Shayne Neumann (Blair, Australian Labor Party) Share this | Link to this | Hansard source

As I was saying before the adjournment debate, the Albanese Labor government has provided $23 billion in targeted relief, whether in child care, in housing, in TAFE, in medicine or in electricity bill relief. But those opposite opposed it in this chamber either in votes they cast or, indeed, in statements they made. Those opposite have no record in this term of actually supporting cost-of-living relief. In the member for Hume's contribution, almost no policy was announced in relation to the cost of living, whereas, in contrast, the bills before this chamber will address bracket creep, increase labour supply and increase the hours of work that Australians participate in, particularly women who are earning between $20,000 and $75,000 a year. I said before: look at how those opposite vote; look at what they say as well. If you listened to the contribution of the member for Hume, it was full of righteous unction, but, in reality, they're going to vote for this legislation. I noticed how few opposition members are on the speaking list for this debate. The Independents are plentiful on the speaking list, but there are hardly any members of the Liberal and National parties. You couldn't even get a soccer team. They can't even get that number to speak on this legislation. Maybe they're all rolling themselves back, as the Deputy Leader of the Liberal Party talked about rolling back this particular legislation and these changes. Maybe they're rolling themselves back into their offices. They can't bring themselves to be here to actually speak on this legislation.

The cost-of-living relief in this legislation is really important. It's about delivering a tax cut for every Australian taxpayer. It will provide more tax relief for more people to help with the cost of living and deliver a fairer go, particularly for people in my electorate, regional and rural Blair. The changes are about relief and reform. I've seen some media commentary from people, even those opposite, who seem to think that the only tax reform is giving those people who are wealthy a tax cut—that's the only tax reform, they seem to think. Every form of regressive taxation in this country is progressive in the minds of those opposite. Every single time, they'll want regressive taxation. If they can give those who are wealthy a tax cut, they're really happy. But, when it comes to people on middle and lower incomes, they baulk at tax relief. They want to roll it back—but reluctantly because they know that in their regional and rural Queensland seats, like Wide Bay, Dawson, Leichhardt, Capricornia, Maranoa and Wright, these measures are important. They know that 87 per cent of Queenslanders will do better under this legislation than the legislation that was passed five years ago during the Morrison regime.

We've found a better way to deliver tax cuts—a way that helps with cost-of-living relief, something that those opposite talk about but don't want to do anything about. We're addressing bracket creep. It's better for the economy and it's fairer. The legislation streamlines our income tax system. It cuts two rates and lifts two thresholds, which is the best way to provide tax relief for more Australians and return some of the bracket creep those opposite always like to talk about. They've spent the last couple of weeks talking about bracket creep, but this fiscal drag will be impacted by our legislation.

The reforms will ensure that from 1 July this year the 19 per cent marginal tax rate reduces to 16 per cent for incomes between $18,200 and $45,000. Those opposite were doing nothing on that—nothing to help those who needed it most. So don't cry your crocodile tears of concern about the cost of living for people who are battling, when you were going to do nothing for those on the lowest incomes. We're going to do something about it with this legislation. The 32.5 per cent tax rate reduces to 30 per cent for incomes between $45,000 and the new $135,000 threshold. The threshold above which the 37 per cent tax rate applies increases from $120,000 to $135,000, and the threshold above which the 45 per cent tax rate applies increases—for the first time in about a decade and a half, I might add—from $180,000 to $190,000. If those opposite were really fair dinkum about their stage 3 tax cuts, they would've brought them in during those wonderful Abbott-Turnbull-Morrison years that we see in Nemesis being played out so wonderfully, full of amity and love and respect for one another. I don't know how they have a caucus meeting, honestly, without having a fight. It's really quite astonishing, and we see it on full display on the ABC every Monday night. Their caucus meetings and shadow cabinet meetings must be fantastic, the way they fight amongst themselves. I would love to have been a fly on the wall when this particular thing was debated.

Our plan means that every taxpayer will get that tax cut this year. That's 13.6 million Australian taxpayers from 1 July, which is 2.9 million more that would've benefited under the coalition's stage 3 tax cuts from five years ago, and 11.5 million taxpayers, or 84 per cent of taxpayers, will receive a bigger tax cut. As I say, in my home state of Queensland it's 87 per cent—90 per cent in my electorate. Under our better plan, an average Australian worker on $73,000 a year gets a tax cut of more than $1,500, or $29 a week, which is more than $800 extra in their pocket every year than they would've received under those opposite.

A lot has changed since the stage 3 tax cuts were legislated five years ago, but not much in the mentality of those opposite, I can tell you. We've had a pandemic, wars, global conflicts, a global inflation spike and higher interest rates, and these events have put a lot of people under a lot of cost-of-living pressure. As the great economist John Maynard Keynes said—those opposite don't like him; they're more Milton Friedman people—when the facts change I change my mind; what do you do, sir? He was right. We've listened to our communities and responded to these changing economic circumstances, and we've found a fairer and more responsible way to ensure more people get a better tax cut to help ease the cost-of-living pressures they're under. This is the right thing for the right reasons.

These tax cuts will benefit more Australians. Our tax cuts are good for middle Australia and they're good for women, particularly with participation. They're good for people who are doing it tough—nurses, police officers, electricians, shop assistants, those who work in child care and aged care and those who work in logistics and transport. They're good for the economy generally. For example, 5.8 million women, or 90 per cent of all women taxpayers, will receive a bigger tax cut. A person earning $100,000 a year will get a tax cut of $2,179, which is $804 more than they would've received under the coalition's tax cuts. Someone earning $40,000 will get a tax cut of $654, compared to nothing under the Liberal and National parties. We're giving a tax cut to every taxpayer in 2024, but the hard-working nurses, disability workers, aged-care workers, truck drivers and teachers will be getting more. Ninety-five per cent of these taxpayers will get a bigger tax cut. On top of that, young people, older Australians and people living in the regions will get a bigger tax cut.

These tax cuts are designed to provide cost-of-living relief to middle Australia. I will just say that those opposite represent some of the poorest electorates, particularly those from the National Party in Queensland, yet they listened in silence as the Deputy Leader of the Liberal Party talked about opposing this absolutely, fighting them in the hills and the valleys and fighting as hard as they could against these changes. But you know what? I guarantee she'll be sitting on the same side as all of the Labor MPs when it comes to this particular vote.

We're going to make a difference for a lot of people. That includes every taxpayer in my electorate of Blair. That's 80,000 taxpayers who will get an average of $1,380 in terms of a tax cut. Ninety per cent will be better off under our plan. It's no wonder it's had a positive response. I can tell you that, in my electorate office and when I've been doing mobile offices, we've had a very positive response to these tax cuts and these changes we're making. It builds on our first budget which delivered the first surplus in 15 years. These tax cuts deliver more relief. They're fiscally responsible. They don't add inflationary pressure. This is a responsible thing to do, and I know it'll go down well in Ipswich, the Somerset region and the Karana Downs area. It will be very, very important.

One of the other things that we are doing is we are introducing the Treasury Laws Amendment (Cost of Living—Medicare Levy) Bill 2024 to increase the Medicare levy low-income thresholds for 2023-24, which will benefit more than a million low-income Australians as well. This will ensure that people on lower incomes continue to pay a reduced levy rate or be exempt from the Medicare levy. That's a good cost-of-living relief and a practical thing to do. We're implementing the government's cost-of-living tax cuts and changes to the Medicare levy to ensure more people get more help when they are under pressure. At the same time, we're seeing inflation come down. We're seeing that, and the most recent figures are very encouraging, but there's more work to be done.

The advice from Treasury is clear. Our tax cuts will not add to inflationary pressures. They won't put pressure up on interest rates because they're broadly revenue neutral. The Reserve Bank has also said they don't expect the changes will have any impact on the inflation forecast. Treasury advice makes it clear that these tax cuts will return bracket creep, increase rewards for all Australians who choose to work and earn more, boost workforce participation and deliver a fairer share of tax relief for women and people on low and middle incomes. That's what Treasury says. That's not the Labor Party's talking points; that's what Treasury has found. Those opposite should have a look at that Treasury analysis. They hit the so-called holy trinity of simplicity, efficiency and equity when it comes to new tax policies.

These are simpler, lower and fairer taxes for middle Australia. It's an essential part of our economic plan, along with getting wages moving. Those opposite were worried about a-dollar-an-hour increase. The Prime Minister held that dollar up in question time today and during the campaign. Those opposite thought he was engaging in some sort of socialist endeavour—that the whole world was going to collapse and Marxism was going to happen if Labor won. What nonsense! We hear that sort of rhetoric from those opposite every time we put pressure to get wages going in industrial relations. You'd think that, all of a sudden, some kind of Communist dystopia was coming in this country from those opposite. A number of them use that sort of rhetoric when they're talking about the IR changes. Getting wages moving, particularly for people in the aged care sector and the childcare sector and those who were the heroes of the pandemic, is really important, but those opposite can't bring themselves to support any increase in the minimum wage or any wage. You know, they'll give us this thing that they're supporting cost-of-living pressures, but the moment we do something about it they oppose it. They oppose it in legislation or make public utterances about it.

