Soaring cost of living, massive mortgage, rent hikes and inflation meant Australian households suffering the fastest income collapse in the world last year. Labor’s tax changes will benefit some Australians, a measly $15 a week to make up for this.
Labor are out of touch.
This legislation will barely make a dent in cost of living and the government admits as much by claiming these tax cuts will make no measurable difference to the amount of money Australians have in their pocket to spend. Meanwhile, they are silent on their secret money maker – bracket creep. As wages increase, Australians move into higher tax brackets while only being able to buy the same things due to inflation, yet they’ll be paying more tax. This little trick means government has collected an extra $44 billion in taxes from Australians, thanks to inflation over the last decade. Because it hasn’t been fixed, Australians will be paying an extra $38 billion in the next four years alone.
I moved an Amendment that would change the tax rates to keep up with inflation and eliminate bracket creep. If Liberal and Labor are genuine about real tax cuts, they’ll vote for this Amendment and let Australians keep billions of dollars.
One Nation has been talking about the Liberal-Labor government’s secret tax loophole of bracket creep ever since this debate on the Stage 3 Tax Cuts started and we are doing something about it with our proposed amendment to this bill. We need proper tax reform urgently.
Transcript
I rise to speak to the Treasury Laws Amendment (Cost of Living Tax Cuts) Bill 2024. Like most of the words Australians hear out of Liberal and Labor mouths, the title of this bill is a false promise. It’s a lie. It’s almost a sick joke from the Labor government to even put the words ‘cost of living’ in this bill. Let’s talk about the cost of living. Compared to what was already legislated, these tax changes are $15 a week different for the average Australian. For many that’s significant because of Labor’s huge cost-of-living increases. In four years, Australians have been slapped with some of the worst declines in economic circumstances in decades internationally. Australian households suffered the fastest income collapse in the world last financial year, under Labor. Inflation has sent Australian wages—real wages—back to a point not seen since 2009. That means that Australian wages have gone nowhere in real terms for 15 years. The average mortgage has gone up $1,210 a month—a month! Australia’s average rent has hit a record $601 a week, up from the August 2022 median of $437 an astounding 37 per cent. Fifty dollars doesn’t get you far at the supermarket anymore. Petrol is now considered a bargain at $1.80. How far we’ve fallen!
As billions in government coupons and rebates expire, power bills will rise even further. Despite Labor’s promises to cut electricity bills by $275, Australians have never paid more to keep the lights on. We’ve never paid more. We have the highest electricity prices in the world. We used to have the lowest—until Labor and the Greens and teals came along.
What is the government’s solution to these skyrocketing costs of living? To fix your problems with groceries, your mortgage or rent, power bills and more, the Albanese government is going to give some Australians—some Australians—$15 a week and expect you to bow down and thank them for it.
Like the governments before it, this Labor government is all spin and no substance. In fact, it’s all theft. They will put a fluffy title on a bill, like they have here: ‘cost of living tax cuts’. Oh, really! In reality, this won’t make a dent in the cost of living most Australians are suffering through. The costs Labor is imposing are far, far higher than the minor changes they’ve made. This bill is a perfect example of how out of touch this Albanese Labor government really is. Their priorities are in the wrong place. They’re more interested in looking good than actually doing good.
In his speech about this bill, Treasurer Jim Chalmers just couldn’t help himself. He needed to invoke identity politics and explain that these tax cuts were so much better for women. I checked the Taxation Office website, just to make sure nothing had changed, and it hadn’t. Someone might want to let Treasurer Chalmers knows that Australia doesn’t charge different tax rates based on what’s between our legs. There’s no table that says, ‘If you earn $60,000, as a man you’ll pay, say, 32.5c per dollar, and, if you’re a woman, you’ll pay 35 cents.’ That’s probably lucky, because Labor can’t even answer the question: ‘What is a woman?’ If the Treasurer can’t make a speech about tax without invoking gender political correctness, you have to wonder what hope they’ve got. What hope have we got? Here’s a tip for Labor: regardless of what Australians have between our legs, life is tough right now; the economy sucks; and $15 a week will barely make a dent in the extra costs you have imposed in just 18 months.
