Senate debates

Wednesday, 24 September 2008

Tax Laws Amendment (Medicare Levy Surcharge Thresholds) Bill 2008

Second Reading

Debate resumed from 15 September, on motion by Senator Faulkner:

That this bill be now read a second time.

5:38 pm

Photo of Stephen ConroyStephen Conroy (Victoria, Australian Labor Party, Deputy Leader of the Government in the Senate) Share this | | Hansard source

I thank all senators who have made a contribution in the debate. The Tax Laws Amendment (Medicare Levy Surcharge Thresholds) Bill 2008 will deliver relief to families struggling with household budgets. The Medicare levy surcharge tax was meant to apply to high income earners but it now slugs working families earning less than average wages. We are determined to deliver this relief and we are determined to pass our budget and protect the budget surplus. There has been some opposition to this measure. We have listened to what has been said and we have consulted extensively. Liberal Senator Colbeck said:

If they are talking about indexation, and that is the intent of the government, then indexation of this measure would have put the threshold at about $75,000 or $76,000.

And this from Western Australian Liberal Senator Cormann, who is now the shadow parliamentary secretary for health:

... would it be more appropriate, instead of doubling it and probably overshooting the mark, to look at what the figure would be if it had been indexed? I am talking about approximately $75,000 per annum.

The Australian Private Hospitals Association recommended thresholds of $76,000 and $152,000, indexed thereafter. Access Economics, in a report for the AMA, said that thresholds of $70,000 and $140,000 ‘would have restored the system to previous real levels, if this was the goal’. Terry Barnes, the former senior adviser to health minister Tony Abbott, suggested that $80,000 and $160,000 would be appropriate.

Having consulted and having listened we are prepared to offer a compromise. That is why we are proposing new thresholds of $75,000 for singles and retaining our original proposal for a couple’s threshold of $150,000. This measure will deliver immediate tax relief to 330,000 Australians—a significant number. It will give working families a much needed break. Just as importantly, the thresholds will be indexed every year to reflect wages growth. This will ensure that it will remain relevant into the future rather than ever threatening to become the tax trap that the previous government thresholds had created.

There has been a lot of talk of late about a bipartisan approach to economic responsibility. If the opposition truly wants to pursue a bipartisan approach to economic responsibility, then this is their chance. This measure will deliver relief to working families. It will protect the budget surplus. The Liberals have a chance to support this measure in this place and I very much hope they take it.

Question put:

That this bill be now read a second time.