Mr FRYDENBERG (Kooyong—The Treasurer) (17:42): I move:

That this bill be now read a second time.

This Treasury Laws Amendment (Tax Relief So Working Australians Keep More Of Their Money) Bill 2019 lowers taxes for hardworking Australians. It puts more money in their pockets, it strengthens the economy, it rewards aspiration and it should be supported by this parliament.

Our tax plan was carefully developed, and it was detailed comprehensively in this year's budget before being put to the Australian people at the election just six weeks ago. The Australian people were presented with a clear choice between the coalition's $158 billion of tax cuts and Labor's $387 billion of higher taxes on retirees, renters, home owners, superannuants, family businesses and income earners. Faced with this choice the Australian people delivered their verdict loud and clear in favour of our tax cuts, comprehensively rejecting Labor's tax hikes. Values drove our policy—to reward effort and encourage aspiration—with Liberals and Nationals wanting to see Australians earn more and keep more of what they earn.

This bill delivers on that commitment: a further $158 billion of tax relief. Our tax cuts provide both short-term relief and long-term reform. Australians earning up to $126,000 a year will receive up to $1,080, with more than 10 million Australians better off. This means that a couple—say, a teacher and a tradie—each earning $60,000 a year will get $2,160 in their family wallet. This tax relief will boost household incomes and ultimately household consumption, which will be good for the economy.

In 2024-25, the government will reduce the 32.5 per cent tax rate to 30c. This will accompany the abolition of an entire tax bracket, the 37 per cent tax bracket, which we have already legislated. The longer term structural reform will mean hardworking Australians will face a single marginal rate of tax of 30c in the dollar on the taxable income they earn between $45,000 and $200,000. Somebody who moves up the income scale by getting a promotion, working more hours or taking a second job will under these reforms get protection from bracket creep. This will improve the incentives for working Australians and reward effort.

As a result of the government's plan, around 94 per cent of Australian taxpayers are projected to face a marginal tax rate of 30 per cent or less in 2024-25. This compares to just 16 per cent if stages 2 and 3 of our tax package didn't go through. Around 13.3 million taxpayers will pay permanently lower taxes by the time the government's plan is fully implemented. The government's personal income tax measures will increase aggregate household income by around $8 billion each year over the forward estimates period. This will help support consumption growth, and given that household consumption makes up around 60 per cent of the economy the government's plan will help support economic growth. Lower taxes will increase the financial return from work with higher take-home pay, helping to encourage workers to re-enter the workforce or work additional hours if they wish. By tackling bracket creep, it will support those workers who are hit with a higher marginal rate as their wages go up to compensate for inflation.

Our tax relief measures will keep taxes as a share of GDP within the 23.9 per cent cap, ensuring that we don't impose an increasing tax burden on hardworking Australians. Securing future tax cuts now will provide confidence to Australians that they will be rewarded for their hard work and it will help protect their future pay increases from bracket creep. The government is committed to delivering a tax system that rewards effort and aspiration; a tax system that promotes opportunity and drives investment and growth; a tax system that underpins a strong economy and opportunities for all Australians now and into the future; and a tax system where all individuals and businesses pay their fair share so that the government can guarantee the essential services Australians rely on.

The government plan will maintain a progressive tax system. It is projected that in 2024-25, around one-third of all personal income tax will be paid by the top five per cent of taxpayers, a slightly higher proportion than what they currently pay. Schedule 1 to the bill enhances the current low- and middle-income tax offset by increasing the base offset from $200 to $255 and the maximum benefit from $530 to $1,080 for the 2018-19, 2019-20, 2020-21 and 2021-22 income years. Schedule 1 of this bill also increases the amount of the low-income tax offset from $645 to $700 from 2022-23. Schedule 2 of the bill increases the top threshold of the 19 per cent tax bracket from $41,000 to $45,000 from 1 July 2022. It also reduces the 32½ per cent rate to 30 per cent from 1 July 2024.

The government's first legislative priority for the 46th Parliament is consideration of the government's tax plan we took to the election. I call on the parliament to respect the wishes of the Australian people so that tax relief can flow to Australians quickly. I say to the parliament: promptly pass this bill this week and pass it in full, because lower taxes are part of the government's plan for a stronger economy. I commend this bill to the House.

Leave granted for second reading debate to continue immediately.

Mr ALBANESE (Grayndler—Leader of the Opposition) (17:50): I rise to speak on the Treasury Laws Amendment (Tax Relief So Working Australians Keep More Of Their Money) Bill 2019. Just hours ago, the Reserve Bank of Australia cut the cash rate by 0.25 per cent. A month earlier, it cut the cash rate by 0.25 per cent. The cash rate is now one per cent. The inflation rate in this country is 1.3 per cent. We actually have negative interest rates. Not only is money free, it's actually better than free. That's how well this government is doing on the national economy. And do you know what the cash rate was at the height of the global financial crisis? It was three per cent. It's been cut to one-third of what it was at the peak of the greatest crisis in the global economy since the 1930s—on their watch. That's in spite of the fact that they have a number of advantages, including commodity prices and what's happened with iron ore in Brazil, in particular, lifting up the price of that commodity.

When interest rates were at three per cent those opposite declared it to be a national emergency. Well, if three per cent is a national emergency, then one per cent is a national crisis, an absolute crisis, on their watch. They are now in their third term and they have no-one else to blame but themselves. When the Reserve Bank made that statement today, they said:

Consumption growth has been subdued, weighed down by a protracted period of low income growth and declining housing prices.

What have they identified? We have low consumption growth. We have economic growth at around 1.8 per cent on an annual basis, which is well below trend. We have wages that are decreasing. We know that that's occurring in real terms. They are stagnating. The Reserve Bank has identified wage stagnation as a major issue in the economy. So, what's the solution? It is to decrease people's wages, as of yesterday. From yesterday, 700,000 Australians will lose their penalty rates: low- and middle-income earners who work in hospitality; people who are building cleaners; and people who work on weekends and late at night to put food on the table for their families, to put petrol in their cars, to pay their school fees and to pay their rates. They copped a cut as a result of this government's contempt—contempt!—for working Australians. So, don't come in here and speak about the rights of working Australians. The Reserve Bank has said that they, and monetary policy, can't do all the heavy lifting—once you hit a one per cent cash rate, there's not far to go. They have said that it is time for all arms of policy to be used together. We agree with the Reserve Bank.

At the moment we have a trifecta from this mob. On top of the pathetic growth figures, we have low wages, weak consumption and weak productivity. At the moment, in their third term there are no economic indicators of which they can be proud. What is Labor's response to that? Our response is to be economically responsible. It is to put the national economic interest before politics.

Those opposite are focused on what will happen in 2024-25. I say, the Reserve Bank of Australia says and every economist who knows anything about what is happening in our economy says: the time for action is right now, not in five years time. Now. That is what is required and that is what we are focused on. That's why, under Labor's proposals, put forward constructively in a spirit of cooperation, you will see more tax cuts sooner with the amendments that we will move tonight. And if the government vote against Labor's amendments, they'll be saying that they don't think all Australians are deserving of a tax cut this term.

Those opposite speak about mandate. Look at the Treasurer's speech tonight with its absurdly, frankly, titled bill, which the government should be embarrassed by—that sort of Orwellian behaviour that it engages in. But the fact is it should say 'some tax relief so some workers keep a bit of their money', because not every worker is going to get a tax cut this term in this proposal, far from it.

Those opposite speak about aspiration. Well guess what? The cuts stop at $126,000 for this term under the bill that's just been presented by the Treasurer. If you earn a dollar more than that, you don't get a dollar, not one. You get absolutely nothing. Because it's not actually adjusting the scales—it's through the offset—you will not actually get any flow through. The only people arguing the case for those hard-working Australians who have done well is those on this side of the House, who are putting forward a proposition that would see every single worker get a tax cut, not after the next election, not after the one after that, but right now.

To the arrogance of those opposite: yes, they succeeded on 18 May, but they didn't get elected for life. The truth is that if politics was like an Aussie Rules game and this was Carlton-Hawthorn, then Carlton would be ahead at this stage by 78 to 68. But the thing about politics, unlike Aussie Rules, is that it doesn't end. The siren goes but there's another quarter and, in another three years, there's another one. Guess what? Scoring two goals is pretty easy, so don't get too arrogant, those opposite, because what you are suggesting is that you are prepared to hold up tax cuts today because of something that might happen in 2025. Is that really your position? Because you're the only people who are speaking about holding up tax cuts for Australians.

We on this side of the House are talking about bigger tax cuts sooner. That's our position. We're not talking about holding anything up, and that's why we facilitated debate in this chamber right now. The fact is that the government do have a choice if our amendments are carried. The government can choose national economic policy and the national interest or they can choose politics. But good luck arguing that when people realise that what those opposite are really saying is they'll hold up tax cuts if our amendments are successful in the Senate. We're up for that debate, frankly. We're up for a debate on national economic policy, we are up for a debate about what's required in the economy and we're up for a debate about putting firmly and squarely on the shoulders of those opposite the responsibility they have as a third-term government to deal with the national economic issues which aren't just about tax and a fair tax system but about wage stagnation. The government has no wages policy beyond getting rid of penalty rates. That's about productivity growth. It has no policy for productivity beside cuts to education, more cuts to TAFE, other measures as well, and an infrastructure plan that is also way off in the never-never.

So the amendments that we'll be moving before this House tonight will do two things, essentially. Firstly, they mean we will support—and we did support this before the election—stage 1. That provides, for those who earn up to $126,000, up to $1,080 of benefit. We think that's a good thing, because people, particularly at the lower end of the scale, will spend the money. That creates economic activity and supports jobs.

On stage 2, the Treasurer say it's good in 2022. I ask the Treasurer this: if it's good in 2022, why isn't it good in 2019, right now? It's right now that it's required. Our proposal of bringing forward that change to the 37 per cent marginal rate from $90,000 to $120,000 would mean that, from $90,000, an increase would be more cash in the hand and, up to $120,000, people would receive $1,350. But, because it's a change to the marginal rate, it will be a flat increase beyond that. So, if you are on $150,000, you'd get that $1,350. If you are on $250,000, you'd get it as well—the same amount. A tax cut for every working Australian is what we are proposing here. The government really has to put forward a case of why, if it's good to do that in 2022, it's no good in 2019—because today's alarm bells from the Reserve Bank of Australia indicate that stimulus is required right now.

Second, in terms of economic activity—and this, in part, would deal with some of the productivity growth—would be bringing forward the government's infrastructure investment plan. We're not arguing that the government should see sense and fund Cross River Rail in Brisbane, which is underway, or that Melbourne Metro should be fast-tracked for the economy. We are prepared to not even argue that case, because we know they don't like public transport. But we will say that the government could bring forward now their own proposals they have put forward in their plan for off in the future. They could bring forward now some of the work on the North-South road in Adelaide. They could bring forward the western rail line in Sydney through Badgerys Creek airport. They could bring forward stage 2 of the Mackay Ring Road. They could bring forward stage 5 of the Townsville Ring Road. They could bring forward some of the Perth METRONET projects. They could bring forward the Bridgewater Bridge in Tasmania. They could do that now, not off in the never-never.

I'll give you one example of the fraud that is this government's infrastructure package. During the election campaign, both sides of politics committed to upgrading the Linkfield Road. That's a road across the Bruce Highway. It runs between two marginal seats in which there was a bit of interest during the campaign—the seat of Dickson and the seat of Petrie in the northern suburbs of Queensland. I visited there and it is, indeed, a choke point. The government said that, yes, it would match the commitment that we made many months ago—about a year ago, indeed—to upgrade that particular project. But when the budget came down there were Senate estimates afterwards and we got the timeline for the projects. If you thought the tax cuts for 2024-25 were bad and on the never-never, the Linkfield Road project funding commences in 2026-27. It doesn't finish or open then; they dig a hole in 2026-27! Do you think those people who got the direct mail letters from the member for Petrie and the member for Dickson said: 'Oh, it's great! Peter Dutton is going to dig a hole in 2026'? I reckon they thought he was going to do it this term. We are saying: do it this term. You committed to it, so bring it forward—that's what we're saying.

