Jim Chalmers (Rankin, Australian Labor Party, Shadow Treasurer) Share this | Link to this | Hansard source

Thank you for the opportunity to speak on the Treasury Laws Amendment (2021 Measures No. 4) Bill 2021. As the House would be aware, there are a number of schedules in this bill which implement measures from the last two budgets. There's a measure on the fringe benefits tax, there's a measure on the Junior Minerals Exploration Incentive, there's one about granny flats and capital gains tax, there's one about the way ASIC and the product intervention regime work and there's one for members of New Zealand sports teams who have spent longer than expected in Australia because of COVID-19.

But the most prominent part of the bill before us, of course, is the extension of the low and middle income tax offset. Both sides of the House support the low and middle income tax offset. We have done so since the very beginning. We do think, when it comes to tax relief in the budget, that the priority should be those who need it most and who are most likely to spend it in the economy. Since the beginning, since the last term of the parliament, we have said that we are enthusiastic supporters of some cost-of-living relief for the Australians who are doing it toughest. So, of course, our position on these bills before the House reflects that. We'll be supporting these bills through the House and through the Senate. We'll be supporting the individual measures, but, most particularly, supporting the extension of some more tax relief for people on modest incomes in this country who are doing it tough, the people who we want to be spending in our shops and small businesses and local communities right around Australia. So we support the bills for that reason.

There are, though, a couple of points that need to be made for the public record as these bills make their way through the House and through the Senate. The first point is the obvious point that the extension of the LMITO, the extension of this particular offset, happens to—what a coincidence!—push this tax relief to immediately beyond the next election. This tax relief ends on 30 June next year, which may be a few weeks or a few months after the next election. Because those opposite have form with making decisions for purely political reasons, I think there is a lot of concern in the community that the extension of this tax relief—otherwise welcome tax relief—is being pushed just to the other side of an election, where millions of Australians will then get a tax hike when this offset is removed. I think Australians are right to be suspicious and sceptical of a government which always puts the politics before the economics and which is always thinking in terms of the next election and not necessarily what is the optimal outcome for people. I think perhaps the starkest evidence of that, in a budget chock full of other examples of decisions taken to plug political holes, is the extension of this LMITO to immediately after the next election. It really is the most stunning example of that.

The next point I'd like to make is that in the budget a little over a month ago—and then, indeed, this week—the Treasurer put some numbers out into the public sphere about what this tax relief means for the amount of jobs created in the Australian community. Clearly, the 120,000 or so jobs that the Treasurer is claiming will flow from this tax relief—obviously, we want to see jobs created. We want to see a heap of jobs created in the community. We welcome the strong labour force figures that were released in the last 20 minutes. I expressed that privately to the Treasurer, who's here, and I expressed it publicly. We want to see jobs created. We want to see Australia recover strongly from the recession of last year. But, more than that, we want to make sure that those jobs are good, secure, well-paid jobs. Targeting the unemployment rate is important, but it's not the full story.

We've got a challenge here with underemployment. We've got a challenge with insecure work. We've got a challenge with some of the structural barriers that are in our society and prevent people from grabbing the opportunities of a recovering economy. These barriers include child care, training, concentrated disadvantage and the like. And so I think it's important to understand, even as we acknowledge the improvement in the unemployment rate today, that that is not the full story. There is a bigger story here in the labour market, and it's about job insecurity, underemployment and what that means for record-low wages growth in this country, which has been the defining feature, in my view, of the economic management of those opposite over the last eight years or so.

Wages had been growing at a record slow pace under those opposite even before COVID-19. It is not necessarily a problem created by COVID-19. It has been a feature of the economy for some years now. The long-serving finance minister Mathias Cormann said that stagnant wages growth was a deliberate design feature of the coalition's economic policy. So this stagnant wage growth has not been accidental. It has been a deliberate feature of those opposite when it comes to the economy.

Think about that record while I'm speaking about that stagnant wages growth. We had quite a stunning report from the Productivity Commission released overnight as well. The conclusions of the report were that, when it comes to national income, the last decade—overseen in large part by those opposite—has seen the slowest growth in national income and economic growth per person out of the last six decades. Those opposite, of course, have been in charge for eight of those 10 years. What that means, according to the Productivity Commission, is that national income is about $11½ thousand less in the last year of the last 10 years than it would have been had the productivity growth and economic growth continued as it was before those opposite got the keys to the Treasury.

These are important factors that we need to consider as we think about the extension of this low- and middle-income tax offset, the jobs claim by those opposite and the broader claims made about the economy by those opposite. Whether we look at the Productivity Commission report or all of the other data that we have before us, we see that there have been issues with the economy in the last eight years: wages, productivity, business investment, living standards and per-person national income. We need to do better as a country than just going back to that. I fear that the ambition of those opposite is limited to simply going back to how things were before COVID. Things weren't real flash for a lot of people, particularly Australian workers, particularly people on modest incomes, before COVID-19. We can do better than going back to that.

To go back to the 120,000 jobs claimed by the Treasurer, flowing from this tax relief and these tax bills: we also need to remember it's the same Treasurer who said 450,000 jobs would flow from the JobMaker policy. That was the centrepiece of last year's budget, in October last year. He said 450,000 jobs would flow from JobMaker. Instead, we know from estimates that it was more like 2,000 jobs that came from JobMaker, so I think we are right to be a bit sceptical about the grand claims that the Treasurer makes about how many jobs will flow from his policies.

The next point I wanted to make—really the final set of points I wanted to make—was about the claim that the Treasurer likes to make about how those opposite are the party of low taxes.

Tim Wilson (Goldstein, Liberal Party) Share this | Link to this | Hansard source

Hear, hear!

Jim Chalmers (Rankin, Australian Labor Party, Shadow Treasurer) Share this | Link to this | Hansard source

I'm very pleased that the member for Goldstein came in at that point, because the unfortunate, inconvenient reality of the numbers in the Treasurer's own budget is that the two highest-taxing governments of the last three decades have been the Howard government, No.1, and the Morrison government, No. 2. And so this absolute rot, this absolute rubbish, this absolute bollocks that we hear from those opposite about their being the party of low taxes is not borne out by any number in the Treasurer's own budget. This is not a number that we've put into the public domain. If you go to the back of Budget Paper No. 1 and you look at the historical tables, it's very clear there. They've laid it out for us in quite a simple way—the highest-taxing government. Well, actually, the highest-taxing government on record ever is the Howard government; the second highest-taxing over the last 30 years is the Morrison government. So enough of this rubbish about being the party of low taxes. Taxes have never been higher than they were under Howard and, in the last 30 years, have never been higher than they have been under Prime Minister Morrison.

I know that those opposite have their slogans and they have their spin. The unfortunate thing is that the back of the Treasurer's own budget paper says that those claims made by those opposite are nothing more than a lie, frankly. They've lied about this repeatedly. We should have a debate in this country about the appropriate level of tax, but that debate should be informed by facts. I'm happy to use the Treasurer's own numbers when it comes to the level of tax in the economy. Those opposite like to talk about what a great prime minister Prime Minister Howard was. They need to acknowledge that Prime Minister Howard was also the highest-taxing prime minister in the history of the Commonwealth, much higher—much, much higher—than Prime Minister Whitlam and higher than Prime Minister Hawke, Prime Minister Keating, Prime Minister Rudd and Prime Minister Gillard. The gold medallist when it comes to tax is Prime Minister Howard. The silver medallist in the last 30 years is Prime Minister Morrison. So let's have those facts on the table.

