MONDAY, 1 JULY 2019
Subjects: Tax cuts, penalty rate cuts, the government’s heroic economic forecasts.
ANDREW LEIGH, SHADOW ASSISTANT MINISTER FOR TREASURY AND CHARITIES: My name is Andrew Leigh, the Shadow Assistant Minister for Treasury. Today's the day when many Australians were meant to be seeing more money in their pockets. Instead they're getting less. Scott Morrison promised that on the 1st of July his tax cut would begin to flow. He lied. Many Australians will not get the tax cut today they were promised by Scott Morrison, because he ineptly failed to get the legislation through Parliament when Labor offered bipartisan support. But instead today we’re going to see 700,000 Australians on penalty rates getting less money in their pockets. As a result of the Coalition's cuts to penalty rates, these 700,000 Australians will lose up to $2000 a year through lower penalty rates.
Australians on the 1st of July should be getting more money in their pockets and instead they're getting less. And this is a deep concern at the time in which we've got plenty of fragility in the Australian economy. We're seeing gold prices at record highs, bond prices at record lows - both indicators of a fragile economy. Today we had a survey out of 20 top economists and they were asked about their forecasts for household spending. Not one, not a single one of Australia's 20 top economists believe the government's 2.75 per cent forecast for household spending. That's a budget forecast which underpins the projections that the government has based its tax plan on.
Labor strongly supports stage one of the tax cuts. We believe that stage two should be brought forward to put more money in the pockets of Australians. Stage three should be deferred. Let's remember stage three doesn't take effect for five years. Almost a third of the benefits go to those earning over $180,000, who make up just 3 per cent of taxpayers, just 2 per cent of all Australian adults. At a time when the Australian economy is fragile, it's critical the government has the fiscal firepower to respond if the economy goes into a slump. These 20 top economists were asked about their forecasts for a recession in the next two years. The average forecast was a worrying 29 per cent. It's vital that the government is able to respond quickly if the economy turns sour. Labor has suggested that we have the ability to bring forward infrastructure spending.
It's vital also to recognise that if you lock in expensive tax cuts, that comes with an opportunity cost. It means you can't invest in schools and hospital, in roads and rail networks, that you can't raise Newstart. All of these things need to be taken into account in considering the stage three tax cuts. And that's why Labor has called for those stage three tax cuts to be deferred. They don't take effect during this term of Parliament. Whatever you believe about mandate theory, no government wins a mandate for two terms with one election. So let's defer those stage three tax cuts and let's focus on getting more money in the pockets of Australians.
It is an absolute travesty that on the 1st of July, Australians should have been seeing more money in their pockets and are in fact getting more money taken out of their pockets by the Morrison Government. Any questions? Thanks very much.
Authorised by Noah Carroll ALP Canberra.