When the government talk about the infrastructure package, it is way off on the never-never. Indeed, the Reserve Bank have explicitly called for infrastructure investment to be brought forward. They did it last month. They did it this month. They've been doing it for some time. The government has these figures. Even in the Governor-General's speech today, the East West Link was spoken about. That isn't going to happen. The Victorian government says it isn't happening. It's in the contingency fund. There's not a dollar of actual investment against a year, but it made the GG's speech. I mean, for goodness sake, get real. Forget fantasy projects. There are projects that need real funds, with real workers earning real money and producing real productivity benefits, right now. I say bring forward stage 2. Bring forward the infrastructure investment.

Now I come to our other amendment, which is about stage 3, the 2024-25 proposal that's going to help the economy now because in five or six years time someone will get some benefit. That's their proposal. We know in this chamber that, through the House and through the Senate, they've already flattened the tax levels in 2018. That has already happened. The level of 32.5c, down from 41c, to $200,000 has already been done—it's legislated. What's actually before this chamber is decreasing the 32.5c rate to 30c. And that has a cost of $95 billion. It has an annual cost in its first year of $19 billion. Now, think about a household budget. If you said to someone: 'Mr and Mrs Smith of Kooyong, you're going to have to save. You're going to get $95 less in your budget every week,' do you think they'd go: 'Oh, okay. That's okay. That's just $95 less we have,' and that would be it? No, they wouldn't. They'd have to work out what they could no longer buy. They'd have to budget for it.

We've asked the government to provide information about two things. The first is the distributional impact—basically, who benefits. They won't provide the information. The member for Melbourne—I won't often say that he's got a point—had a point earlier, because there's no information being given by the government about the distributional impacts that are made. The second thing is that they have to say what the response is. What cuts will be required to health, to schools, to aged care, to child care and to regions? What will the impact be of ripping that much money out of the budget on an annual basis? What's the plan? What's the impact? Where's the modelling?

This is a very significant change being proposed by the government. It is more than half a decade off into the future, and they say, 'We've got to vote on it this week.' I say to them: that's all about politics, not about good, sound economic policy, because if we're reminded of anything that the Reserve Bank did today it's the uncertainty of the economic times in which we live. Since May 2018, they have made a decision to cut interest rates twice in under two months. Did the government go to an election saying, 'Vote for us and we'll get interest rates cut twice in under two months'? What's the impact? They like to talk about people on retirement incomes. I tell you what, sunshine, people who rely upon interest rates to be at a certain level in order to survive and to do well just lost a lot of money. They just had a cut in their incomes today as a result of that Reserve Bank decision.

What we're also concerned about is that what we're dealing with in this legislation is the 2014 budget but in stealth mode, silently going across and bombing the household budgets of Australians. That is what this potentially does: bomb the budgets of Australians like a stealth fighter. That's what they're doing here, silently, not talking about the impact. They won't give us the information. They just say, 'Just vote for it down the track because we've been elected for life'—apparently. According to those opposite, there won't be an election in 2021, 2022 or 2024. They are there forever, according to them!

Mr McCormack interjecting—

Mr ALBANESE: The Deputy Prime Minister supports this concept of abolishing democracy! That is consistent with their approach towards debate on these issues. But the truth is this: whether you face north or south in this chamber, those of us who were privileged enough to be sworn in to this chamber—facing this way or that way, and I have done both—have an enormous responsibility. We have a responsibility to those who we represent. We also have a responsibility greater than that. We have a responsibility not just to our electorates but to the national economic interest.

Those opposite have a nonsense debate about aspiration. I understand aspiration. I regard myself as someone who aspired to a lot in life compared to how I began life. Australia provides that opportunity. I stand here, as the leader of the Labor Party, as someone who was born in a council house to a single mum. This country provides that opportunity, but we shouldn't take it for granted and we shouldn't play politics by saying that we know what the economy will look like in 2024-25. That really would be a triumph of hope over economic experience and economic reality. We are better than that, and the parliament needs to be better than that. We cannot just leap into the unknown, which is what the government is asking us to do. That's why we are putting forward responsible amendments in two forms. We would ask for the support of the crossbench, and we want to negotiate with the government. We want to negotiate not by trying to impose our positions but by trying to impose some economic common sense on this debate. At the moment, there hasn't been any of that.

The government suggests that they went out there, with a pamphlet—just show it to me—and by direct mail, and said, 'If you vote for us in 2024-25, we will decrease the rate from 32.5 per cent to 30 per cent.' They didn't do that. What they did was say that Australians would get a tax cut on 1 July, and they have broken that promise. Parliament was due to come back. At that time, they knew—because of what happened with the writs—that that wouldn't occur.

We, on this side of the House, are going to put the national economic interest first. We are not going to play politics. One things I have said is that I don't want to be known as the Leader of the Opposition; I want to be known as the Labor leader. We are being constructive. We're not just saying no. We wouldn't even be having this debate unless we were prepared to facilitate the legislation. Our amendments won't be successful in this House, but we will vote in this House for the legislation so as to facilitate its discussion in the Senate on Thursday. We also will agree that the House and the Senate should stay here, this week, until it gets done. The government have asked for our cooperation on that. We are being cooperative with regard to the procedures. Notwithstanding that, I think the member for Melbourne had a legitimate complaint to put forward.

We have not been intransigent about this. We have changed our position, since the election, about stage 2. We are saying two things. Firstly, when the economy is flatlining like it is and when the Reserve Bank have gone to two interest rate cuts in two months and are saying that they can't continue to do all of the heavy lifting, the bringing forward of stage 2 is a sensible proposition, as is the bringing forward of infrastructure investment. That isn't dealt with in this legislation, but the government has the capacity to do that. Secondly, we are saying that it should be separated out. We can have it through, and we can stop talking in the Senate, really quickly.

If we get through stage 1 and stage 2, you can come back with stage 3 whenever you like. You have many years to do it. There is a bit of time! I'll give you that big tip. You haven't got much of an agenda, so you have to fill in the time with something! This is an idea that I'll put to you, which you wouldn't have heard of before: why don't the government filibuster? We saw them do it in the last term. They actually filibustered in this chamber quite remarkably in order to avoid votes in this chamber. But we are being constructive and economically responsible. You have the opportunity of having more tax cuts sooner under our proposals, and you should be voting for them.

Mr McCORMACK (Riverina—Deputy Prime Minister, Minister for Infrastructure, Transport and Regional Development and Leader of The Nationals) (18:15): There's a lot of applause for my arrival at the dispatch box, and I know they're all keen to hear my contribution on the Treasury Laws Amendment (Tax Relief So Working Australians Keep More Of Their Money) Bill 2019. What an appropriately named bill it is—how apt, how correct, how appropriate. Those opposite would do well to listen to these words:

The Labor Party has put itself in a perilous position by refusing to back the tax cuts. The coalition placed its tax package front and centre of the election campaign. The government has a mandate to deliver on it.

Who would have said that? Would it be somebody from this side of the House?

Mrs Marino: Maybe.

Mr McCORMACK: I hear the member for Forrest say, 'Maybe'. No. In fact, it was none other than Martin Ferguson, a former senior Labor minister.

Honourable members interjecting—

Mr McCORMACK: You may well laugh, but he was a former head of the Australian Council of Trade Unions—the ACTU no less. He's a man who obviously understands the Australian economy and the needs of both workers and businesses. His words should be not only listened to but also heeded. I think the members for Hunter and Wills are perhaps already convinced. They know the validity of the Treasurer's argument. They know the validity of this particular bill—because they've already stated it—more so than Martin Ferguson and so many others who've been quite dismayed that the Labor Party cannot work out exactly what it stands for. Listen to the will of the Australian people. Speaking of will, the member for Wills told The Australian that Labor should 'wave the tax cuts through'. A Labor MP said:

Otherwise, we just become the issue. They have a mandate for the tax cuts.

I say to the member for Wills: 'You are correct. You are absolutely correct.' The Liberal-National government offered a broadscale tax cuts package to get cash into pockets and to improve the household budget, and the Australian people said yes. The Australian people said an emphatic yes.

We're working to build a stronger economy for regional Australians, and tax cuts are at the heart of what we're doing. More cash in the hand means less stress paying bills. It means more for a restaurant dinner or a much anticipated holiday. They are very significant tax cuts. Already we've legislated a rebate of up to $530 for 2018-19, but in the April budget we doubled the deal. Now there's a rebate of up to $1,080 for the year that's just ended. That's up to $2,160 for two-income families as soon as your tax return is processed, possibly as soon as next week.

Our plan for stronger regions also includes small business. Instant asset write-off is now up to $30,000 for each piece of capital equipment purchased and is now for companies with a turnover of $50 million a year. Small businesses are paying their lowest company tax rate since 1940. That's only possible thanks to a Liberal-National government, because that's what we do. That's more money into the pockets of hardworking businesses and hardworking Australians. We want to employ more Australians, certainly more regional Australians.

Last month I visited the Nationals Victorian seat of Mallee. We've got a fantastic new member for Mallee in Anne Webster. I met truck salesman Anthony Dalfarra. He said in the days following the election his telephone was ringing off the hook. During the election campaign, I have to say, sales slumped. The phone wasn't ringing off the hook because he and his customers feared that Labor might possibly have won the election. That was his great fear. He told me there's much more confidence in the regional market when there's a coalition government than when people are staring down the face of what Labor could potentially offer. More people have more money in their back pockets when we're in government than when those opposite fill the treasury bench. During the campaign the Nationals member for Flynn—I'm glad he's here to listen to this—and I dropped into a good little butchery shop called Fair Dinkum Meats in Emerald. He remembers it. He's nodding. In Queensland we had a chat with butcher Jason O'Loughlin—a good fellow. Jason said that since the Liberals and Nationals came to government six years ago he's been able to employ 20 more staff because of our instant asset write-off scheme and other policies. Twenty more additional staff—that's fantastic. He's also seen an increase in customers since the election, and they all tell him it's because they feel more comfortable spending because the economy is more secure. You could say they're getting in for their chop, Member for Flynn. More cashflow means more confidence. It keeps people on farms and in towns and mines. It brings new residents to the community. Why can't Labor work that out?

The Leader of the Opposition said during the Treasurer's contribution, 'Show me the money.' Well, I will show you the money. There it is; it's in the budget handed down on 2 April. Now, this is a surplus budget. I know those opposite don't know what a surplus budget looks like.

Mr Albanese interjecting—

Mr McCORMACK: I'll get on to infrastructure in a minute, Leader of the Opposition! But, Mr Speaker, that is a surplus budget, something that those opposite haven't been able to produce since the late Bob Hawke was Prime Minister.

The Leader of the Opposition, the member for Grayndler, talks about infrastructure, and three times during his contribution he talked about the never-never. Interestingly, the never-never could be described as Australia's outback, and we've put millions upon millions of dollars into the Outback Way. When I was in Laverton in March, in the member for O'Connor's seat, this fellow came up to me—we're funding the Western Australia section to the tune of a considerable amount of money.

Mr Albanese interjecting—

Mr McCORMACK: It's tens of millions of dollars.

Mr Albanese: How much this year?

Mr McCORMACK: $76 million for—

Mr Albanese interjecting—

Mr McCORMACK: wait for it—the Western Australia section. In fact, it's $76½ million, Member for Grayndler. The Northern Territory section is getting a further $50 million; the Queensland section, $33½ million.