We're providing meaningful cost-of-living relief in a responsible way that doesn't add to inflationary pressures. It's laying the foundation for a stronger, more resilient and fairer economy and retaining the progressive nature of our tax system which has been there a long time. Those opposite will vote for it, notwithstanding their protestations.

James Stevens (Sturt, Liberal Party) Share this | Link to this | Hansard source

I appreciate the contribution so far to this debate, particularly from those in the government who have run a variety of arguments—some of which, I might add, are extremely contradictory of each other—about the merit of the proposal that they're putting before the parliament here and now. The Treasury Laws Amendment (Cost of Living Tax Cuts) Bill 2024 is a proposal to change what we referred to as the third stage of income tax relief for all Australians, which, of course, I was honoured to vote for in the first ever debate that I participated in this parliament after the 2019 election. Although I correct myself, because I didn't need to vote on it because, of course, the parliament supported it without a division. That's because back in 2019 the new opposition leader, Anthony Albanese, made a decision that the Labor opposition would support what are known as the stage 3 tax cuts. There were comments made about that in the debate, to be sure, by them in those early days of the new parliament. They ultimately made what seemed to be reported out of the Labor caucus as a pragmatic decision to support tax cuts for all Australians. Of course, stage 3 is called stage 3 because there are three stages of tax cuts that saw the tax burden appropriately relieved for all Australians.

One wonders, in listening to the debate and the comments being made by Labor members, if what they're doing here is such a great idea and such a popular idea, why it wasn't something that they articulated and campaigned for in the recent federal election. For all of the reasons that are being put forward by government members, I find it very curious and strange to understand why they didn't want to make any of these points in an election campaign. If they're such good arguments, and if so many Australians would be better off thanks to the changes that they're proposing to our previous government's broad and comprehensive income tax relief, then it should have been something to campaign on and get elected on. But of course the complete opposite happened. The now Prime Minister made a very solemn covenant with the people of this country. When he went to the polls in May 2022 and when he was seeking to become the prime minister he was asked repeatedly—and he was very clear repeatedly—that an Albanese government supported the legislated stage 3 tax cuts, that they would not touch them if they were elected, and that the people of this country could trust Anthony Albanese because he was making a solemn commitment. It's pretty clear since the election what Anthony Albanese's commitment and solemn word means—absolutely nothing.

Of course, this isn't the first time. We know that with $275 power bill cuts that are frankly laughable now and a range of other things that I won't digress into in this debate. This, unfortunately, is the deepest cut of all. By order of magnitude, the value of this broken promise is the greatest in the history of Australian democracy. If you look at the value of this betrayal, it is the greatest in the history of Australian democracy. There are some other examples in the history of Australian democracy. Paul Keating comes to mind—a very famous iron-clad tax commitment that he gave, l-a-w law.

The GST's a great example, because the GST is an example of having a policy, taking it to the people and giving them the chance to vote for it or not. What an excellent example of having a policy position that you take to the people and ask them whether or not to endorse. The concept of going to an election in May 2022 and giving a repetitive, iron-clad promise on honouring legislated income tax cuts and then changing your position is absolutely appalling. What we're voting for on this side of the chamber are tax cuts—no question about it. We're the low-tax party. It's in our DNA. What's happening right here is that taxes are getting cut for some Australians whilst increasing taxes on other Australians to pay for it. What an absolute fraud.

Mike Freelander (Macarthur, Australian Labor Party) Share this | Link to this | Hansard source

Order, Member for Moreton!

James Stevens (Sturt, Liberal Party) Share this | Link to this | Hansard source

We've just had the last speaker say this is fiscally neutral. It can't be fiscally neutral to cut taxes if taxes aren't going up somewhere else. That was the government speaker, Member for Moreton. You missed his contribution, but he made a virtue of what you're interjecting and condemning by saying it was fiscally neutral.

Mike Freelander (Macarthur, Australian Labor Party) Share this | Link to this | Hansard source

Address your remarks through the Deputy Speaker, please.

James Stevens (Sturt, Liberal Party) Share this | Link to this | Hansard source

Pardon me, Deputy Speaker. What this legislation does is increases tax for some Australians, and, instead of cutting government expenditure or wearing it through the budget process, what you're doing is saying, 'To give some Australians a tax cut, we're going to go and bludgeon some others.' The ones Labor love bludgeoning are the successful ones. The previous speaker made the point and said with pride that this is a policy that expands the progressivism of our tax system and goes and takes money from wealthy Australians to fund a tax cut for other Australians.

So I'm not going to vote against tax relief for any Australian—never, ever—but what we will be doing is going to the next election with a debate and a policy position that is very different to what this government is doing, which is saying, 'To give tax cuts to some Australians, we're going to ratchet taxes up on other Australians.' We will find out at the next election what the Australian people think of this approach.

Firstly, the fraud: the Labor Party went to the people and made a solemn commitment and then broke it after the election. I think a lot of Australians will wonder what that means for other promises that the Labor Party might take to the next election. We've just had the previous speaker give the hilarious Keynes quote, saying, 'Well, when the facts change, I change my position.' We can apply that now to absolutely every election policy and every election promise that this government takes to the next election. It's actually being used in speeches in the parliament—with five people in here, I might add—which is great content for election campaigns and for billboards and brochures. A member of the government is bragging about the fact that, for any policies that they have and any promises that they take to an election, if the facts change and if something changes—

Mike Freelander (Macarthur, Australian Labor Party) Share this | Link to this | Hansard source

Order! Member for Banks, the member for Sturt doesn't need your echo to reinforce his point.

James Stevens (Sturt, Liberal Party) Share this | Link to this | Hansard source

then, absolutely, any policy promise or policy commitment will change.

Those opposite are also running two contrary arguments in the contributions that are being made, and some of them are making the same contradictory arguments in the same speech. On the one hand, apparently the circumstances have changed and it's because of the economic situation since the last election that they couldn't have possibly predicted what led them to need to change their position on an ironclad election promise and increase taxes on some Australians to cut taxes on other Australians. That's one argument. But then some of the very same speakers are saying in their same contributions that the policy they had was never the right policy in the first place. To be honest, I think we all know what the truth is, and it's the latter.

I do believe government members that are now coming clean in this debate and saying they never supported the stage 3 tax cuts in the first place. To be fair, that seems quite credible. What it also does is magnify the extent of the fraud, because we now have members of the government owning up to the fact that this was their secret plan all along. They could have gone to the last election and said, 'It is not the position of the Labor Party that income tax rates that were legislated by the previous government are what we support, and, if we were elected, we will change them.'

We got all sorts of contributions about why, apparently, the changes that are being made are so sensible, are going to benefit so many people and are going to be so popular. So it is miraculous that they didn't want to campaign on this in a recent election, and that says something about just how much they believe some of the lines that they're using in this debate. I actually think that the Australian people will say, 'What we've learnt about them, what we've learnt about the Labor Party, is that, whatever they say in an election campaign and whatever commitments and promises they make, we now know that they will all be junked, using any excuse they like after, and if, they're re-elected.'

That's why we know that all sorts of things that they won't talk about before the election are suddenly going to be on the table if they get re-elected. That's why they're using the same sorts of weasel words on negative gearing. They're jacking up superannuation tax already, but that's the tip of the iceberg. The Assistant Treasurer described superannuation as the 'honey pot', and I see that we've got some legislation coming into the parliament to increase super tax. This is where earnings on balances of over $3 million will attract a higher tax rate. But I hear that, regrettably, it won't apply to politicians on the defined benefit superannuation scheme. My understanding from my briefing on that legislation is that, regrettably, the Prime Minister's superannuation won't be affected by the higher rate of taxation that other people with super worth more than $3 million—which is what the superannuation of someone in the Prime Minister's position would be worth, if you could value it—in a lump sum rather than a defined benefit will have to pay. He's very good at raising taxes on other people, but unfortunately he just missed out on applying that same standard to his own superannuation. It is absolutely pathetic. We have a Prime Minister that will ratchet up taxes on everyone else's super but not on his own. That's what Australians know about this Prime Minister, and the legislation before us—

Mike Freelander (Macarthur, Australian Labor Party) Share this | Link to this | Hansard source

Assistant Minister, this is not a debate.

James Stevens (Sturt, Liberal Party) Share this | Link to this | Hansard source

The legislation before us is the greatest example of that fraud, and we will see what the people of Australia think about that fraud at the next election. We will find out what they think about a government that makes solemn vows, solemn commitments and solemn promises and breaks them after making them.

This legislation will pass the parliament, and we welcome reducing the tax burden on Australians. It is appalling that it is being funded by increasing taxes on other Australians, and we will have more to say about that in the lead-up to the next election. In the meantime, it is absolutely appalling that a solemn commitment to the people of this country was made by the Labor Party in a campaign and they are now legislating to break that promise.

