Ms SPENDER (Wentworth) (15:09): My question is to the Treasurer. Your budget is framed around intergenerational equity, and I congratulate you for seeking to tilt the balance back towards young home buyers. A tax system that overburdens young workers is not only unfair; it is also unsustainable in an ageing population. But to help young Australians build their wealth, we also need to reduce their income tax rates. This budget raises more than $77 billion in extra revenue over the medium term. When will you legislate to return that extra revenue to taxpayers by reducing income tax rates?
Dr CHALMERS (Rankin—Treasurer) (15:09): I acknowledge the very substantial amount of work and thinking that the member for Wentworth has done when it comes to tax reform, with her participation in the reform roundtable and in other meaningful ways, as well as the very serious input and contributions being made by people on this side of the House.
A lot of the tax reforms that we announced on Tuesday night come from people working through these issues in a considered and methodical way, and I acknowledge that that's how the member for Wentworth comes at some of these questions. Her question really goes to, I think, the core of the tax reform package that we announced on Tuesday night, because it is—as she rightly identifies in her question—about better aligning the tax treatment of people who work for a living with the people who get their income from other legitimate sources. That really is one of the main motivations for the tax reforms that we handed down.
The member for Wentworth is right to point out that that has two elements. One element is making things easier for people who work for a living. Another is making sure that the tax arrangements for people who earn their income from assets is more sustainable. That those two things are in closer alignment—that's what we've tried to do with this tax reform package. So the CGT changes and the negative gearing changes are part of the story but not the whole story.
This is a government which, only being here for four years, has now cut income taxes five times in three different ways. Three income tax cuts have come from higher thresholds and lower rates, and one from instant deduction, which provides a bit more tax relief. The last piece is the working Australians tax offset. What that does is it creates some new architecture to provide tax relief only to working people. It means that, in the future, a government of either political persuasion—to be fair—has a broader range of options when it comes to returning bracket creep, as this government has been doing enthusiastically and regularly.
Opposition members interjecting—
Dr CHALMERS: I can hear the ill-informed guffaws from over there. They seem to have forgotten that they went to an election with a policy to increase taxes on every working Australian. They might want to think about that before they interject.
On the serious issues that the member for Wentworth raises, of course this is a government that looks to give bracket creep back when it's affordable and responsible to do that. We've done it five different times already in the four years that we've been in office. We'd like to get the opportunity to do that again into the future. I'll come to the medium-term outlook, which was also cited in the honourable member's question. With the big improvement over the medium term in the budget position, by the end of the 10-year period, three times more of a contribution is made by our savings effort than the changes in taxes. But, if and when there's more room to return more bracket creep, of course we'll look to do that. (Time expired)