Those opposite are not the party of lower taxes when you look at the historical record. But they are the party of the highest debt we've ever had in the Commonwealth—a trillion dollars in debt, with too little to show for it. They are, and the Productivity Commission belled the cat overnight, the party of weak productivity growth. They are the party of stagnant wages growth. They are the party of stagnant business investment. They are the party that likes to talk a big game when it comes to economic management, but, when you line up all of those facts across all of those areas that I've just mentioned, then once again their claims are exposed for the hollow, shameless spin that they are.

These bills are about extending LMITO. We're happy to do that—happy to support that initiative from the budget. But, as we do so, let's have a bit of perspective about the claims made around it.

Tim Wilson (Goldstein, Liberal Party) Share this | Link to this | Hansard source

It was wonderful to hear the shadow Treasurer before the parliament as he lamented the rate of tax that's paid in this country. Make no mistake—no ambiguity—I am for lower taxes, because taxes are about empowering individuals and families to take responsibility for themselves. And I absolutely believe taxes in this country are too high and I'll continue to argue that taxes should be cut. It's one of the reasons we went to the last election opposing Labor's plan for nearly $400 billion more in taxes. And the temerity, the chutzpah, the hubris, the arrogance, whatever you want to call it, of the shadow Treasurer, who was the architect of that plan with the then shadow Treasurer, the member for McMahon, to then say, 'They're taxing too much,' this side of the chamber is, frankly, farcical.

When you propose $400 billion more in taxes on the Australian people, the Australian community, Australian jobs, Australian workers, Australian small businesses, mums and dads all around the country, as Labor did before the last election—and, let's face it, whether honestly or secretively, will do the same before the next election—to come into this chamber and argue against this government, which has consistently said, 'Where there are taxes and we can cut them, we will,' including the low- and middle-income tax offset in this bill about restructuring the entire base of the tax system and flattening out income tax, is, frankly, absurd.

We stand for lower taxes—as a party, as a movement and as a principle—and we do so, as I said before, not because we can have an argument about the GDP-to-tax ratio, although that's very important, but because it's actually about power. The foundational difference is the difference between the world views that sit in this chamber, on this side versus that side of the chamber. People on this side of the chamber see the nation governed from the citizen, the family and the community up. We want to empower individuals, families and communities. The Labor Party has a different vision for the country—and they're entitled to that; it's part of the great contest of ideas, which is one I believe we should have, and all policies should be anchored from that basic proposition. They want to empower Canberra, unions and increasingly organised capital through superannuation funds that they have influence over so that they can run a corporate state, so that they can run a nation in the hands of the few with a claim of benefits for the many. But of course we know that the more concentrated is economic, political, social and cultural power the more it favours those who dictate and wield that power—it's just that they think that should be them.

We're proud of our achievement on taxes. But I absolutely agree that there's more to do. That's in part what this bill is about. It's about saying, 'Hey, we're going to give a tax offset to low- and middle-income earners.' Why? Because we want these individuals to be able to be the masters of their own destiny, to choose their future and to be empowered as much as possible. And I'd hope there's more to come—much more to come—because the more power that's in the hip pocket of Australians, the more we're empowering them to make choices about their own lives rather than having it imposed on or dictated to them by bureaucrats or politicians based in this chamber. It's quite a good thing, really, when you think about it—and I hope you do, Mr Deputy Speaker Andrews, although I suspect you have been, for a very long period of time, throughout your long and distinguished service in this chamber.

That's at the core of what this bill is trying to achieve—and will achieve. There are of course other measures, around reforming ASIC and the fringe benefits tax and various other issues around incentives. One of the critical things that's also in this bill is that we're Australians through all stages of their life. Mr Deputy Speaker, you'll be well aware that one of the big concerns I have is around making sure that Australians have proper housing so that they're able to have the security and the opportunity that they need throughout their working life and their retirement. One of the great challenges in housing—and there are many in this nation at the moment, particularly for young Australians looking to buy their first home—is making sure there's available supply in the marketplace. A critical part of that conversation relates to people having access to housing supply that reflects their stage of life. The reality is that a lot of the housing stock that traditionally has been built has been targeted specifically at people during a particular stage of their life, often where there are multiple inhabitants, because they're having children with their spouse, raising their family. But of course people don't always need three-, four- or five-bedroom homes; lots of people need just a one-bedroom apartment, or a two-bedroom apartment—and of course that's often the property people purchase when they're youngest, and then they graduate up as they need to, and they might sell the property and reverse back to having smaller accommodation as they downsize. As you may recall, there are incentives in the budget to encourage people to downsize in order to open up that housing stock for the next generation as they have children.

But of course there can also be circumstances where people decide they need to downsize further than perhaps a small unit or apartment, because they may become increasingly dependent on their families for care, or because of their economic circumstances. There might have been tragedy, such as losing their spouse. So, they turn to things like granny flats, as we colloquially refer to them, often co-located with their families so that they can have economic and financial security as well as household security and mutual care and support from those they love and care about. Currently there's a CGT arrangement on granny flats, which is discouraging, because the co-location of flats on existing properties could actually help bring families together. So, we're reforming that to encourage Australians to be able to care for and love each other through mutual cohabitation on a single site. This is very important because it will again free up the opportunity for people to move through the different stages of life based on their accommodation and their accommodation arrangements.

But we also want to make sure that young Australians are in the best position to be able to purchase their own home, and that's why freeing up capital is so important. The reality is there are lots of factors that drive house prices in this country—availability of supply, interest rates, planning and zoning regulations. The Reserve Bank of Australia has identified that up to a third of the costs of an apartment in Sydney come just from planning and zoning regulations alone. But the other one that comes at the expense of young Australians being able to buy a home is the complete economic perversion this parliament has sanctioned by prioritising superannuation ahead of homeownership. It's a form of economic insanity. Up until 1992, it was entirely logical—for literally the whole of human history up to 1992—that people saved for a deposit to buy their own home, started paying down their mortgage and built up other assets they could then save for their retirement. It was consistent with people's slipstream in life, completely consistent with securing their own home in order to be able to retire with dignity and surety and, of course, income, completely consistent with people's ambitions for the benefits that they enjoyed throughout their working life and their retirement. And then we changed that.

This parliament and previous parliaments have literally sanctioned a form of economic social engineering to put super before homes. It's mad. What are the consequences? Young Australians are less in a position to be able to buy their own home, homeownership rates are declining for every single age group except for people over the age of 65 in the top economic quintile, the rich are getting richer, and the asset-rich are getting even richer. And who is paying the price? It's new migrants and young Australians. I think that's absurd.

I want an Australia where everybody can realise their aspirations and their dreams. I want an Australia where everybody can move through the different stages of their life and the government is there to support them, not to deliberately and maliciously undermine them. I want an Australia where young Australians grow up with the ambition to purchase their own home and are able to. I want to support them and their families and provide them with the foundation of their economic security in their working life and in their retirement.

As I said, the whole path of human history until 1992 was home first, super second. But we know that has changed and now we put super before homes. It is mad. I know members of the Labor Party hate me saying it, because they know that Australians get this, too. You know who really gets it? It's young Australians who are struggling to save a deposit. What's the trade-off? Because we're putting super before homes, we're constantly increasing the taxpayer funded incentives to get young Australians into their first home, so we're publicly funding people's private purchase, privatising the gains and socialising the losses. Again, it's something the Labor Party and the Left used to oppose vehemently, and today it seems to be left to those on this side of the chamber to point out this self-evident, obvious truth. The more we pump into super, the more we have to pump into taxpayer benefits to enable young Australians to get into their own home, and they're actually similar in proportion to each other. This is how mad this policy is. You are literally using the tax system to underwrite people buying their own home, at the expense of the democratisation of both the ownership and the wealth distribution of the nation.

