PRIME MINISTER:
Today is a great day for hard-working Australian families. Because of our comprehensive personal income tax reform, they will be able to keep more of the money they earn.
This is the most comprehensive reform of personal income tax in a generation.
It means that from next year, middle income Australian families with two parents, each working in middle income jobs, will have over $1,000 returned in a tax offset. As the whole plan rolls out to 2024/25, we will get to the point where 94 per cent of Australians will not have to pay more than 32.5 cents on every extra dollar they earn.
The plan is thoroughly fair. In fact, taxpayers in the 45 cent tax bracket, which by 2024/25 will begin at $200,000, they’ll be paying a larger share of personal income tax receipts than they are today. So those on the highest incomes will continue to pay most of the tax. It is fair.
It rewards and encourages enterprise. It encourages and enables aspiration. That is what this is all about. That is what is delivering a stronger economy.
Our economic plan for a stronger economy depends on the hard work of Australians.
It depends on them having the courage and the incentive and the initiative to have a go and get ahead. To aspire, to earn more, to aspire to realise their dreams. We do not deny that, we are not mystified by it. We want to enable it and this tax reform plan does just that. It is fair, it’s comprehensive, it is well thought out, it is a long-term plan.
It’s consistent with higher government revenues, to enable us to guarantee essential services. It’s consistent with enabling us to bring the Budget back into balance a year early, so we live within our means. It enables us to do all the things government needs to do to support Australians, whether it’s in health or education or national security or infrastructure. But above all, it says to Australian families, “We believe in you. We believe in your aspirations. We want you to realise your dreams. We want you to keep more of the money you have earned. It’s not the Government's. It is yours. We want you to be able to realise your dreams and get ahead. This personal income tax plan is for you.”
THE HON. SCOTT MORRISON MP, TREASURER:
Thanks, Prime Minister. Today, Australians who wanted to get ahead had a good win. They had a big win today, courtesy of the plan that has passed through the Parliament, the plan that was set out in this year's Budget, part of a bigger plan for a stronger economy that guarantees the essentials that Australians rely on. That delivers the jobs, that keeps Australians safe, that ensures that the Government can live within its means. It’s also a plan that gives Australians certainty about what the tax system looks like out into the future. So as they earn more, as they get more opportunities, as they may do extra shifts or simply - even if it’s inflation lifting their wages - they will not be penalised for that. So it gives those families certainty.
I want to thank particularly the Prime Minister and the Finance Minister and the whole team that has been able to shepherd that through the Parliament. I appreciate the support of the Parliament, both those who supported it in the House of Representatives the second time and those who supported it in the Senate, to ensure that this could be made possible. I should note though that the Labor Party today voted to try and cut that plan, which is worth more than $140 billion in tax relief to Australians, in half.
What the Labor Party said to those Australians is if they’re elected at the next election, the personal income tax burden on this country, will be $70 billion higher over the next 10 years. That doesn't include the increase in the top marginal rate, which they say they’ll take off after a few years. Yeah, sure they will.
There will be a higher personal income tax burden on Australians under Labor.
It will be tax on under Labor. It will be tax off continued under the Turnbull government.
SENATOR THE HON MATHIAS CORMANN, MINISTER FOR FINANCE:
Today, working families across Australia are very grateful to their Senate for having supported much-needed income tax relief for them. Australian working families are particularly grateful to those crossbench Senators who have decided to support them having the best possible opportunity to get ahead by being able to keep more of their own money, more of the money that they have earned. The plan that the Senate voted for today is a long-term plan to provide cost of living pressure relief, in the first instance for low and middle-income earners, but it is also a plan to ensure that all working Australians have the right incentive, the right encouragement, the right reward for effort. Because we as a Government, we want all Australians today and into the future to have the best possible opportunity to get ahead. On a personal note, I am very grateful to all those Senators who have decided to support the Government's plan in the Senate today. This was all for working families across Australia. This was all about making sure that families around Australia have the best possible opportunity to get ahead.
PRIME MINISTER:
Thank you Mathias, thank you for your leadership in the Senate and thanks the all of the Senators who voted for this vitally important reform today.
JOURNALIST:
Prime Minister, one down, one to go. Company tax cuts are still unresolved and speaking to the Senators, less assured of passage at this stage. Is it the Government's intention to put that to a vote in the Senate next week, regardless of whether it has the numbers or not?
PRIME MINISTER:
We continue to make the case for lower taxes because it is the foundation for a stronger economy. We want Australian families to have the opportunity to have more jobs, higher wages, see more investment, see more businesses started and growing. We are committed to a competitive tax system for Australia.
MINISTER FOR FINANCE:
If I might add to that as well. There is always a lot of speculation, in particular among the press gallery on whether or not something will or will not get up. There was a lot of speculation in relation to personal income tax cuts. Let me just make this very important point; working families across Australia need their Senate to vote for our proposal to reduce business tax rates for all businesses in Australia, in full. That is because any decision to keep business taxes high here in Australia, while countries around the world are lowering theirs, is a decision to help businesses overseas take investment and jobs away from Australia. Nine out of ten working Australians work for a private sector business. If we make a decision to put them at an ongoing competitive disadvantage by imposing higher taxes here than are faced by their competitors in other parts of the world, we are putting working Australians here in Australia at a competitive disadvantage. So of course we will continue to persist and the press gallery will continue to speculate as to what may or may not happen. But we will continue to do the job we were elected to do, that is to persuade a majority of Members of Parliament both in the House of Representatives and in the Senate of the merit of our plan for a stronger economy and more jobs.
