Assistant Treasurer, Minister Assisting for Financial Services & Superannuation and Minister for Competition Policy & Consumer Affairs
5 March 2012 - 18 September 2013
8 April 2012
SUBJECTS: Tax cuts, carbon price
I'm here today to talk about the Gillard Government's tax cuts and increases in pensions and family payments that will start to flow to working families and pensioners right around this country in the coming weeks.
These tax cuts in particular will represent the latest instalment in our Government's efforts to cut taxes, to put more money in the pockets of working Australians and to ensure that as we all face tight household budgets that we have the ability to meet those expenses that all households have to meet.
Since we came to office we've undertaken a number of important policies that are helping families meet the cost of living, whether it be by introducing the education tax refund, giving parents more money to invest in their children's education; whether it be by providing an increase to the childcare tax rebate from 30 per cent to 50 per cent, giving parents some extra support to keep their children in childcare; or by introducing an historic increase in the aged pension, providing pensioners with more support and relief than they've ever had before.
When it comes to tax cuts it's important to understand that the overall levels of taxation as a proportion of the economy are lower today than they were when our Government came into office. In fact, as of 1 July this year, a person who's earning $50,000 will be having $40 a week less in tax that they are paying as a result of the tax cuts that our Government has introduced. So, someone earning $50,000 will be paying $40 a week less in tax from 1 July than they were when our Government came to office.
Most importantly, not only are we delivering tax cuts but we are delivering major reforms to our taxation system. This will benefit in particular part-time workers, working mums, retirees, who will not only be paying less tax, but they will join the ranks of 1 million Australians who will not even have to submit a tax return. This is tax reform that is delivering tax relief, putting more money into the pockets of working Australians and retirees but at the same time lifting and alleviating the burden for 1 million Australians of even having to put in a tax return.
How far do these tax cuts actually stretch? The Coalition is saying to voters don't get too excited, it's not going to go very far.
Well I think you need to look at not only this latest round of tax cuts but you need to look at these tax cuts as a part of the overall picture of our Government having cut taxes over the last several years. So that means that for a person on an income of $50,000, that they will now be paying, from 1 July, $40 a week less in tax than they were when our Government came to power. Overall, we've delivered tax cuts in the order of $47 billion. That's $47 billion worth of tax cuts when it comes to personal income tax. So that means that Australians all around the country, when they go and look at their pay packets are paying less tax as a result of the tax reform that we've introduced, not just with this latest round of tax cuts, but the tax cuts that have been put in place since we came to office.
How is the Government able to manage such tax cuts given the economy, I suppose there are struggles ahead and tough times that many people are facing?
Look it's important that at a time when we are making a change of the sort that we have foreshadowed in trying to move the country toward a clean energy future that we are ensuring that Australians, whether they be working families or seniors, have the support and assistance they need to continue to meet the cost of living pressures on all budgets. It's important we do that. We want to cut taxes. We are committed to cutting taxes and that's why we've been cutting taxes since we came into office.
If you look at the percentage of tax being paid by Australians as a proportion of the Australian economy, it's now at lower levels than it was when our Government came into office. That's important because we need to demonstrate that when people work hard there should be reward for effort. That's why we cut taxes and want to put more money in the pockets of working Australians. But in doing that, we need to acknowledge that we are facing some challenging budgetary circumstances and it's in the face of those circumstances that we'll be handing down the Budget in the coming weeks.
The carbon tax hasn't been the most popular of legislation being put forward. Are these tax cuts just a way of sweetening the deal for voters?
When it comes to the cost of living, as a country if we continue to depend on fossil fuels as we are today into the future, that inevitably will push up everyone's cost of living, so it's important that we take action and that's why we've done what we have done. When it comes to taking action and building a clean energy future we also recognise that it's important to do that in a fair way. That's why we want to build a clean energy future but we want to make sure that all Australians, and in particular those hard-working Australians that will get a tax cut, those pensioners that will get more money in their pocket through an increase in the pension and those parents that will receive an increase in their family payments, have the support that they need so that we can not only build a clean energy future but do it in a way that respects the challenges that all families are facing when it comes to their household budgets.
As Jess said, the carbon tax obviously quite unpopular with the voting public, do you think that it might cost the Gillard Government the next election?
Look I'll leave that sort of commentary for others. What we are determined to do is to cut taxes for working people. That's why we've delivered $47 billion worth of tax cuts for personal income tax since we came to office. We want to relieve the pressures that people are facing in their household budgets, that's why we're increasing family payments, building on top of introducing the Education Tax Refund or increasing the amount that people can claim when it comes to Child Care Tax Rebates. We want to make sure that people have the support that Governments can provide to assist them so that they can meet the costs and expenses of the household budget.
On the carbon price, can I make the point that it's estimated that the impact of the carbon price will be less than one per cent on prices. That means that a very small impact will be felt on prices as a result of these measures but these are important measures and we want to make sure that as we embark upon the road to a clean energy future that we do that by providing the necessary support that working Australians, families and retirees need.
You must acknowledge that it's a hard road ahead to continue to sell this carbon tax, even once it does come into effect for people who do live in areas like St Marys where they are doing it tough and this might just not be enough?
Politics was never meant to be easy but what is important is that we have political leaders and Governments that rise to the challenge of tackling the hard decisions that have to be made. But making hard decisions has impacts and we want to make sure that those impacts are minimise for people. Nine out of every 10 households will benefit from assistance under the various measures that we're introducing over the coming weeks. It's important that we take the country forward, we make the decision that is needed to move us to a clean energy future but we do that it a way that ensures that working families, seniors and those doing it tough have the assistance that they need in order to continue to balance their household budget.