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representatives vote 2018-05-23#2
Edited by
mackay staff
on
2018-05-30 16:12:43
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Title
Bills — Treasury Laws Amendment (Personal Income Tax Plan) Bill 2018; Consideration in Detail- Treasury Laws Amendment (Personal Income Tax Plan) Bill 2018 - Consideration in Detail - Split the bill
Description
<p class="speaker">Chris Bowen</p><p>I seek leave to move amendments (1) to (7) and (12) to (23) as circulated in my name together:</p><p>Leave granted.</p>- The majority voted against [amendments (1) to (7) and (12) to (23)](https://www.openaustralia.org.au/debates/?id=2018-05-23.108.1) moved by Labor MP [Chris Bowen](https://theyvoteforyou.org.au/people/representatives/mcmahon/chris_bowen), which means they failed.
- Bowen MP explained that:
- > *The amendments that I just moved will effectively split this bill. Those elements that start on 1 July this year would remain and those elements that start on 1 July 2022 and 1 July 2024 would be removed. It is, frankly, good governance to allow both houses of parliament, and this House in particular, to vote on each tranche on its own merits.*
- ### What does this bill do?
- The [bill was introduced to](http://parlinfo.aph.gov.au/parlInfo/search/display/display.w3p;query=Id:legislation/billhome/r6111):
- * *introduce a low and middle income tax offset to reduce the tax payable by low and middle income earners that are Australian residents in the 2018-19, 2019-20, 2020-21 and 2021-22 financial years;*
- * *merge the low and middle income offset and the current low income tax offset into a new low income tax offset from the 2022-23 financial year; and*
- * *progressively increase the income tax rate thresholds in the 2018-19, 2022-23 and 2024-25 financial years.*
<p>The amendments that I just moved will effectively split this bill. Those elements that start on 1 July this year would remain and those elements that start on 1 July 2022 and 1 July 2024 would be removed. It is, frankly, good governance to allow both houses of parliament, and this House in particular, to vote on each tranche on its own merits. The Treasurer has said that this is a take-it-or-leave-it offer, an all or nothing proposition. It's not. It doesn't have to be. The Treasurer said they're intrinsically linked. They are not. They are quite separate tranches of tax cuts. The Labor Party has made it very clear that we support the government's efforts to have tax cuts on 1 July 2018. That's why we just sat with the government, to support those tax cuts. We also sat with the government to facilitate this amendment to allow us to split out the 2022 and 2024 tax cuts, as any responsible opposition would do, because we want to analyse the proposals. The Treasurer just released new figures on the different tranches. That's good. It would have been better if it had happened earlier. To do it in the summing-up speech of the legislation is a rather novel approach, a rather odd way, an odd order, of doing things—providing the information to the House at the end, not the beginning, of the debate. But, anyway, that's the way the Treasurer's chosen to do it.</p><p>The Treasurer and the Prime Minister have been unable and unwilling in question time after question time to answer the Labor Party's questions about the costs of tranches 2 and 3, so it's only appropriate that we separate this bill and vote on the things that we all agree on—at least the government and the opposition agree on. The honourable members on the crossbench do not—that is their right—but the government and the opposition do agree on the need for the tax cuts for low- and middle-income earners to come into force in 2018. Indeed, we think we should go further, but that's a subject for the second amendment, which I'll be moving later in this debate. It should not matter to the government that we split the bill, because we are very clear in our support for the 2018 tax cuts. But we want to carefully deliberate on the other tranches.</p><p>I would be surprised to hear the government mount the argument that it is urgent for the 2022 and 2024 tax cuts to be voted on, because it is 2018. We can argue at the edges about what's urgent and what's not urgent, but something that's happening in 2024 is not urgent to vote on in the House in 2018. What is appropriate is for the House to take due consideration, for the Senate to have an inquiry and for the government to release much more data on the impacts of the costs, particularly as Treasury does not know what the financial circumstances will be in 2024. It doesn't know what the fiscal environment will be. I don't know. Mr Deputy Speaker Andrews, with all due respect to your good self, you don't know. No economists knows. We can all make predictions, forecasts and best guesses, but none of us know what the economy will be like in 2024, whether these tax cuts are affordable or whether indeed something larger might be affordable. Something larger might be affordable or something less. We just don't know, so this takes very careful deliberation.