JOURNALIST:
On that, it’s hard to be certain about these things, but I think Pauline Hanson just indicated that she might be open to passing the company tax cuts if you did more against multinational tax avoidance. Would you be willing to do more on tax avoidance by big companies to get the company tax through with her support?
PRIME MINISTER:
We’re often offered the opportunity to negotiate with other members of the Senate here in the courtyard. We haven't done so in the past and we are not going to start now.
JOURNALIST:
Prime Minister everything that was on the table last week, perhaps [inaudible] everything that was on the table with Senator Hanson in the negotiations, are they still on the table? I know that you have given some in recent hours to apprentices and a few other bits and pieces.
MINISTER FOR FINANCE:
Well, I am not sure what you know, but what the Prime Minister just said is precisely right and that is that for very good reason we don’t conduct discussions with crossbench Senators through the media. We will not start today. Let me just say, in relation to the issue that you have just raised, of course the Government is always open to engage with all Members and Senators who have good ideas, which they want to put to the Government. The Government is always prepared to consider good ideas that are put to the Government by any Member and Senator who is prepared to engage with us. It is a matter of public record that Senator Hanson has put forward a proposal to the Government that we should consider a trial that would provide better, more effective support to apprentices in particular, across regional Australia. The Government is very happy to consider that.
JOURNALIST:
So what other good ideas have you accepted of Senator Hanson’s?
MINISTER FOR FINANCE:
That is one that Senator Hanson herself has put on the public record as one that she has put to the Government. I am happy to confirm that the Government is prepared to consider the idea she has put forward.
JOURNALIST:
So are there others that aren’t on the public record? What about the PRRT? [inaudible] public record?
TREASURER:
I can comment on the PRRT. The Government, obviously, has been working around that issue with an inquiry and has been working through that for a long period of time. You’re aware of the changes we have already made into things like stapled structures and we’ve been going through the process of multinational tax avoidance reform now for many years. There is no jurisdiction in the world that has taken a stronger position on multinational tax avoidance than the Turnbull Government. I mean there is some $7 billion of revenue that has now been caught up in Australia's tax net as a result of the reforms that we have put in place.
In a few weeks time we will be releasing a further discussion paper as I outlined in the Budget, in the whole area of digital taxation and the new economy. That will be there for consultation and discussion. But when it comes to multinational tax, the Turnbull Government is leading the way.
JOURNALIST:
Treasurer, why do people earning above $200,000 deserve a tax cut rather than devoting those billions of dollars to better essential services?
TREASURER:
Well, let me just make this point; at the end of the tax plan, those on the highest rate of tax will account for 36 per cent of the personal income tax that comes into the Treasury coffers. That is higher than what that is today. It’s around 30 per cent.
So under these changes, those on higher incomes will actually still be facing a higher share of the tax burden in this country. That’s why it maintains its progressivity. The multiple of what average wages are will actually be lower for those on the top tax bracket at the end of this plan, than it is today. So it is a fair tax plan.
But let's not forget, those, as they earn more in the system, take on a bigger share of the tax burden.
The question is, “How much tax is too much?” That’s the question to the Labor Party. It’s clear that under the Labor Party too much tax is never enough.
JOURNALIST:
Prime Minister, is there any reason why the National Energy Guarantee should have to come back before the Coalition Party Room before Josh Frydenberg takes it to the COAG meeting in August?
PRIME MINISTER:
Well, the National Energy, any legislation that is required relating to the National Energy Guarantee will of course come to the Party Room in the usual way. We have a very active discussion, constantly, about energy matters. It’s a matter of very keen interest. Australians and indeed Members of Parliament, members of the Coalition, are rightly concerned by the way in which the combination of left-wing ideology and idiocy has seen power prices go up over recent years.
Now, thanks to our policies, we are turning the corner.
We’re seeing, we have seen over the last year, the cost of wholesale generation go down by 30 per cent, thanks to the actions I took, fairly strong ones for a Liberal Prime Minister, relating to gas exports. We have seen the wholesale price of gas come down over the last 18 months by around 50 per cent. Now, we have seen retail prices starting to come down and there’s more to go, as the Energy Security Board has predicted.
So our focus is on delivering more affordable and more reliable power. Let’s just be quite clear; the next election is going to be a very clear choice.
You will have the Labor Party wanting higher taxes. We will be standing for lower taxes.
Labor will be standing for fewer jobs. We will be standing for more jobs.
We will be standing for a stronger economy, Labor will be standing for a weaker economy.
And you know what that means? A weaker economy under Labor means you cannot afford to pay for the infrastructure, the hospitals, the schools, the defence capability. All of those things Australians expect government to deliver need a strong economy to provide the revenues we need.
And our plan for a stronger economy is working. Record jobs growth last year, highest in our nation’s history. Three point one per cent GDP growth. And now we have been able to achieve through the Parliament the biggest reform of personal income tax in a generation, so that 94 per cent of Australians will not pay more than 32.5 cents in the dollar as a marginal tax rate. You know what that’s saying to Australians? It’s saying, “We believe in you. We are backing you. We are believing in and backing your aspiration to get ahead.”
That is the values. Those are the values we stand for. We are inspired by the aspiration of hard-working Australians.
The Labor Party of today, as the Australian Financial Review said very well in the editorial today, the modern Labor Party is mystified by aspiration. It denies it. It holds the aspirations and the dreams of hard-working Australians in contempt.
And that is why they have voted against our personal income tax reform. And on that note, Question Time calls. You are not the only interrogators we face in this building.
Thank you very much.
[ENDS]