Pat Conroy (Shortland, Australian Labor Party, Minister for Defence Industry) Share this | Link to this | Hansard source

It is indeed a great pleasure to be speaking on the Treasury Laws Amendment (Cost of Living Tax Cuts) Bill 2024. It is also a pleasure to follow the member for Sturt, whose greatest contribution to this place so far has been sleeping through a vote a year ago. His speech just then demonstrated that he makes more sense when he keeps his mouth closed, because his argument was fundamentally contradictory. If this is such a bad policy, why is he going to vote for it? That's the ultimate question he and every member of the opposition have to answer. They can come in here and bleat and carp, but, ultimately, if they think this is a bad policy and the wrong move, they should vote against it. Go to the election and pledge to roll it back. Go to the election and pledge to increase taxes on low- and middle-income earners in this country, just like your deputy leader did before she even saw the policy.

The truth is that what we're talking about now is providing cost-of-living relief to every single Australian taxpayer. Every single Australian taxpayer gets a tax cut. Let me repeat that: every single Australian taxpayer gets a tax cut. We have been very clear with the Australian people that we are laserlike in our focus on providing cost-of-living relief to those who need it most—to low- and middle-income families in this country—and that's why I'm proud to speak in favour of this bill.

The truth is: every taxpayer in Shortland—that's 67,000 people—will receive a tax cut from 1 July under Labor's better tax cuts, announced by the Prime Minister and the Treasurer. The average tax cut will be $1,551. Around 57,000 taxpayers in my electorate, or 85 per cent, will receive a bigger tax cut than they would have under the plan that the member for Cook, Scott Morrison, legislated five years ago. Across the Hunter and the Central Coast, 428,000 taxpayers will now receive a tax cut and 367,000 taxpayers will receive a bigger tax cut than they would have under the Morrison plan. Those opposite need to work out whether they're for a bigger tax cut for 84 per cent of Australians or against it. Ultimately, that's their decision. They can't carp and whine, saying it's a bad policy, but then come in here and vote for it.

We're delivering more help for working families and more help for Australians who are unfortunately under the pump from the cost of living due to the remnants of the global pandemic, the war in Ukraine and the conflict in the Middle East. We're putting cash back into people's pockets when they need it most. Our tax cuts are about ensuring more workers, in the Shortland electorate and in every electorate, can keep more of what they earn, because we know that will take pressure off people doing it tough.

I'm incredibly proud that 5.8 million women, or 90 per cent of female taxpayers, will receive a bigger tax cut than under the Morrison plan, with an average increase of $707. A nurse earning $76,000 will get a tax cut of $1,579, and I'm proud to say that there are 1,847 nurses living in Shortland. We have Belmont Hospital in our electorate, and we're very close to both Wyong and the John. We have 200 nurses in Charlestown, 66 nurses in Belmont, 53 nurses in Lake Munmorah, 49 nurses in Mount Hutton and 99 nurses in Warners Bay, all getting a tax cut. If those nurses are earning $76,000 they'll get a tax cut of $1,579.

A primary school teacher earning $93,000 will get a tax cut of $2,004, and I'm delighted to say there are 2,849 schoolteachers living in Shortland. There are 112 teachers in Cardiff, 101 teachers in Belmont, 77 teachers in Redhead, 155 teachers in Eleebana and 26 teachers in Chain Valley Bay. They get up every day and make a contribution, teaching our kids, giving them the best possible start in life. A primary school teacher on $93,000 a year will get a tax cut of $2,004, significantly more than what they would've received under the previous tax plan.

A truckie earning $77,000 will get a tax cut of $1,604, and I'm proud to say there are 872 truckies in the Shortland electorate—21 truck drivers in Windale, 41 in Cardiff, 50 in San Remo and 32 in Mount Hutton. Importantly, a police officer earning $110,000 will get a tax cut of $2,429, and there are 288 police officers in Shortland—20 in Valentine, 32 in Warners Bay and 35 in Charlestown.

A person earning $40,000—someone working part time, or someone working in the retail sector, say at a local Woolies, who the Leader of the Opposition wants to put out of work—will get a tax cut of $654, compared to nothing under the Morrison plan. A person earning $100,000 will get a tax cut of $2,179, which is $804 more than they would've received under the member for Cook's plan. A person earning $200,000 will still get a tax cut, which will be $4½ thousand.

This plan is the right plan for our times. It's so important to support this plan. This is a plan that provides cost-of-living relief to every single Australian taxpayer, particularly to low- and middle-income earners. The government is responding to the pressure Australians are under here and now. That's the right and responsible thing to do: to deliver more relief to more workers without adding to inflationary pressure or burdening the budget. Under Labor's plan, Australians will get a tax cut and more Australians will get a bigger tax cut. Nurses, teachers and truckies, as I've highlighted, are some of those most likely to benefit, with more than 95 per cent of those taxpayers getting a bigger tax cut. Our tax cuts are good for middle Australia, good for women, good for helping with cost-of-living pressures, good for labour supply and good for the economy.

Labor's tax cuts come on top of the billions of dollars in cost-of-living relief that we're rolling out, including energy bill relief, cheaper medicines, a stronger Medicare, higher income support payments and the biggest boost to rent assistance in 30 years. That is the importance of this plan. Australians are under pressure right now, and it's crystal clear that every single taxpayer needs and deserves a meaningful tax cut. That didn't happen under the former government's plan but it will now. We've listened to our communities, and it has become increasingly clear that this is the best way to ease some of the pressure they are under.

Since the tax cuts were legislated by the member for Cook five years ago, there has been a once-in-100-year pandemic, wars and global conflicts, a global inflation spike and higher interest rates. Those events have put people under greater cost-of-living pressure. Good government isn't about doing what's easy for yourself; it's about doing the right thing for the right reasons. It's about putting people ahead of politics. I've had a few street stalls since we made the announcement. I had a shopping centre stall at Charlestown Square, which is the biggest shopping centre in my electorate, if not the whole region, and I've had street stalls at places like Kahibah and Whitebridge. I've had people coming up to me saying, 'Thank you for what you have announced.' I've had people outside the Whitebridge butcher telling me, 'I won't get as big a tax cut as I would have under the member for Cook's plan but I completely support your policy because it's the right thing to do for Australia.' I heard similar sentiments at Charlestown and Kahibah, and at a beautiful Australia Day breakfast at Chain Valley Bay I heard very similar sentiments.

It's up to the opposition to justify their multiple positions on this matter, because we're acting in the national interest. The Deputy Leader of the Opposition let the cat out of the bag when she said that absolutely the Liberals would unwind our tax cuts for every single taxpayer, which will mean higher taxes on middle Australia under the Liberals. Unwinding our changes and clinging to the tax cuts those opposite proposed five years ago would mean higher taxes for middle Australia, to fund even bigger tax cuts for people on the highest incomes. The Liberals' position on our tax cuts is incoherent, unintelligible and incomprehensible. They didn't even ask a question in parliament today about our plan to give every Australian a tax cut. They're trying to distract from their division on this and their contradictory position.

The choice is clear here. This is a Labor government that is taking the hard but important decisions to put Australians first, to address urgent cost-of-living relief for all Australians but principally targeted at low- and middle-income earners. That is the policy we've announced; that's the legislation we're debating today; that's the legislation we're so proud of. The opposition have to make up their mind. If they think it's bad policy, they should vote against it. If their speakers come in and criticise us for 15 minutes, that's fine, but they should vote against the legislation—vote against it and say they're in favour of putting up taxes on low- and middle-income Australians in this country. That's their choice.

I commend this bill to the House. I'm proud of it. I'm proud that it will give every single taxpayer in Shortland a tax cut. I'm proud that it will give 57,000 of the 67,000 taxpayers in Shortland an even bigger tax cut than they would have had under the original plan: a tax cut, on average, of $1,551, which is around $800 more than they would have received under the previous plan.

Steve Georganas (Adelaide, Australian Labor Party) Share this | Link to this | Hansard source

Order! The member for Moreton on a point of order?

Graham Perrett (Moreton, Australian Labor Party) Share this | Link to this | Hansard source

I would ask the speaker to withdraw that comment made about the Prime Minister.

Steve Georganas (Adelaide, Australian Labor Party) Share this | Link to this | Hansard source

Which was?

Graham Perrett (Moreton, Australian Labor Party) Share this | Link to this | Hansard source

Unparliamentary language made about the Prime Minister.

Steve Georganas (Adelaide, Australian Labor Party) Share this | Link to this | Hansard source

I'll ask the member for Moncrieff, for the sake of the House, to withdraw that comment.

Steve Georganas (Adelaide, Australian Labor Party) Share this | Link to this | Hansard source

Thank you, Member for Moncrieff. Continue.

