Second Reading – Treasury Laws Amendment (Income Tax Relief) Bill 2016
Mr PITT (Hinkler—Assistant Minister for Trade, Tourism and Investment) (11:24): Acting Deputy Speaker Hogan, it is good to see the member for Page from The Nationals in the chair.
Before I get to the fundamental issues that we speak on today in the Treasury Laws Amendment (Income Tax Relief) Bill 2016, I would like to address some of the comments by the member for Kingsford Smith. Just like the ‘Mediscare’ campaign, it is—as I am sure you are aware, Deputy Speaker Hogan—just wrong. They are just making it up. In fact, this bill will, from 1 July 2016, provide a tax cut to 3.1 million taxpayers—that is the reality. There will be a tax cut from 1 July 2016. So Labor are wrong once again. They are wrong to state that taxpayers will not receive a benefit from this tax cut until the end of the financial year. Page three of the explanatory memorandum says just this.
The Australian Taxation Office (ATO) will issue new income tax withholding schedules once the Commissioner of Taxation (Commissioner) is confident that Parliament will pass these amendments.
I am very pleased that the member for Kingsford Smith has said that Labor will support this bill.
The commissioner has already amended the pay-as-you-go withholding schedules, and all affected taxpayers will be able to obtain the benefit cut not at the end of the year but from 1 October. This is already published online. It means that the tax cut will be reflected immediately at this point in the take-home pay of all Australian taxpayers.
As I am sure you know, Deputy Speaker Hogan, as someone who comes from the real world and as someone who has been employed, who has employed people and who has been in business—in fact, I believe you are an economist; one of two we have in the Nationals party room—things change over a financial year. They change constantly. They change depending on how much work you do. They change depending on how much overtime you work. They depend on whether you get ill, whether you do less work or more work, whether you take holidays, whether you get leave loading, whether you get a lump sum payout, whether you retire. Consequently, this is exactly what happens in normal working life for normal working people who are employed. So there will be a tax cut. It will be effective from 1 July 2016, and people will see the benefits. They will see the benefits. So there are no real differences there at all. Labor, in their statements, are fundamentally wrong on this issue.
This was announced in the budget by the Treasurer. It will be a course of tax reduction for hardworking Australians and it does deliver on the coalition government’s commitment to bring down personal income taxes, because we are about less taxes for hardworking Australians. This is an important step in modernising the tax system. It means that individuals of taxable incomes from $80,001 up to $87,000 will be subjected to the lower tax rate of 32.5 per cent rather than the rate of 37 per cent.
I know, as someone in this place who has actually paid taxes for most of his working life, that is an important change, because that trigger point is critical to many families and many earners in this mid-range level. If you earn an extra $1 because you do decide to work extra time and to work harder, to be driven into a higher tax bracket is usually very difficult. Around 500,000 taxpayers—many of them, as I said, are working families—will be kept out of the 37 per cent tax bracket in this financial year. About 3.1 million taxpayers will receive an annual tax cut of up to $315 in 2016-17 and beyond. This tax measure will reward hardworking Australians for doing more overtime, taking a promotion or a better, new job without being penalised by paying more tax through the higher rate. We do not want a tax system in this country that limits opportunity or that punishes those who work hard or take risks in their business, particularly those who take risks in small business.
Small business is the economic life blood of regional communities like mine and like yours, Deputy Speaker Hogan. On this side of the house, we want to see them prosper. There are some 8,600 small businesses in the Hinkler electorate operating across a range of sectors, including construction, manufacturing and agriculture. Most of those are family-run businesses run by mums and dads, aunts and uncles and their siblings. They work long hours, they take few holidays and they, sometimes, take enormous risks to provide important services and products to our community.
Across the country, small businesses employ more than four million people. Four million Australians are employed in small business. In Queensland, small business is responsible for over 90 per cent of all employment. We want those small businesses to have confidence because businesses with confidence are businesses which expand and they are businesses which employ more Australians. Small businesses, as I am sure you know, are the backbone of the nation, and they will drag us forward. The more support we can provide to them, the better off as a country we will be.
