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What is Bracket Creep?

As inflation rages on, the Government is making money out of it through “Bracket Creep” – collecting more taxes.

I moved an amendment to a bill so that tax thresholds are indexed to inflation, meaning you won’t pay more tax because of inflation. Predictably, the major parties voted it down. They rely on squeezing more and more tax out of you and making money out of inflation.

This clip from the Centre for Independent Studies is a great explainer on how “Bracket Creep” works so that the Government benefits from inflation at your expense.

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$18 Billion in COVID Vaccines 💉

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In a recent senate estimate session, I raised questions about the massive purchase of 267 million COVID-19 vaccine doses for Australia’s 27 million population. Despite only using a fraction of these doses, concerns remain about transparency and cost efficiency of that purchase.

Bureaucrats state that there was a need for a diverse vaccine portfolio and future supplies, yet exact delivery figures remain undisclosed due to commercial sensitivities. 👂 Listen as they sidestep the questions.

The question remains, was the expenditure justified and how much has actually been delivered.

Transcript

Senator ROBERTS: I’d like to continue with the questions that I was asking before. Minister, the purchases of COVID injection doses were, by any measure, excessive—a cost of $18 billion—yet we have only used 37 per cent of Pfizer, 26 per cent of Moderna, 25 per cent of AstraZeneca and one per cent of Novavax. Why did we buy 267 million vaccines for a population of 27 million people?  

Ms Fisher: I think that Professor Kelly went through some of the rationale for the COVID purchasing arrangements earlier. But just to recap, I think the most important consideration at the time was to ensure that every Australian would have access to COVID-19 vaccines. Given that it was a new vaccine and a whole new disease, it was necessary at the time to have a portfolio approach to our purchasing, so we had a number of vaccines purchased, and we needed to make sure that they were all going to be safe and effective and that we’d have enough of each of the vaccines to cover the population. I would note that, in terms of the vaccine program, purchasing is carrying through into the future as well. Some of the vaccine numbers that you gave are those that are currently going through the system. Also, we have an acceptable level of waste for the program, which we look into to make sure that it’s an effective and efficient use of public money. 

Senator ROBERTS: According to my simple calculations, 267 million vaccines equate to 10 vaccinations for each individual; and that number also covers people who didn’t want to be vaccinated, so it’s even more than 10 person, per Australian, per baby.  

Ms Fisher: I won’t question your maths but, going back to my comment about having a portfolio approach— noting that different vaccines, according to the advice of the Australian Technical Advisory Group on Immunisation, have been recommended over time for different groups, such as the AstraZeneca vaccine—it was necessary to have some flexibility in the purchasing arrangements.  

Senator ROBERTS: Were all of the 267 million doses delivered to Australia?  

Ms Fisher: Were they, at what time period?  

Senator ROBERTS: Have they all been delivered?  

Ms Fisher: No. Some of them continue to arrive through our advance purchasing agreements.  

Senator ROBERTS: How many have arrived and how many are yet to arrive?  

Ms Fisher: Due to commercial sensitivities and the secrecy provisions in the contracts, I’m not able to answer specific questions relating to specific vaccines around that. I am able to tell you how many we purchased of the different vaccines and some of the uptake that we’ve had overall, which is that 71 million vaccines have been administered over the last few years.  

Senator ROBERTS: That’s about a quarter of what we bought.  

Ms Fisher: Yes, so far, but there are more coming every day.  

Senator ROBERTS: So, because of commercial sensitivity, you’re refusing to tell us how many have been delivered?  

Ms Fisher: Yes, to date.  

Senator Gallagher: And because of the requirements of the contract, the agreements, with the companies.  

Senator ROBERTS: As I understand it, Minister, Ms Fisher is ‘required to produce to this committee any information or documents that are requested’, and I’ve requested the number of vaccines that have not been delivered.  

Senator Gallagher: I don’t know what you’re reading from there but—  

Senator ROBERTS: The standing orders.  

Senator Gallagher: within the standing orders, there are also provisions for things like commercial in confidence. But we can tell you how much has been our expend. We can go through how many have been purchased from each company, and I would imagine we could answer by saying that the agreements are being conducted in accordance with the requirements of the contract, for example. That’s the transparency, but there are still legitimate reasons before committees that matters remain commercial in confidence or security in confidence for a range of different reasons.  

Senator ROBERTS: As I understand it, Minister, there’s no privacy, security, freedom-of-information or other legislation that overrides this committee’s constitutional powers to gather evidence, and Ms Fisher and you are protected from any potential prosecution as a result of your evidence or producing documents to this committee. So, if you want to seek indemnity from providing that then you have to submit such a request to the committee.  

Senator Gallagher: If you’re insisting that we provide that, I can refer the matter to the minister for health to make a public interest immunity claim, and I’m happy to do that.  

Senator ROBERTS: Thank you; I’d like the data. 