Graham Perrett (Moreton, Australian Labor Party) Share this | Link to this | Hansard source

I'm very happy to rise in support of Labor's Treasury Laws Amendment (Cost of Living Tax Cuts) Bill 2024. I'm very happy because I know the amendments to the tax cuts will directly help the constituents of my electorate of Moreton and, indeed, every single Australian taxpayer from 1 July this year. That is 13.6 million people who will be better off. This figure includes nearly three million Australians who would not have received any tax cut under Scott Morrison's plan. Every representative in this chamber should support the Albanese government's cost-of-living tax cuts. It's common sense. This is a bigger tax cut for more people. It helps with the cost of living and it helps make our tax system more equitable. It is both support in a tough time and reform.

Under our tax plan, the average taxpayer on an income of $73,000 will get a tax cut of $1,504. That's an extra $804 compared with Scott Morrison's plan. As the honourable member for Rankin said:

This is all about supporting the hard work of people who make our economy and our country strong. It's all about supporting people who work hard so that they can provide for their loved ones and get ahead.

These are the aspirational Australians that the Labor government is committed to helping.

It's instructive that the coalition's knee-jerk response when these tax cuts were first announced was negative—straight to 'Dr No'. Even before these tax cuts were announced, those opposite were against the policy. The deputy opposition leader immediately confirmed the intention to roll the changes back, A statement she later retreated from—crab walked away from, I guess you would say.

Those opposite may continue to grandstand about Labor's change for the better—a policy that they've also said they will support. So my questions to them are: Why would you put politics before the people that you represent, when 85 per cent of the people in Moncrieff are going to be better off under a Labor policy? Aren't you listening to the people doing it tough in your electorates? How can you look the cleaners in the eye and say that they deserve nothing? Why would a millionaire deserve $9,000 back from the tax office but a Woolies cleaner deserve zip? How could you be that politician that ran that up?

Since the tax cuts were legislated by the member for Cook, five years ago, there has been a once-in-100-years pandemic, conflicts throughout the globe, a global inflation spike and all of those higher interest rate rises that have passed costs onto households. We know that Australians are suffering because of the economic ripples flowing into their homes and workplaces from all of these factors. When economic circumstances change, the responsible thing to do is to change your economic policy. This is what the Albanese Labor government has done, and we stand behind this change for the better. I'll choose commonsense over stubborn stupidity every single time.

The honourable Leader of the Opposition has grudgingly indicated that his team will support these tax cuts. You wouldn't believe it when you listened to the content of their speeches, but even the honourable Leader of the Opposition realised that the choice was obvious: to vote with Labor in favour of a tax cut for every Australian rather than stick with the Morrison plan from 2019.

Labor's tax cuts have broad support across my electorate. I doorknocked twice last week, and there's been uniform support for the additional help we're delivering to the people of southern Brisbane. As one of my constituents said prior to our government's 25 January announcement, 'As a high-income earner with a mortgage, I'm someone who will benefit from the proposed tax cuts'—that means the Morrison cuts—'but I want you to cancel them because the benefit to people like me of keeping the tax cuts is so small compared to the benefit of using the money for something else that will benefit all Australians, low-income earners in particular.'

The key here is that Labor's tax cuts benefit all Australian workers. We know Australians are doing it tough. We've listened to people and we know that they're under pressure. The Albanese Labor government doesn't just accept that people are under pressure and say, 'Well, what can I do?' We do something about it. That's why easing these tough cost-of-living pressures has been the Albanese government's No. 1 priority. These tax cuts provide meaningful and immediate cost-of-living relief up and down the income scale without adding pressure on inflation. That's so important. I stress that, because we know that inflation hits low- to middle-income earners most. It takes buying power out of their pockets.

So this is a fair and responsible plan, responding to the economic conditions of 2024 and helping those hardworking Australians most under pressure. Labor's cost-of-living tax cuts come on top of the other important relief measures we've rolled out, measures that are making a real difference in communities across the country. Despite a lack of support from the coalition, we've moved to make so many positive changes for Australians. We've provided energy bill relief—which I think they voted against—higher income support payments and the biggest boost to rent assistance in 30 years. We've made child care cheaper, we've made TAFE free and we're building more social and affordable homes. I know we need to do more, but we've got some great plans. I particularly commend the Steven Miles government in Queensland for what they're doing in terms of rolling out new homes.

In the week of the 40th anniversary of Medicare, designed by Labor, we can reflect with pride on the Albanese Labor government's strengthening of Medicare and the rolling out of cheaper medicines for Australians. We've tripled the bulk-billing incentive, supporting 11.6 million Australians to access a GP with no out-of-pocket costs. We saved Australians $250 million last year on medicines, and we're establishing the Medicare urgent care clinics across the country—like the one in Dutton Park, right on the border of my electorate— to boost access to critical medical care.

The Treasurer also introduced the Treasury Laws Amendment (Cost of Living—Medicare Levy) Bill, which directs more support to Australians on modest incomes. The Albanese government will increase that Medicare low-income threshold for 2023-24, ensuring that people on lower incomes continue to pay less or are exempt from the Medicare levy. It's great help but non-inflationary. It's a sensible approach to government, rather than one that sprays money around with a hose. Labor's tax plan centres around relief and reform. It provides more help up and down the income scale without adding to inflation, as I said.

What else are we doing? We're decreasing the lowest rate of income tax from 19 per cent to 16 per cent. This is for the people earning below $45,000. Those in that tax slot, above the income tax-free threshold of $18,200, instead of giving nearly one-fifth of each dollar to Treasury, will now only pay 16 per cent. And we're lowering the second tax rate from 32½ per cent down to 30 per cent, so that's for middle Australians earning between 45 grand and $135,000. We're raising the threshold of the 37 per cent tax bracket to $135,000 and raising the threshold of the 45 per cent tax bracket up to $190,000.

I note we've had a few contributions from those opposite about bracket creep, but I also note that the Abbott-Turnbull-Morrison horror show didn't touch this threshold in that wasted decade that they haunted the Lodge. This is a substantial and sustainable tax reform that has a direct impact on all workers at all ages in every community in Australia.

The Labor cost-of-living tax cuts, I'm proud to say, are a great boost for women. All 6.5 million women taxpayers will receive a tax cut, on average that's a tax cut of $1,649 each year under Labor's plan, and 5.8 million women—that is, 90 per cent of taxpaying women—will benefit from a bigger tax cut, with an average increase of $707. This directly helps families with parents who are returning to work and it support workers in high-demand occupations that have high numbers of women workers.

Ninety-six per cent of the nurses at QEII Jubilee Hospital, down the road from my office, will benefit. I'm sure Logan Hospital will be much the same. That's where my neighbour works as an obstetrician—as a midwife, sorry! I think that's a demotion! I thank all the people at QEII for the great work that they do, and I particularly want to call them out for helping my son Leo, who broke his arm on the last day of school. The QEII staff were magnificent.

I'll also do a call-out for my former profession: 98 per cent of the teachers at the 49 schools peppered across Moreton will receive a boost to their pay packet. The hard workers in early childhood, disability support and aged care, who are the crux of our community, will all benefit from the Albanese tax cuts.

Another group to benefit will be the young working Australians. Again, more than 90 per cent of under 35s will receive a bigger cut—remembering that those above this threshold, above that 90 per cent mark, will be doing okay. This plan has a positive effect on labour supply, will increase it by about 930,000 hours per week—yet again a substantial improvement compared to that flawed, out-of-date Morrison plan I mentioned earlier. This is more than double the labour supply impact forecast from five years ago.

The Treasurer and the economic team consulted extensively with the Treasury and received confirmation that the plan in front of the House addresses the bracket creep that can hit low- and middle-income earners. The average worker will pay around $21,000 less in tax over the next decade. So Labor's cost-of-living tax cuts don't burden the budget and don't add to inflation. Inflation is cooling—more work to be done, Treasurer, obviously—and, by the time the cuts rollout from 1 July, it's expected to moderate further. The RBA has also confirmed these tax cuts don't affect inflation forecasts.

The Albanese government wants people to earn more and it wants people to keep more. We want for no-one to be left behind and nobody to be held back. The Labor tax cuts mean that 84 per cent of Australian taxpayers will get a bigger tax cut from 1 July, just a few months away. These measures are fair and responsible. They provide support; they provide reform. This is something I'm proud to get behind, and I commend this bill to the House.

Monique Ryan (Kooyong, Independent) Share this | Link to this | Hansard source

I also rise to commend the Treasury Laws Amendment (Cost of Living Tax Cuts) Bill 2024 to the House. This bill modifies the legislated stage 3 tax cuts to give greater benefit to lower and middle-income earners. The vast majority of Australian taxpayers will be better off over the next decade under this revised legislation. In its first year, about 11.6 million people will receive a bigger tax cut. Ninety per cent of women and more than 90 per cent of people aged under 35 will receive a bigger tax cut than they would otherwise have received.

