Senate debates

Wednesday, 20 June 2018

Bills

Treasury Laws Amendment (Personal Income Tax Plan) Bill 2018; Second Reading

9:33 am

Photo of Rachel SiewertRachel Siewert (WA, Australian Greens) Share this | | Hansard source

When I left off my contribution last night, when the adjournment intervened, I was talking about how I would spend the $26 billion a year of tax cuts in the areas of my portfolio. I realise that other senators also have priorities for their portfolios, but I am focusing on my portfolios. I went through issues about Newstart, reparations for the stolen generations and making sure that we have adequate housing in remote communities. I'd also make sure that we were properly addressing redress for those affected by institutional sexual abuse and making sure the cap was $200,000, for example, instead of the $150,000 which was in the legislation that passed this place yesterday. I'd also make sure that we had adequate services in emergency departments for people suffering from a mental health crisis. I'd also make sure that grants for organisations delivering vital services in our communities were indexed so that community organisations weren't suffering a reduction every year in the funding and services they could provide. I'd make sure that Centrelink actually worked and that we had a functioning system where people actually answer the phone and calls are answered the first time people ring.

We Greens would increase the minimum wage by 60 per cent. I reckon that's a much better way of spending the money this government is spending on these tax cuts. And, from the feedback that we have had, Australians would prefer that's the way the money was spent. They would prefer that we were delivering good, strong public services rather than funnelling this money to the big end of town. We need to address inequality in this country. We need a poverty plan, not a plan to make the wealthy even wealthier, which is what these tax cuts do. Most people won't benefit at all. The rich will get even richer. The fact is the majority of the benefits flow to the top 20 per cent of income earners. We have a plan to make the rich richer. We don't have a plan in this country to address poverty. Three million Australians are living in poverty and 3.6 million Australians do not have food security, according to the latest Foodbank report. We have people living in poverty, and the people that are most vulnerable are those trying to get by on the inadequate payment of Newstart and the youth allowance. We have people who are trying to survive below the poverty line, but the government's argument is: 'They're not really in poverty. The Anderson line and the poverty line are just an indication.' The research shows that there's a very good correlation between the poverty line and the expression of the poverty line as a measurement and the deprivation measures and deprivation structures. The research finds there's a good correlation between those in deprivation and where those poverty line measurements are.

The government likes to play fancy with words to imply that those on Newstart are doing relatively okay, thank you very much, because those poverty lines not a very good indication. But we know they are a good reflection of those suffering from various measures of deprivation, such as how often they've eaten, what they can buy to send their children to school with and whether their children are missing out on going to school because they don't have the necessary resources and supports to be at school. Those measures of deprivation are reflected well in the poverty line. The government also says, 'Those living on Newstart get other benefits.' But we know that, for the vast majority of those receiving the Newstart allowance, the main additional payment is the energy supplement, which is a whole four bucks a week. Hurray! They could go out and buy a cup of coffee. And that's the very measure that the government wants to take away and still has on the books to take away. In terms of the so-called supplementary income for income support payment recipients, as I've just said, the only payment received by the majority of people is the energy supplement, and we all know the government plans to cut that. Thirty-eight per cent of people receiving Newstart do receive rent assistance because they pay private rent. The maximum rate for single adults without children is $67 a week. In what we know is an unaffordable rental market, that goes very little way to being able to pay rent. Anglicare does a study every year about access to housing. From their recent study, we know that three properties out of 67,000 nationally were affordable for a single person on Newstart receiving rent assistance. So it is just a joke that the government thinks that rent assistance goes anywhere near addressing the need for affordable housing or making sure people aren't living below the poverty line.

The Salvation Army reported a couple of weeks ago that their latest study has found that, when you take out the cost of accommodation, those on Newstart have $17 a day to try and survive on. Again, I renew my challenge to those on the other side of the chamber to try living on Newstart, even for a week. A week gives you a taste of what it's like to try and survive on Newstart. Other additional payments, such as family tax benefit, are only received by 19 per cent of the people on Newstart—again blowing a massive hole in the government's argument that those living on Newstart really aren't living below the poverty line and there's no need to increase Newstart. The family tax benefit is actually to help parents raise their children.

There is only one job available for every eight people looking for paid work. Two-thirds of people receiving Newstart are having to rely on the allowance for 12 months or more. When this payment originally came in, when we were calling it the dole and other previous names, it was about people being temporarily out of work for around six weeks, and people could survive on the payment for that length of time. That situation, of course, has changed. So many more people are having to rely on Newstart for much longer, work is not as readily available and there is much more active age discrimination against older workers trying to find work. And we all know the appalling statistics for young people who are unemployed. We used to talk about this affecting people in their early 20s. Now we're talking about those over 25 being unable to find permanent full-time work; they're more likely to be in temporary or part-time work. So our work situation is much more precarious than it used to be. People need to rely much more on income support.

We also know living in poverty is a barrier to employment. We know that many people on Newstart have a number of vulnerabilities. Due to cuts from the Howard government, the Rudd-Gillard government and then the Abbott government, people with disability applying for the disability support pension have not been able to access it, and there's been an active push by this government, started by Mr Abbott and followed by Mr Turnbull, to try and kick more and more people off the disability support pension. Rather than enable them to remain on the disability support pension and improve their prospects of finding work, they are being actively assessed to kick them off the disability support pension. So they're living on the poorer payment of Newstart while they're trying to find work. This all adds up to a mess, where we have hundreds of thousands of Australians living below the poverty line while they are trying to survive on Newstart.

Because of the way the government chose to index Newstart, it has not adequately kept pace with the true cost of living. It is not indexed the same as the age pension, so it has fallen further and further behind. The money that is being given away to the big end of town should be spent on those people that are living below the poverty line, that are trying to find work on Newstart, on youth allowance and on other payments. That's where we should be focusing that money.

We should invest in the services that support Australians, as I articulated earlier. We have a commitment in this country to universal service. The Greens are deeply committed to universality to ensure that we have a health system and an education system, and a social security safety net that truly is a social security safety net. That's where we should be spending the money that the government is giving away to the big end of town. As I said, the majority of it's going to the top 20 per cent of income earners. That money is not addressing inequality in this country; in fact, it will be driving inequality. Instead of focusing on those on the very lowest incomes, the government's saying, 'Big end of town, work on the trickle-down effect.' We in Western Australia know very well, from when we had the mining boom, that that money does not trickle down to those on the lowest incomes.

Let's remember a little bit of history. I was in this place when John Howard decided before the 2007 election that he would hand out money hand over fist for tax cuts. Let's have a quick look at where that ended up. Mr Rudd came in and continued with those tax cuts. Then we had the GFC, but those tax cuts were in place. That largesse was still in place. Instead of spending that money on services that would have better supported those who would be most affected by the GFC or by a downturn from good economic times to bad economic times, those tax cuts were allowed to flow through. Then we got to Mr Abbott, who came in and slashed the social security safety net—he absolutely slashed it—and came up with a brilliant idea: 'Oh! We'll force young people to wait six months before they can access Newstart or youth allowance.' Fortunately, this Senate stopped that ridiculous plan. It would not support that ridiculous plan. The government also took half a billion dollars out of funding for Aboriginal services. This can be related directly back to the fact that they gave away all that money in tax cuts. Now we're seeing a slight increase in revenue, and the government rushes to give it away.

And what does the ALP do? It wants tax cuts that are 'bigger, better and fairer'. I don't know where the ALP came up with the term 'fair' in terms of tax cuts, when they are not supporting an increase to the most vulnerable people in our community, those who are struggling on Newstart, on youth allowance, on the age pension and on disability support pension. Those are the people that we need to be supporting not only through an increase in Newstart and an increase in youth allowance but by making sure that we are addressing and supporting the services that really will make a difference in people's lives.

The 10 richest families in Australia own as much wealth as the poorest four million Australians combined. Three million of those poorest Australians are living below the poverty line. As I said, 3.6 million, part of those four million, are suffering from food insecurity, and yet what does this government want to do? It wants to hand over more money to the wealthiest in this nation, to those earning the highest incomes. We Greens say no, that is not good enough. We need to make sure that we are funding Australians who need the support, and we do that by making sure that we can fund Newstart and youth allowance, that we can fund those most in need.