Now, I’ll never oppose Australians getting a tax cut. Yet calling these tax changes ‘cost-of-living relief’ is like claiming you’ve fixed a raging bushfire after throwing cup of water on it.
These tax changes won’t do anything while government policies make Australia’s cost of living even worse—far, far worse. There’s energy. They’re killing agriculture. There’s immigration. They’re hiding per capita recessions. There are house prices and rents. The government response to COVID created the inflation problem that has wrecked Australian households. And Labor was all the way with Prime Minister Morrison.
The government’s net zero policies are increasing power prices, making it harder for households to keep the lights on and businesses to keep their doors open. That’s a fact. Only this week, the government is discussing putting an extra four per cent tax on clothes, to comply with United Nations/World Economic Forum policies—four per cent on clothes, in addition to the 10 per cent GST on clothes. The government will be putting an emissions tax on vehicles, forcing Australians’ favourite utes off the road and making any other cars far more expensive. That’s from a Labor government. All of the pressures facing Australian households are a result of government policies, and Labor’s response is a measly $15 a week.
The Liberals do not get a free pass on this. The only reason we’re in this situation is because of the Liberal Party’s gutlessness in parliament. Many will notice that the original tax changes were called ‘the third stage’. All three stages were announced by the Liberal coalition government in 2018. Why, then, was stage 3 left until 1 July 2024 to come into effect? I’ll tell you why: the truth is the Liberals wanted to leave stage 3 as a trap for Labor, who have always been opposed to them. If the Liberals were genuine about stage 3, why didn’t the changes come into effect five years ago? That didn’t happen because the Liberals wanted to play cynical political games and trap Labor. Neither Liberal nor Labor are interested in genuine tax reform; they’d rather play games with it to get a headline—play games with people’s livelihoods, lives and futures.
The crown of destroying Australia sits on the heads of both the Labor party and the Liberal party. They both have gutless policy on everything in our country, especially tax. They run away from the real issues facing Australians. The Treasurer and the government claim that these tax changes won’t add to inflation—that’s shooting themselves in the foot. If that’s true then the government is admitting these changes won’t do anything. They’re saying it won’t make enough of a difference to the amount of money Australians will have to spend to even be measured. Maybe the government is lying, and these changes will make inflation worse. That would be embarrassing to admit, given Treasurer Chalmers says our No. 1 priority should be ‘to finish the fight against inflation’. Labor appears to have put themselves between a rock and a hard place, a situation all of their own making. Australians have got used to this Labor government speaking out of both sides of their mouth—this tax bill is no different.
Now, I’ll never oppose tax cuts for Australians. These tax changes, however, are just fiddling around the edges. Instead, we need real tax reform. Real reform is in the amendment I have proposed on sheet 2342. This would index the income tax thresholds to inflation and eliminate bracket creep. This is genuine tax reform. Bracket creep is the government’s dirty little secret. Inflation means Labor will quietly pocket tens of billions of dollars in extra taxes by simply doing nothing. As wages increase with inflation, they go into higher tax brackets, you’re paying higher tax rates and no one says a thing. We are going to say something. We’ve been saying something about this ever since this debate started, and we will fix it by putting an amendment in there.
It’s a stealth tax. As wages increase, Australians move into higher tax brackets, while being able to buy only the same things due to inflation, yet they’ll be paying more tax, so they’ll have less money to spend on groceries effectively and less money to spend on disposable income. Bracket creep amounts to a secret tax that the government are keep collecting to pay for their pet projects of questionable benefit. If the Liberals and Labor want to increase taxes, they should put in a bill or take it to an election and be honest with Australians, rather than quietly rely on bracket creep to secretly plug their budget holes and ratchet up income tax receipts.