</p><p>The government wanted us to vote for it sight unseen. The Treasurer wanted us to do it the day after the budget, such was the Treasurer's disregard for the processes of the parliament and for the principles of review by the House of the legislation. The government has, as I said, singularly failed to provide the information that the opposition has asked for. We have made no secret of the fact that we have a high degree of scepticism about the nature of the 2024 tax cuts and their impact on the progressivity of the tax system and the fairness that goes with that. There are elements of the 2022 package that we see we should consider and the House should consider, but we want to consider them.</p><p>I say this very clearly to the government: do not hold the 2018 tax cuts hostage to the 2024 tax cuts. Do not say that to the Australian people. Do not be so cynical that you think they will accept that you can hold their 2018 tax cuts hostage until you get tax cuts in 2024 through this parliament, because you don't have to do that. You know you're going to have to blink. You know you're going to have to split the bill, just as you did on corporate tax. You'll have to split this bill. You might as well do it now. You might as well get it done now, because we'll be arguing the same in the other place. Other senators have said they will argue the same. Split the bill. Let the House determine each tranche on its merits, as you should.</p> <p class="speaker">Kevin Andrews</p><p>Before calling the Treasurer, can I ask the honourable member for McMahon to formally move the amendments.</p> <p class="speaker">Chris Bowen</p><p>My apologies, Mr Deputy Speaker; I thought I had. I move the amendments:</p><p class="italic">(1) Clause 2, page 2 (table item 3), omit the table item.</p><p class="italic">(2) Clause 2, page 2 (table items 5 and 6), omit the table items.</p><p class="italic">(3) Schedule 1, heading, page 3 (line 2), omit "and Low Income tax offset".</p><p class="italic">(4) Schedule 1, item 1, page 3 (lines 7 and 8), omit "and Low Income tax offset".</p><p class="italic">(5) Schedule 1, item 1, page 3 (lines 24 and 25), omit "2018-19, 2019-20, 2020-21 or 2021-22 income year", substitute "2018-19 income year or a later income year".</p><p class="italic">(6) Schedule 1, item 1, page 4 (lines 5 and 6), omit "2018-19, 2019-20, 2020-21 or 2021-22 income year", substitute "2018-19 income year or a later income year".</p><p class="italic">(7) Schedule 1, item 1, page 4 (lines 17 and 18), omit the note.</p><p class="italic">(12) Schedule 1, item 1, page 6 (line 10) to page 8 (line 12), omit sections 61-110 and 61-115.</p><p class="italic">(13) Schedule 1, page 9 (line 12), omit the heading.</p><p class="italic">(14) Schedule 1, item 5, page 9 (lines 13 to 18), omit the item.</p><p class="italic">(15) Schedule 1, item 6, page 9 (lines 20 to 22), omit the item, substitute:</p><p class="italic">6 Section 13 -1 (table item headed " low income earner " )</p><p class="italic">Omit:</p><p class="italic">substitute:</p><p class="italic">(16) Schedule 1, item 7, page 10 (lines 1 to 4), omit the item.</p><p class="italic">(17) Schedule 1, page 10 (line 5), omit the heading.</p><p class="italic">(18) Schedule 1, items 8 and 9, page 10 (lines 6 to 15), omit the items.</p><p class="italic">(19) Schedule 1, Part 3, page 11 (line 1) to page 12 (line 16), omit the Part.</p><p class="italic">(20) Schedule 2, Part 1, page 13 (starting at line 2), omit the Part, substitute:</p><p class="italic">Part 1—Main amendments</p><p class="italic"><i>Income Tax Rates Act 1986</i></p><p class="italic">1 Clause 1 of Part I of Schedule 7 (table item 2, column headed " For the part of the ordinary taxable income of the taxpayer that: " )</p><p class="italic">Omit "$87,000", substitute "$90,000".</p><p class="italic">2 Clause 1 of Part I of Schedule 7 (table item 3, column headed " For the part of the ordinary taxable income of the taxpayer that: " )</p><p class="italic">Omit "$87,000", substitute "$90,000".</p><p class="italic">3 Clause 1 of Part II of Schedule 7 (table item 1, column headed " For the part of the ordinary taxable income of the taxpayer that: " )</p><p class="italic">Omit "$87,000", substitute "$90,000".</p><p class="italic">4 Clause 1 of Part II of Schedule 7 (table item 2, column headed " For the part of the ordinary taxable income of the taxpayer that: " )</p><p class="italic">Omit "$87,000", substitute "$90,000".</p><p class="italic">5 Clause 4 of Part II of Schedule 7 (example)</p><p class="italic">Repeal the example.</p><p class="italic">6 Clause 1 of Part III of Schedule 7 (table item 2, column headed " For the part of the taxpayer ' s working holiday taxable income that: " )</p><p class="italic">Omit "$87,000", substitute "$90,000".</p><p class="italic">7 Clause 1 of Part III of Schedule 7 (table item 3, column headed " For the part of the taxpayer ' s working holiday taxable income that: " )</p><p class="italic">Omit "$87,000", substitute "$90,000".