How about we have a redress scheme for those children who were in institutional care but suffered other forms of abuse, such as physical and mental abuse, who still have not received reparations and who will not be able to access the counselling services under the National Redress Scheme—limited though they are, because they're not lifelong services? How about a redress scheme for those survivors, for those care leavers? Many of them were brought to this country by our government, were subjected to abuse and have not received redress. How about spending some money on them? How about providing services that all the community wants?

When you ask Australians if they want public services or tax cuts, they'll tell you they want public services. They want to make sure that they and their children can access a top-quality education system. They want to make sure that they can get health services when they need it. They want to be able to ring Centrelink and the Department of Human Services and get the information they want without having to keep dialling and dialling. They want a social security net for when they fall on hard times. I want to be able to look in the faces of people with disability and say that our country can provide them with the support and services they need, instead of demonising them and making them jump through all sorts of hoops, trying to find work for 18 months before they can access the disability support pension. That's not the country I want to live in. (Time expired)

9:51 am

Photo of Louise PrattLouise Pratt (WA, Australian Labor Party, Shadow Minister for Environment and Water (Senate)) Share this | | Hansard source

We've heard a lot from the government so far in this debate about their tax plan making things more fair; however, it's very clear to Australians, because they're fair-minded people, that there's nothing fair about the 2018 budget or about the Treasury Laws Amendment (Personal Income Tax Plan) Bill 2018. What most people think is fair in this nation is a greater sense of equity and equality. For example, when there are two people at a football match, and one can see over the fence and the other can't, it's not fair to keep them both standing on the ground; it's fair to give the short person a leg-up and put them on a box so they can see. That is the principle of progressive taxation. Fairness is about levelling the playing field for people.

What we have in this budget is big business and the banks getting an $80 billion tax handout, which will be paid for with cuts to our schools and hospitals. In this bill the flattening of the progressive nature of our tax system would give high-income earners in our country a much higher benefit than lower income earners. Here we have it again for all to see: high-income earners and big business are the true priorities of the Turnbull government. Under the proposal the government has put forward, 62 per cent of the benefits would go to higher income earners while just seven per cent would go to the 30 per cent of Australians on the lowest wages. Why would you do that? Are you insane? Do you not care about the working poor in our nation?

This bill continues to demonstrate how out of touch this government is with the reality of Australians' lives and in particular the people doing it toughest. This bill also demonstrates a government that is prepared to risk the budget bottom line—our capacity to pay down debt, to pay for services, to have a good Defence Force and to bail ourselves out of bad times—so it can hand out tax cuts to big business and top-income earners while doing very little for middle-income households. Whilst those opposite will argue that they're flattening the tax system, making it fairer, and that lower income households are getting a tax cut, it's a much smaller tax cut in dollar terms than the one for those who are already substantially much better off.

In our current economic climate, we should have a government that's concerned about workforce participation, concerned about lack of wage growth and concerned about increasing the disposable income of targeted households as a way of boosting consumer spending. It's very clear that this government is not interested in that. What happens when you boost the incomes of higher income households? They invest more. They save more. These are worthy aspirations, but, when you put income into lower income households, they spend it and stimulate the economy, and everyone benefits. Investing more when you are on a higher income is all very well, except that people are accumulating wealth, in many instances, above and beyond that which ordinary Australians will ever be able to see or access in their own lives.

Under the coalition, we see the cost of living set to increase. Workers in the retail, food and accommodation industries are losing up to $77 a week in penalty rates. We see families and pensioners paying around $20 a week or more, or about $1,000 a year, for private health insurance. We see parents paying more for child care—$40 a week, or $2,000 a year, more in fees. And we see record costs to visit a GP—on average, about $9 more every time you visit a doctor. These are the reasons why Labor is very prepared to support the government's proposed changes that are set to take effect on 1 July—those tax cuts that are targeted at people who need them. Labor will support tax cuts for 10 million people on 1 July, and we are ready to vote for those tax cuts today.

If Labor is elected, we want to double these tax cuts and make them permanent, while asking those in the top tax bracket to pay a little more to help reduce debt. People in the top tax bracket, relative to people in the lower tax brackets, still have the resources to pay for their accommodation and pay for their retirement. Labor's bigger, better, fairer income tax will see those earning up to $125,000 a year better off when compared to Malcolm Turnbull's plan for the next four years.

It is simply absurd to us in the Labor Party that someone on $200,000 a year should pay the same tax rate as someone on $40,000 a year. It is unfair and absurd. So we don't agree with the Turnbull government giving more tax cuts for the top bracket—and this is after the Turnbull government cut the tax rate for high-income earners just last year. The idea that a corporate executive or a politician on $200,000 a year should pay the same marginal tax rate as a worker earning close to the minimum wage, on a salary of about $41,000, strips away every shred of progressiveness in our taxation system. Yet, absurdly, this government is trying to pull the wool over Australians' eyes—and I don't think they will fall for it—to sell the idea that this is a tax cut for ordinary Australians. It's not a tax cut for teachers, police, cleaners or aged-care workers. It's a tax cut for the high end of town, for well-paid professionals, who will have a high standard of living relative to others without a tax cut. That's why Labor will move amendments in the Senate to the Treasury Laws Amendment (Personal Income Tax Plan) Bill 2018 to ensure the passage of tax cuts starting on 1 July.

We will seek to implement better, fairer tax cuts through Labor's tax refund for working Australians. This would double the tax relief up to $928 a year. It will mean that the 57,000 people in Canning, the 63,000 people in Forrest and the 65,000 people in Moore will receive an increased tax refund. However, what we've seen is the Turnbull government's tax cuts overwhelmingly benefit wealthier electorates. So it's not surprising to me that this government has seen tax cuts that overwhelmingly benefit inner Melbourne and inner Sydney electorates, but it is of great concern and a disgrace that Mr Andrew Hastie and the Turnbull government are not standing up for the people of Canning—the good, hardworking people of Mandurah, Pinjarra and Byford and all those across the Canning electorate. As I move around Canning, I talk to constituents about their struggle to make ends meet and the fact that they juggle numerous jobs just to earn a modest income. They will tell you how they're overworked and underpaid or struggling to find enough work to get by. People who are struggling to find enough work to get by deserve a better, bigger tax cut than the high end of town because they rely on every cent of what they earn just to get by. There's no rational reason to take the same amount of tax out of their income as is taken out of my or your much higher incomes.

We see that up to 70 per cent of taxpayers will be better off under Labor's fairer tax plan, and that includes 57,000 residents who live in Canning. Seventy per cent of the hardworking taxpayers in Mandurah, Pinjarra and Byford will be better off under our tax plan. And I suppose the Prime Minister does try to help, in his own way, when he says, 'They should just get a better job.' Try telling that to every single cleaner, storeperson, shop assistant, orderly, retail worker or hospitality worker. We need people to do these jobs. We need them to have incomes that keep those industries viable. They need good wages. We need to see wages growth in those industries. We know those industries will never see wages growth that compares with wages growth for high-paid professionals, but we need them to do those jobs. Why do you rub people's faces in their own professions in that way? We have to value the work that Australians do, because it needs to be done. Every day, in our communities and in our cities, we depend on the great diversity of work that people do, be it well paid or low paid. People on low wages should get better pay, but the simple fact is, because they are on lower wages and we need people to do that work, we should not, in our right mind, ever consider taxing them at the same rate as wealthier Australians. The absurdity of it is absolutely disgusting.

In our nation, inequality is at a 70-year high. We should be taking steps to do exactly the opposite of what the government is doing, and that is taking steps to improve and address inequality and to remove inequality in our system by using our tax and transfer system and implementing principles that are exactly the opposite of what this government is seeking to do.

With overall inequality worsening, there are negative impacts on our economic growth. The best thing we can do to fix that is to have a strong, progressive taxation system where those who can afford to pay more do pay more and those who can't afford to pay as much aren't asked to pay as much. We need a government that stops standing in the way of tax relief for the 10 million Australians who need it. We need a more progressive taxation system, not a less progressive one. Tax cuts this year for teachers and tradies should not be held hostage to tax cuts for bankers or highly-paid professionals in six years time.

The Turnbull government's priority is for tax cuts for big business and high income earners, at a stupendous cost of $25 billion a year in 10 years time. I don't think our nation can afford that—our schools and hospitals can't afford it, our TAFE system can't afford it, our social services can't afford it, our public sector can't afford it and our defence force can't afford it. The fabric that holds our community together simply cannot afford it.