Bracket creep should’ve been fixed a decade ago. Analysis from the Parliamentary Budget Office shows that Australians have had to pay an extra $44 billion over the last decade because of bracket creep. Shh, don’t tell them! Because we didn’t take that action and fix this 10 years ago, over just the next four years bracket creep will mean Australians will pay more than $38 billion extra in taxes. You thought you were getting a tax cut. If the government gets inflation under control, fixing bracket creep won’t cost the budget anything. Australians don’t deserve to pay for inflation twice because of government mistakes, and the budget shouldn’t benefit from out-of-control inflation. Here’s how you’re paying twice: firstly, inflation because of an out-of-control government—higher prices; secondly, the higher wages that come with inflation put you into a higher tax bracket—bracket creep, higher taxes. You have less real money overall. Now, I note that the Liberals have made many comments about the scourge of bracket creep. This is your opportunity to fix it once and for all, and I urge all senators to stop the taxation increases-by-stealth and index the tax thresholds—the brackets.
If Labor need any suggestions on areas of spending to fix it so they don’t have to keep secretly stealing more money from Australians, they can consult One Nation’s extensive work at Senate estimates for a few tips. There are lots of tips in there. We exposed so much: the flawed $65 billion Hunter frigate program they fiddled with and didn’t cancel; the NDIS being on track to cost $100 billion every year; and up to $8 billion a year in Medicare fraud. They are all some good places to start.
We support this bill. It’s being dishonestly represented by Labor as a tax cut; it’s a tax fiddle. We can change that by passing my amendment to remove bracket creep. As a servant to the people of Queensland and Australia, I recommend that, instead of fiddling with the tax system, we fix the tax system. Reform the tax system for the benefit of all Australians, all families, our economy and our grandchildren’s economic future and security.
I will just make some comments about tax reform, in connection with this bill. The tax system is complex, wastes enormous resources and is destroying economic productivity. Tax is essentially necessary because it’s a cost of government. It has become the cost of unaccountable waste over government needlessly micromanaging and controlling people’s lives and destroying economic initiative, hope and security. That’s what our tax system has become. It’s necessary as a cost of government, but it has now gone overboard. The tax act is immense—thousands of pages, a feast for lawyers and accountants.
In a highly competitive international market, our resources are being wasted. Instead of our best and brightest accountants helping us to be more competitive in facing our international competitors, companies in Korea, Japan, China, America, Indonesia and Asia—instead of facing them and being more competitive by putting our best people to work, we’ve tied them up in the tax system trying to dodge tax because it’s so damn complex and so inefficient. Jim Killaly, the deputy commissioner who was responsible for international matters and large companies, who was second in charge at the Australian Taxation Office and in charge of large companies and international matters, said twice, in 1996 and 2010, that 90 per cent of Australia’s large companies are foreign owned and, since 1953, have paid little or no company tax due to the Liberals introducing legislation exempting foreign companies back in 1953.
The tax act enables companies to use tax tricks such as transfer pricing to eliminate book profits and tax being paid in Australia and take it all overseas. In 1987 the Hawke Labor government introduced a petroleum rent resource tax that effectively exempted the world’s largest tax evader, Chevron, from paying tax. They steal our gas and export it to other countries, and we don’t get much for it at all. The Liberal-Labor party, the uni-party, are working for their global corporate masters. Exempting corporations from paying their fair share of tax means the burden falls on us, the people. To the people in the gallery: you’re paying for these uni-party rorts.
Aussies are paying far too much tax already. Former Treasurer Joe Hockey said that typical Aussies work from January to June paying tax. Half of the year paying tax, effectively a 50 per cent tax rate—that’s what Joe Hockey said. And then we get to keep the rest from July to December. Industry figures calculate that almost 50 per cent of the price of a house is tax, meaning an effective tax rate of 100 per cent. Brisbane accountant Derek Smith said that 50 per cent of the price of a loaf of bread is tax, meaning the effective tax rate is 100 per cent. Seventy per cent of the price of fuel is tax—or it used to be; the price has gone up even higher now. Essentially, workers have to pay double and they’re getting ripped off. They pay income tax, and, with what’s left, they pay taxes on everything they buy. We need tax reform urgently.
