Bob Katter (Kennedy, Katter's Australian Party) Share this | Link to this | Hansard source

No wonder the Liberal Party is where it is. That person knows nothing about what he's talking about.

Mary Aldred (Monash, Liberal Party) Share this | Link to this | Hansard source

The member will address his—

Bob Katter (Kennedy, Katter's Australian Party) Share this | Link to this | Hansard source

No, I'll move on. I move:

That this House:

(1) acknowledges that:

(a) an Australian couple both in paid employment without kids can have a combined income of $250,000 and pay approximately $67,634 in combined tax;

(b) an Australian couple with only one person in paid employment while the other is looking after the kids can also have an income of $250,000 yet have to pay $88,167 in tax, over $20,000 more than other couples; and

(c) income splitting:

(i) would allow the couple in the second scenario to pay the same amount of tax as the couple in the first scenario;

(ii) would also acknowledge and give monetary value to the incredible work done by stay-at-home parents; and

(iii) might also allow couples to start and/or grow their families so our nation stops relying on migration for growth; and

(2) calls on the Government to take immediate and decisive action to introduce income splitting to:

(a) more fairly share the taxation burden between couples with kids and couples without kids;

(b) acknowledge and value the contribution made by stay-at-home parents; and

(c) address Australia's declining birth rate.

We have the great honour of belonging to a vanishing race. Dr Bob Birrell said that our population will be seven million towards the end of this century. We will vanish as a race of people. Now, I personally love Australians, and I'd like to see a lot more Australians. I'm not going—and I don't have time—to go into the reasons we are not seeing more Australians. But we believe profoundly that if women are provided with $65,000 at the birth of a baby, then we will have a lot more babies in Australia. The current birthrate is 4.4 million a year, but that should reasonably, I think, be over one million a year. What we are advocating is $65,000 on the birth of a baby. People say, 'What, are we going to buy babies now?' It changes the attitude of people. Young people are desperately trying to buy a house. They can suddenly see, 'Jeez, that would be good.' It will change the attitude, and that really is much more important than the actual $65,000 in itself.

Deputy Speaker Aldred, you may say, 'That's a lot of money.' Look at income splitting at the moment—or DINKS versus SINKS, as they say. Double income, no kids—that's the DINKS—get $110,000 a year. They pay tax. They've got nearly $80,000 in disposable income. If you're a SINK, you're on a single income with a number of kids. Let's say you have three kids and a non-working wife who stays at home to look after the kids. You will be on $15,000 a year. The question is: do you want to be on a $75,000 disposable income or do you want to be on a $15,000 disposable income? Needless to say, Australians are not having a lot of babies. If we've got a value system imposed upon the people of Australia where you are brutally punished if you have children and you're on easy street if you don't have children—well, excuse me if our young people are not having any children.

You ask, 'Where are you going to get that money from?' It behoves me to say: you build the Bradfield Scheme. It's not exactly a fool. We built the Sydney Harbour Bridge, Sydney's water supply, the underground railway system—won the world prize for engineering. It's not exactly a fool. That brings in the Bradfield Scheme. It diverts the water to where it can be used—it rains all the time in the electorate I represent—from where it never stops raining out to the other part of my electorate where it never starts raining. That's the Bradfield Scheme.

We import 62 thousand million dollars worth of petrol every year. What sort of brainless country are we? We send our petrol overseas and we get eight thousand million dollars for it. Then we spend 62 thousand million buying that oil back as petrol. What sort of brainless country are we? We buy all our motor vehicles from overseas—23 per cent of the motor vehicles bought in Australia are bought under a government contract. If you want to get your car free under a government contract, then you will drive a motor vehicle made in Australia—and then we'll have secondary industry back in this country, as well as providing a huge income for Australia. Our gas we gave away for nothing. Qatar exports the same amount of gas—these figures are about 12 years old; it's much worse now. But they get 29 thousand million for their gas. We get 630 million for our gas. They get 29 thousand million for theirs! So, yes, it'd be nice if we got a bit of a return on gas.

For water development programs, we have a proposal called CopperString which'll open up the mineral wealth of North Queensland, and the Bridle Track tunnel, which will open up the mineral wealth of North Queensland. We'll give you back about $30 billion a year if you give us a little bit of wire going out west—and that little tiny tunnel one kilometre long. Brisbane's got 27 kilometres of tunnels, with a million people. We've got a million people in North Queensland and we've got no tunnels—

Mary Aldred (Monash, Liberal Party) Share this | Link to this | Hansard source

The member's time has expired. Is the motion seconded?

Rebekha Sharkie (Mayo, Centre Alliance) Share this | Link to this | Hansard source

I second the motion and reserve my right to speak.