Labor, on the other hand, because we're not giving millionaires another tax cut and we're not giving big business an $80 billion tax handout, can put more money into the pockets of working Australians while funding better schools and hospitals and paying down debt quicker. This bill will make our tax system in Australia less progressive and it will continue to erode our tax base. It doesn't deserve the paper it's written on.

10:07 am

Photo of Sarah Hanson-YoungSarah Hanson-Young (SA, Australian Greens) Share this | | Hansard source

I rise today to contribute to this debate on a tax cut for millionaires, put forward, of course, by the Turnbull government. The whole essence of this debate on the Treasury Laws Amendment (Personal Income Tax Plan) Bill rests on what types of priorities we have in this place and on what types of priorities we have for the nation. On one side we have the Turnbull government wanting to spend hundreds of billions of dollars—taxpayers' money—in tax cuts for the big end of town, in addition to the tax cuts they've already flagged and have tried to push through this place already in relation to corporate Australia and the big banks. Malcolm Turnbull's priority is to look after the big end of town—to look after the corporates, the big banks and rich, wealthy Australians. Meanwhile, everybody else is going to cop a cut in access to public services.

That is the choice here. It's about priorities. Malcolm Turnbull wants to fund the billionaires and the big banks but those of us trying to stop these tax cuts from going through are asking: 'What happens when regular Australians need to go to hospital? What happens when someone's kid is sick? What happens when you rock up to school and you realise your public school is charging families school fees up to $4,000 to send their children to public schools, because we don't have money for the education system? What happens when a mother can't go back to work because childcare is too expensive?' These are the choices that we are being presented with in this bill today.

The government can only spend and invest money based on what it collects. We know that we don't just have a tax problem here. We have a problem with collecting the right amount of tax, because tax avoidance in this country, particularly from the big end of town, is rife. If you're a big corporate bank and if you're in corporate Australia, you can find many, many ways to reduce your taxable income. If you're a rich Australian, you can find the best accountant in the country to make sure you pay no tax at all. Meanwhile, average Australians are struggling day by day, and they rely on public essential services right around the country.

If you collect less tax as a government, you're going to have less money to spend on public services. If we have less revenue, that fundamentally undermines the ability of governments to do what they need to do, and that is to underpin essential services that are available to everybody—schools, hospitals and the broader health system—and to ensure that, if you lose your job and you're on unemployment benefits, Newstart payments are enough to live on so you can be supported until you get another job, not punished by living on less than $40 a day just because this government wants to prioritise giving millionaires $7,000 back. That's what's on the table here. Someone on an average income is perhaps, if they're lucky, going to get around $200 in a tax cut. And yet the wealthy Australians, the millionaires and, in fact, the politicians—those of us in this place—will get $7,000 out of this. That must be pretty galling to people out there listening to this debate.

We're told by the neoliberals on the other side that, despite being a wealthy nation, we can't afford things like proper funding of hospitals, or to ensure our elderly are taken care of in their aged-care homes, or for schools to be funded properly so parents don't have to fork out thousands of dollars just to send their kid to a public school. We're told we can't afford these things, and yet hundreds of billions of dollars in this package today are going to roll out the door in election bribes by this government.

The neoliberals on the other side have done a very good job at trying to hoodwink the Australian people. Although we are a very wealthy country, the neoliberals have done everything they can to undermine and run public essential services into the ground. They want to give people a false choice: you can choose between Malcolm Turnbull's handout to millionaires or you can choose to fund public services. Spending, of course, is all about priorities, so is revenue and so is where we collect our revenue from. This government finds many, many ways to undermine the bare collection of revenue, because they don't want to upset their big mates in the banks, in corporate Australia or, indeed, in the rich end of town. This government says to average Australians and those who are struggling living on the median wage: 'We can't afford to help you, if you fall through the cracks. It's 40 bucks a day from Newstart if you lose your job. Suck it up.' No. That is not a choice we should be forcing Australians to make.

If you turn up to university in this country, you should be able to access a good-quality education, regardless of how much money is in your parents' bank account and regardless of what private or public school you may have attended. We need more young people, not fewer, being able to access good-quality higher education, whether it's through universities or the TAFE sector. That means we have to fund education properly. We have to make it available and accessible for all, not just for those whose parents are on the top of the rich list and are going to bank a $7,000 tax cut out of this and their kids will be okay. We need all Australian children to access good-quality education and know from a very early age that if they want to go on to university or TAFE they'll be supported in doing so. We should make that a guarantee. Every Australian child should know that if they want to get a higher education they can get one; they shouldn't have to be in the top income bracket to do it.

This is what making government spending priorities is all about. Australians overwhelmingly know that the trade-off, or the dividend, of paying their taxes should be good quality public services. Australians don't mind paying tax if it means having good quality schools and being able to access the emergency ward in the hospital if someone falls over and breaks their hip or if a child is sick in the middle of the night. Australians don't mind paying taxes if they know that they're going to go to a well-funded NDIS. Australians don't mind paying their taxes if they're going to have a strong Medicare safety net. Australians know that being part of a decent democratic society is all about having the people who can afford to pay a bit more pay a bit more so that those who are struggling can be helped to get back on their feet.

A progressive taxation system is essential for the fair and decent society that we are all proud to live in here in Australia. That is under attack from this legislation and agenda of the government because all they care about is looking after the big banks, the rich end of town and Malcolm Turnbull's mates. If the Prime Minister really cared about productivity growth in this country, he'd fund child care properly so that more women were actively supported to go back to work. But what we will see come 2 July is a bunch of families losing access to their childcare support, particularly those families where both parents struggle to be in the workforce.

The absolute lunacy of this tax bill is that it spends hundreds of billions of dollars as an election bribe, yet the majority of Australians who work hard every day and those who struggle to get into the workforce, those on unemployment benefits, really get nothing from this. No wonder Malcolm Turnbull's mates want this to pass, because they're going to bank $7,000 from it. Meanwhile, average Australians and the rest of the country will lose out because hospital waiting lists will grow, because school fees will rise and because our older Australians will continue to suffer in old aged-care homes.

Look at my home state of South Australia. We know that the overwhelming majority of the tax cuts outlined in this bill are going to go to those who are already the most well-off, those who are earning well above $120,000 a year. That's about five per cent of South Australians. So five per cent of South Australians might get something out of this, but 95 per cent of South Australians will get very little. In fact, there will be a double whammy because our state relies significantly on well-funded essential public services. As a result of this priority choice by this government to fund the rich and cut services most South Australians will lose out. By the time the full impact of these tax cuts is realised, South Australia will be losing around $2 billion from essential services—that's cuts to schools, that's cuts to hospitals and that's cuts to other essential services. Bad luck if you need to put your kid in child care so that you can take an extra day of work a week. You won't be able to afford it, because the Turnbull government isn't going to be able to fund child care in this country.

Our universities and TAFEs are going to lose funding. They'll be $105 million worse off. We'll lose $305 million in spending on hospitals and health care. We can't afford that. We have an ageing population, particularly in South Australia, and we want to make sure our older Australians are looked after with dignity and with care. Yet the government is going to slash $305 million in funding used to support essential health care in South Australia.

We'll lose $905 million on pensions and payments, and this is a very clear message to the people of Mayo—those South Australians who live in the Adelaide Hills and down along the Fleurieu Peninsula down to Victor Harbor. This tax cut for Malcolm Turnbull's mates is going to cost age pensioners and other recipients of government funding almost a billion dollars! How are we going to look after our aged and elderly Australians if we don't have the money to fund it? But who will be laughing? It'll be Malcolm Turnbull's mates, who are banking $7,000 a year. I guess that's a nice overseas holiday.

The government says: 'Look, don't worry about it. Everyone'll be paying less tax.' The reality is most Australians rely on public services to ensure that we can get through our daily lives. We all respect our well-funded public hospitals and health system. We all know that we need a public education system to ensure that there is a proper safety net, to ensure that our kids can go to school and get a good education, regardless of whether their parents have a job at the time or how much money their parents have in their bank account. In South Australia, these tax cuts mean that for every dollar that is given in a tax cut, South Australians are going to lose $1.40 in public services. On anyone's maths, that's a lose-lose.