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The NDIS System is Broken

During recent Estimates, NDIS Integrity Chief, Mr. John Dardo, stated that 90% of plan managers showed significant signs of fraud, and 87% of service providers were unregistered and unmonitored, lacking adequate training for their responsibilities. Mr Dardo said, “we have no idea what they do when putting in their invoices.” This underscores the broken state of the NDIS, stemming from an ill-considered election promise devoid of data, reminiscent of the Gillard government’s hasty policy announcements without sufficient planning.

I proposed that an inquiry should evaluate the merits of returning responsibility for these services back to the states from which they originated. I pointed out that an unintended consequence has been a shortage of workers in the health and aged care sectors due to the excessively high pay NDIS service providers receive—often triple what they would earn in equivalent roles within these sectors.

Labor’s penchant for wasteful spending was exemplified by the squandering of $430 million on “the Voice,” funds that could have been more effectively allocated to NDIS services. 

Ultimately, taxpayers foot the bill for this waste. I advocate for a shift away from the costly and ineffective centralised service model towards competitive federalism.

Transcript

At the recent Senate estimates hearings, the NDIS integrity chief, Mr John Dardo, admirably confirmed that 90 per cent of plan managers displayed significant indicators of fraud. The level of fraud it is now so high that there are dozens of examples of organised crime groups abusing the systems, with millions of dollars being rorted. The system is so out of control that 87 per cent of service providers are unregistered and unmonitored. I quote words that appeared in an article about Mr Dardo: 

We have no idea of knowing what they do when they put in their invoices. 

It’s taxpayers’ money, spent on something they have no idea of. He had the courage to admit that. He said that existing cases exceeded Australia’s judicial capacity, without finding more. 

NDIS funds must not be used to pay for sex workers, expensive holidays or new cars that other taxpayers cannot afford. Projections are for a blowout of NDIS spending to $90 billion within a decade; it must be prevented. Using the system to peddle drugs is happening extensively. The name of this bill says what we already know about the NDIS. It’s broken and getting worse. It’s a licence for criminals and fraudsters to print money. It’s so far off track that the hope that this bill will get things back on track is a pigs-can-fly pipedream. 

Since the Gillard Labor government’s NDIS inception, there has never been a track. It was hatched with no meaningful metrics or plan. It was simply an election slogan to desperately buy votes in an election that Prime Minister Gillard lost. It was hatched as a headline grabber and a vote harvester. Typical of ‘uniparty’ initiatives—and of policies and legislation in our parliament over recent decades—it lacks the discipline of a system based on hard data and a focus on customer needs. It was done to look good, not to do good. A hastily cobbled together election policy, it had holes in it a mile wide that clearly enabled fraudulent claims to be made with little chance of being picked up and stopped. 

As servants to the people of Queensland and Australia, Senator Pauline Hanson and I have been calling out the NDIS fraud model since 2016. A significant effort is now needed to remove dodgy plan managers and service providers and to protect capable and honest plan managers and providers, using stricter laws to prevent participants from being defrauded, to prevent unscrupulous service providers from abusing vulnerable people and to save NDIS for genuinely disabled people with real needs. If we really care, we’ll clean up this mess. If we really care for disabled people, then we’ll have to get tough and sort out the criminals and the rorters. Providers, managers and recipients who commit fraud under this NDIS scheme must be heavily penalised and banned from any involvement in the scheme again. Wasted money through overspending has cost taxpayers well in excess of $8 billion already, and it’s essential to ensure that the current 150,000 unregistered care or service providers become registered and then are monitored for effective compliance. 

The Gillard Labor government introduced the NDIS. In their election loss, they handed the incoming coalition government an illegitimate, loose and sloppy mishmash of slogans and empty titles, lacking discipline, coherence, focus and care, and lacking solid systems. If they’d cared, Labor would have put together a proper system, but they didn’t. They should have put together a system to provide effective care and to protect taxpayers’ hard-earned money. The Liberal and National parties tried to refine the monster, and now the NDIS is back in Labor hands for more mismanagement. The NDIS must be reconsidered and protections against mismanagement and abuse strengthened.  

But who should be responsible for management? References to the non-constitutional National Cabinet are just a poor joke. National Cabinet is a mere grouping of state ministers responsible for similar portfolios, with no statutory authority or constitutional recognition of its existence or authority. It’s toothless—all mouth and no accountability. There’s no accountability in the current system. Right at the very top there’s the bogus unconstitutional National Cabinet. In such cabinets the state and federal government ministers just go, ‘They’re responsible.’ That means no-one is responsible. There is no accountability. It’s fundamentally structurally flawed. 