At least we on this side of the chamber are prepared to stand up and call out this fallacy and say it's wrong. Look at the opposition benches, and all you will face is a wall of noise and anger and repudiation and a fight every step of the way because what they want is more money to go into the funds that their mates control at your expense—at the expense of the people of Australia.

They think they know better. They've literally privatised huge sections of the social welfare system. They used to be opposed to that. Now on some points I agree with them and on some points I disagree. But the intellectual dishonesty and inconsistency that sits at the heart of their position is revealed by their motivations. They want to control the capital of this country and bring organised capital and organised workers together as part of a corporate estate, with big government and big business. They should hold their heads in shame.

Opposition Members:

Opposition members interjecting—

Tim Wilson (Goldstein, Liberal Party) Share this | Link to this | Hansard source

They scoff, yet every step of the way they know what they're doing. I don't mind their scoffing, because I am calling them out. It often takes years of people standing up and calling out people's behaviour before everybody realises how big the con and scam they're imposing on the Australian people is. They scoffed and mocked us before the last election, when we made the point that they were pushing older Australians down the financial stairs by taking their refundable franking credits and imposing a retiree tax. They scoffed and mocked and they tried to undermine anybody who would give a platform to lower income Australians who wanted to find their voice, including Australians with a disability who wanted to find their voice, who were going to be pushed down the financial stairs by the Labor Party. They tried to silence and censor anybody who would dare get up and speak out against them. Don't get me wrong—I was elated with their response, because all it did was give more voice, more power and more anger to the movement to make sure they sit on that side of this chamber. And they have not learnt the lessons.

A wave is coming to empower young Australians to be able to own their own home and to take control of their own destiny. I can tell you: on this side of the chamber, we will back it every step of the way, because at the heart of homeownership is the democratic ownership of this nation, at the heart of homeownership is the democratic wealth distribution of this nation, and at the heart of homeownership is the empowerment of citizens, families and communities to live out their lives. Those opposite criticise and condemn me and other members. As always, I say: bring it on. It comes from a fundamental mistruth at the heart of their mad political ideology. At the heart of their mad political ideology is the fact that they want a nation of dependence, not one of empowerment. They want a nation that empowers them, not the Australian people, and I will stand and fight it every step of the way.

Matt Thistlethwaite (Kingsford Smith, Australian Labor Party, Shadow Assistant Minister for the Republic) Share this | Link to this | Hansard source

This bill, the Treasury Laws Amendment (2021 Measures No. 4) Bill 2021, contains six Treasury measures, the most substantial being the one-year extension of LMITO, the low- to middle-income tax offset, for the 2021-22 income year, at a cost of $7.8 billion. This was announced in the budget, and it will mean that LMITO will end at the beginning of the 2022-23 financial year. Whilst Labor of course supports tax relief for low- to middle-income workers, the great shame about this measure is that it is temporary. It ends at the end of this financial year. Contrast that with high-income earners—those who are earning above $180,000 a year—who will get a substantial tax cut from 2024 onwards, which is permanent. But if you're a middle-income earner, a hardworking Australian with a family, trying to make ends meet, you won't get a permanent tax cut at all under this government. You will continue to pay a relatively high rate of tax under this government. That is the great shame about this budget. It doesn't deal with the structural problems that we have in the Australian economy at the moment, and it certainly doesn't deal with the tax reform that we're going to need to set our nation up for the next 20 to 30 years of economic success.

Unfortunately, in recent years, on every conceivable measure, Australia has been going backwards. Real wages aren't increasing in Australia; in fact, they are falling. The budget papers baked that in over the forward estimates period; they admit that real wages are going to go backwards. Labour productivity, for the first time in Australia's history, has fallen under this government—no growth. Since labour productivity records were first kept, in the early 1990s, there has always been growth. Under this government? No. It goes backwards. Business investment, under this government, fell off a cliff after 2014 and hasn't recovered. We have the third-highest level of household debt of any nation in the OECD and it's getting worse—house prices are once again out of control under this government. Not a week goes by in the community I represent that a parent doesn't pull me up and say, 'How are our kids going to be able to afford to buy a house in the future?' This government's solution is to bring in all these first home buyer grants that simply pour fuel on the fire. Any real estate agent will tell you that, in the 12 months after one of these schemes is announced, house prices go through the roof once again. Increasing wealth inequality is a characteristic of this government. The haves are doing better and the have-nots are doing worse.

Hospital waiting lists are exploding once again because this government isn't making the necessary investments in health funding to keep pace with the growth in our population. Any nurse working in an emergency ward in a hospital will tell you they are run off their feet. When nurses are leaving the profession because they have had enough—particularly in hospitals—they are not being replaced, because of budget cuts associated with this government not providing growth funding for our healthcare system. We all know what a joke aged care has become under this government. There are hundreds of thousands of people on waiting lists for aged-care support.

We have an enviable record when it comes to our internet speeds in this country. We are 61st in the world when it comes to download speeds. Isn't that something to be proud of as an advanced nation! Under this government we go backwards and backwards and backwards and backwards; we get worse and worse and worse. If you live in a rural or regional area it is archaic; it is almost like the days of dial-up, trying to get decent NBN and internet speeds. Investment in research and development has also gone backwards under this government.

Job insecurity is increasing. And today we have confirmation in economic terms of how Australia is going backwards, with a report released by the Productivity Commission confirming that living standards have fallen under this government to the value of about $11,000 per person. People were better off in the years of the Hawke and Keating governments, when we had that necessary economic reform—in particular, taxation reform—that set us up for the almost 30 years of uninterrupted economic growth that Australia enjoyed. It was those decisions of the Hawke and Keating governments that set us up for the success we have enjoyed economically for the past 30 years.

Does this government's budget deal with any of the challenges I have just mentioned? No, it doesn't at all. It doesn't make the necessary structural changes to our budget position to set us up for the future. We know that spending is increasing under this government. Spending under our budget is increasing, yet revenue is falling. The end result of that is that budget deficits are going to get worse. Under this government, debt is going to go to $1 trillion for the first time in our nation's history. Are they dealing with any of those structural problems in our budget to, importantly, provide funding so that Australians get the necessary health care they deserve, the necessary aged-care support that they deserve, and so our kids have the best opportunity of a decent education through proper school resources?

Is any of that support for reform there in this budget? There's not one iota. In that respect, it means that Australians are going backwards.

When it comes to Australians being worse off, look no further than what's going on in this parliament, as we speak, in the Senate. This government has done a dodgy deal with One Nation on superannuation. They are changing the rate of the high-income superannuation concessional contributions cap for everyone aged 67 and over. I note the age of 67. I'll tell you why in a moment. Under this dodgy deal that the Morrison government has made with Pauline Hanson's One Nation, people who are higher income earners and aged 67 and over will pay less tax on their superannuation contributions to about the value of $30,000. It equates to a pay rise for politicians. Have a guess how old Pauline Hanson is? You can't make this stuff up. Pauline Hanson is 67 years old. Can you believe it? You greedy buggers. You've done a dodgy deal with One Nation to give yourselves a $30,000 pay rise on your superannuation and dudded the rest of the Australian workforce so that you can get your superannuation legislation through on a dodgy deal with someone who's only looking out for her own interests, because she's 67 years old and will get a $30,000 pay rise on her superannuation contributions. What a disgrace you lot are! How dare you do that to Australian workers who work hard and struggle to make ends meet and deal with the cost of living. You have no shame whatsoever. And you're trying to sneak it through the Senate under the cover of darkness.