The Grattan Institute and the Treasury have both released analyses indicating that more than 80 per cent of taxpayers will be better off over the next decade. Treasury estimates that these changes will increase labour supply by as much as 930,000 hours every week in this country, an important contribution at a time of labour shortages and when many are concerned about immigration. The proposed changes will also restore the 37 per cent bracket to the tax system. The Morrison stage 3 cuts had a single tax bracket from $45,000 to $200,000. This would have flattened our income tax system radically, to the point where it would have been more aggressive than at any time since the 1950s. The restoration of the 37 per cent bracket, which I called for in 2023, improves the basic structure of our tax system.

The move to modify the stage 3 tax cuts is evidence based. Last year, more than 100 tax experts and economists publicly declared their concern about the impending tax changes. Their concern was that the Morrison stage 3 cuts would worsen inequality in this country and that they were unfair and inflationary. Those experts stated that they believed politicians should take their promises seriously, but that they also believed the country's economic circumstances had changed radically since the stage 3 tax cuts were legislated in 2018.

To date, my community has been disappointed with Labor's response on the cost-of-living crisis. This legislation will provide greater tax cuts to more Australians, and most of my constituents support this change. Indeed, 71 per cent of taxpayers, even in Kooyong, will be better off with the modified stage 3 tax cuts. However, the changes do mean that some taxpayers will not receive the full tax cut that they had planned and budgeted for. At the time of increases in the cost of living, that is extremely disappointing for some. I want to acknowledge that this evening. While many constituents have written to me to express their support for the changes to the stage 3 tax cuts, some have contacted me to express their concerns. There are two main reasons why some constituents are disappointed with the changes. Firstly, many people, especially single parents, were relying on those tax cuts. Last month I heard from a young single mother in my electorate who would have received a larger tax cut under the Morrison legislation. She had recently been offered a new job with a significantly higher salary. In her words: 'Because of an existing HECS debt and because of the high tax rate, it's amazing how quickly a striking on-paper salary can be cannibalised. I really feel that the amount being taken at the payroll office is unreasonably high. Because I don't have a partner, I am taxed at a far greater rate, in effect, than a couple earning my salary between them, due to there being one tax-free threshold, not two. The prospect of the planned tax cuts was a great relief; it was going to mean I would see a greater proportion of my income actually hit my bank account, and it would allow me to more viably save for my kids' future. I don't yet own a home.'

I have also heard from constituents who are concerned about the impact of bracket creep, with one couple noting that the $180,000 threshold introduced on 1 January 2008 would be over $265,000 now, had it been adjusted appropriately for inflation. That couple also told me that the government needs to take the lead in explaining the impact of inflation on the tax thresholds, and that it needs to be more open with the public about the resultant need to regularly adjust these. I agree that bracket creep is a vexatious problem; it can be a real disincentive to people working more. To address bracket creep, we need to review our tax brackets and we should index them. My constituents' difficulties are real; they reflect the severity of the current cost-of-living crisis. I share my constituents' concerns about the cumulative effect of income tax and of compounding HECS debts—and about systemic inequalities and the cost of child care; the financial disadvantages of being a single parent; and the increasing difficulty of saving for a home deposit, or paying the rent or a mortgage.

The other reason that some constituents are disappointed with this tax change is that they believe it was a broken promise from our Prime Minister. Most of the stressors feeding into the current cost-of-living crisis were already apparent at the time of the 2022 federal election: COVID, the war in Ukraine, rising inflation and consequent increases in interest rates. All of those manifested after the tax cuts were legislated, but before the most recent election. When asked in 2022, and when asked subsequently, repeatedly, whether they planned to change the stage 3 tax cuts, the Prime Minister and the Treasurer repeatedly said, 'No'.

We have a trust deficit in this country. A deficit driven by increasing economic inequality and fuelled by the stressors of the recent pandemic. A deficit which is, sadly, fuelling increasing populism and division. That trust deficit may well have been exacerbated by the government's change of mind on these tax cuts. We don't yet know when the government did change its mind.

In politics, words matter. When we're elected, we enter into a covenant with our community to act, as much as we can, with honesty and with integrity. But we also promise to act, as much as we can, in the best interests of our community, and that is why I am supporting this bill.

There are two important points to make here. Firstly, the sad reality of tax debate in this country is that politicians of all sides face brutal, bitter smear campaigns when they start conversations about tax. We've seen that in almost every term of parliament this century, on issues from the GST to the mining tax and stage 3. We've seen that in the media this week, in the mainstream media's concentration on rule-in rule-out questions, on wedges and on wordplay. We deserve better. In an ideal world, the government would have announced a plan for genuine tax reform before the last election, a plan to address what Ken Henry—more than 10 years ago now—called 'extraordinary intergenerational inequity'. We have not addressed that to date, and this bill does not do that.

The second point I want to make is that our circumstances in this country have significantly changed since the last election. In May 2022, Australia was doing relatively well. Consumer spending and economic growth were on the up. Mortgage rates and rents were only just starting to climb. In the last 18 months we have dealt with persistent inflation, 13 interest rate rises and a war in the Middle East which places us at risk of an energy price shock. Real household disposable income, per capita, decreased 5.3 per cent last year. That was the worst decline in 40 years. Mortgage payments and rent are taking up a larger share of our income than at any time in Australian history.

The tax cuts in their previous form were slated to cost $20 billion a year. That's about what we spend on the Pharmaceutical Benefit Scheme each year; it's almost twice what we spend on higher education, and $20 billion a year in tax cuts when the budget is in deficit and there's inflation is a problem. They didn't make sense then, especially in the face of increasing inflation, and they don't make sense now. That's why they need to be changed. The RBA's response has been, in recent years, a series of interest rate rises which have disproportionately affected those with mortgages and renters. This is a group which is already doing it tough. The Morrison stage 3 tax cuts would have worsened inflation, and they likely would have led to further interest rate rises and further stress on those renters and mortgagees.

The US jurist Oliver Wendell Holmes Jr famously said, 'Taxes are the price we pay for a civilised society.' In our country, our civilised society, we are very, very lucky to expect the standard of living that most of us have. We expect high levels of education. We expect superior health care. We expect that our country will be kept secure and that our aged and our disabled are looked after. We expect that people who cannot work are afforded financial and housing support and that people who come to our country seeking asylum are welcomed and helped to start a new life. We expect that our government will provide those things. As citizens we know that the price we have to pay for them is tax, and every three years we get to judge how legitimately our taxes have been spent.

Our government must find a sustainable way of funding societal needs and expectations. Right now, our dependence on personal income tax to provide that funding is too high, and the impact of that on future generations is too great. As was recently noted by the Parliamentary Budget Office, in the current tax mix, with its high dependence on personal income tax, there is a trade-off between providing sufficient support for the ageing population and maintaining intergenerational fairness for younger Australians whose primary income is wages. Really, what we need is a whole-of-system tax reform which looks at all of the services that we need from government—how much they will cost and how best to pay for them—and which not just looks at domestic sources of revenue but also takes full benefit from the windfall profits made by multinationals from our mineral and fossil fuel wealth.

Australians are sensible and pragmatic. They know that nothing comes for free, but they've lost trust in government processes and spending decisions—with good reason. We must future-proof our economy for the next generation, which faces increasing national debt and HECS debts, challenging housing affordability, the cost of climate remediation and the need to support an ageing population. I will continue to make the case for this government, the Labor government, to be brave and to help all Australians through the worst cost-of-living crisis in a generation. Tinkering around the edges on tax isn't good for us in the long term.

My community has been clear with me. It is supportive of these changes to the stage 3 tax cuts in order to make them less inflationary, in order to make them fairer, and I support these changes, too. But what Australia really needs is a broader discussion about intergenerational inequity and about our economy. We must ensure that we can fairly and equitably raise the revenue that we need to provide the services and the infrastructure that Australians expect and deserve. I urge both major parties to put politics aside and to be open to reasonable, expert led tax reform. I commend this bill to the House.

Susan Templeman (Macquarie, Australian Labor Party) Share this | Link to this | Hansard source

The emails that I've got from my constituents have given a really good reflection and appreciation of how they are feeling and what their response is to our decision to make changes to the stage 3 tax cuts so that the Labor tax cuts are more equitable. This is what Ross says: 'I wish to thank the government for adjusting the tax cuts in order to help those less well-off. In a society where there is so much inequality, any move to address this situation is to be applauded.' Jane writes: 'Recent governments have taken decisions which advance their own political ends. It is so refreshing to see a government consider the needs of the Australian people and the challenges they are facing in current economic circumstances. The changes reflect great integrity and bravery, particularly given the strong opposition the government would be aware it would face.' And, finally, David says: 'As a higher income earner missing out, I nonetheless agree that the changes to stage 3 are more equitable than the Morrison attempt to bribe me. Keep up the good work'—and we will.