I suggest an inquiry to consider the alternative model: putting the responsibility for providing for the needs of people living with a disability back to the states and territories, where it was stolen from. Clearly, each state is responsible. The states would work to ensure that services were monitored, reasonable and meeting client needs under a model reflecting the proven benefits of competitive federalism, the foundation under which our Constitution and government is made. This will provide the level of accountability that has been missing to date. Centralising doesn’t work; decentralising closer to the surface does. One of the unintended consequences of Labor’s mismanagement of NDIS funds is the shortage of aged-care and healthcare workers who migrated to work in the lucrative NDIS model. This is because NDIS wages are so overinflated that a worker can receive three times the rate of pay for the same work done in other sectors. This is not just hurting the NDIS. This rorting, mismanagement and waste of taxpayer funds is hurting aged-care and healthcare workers. 

Labor wastes money in other areas, too. Look at the wasted $430 million plus that the doomed referendum cost Australians—just like the Gillard government’s NDIS facade, which was based on slogans and empty promises lacking substance. Just think how that $430 million could have been spent directly to improve the lives of remote Australians living in need or spent on improving NDIS services and security for people who are disabled in some way. Then there are the follies of government cutbacks, such as when psychological services were cut from 20 appointments to a relatively useless 10 appointments for needy participants. Just think about what could have been supported with the wasted money—health, education and child protection are a few. Frontline staff are in short supply now, partly because of poor pay, inadequate training and lack of support and partly because of NDIS rorts and sloppiness. Many NDIS carers and support staff have little or no training in basic personal caring skills. Many recipients have physical health needs and their carers should have sound skills in lifting, mobility, feeding, toileting and showering. Expecting NDIS carers to do these things with no, or inadequate, training is unfair and dangerous for the recipient and the carer. 

I have described a support system in crisis. This bill tinkers around the edges. As it is, this bill will not make significant positive differences, and who pays for all of this waste? Always, it’s we the people. Instead of tinkering around the edges of a broken system, do the work! I call on the government to do the work to define disabled people’s needs for service and taxpayers’ needs for protection. Instead of the ubiquitous fraud under low levels of accountability, consider returning to the original system of state governance. One Nation knows what history repeatedly proves: administration and services are of higher quality when services are closer to recipients. That enables understanding of needs, which is core to effective service. Replacing centralisation with competitive federalism provides a marketplace in governance. That’s what we all want. That’s what we need because improved governance provides accountability, effective service and better care. 

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$2.5 Million EV Chargers Installed at Parliament House, Serving Just 2.8% of Vehicles

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The woke and under-fire boss of Department of Parliamentary Services (DPS) has installed 58 electric vehicle chargers at Parliament House, using $2.5 million of your money. This is despite only 2.8% of the vehicles in Canberra (the wokest city in Australia) being able to use the chargers.

I find it concerning that I needed to remind DPS Secretary, Rob Stefanic, that the money he’s using for these chargers belong to Australian taxpayers, not a pot of money that replenishes magically. His “out of touch” attitude regarding the chargers he’s installing and the origin of the funds is troubling.

Transcript

Senator Roberts: Let’s move on to electric vehicle chargers. I’d like to return to the 58 electric vehicle chargers—that’s 58—that you’ve installed, Mr Stefanic, at Parliament House. Can I confirm you haven’t installed any petrol or diesel pumps? 

Mr Stefanic: No, we have not. 

Senator Roberts: So 2.8 per cent of the vehicles registered in Canberra are electric vehicles or plug-in hybrids. It seems to be a weird policy priority to spend $2.5 million on installation of EV chargers. Do you think your policy is out of touch with the reality of the types of vehicles that are in use in the ACT and Canberra? 

Mr Stefanic: Sometimes planning for a future state is important, and, given the take-up of electric vehicles within the country and particularly the rate of take-up within the ACT, I would have thought it to be prudent planning. 

Senator Roberts: What is the mix of seven-kilowatt and 22-kilowatt chargers? How many of each are installed? 

Mr Stefanic: I’d have to take that on notice. I’m not across the technical aspects of it. 

Senator Roberts: Thank you. As to question on notice 114, your cashflow statement is anticipating $160,000 in employee expenses and nearly $170,000 in the following year. Why do Australian taxpayers need to pay $330,000 in employee wages over the next two years for these EV chargers? 

Mr Stefanic: The business case for the chargers is a cost-recover over the long term. So, while it is an initial investment of Commonwealth funds, there is a recovery anticipated as part of that. 

Senator Roberts: So Commonwealth funds come from taxpayers, or loans. 

Mr Stefanic: They come from consolidated revenue, yes. 

Senator Roberts: Which comes from taxpayers. It’s a bit of a concern that it seems to be awkward to actually admit that it comes from taxpayers. Charging lithium batteries is a fire safety risk. Who did the assessment of the fire safety risk and mitigation for these chargers? Can you please provide those details on notice. 

Mr Stefanic: I know that all the appropriate engineering approvals were obtained, but I can get that detail for you on notice. 

