MPI - Goods and Services Tax

Mr HAWKE (Mitchell—Assistant Minister to the Treasurer) (15:19): You would be a fun guy to have at a party, Shadow Treasurer: things are so bad, bad, bad—everything is so bad. You would be the life of any party, I can tell you. You would not think that on a day when 58,600 people gained employment in this country we would have the shadow Treasurer enter this chamber and lecture us about how bad things are in the Australian economy. You would not think at a time when consumer confidence is on the rise and we see in the consumer confidence figures that consumers in the next month are planning the biggest Christmas spend in seven years. That is what is forecast for the next month.

You would think that the shadow Treasurer would come in here with a plan to explain to the Australian people how they can make it easier to work, save and invest for those Australians who are doing it tough and working hard. But what we heard from the shadow Treasurer is an attack on plans that the government do not have, an attack on policies that we have not announced and an attack on mythical tax policies that they have created, completely isolated from everything that the Prime Minister has been talking about. It is so misleading that I think it is not fooling ordinary people. It is so misleading to the Australian people that it will not go down well when the shadow Treasurer returns to Fowler or McMahon, or wherever he goes back to, and says, 'This is our plan and this is your plan.'

You said you had a tax plan but you just had 10 minutes, shadow Treasurer, to tell the Australian people what that tax plan is. What did you say about your tax plan? Well, you did not say anything about your tax plan. You did not have one word to say about your tax plan.

What the government has said is: we have a process in place, a white paper process, which is underway currently, where we are putting all things back on the table. We are considering the tax mix, absolutely, and that of course is in response to the fact that people on average wages today are now in the second-highest tax bracket. There is nobody in this chamber, listening to this debate today who would think it is okay that average wage earners are now in the highest tax bracket. It is a critical concern for Australians. It is a critical concern for those Australians working very hard, paying an even higher rate of tax now. That is the one thing you will never hear from the Labor Party. They talk a lot about fairness to those on welfare. They talk a lot about fairness to those on lower incomes. Of course, as the Prime Minister says, any changes to the tax system must be fair. But the Labor Party never talks about fairness to those people who work for a living, fairness to those people on average incomes who are paying more and more of their tax in income tax.

Where is the shadow Treasurer saying this is unfair? It is unfair that average income earners are now in the second highest tax bracket. Why won't the Labor Party just say it? Why won't they acknowledge that something has to be done to address bracket creep, to address the fact that people are working harder and harder for less and less of their own money? That is the principle that any tax system must be constructed on. Australia has the second highest reliance on income tax in the world. We have one of the highest reliances on corporate tax as well. If we do not lower our corporate taxes and become competitive with our international neighbours here in the Asia-Pacific region and around the world—if we have one of the highest corporate tax rates in the world—we will not be able to compete effectively. We will not be able to attract more investment and more jobs or have more prosperity for all Australians.

Yet you will not hear this challenge that confronts Australians crossing the opposition's lips. Instead they criticise any attempt to have a national debate, any constructive process that the government has to bring forward plans.

Mr Burke: What about pensioners?

Mr HAWKE: The member for Watson mentions pensioners, of course. It was their government that brought in the carbon tax. The shadow Treasurer had a lot to say about pricing signals. We know that, more than any other party in Australian political history, it is the Labor Party that does not understand price signals. Why would you introduce a carbon tax at the world's highest price? It indicates how little you understand price signals. Why would you start a market mechanism with the world's highest price for your carbon tax? How fair was that to pensioners, I say to the member for Watson. How fair was introducing a carbon price at the world's highest price?

When we abolished the carbon tax, we kept those compensation measures, and pensioners are better off with the abolition of the carbon tax.