Opposition members interjecting—

Mr McCORMACK: If you just listen—a businessman came up to me and he said, 'That section, that 70-kilometre section'—

Ms Butler interjecting—

Mr McCORMACK: I know you might think it's funny because you come from Brisbane, but this is really important for regional people. That section of road, that 70-kilometre section of road, is going to save his mining company nine hours of travel time to get its heavy vehicles with mining equipment to the mine, to get its miners from Laverton to the mine. That is a significant saving, and it's also making it certain that they're going to get what they need to them sooner and safer. Talk about the never-never: we're spending $100 billion over the next decade on infrastructure and every electorate, including the member for Griffith's, will benefit from this investment.

Why do Labor play games around the edges of the tax cut package that we're putting to the Australian people? Why are they running around the edges of the tax cut benefits? Why don't they just get on board and do what the Australian people want this parliament to do? The Australian people clearly said on 18 May that they wanted us to do it, by voting for us. It's plain; it's clear: pass the tax cuts now. Look what we're doing: the government have legislated to double the 2018-19 tax rebate to as much as $1,080, and we want to get it done this week. And in 2023 we're raising the low-income tax offset from $445 to $700, and lifting the 19 per cent rate threshold from $37,000 to $45,000. And from 2024-25, 94 per cent of taxpayers will pay a marginal rate of no more than 30c in the dollar.

It's massive tax reform, and on 18 May Australians said, yes, they wanted it. The Liberal-National government are doing what it takes to get the cash onto the kitchen table, and across our villages, towns and big regional cities they have given us an overwhelming tick of endorsement. The drought alone is a huge reason to get cash back into our communities, and it must start with rebates when people lodge their tax returns. Just do it now. I don't know why we just don't do it now.

I'll conclude with the Treasurer's wonderful op-ed in The Australian yesterday. He finished his remarks in his very well written piece in The Australian by saying:

Labor made no secret of its tax policies at the election.

No, they didn't.

Well, now the Australian people have spoken. They want the Coalition's tax package in full.

The message to Labor is clear: don't deny the tax cuts Australians voted for, and if you're going on a listening tour, don't ignore what they say.

Dr CHALMERS (Rankin) (18:24): As the Leader of the Opposition said a moment ago, this bill does have an absurd title, and it would be more appropriately called the Tax Relief So Working Australians Keep More of Their Money but Not For a Few Years Bill, because that's what the government is proposing in the bill that they're putting forward today: that there be tax relief on the never-never when the economy desperately needs a boost right now. That's why I'm moving the second reading amendment circulated in my name:

That all words after "That" be omitted with a view to substituting the following words:

"whilst not declining to give the bill a second reading, the House calls on the Government to:

(1)amend the bill to remove the measures that begin in the 2024-25 financial year, so that measures that provide relief now can be passed by the Parliament without delay; and

(2)support the economy by adopting the Opposition's plan to provide income tax relief to every Australian worker from the 2019-20 financial year and bring forward infrastructure investment".

Our position on this tax bill is built on three fundamental principles. The first one, as we saw today with the Reserve Bank cutting rates again, is that the economy desperately needs a boost, and we want to give the economy a boost. The second principle is that everybody—every worker in the Australian economy—deserves to have a tax cut from this week in this parliamentary term and not on the never-never. The third principle is that it is irresponsible to sign up to a $95 billion tax cut which doesn't come in until after the next election five years away.

Our position is based on a reasonable, rational, hard-headed assessment of the economic and budgetary conditions under this third-term government. Let's go through where we are at. These are facts; they're not opinions. This is the slowest economic growth since the global financial crisis. Australia is in the longest per capita recession since the 1982 recession. The national economy has fallen from the eighth-fastest-growing in the OECD in 2013 to the 20th-fastest-growing today. We've got stagnant wages which are growing at one-eighth of the pace of profits. We've got rising underemployment and youth unemployment. We've had five years of weak productivity growth. Productivity has actually fallen every quarter for the last four quarters. We've got weak household spending, weak business conditions, a sluggish retail sector and business investment at the lowest level since the 1990s recession. Living standards are growing more slowly under the Liberals than they were under Labor. The Reserve Bank has had to cut interest rates to one-third of what they were in the darkest days of the global financial crisis, and net debt has more than doubled under those opposite.

The government sees these figures—the same figures that we see, that I've just run through—and they say: 'Look, everything's fine. It can be business as usual.' If you walk down the main street of any of our communities—any of your communities—people will tell you they're worried about the slowing economy, they're worried about stagnant wages, they're worried they won't be able to pay their mortgage and they're worried they won't be able to pay their bills. And, with a record like this, you've got to ask the obvious question. A record like the Treasurer's begs the obvious question: why does he always look so pleased with himself with a record like that? And why does he spend all of his time talking about the Labor Party? Why doesn't he do his actual job in this economy?

You can imagine the Treasurer's day. He rocks into the office at probably about 9.30 or so after a couple of hours in front of the mirror. I know a bit about that office; I've knocked around that office a bit myself over the years. He rocks in and he hands over the overcoat and the briefcase. He wanders into his office and he calls out to his offsider, 'Fetch me my slippers. Fetch me my big stack of Labor transcripts. Fetch me my little yellow highlighter,' and off he disappears, poring over our transcripts and all the things that we've been saying in earlier years. He calls out again and says, 'Look, cancel all of my meetings; I'm going to make a day of this.' And so he spends the day in there, huddled over our transcripts with the little yellow highlighter, and at the end of the day he emerges.

And what does he emerge with? He doesn't emerge with a plan to turn around the floundering economy, a plan for wages or a plan to get things moving again in the Australian economy. He emerges with an opinion piece. In that opinion piece, we had to read and witness that pathetic spectacle of a Treasurer who spends all of his time writing a 42-paragraph opinion piece in which he mentioned Labor in 31 of the paragraphs. What a pathetic spectacle. No wonder this Treasurer has only ever presided over below-trend growth. He is the chief architect of below-average growth from a below-average government. There has never been a bigger, more yawning gap between a treasurer's regard for himself and his actual performance in the economy. If those opposite were doing a good job managing the economy, the Reserve Bank wouldn't have to cut rates again today. There couldn't be a worse time for a government which has no idea and no plan to turn things around. There couldn't be a worse time for this government's approach to the economy.

As the Leader of the Opposition said, we are prepared to do our bit in this place to help the government turn around this floundering economy. We do want to play a constructive and a responsible role in getting things moving again. We do recognise that the economy has deteriorated even since the election. We've seen those national accounts. We've seen those two interest rate cuts. What we're saying is, 'Let's pass stage 1, get them into the economy as soon as possible. Let's pass stage 2 and bring forward some of the benefits of stage 2, so that they can begin to flow this week and not after the next election.' What this would mean is if you earn up to $126,000 you get a tax cut of up to $1,080. If you earn over $90,000 you get a tax cut of up to $1,350 extra brought forward under our plan. What that would do is get more money into the hands of more workers sooner and circulating in an economy which desperately needs a boost after the weak outcomes of the last few years.

Ours is the only plan which gets every worker a tax cut in this parliamentary term. We can do it in a responsible and measured way, which doesn't jeopardise the surpluses that the government has forecast. If they, the so-called party of lower taxes, don't vote for our amendment in a few moments time they will be voting against tax relief for every worker this term. What they will be doing is holding stages 1 and 2 of their own tax policy hostage to a tax cut which doesn't come in for another five years. They are saying to everybody in this parliament, and in the country beyond, that they won't let the parliament commit to a tax cut this week unless we also sign up to a tax cut in 261 weeks time. That is the essence of the position that they are taking. They are prepared to jeopardise tax cuts this term by prioritising the next term when the economy needs a boost now and not in five years time. The government has routinely and regularly got the economy wrong but they want to pretend that they know what it will look like in 2024-25. They haven't said how they'll pay for stage 3. It assumes no downturn. It compromises our ability to deal with a downturn if we commit that $95 billion today to a tax cut in five years time.

Our message for the government is: enough of the finger pointing, the blame shifting and pretending it is somebody else's fault. It is a third-term government now—six years in office. It is long past time to take responsibility for the economy that you have so badly mismanaged. If they spent as much time focused on the economy as they spend focused on us, maybe the economy wouldn't be growing at its slowest rate for a decade.

Today is their opportunity to do the right and responsible thing by the budget and by the economy. Today is their big chance to give every single Australian worker a tax cut this term, to get money flowing into an economy which desperately needs it. If they don't do that they will have to explain to the Australian people why they held tax cuts hostage this week to a tax cut which won't come in for another five years. That's what this debate boils down to tonight in the parliament.

We will move detailed amendments shortly in the other stage, the consideration in detail stage. We call on the government to pick up what is a responsible, sensible and rational proposal that we've made in good faith to try and get the economy going. Growth is not thick on the ground in this economy on their watch and so we need to do what we can to make sure the Reserve Bank isn't doing all the heavy lifting on their own, that they are getting some help from this building and from this government.

To read into the record the second reading amendment, I move:

That all words after "That" be omitted with a view to substituting the following words:

"whilst not declining to give the bill a second reading, the House calls on the Government to:

(1) amend the bill to remove the measures that begin in the 2024–25 financial year, so that measures that provide relief now can be passed by the Parliament without delay; and

(2) support the economy by adopting the Opposition's plan to provide income tax relief to every Australian worker from the 2019–20 financial year and bring forward infrastructure investment".

I urge the House to support our sensible amendments now and in the consideration in detail stage. We can work together to get every Australian worker a tax cut flowing from this week, not five years down the track. If the party of lower taxes were serious about that they would support our sensible amendments. They would do something for once about an economy which has slowed substantially on their watch.

The DEPUTY SPEAKER ( Mr Rob Mitchell ): Is the amendment seconded?

Ms CATHERINE KING (Ballarat) (18:34): I second the amendment. This is a really important debate for this parliament. The fact that the government somehow thinks that it has a mandate to completely overrule the processes of this parliament is simply ridiculous. It is the job of this parliament to put legislation under scrutiny, and it is particularly important that we put this legislation, the Treasury Laws Amendment (Tax Relief So Working Australians Keep More Of Their Money) Bill 2019, under scrutiny, because it is a $95 billion proposal on the budget at a time when our economy is absolutely flatlining. The government seems to be completely oblivious to what is actually happening with the economy. Today we had the Reserve Bank, for the second time, lower interest rates. It has lowered interest rates below what they were during the global financial crisis, a crisis that, if it had not been for the intervention of the government of the day, would have left thousands of Australians out of work. That is what a good government does. It looks at the economic circumstances and it makes policy accordingly.

With these amendments, we are putting forward a proposal, a sensible proposal, that stimulates the economy now. It makes sure that every single Australian worker receives a tax cut in this term, because we know we need to put money into the economy now in order to stimulate growth. When the economy is flatlining, do you know who it hits first? It hits low-skilled workers first. It hits workers in our regions. Our regions are the canaries in the coalmine when it comes to our economy. They are where we are seeing, and will see, hits to the economy—in seats like the member for Flynn's, which has such huge unemployment, and in areas like Gladstone, where unemployment is way too high. We should be doing better. That is what happens when your economy is flatlining. But this government does not have a plan to deal with what is happening to the economy now.

Labor is sensibly proposing that we bring forward part of the stage 2 tax cuts. I say to all of those opposite, but particularly to the new members, who are working their way through how this place works and what amendments are doing: if you new members of parliament vote against the amendments we are putting forward you will be voting against a tax cut in this term for every working Australian—that is, for every working Australian in your electorates, particularly those that have substantially high unemployment rates and that need that economic stimulus now.