Senator Roberts: I’d like to know who did the assessment in particular of the fire safety risk and mitigation. What is the plan if a charging station charging vehicles catches fire? Firefighters are telling us, all over the world, that they are nearly impossible to extinguish. 

Mr Stefanic: I believe all relevant risks were considered during the engineering assessment of the charging facility, but otherwise I’d have to take the detail of that question on notice. 

Senator Roberts: Yes, please. Are you introducing a fire risk by installing 58 of these chargers into Parliament House, given the difficulties of putting out lithium fires? Perhaps take it on notice. 

Mr Stefanic: Yes, I will take that on notice. 

Senator Roberts: Given that only 2.8 per cent of the vehicles in Canberra can use these chargers, I think it is completely out of touch to spend $2½ million of taxpayers’ money on 58 of them at Parliament House. There are far more important things to be spending money on. 

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Rampant NDIS Fraud Leaves Vulnerable Recipients in Need

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My questions to the NDIS Quality & Safeguards Commissioner was primarily about the quality and safety issues that render the system inefficient and hazardous. 

It became evident that fraud was rampant, leading to significant financial waste and leaving many recipients’ needs unmet. 

While some recipients received excessively extravagant packages with overvalued components, such as massages, fishing trips and cruises, others remained in dire need of basic assistance for eating, washing, toileting and dressing. 

Initially, the system functioned fairly well, but it has now expanded excessively, resulting in waste, unmet needs, and dangerous conditions for vulnerable recipients.

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Questions Raised Over $430K Government Job

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Under my questioning, Rob Stefanic, the head of the federal government department tasked with overseeing Parliament House, denied being in a relationship with his deputy, but refused to say whether he’d been in one with her before creating and placing her in a job paying about $430,000 a year. Cate Saunders was also given a $315,000 additional payment to retire, despite being far younger than the retirement age.

Listen to my questioning and tell me whether you believe Rob Stefanic’s answers are worth the $478,000 he is paid by YOU, the Australian taxpayer, as I had to remind him. I also asked about reports of there being a toxic culture at his agency, the Department of Parliamentary Services. Multiple staff have approached me and I am not satisfied with the fobbing off of these concerns.

If you’ve been a staffer in the Department of Parliamentary Services and have a complaint, please contact me confidentially at senator.roberts@aph.gov.au

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One Nation Priorities

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Here are some bold ideas you won’t hear from anyone but One Nation.

1. Ensure cheap power by turning on coal-fired stations, building more, and ending solar and wind subsidies.

2. Stop inflation by halting excessive money printing.  

3. Guarantee cheaper housing and rents, prioritising young Australians.

4. Secure cheaper groceries by supporting farmers and building dams.

And lastly, use our natural resources for Australians first.

One Nation is committed to putting Australians first and freeing them from unnecessary restrictions.

Transcript

Here are things you won’t hear from anyone in the budget, except for One Nation because we’ve got the guts to say what you’re thinking. 

Firstly, guarantee cheap power—turn the coal fired power stations back on, build more coal fired power stations, and remove solar and wind subsidies. It’s the only thing that can save us right now. Secondly, stop inflation. Stop quantitative easing—printing excess money. A trillion dollars was concocted during the COVID response, which is a major cause of the inflation we’re still fighting today. Thirdly, we’ll guarantee cheaper houses, cheaper rents and get young people into their first home. Don’t just cut net overseas migration: start deporting. Prior to COVID, there were 1.9 million visa holders who needed housing and who were fighting Australians for a roof over their heads. That has increased to 2.3 million today, plus 400,000 tourists and others. Ten per cent of our population is on visas and needs extra housing. We will ban foreigners from buying Australian property. They’re currently snapping up nearly one in 10 new Aussie homes. 

Fourthly, get cheaper groceries—build dams and help farmers produce tonnes of fresh, healthy produce for Australians. Give farmers water and the right to use their land, and we’ll never have to worry about grocery bills again. Fifth, use all of our natural resources we have right here for Australians first. There’s no need to become a green superpower, and we never will. We’re already an oil, gas, coal and uranium superpower. The government won’t do this because some foreign, unelected organisation in Zurich or New York will claim that we’re not complying with our international obligations. 

Governments on both sides have forgotten that their first obligation is to Australians and no-one else. One Nation knows this. We’ll put our trust in Australia’s people and release them from the nanny state that tells them everything they can and can’t do, which will enable people to abound and flourish. That’s our promise of what would be a One Nation budget. We will always remind members of parliament to put Australians first. 

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One for You, Two for the Tax Man

For every drink you get, the taxman takes two – and he wants to take more. It’s just another tax that’s out of control.

One Nation believes that you should keep more money in your pocket rather than letting Canberra have it.

