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senate vote 2019-07-04#13
Edited by
mackay staff
on
2019-07-12 13:10:27
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Title
Bills — Treasury Laws Amendment (Tax Relief So Working Australians Keep More of Their Money) Bill 2019; in Committee- Treasury Laws Amendment (Tax Relief So Working Australians Keep More of Their Money) Bill 2019 - in Committee - Low income earners
Description
<p class="speaker">Sue Lines</p><p>The question is that the bill stand as printed—I beg your pardon; Senator McKim.</p> <p class="speaker">Nick McKim</p>- The majority voted against a [motion](https://www.openaustralia.org.au/senate/?gid=2019-07-04.214.1) introduced by Tasmanian Senator [Peter Whish-Wilson](https://theyvoteforyou.org.au/people/senate/tasmania/peter_whish-wilson) (Greens), which means it failed.
- Senator Whish-Wilson [explained his amendment](https://www.openaustralia.org.au/senate/?gid=2019-07-04.214.1):
- > *The Greens amendment strips the tax cuts from this bill. It increases the size of the low-income tax offset, the LITO, from the current $445 level, beyond the $700 level proposed by the government, to $1,080. The amendment also brings about this increase to the LITO immediately, rather than in 2022, as proposed by the government. The net result is that people earning anything up to $37,000 per annum would immediately and permanently be $115 better off under the Greens amendment. People earning a wage of anything up to $67,000, which is very close to the current cap for the LITO, would also receive an immediate and permanent increased tax offset under our amendment. The benefit of the Greens proposal, as opposed to this government's tax cuts, is that it puts more money into the pockets of those wage earners who would most benefit and who most need it. It wouldn't be providing nearly half the value of the entire package to the wealthiest Australians.*
- ### Motion text
- > *(1) Schedule 1, page 3 (line 1) to page 4 (line 5), omit the Schedule, substitute:*
- >
- > *Schedule 1—Low Income tax offset*
- >
- > *Income Tax Assessment Act 1936*
- >
- > *1 Subsection 159N(2)*
- >
- > *Omit "$445, reduced by 1 cents", substitute "$1080, reduced by 3 cents".*
- >
- > *Income Tax Assessment Act 1997*
- >
- > *2 Subsection 61 -115(1) (table)*
- >
- > *Repeal the table, substitute:*
- >
- > *3 Application*
- >
- > *The amendment of section 159N of the Income Tax Assessment Act 1936 as made by this Schedule applies in relation to assessments for the 2018-19, 2019-20, 2020-21 or 2021-22 income year.*
- >
- > *[low income tax offset]*
<p>I just had a question for the minister. Minister, in your summation speech, you indicated that the commitment that the government had given Senator Lambie was to work through the issue of the Tasmanian government's housing debt to the Commonwealth. Is that the full extent of your commitment to Senator Lambie?</p> <p class="speaker">Mathias Cormann</p><p>Indeed, we will be working this issue through with Senator Lambie and with the Hodgman government in Tasmania. These are matters that have already been the subject of discussions in recent times between our government and the Hodgman government. As Senator Lambie has indicated, she has made a judgement—which we appreciate and I'm grateful for—to support our income tax relief package on its own merits because she recognises that it's important for the economy and for hardworking Australians, in particular low-income earners who will, of course, start receiving tax refunds from the end of next week. She has also very strongly and very passionately advocated on behalf of her home state of Tasmania in relation to this issue, and we have agreed over the next six to eight weeks, or thereabouts, that we'll work this issue through and we'll make relevant judgements.</p> <p class="speaker">Nick McKim</p><p>Thank you, Minister. Those words confirmed and reflected the words that you used in your closing speech. But, just to be clear, that is the extent of the commitment that you have given to Senator Lambie and there are no further commitments you have given other than your willingness to 'work this issue through'?</p> <p class="speaker">Mathias Cormann</p><p>When we have more to say, because the issue has been properly worked through, we'll make relevant announcements at that time.</p> <p class="speaker">Nick McKim</p><p>I'm happy to stay all night if we need to, Minister, so I'll put it again just so that the Senate can be totally clear: is that the extent of the commitment that you have given to Senator Lambie? In other words, is there any other commitment you have given to her further than the commitment that you are prepared to 'work this issue through'?