Also, part of our proposal is to bring forward infrastructure, absolutely critical infrastructure that puts real money, real jobs and real projects into economies today. There are hundreds of shovel-ready projects across the country, many of which the government has promised. We heard the Leader of the Opposition talk about when they have promised them—the Linkfield Road is in 2026. I went to seats all around the country and I don't remember when the government was saying, 'We're going to build this new road, this new train station, a new roundabout or a new tunnel' that, somehow or other, those projects would not be delivered until 2026. That's the reality—or the farce—behind this government's infrastructure spending. We have said that stimulus needs to be in the economy now. We want to work with the government on bringing those projects forward. We know some of them take a long time. We understand that. But we want to bring them forward so we can get that stimulus into the economy now.

The proposals before this parliament are in the national economic interest. What this government is trying to do is completely—and foolishly, frankly—decide that it cannot move, that it cannot meet the times that we're in. Without the government sensibly working with Labor to actually look at what infrastructure projects we can bring forward, we know what's going to happen. The economy is flatlining, and our regions are already suffering. If the government does not accept these proposals, it will be voting against putting money into the pockets of every single working Australian, against stimulating the economy now and against making sure that we don't see the sort of crisis we were going to face under the global financial crisis, where thousands of Australians would have been unemployed or in insecure and low-paid work because of the actions of or the failure of a government. It is on this government's head if that's what occurs.

The DEPUTY SPEAKER ( Mr Rob Mitchell ): The original question was that this bill be now read a second time. To this the honourable member for Rankin has moved an amendment that all words after 'That' be omitted, with a view to substituting other words. The question now is that the amendment be agreed to.

Mr SUKKAR (Deakin—Assistant Treasurer and Minister for Housing) (18:40): We don't agree with this amendment because there's a big difference between this so-called plan that the shadow Treasurer and opposition leader have come up with and our plan—we took our plan to an election. The members opposite seem to have forgotten that, six weeks ago, the Australian people repudiated the outrageous taxes that this shadow Treasurer was intimately involved with. This shadow Treasurer wants to wash his hands of $387 billion of proposed higher taxes. We all remember the very presidential-looking photos of the economic team. We see that, rightly, every member of that economic team has been demoted in one form or another except for the shadow Treasurer, who somehow got promoted through all of this. We see the shadow Treasurer talking about the urgent need for stimulus, but when, just six weeks ago, he was very, very freely using terms like 'top end of town'—I didn't notice 'top end of town' in his speech this time—he was arguing to rip $387 billion out of the economy that he apparently now believes needs so much stimulus.

So the Labor Party have learnt nothing. The man who was at the centre of every single hopeless economic decision that they made in opposition has been promoted. He should have been punted down the end of the bench or to the back bench, because we all remember that the shadow Treasurer is really most famous for being Wayne Swan's brain. It's not a compliment to be referred to in that way. We all remember the line that he very famously drafted for then Treasurer Swan—'The four surpluses that we deliver tonight.' How many of those surpluses eventuated? Zero. Anyone who's been in this House knows what happened to those surpluses. So we are not going to take lectures from the shadow Treasurer. We are not going to agree here to amendments hastily thought up in the panic in between Sky News interviews and the opposition's caucus meetings, because our plan was taken to an election. Our plan was endorsed by the Australian people.

To give credit to the shadow Treasurer, he has fronted up today. He is showing a brave face. We know that, as the co-architect of the disastrous economic policies that the opposition took to the election, he should be hanging his head in shame, but he's got more chutzpah than anybody in this House. So, no, we are not going to be taking any lectures from the shadow Treasurer on the plan that we took to the election, the plan that's been endorsed by the Australian people.

What is that plan? That plan, in the end, will mean that 94 per cent of taxpayers won't pay more than 30c in the dollar. That means, most importantly for this week, 10 million Australian taxpayers will receive up to $1,080. For couples, it will be $2,160. I'm very pleased that the Labor Party are on board. I'm very pleased that they are supporting that part of the plan. But what they don't understand is that, in long-term tax policy, everything hangs together. You cannot cherrypick parts of a plan that you like. You can't then come up with hasty plans in between panicked meetings of the leadership and in between caucus meetings and Sky News interviews. No, we have a well-thought-through plan developed by our Treasurer, an outstanding Treasurer, somebody who is delivering for the Australian people and who next week will be delivering to 10 million Australian people, which is more than this hopeless shadow Treasurer could ever claim or ever be able to put on his CV.

So the answer to the Labor Party today, which will be echoed by all of the speakers—and I'm going to keep my contribution short to allow those on our side to get an opportunity to speak—is, 'No, we won't agree to your amendments because the difference between your plan and ours is we took ours to an election; and the difference between this Treasurer and this shadow Treasurer, who was the co-architect of the disaster of the Labor Party, is stark; and the Australian people put much more faith in this Treasurer.'

Mr BANDT (Melbourne) (18:44): The best way to put more money in people's pockets is to lift wages, which are flat lining, and to make education and health free, so that people don't pay more to go and see the doctor when they get sick or to go to university or TAFE. If we keep going down this road of a tax cuts arms race, we are going to run out of revenue that the government needs to fund the services that people expect. Without revenue to fund services, inequality grows. Inequality in Australia is at a 70-year high. To suggest that the answer to our current situation—where underemployment, especially amongst young people, is at crisis levels and the Reserve Bank is starting to ring the alarm bells—is to engage in this tax cuts arms race, where each side is saying, 'Ours are bigger than yours; ours will come sooner than yours.' It is setting us up for more inequality and economic failure.

The government is pushing this for ideological reasons. The government does not want to fund universal services. The government does not want to see free education or universal healthcare. We know that. Part of its agenda is to cut the amount of revenue that comes in to the government's public purse and could then go to fund universal public services. We saw an inkling of it on the eve of the election when the government said that part of the way they were going to fund their election promises was by cutting the Public Service. That came out at the last minute: 'We're going to take $1.5 billion out of the Public Service.' If that's what they need to do to fund their election promises, that is a drop in the ocean, because this package is going to cost $158 billion. That's $158 billion less in the kitty to spend on schools, to spend on hospitals, to spend on education. Faced with such a fundamental fork-in-the-road approach about how we are going to deal with tax, revenue and services, we should have enough time to debate this bill. We haven't, and I've dealt with that before. What we do need to do is not be scared by the ideological rhetoric coming from the government but, instead, start having a debate about the kind of society we want, and use this as an opportunity not to worry about a political point or two being scored but to have a debate about what kind of society we want.

If what we were doing was just talking about the low-income tax offset and working out ways of getting targeted support to low-income earners that didn't change all the tax brackets so it flowed on to high-income earners, stage 1 of the bill might be worth having a debate about. With respect to stage 2, both the government and the opposition, seem to be saying, 'All of this is about low- and middle-income earners.' It's not. It changes the tax brackets. The people who will get the full benefit of stage 2, and for the life of me I don't understand why the Labor Party is saying it's got to be fast-tracked, will be the top 10 per cent of income earners, because it changes the tax brackets. It's not about helping low- and middle-income earners; it's about changing the tax brackets so that everyone at the top are the ones who will get the full benefit. That's where a great big whack of this goes. Stage 3 ends the progressive tax system itself. I move an amendment to the motion moved by the shadow Treasurer:

That all words after "whilst" be omitted with a view to substituting the following words:

"supporting greater assistance to low income working Australians, the House:

1. urges the Government to introduce legislation that provides greater assistance to low income earners; and

2. declines to give this bill a second reading until such assistance is legislated for low income earners".

There are better ways to support people on low incomes than by reducing equality and cutting taxes, because tax cuts hamper the government's ability to reduce inequality and to help people who are doing it tough.

I wish there had been a different result from the election as far as who's the government is concerned. That's clear. I understand that, from the Labor Party's point of view, they've now got to make decisions from opposition, whereas I'd hoped that there would have been a change of government, and we haven't got that. But, at this point, what we've got to do is work out whether we're going to have a parliament where, every time the government say they want to do something on tax, on national security or whatever, the response is, 'Well, we'll see you and raise you,' or we're going to turn this into a place where we have debates about different visions of what Australia should be like.

From the perspective of the Greens, we will oppose this government and its right-wing, deregulatory, neoliberal agenda. We would hope that sense prevails, especially as it comes to the Senate, and that, instead of helping this government create a more dog-eat-dog Australia, others in this parliament will choose to work with us to say: 'No, sometimes it's better not to vote for a tax cut, especially not a tax cut that changes the tax brackets to give the most support to people who are in the higher tax brackets and on the higher incomes. Instead, let's put that money into making education free; making healthcare universal; and lifting some people out of poverty who currently haven't got a job because of the high underemployment rates that this government has presided over.' That's the debate that we should be having. I hope there's a change of heart by the time this goes to the Senate. Until then, we will be fighting this tooth and nail, because this is the kind of approach that eats away at the government's ability to reduce inequality.

The DEPUTY SPEAKER ( Mr Rob Mitchell ): I thank the member for Melbourne. Is the amendment seconded?

Mr Wilkie: I second the amendment moved by the member for Melbourne.

The DEPUTY SPEAKER: The original question was that this bill be now read a second time. To this, the honourable member for Rankin has moved an amendment that all words after 'That' be omitted with a view to substituting words. To this, the honourable member for Melbourne has moved an amendment to the amendment. If it suits the House, I will state the form still in the question that the amendment be agreed to. The question now is that the amendment be agreed to.

Mr TIM WILSON (Goldstein) (18:52): Speaker, it's an opposition policy zone as empty as space and as relevant as Swannie. It wants to be the middle ground between tax rises and cuts, and it lies between the pit of Australia's hip pockets and the ballot box. This is the dimension of absurdity. It is an area we call the Albanese opposition zone.

The DEPUTY SPEAKER ( Mr Rob Mitchell ): The member for Grayndler on a point of order?

Mr Albanese: Yes, the obvious one.

The DEPUTY SPEAKER: To address members by their correct title.

Mr TIM WILSON: The member for Grayndler zone.

The DEPUTY SPEAKER: I ask the member for Goldstein: don't push your luck.

Mr TIM WILSON: Thank you, Deputy Speaker. As the member for Goldstein, I say: this is about trust. This is a debate about recognition of and respect for what Australians voted for. At the last election, they faced a choice. The coalition put forward a plan to improve Australia. The Labor opposition put forward a radical plan to change Australia. What we know is that Australians endorsed this government's plan to cut taxes, to put more money in people's hip pockets, to reward effort and to encourage investment in the Australian economy, because we know that average Australians living out their lives make better decisions about their interests than we do.

Their alternative was not to cut taxes, which is apparently their new narrative. Their alternative was to impose $387 billion, under the shadow Treasurer and the Leader of the Opposition, onto just about everybody in the Australian community. It didn't seem to matter who you were, whether you were retirees, investors or workers; everybody was going to get hit. When you went through the list of the Australians who were ignored by their policy platform to hit people with more taxes, there was virtually no-one left. In fact, it probably almost filled the opposition benches.

The Treasury Laws Amendment (Tax Relief So Working Australians Keep More Of Their Money) Bill 2019 before the parliament now is about honouring the trust we took to the Australian people. It's about recognising and understanding that we want to cut taxes because we want to create, exactly as the member for Melbourne outlined that we should be calling this parliament to do, the type of country we want to be—the type of country where we recognise that the benefits of this package aren't just for the 10 million Australians who will get tax relief today if this bill is passed. It is about the 25 million Australians who aspire to better who will get benefits through other types of tax cuts or through the jobs, growth and opportunity that sits at the heart of this piece of legislation.