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The Cost of Clawing Back NDIS Fraud

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At the February Senate Estimates I asked the National Disability Insurance Agency (NDIA) how much money has the NDIA been able to claw back through identified National Disability Insurance Scheme (NDIS) fraud? Funding across 16 agencies, including the NDIA, of $140 million over four years was provided in 2022 to tackle fraud. Those agencies are working together. It seems reasonable that we should know what return on this investment we’re getting since we’re paying for it.

There are major concerns with the NDIS. It was hastily brought to life and hastily implemented. There are concerns with both over and under-servicing. That’s not necessarily a reflection on the people in the NDIA, but that’s the reality.

I also asked what is being done in relation to auditing service providers who are sucking the scheme dry through fraudulent claims for services that are overcharged or actually not even provided? My questions regarding the amount actually clawed back was taken on notice, however John Dardo, Deputy CEO of Integrity Transformation and Fraud Fusion Taskforce, freely admits to having layers of concern about NDIS fraud. There are over 600,000 participants in the scheme and Mr Dardo says the system is extraordinarily immature for a scheme paying out over $100 million each day, with 400,000 claims a day. Among the risks they’re managing is whether they can be confident that a participant is a real human being, is in the scheme knowingly and actually exists.

Transcript

Senator ROBERTS: Thank you for appearing today. On the topic of fraud, how much money has the NDIA been able to claw back through identified NDI fraud? 

Ms Falkingham: I’ll ask Deputy CEO John Dardo, who leads that program, to come forward to the table. 

Mr Dardo: Thanks for the question. There are different ways to measure that. One of the ways to measure it is to think about how much we’ve prevented from going out the door by implementing systems or detecting the integrity leak before the money has left the door. Another way to measure it is to look at whether we’ve asked the participant or provider to pay the money back. Another way to measure it is by the amount of money that is subject to a prosecution activity—so where it has gone to the courts. Not all of that is recoverable, because unless there’s criminal asset confiscation, or unless there are penalties being charged, that money may not be recoverable. So there are lots of different ways to measure it. 

What I would say is that, as my colleague mentioned earlier in relation to detecting the anomalies, there are a range of things that we’ve been building up over the last 18 months to allow us to identify where there are integrity leaks, and what I would emphasise is that integrity leaks are very, very strongly correlated to participant risk. The safety of participants is put at risk when money is leaking to the wrong places. It’s because the participants aren’t receiving the services they need, or because we’ve got providers that are dodgy and are actually growing their businesses at the expense of good providers—so they’re wiping out the good providers—or because that money is actually funding activity for participants that is putting them at further risk, whether it be drug abuse, alcohol abuse, risky behaviours or other behaviours. So the money’s important, but the reason we look at the money is the participant safety impact that it has. 

What I would also say is that there’s a level of detail that I can’t share in this forum—I’m happy to do it in a private setting—because we do not want to run a 101 session on how to commit fraud against the NDIA. But I’m on the public record in previous hearings talking about the layers of concern that we have. We have, in round figures, over 600,000 participants in the scheme. The system is extraordinary immature for a system that pays out over $100 million a day, with 400,000 claims a day. It is an extraordinarily immature system. Certainly it’s one of the most immature I’ve seen. If I think about the sorts of risks that we’re managing and investing in, being confident that a participant is a real human being, is in the scheme knowingly and— 

Senator ROBERTS: Actually exists. 

Mr Dardo: actually exists is an area of risk that we’re certainly unpacking and understanding, and we’re identifying things that need to be addressed. 

Senator ROBERTS: Excuse me. Out of respect for the chair wanting to conclude pretty soon, could you take it on notice to provide the figures around the categories of fraud that you mentioned earlier on, please? What money has been saved? 

Mr Dardo: We can do that. 

Senator ROBERTS: There are concerns with the NDIS. It was hastily brought to life. It was hastily implemented. There are concerns with overservicing, as you know. There are concerns with underservicing and there are concerns with fraud. That’s not necessarily a reflection on the people in the NDIA at the moment, but that’s the reality. Please also take it on notice to answer: what is being done in relation to auditing service providers who are sucking the scheme dry through fraudulent claims for services that are overcharged or actually not even provided? 

Mr Dardo: An enormous amount of activity. Some of that activity is some randomised integrity checks. We’ve done tens of thousands of those to try and understand, at a randomised level, what we’re seeing. The sorts of common things we’re seeing include overclaiming, duplicate claims, claiming for services that were never provided and claiming for services that are not consistent with the plan. If I think about some other risk points, we have some particular cohorts where we have very significant concerns about the behaviour of the cohorts, and, when we cross-reference our data with other data such as tax data, for example, we see that some of our providers are non-compliant with basic obligations to the Commonwealth. If they’re non-compliant with their basic obligations to the Commonwealth but they’re managing money on behalf of participants or managing services on behalf of participants, we’ve got concerns. We have several hundred providers where they’re managing money or services on behalf of participants or managing other providers on behalf of participants and yet they’re not compliant with their most basic tax obligations. We’re cross-referencing data with other agencies. 