Kevin Andrews (Menzies, Liberal Party) Share this | Link to this | Hansard source

Order! The member for Kingsford Smith will resume his seat. The honourable member for Fisher.

Andrew Wallace (Fisher, Liberal Party) Share this | Link to this | Hansard source

The speaker at the dispatch box should be reminded that, when he uses the word 'you', he's actually referring to the Deputy Speaker.

Kevin Andrews (Menzies, Liberal Party) Share this | Link to this | Hansard source

That's a credible observation by the member for Fisher, and I encourage the member for Kingsford Smith not to use that language. But before he continues, I have a concern in relation to what he's saying. This is coming close to making a personal reflection upon members in this place and, indeed, the other place. I would encourage the member for Kingsford Smith to desist from such language in the remainder of his contribution.

Matt Thistlethwaite (Kingsford Smith, Australian Labor Party, Shadow Assistant Minister for the Republic) Share this | Link to this | Hansard source

I shall. And it is my personal reflection; it's my personal reflection that what this government has done—

Kevin Andrews (Menzies, Liberal Party) Share this | Link to this | Hansard source

The member for Kingsford Smith will resume his seat. It's not a question of whether it's your personal reflection or not; it's a question of whether you're offending the standing orders by making personal reflections on members of this place and the other place. I'm encouraging you not to make any such further comments.

Matt Thistlethwaite (Kingsford Smith, Australian Labor Party, Shadow Assistant Minister for the Republic) Share this | Link to this | Hansard source

The Morrison government is doing the wrong thing by Australian workers. That's at the heart of this. They are doing the wrong thing by Australian workers by doing a dodgy deal with One Nation that provides—

Andrew Wallace (Fisher, Liberal Party) Share this | Link to this | Hansard source

Mr Deputy Speaker, on a point of order: the personal reflection upon which the member for Kingsford Smith has now been warned twice by the Deputy Speaker about the use of the term 'dodgy' is a personal reflection upon members of this House and also the members of the other place. I would ask him to withdraw it.

Kevin Andrews (Menzies, Liberal Party) Share this | Link to this | Hansard source

Whilst probably undesirable, such language has been used, in my observation, in the past. Again, it's in the interests of the orderliness of the chamber that people are prudent in the language they use. The member for Kingsford Smith may continue, but I think he can make his point in a way which is less provocative and less close to the wind, so far as the standing orders are concerned.

Matt Thistlethwaite (Kingsford Smith, Australian Labor Party, Shadow Assistant Minister for the Republic) Share this | Link to this | Hansard source

I hope that the Morrison government can explain to Australian workers the arrangement that's been reached with One Nation in the Senate. Australian workers deserve an explanation of why this government has reached an arrangement with One Nation to give politicians who are 67 and over a $30,000 pay rise whilst Australian workers are worse off in their superannuation arrangements because of this deal that's gone through the Senate. It leaves Australian workers, once again, worse off under this government. That's the point that I've been making about this particular piece of legislation and others that are passed by this government in respect of the budget—that they leave low- and middle-income, hardworking Australians worse off.

The low- and middle-income tax offset is proof of that. It's a temporary arrangement that is withdrawn, under this legislation, at the end of this financial year. Yet high-income earners will receive a permanent reduction in the amount of tax that they pay. It just demonstrates this government's priorities when it comes to the Australian workforce and to decent, hardworking Australians: they're not on your side; they don't have your interests at heart. All they're concerned about are themselves and people like Senator Hanson, who's managed to convince the government to make her financially better off. The collateral damage in that arrangement will be Australian workers.

Andrew Wallace (Fisher, Liberal Party) Share this | Link to this | Hansard source

I rise to speak in support of this bill, the Treasury Laws Amendment (2021 Measures No. 4) Bill 2021. I want to focus on just one aspect, and that is the provisions in schedule 3, which I've no doubt will play a modest but important role in tackling the issue of homelessness and housing affordability in this country.

As chair of this House's Standing Committee on Social Policy and Legal Affairs, I'm currently working with my colleagues on the final report of an inquiry which we have undertaken into the issue of homelessness in Australia. Adopted in February last year, our inquiry received more than 200 submissions and held five public hearings last year. We heard that, at the 2016 census, the ABS found 116,427 people were classified as being homeless, under that definition—an increase of more than 14,000 over five years. The increase among older women was as high as 31 per cent. In my view, it's clear that, in relation to older women, this is an underestimate. In 2014 a study by the General Social Survey found that 2½ million Australians have experienced homelessness at some point in their lives. Specialist homelessness services agencies report that, in 2018-19, there were 290,300 clients who sought assistance.

Homelessness is affecting every community in this country, and, sadly, one of the most severely impacted groups identified by the National Housing and Homelessness Agreement is older Australians. This problem is not always visible in Australia, as so many of our homeless are couch-surfing or living in their cars, just to name a few situations. However, the consequences for hundreds of thousands of Australians are nonetheless very real. Those who are homeless have difficulty accessing the services that they need. They are at an increased risk of violence—including sexual violence—drug and alcohol use, mental and physical health problems and severe poverty.

I don't want to pre-empt the findings of the committee, because that would be entirely inappropriate at this time. The evidence that the committee has heard during its inquiry tells me that there is a shortage of affordable housing options, and we need to do something about that. We need more available homes to reduce the rate of homelessness in this country. This government is investing more than $6 billion a year in supporting Australians with housing affordability. This includes around $4.6 billion in Commonwealth Rent Assistance to help eligible Australians to pay their rent and another $1.6 billion through the National Housing and Homelessness Agreement to states and territories. In the most recent budget, the government invested an additional $124.7 million for states and territories under this agreement, which will be available to use on capital works to bolster public housing stocks.

Finally, in the past six months we've seen the biggest stimulus to the construction of accommodation in a generation, with the advent of the government's $2.7 billion HomeBuilder program. This is the same HomeBuilder program that those members opposite, in particular the member for Rankin, said would never work. They shouted out from the opposition benches, 'HomeBuilder will never work!'

Kevin Andrews (Menzies, Liberal Party) Share this | Link to this | Hansard source

Order. The member for Fisher will resume his seat. The honourable member for Lyons, on a point of order?

Brian Mitchell (Lyons, Australian Labor Party) Share this | Link to this | Hansard source

I ask the member to withdraw that personal reflection on the member for Rankin.

Kevin Andrews (Menzies, Liberal Party) Share this | Link to this | Hansard source

Member for Fisher?

Andrew Wallace (Fisher, Liberal Party) Share this | Link to this | Hansard source

It's a fact. The member for Rankin has said that this program would never work, so, no, I won't withdraw the—

Kevin Andrews (Menzies, Liberal Party) Share this | Link to this | Hansard source

There is nothing to withdraw. The member for Fisher can continue.

Andrew Wallace (Fisher, Liberal Party) Share this | Link to this | Hansard source

In the past six months we've seen this program, the $2.7 billion HomeBuilder program, result in 133,000 applications to build new homes since the middle of 2020. In total, in the 2020-21 financial year, this will produce a record 137,170 detached housing starts, which is an increase of 34.2 per cent on the previous year. This is almost 17 per cent higher than the peak of the previous boom in 2018, according to the Housing Industry Association's national outlook. The effects will pour over into the next year, with the HIA anticipating that in 2021-22 it will be the third-strongest year on record, with another 121,000 starts. This is in an environment where those members opposite said, 'HomeBuilder will never work.' And yet it is proving to be one of the most successful stimulus packages that the building and construction industry in this country has ever seen.