What we now have from the opposition is complete confusion about their policy agenda. We don't know what they stand for and we don't know what they seek to achieve. They seem to want to bring certain tax cuts forward with scant regard for things like the budget surplus and without any proper consideration of the impact. Our plan is balanced. Our plan is managed. Our plan is designed to make sure that we deliver sustainable outcomes for the Australian community by introducing tax cuts today and continuing them on as we need to pull the levers to make sure that Australia's economy can go from strength to strength.

The choice and the focus now for the opposition is quite straightforward: it's what they want to vote for. I realise they had big debates within the Australian Labor Party that they had to have. They had to decide what it was that led them to lose the election. They had to decide whether their tax agenda was such a significant hindrance to their capacity to go on and form government and was why people didn't vote for them. I understand that the Leader of the Opposition wants to keep this discussion live because it helps him avoid having those conversations and the division that will follow as a consequence. So they have a choice: they can vote for themselves or they can vote for the Australian people.

That's what this tax package is focused on: how we can make sure that, yes, we give to low- and middle-income earners in last year's financial year when people are sitting around this weekend doing their tax returns $1,080 off if they are a single or more than $2,000 off if they're a couple. It's about whether Australians can plan a future for their investment and their time and energy to get future tax cuts if they work hard and save. That is the choice, and it is about time the opposition honoured the commitment that the Australian people gave to us, including the people in their electorates who voted against them—because we should never forget those people as well. Let's face it: there is all this confusion in the policy agendas that the Labor Party now seem to be running. They are now in favour of taxes, but they were against them. They now seem to want what they used to call 'the top end of town' to have higher tax cuts as well. I apologise to Dinah Washington for butchering her song, but what a difference an election makes.

Mr WALLACE (Fisher) (18:57): I rise in support of the Treasury Laws Amendment (Tax Relief So Working Australians Keep More Of Their Money) Bill 2019 this evening. It is a very appropriately named bill. Labor are absolutely all at sea when it comes to whether they want to support this bill. There are some sensible members opposite—although not enough—such as the member for Wills and the member for Hunter. They seem to be the only ones who understand the lesson that Labor should have learned at the last federal election, that federal election that was only six weeks ago. But Labor just don't get it.

The member for Rankin, the shadow Treasurer, was the co-architect of Labor's $387 billion worth of planned additional taxes. Who could forget Labor's planned elimination of negative gearing? Who could forget Labor's plan to abolish franking credits or to halve the capital gains tax discount? The shadow Treasurer was the co-architect of $387 billion worth of planned additional taxes. Bear in mind that the member for Rankin, who is now, as I said, the shadow Treasurer, was the chief of staff of that economic giant the then member for Lilley. That was during the heyday of the Rudd-Gillard years, when the now member for Rankin advised the then member for Lilley on all things related to finance. He was the shadow finance minister in the lead-up to the election. He had his footprints and his fingerprints all over Labor's finance plan in the lead-up to the election. The Assistant Treasurer remarked that a sensible leader would have punted him to the back bench, yet those opposite actually promoted him—go figure!

The member for Rankin, the shadow Treasurer, says that Labor has a plan. The problem is that he didn't say which plan he was talking about, because Labor has had a few plans on this particular bill. You can look at the various positions that they have had in just the last few days. They said that they don't support these tax cuts because it will benefit the top end of town. The reality is that these tax cuts are targeted towards low- to middle-income earners. They are the sort of constituents that those members opposite purport to represent. Those opposite then said they won't support the tax cuts. Those opposite argue that they shouldn't be asked to commit to a tax cut in the medium term, but they have absolutely no problem in saddling up the Australian people to long-term spending commitments. They have absolutely no problem doing that whatsoever. Labor have no problem with any type of long-term spending plans, yet they won't commit to long-term tax cuts.

Labor suggest that the Australian economy can't afford these tax cuts. The hypocrisy from those opposite is absolutely breathtaking. Six weeks ago they were arguing to the Australian people that they wanted an increase, which was $387 billion worth of additional taxes. That was just six weeks ago. The co-architect of that plan is now coming in here and saying, 'No, no. All Australians should be getting a tax cut.' You can't have it both ways.

Mr Falinski: But you can!

Mr WALLACE: No, you can't have it both ways. Australians know that they can't trust Labor. We all know that. They know that they should look at what Labor do, not at what they say. In the lead-up to the last election, they showed their true colours. They showed that they were a high-taxing, high-spending party that believes in anything but private enterprise. They come in here, six weeks later—they have had their road to Damascus moment—and now say, 'Everybody should get a tax cut,' without any way of showing how they are going to fund that. They say that everybody should get it. Everybody should get a tax cut now, according to those opposite. The hypocrisy of those opposite is absolutely breathtaking. Labor's approach to taxation, and its approach to whether it will or will not support this bill, is like Melbourne's weather: if you don't like it, wait it minute. It will change just as quickly.

The government, on the other hand, took its tax policy to the people just six weeks ago. It was one of our principal policies. We know that the Australian people know that. The member for Rankin, the shadow Treasurer, has no clue. After his so-called listening tour, he tried to argue that the government doesn't have a mandate to introduce this bill. He said, 'The government didn't really prosecute its tax agenda during the election.' Mr Deputy Speaker Vasta, I don't know about you, but we couldn't have made it any clearer during the last election that we were taking this tax agenda to the last election. But, according to the shadow Treasurer, it wasn't really that important—we don't have a mandate. If that's a listening tour, I just can't believe it. Maybe he had the radio on the whole time, because he certainly wasn't listening to the punters in Queensland, that's for sure.

The government wants to ensure that Australians keep more of their money. That's why this bill is very, very appropriately named. It wants to provide immediate tax relief to low- and middle-income earners of up to $1,080 for singles and $2,160 for dual income couples. The government is delivering structural changes to the system that'll reduce the 32½c in the dollar tax rate to 30c in the dollar. When implemented, it will mean 94 per cent of Australians will pay no more than 30c in the dollar. This will improve incentives for hardworking Australians who, when they look at Labor, know that they will look at what they do and not at what they say. I commend the bill to the House.

Ms SHARKIE (Mayo) (19:06): In their pitch to the Australian people, the government's signature policy was to promise tax cuts to Australians across the income spectrum. Stage 1, as we all know, provides temporary relief for low- to upper-middle-income earners. It will not only provide a welcome boost for their own incomes but also provide a much needed fiscal stimulus to Australia's slowing economy. The multiplier effect will bring economic and social benefit to many Australians, and the parliament would appear to unanimously support them. Stage 2 of the tax cuts is also targeted at low- to upper-middle-income earners. It helps to compensate for the removal of the temporary relief in stage 1 and will not come into effect until 2022.

I and my Centre Alliance colleagues support both stage 1 and 2 of the government's tax cut agenda. We believe they are necessary, affordable and sufficiently prudent. Stage 3 has been more problematic for Centre Alliance and, indeed, the parliament to reach agreement upon. However, two aspects should be noted. Firstly, 60 per cent of the income tax paid will be contributed by the top 20 per cent of Australia's income earners. Secondly, should the economy slow, the implementation of stage 3 can and should be reversed either in this parliament or in a future parliament. That would be the responsible measure to take.

This parliament is faced with a dilemma as the government is refusing to break up the bill. It is an all-or-nothing bill. This weighs on my mind: there are many hardworking Australians who are waiting for this money and waiting to put in their tax return. The Australian economy needs the urgent stimulus from stage 1. With this bill I believe the government can argue it possesses a good deal of democratic legitimacy in seeking to deliver the one signature policy it presented to the Australian people at the recent election. Let us be clear: this was the only major policy the government campaigned on and it was outlined in the budget. I recognise the government was up front with their plan and the Australian community voted them back in.

Centre Alliance's approach to the government's tax plan has been to seek to maximise its benefit to Australian families, workers and small businesses. Centre Alliance went to the election with a promise to reduce energy prices. We are concerned that the value of the tax cuts package will be wiped out for low- and middle-income earners unless there is action on energy prices. We also want to ensure that there is relief in energy prices in sight for pensioners and people on Newstart and very low incomes.

In 2013, Australians were paying $3 to $4 per gigajoule for gas. With the addition of six LNG trains in Gladstone in Queensland the production of gas in Australia has tripled and exports have surged. Yet, in 2019 we are now paying $9 per gigajoule on the spot market in Australia for Australian gas, whereas customers buying Australian gas in the Asian market are paying $7 per gigajoule. Australian consumers, I believe, are being taken for mugs with this. We are talking about $9, triple the price of just over five years ago. This is a grotesque example of market failure, and something that we in Centre Alliance want to address. We know that this is affecting manufacturing businesses and their workers, particularly in my state of South Australia. We are facing an energy crisis because of this.

Centre Alliance is working with the government on both short- and long-term actions to deal with the concerns in the gas market. Without action, those jobs and businesses will simply disappear. I and my colleagues have always acted to help safeguard the future of our great manufacturing state. We believe that its best years are ahead of it, and I am confident that a sensible outcome can be negotiated with this package.

For this reason, I will be supporting the government's tax cuts legislation in this place while Centre Alliance continues to negotiate in good faith with the government on the bill in the other place.

Mr FALINSKI (Mackellar) (19:10): I rise to speak on the Treasury Laws Amendment (Tax Relief So Working Australians Keep More Of Their Money) Bill 2019.

I notice that the member for Burt has been repositioned closer to the dispatch box—much well deserved—from the outer regions where he used to sit. It reminds me of something that one of his personal heroes, Donald Rumsfeld, once said, 'There are some people who be; that's just a fact, and we don't know why.' I know that there are professors of semantics who wondered what Donald Rumsfeld was saying, but listening to the Leader of the Opposition I believe he was talking about that speech!

Six weeks ago, the answer was $400 billion in new taxes. Six weeks later, the answer is $150 billion in tax cuts, but the problem is that the government is not doing it fast enough. But then he said that we're doing it too fast! Then again, the answer might be infrastructure projects. But, then again, we're not doing enough of them. And, then again, we're doing them in the wrong place. Then again, if we could just do it even better it would be great!

Three years ago the people of Mackellar, in what was clearly a shock for them, elected me to this place. In the time since that happened I never thought I would hear a member of the Greens party say that they were concerned about the position of the budget. But that changed today, because the member for Melbourne has become a fiscal conservative in line with the best. He is showing Kevin Rudd up to be something that he never really was in the first place. He's concerned that we're not giving enough tax cuts, because inequality has gone up. It's actually down, but soon it will be up again. But, then again, we should be spending more on education, because we're only spending record amounts now. But if we spent more then something that isn't would be and then we wouldn't need to worry about it at all.

With an opposition like that, who needs frenemies? The truth is that this parliament should pass these tax cuts quickly. What is the point of elections if we put policies to the people, let them decide and then this parliament decides not to pass them? It is good economics. Lower-taxing countries are countries where there is more hope and more opportunity for the people who live in them. That's an important thing.

This government is in favour of hope. This government is in favour of providing more opportunities. Lower taxes incentivise innovation. If you are going to take risks, it is important that those risks get rewarded. Lower taxes mean that the people who take a risk get to keep more of the fruits from what they have sown. It reverses bracket creep. The member for Melbourne is concerned about inequality. Well, what about the inequality of bracket creep, where when you work harder you get less money because the government is taking more money? This reverses that.

It provides the stimulus that the RBA governor is demanding this parliament provide. The member for Melbourne and those opposite speak at length about what the Governor of the Reserve Bank wants and what the RBA has done today. He has made it absolutely clear that what this parliament should do is seek to put as much money back into the pockets of the people of Australia as we can. This bill does that. It also provides credible tax incentives for up to 94 per cent of Australian taxpayers, for them to work harder, earn more and keep what they earn.