A taskforce commenced in November 2022. At the most egregious end of the offending, that taskforce has 16 Commonwealth agencies working together to identify networks of providers or syndicates that are targeting the scheme. You may have seen some media coverage about the search warrants being executed, the prosecutions being conducted and passports being seized or surrendered as part of bail conditions. That work is continuing to ramp up. We have over 100 investigations in the pipeline, and some of those cases are very significant both in dollar value and participant numbers being affected and also in the egregious behaviour of those providers. 

Senator ROBERTS: There are a lot of costs involved. Some of the costs are from the 16 agencies that are working with you and they’ll be hidden from the total cost. 

Mr Dardo: No, those agencies were funded as part of that announcement. That funding was $140 million over four years. Those agencies, as well as the NDIA, were funded as part of that Fraud Fusion Taskforce and they’re working in partnership with us. 

Senator ROBERTS: Thank you. 

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Bracket Creep is a Stealth Tax

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Both Labor and the Coalition voted to collect billions of extra income tax dollars because they need more money. Yet foreign multinational corporations in Australia are paying little or no company tax.

Bracket creep is a secret tax that means government makes money out of inflation. The government is not indexing the tax brackets to fix bracket creep meaning Australians will collectively pay $38 billion extra in tax over the next four years.

I moved an amendment that would eliminate bracket creep by indexing the tax thresholds. This means the inflation rates would be adjusted for inflation so Australian’s pay the same rate of tax instead of continuing to pay more which is the current situation the government is failing to address.

Instead of giving tens of billions of dollars back to Australians, both Liberal and Labor are happy to keep secretly collecting more and more tax, and by their own admission, they’ll only ever give it back when they can afford to. When can we expect that to occur, considering the current government’s focus is on funding UN climate goals and inflationary COVID debts?

Transcript

Senator ROBERTS: Minister, do you agree bracket creep is a problem for taxpayers in Australia? 

Senator GALLAGHER: I think all governments recognise bracket creep is an issue. That’s why governments of both major parties return bracket creep when it’s affordable and sustainable to do so. You’ll notice that, in the reforms to the tax proposal that was outlined by the former government, this does that by lowering the two thresholds and dropping the two tax rates; sorry, I’m getting back into tax land! That’s how we’re dealing with bracket creep. It provides relief, and 84 per cent of taxpayers will be getting a bigger income tax cut than they would have under the former government and paying less tax. By 2034-35, someone earning an average income will pay $21,635 less tax than they otherwise would have without these tax cuts. 

Senator ROBERTS: Minister, you said you return bracket creep when it suits you and when you can afford it. Doesn’t that mean that you’re taking money off taxpayers, and that it’s really a stealth tax because taxpayers don’t know they’re moving into a higher tax bracket? Bracket creep is when the brackets stay the same but people’s wages inflate and they move into a higher tax bracket—so they automatically pay a far higher rate of tax in the next bracket and they don’t even know it. Isn’t that tax by stealth? 

Senator GALLAGHER: No, I don’t agree with that. I think Australians understand marginal tax rates and the interaction between their earnings and those tax rates. I would say again that’s why, regularly, tax cuts are provided to taxpayers—to deal with bracket creep and provide other assistance where that’s possible, where it’s affordable and sustainable to do so. I say that not to say ‘when we choose to’ or ‘when we feel like it’ but because we have to manage a budget responsibly as well. People expect that because taxes pay for all the services that people consume and expect to receive from their government. 

Senator ROBERTS: Minister, I remind you, before asking my next question, that former deputy commissioner of taxation Jim Killaly, who was in charge of large companies and also international matters for the Australian Taxation Office, said back in 1996 and 2010 that 90 per cent of Australia’s large companies are foreign owned and have paid little or no tax since 1953, due to Liberal legislation that was passed in 1953 letting major foreign owned corporations off the hook. Bob Hawke made sure that the Labor Party was also giving gifts to major foreign corporations by letting the world’s largest avoider of tax, Chevron, off the hook for tax in the North West Shelf. Surely the fix to bracket creep is to index brackets. If we’d done that 10 years ago we would have saved the people $44 billion in tax. You say, ‘Where can we get the tax from?’ I get that tax is the cost of government, that tax is the price of government and that tax has to be paid, but foreign corporations in this country are paying little or no company tax. That means they’re using our services that every mum and dad and family and small business is paying for in this country, and they’re doing it for free. We used to be the world’s largest exporters of gas, we get very little for it, and these foreign companies are sending it overseas. Japan gets $3 billion a year off import duty for our gas going into their country, and we get very little for it. So what I say to you is that we can’t afford it because you’re not taxing foreign multinationals adequately. You’re letting them off the hook. Because you didn’t index brackets in this attempt, over the next four years Australians will pay $38 billion more tax than if you indexed brackets. Surely, you can look at the spending and cut some of that back. Surely, you can look at the taxation of foreign multinationals and make sure they start paying their fair share. Then let Australian families off the bracket-creep hook. Why can’t you do that proper budget for the Australians? 