This government is investing billions of dollars in increasing the accessibility of housing in Australia. However, there is more that we can do to support the availability of homes through regulation, and this bill will help to achieve just that. More than 75 per cent of older Australians want to stay in their own home. However, as they get older, larger houses can often become too much for an older person to look after. Meanwhile, many young families are unable to afford a house which is large enough for their needs. For society at large, the available housing stock could be increased if more three-, four-, or five-bedroom family homes currently being occupied by one older person or a couple could be made available to members of their wider families. In response to this situation, many families around Australia are now entering into what are known as granny flat arrangements. These typically involve an older parent transferring the ownership of their home to their adult child in exchange for the promise of care, support and housing as the parent ages. These arrangements can be a great outcome for everyone. They give older Australians the opportunity to continue living in their own homes but with more help to maintain and look after them. They allow young families to get access to larger homes, which can properly accommodate them at a time when rents are inaccessible to many.

For all of us, it makes more efficient use of larger properties and ensures that there is more housing stock available to others. When equitable and carefully codified, these arrangements can benefit everyone, and encouraging more such well-formed agreements will make an important difference to housing in this country. However, at present, these arrangements can have serious unintended consequences for older people. Most are not formalised in writing, meaning that the rights of the older Australian can be entirely at the mercy of the goodwill and the circumstances of their child's family.

No-one or very few would enter into one of these arrangements expecting a relationship breakdown, the death of an adult or child, or a bankruptcy proceeding. More often than not, such eventualities are not included explicitly in any agreement. However, these things do happen, and when they do the older person who has given up their home can be left without any enforceable rights; worse, they can be left homeless themselves. Such issues are made more prevalent by the fact that few of these arrangements are written down and formally executed.

I understand that there are not many of us who want to enter into formal contracts with our loved ones. Most of us would like to believe that our family ties would be strong enough to see us through any challenge. There's an old lawyer joke, Deputy Speaker Andrews, which you would remember: 'Where there's a will there's a family member.' Nothing could be truer than that old adage. Others are concerned that in making a formal arrangement to transfer property they may become liable for capital gains tax. However, when issues of property, debt and taxation are involved, family ties can be powerless to stop the terrible consequences for too many older Australians. In other cases, sadly, children or their partners do not act with the benevolence that we would all hope for and expect, and the result can be ongoing elder abuse in the form of neglect or, very sadly, financial exploitation.

We need to encourage more of these arrangements to be formalised, in writing, to prevent these negative outcomes. At the same time, we need to encourage more of them to be entered into, to maximise the benefits that they can bring for all of us. The bill before us does just that, by amending the capital gains tax regulations to provide a targeted exemption for formalised granny flat arrangements. The bill will provide that no capital gains tax event will arise on entering into, varying or terminating a granny flat arrangement if it is properly formalised under the bill. By providing a specific exemption, the bill will ensure that taxpayers know that there will be no capital gains tax consequences for them if they transfer property in this way. There is, in short, no motivation to attempt to avoid a tax through an informal arrangement, if the arrangement is exempt from the tax, and every reason to ensure that your arrangement is properly and equitably formalised if it will grant a major tax benefit.

This capital gains tax exemption will not only encourage more of these granny flat arrangements to be entered into but also incentivise construction of the additional accommodation within properties that are so often part of these arrangements. Parties to formalised arrangements will be able to build a granny flat, annex or extension where the older person will live, increase the value of their property, increase the housing stock available to all Australians, and not incur capital gains tax on that investment. This will be a significant driver for many families to take that step and realise those mutual benefits.

When as society we face a problem as serious and complex as homelessness we need to use every tool at our disposal to make a difference. It is commendable that Australians have taken it into their own hands to innovate and create arrangements that can deliver such benefits—important benefits—to older Australians, young families and those in need of housing alike. We need to encourage these kinds of practical grassroots solutions. We need to make sure that they are safe and fair for everyone. This omnibus bill will bring positive change across our economy. However, schedule 3, in particular, will make a big difference to the challenge of housing and homelessness for older Australians.

One element I haven't raised this afternoon is the importance of local government in this space. Housing and homelessness is principally the responsibility of the states and territories. The Commonwealth government also has a role to play, but very often local government is left out of the equation. This is a part of the equation where local governments can play a very, very important role. Many local governments do not allow a secondary dwelling to be built on a property. In instances where we have housing shortages and increased costs for many young people, this bill will provide a sensible measure to deal with this issue but it will really only work if local governments get on board the bus, if you'll pardon the pun. Local governments need to be able to step into the breach here. Many local governments—and my local government on the Sunshine Coast is an example—seem to have a philosophical problem with secondary housing, or granny flats or whatever you like to call them. Local governments across Australia can play a very, very important role in dealing with housing and homelessness but they need to step up to the plate. It's not going to cost them any money. They will receive funding through applications for approvals. There is no reason why local governments should not be a part of and have a seat at the table in dealing with housing and homelessness. I call upon local governments to get on board and work with the federal government on this very point. I commend this bill to the House.

Stephen Jones (Whitlam, Australian Labor Party, Shadow Assistant Treasurer) Share this | Link to this | Hansard source

I'm very pleased to be joining the debate on the treasury laws tax arrangements and issues that concern the economy and households' savings at large. In the last 24-hours, we've seen an extraordinary passage of events in this parliament where the government was willing to collude with Pauline Hanson's One Nation party to do a deal—an extraordinary deal, an immoral deal—to push through changes to superannuation administration and regulation in this country which have been trouble plagued from the start. They are changes that were so problematic that they threatened to see a revolt in the government's own backbench.

Before parliament broke up last week we saw the result of that. The government—after spending weeks and weeks telling its backbench and the crossbench that its bill was perfect, was ready to be voted on and should be passed through the House—had to introduce amendments into this place to remove the extraordinary provision which would have given the Treasurer the power to cancel private sector investments. The Treasurer at that point in time had promised key members of the National Party backbench that he had removed the provisions which were so offensive to them and to so many other members in this place. What he didn't tell them was that, while he had put a padlock on the front door, he had left the back door wide open to enable him to continue that very same power through a backdoor measure.

Labor has consistently pointed out this issue to the community, to backbenchers of both the government and the opposition and to crossbenchers. Still the government persisted, by saying, 'We've got this all right. You should trust us. You should believe in what we say. You should believe the materials that we've put before the House.' But it was revealed in the Senate this morning that nothing could have been further from the truth. The government backbenchers can't trust or believe what they're own government tells them and brings before the House, because another raft of amendments had to be moved to that bill. And it is still not fixed.

But what was most extraordinary was the proposition that was being put forward by Pauline Hanson's One Nation that we know the government had agreed to, which would have had the effect of providing a whopping big tax cut, effectively a pay boost and a superannuation boost, to certain government MPs and senators of a particular age, and particularly remuneration arrangements which would have benefited Senator Hanson herself. They were extraordinary. In the Treasury bills and the budget initiatives that are being debated before this House, these matters were being contemplated.

It's incredibly important that the House take note of these issues because, while we are debating laws to implement budget decisions in this House, there are, around budget measures, a range of deals that are being put in place which are very, very wrong—very, very wrong indeed. I want to draw the attention of members of this House to these matters as we debate bills which implement budget measures in this place.

The shenanigans that have gone on in the Senate around the superannuation bills are nothing less than extraordinary. Fancy this—that, at a time when we've got flatlining wages and when economic growth is not delivering the productivity enhancements that we need to bring us forward as a nation, to deliver real wage increases and living standard increases for ordinary Australians, the government thought its No.1 priority was to do a deal with Senator Hanson which would have boosted the pay packets of politicians and high-wage earners but leave unattended all the problems in superannuation administration.