That sums up the response from the majority of people who've spoken to me about these changes and our decision to give every taxpayer a tax cut in a bit over four months time. For me, this bill is a demonstration of something that I certainly didn't see in the previous government, and that is an ability to really listen, to hear what communities are saying and to then respond in a way that might not have been considered a few short years ago. I was one of many MPs who listened to their community as they shared the experience of being squeezed by the rise in interest rates that started before we came to government and continued fiercely for many months, by the rising prices and—even though wages had started rising and unemployment was historically low—by too little being stretched too far. These were parts of the community who may have missed out on some or much of the cost-of-living relief that we delivered: cheaper child care, expanded paid parental leave, electricity bill relief, cheaper medicines and more Medicare bulk billing, fee-free TAFE, increased rent assistance and boosted income support payments.

The key conversation, the absolute key conversation I had with so many people was the need to provide relief if possible, but not to send their mortgage repayments skyrocketing any further. So this decision, our decision, our tax cuts which deliver more relief to more people in a way that is fiscally responsible and doesn't add to inflationary pressures, is something I'm very proud to be standing here and speaking to. The Labor tax plan means every Australian taxpayer will receive a tax cut this year from 1 July. These new tax cuts provide bigger cuts for middle Australia to help with cost of living, and at the same time they make our tax system fairer. This is a plan for both tax relief and tax reform.

Let's look at some of the ways there will be benefits from these tax cuts. They are good for middle Australia; they are good for women; they are good for young people; they are good for helping with cost-of-living pressures; they are good for labour supply; and they are also good for the economy. When I look at Macquarie, my electorate, every single one of the 67,000 taxpayers in the Blue Mountains and Hawkesbury will receive a tax cut under Labor's tax plan, with 85 per cent—that's 57,000 people—receiving a bigger tax cut from 1 July than under the old stage 3. The average tax cut is $1,624. That's around $90 million back into the pockets of taxpayers, the pockets of workers, just in my community alone in the Blue Mountains and Hawkesbury. That's just for the first year.

Here are some of the examples: nurses, teachers and truckies are some of the most likely to benefit, with more than 95 per cent of those taxpayers getting a bigger tax cut. Parents, particularly women with young children, will have even more meaningful support to return to work under our changes because of the increase in their take-home pay. Someone on the average wage in Australia—that's around $73,000—will now get a tax cut of more than $1,500 a year. That's around $29 a week, more than double what they were going to get under the old coalition plan. Someone earning $100,000 a year gets a tax cut of around $42 a week, or $2,179 a year. For a family on the average household income, which is around $130,000, with one partner earning $80,000 and the other $50,000, their combined tax cut will be over $2,600, with is about $50 a week and $1,600 more than they would have got under the old plan.

How we achieve it is by a number of steps. From 1 July this year we will reduce the 19 per cent tax rate to 16 per cent. We will reduce the 32.5 per cent tax rate to 30 per cent. We will increase the threshold above which the 37 per cent tax rate applies from $120,000 to $135,000. And we will increase the threshold above which the 45 per cent tax rate applies from $180,000 to $190,000. The 45 per cent threshold is being lifted on 1 July for the first time since Labor was last in office. It didn't go up, it didn't get changed, it wasn't made better. There was no relief in the last nearly 10 years. It's taken Labor to be in government for there to be a change to that top tax rate.

All 13.6 million Australian taxpayers will receive a tax cut from 2024-25 onwards. The tax cuts will also help tackle bracket creep and lower average tax rates for all taxpayers. So our changes deliver a better, more progressive tax system and they address bracket creep more evenly. This whole program is broadly revenue neutral, so it won't be adding inflationary pressure. All of these things mean that there are many, many winners from the changes that we've brought in.

I've mentioned women. All 6.5 million female taxpayers will receive a tax cut. Ninety per cent, or 5.8 million, of female taxpayers will receive a bigger tax cut than under the Morrison plan, an average increase of $707.

I'm really pleased that our tax cuts extend the relief to a group that was probably likely to miss out under the old stage 3 tax cuts. All 1.5 million young Australian taxpayers aged between 18 and 24 will receive a tax cut. The average tax cut will be a bit over $1,000. All 1.6 million taxpayers aged 25 to 29 will receive a tax cut and their average tax cut will be just over $1,500 a year. I also note that students who have been able to take advantage of fee-free TAFE and are studying at TAFE are also workers, many of them, and they will not only get the benefit of fee-free TAFE but these thousands students who are working part-time will also get a tax cut. They are working hard to do better, they are aspiring to do better, and we're supporting them, not just through fee-free TAFE but also through tax cuts.

Now, older Australians don't miss out on this. Older Australians who are paying tax, all 500,000 taxpayers aged between 65 and 69, will receive a tax cut. All 250,000 taxpayers between 70 and 74 will receive a tax cut and all 344,000 taxpayers aged over 75 will receive a tax cut, so these benefits will be felt right across the board.

When I look at some of the professions that I know are heavily represented in the seat of Macquarie, I can see these benefits. Ninety-eight per cent of nursing support and personal care workers will be better off under our tax cuts than under the previous model from the coalition. Ninety-eight per cent primary school teachers are going to be better off, get a greater tax cut. Ninety-seven per cent of secondary school teachers are going to get a bigger tax cut than under the previous government. Ninety-seven per cent of registered nurses, 97 per cent of chefs, 90 per cent of childcare workers, 90 per cent of aged and disability carers, 97 per cent of truck drivers and welfare support workers, all of these groups are going to benefit enormously. It is the sort of thing that is going to go right across my electorate. There will not be a town or village or suburb where the benefit isn't felt and that is great for our local economy.

So, let's get really clear. A person on an average income of around $73,000 is going to see a tax cut of $1,504, $804 more than they were going to receive under Morrison's plan. A person earning $40,000 will get a tax cut of $654 compared to nothing under the previous government's plan. A person earning $100,000 will get a tax cut of $2,179, $804 more than they would have under the Morrison plan. And a person earning $200,000 will still get a tax cut, which will be $4,529.

The Treasury estimates, when looking at these results, show that one of the consequences will be increased labour supply by around 930,000 hours a week. Now, that's more than double the labour supply benefit from the former coalition government's plan. That means more people in the workforce doing more work. It's driven by increases in hours worked and by the participation of women with taxable income between $20,000 and $75,000. These are things that we are very proud to be able to achieve.

The other change that we're making is around the Medicare levy. This bill sits alongside the Treasury Laws Amendment (Cost of Living Tax Cuts) Bill. I think what a lot of people have missed is we want to further support low-income households, because households with taxable incomes below the relevant statutory low-income thresholds will not be liable for the Medicare levy. The change is that we're going to increase the income threshold for the partial Medicare levy to $26,000 a year and for the full Medicare levy to $32,500 a year. For a single person earning $30,000 a year, it means they're going to keep an extra $170 in their pocket. That's another small part of the change which is going to yield widespread benefit.

We're introducing these changes because they recognise the economic realities of 2024. Australians are under pressure right now, and they deserve a tax plan that actually responds to the challenges that they're facing right now. We couldn't have predicted this situation five years ago; we didn't know exactly what was coming. But we are a mature government that can look at a situation and assess it.

I did have someone say to me, 'Oh, I'm really disappointed you've done this, because you've been in small business; you should know that this is a bad thing to do,' and I said, 'To the contrary—I'm doing exactly what I would have done in small business when presented with information that showed me a better way forward than the way I'd planned to go five years ago; I absolutely would've seized that new information, taken into account the new conditions that I was trading in and made changes.' And that's what we've done. We've been responsive.

When the coalition's plan was legislated five years ago, the world was a different place. It was before the once-in-a hundred-years pandemic. It was before this persistent inflation and the higher interest rates and the two big conflicts and global uncertainty which have placed so much pressure on us. When the circumstances change, changing policy is the responsible thing to do.

The Albanese government is providing meaningful cost-of-living relief in a responsible way. We are not adding to inflationary pressures, and we're laying the foundations for a stronger and more resilient economy. As Richard Denniss from the Australia Institute said, Anthony Albanese's decision to recast Scott Morrison's 2018 tax cuts to suit the economy of 2024 is 'the biggest and most honest piece of tax reform' in Australia for decades. I am so proud to be supporting this bill.

Kevin Hogan (Page, National Party, Shadow Minister for Trade and Tourism) Share this | Link to this | Hansard source

I rise to talk on the Treasury Laws Amendment (Cost of Living Tax Cuts) Bill 2024. As we have said, the coalition will be supporting this bill but, obviously, moving amendments as well.

I want to make it really clear that, if the previous coalition government hadn't legislated for three stages of tax cuts—the first two stages primarily for lower income earners, and the third stage for middle- to upper-income earners—and the third stage wasn't about to come into force on 1 July this year, there would be no way that this new government would be legislating any type or form of tax cut. I think we need to lay that out.

It's also interesting that the previous member got up and talked about the 'Morrison tax cuts'. They were bipartisan. They were the Morrison and Albanese—or whoever was the leader: Shorten—tax cuts, because both sides of the parliament voted for these tax cuts.

But it's not in Labor's DNA to support tax cuts. It's not in their DNA to legislate tax cuts. They're having to do this because these cuts were legislated. They said they would support tax cuts, so now, obviously, they are putting tax cuts through, but certainly not the ones that everyone voted for.