Some say that this is about equity. I say to those people that this rewards hard work. I say to them that it reverses bracket creep. There are some who claim that we should spend more on services. Well I say to those opposite who claim that that we are already spending record amounts of money on health, education, mental health and infrastructure. There is very little more that this parliament can do to allocate more resources to those things that we consider to be important. It is not our money; it is theirs. That is what those opposite seem to forget. They think that it is the government who gives people money and that it allows them to keep part of it because that is the kind thing for that government to do. It is their money. We take it from them; we are stewards of their money. And while we spend it properly and sensibly to the benefit of them and our nation and our community as a whole, it is incumbent upon us to leave as much of it as we possibly can with them because it is their money. In short, the arguments against this are, frankly, the product of the eternal sunshine of a spotless mind. This is good economics; it is the right thing to do democratically, and it will make this a fairer and better society.

The SPEAKER: The immediate question is that the amendment moved by the honourable member for Melbourne be agreed to.

A division having been called and the bells having been rung—

The SPEAKER: As there are fewer than five members on the side for the ayes in this division, I declare the question negatived in accordance with standing order 127. The names of those members who are in the minority will be recorded in the Votes and Proceedings.

Question negatived, Mr Adam Bandt and Mr Andrew Wilkie voting yes.

The SPEAKER: The question is that the amendment moved by the member for Rankin be agreed to.

The House divided. [19:25]

(The Speaker—Hon. Tony Smith)

The division was unavailable at the time of publishing.

Question negatived.

Original question agreed to.

Bill read a second time.

Dr CHALMERS (Rankin) (19:33): I move amendments (1) and (2) on sheet 1 together as circulated in my name:

(1)   Schedule 2, page 5 (before line 4), before item 1, insert:

1A Clause 1 of Part I of Schedule 7 (table dealing with tax rates for resident taxpayers for the 2018-19, 2019-20, 2020-21 or 2021-22 year of income)

Repeal the table (including the note), substitute:

[tax rates]

(2)   Schedule 2, page 6 (before line 1), before item 3, insert:

2A Clause 1 of Part III of Schedule 7 (table dealing with tax rates for working holiday makers for the 2018‑19, 2019‑20, 2020‑21 or 2021‑22 year of income)

Repeal the table, substitute:

If anyone in the broader Australian community is wondering how this third-term government found itself with the slowest growth in a decade and interest rates cut to one per cent, which is a third of what they were during the global financial crisis, with productivity going backwards, with weak household consumption, with weak household spending, and with stagnant wages, which are growing at an eighth of the pace of company profits, they need only listen to the contributions from those opposite over the past hour or so. They are so focused on what Labor is doing and what Labor is saying that they have left themselves absolutely no time to do their actual job, and it shows in the outcomes we are getting. The data being put out on an almost daily basis points to a floundering economy, which points to the fact that middle Australia is struggling. Every day we are reminded by the contributions—if you can call them that—of those opposite that they have absolutely no plan to turn things around.

The amendments before the House are about trying to get the place going again, about recognising that the economy has deteriorated. It has deteriorated even since the election. We've got some very poor economic data. The bank has had to cut rates twice in two meetings, down to extraordinary record lows. What the amendment recognises is that we need to do something about it. We have put these proposals to the government before now, and again now, because we do think that something needs to change. We can't have a situation where the Treasurer looks at the data that I've just run through and thinks that everything is hunky-dory. It's not. The economy is struggling on his and the government's watch, and something needs to be done about it. We owe it to the Australian people to put our heads together to try and work out what can be responsibly done to try and get the place moving again.

Labor have said all along that we support stage 1 of the tax cuts. They are, in my view, a no-brainer. We need to get those into the economy as soon as possible. It was promised that they would be in the economy yesterday. Unfortunately, the Treasurer and the Prime Minister broke that promise. They are not flowing through the economy. One of the reasons why we facilitated this debate tonight and why we'll do the right thing to facilitate debate later in the week in the Senate is that the economy is crying out for tax relief. Stage 1 is important in that regard. These amendments say that if the economy's slowing and the government doesn't have a plan to do anything about it, what can we on this side reasonably propose? What we've proposed in a responsible way, in good faith, is: why don't we take a portion of the tax cuts that would otherwise come into being in 2022, if the government passes its package, and bring them forward into the current financial year, which began this week? The net impact, the consequence, of that would be that every single Australian worker would get a tax cut this year. Under this government, some people will get a tax cut this year, some in 2022 and some in 2024. We are saying the economy is soft enough for us to consider a new way forward. That's why we are proposing what we are proposing in the amendments before the House right now.

I want to say one last point about the government's language around aspiration. The government wants to pretend that these tax cuts on the never-never are about aspiration. No government which actually understands aspiration would be cutting the wages of those who work on weekends. If there's something that really speaks to aspiration in this country, it is people who are prepared to work on Sundays to do a bit better for the people they love, to put food on the table. The idea of the government cutting penalty rates at the same time as it is talking about aspiration is in lots of ways, to be frank about it, sickening. Aspiration isn't a marketing term that you learn about from a focus group report; you have to be serious about it. You have to spend time with real people in real communities to understand it. What we are proposing here is to do something to get everybody a tax cut in this economy, to help boost it. People understand that their wages are stagnant, that the link between hard work and reward for that hard work has been severed by this government. We need to do something about it. We need to do something about the slowing economy. We've proposed a way forward here in these amendments. The government so far has been too pig-headed to pick them up and run with them. It's not too late for them to do the right thing and vote for them.

Mr FRYDENBERG (Kooyong—The Treasurer) (19:39): We oppose these hastily cobbled together amendments that create some veneer of credibility for the Labor Party after they took to the Australian people $387 billion of higher taxes. They have the gall to come into this place and start talking about pump-priming the economy and providing tax relief for Australians. You can't take this mob seriously. Six weeks ago, they were going to hit retirees, renters, homeowners, family businesses and people with superannuation with higher taxes. Remember that worker up in North Queensland who confronted the then Leader of the Opposition, Bill Shorten, during the election and said, 'What are you doing for us on $200,000+?' The then Leader of the Opposition didn't have the courage to tell him that he was giving him a tax increase if Labor were to get into office.

The member for Rankin talks about aspiration. What Labor was going to do was tax those who aspired to earn more, tax those who wanted to take responsibility for their retirement. Our plan was laid out clearly in the budget, and it has both short-term relief, with up to $1,080 for those earning up to $126,000, and long-term structural reform, where we are going to reduce the rate of tax from 32½c down to 30c in the dollar for those earning between $45,000 and $200,000—one big, flat, simpler tax bracket. That will encourage aspiration.

These amendments from those opposite have been cobbled together at the last minute and are all about giving them a veneer of credibility when they know their credibility has been in tatters since the election. We do know that under our plan the progressive nature of the tax system will be maintained. We do know that under our plan more money will go into the pockets of hardworking Australians. We do know under our plan that household consumption will be boosted, that overall economic activity will be a boosted and that we can continue Australia's success of 28 consecutive years of economic growth. While those opposite want to talk down the economy at every opportunity, we say on this side of the House that, yes, there are serious challenges. There are challenges in the housing market, there are challenges as a result of drought and there are challenges in the global economic outlook. But at the same time we have a AAA credit rating, we have net debt to GDP of around 20 per cent and we have also created over 1.3 million new jobs, including 40,000 new jobs over the last month.

The Labor Party have torn themselves to pieces over the last few weeks having different positions every day—whether it's because they can't commit in 2024-25, even though they have long-term spending commitments and tax hikes. You heard from the member for Hunter that the Labor Party should not block these tax cuts.

Mr Khalil: The most sensible thing he's ever said!

Mr FRYDENBERG: Then you have the member for Wills say that you shouldn't be blocking these tax cuts from opposition. Now the Labor Party is saying, 'We need to wait and see what the crossbenchers do in the Senate because we can only vote for this legislation if we can't oppose it as a result of what the crossbenchers do.'

We oppose these amendments from the Labor Party because we took our plan to the Australian people—we laid it out in the budget, and it was central to our campaign—and it was endorsed on 18 May. Our plan will lead to more money in the pockets of hardworking families, low- and middle-income earners. The Labor Party will always be the party of higher taxes.

Mr BANDT (Melbourne) (19:44): This government is on a mission to end progressive taxation and dismantle the welfare state. That much was obvious from the Treasurer's contribution just then, talking about the glory days that they see in their neoliberal fantasy land, where everyone will be swearing on Milton Friedman as they come into this place, where there's only going to be one tax rate—that's what they'd love, if they could get there—and where someone who's a CEO of a corporation pays the same amount of tax as someone who is on the minimum wage. That's where they want us to get to, and we know the consequences of that. The more you attack revenue, the less money there is for services that make Australia more equal.

What you haven't heard from the government in any of the speeches we've had today—in the Governor-General's speech or any of the other speeches—is about those people who are struggling on Newstart who are living in poverty at the moment. The only way to assist them to get out of poverty at the moment is (a) to create more real jobs, which this government seems unable to do, and underemployment is at a crisis rate, and (b) to lift the level of Newstart so that people aren't living in poverty while they're waiting to find a job. To do that, you need money. You need money to be able to do that. That money comes from taxes. As I said in my second reading debate contribution, the best way to put more money in people's pockets and increase the revenue base of the government to provide services is lifting wages. That's what we need to do in this country at the moment. What we shouldn't be doing, given what we know very clearly the government's agenda is, is helping it to fast-track part of its plan—and that's what this amendment does.

I understand that there are largely political motivations for the opposition moving this amendment, but I would urge them to be very careful, because some day—hopefully, very soon, especially in a finely balanced parliament—this government will, hopefully, be out on its ear and there will be a change of government. When that happens, there will need to be revenue to do things such as lifting the rate of Newstart. The more we engage in this tax cut arms race and say we are going to vote to bring forward even part of the government's plan, the less money there is in the kitty. I don't know exactly what this will cost, but based on the PBO costings so far it wouldn't be unreasonable to assume that there will need to be in the order of $5 billion to $6 billion a year to deal with stage 2.

We shouldn't be having tax cuts for high-income earners at all, let alone bringing them forward. What I think needs to be understood is that, as much as this amendment and stage 2 are framed around low- and middle-income earners, what the government is doing in its bill and what the opposition is doing in its amendment to try and bring this forward is fundamentally changing all the marginal tax rates. So people who are earning $200,000, $300,000 or $1 million dollars are going to get a benefit from this amendment. In fact, the proportion of the population that are going to get the full benefit from this amendment that the opposition is moving are those on the highest incomes. It's not an amendment that will help reduce inequality. It's not an amendment targeted at low-income earners. So, for reasons very different to the government's, the Greens cannot support this amendment, because what it actually does is take a very bad thing that government is doing and bring it forward so it will happen earlier. We should, instead, be saying that we want services and wage rises instead of tax cuts and, if we can find a way of providing assistance that's targeted—for example, by increasing the low-income tax offset so it's properly targeted at low-income earners—so that you don't need to change all the marginal rates and you don't provide flow-on benefits for people earning $200,000, $300,000 or $400,000 a year, then let's look at that.

I'll be supporting the next opposition amendment to get rid of stage 3, because that's a good amendment and it's consistent with maintaining, as much as we possibly can, progressive tax in Australia. But I would urge the opposition to have a bit of a rethink about this idea of saying, 'The best way to deal with the government is to match them and bring their plans forward.' That's not the best way. That is just going to make a bad situation worse. If we want to deal with the economic challenges that have been laid out by the opposition and by the government, let's work on a plan to lift wages and let's work on a plan to lift Newstart. Let's not engage in a tax cut arms race.

The SPEAKER: The question is that the amendments moved by the member for Rankin—amendments (1) and (2) on sheet 1, as circulated—be agreed to.

The House divided. [19:53]

(The Speaker—Hon. Tony Smith)

The division was unavailable at the time of publishing.