Senator GALLAGHER: There was a lot in that, Senator Roberts. I think your final question was around budget management, and the work we have done in the last or two budgets and MYEFO has been to repair the budget. The deficits are a lot less, going forward. We’ve had a surplus budget, we’ve lowered our debt, we’ve contained spending despite the pressures the budget is under, and where we’ve had revenue windfalls we have returned the vast majority of it— over 80 per cent, 88 per cent I think—to the budget to repair it. We do have to manage the budget responsibly and we’ve been able to do that and provide bigger tax cuts to more Australians. On your point about multinational tax reform, I don’t necessarily agree with all of it because I haven’t been able to verify some of the things you’ve said. We agree that we should be making multinationals pay their fair share of tax—we’ve got a bill before the parliament on that, we’ve got a bill on PRRT and we’ve got a bill on high-balance super, and that is about making sure we are putting the budget on a sustainable footing, that we’re able to pay for defence, aged care, hospitals, the interest on our debt and the NDIS, and that we are able to pay for those services that people expect. But this plan does deal with bracket creep, so I don’t accept the position that you put saying we don’t. That’s part of the reason why we’re doing it. The Treasury advice there is very clear. Our plan provides better protection against bracket creep for 70 per cent of all taxpayers over the decade, including the average taxpayer and those on low and middle incomes. 

Senator ROBERTS: Minister, how can you say it fixes bracket creep when over the next four years Australians—families and individuals—will be paying an extra $38 billion due to bracket creep? You are not indexing the brackets themselves; you’re just making a one-off adjustment. As soon as that happens, with inflation continuing, you will continue to increase revenues. Inflation hits families in two ways: first of all, goods and services cost more; second of all, they move into a higher tax bracket and they pay more tax. They actually end up with less take-home pay. So I don’t buy your argument. Why doesn’t Labor want to fix bracket creep? 

Senator GALLAGHER: I think we’re just agreeing to disagree, Senator Roberts. This plan does deal with bracket creep by reducing two tax rates and increasing two tax thresholds. It does deal with bracket creep. In particular, as I said in my previous answer, for average taxpayers—those on the average wage, and low- and middle-income earners—this substantially improves the money they get back in their pockets, and returns that bracket creep. But you disagree with me—I will keep making that point and, presumably, you will keep making yours. 

Senator ROBERTS: Minister, you cannot argue with the fact that someone who is just below the next tax threshold will soon be paying higher tax because of inflation. That is a fact. The only way to beat that is to index the tax thresholds. As to supporting my amendment, it shows you do not want to stop rampant increases in tax or you want to keep bracket creep to exploit taxpayers. Why don’t you want to fix bracket creep properly by indexing it so that brackets rise as inflation rises and wages rise, so people stay within the same bracket and there is no creep? Why don’t you want to fix bracket creep? 

Senator GALLAGHER: The tax rates haven’t been indexed, that’s right. I understand your amendment seeks to do that. I don’t think you’ve moved your amendment, but I may as well cover off. We are not supporting your amendment. The approach in this bill is preferable to your amendment because it provides governments—I’m talking about not our government but all governments; this is the way it’s been done—with greater flexibility to respond to fluctuations in the economic cycle. This proposal does deal with bracket creep. It does return money to taxpayers. I don’t know where you get your $38 billion figure from over the forward estimates, but I think your point there is that there will be—that’s assuming, wherever that number comes from, that there will be no change to tax rates in that. History will show that governments have made decisions to implement tax cuts where it’s affordable and sustainable to do so on the budget, and I expect governments of both political persuasions will continue to take that approach. 

Senator ROBERTS: Minister, in my view, I don’t think you’re being honest with the people of Australia, because bracket creep is a stealth tax. Inflation helps your tax revenue. How many pages are in our tax act? 

Senator GALLAGHER: We might have to take that on notice. I’m just seeing if we can provide you with an accurate answer, but it’s quite detailed and there are obviously pages that underpin the tax act as well. I’m not sure we’ll be able to do that accurately tonight, but we’ll see what we can do. 

Senator Scarr: To the nearest ten thousand! 

Senator GALLAGHER: I was going to say: it’s a lot! 

Senator ROBERTS: To the nearest thousand would be fine, thanks, Minister. The point I’m trying to make is that we already have a very complex tax system, which is confusing for small businesses and confusing for people who don’t have access to lawyers and deep pockets. It’s confusing for individuals and families. We always support returning more money to taxpayers, and $15 a week is a lot of money to many people. In the overall scheme of things, it’s not very much. In a few years, you’ll be recovering far more. Is there any plan to actually reform taxation properly, to do a comprehensive reform so that the tax system becomes simple, clear, effective, efficient, fair and honest? Is there any stomach within the Labor Party to be honest with the people of Australia and really reform taxation comprehensively? 