Let me give you an example. In the government's budget measures, they said that they intended to do something to ensure that Australians were not forced to be members of underperforming funds. And we know, because the Productivity Commission has told us, that there are in excess of three million Australians who at the moment have their money in underperforming superannuation funds charging higher fees and delivering low outcomes, and it could be costing those Australians as much as $230,000 in lost retirement savings. So we have this problem identified by the government—the underperformance of funds, and Australians overpaying fees—but dealing with that issue was not their No. 1 priority; it was attempting to do a very grubby deal with Pauline Hanson's One Nation to get an imperfect bill through the parliament. The House should take note of these issues as we are debating these Treasury laws amendment bills which introduce budget measures.

Now, schedule 6 of this bill, which extends the low- and middle-income tax offset, enjoys our full support. But we do note in passing that this provision, which provides a tax offset of up to $1,080, is a temporary measure, yet the government in its budget is persisting with its permanent tax cut for some of Australia's highest-income earners—another example of where this government has its priorities wrong. Whether it's superannuation or whether it's the provision of tax cuts to high-income earners, they have their priorities wrong and they're not focused on the big issues.

When the superannuation legislation was first introduced and debated in this House, we drew to the government's attention a range of significant problems if they were intent on implementing this budget measure. We told them that a bill which proposed to reduce the fees that people were being charged on their superannuation accounts was actually going to have the impact of increasing the fees, because administration fees were completely excluded from the measures within that bill. We pointed it out to the government. They denied it was a problem. Only because of Labor's strenuous campaign against this issue did the government correct that obvious flaw in their legislation. We pointed out to the government that the measures in the bill that they introduced in the House were going to have the effect of penalising superannuation funds that used Australian workers' superannuation funds to invest in Australian infrastructure and Australian unlisted assets. Fancy that—a provision which actually penalises superannuation funds for using workers' money to go to work for the benefit of the nation and the benefit of those workers. But that's exactly what this government's bill did.

They included within the bill—which still existed until 25 minutes ago—a provision which we have called 'the investment kill switch'. This was a provision which made the Treasurer the superannuation trustee-in-chief. It gave him an extraordinary power that has never existed in this Commonwealth before, a power to cancel any private sector investment of a superannuation fund that he did not like. They persisted with it, after telling their own backbench that they'd fixed it, until we were able to shame it out of them in the Senate, not 25 minutes ago.

These are important measures, because we are debating a bill which deals with the implementation of budget measures, and we have reason to be concerned about the government's intent and competence when it comes to implementing budget measures. I've addressed schedule 6 of the bill, which deals with the low- and middle-income tax offset, a provision which we support. In fact, we will be supporting each of the schedules within this bill, but we have grave concerns about the government's capacity to competently administer the provisions within this bill, because we have seen so many examples in this parliament in the last 24 hours of the government's incapacity to competently manage the implementation of budget measures.

I return to the superannuation measures, which are also included in budget measures. They are persisting with a piece of legislation which will staple members to dud funds. They say they want to fix the problem. We've provided a mechanism for them to fix the problem, but they have refused to implement this measure. So we have many reasons to be suspicious about the government's capacity to competently and honestly implement the measures that are before the parliament today in this session, because of the actions and the inactions of the government in so many other areas of budget bill implementation.

Whilst we won't be opposing this bill, we ask all members of the House, particularly members of the government backbench and members of the crossbench, when other budget bills come before the House, and the Treasurer or his representative stands at that dispatch box and says, 'Trust us; these bills do what we say they are going to do,' to be very suspicious indeed. If they can tell untruths to their own backbench and to the crossbench about the content and the administration of superannuation bills, then there is no limit to the capacity of this government to tell untruths about other budget implementation bills. We'll be supporting this bill, but we'll have a lot to say about other bills which implement budget initiatives, because we simply do not trust this government's ability to do what it says it's going to do and for its legislation to implement the announcements that the government says that it intends to do. With those comments, I commend the bill to the House.

Katie Allen (Higgins, Liberal Party) Share this | Link to this | Hansard source

I rise to speak on the Treasury Laws Amendment (2021 Measures No. 4) Bill 2021. This bill addresses a number of tax issues and introduces the continuation of the low- and middle-income tax offset, an offset that has been so important during the time of COVID and has been widely welcomed right across Australia, including, of course, in my seat of Higgins. I know that many of my constituents have been waiting anxiously for this offset to take effect, in light of the financial strain that they've experienced as a result of the COVID-19 pandemic and associated lockdowns and restrictions imposed on all Australians and most particularly in my state of Victoria.

I was delighted to hear that approximately 65,700 taxpayers in my electorate of Higgins will benefit from tax relief of up to $2,745 this year. In fact, the Treasurer, the Hon. Josh Frydenberg, joined me in Higgins and met with two of my constituents—Amy, a kindergarten teacher, and Darren, a small business owner—who have their first child on the way, and they are looking forward to the extra tax relief that this bill will offer. In fact, Amy told me how she will use this money to help set up the nursery for her baby—an exciting time of life which can be tempered by the extra costs of having another mouth to feed.

This bill also supports business by providing an additional fringe benefits tax exemption, by supporting consumers of financial products through additional ASIC oversight and, finally, by protecting our elderly population from potential exploitation through exempting granny flats from capital gains tax. So there are many measures in this bill, and I'd like to talk through several of those this morning. But first I'd like to say it is so important to support each and every Australian through the ongoing COVID-19 economic recovery and help them to further our economy—after all, our economy is built on the hard work of each and every Australian—and the amendments in this bill aim to do exactly that. We're providing additional support to taxpayers through extension of the highly popular low- and middle-income tax offset. That will help to free up their resources, which will help to stimulate the economy and lead to greater opportunities and prosperity for all Australians.

Importantly, these tax initiatives will also protect one of our most vulnerable cohorts, our older Australians, from the financial and elder abuse often associated with what is commonly known as granny flat arrangements. Protecting a granny flat arrangement by way of removing the CGT implications will have the added bonus of allowing ageing Australians to age at home longer, surrounded by their family and loved ones. That's something we should all welcome. We know Australians are choosing to age at home and that this is their preference. That is what our government does; it listens to the needs of the very people that we represent.

Schedule 1 is about FBT exemptions for retraining. The fringe benefits tax exemption to support retraining and reskilling provides an exemption for employer-provided retraining and reskilling. Currently, fringe benefits tax is payable if an employer provides training to employees that is not sufficiently connected to their current employment. This measure will benefit any employer providing retraining benefits to redundant or soon-to-be redundant employees. The employer can apply this exemption where a redundant employee is redeployed to another area of their business or where the new employment is outside their business. The exemption will be available for university, vocational education and non-vocational educational training courses which support redundant employees in finding new employment.

If there was one word that everyone thought about in 2021 besides the word 'COVID', it would be the word 'pivot', and that is why I support this schedule—because it is so important that, as people go through the changing world that we're seeing both post COVID and as we move into the 21st century of the knowledge economy, we need to help people to retrain, reposition and pivot to the new world of work. This measure will support the government's skills reform agenda and current programs and assistance for education and training. The government's continued investment will support apprenticeships, create jobs and boost the skills of Australians to help them get back to work, because, as we know, the dignity of work is something that we value very highly.

