Michael Ferguson (Bass, Liberal Party) Share this | Link to this | Hansard source

My question is to the Treasurer. Treasurer, how have the government’s tax and family payment reforms assisted low-income earners? Treasurer, are you aware of any other policies?

Peter Costello (Higgins, Liberal Party, Treasurer) Share this | Link to this | Hansard source

I thank the honourable member for Bass for his question. I think it is well known in Australia today that the government’s tax reforms have been of particular benefit to middle-income earners. When the government was elected, about 30 per cent of Australians had a marginal tax rate of 30c or less. Today, about 80 per cent of Australians have a marginal tax rate of 30c or less. Perhaps what is not so well known is that the government’s tax and family payments have also been of particular benefit to low-income earners. Let me give an example. A sole parent family with no additional income, compared to where it was in 1996, has increased its disposable income by 29.8 per cent in 2007-08 dollars. A sole parent family with two kids back in 1996, in constant dollars, would have been taking home a disposable income of $20,518 and today takes home $26,631. That is a sole parent family with two kids, with no additional income and totally reliant, therefore, on the pension and family payments. That has been of enormous benefit for low-income families.

I am asked whether there are any other alternatives to this. Labor has now announced that they are not going to have any more tax policies, and it is pretty easy to see why. Labor last had a tax policy in 2004, the ‘ease the squeeze’ tax policy, signed off by Mark Latham, Simon Crean and Wayne Swan, two of whom are still in this parliament—and two out of three ain’t bad when it comes to tax policies. What did Labor propose doing then with a sole parent family with two children and no additional income? As their own annual tables at the end of their tax policy show, Labor’s proposal was to make a sole parent family with two children $624 a year worse off. It was Labor policy to make a sole parent family worse off. Why was that? It was because Labor had an obsession with abolishing the family tax payment, the $600 per child per annum. When you took that $600 away, the poorest of families were worse off under Labor tax policy.

The member for Lilley does not like to hear it, but the decision to take away the $600 payment per child per family was his and his alone. As the Australian reported on 9 September 2004, Mr Swan said that it was ‘fool’s gold’. He said:

“It’s not real—it disappears.”

When it disappeared, it made you $600 worse off. That is what happened when it disappeared. When it appeared, it made you considerably better off—in fact, under this government, 29 per cent better off. No wonder the Labor Party does not want to come clean on its tax policy for the next election. Look what it tried to do in the last election campaign: make the poor worse off. The important thing in politics is policy. You can scoot by with your focus groups and your advertising agents for only so long. The people of Australia want to know about policy. They know that the policy of the Labor Party is not to make low-income earners better off but to make them worse off.