Page 2426 - Week 08 - Thursday, 5 August 2021
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public benefit. Tax cuts ultimately mean a cut to services, a cut to our schools, a cut to our hospitals and a cut to our public service. It is something that we cannot afford.
In 2019 the federal government introduced a three-stage tax bill to the federal parliament. The third stage of those tax cuts, known as stage 3, will see someone who earns $45,000 per year pay the same 30 per cent tax rate as those earning $200,000. The stage 3 tax cut is, to quote the shadow treasurer, Jim Chalmers, “the least affordable, it is the least responsible, it is the least fair and it is the least likely to get a good return in the economy because high-income earners are less likely to spend money in the economy”.
So you can imagine my surprise when the federal Australian Labor Party decided to back in the Morrison government stage 3 tax cuts. The regressive position on this issue by the ALP was confirmed for the Australian community last week when the shadow cabinet decided to drop their commitments to a fair and progressive tax system. Canberrans do not fall for this political posturing. We saw that in last year’s election when the Canberra Liberals astonishingly promised to lower taxes while at the same time increasing services. We know how that fallacy ended.
According to the Australia Institute, stage 3 will overwhelmingly benefit high-income earners like you, Madam Speaker, and I, with almost one-third of the benefit going to the top 10 per cent of taxpayers and over half the benefit flowing to the top 20 per cent. These tax cuts are for people who need them the least. These tax cuts will inevitably rip revenue from the budget that should be going to schools and hospitals, to essential services in our community; not to the pockets of high-income earners. Both of the two old parties have now clearly shown that, when it comes to power, it is politics over people.
Here at the ACT level, these decisions have a very real impact. While Canberra is often held up by the rest of Australia as a shining example of social and economic leadership, we are also a wealthy city that risks leaving people behind. Many of us might not stop to think about the difficulties someone on a low income faces in an affluent city like ours. Some might even think that the wealthy lift the rest of our population up—that trickle-down furphy. But the fact is: the opposite is true. Being poor in a rich town means that the cost of living is astronomical for someone on, say, the NewStart allowance of $545 per fortnight. Canberra continues to record the highest median incomes, along with the highest cost of medical care and the most expensive rents in the country.
At a local level, the ACT Labor Party has benefited from a power-sharing agreement with the Greens for the last 12 years and has been held up as the most socially progressive government in the country. I do not believe that these two things are a coincidence. Having Greens at the table has resulted in our having the most progressive government in the country. My Greens counterparts and I took a comprehensive policy platform to the last election which will improve the lives of all Canberrans, particularly our most vulnerable.
The lost revenue from these unnecessary federal tax cuts means that there will be fewer funds available for badly needed services. It will increase inequality here in
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