Matt Thistlethwaite (Kingsford Smith, Australian Labor Party, Assistant Minister for Defence) Share this | Hansard source

The tax cuts delivered under this treasury laws amendment will provide welcome relief for Australians, particularly those with a mortgage, who have faced successive interest rate increases from the independent Reserve Bank. The Treasury Laws Amendment (Cost of Living Tax Cuts) Bill 2024 provides a tax cut for every Australian taxpayer from 1 July this year. The government has listened, it has consulted and it has acted on behalf of the Australian people. We've heard the message about the struggles of Australian households to deal with cost-of-living pressure.

Most importantly, we haven't sat on our heels and done nothing about it. We've acted. We acted to introduce and to reform the previous government's stage 3 tax cuts and introduce Labor's own tax reform package that will see 13½ million Australians better off, with a tax cut from 1 July. Under Labor's tax plan, three million more Australians will receive a tax cut this year than under the previous government's plan. One hundred per cent of taxpayers get a tax cut compared to 84 per cent under the previous government's stage 3 tax cuts. Ninety per cent of women, or 5.8 million women, across the country will receive a bigger tax cut under this government's plan compared to the previous. Ninety-seven per cent of childcare workers, disability workers and aged-care workers will be better off. Ninety-six per cent of nurses will be better off under Labor's plan compared to the coalition's and 98 per cent of teachers will be better off because of our plan that's being put in place with this bill.

That is a remarkable difference for the people that are at the core of the Australian workforce, from whom we've heard many stories and many anecdotes about the struggles that essential workers have had to make ends meet and about the fact that many schools, emergency services and childcare and disability providers can't find workers within their communities because those workers simply can't afford to live within those communities anymore due to the cost of living. Well, this government has heard that message, and we've acted. We've acted to put in place these tax cuts from 1 July.

This legislation will see, from 1 July, the tax bracket from $18,200 to $45,000, the 19 per cent rate, reduce to 16 per cent; the $45,000 to $135,000 bracket, the 32½ per cent tax rate, reduce to 30 per cent; the 37 per cent rate threshold will increase from $120,000 per annum to $135,000 per annum; and the 45 per cent rate threshold will increase from $180,000 to $190,000 per annum. We're also increasing the Medicare low-income threshold to provide more relief for those low-income Australians from the payment under the Medicare levy. The effect of this bill and of Labor's plan for Australians is predominantly to ease cost-of-living pressures and to provide that much-needed relief in people's pay packets so that they can make ends meet. We're returning bracket creep—and this is very important—and we're reducing the impact of inflation on Australians' incomes, and the effect that that has on the amount of tax they pay each year, by increasing those thresholds and reducing the rates of payment under those thresholds.

Most importantly, in an environment where the government's priority has been getting inflation, or the CPI, down, the advice of the treasury department is that Labor's proposal will not have a material effect on increasing inflation. That is crucially important. There is no point in providing Australian households with additional money if there is going to be a correlated increase in inflation that forces the Reserve Bank to leave interest rates higher for longer. Thankfully, the effect of these tax cuts through this legislation should not be inflationary and will not have a detrimental effect on the CPI into the future, and we are seeing that in the statistics that are produced by the Australian Bureau of Statistics around the CPI. We welcome the recent reduction to 4.1 per cent of the rate of CPI on an annual basis. We know we're not out of the woods and that there is more work to do, but, thanks to this government's economic plan and economic policies, the cost of living and inflation is headed in the right direction—and that is down. That's welcome relief for Australians.

This comes with the other cost-of-living measures that have been implemented by the Albanese government to assist Australians during this difficult period of high inflation in the wake of the COVID pandemic, the supply chain crunches that we've seen throughout the country and the war in Ukraine. They've all had an effect on markets and inflation throughout the world, and Australia has not been immune. Almost two years ago now, when the Albanese government was elected, we recalled parliament during the Christmas recess and got on with the process of providing cost-of-living relief. We put caps on electricity prices. Importantly, in the recent CPI data, the Australian Bureau of Statistics recognised that the cost of household electricity would have been much greater had the government's price caps not been in place. That was a pure example from the independent Australian Bureau of Statistics of the government's policy of price caps working to make sure that cost increases were reduced.