Rowan Holzberger (Forde, Australian Labor Party) Share this | Link to this | Hansard source

The first thing I'd say is that I'm always open to hearing the contribution of the member for Kennedy. Speaking as somebody who's 53 years old, you've been in parliament—state and federal—for two years less than I've been alive. I think that, absolutely, you should be given respect.

I may not have either! The other thing, too, is that you're a former Bjelke minister. You've been around for a long time and you've seen it all.

Mary Aldred (Monash, Liberal Party) Share this | Link to this | Hansard source

Please address remarks through the chair.

Rowan Holzberger (Forde, Australian Labor Party) Share this | Link to this | Hansard source

Sorry, Deputy Speaker. The mover of the motion is a former Bjelke-Petersen minister really just shows the length and depth of experience that the member has. So this is an idea which shouldn't just be dismissed out of hand.

But the two things that I'd say to substantially address the motion are that, in terms of acknowledging and giving monetary value to the incredible work done by stay-at-home parents, yes, they absolutely deserve that recognition, and that's what the family tax benefit was about. My understanding is that it was something introduced by the Howard government, particularly family tax benefit B, which really focused on stay-at-home parents. As a second income earner, once your income gets to about $6,000, you start to lose that FTB B, so there is an incentive at the moment.

In terms of allowing couples to start or grow their families so that the nation stops relying on migration for growth, yes, we absolutely do want to lift the national birth rate, but income splitting doesn't do that because it doesn't specifically target people who are staying home to look after kids. Ultimately, yes, in an ideal world, there absolutely is a hunger in the community to be paying less tax. The community knows that the tax burden falls unfairly on pay-as-you-go income earners, but that is something that this government is also addressing through income tax cuts and repurposing the income tax cuts—which the Morrison government left us with—to be more fairly applied across the community. The two income tax cuts that the government took to the last election were about getting to those lower income earners and spreading them evenly. So, yes, the intent of this is 100 per cent obvious. That why there's an acknowledgement from the government that it needs to be fairer and the actions of this government are about making it fairer.

The honourable member would understand through his time here that the importance of the social wage is ultimately not just what's left in take-home pay; Medicare itself is something that is fundamentally part of that social wage that provides benefits to people fairly and equally across the economy and the community. Superannuation is also something which, apart from some of the changes we've made around the LISTO, really targets those lower income earners. In the electorate of Forde alone, there's something like 14½ thousand people that will benefit from those changes to that, by making the tax on their superannuation less—that's 14½ thousand low-income earners, of which 7,600 are women; somewhere around 68 per cent are women. Superannuation is also now being paid on government maternity leave. So, again, there are incentives there that are fairly targeted across the community to encourage people to stay home and raise their kids.

Finally, there are changes to child care to make it cheaper, such as removing the activity test. There's the work we're doing around bulk-billing. There's a lot of work, and while I agree with the intent of the motion, I think this government is doing it in a fair and targeted way as we move to a fairer system.

Rebekha Sharkie (Mayo, Centre Alliance) Share this | Link to this | Hansard source

I commend the member for Kennedy for this motion, because this is about choice and fairness, and it is currently untenable for one parent to care for children at home if they wish to do so. Fewer young people are having children. Our current birth rate is just 1.5 for every couple. Over half of Australians under 35 have delayed parenthood due to cost pressures. We seem to have forgotten that parents are the first and best teachers, and parents should have the choice to raise their children at home if that suits their family best. During the last decade, the proportion of one-year-olds in child care has gone from 25 per cent to over half. We pay for private childcare centres—over $30,000 in many cases—to fund the care of a child, but we place very little value on the parent or, indeed, the grandparent.

Real wages have not kept up with the increased costs of living. Each household now needs two full-time workers to cover a mortgage and just the absolute basics. There were 1.2 million two-parent families who were eligible to receive Family Tax Benefit Part A in 2001. Now that's just over 600,000. That's because we haven't lifted that threshold limit of $120,000 for eligibility for Family Tax Benefit Part B. Going back to when I had young children, when as a family we very much relied on Family Tax Benefit Part B—my husband was a tradie—there were just over 26,000 families, in 2001, who received Family Tax Benefit Part B. Now it's only 7½ thousand, because the thresholds have not kept up.

Going to the motion from the member for Kennedy, when we look at tax distribution, it is fundamentally unfair to families where one parent is at home raising children and one parent is going off to work. Looking at families where two parents are each earning $100,000 each—a total tax income of $200,000—they pay $41,000 in tax. If one parent earns $200,000 and the other does not earn an income outside the home because they're doing the most important job of all, that being raising children in the home, that same family would pay $56,000 in tax. So $41,000 or $56,000, and the same income is coming in under the main roof. That is patently unfair and must be addressed.

Looking at lower-income families, a couple earning $60,000 each would pay $17½ thousand in tax. If there is the same amount of income in a family, $120,000 under that roof, but one is out earning and one is taking care of the children, they pay $26,000 in tax—22 per cent of their income versus just 14 per cent for the previous family's scenario. This is unfair. This is disincentivizing families from caring for children themselves.

