The Coalition will vote for the changes to income tax rates.
Our intention is to continue to cut taxes even further if we were to win government.
Labor are patting themselves on the back as doing the right thing but if that’s the case why didn’t they cut taxes two years ago upon winning office!
The extra $800 a year they are letting taxpayers keep does not make up for the $8,000 increase in cost of living under their watch.
Chamber: Senate on 6/02/2024
Item: QUESTIONS WITHOUT NOTICE: TAKE NOTE OF ANSWERS – Answers to Questions
Senator RENNICK (Queensland) (15:27): After almost two years in government, the Labor Party has finally decided to do something about the cost of living, and what a pathetic attempt it is. It is an $800 increase from what was originally legislated for middle-income Australia, but here is the rub. While the Labor Party procrastinated for the first two years, indulging in identity politics with the Voice, wasting $450 million there, the cost of living per person—not per household—rose by $8,000. They are not even giving back bracket creep. The legislative changes we made came in in 2019. Labor has had two years to do something about this as a result of their inability to control inflation. That $800 a year, which works out to about $15 to $16 a week, won’t cover the cost of energy. It won’t cover the interest rate rises. Today the RBA governor has come out and said that she can’t guarantee that there won’t be any more interest rate rises. Why is that? It is because she knows that she can’t trust the Albanese Labor government to control the cost of living.
Ultimately, at the end of the day, this is Hobson’s choice. This is basically trying to deflect from the fact that the Labor Party can’t control the cost of living. If they were really serious about dealing with the cost of living, they would have given more generous tax cuts. They would have increased the tax cuts from when we legislated them back in 2019, but they have divided and conquered, which is the only thing they know how to do. These guys love to play the politics of envy. If they are not trying to divide the country between black people and white people, they’re trying to divide the country between rich people and poor people. Let me tell you something. Those tax cuts may kick in on 1 July this year, but, because that 37 per cent tax bracket is still in place, that means that everyone going forward on $135,000—so, if you’re below that level, once you get your pay rise—and let’s not forget that inflation is running at five per cent, so give this a couple more years, and people on $120,000 will be going into the 37 per cent tax bracket. And these people are nurses and teachers, by the way. Up in Queensland, we’ve actually got a police shortage, so we’ve got a lot of police officers working overtime. These guys are going to be paying 37c in the dollar. And, of course, what will that do? It will add to inflation. Why? Because people won’t want to work extra hours. This is some of the rubbish that’s spouted by Treasury—that somehow a tax cut’s going to cause inflation. Who do they think supplies the goods and services in this country? It’s the workers, so let’s cut taxes further.
I will pick up on Senator Walsh’s comments that we don’t know what to do. I know exactly what to do, Senator Walsh. I’ve got a master’s in tax. I’ve got a master’s in finance as well. That’s the whole reason I ran for politics: to reform the tax act. I well remember when I was a Senate candidate that I said we should raise the withholding taxes on profits offshore. I was criticised by none other than the current Treasurer. Apparently, increasing the rate of tax on withholding taxes on profits sent offshore by foreign multinational companies is a bad thing. I’ve been recommending that for years.
I’ve been recommending the abolition of section 855, which gives foreigners a capital gains tax break on non-portfolio interests. I recommend the abolition of section 880 of the income tax act that says that foreign wealth funds shouldn’t be able to pay tax. I recommended the abolition of section 25.90 that says that, when Australian companies invest offshore, they shouldn’t be able to get a tax deduction on the interest they pay on their investments offshore. I’ve come out and said that Aboriginal land councils should start paying tax. I’ve come out and said that universities should start paying tax on foreign students. It’s about time everyone in this country started paying their way. The last and the best one is the old 28F for the public offer test in the 1936 act, which says foreign banks don’t have to pay tax on interest paid offshore. So, if you want tax reform, bring it on.