Ms Henderson interjecting—

Mr HAWKE: The member for Corangamite asks what was fair to small business when you brought in the carbon tax. There was no consideration to the two million small businesses in this country that generate most of the employment, generate most of the growth in employment and keep Australians in jobs. Again there was no thought for small business. It is this government, of course, that brought in the reduction in company tax for small business, and that has from May this year led to growth in employment. Today we saw that 58,600 people have jobs who did not have jobs at the last figures, and I think that is fantastic. It goes to show that, when you do lower taxes, when you do get small business taxes down, if you could get company taxes down a bit, if you could reduce bracket creep and get average wage earners' taxes down and back into a sensible tax bracket, you would generate more jobs, wealth and prosperity. But it is not something that ever comes to mind when the Labor Party discusses tax

Tax is about one thing for the Australian Labor Party. Tax is about revenue. Tax is about taking more from people. It is only to fund ever-increasing government expenditure. They take and take and take from Australians' pockets. It is not the approach of this government, of course.

Mr Bowen: You've still got four minutes to go.

Mr Hawke: Thanks for the heads up on that! It's nice of you to do that! The tax mix here, of course, has been completely disconnected from the government's expenditure.

We have seen that we do have a fiscal challenge ahead of us. The Minister for Social Services is here and he knows that to fund just the increase in the welfare budget that we have coming up—just the gap from where we are today to where we will be in 10 years—requires great growth in government revenue and also a reduction in our expenditures. That is the challenge the government faces. That is why we are having this conversation with the Australian people. That is why all the mixes are on the table. That is why tax reform is a key part of the government's policy agenda. We have to build that growth and opportunity, and we have to reform the tax system to do that. I think there is not an Australian, a small business owner, a big business or a medium company that will not tell you that they need tax reform to do their jobs better to enable them to grow and employ.

We know that, with some of the highest living standards in the world and the greatest competition in the world, we need to face ways to become more competitive and innovative. That is why we will not be distracted—

Mr Bowen: There's no shame in sitting down now!

Mr HAWKE: We won't be distracted by the shadow Treasurer, that's for sure! We won't be distracted by the member for Watson and their 'vuvuzela of negativity', to quote the member for Grayndler. That vuvuzela has been barking very loudly in this chamber in recent weeks.

Every single question about the GST, of course, has missed the mark. Why has it missed the mark? It is because there is no Australian government that would propose changes to the tax system that would not provide for greater fairness for those on low incomes, that would not provide for greater fairness for those who could not afford it. But what about the fairness for the middle class? What about for those on average incomes? What about fairness for small business? These are the things the Labor Party never considers.

I think the Labor Party and all Australians know that, to meet the challenges and to capitalise on the opportunities, we have to develop a more agile economy. We have to incentivise innovation. We have to renew business processes, improve quality and value for customers and reform the way that government operates. That means dealing with our tax system. It means reforming it in a way that Australians accept.

We are here having a debate about the tax system, but the shadow Treasurer will not outline one single measure that he thinks should be reformed in the Australian tax system. This is a party that has never lowered tax rates in Australian history. You have never brought tax down. You have never returned bracket creep to Australians. You have never said to Australians, 'You are working hard enough.' You have never said, 'You are working and delivering tax for the government; we will lower your tax.' You have never said thank you to Australian businesses—those two million small businesses out there who work, save and invest every day to create the prosperity that you take. You only have one message for the Australian people and the business community: 'We want to increase tax. We want to take more out of your pocket and we're going to continue to do nothing about government expenditure.'

In contrast, the Turnbull government is capping government expenditure. We are restraining it and reducing it. Unlike some people in the opposition, we understand the difference between net debt and gross debt. We are not confused about net debt and gross debt. We know what it is. We know how it operates. We know what the tax brackets are. We know what the income tax-free threshold is. We know it is $18,200—

Mr Bowen interjecting—

Mr HAWKE: Do you want me to tell you? I will school you again! I am happy to be the Prime Minister for a second and school you. If I had glasses, I would take them off at this point and I would offer you a lecture. The income-free tax threshold is $18,200. That is where it sits. Surely you know that by now, shadow Treasurer.