There would be more respect for the government if the government hadn't said a hundred times that they were going to support the tax cuts as legislated—if the government of today, at the last election, had not said that they were going to support the tax cuts as legislated. The thing that has to be acknowledged—and the other side would like to say, 'Nothing to see here'—is that they have misled the Australian public about what they were going to do and what they were going to say.

Members, one after the other, are getting up and saying, 'Oh, there's been a change in circumstances.' The previous member mentioned the COVID pandemic. That happened a few years ago. It was only three weeks ago that the Prime Minister and the Treasurer said they were going to support the stage 3 tax cuts as had been legislated. The pandemic happened a long time ago, so, when we're dragging stuff back from two or three years ago—and that's why circumstances have changed—why weren't the Prime Minister and the Treasurer saying, three or four weeks ago, 'No, we are going to reconsider the legislated stage 3 tax cuts'? Why weren't they saying that then? Why weren't all these amazing things that have transformed the world looked at: 'We've had to revisit it and we've had to look at it'? Why weren't the Prime Minister and the Treasurer saying, just three weeks ago, 'We're going to relook at this.' They weren't saying that. They were saying, 'No, we're supporting the legislated tax cuts, as we supported them a number of years ago.' So what an amazing furphy it is when the government says: 'There have been all these changed circumstances. Things have developed. You look at new evidence when it happens.' But there was no new evidence three weeks ago—there were no new circumstances three weeks ago—about why they were going to change what was legislated.

An integral part of this is integrity. An integral part of this is whether you have misled the Australian public or you are taking them for mugs, saying one thing and then just saying: 'Look, everything has changed. What I said two weeks ago isn't the same.' That is a really important point in what we're talking about today, and that's why we have to remind the Australian public that the Prime Minister and the Treasurer misled and deceived the Australian public 100 times. That cannot be waived over. That cannot be forgotten. That cannot be justified by something that happened two or three years ago.

Quite rightly, the Australian public now need to question everything this Prime Minister says, everything this Treasurer says and everything this government says because you can't trust them. You can't rely on them. You can't say, 'No, the Prime Minister said his word is his bond.' Well, he's already proved that's it not. Nothing now is ruled out from them saying, 'But, no, circumstances have changed,' or saying, 'Something happened four years ago, and we've changed our mind on that, even though we said two weeks ago that we were still committed to it.' That is why, with these words that we're now hearing from the government on things like negative gearing and a whole lot of the tax policies, the Australian public cannot trust this government.

I don't think you need much of a crystal ball to predict the next one. I'd say that the next thing this government is going to look at is negative gearing. The words they're using, they're not saying yes or no. They're just saying: 'It has not been considered. It has not been looked at.' Then suddenly it's like, 'Because of changing circumstances and because of this and because of that, we've changed what we said to the Australian public at the last election.' That is what is exceptionally disappointing about this.

It was interesting: I listened quite closely to the member for Kooyong when she got up and spoke. She is someone who came into this parliament as a Teal and talking about integrity, talking about transparency and talking about the fact that we have to be open with the Australian public. I'll withdraw this if I'm corrected tomorrow, but, from what I heard her say, not once did she call out the government that they had deceived the Australian public at the last election. This is the election that she came in on, and the government have changed their position. All I heard was why she thought this was a good idea. I respect that if she believes it, but call this government out. You can agree with the government about what they are doing—I don't have a problem with that if that's your opinion—but you have to call the government out on that. They have deceived, I believe, the Australian public.

I wouldn't say that if they had mentioned it six months ago. If the Prime Minister got up six months ago and said: 'Look, there are a lot of things that have gone on. There's a cost-of-living crisis'—well, six months ago he wasn't talking about the cost of living; he was talking about the Voice. But, if he had got up six months ago and talked about the cost of living and said, 'Look, we are going to revisit stage 3 and we are going to look at this and redesign it in a way that we think would be more targeted,' you would have to respect that. I would respect that. I'd say: 'Okay, you said six months ago that you were going to redesign this. There are changing conditions, and there are circumstances that you think you want to retarget and redefine in it.' I would respect that. You can't not respect that. I would have liked to have seen it at the last election—even six months ago. To wait six months, I think that you'd respect that. But to say three weeks ago that you're not going to change it and then do that three weeks later is unacceptable to the Australian public. That's the issue here; this cannot be forgotten, and it won't be forgotten by the Australian public.

There were a lot of tricky, sneaky words going on here, too. Today in question time there was talk about when Treasury looked at this. When did the department look at this? Why did the department start looking at this? Suddenly there was this inference in looking at the words: it was almost: 'Oh, no, Treasury started looking at this by themselves. This wasn't directed by the Treasurer or any minister and this wasn't directed by the Prime Minister. Treasury, just as a department—just themselves—creatively started to come up with different scenarios.' Okay, so there was no conversation between the minister, the Treasurer, the Prime Minister and Treasury to look at different scenarios about what other things could be done or what parameters there could be around the stage 3 tax cuts? This was done autonomously, without direction, by the Treasury? Without ministerial discretion? Really? Okay, that's interesting—an interesting take on it in itself, which we might pursue with more questions. But that's a key element here.

We can talk about this. I'm happy to sit down, with great respect, and listen to members opposite say why they think that these tax cuts, as they have been redesigned by the government, are a better policy, or more targeted or better right now, than what was designed five years ago with the stage 3 tax cuts, albeit that stages 1 and 2 were for lower-income earners. But it's almost hypocritical to say that times and circumstances have changed. They haven't changed in three weeks. It was only three weeks ago that the Prime Minister and the Treasurer were saying that the stage 3 tax cuts would go through as legislated.

Let's be really blunt about this: why were the Treasurer and the Prime Minister asked about this 100 times? They were asked 100 times because a lot of the media and a lot of people didn't really think they believed in them anyway. That's why it happened. You don't get asked 100 times about an issue if people think you believe in it and people think you're going to carry through with it. Why they were asked 100 times, and why that statistic is there, is because a lot of people knew, or believed, that the Prime Minister and the Treasurer didn't believe in stage 3. But they've reinforced the hypocrisy here, because 100 times they said, 'No, we do, and we're going to put them through as legislated.' Then, suddenly, it was, 'Oh, no, we're not.' That's where the deceit has been here. Everyone knew that they really didn't want to do it. If they had said that two years ago, one year ago or six months ago then maybe; but to say it now at the 11th hour, 'Oh, all the circumstances have changed.' The Australian people aren't mugs, and they have seen through this.

Let's look at the timing of this. A quote was mentioned where one of the ministers said earlier today, 'If you want to be really cynical about this, there's a by-election coming up.' I think that's one of the reasons they've done this—and this may be cynical—there's a by-election and they've asked: 'How can we divide the public? Let's pick out an income and give the tax cut to the people below that but not above that. Let's try and be divisive about this; let's try and wedge the coalition and run a divisive thing about this.' That's quite disappointing, but it's not surprising from this government. I think some of the intentions of some of those opposite—and of some of the ministers opposite, I must say—on the Voice were very altruistic, and I respect them for that. But it was always going to be divisive in the way it was run. They ran it—the Prime Minister ran the Voice as a divisive thing through a lot of things that he didn't do with that campaign—and now, again, I think they're looking to divide the public in Australia on this issue as well.

I look at the Treasurer, who's apparently a student of Paul Keating—and I'm happy to go on the public record and say that I myself have a lot of admiration for former Treasurer Keating and Prime Minister Keating. He didn't divide the country like this. When he looked at tax cuts, do you know what he did? He lowered the upper end of personal income tax from 60 per cent to 49. That's what Keating did. The Treasurer might regard himself as a student of Keating, but, gee, he hasn't digested it, because Keating lowered the personal income tax rate from 60 per cent not just for those earning over $200,000 but for every income earner. These were the top income earners. You're not doing that at all; you're not lowering income tax like Keating—

I'll take the interjection. Keating lowered income tax for everybody, without a capped income.

You're not. You might want to read the legislation. If you earn over $200,000, you're not getting a tax cut.

Matt Keogh (Burt, Australian Labor Party, Minister for Veterans’ Affairs) Share this | Link to this | Hansard source

You are getting a tax cut.

Kevin Hogan (Page, National Party, Shadow Minister for Trade and Tourism) Share this | Link to this | Hansard source

Well, you're not lowering the rate. The top tax rate is staying the same. I'll repeat it for you: Keating lowered the top tax rate.

Milton Dick (Speaker) Share this | Link to this | Hansard source

Order! The Minister will cease interjecting. The member for Page will direct his comments through the chair.

