Peter Whish-Wilson (Tasmania, Australian Greens) Share this | Hansard source

I move Greens amendments (1) on sheet 8689:

(1) Schedule 1, page 3 (line 1) to page 4 (line 5), omit the Schedule, substitute:

Schedule 1—Low Income tax offset

Income Tax Assessment Act 1936

1 Subsection 159N(2)

Omit "$445, reduced by 1 cents", substitute "$1080, reduced by 3 cents".

Income Tax Assessment Act 1997

2 Subsection 61 -115(1) (table)

Repeal the table, substitute:

3 Application

The amendment of section 159N of the Income Tax Assessment Act 1936 as made by this Schedule applies in relation to assessments for the 2018-19, 2019-20, 2020-21 or 2021-22 income year.

[low income tax offset]

We also oppose schedule 2 in the following terms:

(2) Schedule 2, page 5 (line 1) to page 7 (line 1), to be opposed.

[personal income tax reform]

The Greens amendment strips the tax cuts from this bill. It increases the size of the low-income tax offset, the LITO, from the current $445 level, beyond the $700 level proposed by the government, to $1,080. The amendment also brings about this increase to the LITO immediately, rather than in 2022, as proposed by the government. The net result is that people earning anything up to $37,000 per annum would immediately and permanently be $115 better off under the Greens amendment. People earning a wage of anything up to $67,000, which is very close to the current cap for the LITO, would also receive an immediate and permanent increased tax offset under our amendment. The benefit of the Greens proposal, as opposed to this government's tax cuts, is that it puts more money into the pockets of those wage earners who would most benefit and who most need it. It wouldn't be providing nearly half the value of the entire package to the wealthiest Australians.

For the hardheads in this chamber and any out there who may be listening to this debate who have no sympathy for those who are truly struggling in this country, this is not just about the personal welfare of those who would receive an extra benefit. It's an accepted fact that people with less money who are battlers and are doing it tough tend to spend any extra money they're given. Economists call this a 'marginal propensity to consume'. They have a higher marginal propensity to consume, which of course makes intuitive sense, because they don't have a lot of money and they have many things, indeed, they need to spend that money on—versus wealthy individuals who do have money, who have high wealth-functions, who tend to save money and put those funds into investments such as their second, third or fourth investment property. So a bigger tax offset for lower income earners is better for the economy than a tax cut for millionaires.

I just remind the chamber that 50 per cent of the benefit, the value, of these tax cuts will go to the top 20 per cent of Australian income earners. How is that fair? It totally guts the progressive tax system and the fundamental principle of fairness that those who earn more—such as every one of us in this chamber—pay more. This country was set up on the back of that. That's how we've funded our social safety net, our infrastructure and our nation for nearly a hundred years. The Greens believe this is the best way to use the personal income tax system to stimulate the economy and look after those battlers and the most vulnerable in this country. It's the best way to tackle inequality, and I urge the chamber to support our amendments.