South Australia loses massively in this bill, and that's a message I have for the members of Centre Alliance here today. Don't buy this government furphy. You've got a choice here: tax cuts for millionaires and Malcolm Turnbull's mates, or funding for South Australian schools, hospitals and services. As one of the smaller states and as one of the states with the lowest number of high-income earners in the country, South Australia loses out significantly under this bill. As a South Australian senator, I'm standing here today to say: do not risk it. Do not buy the furphy that you have to hand politicians a $7,000 tax cut in order to make everybody else feel okay. We don't need the $7,000 tax cut. What we need is more money for schools, more money to cut hospital waiting lists, and more money to ensure that working mums and dads in the electorate of Mayo actually can access well-funded child care. That's what we want the government to prioritise.

I say to the Centre Alliance members in this place today: don't buy the lie that you should just tick this tax cut through. Does anyone really believe that if we start giving tax cuts to the big end of town, to politicians, to Malcolm Turnbull's millionaire mates—

Photo of Kimberley KitchingKimberley Kitching (Victoria, Australian Labor Party) Share this | | Hansard source

Senator Hanson-Young, I will remind you—

Photo of Sarah Hanson-YoungSarah Hanson-Young (SA, Australian Greens) Share this | | Hansard source

Does anyone believe if we start giving tax cuts to the big end of town, to Prime Minister Malcolm Turnbull's millionaire mates, that anyone is going to come in here after the next election and rescind any of this? I don't believe the Labor Party's going to do that, and I certainly don't believe the Liberal Party will ever do that. Don't be fooled, I say to senators Griff and Patrick of the Centre Alliance. Once this tax cut is in, it will stay. Don't risk it.

On that, I want to point out the sheer hypocrisy of Pauline Hanson and One Nation in relation to all of this.

Photo of Kimberley KitchingKimberley Kitching (Victoria, Australian Labor Party) Share this | | Hansard source

Senator Hanson-Young, again, if you could—

Photo of Sarah Hanson-YoungSarah Hanson-Young (SA, Australian Greens) Share this | | Hansard source

I think it's absolutely important to understand the sheer hypocrisy of the One Nation party, led by Senator Hanson. Supporting this bill means supporting rich Australians, millionaires, and doing nothing for those battling on average incomes. This gives money to the richest and wealthiest Australians at the expense of funding for the age pension and funding for hospitals. This final stage of the tax cut does absolutely nothing for 60 per cent of taxpayers in this country. We have Senator Hanson snuggling up to the government again, selling out the majority of Australians—all of her voters—to tick off on what is going to be the biggest tax cut given to millionaires in a long, long time. Senator Pauline Hanson is going to vote for this bill to give herself a $7,000 tax cut! What a grub! What a sneaky, sneaky move! What a sellout!

Photo of Kimberley KitchingKimberley Kitching (Victoria, Australian Labor Party) Share this | | Hansard source

Senator Hanson-Young, I would remind you of the standing orders. Perhaps 'grub' was not particularly parliamentary. I'd ask you to withdraw that.

Photo of Sarah Hanson-YoungSarah Hanson-Young (SA, Australian Greens) Share this | | Hansard source

Thank you, Madam Acting Deputy President. I withdraw calling Senator Pauline Hanson a grub. I'll replace it: Senator Pauline Hanson is going to come into this place to vote to give herself a $7,000 tax cut—sheer hypocrisy! What an absolute sellout!

This tax cut will do nothing to lift wages. We know we have a wage-growth issue in this country. This tax cut will do nothing to help people on Newstart or, indeed, the minimum wage. What this proves, and what Senator Pauline Hanson and One Nation's deal with the government proves, is that they're all about feathering their own nests and doing nothing to help regular Australians!

10:27 am

Photo of Deborah O'NeillDeborah O'Neill (NSW, Australian Labor Party, Shadow Assistant Minister for Innovation) Share this | | Hansard source

I too rise to put my remarks on the record with regard to this very important proposed piece of legislation, the Treasury Laws Amendment (Personal Income Tax Plan) Bill 2018. This bill has the potential to have a significant and profoundly negative impact on Australians, as it is constructed by this government.

I find that we hear once more—in the throes of the drama and intensity of these last two weeks of sitting before we go to another break—the government saying: 'This has got to be done now. This has got to get sorted now. On 1 July, the whole world's going to fall apart unless we get this resolved.' The pressure, right now, as I am making this contribution to the debate, is being applied to the crossbench, some of whom—or their advisers—I hope might be listening to my contribution. I want to point out how important it is that everyone understands that the Treasurer himself has conceded that the legislation does not need to be in place by 1 July for the tax relief that's being discussed to be received by the end of next financial year. That's the reality. This pressure cooker that's being created is an artifice. In this hastily constructed pressure cooker, we shouldn't be making decisions that would affect people six or seven years hence with such negative consequences, in my view, for our economy and, more profoundly, for our community.

We're being faced with a choice by this government, with its litany of failures in service provision, between continuing along the path that it has set of taking away more and more services from Australians and throwing money, a little bit of money, at those who need it most and extraordinary sums at people on $200,000, who are not clamouring at the doors of this place saying: 'Give me $7,000. I can't survive without it.' That is not the challenge that is facing us in this parliament. The challenge is people clamouring at our doors, day in, day out, asking for the funding of basic services. There are over 100,000 Australians right now who are seeking aged-care packages. They're desperate for some help in their home so they can stay there. They're desperately in need. I see Senator Brown has joined us in the chamber here. People are trying to get decent services for disability needs. People are speaking to me in my role as the assistant shadow minister for mental health, despairing about suicide in their community and being unable to access services.

That's the landscape: the service deprivation that has been imposed upon this nation by this government over five years of ripping money out of the services that Australians should have a right to expect. And having done that now, its grand plan, in addition to having abandoned any sense of fiscal responsibility and budgetary constraint, is to try and buy off Australians by throwing some tax money at them in an entirely inappropriate and unfair way. That's why Labor will oppose the way in which this government wants to advance tax reform in this country.

Budgetary decisions are all about choices, and Labor is going to choose services for all and tax cuts for those who need it most. It contrasts profoundly with the government's proposal of giving tax cuts of a shape and form that six years from now—when kids in year 7 have finished high school—in 2024 will deliver a tax structure where 80 per cent of the benefit will flow to the top 20 per cent of wage earners in this country. If I only repeated that fact over and over and over in my contribution, if only that single fact could seep into the conversation about this proposed tax reform by the government, Australians would understand what a dog they're being sold and how cruel and unfair this government's proposal is. The bottom 60 per cent of all workers will get no tax benefit at all by 2024, if this government's bill passes as it is. That's the shape and form of what we're discussing here and why the debate that we're having is so important.

This government's Personal Income Tax Plan demonstrates exactly how out of touch this government is. We as the Labor Party do not support someone on $200,000, which is the standard pay for most of the people who work in this parliament, paying the same tax rate as someone on $40,000. That is plainly unfair. We've seen this over and over in the course of this Liberal-National Party government with the prioritising of the top end of town over ordinary Australians; the prioritising in terms of tax where the cost is not just a lack of income benefit to low- and middle-income earners but the ongoing removal of services and the ongoing cuts to services absolutely across the horizon, if it gets this piece of legislation through.

I want to have a little bit of a look at a distributional analysis. If we look at the impact of this government's decisions, we can see that it has failed to provide any form of a distribution analysis of its Personal Income Tax Plan. But Labor and interest groups have, and it's very clear that stages 2 and 3 of the proposed tax reform by this government absolutely and totally fail the fairness test. Let's be absolutely clear here: stages 2 and 3 of the government's tax plan will flatten out Australia's personal income tax system, and that structural change to the personal income tax system is eroding its progressivity. This is a fundamental principle of our tax system, and it's based on the premise that, if you earn a small amount of income, pretty well everything that you earn goes to keeping a roof over your head, providing food, providing shelter and providing for the basics, but as you go up the tax scale, with those things accommodated, there is an increase in your capacity to contribute to the general wellbeing of the community and to pay a bit more tax so that we have decent hospitals and schools that are properly funded, where parents can send their children through the gates of any school in the country and know that there'll be readers for the kindergarten kids to read from and paper and resources for teachers to creatively engage with young people in high school. We trust that our tax dollars, invested on a slightly higher scale by those with a bigger income, benefit our entire community.