Schedule 3 provides a targeted capital gains tax exemption for granny flat arrangements where there is a formal written agreement. CGT consequences are currently an impediment to the creation of formal and legally enforceable granny flat arrangements. The Australian Law Reform Commission released a report in 2017 which examined elder abuse in Australia. We all are going to grow old—hopefully; the alternative is not worth thinking about. But we all want to know that we can age with dignity and grace and we all want our relatives and our friends who are older not to be the victims of elder abuse. The Australian Law Reform Commission examined the prevalence of elder abuse in relation to granny flat arrangements in particular. This schedule in the bill is an incredibly important one with regards to these arrangements. When faced with a CGT liability, families often opt for informal arrangements, which can lead to financial abuse and exploitation of older people. This amendment ensures that CGT consequences are not an impediment to formalising granny flat arrangements and seeks to reduce the risk of financial abuse and exploitation of older Australians and other vulnerable people.

The measure has extensive support from stakeholders, because this schedule has been extensively consulted about and there has been extensive public discussion of the processes. In a typical case, granny flat arrangements occur when an older person transfers some sort of consideration, often title to property or proceeds from the sale of property, to their adult child in exchange for the promise of ongoing care, support and housing. These arrangements can be beneficial to all parties; that's obvious. When operating effectively, they can provide benefits to the adult child in the way of property or funds and to the older person in the way of care, support and housing. However, the older person tends to be in a more vulnerable position and can suffer serious consequences if circumstances change. Problems can arise as a result of the adult child predeceasing the older person, relationship breakdowns between the adult child and their partner, or the adult child becoming bankrupt. Contingencies are often not considered for these types of events happening. This, combined with the common informality of granny flat arrangements, can make it difficult for the older person to establish, assert or enforce their rights under the arrangement.

Perceived tax consequences are one barrier to parties having a formal granny flat arrangement in place. CGT events could arise on entering into, varying or terminating a granny flat arrangement, depending on the circumstances. Informal arrangements can make it easier for a taxpayer to argue that there are no formal rights in existence and, therefore, no assets that could be subject to CGT. With these amendments, a CGT event does not happen on entering into, varying or terminating a granny flat arrangement if certain requirements are met. These requirements include that the individual having the granny flat interest has reached pension age or has a disability. In the days of the NDIS, these sorts of arrangements are really very important. The arrangement needs to be in writing and not be of a commercial nature.

The intent of this measure is to encourage the formalisation of granny flat arrangements to support the stable and long-term housing arrangements of older people and people with disabilities and to reduce the risk of financial abuse or exploitation. We all know families where there is a child with a disability. Parents worry about the long-term sustainable future of their children, and these sorts of amendments will be helpful in sorting these issues out.

With regard to schedule 4 of the bill, there will be an amendment to the product intervention regime to address unintended consequences and to ensure that the product intervention regime operates as intended. A product intervention order is an order made by ASIC under its product intervention powers to impose conditions on or, if necessary, to ban potentially harmful financial and credit products where there is a risk of significant detriment to retail clients or customers. Removing ambiguity and ensuring that ASIC has the ability to intervene in relation to the costs of a financial and credit product—such as administrative fees, interest charges, surcharges or default fees—paid by a retail client or consumer through the use of a product intervention order is critical for retail client and consumer protection against significant detriment. Again, this is an important safety net to ensure that, as we go through a post-COVID recovery, we don't find people becoming more financially vulnerable. Importantly, this also increases consumption investment as a result of greater uptake of worthy financial products due to increased confidence and trust. The taxpayers of Australia need to be able to trust and respect our financial institutions and the products that they develop.

This bill provides tax relief to those who need it most. I'm very pleased that schedule 6 will come into effect, once this bill is passed, to provide a low and middle income tax offset. This bill will create $7.8 billion in tax cuts to around 10.2 million low- and middle-income earners by retaining the low and middle income tax offset for the 2021-22 income year. The low and middle income tax offset is worth up to $1,080 for individuals and $2,160 for dual-income households and is paid on assessment once taxpayers lodge their tax returns. It's something to keep in mind. Retaining the low and middle income tax offset in 2021-22 will support household incomes as the economy continues to recover. I know this has been a very popular COVID measure, and I'm very pleased that it's going to continue into this next year. As we emerge from COVID it is an important period of time with regard to our growth and development. And as we see the vaccination rolling out across the country I'm very pleased that we're moving to a post-COVID recovery—but we're not there yet, and we need to continue to provide the support that is needed by those on low and middle incomes.

This bill provides tax relief to those who need it most—low- and middle-income earners—at a time when they need it most. The bill goes further by helping employees and businesses alike to incentivise retraining and upskilling, and it protects consumers from low-quality and poor-value financial products. It also provides more certainty to often elderly or disabled Australians in order to make the most of granny-flat arrangements without needing to worry about the CGT implications. I commend this bill to the House.

Brian Mitchell (Lyons, Australian Labor Party) Share this | Link to this | Hansard source

I'm pleased to have the opportunity to speak on the Treasury Laws Amendment (2021 Measures No. 4) Bill 2021. This bill contains several Treasury measures. I won't go into the detail of each, but I do want to speak on the most substantial measure, which of course is the one-year extension of the low and middle income tax offset for the 2021-22 income year, a measure that provides a tax offset of up to $1,080 for incomes of up to $126,000. To be clear, Labor supports and has always supported tax relief for low- and middle-income earners and will facilitate the passage of this bill. But it has to be said that this Liberal government has once again delivered a bill that looks great on paper but fails the pub test.

I'm sure it is just a happy coincidence for the government that the extension of the measure for another year means that the government can avoid the question of when to cut the measure until after the next federal election. When the Treasurer announced the extension of this measure he made it very clear that Australians should not expect it to become a permanent feature of the tax system. He emphasised, in fact, that it was 'a stimulus measure to support the recovery of our economy'. I want to be very clear about what the Treasurer is saying. He is saying that tax relief for our low- and middle-income earners is temporary, that it does not last. It's been extended for just long enough to see the government through the next election, after which many millions of Australian workers will pay more in tax than they do today. But the government has said that the vast bulk of the tax relief coming into the budget over the next few years is permanent. Isn't it funny that the vast bulk of permanent tax relief just happens to benefit the highest income earners in Australia?

Why doesn't the government flip it? If it really wants to look after low- and middle-income earners, why not make this tax offset permanent and make the tax cut for high-income earners temporary? Why not make that dependent on the future economic performance of the economy? Why not say to high-income earners—the people in this place, the judges and others who are on hundreds of thousands of dollars a year—'Look, we'd like to give you a tax cut, but maybe the economy can't quite afford it. How about we give you a temporary tax cut for now, because we want to make sure that the low- and middle-income-earning Australians in this country get a permanent tax cut'? Wouldn't that be a better solution? I think it would be. But they can't help themselves on that side. Just to reiterate: tax relief for low- and middle-income earners is temporary; tax cuts for high-income earners are permanent. That's the message from this government: we look after our mates and make sure high-income earners stay on top.

If you're a low- or middle-income earner this government is happy to provide relief—temporary relief—on the proviso of re-election. It's further proof that this government's most recent budget is about getting through an election rather than helping people with the cost of living and setting up the economy for the long term. Wages are stagnant. Real wages are going backwards; the Treasurer has told us as much. Even before that, we had the former finance minister, Mathias Cormann, telling us low wages were a deliberate feature of the government's economic architecture.