</p> <p class="speaker">Mathias Cormann</p><p>I can't be clearer than this. As I've indicated, this also involves a state government, and so there are some conversations to be had with the state government in Tasmania. As we've indicated to Senator Lambie, as she made very strong and passionate representations in relation to this issue—and I think all Tasmanians and all Australians would have seen the passion with which Senator Lambie put this issue forward yesterday in her Facebook post; I saw that, and I could see the passion—we would be prepared to work this issue through. When all of the issues have been properly considered on their own merits, we will be making further announcements at the right time. We will be working, in good faith, over the next six to eight weeks to work this issue through.</p> <p class="speaker">Nick McKim</p><p>Thank you again, Minister, for repeating words you'd just used, but my question is actually very clear: is there any commitment you've given to Senator Lambie further to the commitment to 'work this issue through'—yes or no?</p> <p class="speaker">Mathias Cormann</p><p>I've very clearly articulated the commitment I've given. I'm not in a position to say more at this point in time because there are more discussions to be had, including with the state government of Tasmania, and that will happen over the next six to eight weeks. When we are in a position to make further announcements in relation to these matters, we will.</p> <p class="speaker">Nick McKim</p><p>Thank you again, Minister, for repeating words that you'd already used. Perhaps I'll just frame my interrogation of you slightly differently. I'll say to you here, very clearly, that my understanding, from what you've said and the implication in your words, is that you have given no further commitment to Senator Lambie other than to 'work this issue through'. If I'm wrong about that in my understanding, I invite you to correct me.</p> <p class="speaker">Mathias Cormann</p><p>Thank you very much—</p><p>The CHAIR: Minister, wait for the call.</p><p>I stand by the comments that I've made. The government, as we've indicated on a number of occasions now, is always prepared to engage with non-government senators in relation to issues of concern to them and their constituents. On occasions we've had these sorts of conversations with the Australian Greens. In relation to the issue raised with us by Senator Lambie, we have agreed to work this issue through in good faith. This is incidentally, as Senator Lambie herself indicated, not the reason she decided to back our income tax plan today. As I heard when Senator Lambie gave her speech, she made a judgement today, on balance—having considered all the arguments—to back our income tax plan on its own merits.</p><p>But we will work this issue through over the next six to eight weeks. There are obviously some matters to be considered and some matters to be explored with the state government of Tasmania. When all of these things have happened, then we will make a relevant announcement at that point in time. I'm not in a position to tell you any more at this time, because these processes have not yet taken place.</p> <p class="speaker">Peter Whish-Wilson</p><p>Senator Abetz has been on the public record, on the radio, at least three times on this issue in the last three weeks, Senator Cormann. Did you have a chat to Senator Abetz about this? Did you bring him into the tent on this dodgy deal that you are signing with Senator Lambie?</p> <p class="speaker">Mathias Cormann</p><p>Firstly, I reject the premise of the question. I reject the characterisation you've just put before the Senate. Millions of Australians tonight are grateful to Senator Lambie for having decided to back in the legislation to deliver the lower income taxes for all working Australians that the Australian people voted for, because it will mean up to $1,080 into the bank accounts of millions of Australians from the end of next week. So I completely reject that characterisation in what you've said. Have I had conversations with Senator Abetz in relation to these matters? Yes, I have.</p> <p class="speaker">Peter Whish-Wilson</p><p>I move Greens amendments (1) on sheet 8689:</p><p class="italic">(1) Schedule 1, page 3 (line 1) to page 4 (line 5), omit the Schedule, substitute:</p><p class="italic">Schedule 1—Low Income tax offset</p><p class="italic"> <i>Income Tax Assessment Act 1936</i></p><p class="italic">1 Subsection 159N(2)</p><p class="italic">Omit "$445, reduced by 1 cents", substitute "$1080, reduced by 3 cents".