</p><p class="italic">8 Application</p><p class="italic">The amendments made by this Part apply to the 2018-19 year of income and later years of income.</p><p class="italic">(21) Schedule 2, items 10 to 12, page 18 (lines 3 to 12), omit the items.</p><p class="italic">(22) Schedule 2, items 15 and 16, page 18 (line 22) to page 19 (line 3), omit the items.</p><p class="italic">(23) Schedule 2, Part 3, page 20 (line 1) to page 21 (line 12), omit the Part.</p> <p class="speaker">Scott Morrison</p><p>The Labor Party do not agree with the government that 94 per cent of Australians should pay no more than 32½c in the dollar as their marginal rate of tax. They don't agree with that. That's what they've just said. They also don't agree that we should be dealing with bracket creep. That's what these amendments are designed to address. They're designed to say: 'No, we don't support the government's plan to address bracket creep. We want to take that hard-earned money from Australians and keep it and spend it.' And they'll spend it. At the last election, this shadow Treasurer put up $31 billion and more in higher spending. I note—it's interesting—that he says, 'We don't know what's going to happen in 2022-23 and 2024-25,' but he's quite happy to spend money in 2022-23, 2024-25 and in 2050-51. He'll spend money forever, and he's happy to pass bills in this place that spend money, but he's not happy to pass bills that provide for tax relief. That's what they're not prepared to do.</p><p>What he's saying is that someone who's on an average wage today of $84,600 should pay a higher rate of tax in 2022-23 than they do now. They will move into the 37c tax bracket without these changes. In 2024-25 it will get even worse. Someone on an average wage today will be on around $100,000 in 2024-25. In 2022-23, they'll be on about $95,000 and a bit more, and they'll be paying a higher rate of tax. Make no mistake: what the Labor Party are saying here is that they want to bank bracket creep, and they want to spend it all. They just want to spend it all in a big splurge at this election. The reckless spending will be back from the Labor Party. And they'll be seeking to do it by pilfering the hard-earned savings and earnings of Australians.</p><p>That's why we won't be supporting these amendments. We believe that you need to deal with these structural problems in the tax system and that you need to lay out a clear plan. That plan has to be fair. That plan has to protect the progressivity of the tax system, which our plan does. And it has to ensure that Australians have some certainty as they put that extra effort in. We're talking about a seven-year plan. They can't even commit to tax relief over seven years, let alone 10, but they will commit to expenditure forever. So what we're learning here is that the Labor Party are for higher taxes.</p><p>What they're not agreeing to is the full tax relief of $143.95 billion that is set out in this bill. They're not agreeing to $192.35 billion of tax relief. What they are simply seeking to do is pull one over on the Australian people, pilfer what they earn and pilfer what they save, whether they're retirees or just people going to work honestly every day who want some certainty that the government in the future won't be putting its hands deeply into their pockets and that what they earn they'll be able to keep.</p><p>This is a cynical exercise from the Labor Party. The shadow Treasurer himself used to believe in lower taxes. He no longer does. He's become hostage to those who sit on his own front bench, unable to stand up to any of them. It's disappointing. But he makes his bed; he can lie in it. But he shouldn't force Australian taxpayers to lie in a bed of higher taxes, because that's what he wants to do to them. He's going to stop us dealing with bracket creep here in this place and he's going to stop us having a simpler tax system into the future. That's his choice. That's Labor's choice. This is why tax as a share of the economy will let rip under the Labor Party. This is the same shadow Treasurer who said that this government should be held to the standard of ensuring that tax as a share of the economy should rise no higher than 23.7 per cent. We've been achieving that and we've set a tax speed limit to ensure that we stay under that into the future, and that's what this bill does.</p><p>By not supporting the full tax plan, what Labor is saying is that they want taxes to go up and up and up, because under Labor they'll spend and spend and spend. You want to know what the proof of that is? At the last election they committed to $31 billion of additional expenditure and they put taxes up by over $15 billion, and they still ended up with a higher deficit after all that was done. Higher taxes, higher spending, higher deficits—that's the form of this shadow Treasurer.</p> <p class='motion-notice motion-notice-truncated'>Long debate text truncated.</p>
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