with this. We are talking about $9, triple the price of just over five years ago. This is a grotesque example of market failure, and something that we in Centre Alliance want to address. We know that this is affecting manufacturing businesses and their workers, particularly in my state of South Australia. We are facing an energy crisis because of this.
Centre Alliance is working with the government on both short- and long-term actions to deal with the concerns in the gas market. Without action, those jobs and businesses will simply disappear. I and my colleagues have always acted to help safeguard the future of our great manufacturing state. We believe that its best years are ahead of it, and I am confident that a sensible outcome can be negotiated with this package.
For this reason, I will be supporting the government's tax cuts legislation in this place while Centre Alliance continues to negotiate in good faith with the government on the bill in the other place.
I rise to speak on the Treasury Laws Amendment (Tax Relief So Working Australians Keep More Of Their Money) Bill 2019.
I notice that the member for Burt has been repositioned closer to the dispatch box—much well deserved—from the outer regions where he used to sit. It reminds me of something that one of his personal heroes, Donald Rumsfeld, once said, 'There are some people who be; that's just a fact, and we don't know why.' I know that there are professors of semantics who wondered what Donald Rumsfeld was saying, but listening to the Leader of the Opposition I believe he was talking about that speech!
Six weeks ago, the answer was $400 billion in new taxes. Six weeks later, the answer is $150 billion in tax cuts, but the problem is that the government is not doing it fast enough. But then he said that we're doing it too fast! Then again, the answer might be infrastructure projects. But, then again, we're not doing enough of them. And, then again, we're doing them in the wrong place. Then again, if we could just do it even better it would be great!
Three years ago the people of Mackellar, in what was clearly a shock for them, elected me to this place. In the time since that happened I never thought I would hear a member of the Greens party say that they were concerned about the position of the budget. But that changed today, because the member for Melbourne has become a fiscal conservative in line with the best. He is showing Kevin Rudd up to be something that he never really was in the first place. He's concerned that we're not giving enough tax cuts, because inequality has gone up. It's actually down, but soon it will be up again. But, then again, we should be spending more on education, because we're only spending record amounts now. But if we spent more then something that isn't would be and then we wouldn't need to worry about it at all.
With an opposition like that, who needs frenemies? The truth is that this parliament should pass these tax cuts quickly. What is the point of elections if we put policies to the people, let them decide and then this parliament decides not to pass them? It is good economics. Lower-taxing countries are countries where there is more hope and more opportunity for the people who live in them. That's an important thing.
This government is in favour of hope. This government is in favour of providing more opportunities. Lower taxes incentivise innovation. If you are going to take risks, it is important that those risks get rewarded. Lower taxes mean that the people who take a risk get to keep more of the fruits from what they have sown. It reverses bracket creep. The member for Melbourne is concerned about inequality. Well, what about the inequality of bracket creep, where when you work harder you get less money because the government is taking more money? This reverses that.
It provides the stimulus that the RBA governor is demanding this parliament provide. The member for Melbourne and those opposite speak at length about what the Governor of the Reserve Bank wants and what the RBA has done today. He has made it absolutely clear that what this parliament should do is seek to put as much money back into the pockets of the people of Australia as we can. This bill does that. It also provides credible tax incentives for up to 94 per cent of Australian taxpayers, for them to work harder, earn more and keep what they earn.
Some say that this is about equity. I say to those people that this rewards hard work. I say to them that it reverses bracket creep. There are some who claim that we should spend more on services. Well I say to those opposite who claim that that we are already spending record amounts of money on health, education, mental health and infrastructure. There is very little more that this parliament can do to allocate more resources to those things that we consider to be important. It is not our money; it is theirs. That is what those opposite seem to forget. They think that it is the government who gives people money and that it allows them to keep part of it because that is the kind thing for that government to do. It is their money. We take it from them; we are stewards of their money. And while we spend it properly and sensibly to the benefit of them and our nation and our community as a whole, it is incumbent upon us to leave as much of it as we possibly can with them because it is their money. In short, the arguments against this are, frankly, the product of the eternal sunshine of a spotless mind. This is good economics; it is the right thing to do democratically, and it will make this a fairer and better society.
The immediate question is that the amendment moved by the honourable member for Melbourne be agreed to.
A division having been called and the bells having been rung—
As there are fewer than five members on the side for the ayes in this division, I declare the question negatived in accordance with standing order 127. The names of those members who are in the minority will be recorded in the Votes and Proceedings.
Question negatived, Mr Adam Bandt and Mr Andrew Wilkie voting yes.
The question is that the amendment moved by the member for Rankin be agreed to.
The House divided. [19:25]
The division was unavailable at the time of publishing.
Original question agreed to.
Bill read a second time.