While Labor supports this bill it must be noted that, while tax relief for low- and middle-income earners is temporary, the vast bulk of incoming tax relief will overwhelmingly benefit high-income earners and that will be permanent. It can't be stressed enough. It has to be stressed that they're only looking after low- and middle-income earners on a temporary basis but they're looking after the wealthy on a permanent basis. It must be understood that Australians on an income below $88,000 a year will be worse off under the Prime Minister's stage 3 tax cuts compared to what they are under with the low and middle income tax offset. Wage earners will be worse off—cleaners, clerks, teachers, paramedics, aged-care workers and nurses will all be worse off. Some of the people who have done the heavy-lifting through the COVID-19 pandemic will be worse off after next year while high-income earners will pocket thousands extra on a permanent basis. Seven in every 10 Australian workers will be paying more tax than they do today—and all from a coalition that trumpets sound economic management as a key strength. What an absolute joke!

It's hurting people in my state the most. In my electorate, workers earn the lowest average income in the country. Tasmanians earn the least among all states and territories. That means even more of my constituents will be hit by the Morrison government's tax grab when this tax offset goes away. Isn't it bad enough that we are already facing a housing crisis, stagnant infrastructure funding and a shortage of general practitioners in regional Tasmania? Now low- and middle-income earners in Tasmania, after the next financial year, face the prospect of higher taxes. We've got thousands on the government emergency housing list, a healthcare sector in disarray and parts of our east coast cut off by a mismanaged highway closure. My state is doing it tough. So how can the Morrison government justify tax policies that will harm our most vulnerable in the long term?

Labor supports this bill because it provides support, albeit temporary, to the Australians who need it most. We've always supported putting more money in the pockets of workers and we always will. Labor has said all along that the priority for tax relief is that it should be going to the people who need it most and who are most likely to spend it in the economy. Tax breaks for middle-income-earning Australians and low-income earners are a good thing. These are the people who spend money going to the beach on the weekend with their families. These are the people who buy a pie and a drink at the footie on a Friday night. They buy new cars and, when they can afford it, do a reno on their house. They spend money in their local economies; they keep the money churning around. It's not the same when you give tax breaks to high-income earners; the money is not spent in the same way. It gets invested, sometimes offshore. It doesn't benefit the local economy in the way that putting more money into the pockets of low-income earners does. It doesn't have the same benefit to the economy at all.

Low- and middle-income earners are the people who, by spending money on themselves and their families, reinvigorate our economy—and nowhere more than in regional communities. These are the people this government is going to tax more when this tax offset ends after 2021-22. It beggars belief. The Morrison government is committing tens of billions of dollars in tax cuts for the highest-income earners while offering limited support for the average Australian family to get them through the election. Not only has this government racked up $1 trillion in debt with precious little to show for it in terms of long-term economic reform; they are prioritising high-income earners with long-term tax relief while taking the average Australian income earner for a ride.

It has to be said, this is not just related to the bill before the House. The shadow minister mentioned before what's going on in the other place, right now, with superannuation and how that's going to hurt Australian workers as they head into retirement. This deal the government has done with One Nation beggars belief. It's absolutely appalling for Australian workers who are nearing retirement. Judas Iscariot got 30 pieces of silver for betraying Jesus at Gethsemane. Senator Hanson's getting 30,000—

Ross Vasta (Bonner, Liberal Party) Share this | Link to this | Hansard source

Order! The member will come back to the debate.

Brian Mitchell (Lyons, Australian Labor Party) Share this | Link to this | Hansard source

I was talking about how this government's budget measures are not helping income earners, but I do take your point about getting back to the measures in this bill.

This bill says everything you need to know about this government's agenda and its fiscal incompetence, and its mean-spiritedness towards low- and middle-income-earning Australians. This bill is exactly like the eighth budget handed down by this tired government. It's been designed with one goal in mind: re-election. Just do enough to get re-elected. Don't worry about the long term. Don't worry about what's needed for the country or the economy in the long term. Just do enough to get re-elected. Beyond the spin and the headlines, beyond our media addicted Prime Minister, we can see the government for what it really is: tired, out of touch and out of time.

We see a government actively lowering workers' wages while providing tax relief to the wealthy. We've seen penalty rate cuts. We've seen stagnant wages. We've seen no plan to lift wages. Now we see before us a bill that offers temporary tax relief. It extends temporary tax relief, for low- and middle-income earners, not permanent tax relief. We see a government attempting to implement policies that hit working families the hardest, and we see a government willing to smash the Australian way of life to boost the coffers of its highest-income-earning mates, the highest-income-earning lawyers, judges and politicians who are doing the best out of this government and its tax relief policies.

Remember, this mates-rates deal for high-income earners has been pitched by the Treasurer as a stimulus measure to support the recovery of our economy, but it's one that benefits only the very highest-income earners permanently. It doesn't look after average wage earners permanently. They're left out in the cold to fend for themselves: flat wages, their super under attack and now only temporary tax relief. Not only is it unfair but it is risking the Australian values that we've all come to cherish.

While we do support this bill for the temporary tax relief it offers, let it be known that these temporary measures will not undo eight long years of record low wages growth, chronically high underemployment and a shameless disregard for the Australian values of fairness and equality.

David Coleman (Banks, Liberal Party, Assistant Minister to the Prime Minister for Mental Health and Suicide Prevention) Share this | Link to this | Hansard source

I'd like to thank all members who have contributed to this debate. Schedule 1 of the bill will provide a fringe benefits tax exemption to encourage employers to provide retraining and reskilling benefits to redundant or soon-to-be-redundant employees. The amendments will benefit any employer who provides retraining fringe benefits to their redundant or soon-to-be-redundant employees. The measure supports the government's skills reform agenda and current programs and assistance for education and training.

Schedule 2 to the bill amends the Income Tax Assessment Act 1997 to extend the junior minerals exploration incentive for a further four years, from 2021-22 to 2024-25, with a minor amendment to allow unused exploration credits to be redistributed a year earlier than under current settings. In conjunction with Australia's broader support for resources development, the junior minerals exploration incentive will help to open up new opportunities for the sector into the future.

Schedule 3 to the bill delivers on the government's plan to support older Australians and people with a disability in their families by providing a targeted capital gains tax exemption for granny flat arrangements where there is a formal written agreement in place.

Schedule 4 to the bill makes technical amendments to the Australian Securities and Investment Commission product intervention power so that it can continue to proactively address consumer harm caused by financial and credit products, as originally intended.

Schedule 5 to the bill ensures New Zealand maintains its primary taxing right under the convention between Australia and New Zealand for the avoidance of double taxation with respect to taxes on income and fringe benefits and the prevention of fiscal evasion, otherwise known as the convention. This is in respect of members of New Zealand sporting teams and support staff that spend an extended period of time in Australia to participate in league sporting competitions because of the COVID-19 pandemic. The measure ensures that the treatment of New Zealand sporting teams is consistent with the unique intent of the convention by relinquishing Australia's taxing right. This applies to income in the 2020-21 and 2021-22 income years only.

Schedule 6 to the bill retains the low- and middle-income tax offset in 2021-22. The tax offset is worth up to $1,080 for individuals and $2,160 for dual income households and is paid on assessment when taxpayers lodge their tax return. The government is delivering tax cuts to low- and middle-income earners to support household incomes and create jobs as the economy recovers. It is estimated that around 10.2 million taxpayers will benefit from retaining the LMITO in 2021-22, with the majority of the benefits delivered to those earning less than $90,000. This is on top of the $25.1 billion in tax relief flowing to households in 2021-22 that has been announced in previous budgets.

Retaining the LMITO will put more money in taxpayers' pockets, allowing them to spend more and, in so doing, strengthen the economic recovery. Further details of each of these measures are contained in the explanatory memorandum. I commend this bill to the House.

Question agreed to.

Bill read a second time.

Message from the Governor-General recommending appropriation announced.