I can tell you from this morning, when I was at the Kids' Cancer Project breakfast, that no-one in that room thinks there's adequate funding going into the prevention and treatment of cancer for young people. They were there asking the government, the opposition and anybody who would listen to hear their pleas for further investment in proper research capacity. The reality that we face right at this moment in our country is a choice between Labor and a Liberal government who have no commitment to decency, to fairness or to equity. The attempt to force this inequitable piece of legislation through the chamber should be abandoned.

10:37 am

Photo of Richard Di NataleRichard Di Natale (Victoria, Australian Greens) Share this | | Hansard source

These tax cuts are saying to Australians that whatever government might be providing for you at the moment is more than you need. Whatever you receive at the moment, whether it be an education in a public school, treatment in a public hospital, using public transport or, indeed, some sort of family assistance payment, it's too much. You're already getting too much, because what the Treasury Laws Amendment (Personal Income Tax Plan) Bill 2018 does is strip away vital public revenue from those essential services.

This bill, more than most of the other bills that come through this place, is going to help determine what sort of country we want to create. We've got some big choices ahead of us: we can choose to continue down the path of the Liberal and National parties to a dog-eat-dog world where everyone's in it for themselves and we shrink public services, or we can create a different sort of world, where we collectively come together, understand that we're in this together, invest in our people and ensure that no person languishes for months on a waiting list and that every young child gets access to the best possible education they can get—a world where we have publicly owned infrastructure that provides all of the vital services that people need and where we have a strong social safety net so that no-one's left behind. That's the sort of future we can create. It's not a utopian dream; it's actually within our grasp here. It's just about the choices that we make in this chamber.

We've been told by politicians of all stripes for more than a decade that Australia can't afford to do these things—that we can't afford to increase Newstart, tackle climate change or protect the threatened species that exist in this continent and are disappearing at an alarming rate. In fact, we're going to do worse; we're going to cut the jobs of the people responsible for looking after the precious biodiversity in this island continent of ours. And we're now hearing a debate where the premise seems to be, 'My tax cut's bigger than your tax cut.' Some $144 billion is going to be taken out of public services. We're told that the reason for this change is to address bracket creep, yet wages are at an all-time low. This bill's not about bracket creep. It's about shrinking the size of government and the public services that follow from that, and it's about making sure that people who need a little bit of help don't get that help.

We've got some choices ahead of us. We know that healthcare costs are increasing. We know that our education system needs more support. We know that our infrastructure is failing. We can afford to invest in all of those things. We could have a world-class public health system so that no person in this country languishes on a public waiting list. We could make sure that every child in the country gets access to a world-class education and, indeed, that those people who choose to send their child to a public school don't have to spend a cent out of their own pocket. We could build cities and regions that create no net pollution. We could preserve our planet for future generations to enjoy while they prosper. We can start restoring our environment, rather than destroying it.

And at the heart of this debate is a lie. We're told that income taxes are too high, but the reality is very, very different. Australia is, by all indicators, a low-taxing country. When you consider our total tax take as a proportion of GDP compared to other similar OECD countries, we do very well. We're a low-taxing country. Yet we're told again that we have to reduce taxes, and the consequences of that are alarming. Our Public Service is already so badly decimated that it can't answer the phone when you call to find out why it's cancelled your pension or a family assistance payment. Past governments have spent the last two decades privatising government. We've got big corporates enjoying all of the upsides and everyday people getting stuck with all of the downsides. You only need to look at the announcement today from Telstra. Do you remember when Telstra was privatised? 'Better services. People will be looked after. We're going to save money.' There are 8,000 people today who don't know how they're going to be able to put food on their table. Yet we've got no-one in this place who's got the political courage to stand up and say: 'We don't need tax cuts. We need investment in services. We need to look after people. We need to raise Newstart. We need to start protecting our environment.' No-one has had the courage to stand up and do that apart from my colleagues in the Greens, and I want to thank each and every one of them for it.

These are financially reckless tax cuts. They're going to punch a $23 billion hole in the budget annually. If you look at stage 3 alone, they're going to grow by 12 per cent each year. It's completely unsustainable. We can't afford it. We know what the costs are. And we all know that, when it comes to issues like global warming, housing, student debt or work security, it's not going to be the people in this chamber who are going to have to deal with those issues; it's going to be the generations that come after us. It's going to be young people today who are going to be lumbered with the costs of this decision that we make in this chamber. We know that these tax cuts are a prescription for turbocharging inequality in Australia. When stage 3 kicks in, someone on the minimum wage will be paying the same rate as a bank executive or a politician. That's not a progressive tax system. It's taking us down the US route.

And, of course, like the Turnbull cabinet itself, the big winners are men, and women get a few scraps, with less than one-third of the top-end tax cuts. We've seen some analysis today from Professor Miranda Stewart at ANU, who has added more evidence of just how discriminatory against women these tax cuts are. You have to be working full time to get the benefit, yet 45 per cent of women work part time. For men, it's only 16 per cent. And 61 per cent of women caring for a child under the age of five are working part time, while for men it's only eight per cent. If you look at the interaction between these tax cuts and the new childcare payment starting next month, the research shows that a mother wanting to work a few extra days would get to keep just $4,000 if she earnt $27,000 in additional income. If you're a young mother not earning a high wage, you face an effective marginal tax rate of between 85 per cent and 95 per cent. Professor Stewart's conclusion is that we'd be better off investing the tax cut money into universal child care. Now there's a ripping idea which benefits women so they can live the lives they want to lead and doesn't hand out tax cuts which largely benefit men.

Of course, the Treasurer's been deceptive in selling the benefits of this tax cut to senators and the public: $82,000 isn't the normal wage; it's the average salary of a full-time working bloke. The median wage of all Australians is around $54,000. Under even stage 1 of this tax cut, you can be a family with a combined income of just under $250,000 and you'll get a tax cut. The benchmark that the government's using, of a regular worker on 82 grand, is only a quarter of the workforce. Three-quarters of the workforce earn less than that. This plan's too focused on wealthy Australians. It does nothing for ordinary people. I reckon that if the majority of Australians—by definition, those earning less than $54,001, so, anyone under the median wage—knew they were getting nothing in exchange for having their local schools and hospitals completely gutted, people in this place might reconsider. Let me be clear about that: there will be a few dollars a week in the pocket of somebody who's a childcare worker, a nurse or a teacher and, under stage 3 of this plan, an extra $7,000 for CEOs, politicians and bank executives.

This bill does nothing to address the concerns of the most vulnerable people in our community. People on Newstart or on a pension get nothing out of this bill—not a cent. If you're somebody who can't afford to take out private health insurance to jump a queue and you're languishing on a waiting list for a year to have your hip replaced, you get nothing out of this; in fact, you'll be waiting for longer, because every cent of this money that's spent on giving out a big tax cut is a cent not spent on cutting waiting lists. If you're somebody languishing in an emergency department for half a day to be seen, you get nothing out of this tax cut; in fact, you'll be waiting for longer. If you're a family who sends their child to a public school and are noticing that those out-of-pocket costs are growing each year, they will continue to grow, at a faster rate, because every cent that goes into the pocket of somebody on a high income is a cent that's not invested in our public schools. It does nothing for mums re-entering the workforce for one or two days a week. It does nothing for a carer who is looking after their elderly parents and can just fit in a few days a week of work. It does nothing for the lowest 40 per cent, but this bill does everything for the investment banker, for the politician, for the CEO and for the partner in a law firm helping their clients to avoid paying taxes.

We've got choices to make. If we want to have tax reform in this country, let's start talking about the real problems that we face. We don't have a tax system; we have a tax avoidance system. Let's start talking about the tax reform that's necessary to close those loopholes that mean the wealthiest Australians and corporations aren't paying their fair share at the moment. Let's introduce a Buffett rule which says to people, 'It doesn't matter whether you've got the fanciest accountants and lawyers in the world; you will be paying a minimum of 30 per cent tax on every cent over $300,000.' Let's look at reforming our tax system. Let's have a PRRT that means that those oil and gas companies, who are currently ripping out Australian resources and not paying a cent of tax on them, start paying for Australian resources, for the things that we all own. Let's make sure that miners who are not paying a cent of excise on the diesel that they use start paying that. If it's good enough for every Australian in the country when they go to the bowser to have to pay a diesel excise, why isn't it good enough for our mining companies? Let's do something about multinational tax avoidance. Let's stop the practice of those big companies lending themselves money from offshore tax havens. Let's make sure we close that loophole by introducing worldwide gearing ratios. There's so much that we could be doing right now to close the loopholes to ensure that the wealthiest Australians, those corporations that aren't paying their fair share right now, pay their fair share, and we wouldn't be having a debate about stripping money away from our schools and our hospitals.