Yes, we've got paid parenting leave of 26 weeks a year. But then what happens? What happens when the baby's 26 weeks of age? No family in Australia can afford to stay home with them still. They bundle them off to child care. I see them in the morning, at 6 or 6.30 am, in the dark, having to drop babies off. And I talk to so many families in my community. They say the ultimate dream for their family is to be able to have one parent staying home and raising the children and one going off to work for just those early years. This is about choice. Many women would like to go back to work—absolutely; that is your choice. But at the moment we're taking away that choice from families where one parent doesn't want to go back into the workforce but wants to be able to stay home and see those first steps and hear those first words.

So we must do better. It seems patently obvious to me that we need to do income tax splitting. When you have children who are under school age, it is a fair thing to do. It's something the government must absolutely do. If we want to lift our birth rate, we have no other choice aside from making sure we have incentives there for families. We're then valuing families and valuing the role of the stay-at-home parent. We did that in 2001, but now it's 2026. I feel that that value is not there and not being recognised. We can do better.

Renee Coffey (Griffith, Australian Labor Party) Share this | Link to this | Hansard source

I would like to acknowledge and thank the member for Kennedy for bringing forward this motion on income splitting. I would in particular like to acknowledge the intent of the motion, which is very clearly supporting families—something I know the member for Kennedy is passionate about, and it is a passion I share.

In Griffith, families are doing what families right across Australia do every single day. They are working hard, juggling care, managing school drop-offs and shift changes, and stretching every dollar as far as it can possibly go. So when a proposal like income splitting is put forward as support for families, we owe people an honest assessment. Does it make life easier for the families that are under the most pressure? And does it reflect how the majority of Australian families actually organise their work and care today? The answer is no.

When it comes to tax, this government's policy is clear: to deliver a system that is fairer, simpler and more sustainable and that helps Australians earn more and keep more of what they earn. Labor's first round of tax cuts has been flowing since July 2024, benefiting more than 14 million taxpayers, with further tax cuts legislated for this year and next year. Combined, they are expected to deliver an average annual tax cut of more than $2,500 in 2027-28. This is relief for every taxpayer. It does not depend on whether a household has one income or two, and it does not build dependence on the tax system.

Alongside those tax cuts, Labor has increased the Medicare low-income thresholds so more—

Sharon Claydon (Newcastle, Australian Labor Party) Share this | Link to this | Hansard source

Member for Kennedy!

Renee Coffey (Griffith, Australian Labor Party) Share this | Link to this | Hansard source

It's his passion, Deputy Speaker. I hear your passion, Member for Kennedy. Labor has increased the Medicare levy low-income threshold so that more than one million Australians on lower incomes continue to be exempt from the levy or pay a reduced rate. We have also boosted the low-income superannuation tax offset from 1 July next year, benefiting 1.3 million Australians, around 60 per cent of them women.

Families deserve support, and we already have tools to provide it, like the family tax benefit. Part A helps with everyday costs of raising children while part B supports single parents, grandparent carers and some couple families with one main income. That's targeted support which recognises need directly without distorting the income tax system.

Bob Katter (Kennedy, Katter's Australian Party) Share this | Link to this | Hansard source

I've got a point of order.

Sharon Claydon (Newcastle, Australian Labor Party) Share this | Link to this | Hansard source

What is the point of order? Under what standing order is your point?

Bob Katter (Kennedy, Katter's Australian Party) Share this | Link to this | Hansard source

The misrepresentation of what is proposed in this proposal.

Sharon Claydon (Newcastle, Australian Labor Party) Share this | Link to this | Hansard source

Well, no, that's not a point of order. Sorry.

Bob Katter (Kennedy, Katter's Australian Party) Share this | Link to this | Hansard source

The proposal is to get a fairness between this group of people and that group of people, and the member has not addressed that issue.

Sharon Claydon (Newcastle, Australian Labor Party) Share this | Link to this | Hansard source

No, you need to sit down. Please resume your seat. The member for Griffith is completely being relevant, and that's the only point of order that you might have been referring to. I'm going to ask you to resume your speech.

Renee Coffey (Griffith, Australian Labor Party) Share this | Link to this | Hansard source

Thank you, Deputy Speaker. The same is true of paid parental leave. The scheme is already at 24 weeks for children born or adopted after 1 July last year, and that will expand to 26 weeks from 1 July this year. Four weeks can be taken concurrently, giving families more flexibility to share care. Superannuation is now also being paid on government paid parental leave, directly addressing one of the long-term financial penalties that caring has imposed, especially on women. Our cheaper childcare reforms follow the same principle. They are ensuring around one million families receive more help with childcare costs, and the three-day guarantee means 100,000 families will receive more subsidised early education and care.

