Nick Minchin (SA, Liberal Party, Minister for Finance and Administration) Share this | Hansard source

I make the point that the OECD and others have indicated how out of step with the major economies have been our higher rates of taxation—the top of the tax rates—and the very low thresholds at which they cut in. That was one of the reforms we made last year to bring ourselves more into line with the Western world. Senator Murray has asked before about the issue of automatic indexation of thresholds. We have said repeatedly that it is not government policy to index the thresholds. If you examine the facts, they show that we have returned to taxpayers more than would have been returned in our 10 years in office if we had simply indexed the thresholds we inherited from the Labor government. The problem, I believe, with indexation is that in a sense you freeze the tax system, the tax thresholds and the tax rates that are indexed. I think it much better that the government takes an active part in reviewing the thresholds on a constant basis. (Time expired)