Question negatived.

Dr CHALMERS (Rankin) (20:01): I move opposition amendments (1) and (2) on sheet 2, as circulated in my name:

(1)    Schedule 2, item 2, page 5 (starting at line 11), omit the item, substitute:

2 Clause 1 of Part I of Schedule 7 (table dealing with tax rates for resident taxpayers for the 2024-25 year of income or a later year of income)

Repeal the table, substitute:

(2)    Schedule 2, item 4, page 6 (starting at line 8), omit the item, substitute:

4 Clause 1 of Part III of Schedule 7 (table dealing with tax rates for working holiday makers for the 2024-25 year of income or a later year of income)

Repeal the table, substitute:

What the government has just done is vote against a tax cut for every Australian worker this term. This so-called party of lower taxes just came over to this side of the House to vote with the Greens to prevent the bringing forward of part of stage 2, which would have given every Australian worker a tax cut from this week. At a time when the economy is floundering and middle Australia is struggling, they voted with the Greens against bringing forward their own tax cut. They say it's a great idea in 2022. They say it's a horrible idea in 2019, when the economy of 2019 has slowed so dramatically on their watch and needs so much help right now from those opposite and isn't getting it.

What the government is doing here more broadly is holding hostage to a tax cut in five years time the tax relief that the economy needs now to try to get the place moving again. And so what this second set of amendments does is attempt to pull out of the bill stage 3of the government's tax cuts. The reason we are seeking to do that and seeking the support of the parliament to do that is that, from a government which has got all of the big economic calls wrong and has routinely and repeatedly got the economy wrong, we've now got this floundering economy. They want us to believe that they know what the show will look like in five years time. They want us to believe that they know what the economy will look like and what the budget will look like in five years time. They don't know what the place will look like in five minutes time the way that they are going. So this amendment seeks to bring out that part of the income tax package—to bring out stage 3. They can consider it at some future point, but it shouldn't get in the way of us as a parliament passing stages 1 and 2 this week and bringing forward part of stage 2, as the member for Lalor points out.

If those opposite don't want to take our word for what's going on with stage 3 of the tax cut, I draw the House's attention to the detailed analysis that was done by the Grattan Institute. If you read the Grattan Institute analysis, you will see they say that stages 1 and 2 are good ideas, that they give the economy a boost and give people a bit of tax relief—that's important. The Grattan Institute are right to point that out. But what they say about stage 3 is that stage 3 of the tax plan needlessly reduces fiscal flexibility. That is an important point. Stage 3 mainly benefits high-income earners—a point made by the Grattan Institute. The other point they made is that it will make Australia's income tax system less progressive. So what the Grattan Institute says about stage 3—and this really accords with our own thinking about stage 3 and why we are attempting to pull it out of the bill which will pass the House of Representatives tonight—is:

Locking in such substantial tax cuts in 2024-25 carries plenty of downside risk in Australia's current highly uncertain economic environment. The economy is softening, the budget position is uncertain, and calls for the Government to use fiscal policy to stimulate the economy are growing. Tax cuts in 2024-25 are likely to come well after stimulus is needed.

We couldn't have put it better ourselves. That is precisely why we need to pull stage 3 out of this bill.

As everybody here knows, we will enthusiastically support stage 1 and stage 2. We think part of stage 2 should come forward. The government voted against that. Remarkably, the government of lower taxes voted against a tax cut a few moments ago. We need to get stages 1 and 2 through this parliament this week. Stage 3 doesn't come in until 261 weeks from now. There's absolutely no reason for the parliament to pass those tax cuts that come in in five years time. What we're seeking to do is to come to a reasonable and responsible conclusion, that it's not the right thing to do to commit $95 billion five years out when those opposite don't have a clue about what the economy or the budget will look like at that point.

That's the core of our amendment that we're moving now. We're seeking the support of the parliament. We'll seek it here. We'll seek it in the Senate as well after tonight, because it is important that we do the right and responsible thing: stimulus into the economy now, stages 1 and part of stage 2. Stage 3 can be debated at a future point, at some point in the next five years, in the next 261 weeks, before this comes in. They should stop holding tax cuts now hostage for tax cuts in five years time.

Mr STEPHEN JONES (Whitlam) (20:05): I want to take the unusual step, in starting, of congratulating the members of parliament who've returned here to the government side of the benches, because the fact of the matter is that they are some of the most surprised people in Australia that they were returned to government. We know this, because, if you want to see a government that is divided, that has lost its way and that doesn't have an economic agenda, have a look at stage 3 of the tax cuts. Have a look at stage 3 of the tax cuts, because the truth is—and every single one of those members of the frontbench knows it's absolutely true—that this is legislation that they never thought they were going to have to implement. They thought that they were being very, very tricky by loading into the budget a whole bunch of time bombs that were going to blow up on somebody else. They were going to blow up on somebody else's watch. The truth is this: stage 3 of these tax cuts is one part politics and one-part reckless but no part good economic management. It's $95 billion and it's unfunded.

I want to direct some comments to the new members of parliament over there, because at some stage over the next three years they are going to have constituents coming in to their offices. They are going to have constituents coming in to them to complain about the government's approach to deeming rates. They're going to be saying, 'How come, when I go to my bank and I want to invest in a term deposit, the best that I can get is somewhere between one and 1½ per cent, but when it comes to tax time the government assumes that I am getting a deeming rate of 3.25 per cent?' You are going to have to say to them: 'Well, I'm very sorry. We'd like to do something about that, but the fact is we've decided to give $95 billion away in unfunded tax cuts.'

At some stage over the next three years, you're going to have people coming in who are clients of the NDIS. They're going to be after equipment. They're going to be after assistance, whether it's caring assistance or other facilities. They're going to be getting news from the NDIS that their needs are unfunded. They're going to come to you to ask, 'What is the government going to do about it?' and you're going to have to say: 'I'm very sorry. We'd like to do something about your legitimate needs, but we've given $95 billion away in unfunded tax cuts.' At some stage over the next three years—no, at some stage over the next three months you're going to get an elderly person or one of their carers come in to your office. They're going to say: 'We need assistance with an aged-care package. We've had an ACAT assessment and we've been told that we are entitled to a very high level of aged care'—maybe they're on level 3 or 4—'but we've been told that there are no aged-care packages available.' What's more, I believe that there are 110,000 people on a national waiting list. I can see the blood draining out of the faces of those opposite today because they know this is right. They've probably already had these constituents coming to them saying, 'I've been assessed as needing an aged-care place but I can't get one'. You are going to say to them, 'I'd love to do something about those aged-care places, but our priority was an unfunded $95 billion tax cut.' That's one part politics and one part reckless, but no part sound economic management.

What the country needs today is what Labor put forward and what the government has just voted against: fiscal stimulus. We have the Reserve Bank Board and the Reserve Bank Governor saying, 'We've done all we can with monetary policy. We are giving money away. At one per cent we are at historic low rates for the price of money. There is nothing more we can do.' They are saying to the government, 'Over to you, guys.' We need fiscal stimulus. We know that you guys went to the last election without an economic plan. We have provided you with a positive alternative, one that you should have voted for. Instead, you have voted against tax cuts for the majority of Australians and you have voted against the only economic plan going.

I've heard a bunch of people on that side say, 'We have got a mandate.' There are 151 members in this place and we all went to our constituents and we all have a mandate to vote responsibly and vote in the national interest. If the members on that side were doing the right thing by the economy and by their constituents they would have voted for the last amendment and they'll vote for this amendment. (Time expired).

Dr LEIGH (Fenner) (20:11): The debate in this House comes down to one simple proposition. We on this side of the House are arguing for tax cuts for everyone now. The coalition are arguing for inequitable tax cuts in five years time. And which of those arguments should prevail depends on one simple question: is the Australian economy weak or is it strong? A few facts: inflation is now virtually non-existent, new building approvals are drying up, new car sales are falling, unemployment is rising—our unemployment rate is now one percentage point higher than it is in Britain, the United States, Germany and New Zealand—real wages have been flatlining for six years and household savings are low. The Productivity Commission says productivity growth is 'mediocre' and notes that in farming, mining, construction, transport and retail labour productivity has been falling.

This year, for the first time on record, the amount of capital per worker went backwards. We've got fewer new start-ups now than we had in the early 2000s. Real GDP per person has been falling for the last nine months. We are in the longest per capita recession since the early 1980s.

A survey of 20 leading economists, at the start of the week, estimated a 29 per cent chance of Australia falling into a full recession in the next two years. Gold prices are at record highs and bond yields are at record lows—two key signs of trouble in the economy. Today, the Reserve Bank cut interest rates to historic lows, an extraordinary two rate cuts in two successive months.

When the budget was brought down it forecast 2.75 per cent growth in consumer spending. On Monday, 20 of Australia's leading economists were asked how many of them supported that forecast. How many of those 20 economists didn't believe the government's forecast? I'll give you a hint, that answer rhymes with plenty. Twenty out of 20 didn't believe the government's consumer spending forecasts. The economy is weak; it needs stimulus now.

There are equity arguments against stage 3. Thirty-one per cent of it goes to the three per cent of taxpayers who earn over $180,000. It would reduce the share of tax paid by the top one per cent—they've had a pretty good few decades. Two-thirds of the benefits go to men. According to the Grattan Institute it would make our tax system less progressive than at any other time since the 1950s. It would make our tax system less progressive than the OECD average, compared to the current situation where we have a more progressive income tax scale than the OECD average.

Then there is the opportunity cost. This stage 3 is based on heroic growth forecasts and unprecedented assumptions about spending growth restraint. It assumes 1.3 per cent real growth in spending, a lower rate of spending growth than we have seen in any government going back a generation. As the member for Whitlam has said, we have to ask those opposite: what are you going to cut in order to pay for stage 3? It's $85 billion. Are you going to be cutting schools? Are you going to be cutting hospitals? Are you going to be cutting aged care? Are you going to be cutting social programs? There is an opportunity cost to this. No-one believes the government's heroic growth forecasts. No-one believes that they are just going to cap spending with not a single new social program under their assumptions.

Yes, there is an opportunity cost argument against stage 3, but the main argument against the $85 billion stage 3 is a fiscal one. When you are in an ocean liner and heading to oceans with icebergs, do you really want to start selling off the lifeboats to pay for upgrading the first-class cabin? Do you really want to be saying, 'We are going to throw overboard our best chance of dealing with a financial crisis,' in order to lock in large, expensive tax cuts? Under Labor, more people will get a tax cut sooner. The coalition have just voted against tax cuts. As the member for Rankin pointed out, they have voted, with the Greens, against every taxpayer getting a tax cut now.

Our approach is a fair approach, and it's an approach that addresses the weakness in the global economy. The Australian economy is too weak for the proposals the government is putting before the House.

Mr FRYDENBERG (Kooyong—The Treasurer) (20:16): We don't agree with these amendments, because we on this side of the House believe in lower taxes. Labor is only putting forward this amendment because they believe in higher taxes. Let's understand exactly what Labor is saying. They are saying to the millions of Australians who earn between $45,000 and $280,000 that they don't want to give them a tax cut.

They have in the shadow Treasurer, the member for Rankin, somebody who has never seen a tax increase that he doesn't like. He was a big fan of the mining tax, he was a big fan of the carbon tax and he was the co-architect, with the member for McMahon, of $387 billion of higher taxes. Those were taxes that would hit retirees, taxes that would hit superannuants, taxes that would hit family businesses and taxes that would hit income earners like the blue collar workers who the then Leader of the Opposition met in North Queensland during the election campaign.