These policies reflect how families actually live. They support children, parents and workforce participation. Income splitting does the opposite. It rewards stepping back from paid work, particularly for the second earner in a household, who in Australia is very often a woman. Treasury's tax review stated clearly:

Individual assessment supports workforce participation by secondary earners …

and that a progressive individual tax system is far more efficient than family taxation.

Then there's the cost. The Parliamentary Budget Office costed a similar proposal in March last year—

Sharon Claydon (Newcastle, Australian Labor Party) Share this | Link to this | Hansard source

Member for Kennedy! This is your motion. Have a bit of respect, please.

Renee Coffey (Griffith, Australian Labor Party) Share this | Link to this | Hansard source

The Parliamentary Budget Office costed a similar proposal in March last year and found it would reduce the fiscal and underlying cash balances by around $12.4 billion over the forward estimates and by $68.9 billion in 2034-35. That's a staggering amount of money for a policy that is poorly targeted and does nothing to address the structural barriers that real families face. Income splitting is not a fair reform. Families in Griffith deserve better than that.

Sharon Claydon (Newcastle, Australian Labor Party) Share this | Link to this | Hansard source

Thank you. Now we're going to continue this debate without interjections. It's a good motion that the member for Kennedy has put forward, and the whole point of that is to enable a debate.

Tom Venning (Grey, Liberal Party) Share this | Link to this | Hansard source

Thanks to the member for Kennedy, Bob Katter, for raising this motion on income splitting. Let's talk about fairness—not the kind of fairness that gets you political soundbites but the quiet, everyday fairness that happens, or fails to happen, around the kitchen tables of Australian homes.

Let us consider a simple scenario. Imagine two households living side-by-side in any suburb or regional town in my electorate. In house No. 1 we have a couple. Both are in paid employment. They have no children. Together, they bring home a combined income of $250,000. Under our current tax system, they will pay approximately $67,000 in combined tax. Now look at house No. 2. This family also has a household income of $250,000. But, here, only one parent is in the paid workforce. The other parent is at home doing the vital, exhausting work of raising their children. Because our tax system treats them as isolated individuals rather than as a family unit, this household pays $88,000 in tax. That is over $20,000 more.

While we're on the topic of tax, I'd love governments, no matter their colour, to index the tax brackets. Labor's inflation means that more and more tax is raised each year due to our antiquated tax system. The current approach is punitive. It punishes single-earner families. It ignores the reality that, in a household, income is shared, expenses are shared, and sacrifices are also shared. Should the tax burden not be shared as well? The solution is practical and is already staring us in the face. Income splitting would allow a couple to divide their income before tax is calculated, just as they do in other modern economies.

Income splitting is already a reality for the wealthy. Through family trusts, those in certain professions can legally distribute income to spouses and adult children to ease their tax burden. But a standard wage earner is locked out. Income splitting would democratise this system. It would level the playing field. But this is about more than just economics. This is about our national future. We are facing a declining birth rate. We are increasingly reliant on migration to sustain our growth. If we want young couples to start and grow their families, we must stop penalising them for it. In the year 2025, South Australia grew by approximately 19,500 people, with a natural increase of 2,700. That means migration contributed to 88 per cent of the growth in my great state of South Australia. One of the key issues is child care and regional South Australia—or, should I say, the lack thereof. My electorate of Grey faces a severe childcare shortage that forces secondary earners to stay home instead of working. It's deeply unfair that the system punishes families who simply have no childcare options, while favouring those who do.

Income splitting gives tangible monetary value to the incredible work done by these stay-at-home parents. It incentivises those in this position not only to feel financially comfortable enough to have more children but also to stay in the regions that they otherwise might have to leave to find child care. Critics suggest this reinforces an outdated model or that it removes incentives to enter the workforce. But this makes no sense. This is not about forcing anyone into a specific role. This is about choice. It is about removing the financial penalty for a family that chooses or is forced to have a parent at home when their children are young. We must reform this inflexible system. We must recognise that families are the foundational building blocks of our society, not just individuals to be taxed at the highest possible marginal rate by an aggressive Labor Treasury. It is time to share the burden fairly. It is time to value the sacrifices of parents. It is time to bring some common sense to taxation.

Barnaby Joyce (New England, Pauline Hanson's One Nation Party) Share this | Link to this | Hansard source

I support income splitting. I think it's incredibly important. If you want to know where you're going to get savings from, close down the climate change department. All those savings can more than cover the cost of income splitting. It's totally unfair that you have couples discriminated against because one person chooses to stay home. You shouldn't have to stay home, but if you want to stay home, you should be allowed to stay home, and that should be recognised.

Sharon Claydon (Newcastle, Australian Labor Party) Share this | Link to this | Hansard source

The time allotted for this debate has expired.