We in the Greens believe unashamedly that now is not the time for income tax cuts. We believe that a decent society is founded on how we look after the most vulnerable people, those people who are struggling, which is why we've made a strong case for increasing Newstart. And we've heard nothing from the government or, indeed, from the Labor Party on that. We don't need a review into Newstart; we need to increase it. Let's make sure that as a nation that is losing biodiversity at a rate greater than almost any other nation on earth we start putting into practice some of the things that we know can help us protect our iconic Australian animals.

We oppose this retrograde package in its entirety because we believe this is going to fundamentally reshape Australian society. This is a nation founded on the notion of egalitarianism, of a fair go, and there's nothing fair about this tax package. When economic inequality is already at dire levels, this is a prescription for turbocharging inequality in Australia. It will leave our schools, our hospitals and our public infrastructure to wither on the vine and it will make Australia a less equal society. It's not a future for this country that I want to see. It's not a future for this country that my colleagues want to see. That's why when this bill comes before this Senate we will be opposing each and every element of it.

10:52 am

Photo of Pauline HansonPauline Hanson (Queensland, Pauline Hanson's One Nation Party) Share this | | Hansard source

No-one can say that One Nation is responsible for the passage or the fall of the Treasury Laws Amendment (Personal Income Tax Plan) Bill 2018. Everyone in this chamber carries that responsibility. I would like to see families, those hardworking Australians, and resident companies pay less tax, but the question is: can we afford it? The government says we can afford $140 billion of personal tax cuts and $60 billion of company tax cuts over a 10-year period, which means the cost to the revenue base is $20 billion a year, or seven per cent of the income tax base. The government has no plans to reduce wasteful spending, so how will the $20 billion shortfall in taxation income be made up?

In the last financial year, high commodity prices, particularly for iron ore and coal, led to the surprise increase of 22½ per cent in company income tax receipts. The government says these additional taxes are sustainable income in the long term, even though commodity prices go through a boom-and-bust cycle. The government has made a large number of assumptions about future income that in my view are not realistic, and a never-ending commodity boom is but one of them.

I come back to whether the tax cuts proposed by the government, both personal and corporate, are affordable. If they prove not to be affordable then we will see a dramatic decline in frontline services or an increased national debt. It is no accident that in an election year the government wants to rain money down on citizens in the form of tax cuts. There are five by-elections coming up in July and there will be a general election in the next 12 months. In stage 1 of the proposed personal tax cuts, the government promises $10 a week in the form of a tax offset. Labor say $10 a week is an insult. They will up the bid for your vote to nearly $20 a week, but these tax offsets end in four years. A by-election in the electorate of Longman, in Queensland, will take place in July. The citizens of Longman paid $784 million in income tax to the federal government in 2015-16. These taxpayers paid more in income tax than 80 per cent of multinational companies and their Australian subsidiaries, but still the government says we do not have a revenue hole created by multinationals not paying a fair share of tax.

In the past 20 years we have had both Labor and Liberal national governments, and neither party has had the wit or the will to do anything to fill the revenue hole created by foreign-owned companies and their wholly owned subsidiaries. How can the government say there is not a revenue problem when 39 fossil fuel companies operating in Australia pay no tax, and they include our biggest electricity providers, Origin Energy and EnergyAustralia? The two major parties want to tell you they are different, but when it comes to getting multinational companies to pay tax in Australia they are one. We estimate the revenue hole left by non-resident foreign companies operating in Australia to be big enough to pay for the government's proposed tax cuts for individuals and companies.

When we talk about getting multinationals to pay tax in Australia, Labor is like the scarecrow with no brains and the Liberals are like the tin man with no heart, walking down the yellow brick road in search of everything they lack, which is why so many voters give their vote to a minor party. Around 25 per cent of votes are given to minor parties, which reflects the disconnect between the major parties and what concerns Australians. The majority of Australians do not want population growth driven by high levels of immigration and they do not want to pay more tax than they should. The big four banks in Australia pay 25 per cent more income tax than all the multinational companies and their subsidiaries operating in Australia. The biggest corporate taxpayers in Australia are banks and resource companies. The Commonwealth Bank paid $3.3 billion, followed by Westpac, with $3 billion, and NAB, $2.4 billion. ANZ paid $2 billion. The highest amount of tax paid by a multinational was $386 million. How on earth can the government say there is no problem with the conduct of multinationals and their subsidiaries in Australia?

If citizens want a more equitable and fairer society, then multinationals have to pay their fair share of tax, and citizens need to communicate that at the ballot box when they cast their vote. A vote for the One Nation candidate in Longman is a vote for a change in dealing with multinationals, who expect to pay nothing for all the things that allow them to operate profitably in Australia. Voters in every by-election need to tell politicians that being asleep at the wheel on multinational tax is not good enough, and the best way is to give your vote and your preferences to candidates who say they have a viable plan. The average Longman taxpayer paid $12,000 in income tax in 2015-16, while 26 per cent of multinational subsidiaries operating in Australia paid nothing. The list, of 145, includes Chevron Australia Holdings; ExxonMobil Australia; Puma Energy, who operate petrol stations across Queensland; American Express; and Vodafone Hutchison Australia. There is not time to read out the full list, because it is a long list.

The length of the list of multinationals not paying tax in Australia should be a matter of shame to the government and the previous Labor government. I have been talking about non-resident companies failing to pay their tax for over 20 years. I am sick of hearing that the ATO has all the laws and staff it needs, because self-evidently that cannot be the case when fossil fuel companies pay more in political donations than they do in tax.

I have been talking to the government about budget repair since I became a senator. I have told the government at every opportunity that they need to get multinationals and their wholly owned subsidiaries to contribute to the income tax base. I have strongly advocated for reform of the gas taxation system, but the government is not interested. All I can do is make Australians aware of the facts and let them decide whether it is an issue that will help decide which candidate receives their vote. One Nation's policy on multinational tax reform and reform of the gas taxation system is well documented.

It is pleasing to hear now that Senator Di Natale, in his comments today about taxes and multinationals not paying their taxes, has clearly been listening to my comments in the chamber for the last two years and has now picked it up and is running with it, the same as he did with the Australians building the rail line in Queensland to do with the Adani mine. So it's good to hear that he's actually been listening to me and taking up this case.

I supported company tax cuts for businesses with a turnover of up to $50 million, but I will not support further tax cuts for businesses until the government acts to repair the budget through a new tax base from multinational companies. I find myself in a dilemma over whether or not to support the government's Personal Income Tax Plan, which costs more than the extension of the company tax cut plan. I do not understand why the government is so reluctant to fund tax cuts with a new tax base created by getting multinationals and their wholly owned subsidiaries to pay their fair share of tax. I do not understand why the government's plan for personal income tax cuts is so complex.

In stage 1, the tax offset of $520 ends in four years and becomes a tax offset for those on very low incomes. In stage 2, effective in four years time, the threshold amounts in different brackets change. In stage 3, effective in six years time, one tax bracket disappears and the tax rates change. Once the second reading speeches are finished, the Senate will go into committee to debate amendments to this complex legislation. The government does not want to split the three stages of personal tax cuts even though there is broad support for stage 1, starting on 1 July 2018. Tomorrow, senators will be asked to undertake a difficult process not dissimilar to comparing mobile telephone plans.

The government's failure to split the bill into three stages creates a dilemma for me because stage 3 starts in six years time and no-one can predict whether we will be able to afford tax cuts legislated now. My dilemma is that I know Australians are doing it tough. Wage growth is very low. Certain cost-of-living items are rising much faster than wages. People are struggling to pay electricity bills. They manage by going without adequate heating or cooling when needed. Electricity bills are the No. 1 cost-of-living concern for Australians, and that is a tragedy in a country rich in gas and coal.