</p><p class="italic"> <i>Income Tax Assessment Act 1997</i></p><p class="italic">2 Subsection 61 -115(1) (table)</p><p class="italic">Repeal the table, substitute:</p><p class="italic">3 Application</p><p class="italic">The amendment of section 159N of the <i>Income Tax Assessment Act 1936 </i>as made by this Schedule applies in relation to assessments for the 2018-19, 2019-20, 2020-21 or 2021-22 income year.</p><p class="italic"> <i>[low income tax offset]</i></p><p>We also oppose schedule 2 in the following terms:</p><p class="italic">(2) Schedule 2, page 5 (line 1) to page 7 (line 1), to be opposed.</p><p class="italic"> <i>[personal income tax reform]</i></p><p>The Greens amendment strips the tax cuts from this bill. It increases the size of the low-income tax offset, the LITO, from the current $445 level, beyond the $700 level proposed by the government, to $1,080. The amendment also brings about this increase to the LITO immediately, rather than in 2022, as proposed by the government. The net result is that people earning anything up to $37,000 per annum would immediately and permanently be $115 better off under the Greens amendment. People earning a wage of anything up to $67,000, which is very close to the current cap for the LITO, would also receive an immediate and permanent increased tax offset under our amendment. The benefit of the Greens proposal, as opposed to this government's tax cuts, is that it puts more money into the pockets of those wage earners who would most benefit and who most need it. It wouldn't be providing nearly half the value of the entire package to the wealthiest Australians.</p><p>For the hardheads in this chamber and any out there who may be listening to this debate who have no sympathy for those who are truly struggling in this country, this is not just about the personal welfare of those who would receive an extra benefit. It's an accepted fact that people with less money who are battlers and are doing it tough tend to spend any extra money they're given. Economists call this a 'marginal propensity to consume'. They have a higher marginal propensity to consume, which of course makes intuitive sense, because they don't have a lot of money and they have many things, indeed, they need to spend that money on—versus wealthy individuals who do have money, who have high wealth-functions, who tend to save money and put those funds into investments such as their second, third or fourth investment property. So a bigger tax offset for lower income earners is better for the economy than a tax cut for millionaires.</p><p>I just remind the chamber that 50 per cent of the benefit, the value, of these tax cuts will go to the top 20 per cent of Australian income earners. How is that fair? It totally guts the progressive tax system and the fundamental principle of fairness that those who earn more—such as every one of us in this chamber—pay more. This country was set up on the back of that. That's how we've funded our social safety net, our infrastructure and our nation for nearly a hundred years. The Greens believe this is the best way to use the personal income tax system to stimulate the economy and look after those battlers and the most vulnerable in this country. It's the best way to tackle inequality, and I urge the chamber to support our amendments.</p> <p class="speaker">Mathias Cormann</p><p>The government will oppose these amendments. Under our plan, once fully implemented, those who earn more will continue to pay more. In fact, at the end of the seven-year phase-in period of our income tax relief plan, by 2024-25, the top one per cent of income earners will pay slightly more in terms of the proportion of all income tax revenue generated. The top five per cent will pay about the same. The top 20 per cent will continue to pay about 60 per cent of all income tax generated; they're paying about 60 per cent of all income tax generated now and will pay about 60 per cent of all income tax generated in 2024-25. If we don't do this, essentially bracket creep will push more and more middle-income earners into the higher tax brackets, leaving them worse off. That is what you call bracket creep, which is a drag on the economy, which weakens the economy over time and is essentially what undermines aspiration if left unaddressed. That is why we need to ensure that this legislation is passed in full.</p><p>The CHAIR: We're dealing with amendment No. 1 on sheet 8689. At the conclusion of this count we will deal with schedule 2. The question is that the amendment be agreed to.</p><p>The CHAIR: The question is that schedule 2 on sheet 8689 stand as printed.</p><p>Question agreed to.</p>
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