The coalition government is focusing on building a strong economy which will help working families and small businesses with tax cuts right now. As a government, we have already delivered free trade agreements with China, Japan and Korea, and they have provided unprecedented trade and export opportunities for producers and businesses in our regions. Those opportunities are helping their bottom line, and stronger bottom lines means more confidence. Those free trade agreements result in giving local producers the better return that we want them to have, and the more that we can give to their bottom line, the better the opportunities for them to employ more of our people, particularly in regional areas. That is what as a government we are about—providing more employment.
Just recently I had the pleasure of visiting the member for Capricornia in her electorate, in my capacity as the Assistant Minister for Trade, Tourism and Investment, after an invitation from my colleague Michelle Landry. Well, it is not really an invitation; it is usually a phone call that says, ‘You’ll need to come to my electorate as soon as possible,’ which, of course, we always try to do. So we visited tropical fruit grower Ian Groves, one of these small business owners, and discussed new market opportunities in Asia for Central Queensland producers of things like mangoes. Mangoes are an important fruit export for Queensland, and the China-Australia FTA has already cut the tariff for Australian mangoes from 15 per cent to nine per cent. That means that the forward-looking price to those people who are purchasing this product has the capacity to be lower, which means more products, which means more products sold, which is great for our producers. Trade data shows that in the early part is this year Chinese imports of fresh Australian mangoes more than doubled compared to the previous growing season. This meant that Australia overtook Thailand as China’s principal supplier of mangoes in the first half of 2016, and that is a fabulous result. We are increasing our exports, which is great for this nation.
Under the KAFTA—the Korea-Australia FTA—the 30 per cent tariff which Korea charged on shelled macadamias is down to 12 per cent already. You might not have heard, Mr Deputy Speaker Hogan, but my area is now the largest producer of macadamias in the country. This was only just recently announced. I see you are looking sceptical, but it is in the press, so you have to believe it! We have enormous growth in this country in macadamia exports. These tariff cuts contributed to a tripling of macadamia exports to Korea in the first half of 2015 compared to 2014, and they maintained that higher export level into the first half of this year. To give you an example, some years ago the high-quality kernel for macadamias was only worth about $3 to $3.50; now I have heard of prices as high as $8.60 a kilo for high-quality kernel. That is an enormous turnaround in price, which means that these businesses are being very, very successful. As I have said, the Bundaberg region is now the largest macadamia-producing region in Australia, and of course it is still the home of the world’s best rum—officially.
The beef outcomes in these FTAs have been a boon for Queensland. Australia is now the only major global beef exporter that has preferential access into all three of these large North Asian markets, meaning we have the jump on our competitors, and that is where we need to be. Australia needs to be positioned so we are first and foremost in these trade agreements.
Another success story under ChAFTA is the Geraldton Fishermen’s Co-operative in Perth, which I toured last week as part of my role. They are the biggest rock lobster processor and exporter in the world, selling around $450 million worth of rock lobsters each year—almost half a billion dollars worth. ChAFTA opened doors almost overnight to allow the co-op to export directly to any port in China, which was previously not commercially viable due to the high tariffs. Not only do they produce $450 million worth of rock lobsters; they employ 350 hardworking people. So GFC have invested heavily in response to the FTA to recently become the first Australian seafood exporter to own a live holding facility in China. They have gone and built a facility within the grounds of Guangzhou airport which will be paired with another under construction alongside the Perth airport. When complete, the latter will be the largest facility of its kind anywhere in the world, aiming to have the shortest tank-to-tank flight time of just 14 hours. This literally means that in 14 hours they can take fresh, live Australian produce from tank to tank into China—one of the biggest markets in the world.
We will continue to work on free trade agreements that provide advantages for our producers, because the stronger they are the more Australians they employ. These types of investments will continue to happen when there is a strong economy, and right now business confidence is up, and that is a result of strong coalition policies which have helped to build this economy. There has been over three per cent growth, according to the most recent figures, because we have a plan for the economy. We have a plan to make a stronger economy for Australia. The stronger the economy is, of course, the more people are employed, the higher confidence is and the more services we can deliver as a government.
But what has the opposition got? Bill Shorten and Labor have a debt wish. That is all they have. They have a debt wish. They wish to ensure that future generations of Australians cannot pay off the debts of this nation. We need to control the budget, and I would certainly thank the Labor Party for seeing sense in terms of the omnibus bill, because we do need to work together. The Australian people expect it of us, and we need to deliver for them. Mr Deputy Speaker, I conclude my contribution and thank you very much. I commend the bill to the House.