Labor has come to see me this week to seek support for their position, which is to support stage 1 of the personal tax cuts while increasing the tax offset. Labor tells me that stage 2 of the personal tax cuts should not be supported, because a threshold move will give those on $90,000 to $120,000 a windfall of $1,350 and later, in stage 3, those on $200,000 tax relief of up to $7,000. Do I need to remind Labor that tens of thousands of electricians, plumbers, nurses, secondary school teachers, lift mechanics and welders earn more than $90,000 and will miss out on a permanent tax cut if Labor opposes stage 2 of the proposed Personal Income Tax Plan? These are your voters. These are people who are possibly just on a basic wage. Then they get offered overtime to earn those few extra dollars, yet you are denying those people you are supposed to support: the battlers. And they are the battlers; it's not a fortune that they're making.

Let me also remind this house that the average backbench politician on $200,000 will receive an extra $4,000, but many will get much more because their salaries are much higher than $200,000. How can Labor and the Greens deny these tax cuts to hundreds of thousands of hardworking Australians on taxable incomes from $120,000 up to $200,000 when they have accepted pay rises in excess of six per cent in recent times? Individuals who work in isolated and dangerous workplaces and are highly skilled have taxable incomes much greater than $100,000, and they include 31,998 coalminers. Mining technicians earn an average taxable income of $118,409; 2,706 plant operators earn an average taxable income of $136,985; and 234 pressure welders earn an average taxable income of $107,210.

I challenge Labor, who argue against tax cuts of $1,350 for those on $90,000 to $120,000 in four years time, to reject their minimum wage increase of $4,000 a year from July 2018. Bill Shorten will pocket an increase of over $7,000 from 1 July 2018 but says those who work long hours do not deserve a tax cut of a similar amount. I challenge Labor to set an example and reject the two per cent pay rise awarded by the Remuneration Tribunal last week. Knock back your pay rise, Labor. You don't want to give anyone—

Opposition Senators:

Opposition senators interjecting

Photo of Pauline HansonPauline Hanson (Queensland, Pauline Hanson's One Nation Party) Share this | | Hansard source

I was one of six senators in March last year to vote against a pay rise until a budget surplus is delivered. For the record, all Labor senators and the Greens—

Opposition senators interjecting

Photo of Barry O'SullivanBarry O'Sullivan (Queensland, National Party) Share this | | Hansard source

I urge the chamber to come to order. It has been a fairly diplomatic house since I've been here, so I urge the chamber to come to order and allow the senator to present without disruption.

Photo of Pauline HansonPauline Hanson (Queensland, Pauline Hanson's One Nation Party) Share this | | Hansard source

I was one of the six senators in March last year to vote against a pay rise until a budget surplus is delivered. For the record, all Labor, Greens and Liberal-National Party senators voted for their pay rise in March 2017. So did some of the crossbenchers. Remember, only six senators—and they sat on this side—voted for a pay cut. But those same senators who voted for their pay rise now say it is unaffordable for others to receive a modest tax cut. Hypocrites!

The Australian Greens do not support any of the tax cuts because they feel every dollar is needed by the government—

Photo of Anne UrquhartAnne Urquhart (Tasmania, Australian Labor Party) Share this | | Hansard source

Mr Acting Deputy President, I rise on a point of order. The senator is reflecting on members of this chamber by calling us hypocrites. I would ask that she withdraw that.

Photo of Barry O'SullivanBarry O'Sullivan (Queensland, National Party) Share this | | Hansard source

The expressions in this chamber have been far ranging. The senator didn't direct that remark to any person in particular. I don't think there's a point of order.

Photo of Pauline HansonPauline Hanson (Queensland, Pauline Hanson's One Nation Party) Share this | | Hansard source

Thank you very much, Mr Acting Deputy President. I've had to toughen up in this place; it's a shame others don't do the same. The Australian Greens do not support any of the tax cuts because they feel every dollar is needed by the government for refugees, the Safe Schools program and subsidies for unreliable energy sources that will drive up electricity prices, and they want to dramatically lift the amount of money helping those in foreign countries. Labor wants to double the foreign aid budget, but the Greens want to almost triple the foreign aid budget to $12.28 billion. They want to give foreign aid, Australia's taxpayers' dollars, to overseas countries. They're not worried about hardworking Australians and giving them tax relief here. They want the money to go overseas—$12.28 billion.

Senator Hanson-Young read the bill and spoke on it, but unfortunately she did not understand it. It's quite funny when the senator makes comments about me. She said that I'm getting a tax cut. No, I'm not. I'm on the same wage as Senator Hanson-Young. The tax cuts are going to be up to $200,000. I'm a very fortunate Australian to be earning more than $200,000. I am paying tax of 45c in the dollar on that. I'm not getting tax relief. To make that comment is to mislead this parliament. I don't think she understands it. If she's really worried about pensioners and the battlers and everyone out there, then I suggest that she flies economy class, like I do, instead of sitting up the front of the plane, at more cost to taxpayers, or taking her child on a taxpayer funded whale-watch—or the overseas trips.

What can I say? That there are people in here expecting Australians not to get a tax cut makes the whole place a joke—yet they don't want to take tax cuts themselves. The whole thing is that hardworking Australians need a helping hand. They need to know that they are going to get something back—that something is being done for them. They are sick and tired of seeing everyone else around the world getting relief—we give foreign aid to everyone. People here are struggling to pay their bills. Because of the Greens in this room, renewable energy is sending up electricity prices and the cost of living. Australians cannot keep going at this rate.

My dilemma is this: yes, we have a black hole, but are we going to fill that black hole? My proposal is to go after the multinationals to pay their fair share of tax in this country and to look after Australians, the hardworking families that need some relief and need help in this country. Yes, suspend taxation and suspend increases in politicians' wages and those of bureaucrats. How can you say to hardworking Australians, 'You can't get tax relief—even the highest amount of up to $7,000 a year,' yet bureaucrats are receiving pay increases of up to $17,000 a year? That doesn't pass the pub test for the Australian people and it doesn't pass the pub test for me.

My job in the Senate is to represent the Australian people to the best of my ability. I will make my vote clear on the floor of the parliament. I will listen to all the amendments that are going to be put up and I will make a decision based on what I think is right for the Australian people.

11:12 am

Photo of Rex PatrickRex Patrick (SA, Centre Alliance) Share this | | Hansard source

I will be brief in my contribution to on the Treasury Laws Amendment (Personal Income Tax Plan) Bill. At the outset, I can indicate that Centre Alliance will be moving an amendment that omits stage 3 of the income tax cuts. I understand Labor will move an identical amendment. As an alternative to our amendment we will support theirs. Centre Alliance supports the stage 1 tax cuts. Stage 1 involves an end-of-year rebate for low-income earners and raises from $87,000 to $90,000 the income tax threshold to which the tax rate of 37 per cent applies. The combination of the two will return between $135 and $665 to low-income earners, depending on their income. It's our belief that stage 1 will provide much-needed relief for low-income earners.

Centre Alliance will also support the stage 2 tax cuts. These tax cuts are scheduled to commence from July 2022, with the threshold for the 32.5 per cent bracket being lifted from $37,000 to $41,000 and the threshold for the 37 per cent bracket to go from $90,000 to $120,000. This will give tax relief to low- and medium-income earners and to mum and dad professionals, who have worked hard all of their lives and have helped to generate the recent growth we have seen in the economy. They are entitled to enjoy the fruits of their inputs to our economy. Many of the people in this tax bracket are dealing with large mortgages, high electricity bills and a general rise in the cost of living.

As stated, our amendment knocks out stage 3 of the income tax cuts. Stage 3, which is scheduled to start in 2024, abolishes the 37 per cent tax bracket from the system, creating one middle tax bracket of 32½ per cent for workers who earn between $41,000 and $200,000 a year. We're not convinced that this is prudent at this point in time. We also note the distance in time between the passage of this bill into law and when the amendments come into effect. Whilst we are sympathetic to the idea that companies investing large sums of money on projects spanning multiple years, if not decades, may need to know tax rates into the out years, the same can't be said of individuals. So why commit to this law? Why not wait until there is clarity in the budget bottom line in 2022 or 2023 and then change the tax regime for high-income earners?

Having said that, we do reserve our position in regard to the third stage if our amendments are not successful or if an amended bill is rejected in the House, because we do think that low-income and medium-income earners deserve some tax relief.

