Senator IAN MACDONALD (Queensland) (16:37): If increasing taxes on cigarettes is a Mr Bill Shorten thought bubble on additional tax, it has to be a bad idea. That should be the end of the debate. We know of Labor's record of taxing and spending. I often relate in this chamber an example of Labor's tax policy and their honesty. I happened to be in the parliament in the days when Mr Keating introduced, before an election that he thought he was going to lose, a tax amendment to reduce income tax. For those who remember back to those days, it was identified as the L-A-W law tax reduction. It went through parliament with the support of the then opposition, which was outside of parliament. No sooner had Mr Keating and Labor won the next election—unexpectedly, I might say—do you know the first legislative action they took? It was to repeal the law that they had passed just a couple of months earlier reducing taxes. So if you ever want an example of how to deal with Labor's promises on taxing and spending, there is a great example.

Of course, I need to go no further than the 2010 election, when Ms Gillard famously promised, as did her then Treasurer, Mr Swan, a week before the election, three days before the election, two days before the election, 'There will be no carbon tax under a government I lead.' Remember that? You would remember that, Senator Polley. 'There will be no carbon tax under a government that I lead.' Let's not have an argument about carbon and emissions and taxes—let's just have a little discussion about honesty. There we are, hand on heart, three days before the 2010 election: 'There will be no carbon tax under a government that I lead.' What was the first piece of legislation that came in when Ms Gillard won the election? It was the introduction of a carbon tax.

People voted for Ms Gillard in that election because they took her at her word. They thought, 'We can comfortably vote for the Labor Party at that election and we will know that a carbon tax is not going to be on the agenda.' So many thousands and thousands of Australians did that on the basis of Ms Gillard's assurance and promise to the electorate. There are just two examples of how people should treat any promise made by the Australian Labor Party in relation to taxes and spending.

I suppose that I should be happy about the commitment from the Labor Party to increase taxes on cigarette smokers. I do not know if this is true, but I read it in the newspapers and people often talk about this, and these articles, newspaper reports and so-called experts tell me that it is principally the lower socioeconomic groups that smoke most. Of course, the amount that someone on a pension or an unemployment benefit might pay for a packet of cigarettes is much more substantial, as a percentage of their income, than it is for someone on $100,000 a year who might pay for a packet of cigarettes. So if I believe what the media say, this will impact on the lower socioeconomic groups, who—again, I do not have the statistics on this, but I think it is fairly well accepted in political science circles—are the principal supporters of the Australian Labor Party in every election. So if they are slugged, as Mr Shorten is proposing, with an additional tax on one of their few pleasures in life, hopefully it may encourage them to think differently about how they might vote at the next election.

It is these people that Mr Shorten's taxation proposal will impact most heavily upon. It is not as if these people are going to stop smoking. I know that many would like to think that if you increase the tax on cigarettes people will stop smoking. But that is not borne out by the figures. You have seen the forward estimates for the take from the tobacco excise on their current levels. This is not any new tax that Mr Shorten is proposing—this is just the increasing revenue from tobacco excise which is in place at the moment, thanks again to Labor, as the tax increases each year with the normal inflation rate. That was Labor's last proposal: we will make it so that when the cost of living goes up so does the excise on cigarettes. Can I tell the Senate that in 2014-15 the tobacco duty is estimated to bring in $8.848 billion. A year later—this is without any increase that Mr Shorten is proposing—in 2015-16 that $8.8-odd billion will go up to $9.150 billion; the following year to $9.7 billion; the following year to $9.9 billion; and in the 2018-19 year to $10.28 billion. Clearly, the increase in revenue and the automatic indexation of the excise is not stopping people from smoking. It is not cutting the amount of cigarettes and tobacco that is smoked; all it is doing currently, with the automatic increase, is increasing the revenue for the government. The idea that increasing the income from tobacco tax will stop smoking and have a health benefit is simply wrong. Certainly, that is not borne out in the material we have.

I have heard the Labor Party introduce five, what they call, 'policies' for the next election, and the tobacco tax is one of them. But all five policies are about increasing tax on someone. In Labor Party, that seems to pass as policy for the alternative government.

Senator Polley interjecting

Senator IAN MACDONALD: And, Senator Polley, you think that is a good idea, I take it, from your interjection—that new policies that increase the taxation of Australians across the board are good. As I understand, Mr Shorten is proposing to bring back another carbon tax and another mining tax. Gee, I hope he does! We might need the votes! But the Australian public have already told you what they think about those ridiculous taxes. The carbon tax did nothing to reduce emissions. Even if it did, Australia is emitting less than 1.4 per cent of the world's emissions of carbon. Even if any increases had stopped that completely, it still would not have made any difference to the world's climate. And, of course, the mining tax—that famous mining tax that Mr Swan introduced—cost more to collect that it collected. These are the sorts of ideas, the thought bubbles, that the Labor Party have and that pass in their minds as policy commitments.

In concluding, I just remind the people of Australian: if you want trust in government, if you want people who understand how to manage the economy, how to reduce taxes and how to reduce wasteful spending, then you have to vote for the coalition.

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