We, on this side of the House, are doing everything we can to lower the overall tax burden. That's why we, on this side of the House, have a tax-to-GDP cap of 23.9 per cent. Today, it's 23.3 per cent. If the Labor Party got to implement their tax increases in full, their tax to GDP would have been 25.9 per cent. Labor would have been the highest taxing government in Australia's history.

For many people who were voting in the election on May 18, they knew that they would get tax cuts with the coalition and tax increases with the Labor Party. That was what was behind their decision. The Labor Party, having lost the election, have not learned anything. The Labor Party, having had their new Leader of the Opposition and shadow Treasurer embark on a listening tour across the country, have not heard anything. They haven't learned anything, and they haven't heard anything. What we have seen from the Labor Party is a continuation of their previous position in favour of higher taxes.

We, on this side of the House, put to the Australian people very clearly, at the budget and at the election, a plan for short-term relief and long-term reform. That's short-term relief that will see Australians who earn up to $126,000 get up to $1,080 in their pockets. If you're a teacher or a tradie—each earning $60,000—you will get $2,160 in your pocket when you put in your next tax return, if this legislation gets through the parliament. Now, that is very significant tax relief. Overall it's equivalent to two 25-basis-point rate cuts, and the Reserve Bank governor has said that this will boost household incomes, will boost economic activity and will be good for the economy.

The Labor Party have been tearing themselves apart in public view over their position or non-position on these tax cuts. The member for Wills and the frontbencher the member for Hunter have told everyone who is prepared to listen that they are in favour of the government's tax package in full. Then we heard Senator Katy Gallagher, in a train wreck of an interview, saying that she couldn't even make a decision as to Labor's position on this until she saw what the crossbenchers did. That level of uncertainty and that level of disbelief in lower taxes is not something you get from those on this side of the House. We believe in lower taxes. We have a plan for lower taxes. It's before the parliament today and it should be passed in full. (Time expired)

The SPEAKER: The question is that amendments (1) and (2) on sheet 2 as circulated, moved by the member for Rankin, be agreed to.

The House divided. [20:25]

(The Speaker—Hon. Tony Smith)

The division was unavailable at the time of publishing.

Question negatived.

Mr ALBANESE (Grayndler—Leader of the Opposition) (20:31): I move the amendment:

That the short title of the bill be amended to read:

Treasury Laws Amendment (Tax Relief So Working Australians Keep More Of Their Money But Not For A Really Long Time) Bill 2019.

We've heard from those opposite that they're actually interested in tax cuts, but what we've seen from the amendments that were moved by the shadow Treasurer were tax cuts being brought forward and voted against by those opposite. I wasn't surprised that the member for Melbourne voted against it, because that's consistent with the Greens' position. What just occurred on the floor of this parliament was the new alliance between the coalition and the Greens to stop tax cuts being brought forward for every worker in Australia. Then we had another debate about stage 3, and that's what this amendment goes to. They say they want tax relief for working Australians, but they don't want it this term. They don't even really want it next term. Maybe they'll want it in the term after.

It's not like there are any signals out there saying there are problems with the economy. Interest rates are down to one per cent.

An honourable member: It's free money!

Mr ALBANESE: It's free! Inflation is 1.3 per cent. Growth is 1.8 per cent on an annual basis. We have low consumption. We have wages that were cut yesterday for 700,000 Australians. We have productivity growth that's gone backwards for four quarters in a row. We have debt which has doubled on their watch. And do you know what they'll say? They'll say, 'Well, what we have is, of course, Labor's fault.' The shadow Treasurer writes op-eds that say—oh, the Treasurer; that's right. But the point is that it's really easy to confuse them, because they act like they're in opposition. You know, the days of opposition are where you provide critiques, because that's your job—to hold them to account. But this mob, who are the government, act like they're the opposition day after day.

Tonight they voted against bringing forward tax cuts, and the whole justification for all of this is that they have a plan for 2024-25. They say that will help consumer demand right now. They say that will help wages. They say that will boost economic growth. They say that will boost employment. But, of course, none of it will. It's a bit like the road the member for Dickson promised—Linkfield Road. It's due to commence in 2026-27. That will fix urban congestion! That was in direct mail, right next to, 'If you vote for us, you will get a tax cut in 2024-25.' It was in the direct mail.

Mr Dutton: We won!

Mr ALBANESE: I know they won. The question is: do they know they won? That's the question, because they don't act like the government. A government has to put national economic responsibility at its core, and they don't do it. What they do is make everything about politics. They actually say that, if our amendments get up, they'll vote against their own tax plan—the whole thing. They'll block it all. So if amendments get up saying that dealing with what is due to happen in 2024-25 will be deferred for a future date—like a fortnight, when parliament comes back—they're going to vote against the whole thing. They're going to say to workers, 'You don't get a tax cut today because we have a plan for 2025.' That is their actual position. This title shows how childish and pathetic they are, which is why we've moved this amendment, which I commend to the House, because it is more accurate than the current title of the bill.

Mr FRYDENBERG (Kooyong—The Treasurer) (20:36): We oppose this amendment because we won't join the Labor Party in mocking Australians. We won't join the Labor Party in making light of the fact that hardworking Australians are counting on this parliament to pass our tax package in full. The Leader of the Opposition is following the losing strategy of the member for Maribyrnong and supporting higher taxes, because it's in the Labor Party's DNA to see higher taxes. The shadow cabinet today, under this Leader of the Opposition, is pretty much the same shadow cabinet that supported—wait for it!—$387 billion of higher taxes. Those were higher taxes and policies that would have hit over a million retirees. They would have seen renters pay more. They would have seen homeowners see their home be worth less. People who saved for their superannuation faced higher taxes.

Ms Kearney interjecting—

The DEPUTY SPEAKER ( Mr Hogan ): The member for Cooper is warned!

Mr FRYDENBERG: Income earners and family businesses would also have been hit with higher taxes. Those are still the Labor Party's policies, because the Labor Party was, is and will always be the party of higher taxes.

Mr Fitzgibbon interjecting—

Mr FRYDENBERG: The Leader of the Opposition can't even keep his own members in line, because where was a speech on this bill from the member for Hunter? Where was the member for Hunter? We know what the member for Hunter thinks. He was in the paper supporting our tax package.

Mr Albanese: Mr Deputy Speaker, I have a point of order. If you approach the opposition to restrict debate, don't then complain that everyone doesn't get to speak.

The DEPUTY SPEAKER ( Mr Hogan ): I call the Treasurer.

Mr FRYDENBERG: We have had numerous speakers from the opposition, and the member for Hunter was nowhere to be seen and the member for Wills was nowhere to be seen.

This is a serious matter. This parliament is debating a package of tax cuts that was at the heart of our budget, that was at the heart of our election campaign and that was endorsed by the Australian people on 18 May.

The Leader of the Opposition has learnt nothing from their election defeat and has heard nothing on his listening tour. He was facing a big test, the first test, in this parliament—would he support the government's tax cuts, which were endorsed by the Australian people?—and he failed. He failed badly.

We oppose this amendment, because we support lower taxes for all Australians.

The SPEAKER: The question is that the amendment moved by the Leader of the Opposition be agreed to.

The House divided. [20:44]

(The Speaker—Hon. Tony Smith)

The division was unavailable at the time of publishing.

Question negatived.

Bill agreed to.

Mr FRYDENBERG (Kooyong—The Treasurer) (20:49): I move:

That this bill be now read a third time.

Dr CHALMERS (Rankin) (20:50): If anybody in the broader Australian community wants to know why we have slowing growth in this economy—the slowest growth since the GFC—if anybody wants to know why productivity has gone backwards, if anybody wants to know why we have weak consumption and weak wages and why people in middle Australia are so worried about their wages, about paying their mortgages and about paying their bills, if anybody is looking for the root cause to a lot of these problems, they need look no further than the contributions made by those opposite in the debate tonight about their income tax package.

When you go through all of the crook economic figures that I've gone through a couple of times tonight, one of the things that hasn't dawned on the government yet is that one of the consequences of them winning the election on 18 May is that they now absolutely own this floundering economy which has slowed and weakened dramatically over six years and will into the third term of a Liberal government. We will have no more of the finger-pointing and the blame-shifting and the pretending that somebody else is in charge of the economy. One of the consequences of winning the election is that the weakness in the economy is on your head, and those opposite have played a role in the slowing down of this economy.

It has actually cost economic growth and jobs that they don't have a plan for wages. It has actually been detrimental to the economy that they've had a pig-headed refusal to support some of the rational, reasonable and responsible measures which we have proposed in the House tonight to try to get the economy going again—to try to get tax cuts into the hands of more workers circulating in the economy sooner, not in the never-never—because the economy needs a boost right now. The economy is floundering. The Reserve Bank has recognised that. If only those opposite would recognise what the Reserve Bank and the broader Australian community has recognised, which is that this government has a problem with the economy and they're doing absolutely nothing to turn it around. They're pretending there's nothing wrong with the economy. The Treasurer says the economy is strong. That's news to the Reserve Bank, who cut interest rates today to a new record low of one per cent, a third of what they were during the global financial crisis.

Just as it hasn't dawned on those opposite that winning the economy means owning the economy and all of the challenges that have developed over the first two terms of this government, the last six years, I also don't think it's dawned on those opposite—particularly some of the colleagues up the back there—that what they did in the House tonight was vote against a tax cut for every Australian worker in this term of the parliament. When they were wandering around their electorates and when they were standing up on their preselections and saying, 'I want to be part of the party of so-called lower taxes,' I'm sure they didn't envisage that their first act of the new parliament—the 46th Parliament—would be to wander in here and, under the Treasurer's direction, vote against their own tax cut being brought forward three years. Some of these new members—I see them there and I congratulate them on their victory—their first act in this parliament, having won the election, is to come in here and vote against a tax cut for every Australian worker this term. It's probably now slowly dawning on them what they've done. In the context of a slowing economy and all of these challenges we have in the economy with consumption and wages and disposable income, what they have done as their first act as new members is come in here and follow the Treasurer and the Prime Minister to vote against their own tax cut being brought forward three years in a way that would help the economy. This so-called party of lower taxes wandered in here tonight and voted against a tax cut for every Australian worker.

What we tried to do was to do the right, responsible and constructive thing and say, 'You've made a mess of the economy, and we're going to help you try to turn things around.' But what they always do is they always put a higher premium on having a barney with the Labor Party than on doing the right thing by the economy. If they genuinely wanted to do the right thing by the economy, they'd bring forward their own stage 2 tax cuts—or part of them—into the current year. They wouldn't be holding stages 1 and 2 hostage to stage 3. They wouldn't be saying that it's more important that we get a tax cut in 261 weeks time than it is that we get a tax cut this week out of this parliament this term. The first vote of those opposite in this place was to vote against tax relief. That will be on their heads. The economy's slowing; they need to do something about it. Stop pretending that there's nothing wrong in the economy on your watch.

Mr FRYDENBERG (Kooyong—The Treasurer) (20:55): The hypocrisy of the Labor Party's position has not yet dawned on me. They're talking down the Australian economy, yet only six weeks ago they took $387 billion of higher taxes to the Australian people. Their solution for the economy was higher taxes. We are all about lower taxes, encouraging aspiration, providing reward for effort and tackling bracket creep. Our tax cuts, laid out in the budget, endorsed by the Australian people, should now be supported by this parliament in full. The Labor Party have been exposed as being the party of higher taxes. They've always been the party of higher taxes; they will always be the party of higher taxes.

The SPEAKER: The question is that this bill be read a third time.

A division having been called and the bells having been rung—

The SPEAKER: As there are fewer than five members on the side for the noes in this division, I declare the question resolved in the affirmative in accordance with standing order 127. The names of those members who are in the minority will be recorded in the Votes and Proceedings.

Question agreed to, Mr Bandt and Mr Wilkie voting no.

Bill read a third time.