11:16 am

Photo of Cory BernardiCory Bernardi (SA, Australian Conservatives) Share this | | Hansard source

I won't delay the Senate unnecessarily, but I do want to get on the record that the Australian Conservatives wholeheartedly endorse and support the government's approach to making personal income tax simpler and fairer in this country. You won't be getting ducks and drakes from us. There'll be no mysterious, 'I'll consider how it's going to come out in the wash.' I entirely support the government's package, because not only is it putting forward tax relief for low-income earners but it maps a pathway of tax relief and some certainty and surety for all taxpayers in this country.

Quite simply, we pay too much tax. Government does not spend our money well enough to maintain the punitive rates of taxation that are impacting the lifestyles of everyday Australian families. It is absurd that our tax brackets are not indexed, that they are not flatter and that more cannot be done to reduce the need for people to pursue tax schemes which are disadvantageous to a great many. For those in this place who say that they want to see capital gains tax changes or changes to negative gearing, I would argue that, if you flatten the tax scales and reduce the need for people to pursue these schemes, the benefits of them to those that are taking advantage will also be reduced. So what we should be doing is looking to lower the tax thresholds across the board to simplify the accounting and taxation affairs for every single Australian.

I also want to make the point, for the class warriors on the other side of the chamber, that about 48 per cent of Australians don't pay any net tax. The burden of taxation in this country is falling disproportionately on those who pay the most tax. That is the simple fact. If you want to reduce the tax burden, we need to reduce it, necessarily, on those that are paying the bulk of it, and we should also be reducing the cost of living and the onerous requirements that government imposes on those who are less fortunate than many of us. You can do that by reducing or taking out the government rorts and attachments that are in our energy industry. You can make our energy more competitive. You can reduce the need for people to pursue negative gearing, as I've touched upon, which will help make housing more affordable. You can reduce the bureaucracy attached to people's employment so that small business is further empowered to employ people and to drive the growth in our economy. They are the simple measures.

We don't need more government. We don't need to give more money to government. We need to get government the heck out of people's lives and let them take some responsibility for themselves. This tax package goes some way to doing that. I endorse it. I wholeheartedly support it. I hope the Senate will do that as well. If they want to have an election based upon one side of parliament putting up taxes and the other side reducing them, I say bring it on, because you will then have a commitment from the Australian people that they endorse low taxes and they think government is not worthy of taking more of their own money.

11:20 am

Photo of Nick McKimNick McKim (Tasmania, Australian Greens) Share this | | Hansard source

Here we are engaged in a race to the bottom between the coalition and the Labor Party on personal tax cuts. Anyone would think there's an election in the air—oh wait; there is an election in the air. Within 12 months the Australian voters are going to be choosing who they want to represent them in this place, to be their government, and—surprise, surprise!—the Labor Party and the coalition are engaged in a race to the bottom on tax cuts. This debate at its heart is about what sort of country we want to be. I'm so proud that the Australian Greens senators are the only ones in this place standing up against this unholy race to the bottom on tax cuts and standing up instead for increasing the funding and quality of essential public services in this country: schools, hospitals and public transport; support for people with disabilities; funding for the environment, the fight against climate change, and threatened species; and funding for productive, long-term infrastructure for this country. The Australian Greens want both the Liberal Party and the Labor Party to properly fund those things, not this race to the bottom on tax cuts, which is designed solely to try to solicit votes at the upcoming election.

Over the last two decades in this country there has been a deliberate attempt by the Labor and Liberal parties to pull apart our society. Economic inequality has massively grown because of decisions made by both the Labor and Liberal parties. Taxes have been cut for the big corporate donors to the Labor and Liberal parties. Personal income tax has been slashed, especially for the wealthiest people, while Newstart, which is supporting the people doing it toughest financially, has not been raised for a generation—nearly 25 years. There has been a transfer of wealth from the less well-off to the most well-off, and now the Labor and Liberal parties are proposing to transfer yet more wealth, via these tax cuts, from people doing it tough to people who already have more than their fair share of our national wealth.

There's a stark choice facing the Australian people and this parliament at the moment. On one hand we can continue to run down our schools, hospitals and essential public services; on the other hand we can stand up for increasing the funding and quality of our essential public services. On one hand Labor and Liberal, neither of whom support raising Newstart, can continue to punish the poor to reward the rich; on the other hand the Australian Greens will stand up for people on Newstart. We want Newstart to be increased by $75 a week to give people a fair crack at rebuilding their lives and to help them avoid those impossible choices between putting food on the table, paying the school levies or paying the power bills. We can rebuild our Australian society in line with the values of looking after people doing it tough and of funding an increase in the quality of essential public services, or we can continue in a race to the bottom on tax cuts.

I want to say something to the people of Braddon, who are facing this choice in their upcoming by-election. The choice for the people of Braddon is clear. They could vote for a tax cut that redistributes wealth from those at the bottom to those who already have more than their fair share. Remember, stage 1 of this tax plan will give a tax cut to people who earn $120,000 a year. That means that, if you're in a household with two people lucky enough to be earning 120 grand a year—that is a household that earns in the region of a quarter of a million dollars a year—that household is going to get a tax cut, but the people of Braddon on Newstart are being offered nothing by the Labor and Liberal parties, so they've got a choice. Either they can vote for a candidate—Jarrod Edwards, an outstanding Greens candidate in Braddon—who knows what it's like to do it tough, who was raised in a family on welfare, who knows what it's like to live on Struggle Street, who's campaigning strongly for a legislated increase in the minimum wage and a legislated increase in Newstart, or they can vote for Labor or Liberal candidates who want to give a tax cut to people on $120,000 a year. That's the choice facing the people of Braddon. I urge them to support Jarrod Edwards, the Australian Greens candidate, as the only candidate taking a policy to this election to increase Newstart.

Of course, that would provide a significant economic benefit to Braddon, which sorely needs it. With an increase in Newstart and with an increase in the minimum wage, you would see cash starting to flow more freely through the economy of Braddon, which would help businesses in Braddon—everything from small businesses in the corner shops to small businesses in the manufacturing sector, to people on farms and right through the economy of the north-west coast of Tasmania. The choice for the people of Braddon is very clear. You can vote for Jarrod Edwards and the Australian Greens for an increase in the minimum wage and an increase in Newstart, or you can vote for your Labor or Liberal candidates and vote to give tax cuts to people on $120,000 a year.

11:27 am

Photo of Mathias CormannMathias Cormann (WA, Liberal Party, Minister for Finance) Share this | | Hansard source

I thank all senators who have contributed to this very important debate. Obviously the Treasury Laws Amendment (Personal Income Tax Plan) Bill 2018, which seeks to implement the government's plan to provide income tax relief to hardworking families across Australia, is a very important part of our plan for the economy and jobs to help low- and middle-income earners with cost-of-living-pressure relief but also to provide the right incentive, reward for effort and encouragement to all working Australians. With those few words, I commend the bill to the Senate.

Photo of Barry O'SullivanBarry O'Sullivan (Queensland, National Party) Share this | | Hansard source

We have a foreshadowed amendment to the second reading, and we have an amendment that has been moved.

Photo of Scott RyanScott Ryan (President) Share this | | Hansard source

The question is that the second reading amendment moved by Senator Whish-Wilson, on sheet 8464, be agreed to.

11:36 am

Photo of Richard Di NataleRichard Di Natale (Victoria, Australian Greens) Share this | | Hansard source

I move the second reading amendment which was foreshadowed during my speech in the second reading debate.

At the end of the motion, add:

", but the Senate is of the opinion that:

(a) the bill should not be considered until the minimum wage is lifted to 60% of the median wage, and Newstart, Youth Allowance and related allowances are increased by $75 a week; and

(b) the revenue used to fund the government's Tax Cut Plan should be invested in health and education services, public infrastructure and the social safety net, instead of being used to fund tax cuts."

Photo of Sue LinesSue Lines (WA, Deputy-President) Share this | | Hansard source

The question is that the second reading amendment moved by Senator Di Natale on sheet 8466 be agreed to.

11:44 am

Photo of Scott RyanScott Ryan (President) Share this | | Hansard source

We now move to the question that the bill be read a second time.

Question agreed to.

Bill read a second time.