We've introduced energy rebates, means tested for low- to middle-income households, to ensure that they can continue to keep the lights on and heat themselves during the winter, during the difficult period when wholesale electricity prices were increasing. Thanks to those policies, those wholesale prices are once again coming down and will start to flow into retail prices towards the middle of this year.

We've provided other relief through the healthcare system. Our cheaper medicines policy ensured that the co-payment was reduced, and 60-day dispensing ensured that people could receive a two-month supply of certain medications without having to go back to the GP. On many occasions people were having to pay a co-payment to receive their prescription. We've invested massively in Medicare, once again, to increase the rates of bulk-billing for seniors and juniors throughout the country by tripling the bulk-billing incentive, and it's paying dividends. In the most recent data published by the department of health, the rates of bulk-billing in Australia have increased by two per cent, including in the electorate of Kingsford Smith. Our cheaper childcare policy, which increases the childcare subsidy, and other policies associated with cost-of-living relief have begun to pay dividends. They are reducing the effect on household budgets and providing much-needed cost-of-living relief. But we know that there is more work to do, that we are not out of the woods.

When it comes to this plan, we know that people in Kingsford Smith will be much better off. A nurse working at the Prince of Wales Hospital will be much better off under Labor's plan. A shop assistant working at Mascot will be much better off under Labor's plan. A teacher working at a public school in Kensington will be much better off under Labor's plan. Those essential workers will get bigger tax cuts because of Labor's plan.

It's not the only reform that we're undertaking in the area of tax. This government has probably done more tax reform than any first-term government since the 1980s and the Hawke government. It's a substantial record of work that we've undertaken. Those other reforms include reform of the petroleum resource rent tax. The government wants to make sure that more Australians get the benefit of a fair return on the exploitation of resources that are owned by all Australians. The reforms to the PRRT introduce a fairer and more efficient system by introducing a cap on PRRT deductions that corporations can claim and strengthening the anti-tax-avoidance measures for the offshore resources sector.

We are establishing a scheme that ensures dignity in retirement is restored to the superannuation system in this country. By reducing the tax concessions for super funds with very large balances, we're making sure the system is fairer. From 1 July 2025, a 30 per cent concessional tax rate will be applied to future earnings on balances above $3 million. It affects a very small proportion of the population but ensures that superannuation meets the purpose for which it was established: to provide dignity in retirement for Australian workers, not to become a vehicle for wealth transfer and the avoidance of taxation on income.

There is also our multinational tax integrity package. There is nothing more frustrating for Australian workers than seeing in their payslip almost half of their hard-earned disappear to the ATO every week or fortnight and, at the same time, seeing multinational corporations in Australia, operating on these shores, use tricky accounting means to transfer income to other jurisdictions and avoid paying any tax here in Australia. There is nothing more frustrating for Australian workers than seeing those large multinational corporations transfer profits overseas and avoid tax here in Australia. The government have listened to that frustration and we have acted by changing the thin capitalisation rules; denying deductions for payments made to related parties in relation to intangible assets; introducing reporting requirements so Australians have a right to know how much multinational corporations operating in Australia pay in tax on our shores; and introducing greater integrity and transparency to our taxation system, in the process providing a much fairer system that Australians can have confidence in.

This government is undertaking substantial tax reform to ensure that our tax system is fairer and more efficient and, most importantly, encourages aspiration. The best way to encourage aspiration is to ensure that those hardworking Australians on low-to-middle incomes, who hope to earn bigger incomes into the future, to educate themselves and to climb that scale and climb the ladder in their workplace, get the fair tax cuts they deserve, rather than the minuscule tax cuts they would have received under the previous government's plan. That is what Labor's tax plan does. It provides tax cuts for all Australians that are much fairer and ensures that Australians get the much-needed relief they need to deal with cost-of-living pressures.

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