Senator GALLAGHER: I think the government’s been clear about what our tax changes are. They are the Treasury Laws Amendment (Cost of Living Tax Cuts) Bill 2024, the bills I referred to before on high-balance super accounts, multinational tax reform, PRRT—they are the government’s tax plans. Am I missing one? 

Senator Hume: Negative gearing! 

Senator GALLAGHER: I don’t accept that interjection. That is the government’s tax agenda going forward. 

Senator ROBERTS: I move Pauline Hanson’s One Nation amendment (1) on sheet 2342. 

Senator HUME: For the benefit of the chamber, I just want to inform you that the opposition is going to oppose this amendment, Senator Roberts. We won’t be supporting it, because the stage 3 tax cuts were originally designed to address bracket creep but do it in a very structural, costed and fiscally responsible way. While this measure would address bracket creep, you’re absolutely right that the fiscal cost of this change isn’t known, and that’s why we couldn’t support it at this stage. The Prime Minister’s broken promise means that delivering the stage 3 tax reforms as they had been legislated originally is now impossible, but the coalition remains committed to fighting bracket creep and to enshrining aspiration, because strong leaders keep their promises, even when it’s hard to do so. 

Senator GALLAGHER: I made some comments previously, but we will also be opposing this amendment. The bill before the chamber does deal with bracket creep. It delivers tax cuts for 13.6 million Australians. It’s carefully calibrated to provide more cost-of-living relief. I know that Senator Roberts said that it was $15. I think that figure he is using is the extra that people will get. Those people will get $15 extra on top of the tax cuts they otherwise would have got, and, for many people, that is a substantial amount of money. We recognise there are other things to do on the cost of living. That’s why our other measures are being put in place. But in terms of your amendment, we oppose it. We think the way we’re approaching it in this bill is preferable, and it’s the way it has been done in the past. It gives government the flexibility to make those decisions when it’s affordable to return bracket creep in a way that can maximise those returns. 

Senator ROBERTS: Minister, I want to take you back briefly to a previous answer you gave when you implied the surplus—which is correct in the budget. The surplus has only been around for two years because of the strength of our agricultural production and our coal and iron ore exports. That’s the only reason. What we’re seeing is a country that is at the mercy of international prices for its major primary products. If something happens, then we have to rely upon bracket creep to pull us out of the mess, and that’s not fair to Australian families and individuals. 

Senator GALLAGHER: I accept that our export industry and our resources certainly contribute to our tax revenue through company tax receipts and others, but the strength of the revenue upgrades has also been improved and strengthened by the strength of our labour market. We’ve had many more people in jobs earning money and therefore paying tax than we have previously. Unemployment is at a record low; participation is at a record high. It’s kicking up a bit now, but that has contributed significantly to the improved position of the budget. Yes, we acknowledge that. Part of that has allowed us to pay debt down so that we’re not paying as much into the future and generations of the future are not paying those interest costs—the fastest-growing cost on the budget is managing the interest costs on our debt— and it’s allowing us to deal with all of those areas of pressure that we talk about all the time in here: the NDIS, aged care, hospitals and defence. They are all big costs coming at the budget, and we do have to manage it in a responsible way. 

Senator ROBERTS: I’m not pretending to say it’s easy. It’s complex, but it’s excessively complex. You’re addressing the need for increasing tax revenues for the extra expenditure, including interest payments, but what you’re not saying is that a lot of that money is coming from individuals through immigration, which is putting enormous pressure on house prices and inflation. That’s a real impediment to people looking for houses right now. We’ve got people in Queensland sleeping in tents in showgrounds in Gladstone, in parks in Bundaberg, in parks and on the banks of the river in Brisbane and in Ipswich, Logan and Townsville. I think we’re making a rod for our own back. When are we going to see comprehensive tax reform to take the load off individuals and put it onto large corporations so they start paying their fair share? 

Senator GALLAGHER: Well, I’ve outlined that we do have a bill around multinational tax reform to ensure that those big multinational companies are paying their fair share of tax. I think if you talk to many domestic companies they’ll say they’re paying their fair share of tax right now. People have a view about that, I guess. Individuals do contribute substantially to the Commonwealth budget through income tax. We need to generate revenue in order to pay for services. On your point around population and housing, obviously you can’t do everything through tax cuts, and that’s why all those initiatives we’ve got in housing are so important and why we want the chamber to support the latest part of our housing initiatives, which is Build to Rent. We’ve got a full suite of programs. We acknowledge that supply is the problem, and the Commonwealth is right in there with our sleeves rolled up, working with states and territories, to do whatever we can to generate more supply. Also, as you know, some of the changes we’ve made to the migration system have ensured that those net overseas migration numbers that we’ve seen rise post-COVID are coming back down to our more traditional rates. 

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