Kevin Hogan (Page, National Party, Shadow Minister for Trade and Tourism) Share this | Link to this | Hansard source

I will, but I'd remind the minister opposite that he doesn't understand what I'm saying, and that's concerning. Keating lowered the top tax rate—the top tax rate. Do you understand what the top tax rate was? The top tax rate went from 60 per cent to 49. You're not lowering the top tax rate, so can you withdraw the comment you just made. But I don't think you understood what I was saying, which is concerning. Keating lowered the top tax rate from 60 per cent to 49, so I say to the Treasurer, who's his student: Keating didn't look to divide us; Keating didn't look to divide the country on those income earners who were at the top tax level like the Treasurer is doing. Again, this is divisive.

We will support the bill, because we support lower taxes, but the government has been very deceitful in their behaviour on this.

Milton Dick (Speaker) Share this | Link to this | Hansard source

Order! The member for Page will cease interjecting so I can give the call to the Minister for Veterans' Affairs.

Matt Keogh (Burt, Australian Labor Party, Minister for Veterans’ Affairs) Share this | Link to this | Hansard source

Labor is delivering a tax cut for every Australian taxpayer. Just think about that for a moment—every Australian taxpayer.

Milton Dick (Speaker) Share this | Link to this | Hansard source

The minister will pause. The member for Page has had his say. I know this is a hot topic, but I'm just going to ask him to refrain from interjecting so we can get through this speech. I give the call to the Minister for Veterans' Affairs.

Matt Keogh (Burt, Australian Labor Party, Minister for Veterans’ Affairs) Share this | Link to this | Hansard source

Labor is delivering a tax cut for every Australian taxpayer. Just think about that for a moment—every Australian taxpayer. That's some 13.6 million people. Every person who pays tax in Australia will get a tax cut this year when they lodge their tax return. This means 82,000 people in the electorate of Burt will receive on average a $1,489 tax cut. In practice, that will mean 87 per cent of the people in our community will be better off under Labor's tax cuts.

Labor's tax cuts build on our targeted cost-of-living relief, and importantly they don't add to inflation. We are taking real action to respond to the pressure Australians are under here and now. I know that rents are rising in our community. House prices have been going through the roof. Groceries at the checkout are costing more. A lot of people in our community are doing it tough. Thanks to this legislation, an average Australian taxpayer will now be getting a tax cut of $29 a week, which is more than double what they would have been getting under the former Liberal-National government's plan.

We've been listening. I've been listening. You've shared your concerns with me, and I get it. The economic reality we're facing is very, very different to how it looked five years ago. When the Liberal-National government legislated its stage 3 tax cuts five years ago, the world was a very different place. Since then we've had a once-in-a-century pandemic, persistent inflation, higher interest rates, two conflicts and global uncertainty. When circumstances change, changing policy is the right thing to do. That's why I'm proud to stand here today to speak on this legislation, lowering taxes for all taxpayers. Yes, the government's position has changed, but good government isn't about doing what's easy, it's about doing the right thing. We've found a better way. As I explained to somebody the other day, if I promised my son Nicholas that I would play Lego with him, but then my other son Benedict breaks his arm, should I make Benedict wait while I play Lego before I take him to the hospital, or should I make sure that I attend to that emergency?

Labor's tax cuts are all about doing the right thing for the right reasons. It's about putting people ahead of politics. We've changed our position and we've changed it for the better. Because it's not just our community who will be better off; it's everyone. Ninety-seven per cent of aged care workers in our community will be better off under Labor's tax cuts. Ninety-eight per cent of primary school teachers in our community will be better off. Chefs, nurses, truckies, mechanics, the list goes on—all will be better off.

Our community is excited about the action the Albanese Labor government has taken to ease the cost-of-living pressures. Under these changes taxpayers earning less than $45,000 will now receive a tax cut. They wouldn't have received anything under the previous government's plan. This will significantly boost the take-home pay of Australians on lower incomes and people working part time.

Graham got in touch with me saying we're on the right track. He told me he's been on the same $80,000 wage for a decade, and it's the only income he and his wife have been living on. He says that this tax cut will soften the grief. Margaret got in touch saying thank you, and made the point that Labor's plan is far more equitable than what the Liberals had proposed. Stephen says, 'Good luck with the tax cuts. They are popular with the workforce.' It would be unparliamentary for me to quote the rest of his message of support.

Every member of the Australian Defence Force and every public servant in the Department of Defence will receive a tax cut under Labor's tax plan. Those who have and who continue to serve our nation will this year take home more of what they earn through a tax cut. A soldier who is in the first few months of training at Kapooka earning just over $56,000 a year will receive a tax cut of $1,089. An army captain posted into infantry based up in Darwin will receive a tax cut of $2,880. A member of the Public Service working for Defence on a salary of $71,343 will receive a tax cut of $1,463. They will all keep more of what they earn, and so they should.

Labor's tax cuts are good for all Australians, and that includes older Australians. There are half a million taxpayers between the ages of 65 and 69. On average they will receive a tax cut of $1,731 a year. All 344,000 taxpayers over the age of 75 will receive a tax cut of about $1,726 a year. Labor's tax cuts will help all workers, whether they're in their first job or in the twilight years of their careers, with all 1.5 million taxpayers under the age of 42 to receive more than $1,000 in their tax return.

Labor's tax cuts build upon our earlier cost-of-living assistance initiatives. We've worked with the WA Labor government to bring down energy bills, making turning on the air con on those 40-plus degree days that we've had this summer more affordable. We've made child care cheaper, which is getting more families back to work. We've increased rent assistance to soften the blow of skyrocketing rents. We've expanded bulk billing, tripling the incentive payment to make accessing a bulk-billing GP easier. People in our community are gaining the skills they need for good jobs through our fee-free TAFE courses. We've got wages moving again, making sure people are better paid for the work that they do.

Our No. 1 priority is addressing cost-of-living pressures, and that's precisely what we are doing through our tax plan that sees all taxpayers paying less tax. I commend the bill to the House.

Michelle Ananda-Rajah (Higgins, Australian Labor Party) Share this | Link to this | Hansard source

People are doing it tough. From renters, pensioners, working families and early to mid-career professionals to tradies, single parents and essential workers, all are facing persistent pressure on their household budgets. When young people are leaving Higgins because they can't make the rent, when families are moving for the same reason, when mortgage holders are near their limit, when people are sleeping in cars in Higgins, and when we are seeing an uptick in domestic violence amongst people being seen at our maternal and child health centres, you know we need to act. If this is happening in Higgins, just imagine how much worse it is right around Australia. There is not one reason to course correct but, in fact, 26 million reasons to do so.

Our decision to change the stage 3 tax cuts was not made lightly. It was done in response to persistent and sustained pressure on household budgets, despite us throwing a slew of medicines at the problem, like cheaper child care, cheaper medicines, energy relief, more bulk billing, urgent care clinics, increases to income support payments and fee-free TAFE.

Our $23 billion cost-of-living package across two budgets has helped, but it is clear that people need more relief. The original stage 3 tax cuts were legislated in 2018, when the world looked very different. Who could have anticipated an inflationary storm triggered by a global pandemic and linked to generous government support, disrupted supply chains and not one, but two, global conflicts.

This cost-of-living problem has proven to be more stubborn than we hoped for, demanding that we do more. Labor's tax cuts will deliver more bang for buck at a time when people are under sustained pressure. On 1 July, the Albanese government will be delivering a tax cut for every Australian taxpayer. A total of 13.6 million Australian taxpayers will be receiving a tax cut, and 85 per cent of taxpayers will be getting a bigger tax cut under our plan compared to Scott Morrison's plan.

Every taxpayer in Higgins—around 85,000 people—will receive a tax cut. Nearly three in four workers in Higgins will receive a bigger tax cut under our plan compared to the previous one. The average tax cut in Higgins will be $2,059. That is huge. The average Australian wage earner on $73,000 per year will receive a tax cut of $1,504, which is more than $800 extra in their pocket each year than they would have received under Scott Morrison's plan.

Among the biggest beneficiaries are women. That is music to my ears in a government that is 53 per cent women. We walk the talk. All women will receive a tax cut, but 90 per cent of working women will receive a bigger tax cut under Labor's plan compared to Scott Morrison's plan. You can't comment on or talk about gender equality without actually supporting women's economic development, and these tax cuts certainly do that. On average, all 6.5 million women taxpayers would receive an average tax cut of $1,649 compared to $1,278 under the previous stage 3 tax cuts.

Treasury estimates that Labor's tax cuts will boost workforce supply, particularly for women. I have walked around Higgins and I've seen women with extraordinary professional qualifications who are currently languishing at home. Why? Because they are basically working part-time. It's not worth their time to increase their hours due to the current tax regime. These changes will encourage more women to step up into the workforce at a time when businesses are desperate for skilled workers.

We have, as you know, had the worst productivity in the last six decades. It was absolutely moribund under the Liberals. Having more workers with appropriate skills that the economy needs will be a real shot in the arm for productivity. This just makes good economic sense.

Treasury expects an increase in workforce supply of around 930,000 hours per week, more than double the previous stage 3 cuts. There are many women in Higgins who are going to get— (Time expired)

Debate adjourned.

House adjourned at 22:00