The shadow finance minister has refused to rule out crafting an “income splitting” tax policy, as she dodged questions surrounding the Liberals’ economic vision for the future.
Tasmanian Senator Claire Chandler on Sunday told Sky News the Coalition was open to considering income tax splitting, after her colleague Melissa McIntosh penned a piece in the Australian supporting families looking to raise young children at home.
“Two households earning the same combined income can pay very different amounts of tax simply because one parent works part time to care for children. That doesn’t recognise the value of raising the next generation,” Ms McIntosh wrote on Friday.
Tax income splitting allows couples or families to divide their total household income between partners to minimise taxes paid under a progressive tax system.
Ms Chandler said she had not read Ms McIntosh’s piece but would not rule out the idea.
“I don’t think we should be closed off to any particular ideas at this point,” she said.
“If that’s an idea that Melissa [McIntosh] thinks is worthy of consideration, then I’m sure we’ll all have a conversation about that if a policy is brought forward in the usual (manner).”
Senator Pauline Hanson previously raised income tax splitting between partners with Sky News. She had not costed the policy at the time.
The Parliamentary Budget Office estimated allowing income splitting for couple with at least one dependent child would cost the tax office $68.9billion over ten years, in an analysis released last year.
A decade ago, Nationals Senator Matt Canavan said a capped form of income splitting would present a more “family friendly” taxation model before raising the idea again with Sky News in 2025.
The Australian Taxpayers Alliance has also called for a “joint family tax treatment” allowing couples with children to file taxes together with a combined tax-free threshold of up to $50,000. It estimated such a change could save famillies up to $6,424 each year in 2025.
Ms Chandler took over James Patterson’s former portfolio in Angus Taylor’s reshuffle in February.
The Senator said her “focus” was currently with watching the Labor government’s budget, and would not outline a longer-term plan for Coalition policy on Sky News on Sunday.
Sunday Agenda’s Andrew Clennell pressed Ms Chandler on what the finance and treasury ministries’ priority policies would be in the lead up to the next election.
Clennell asked whether James Patterson’s calls to lift defence spending and Angus Taylor’s suggestions of tax cuts to-come would see Liberals offering bigger budget deficits in the future.
Ms Chandler repeated she was focused on watching how the government was spending.
“My focus is going to be how can we get that side of the budget into balance by identifying waste saying where expenditure shouldn’t be occurring so that we can be in a position to fund the things that we would like to fund,” she said.
Again, Clennell pressed: “So bigger deficits than Labor, the same or less is your ambition?”
Ms Chandler said her party would look at “balancing” the budget.
“My fundamental principle is that the Liberal Party should always be the party of strong budget management, and there is no doubt in my mind that the Labor Party does not have the budget under control,” she said.
“I got in politics to balance budgets, not to keep racking government debt up on the credit cards. So my focus will be doing everything within my power and working with my colleagues to make sure that into the future, a Coalition government can achieve balanced budgets.”
She would not be drawn on whether a Coalition government would cut the public service, NDIS when asked point blank.
The Opposition is not considering pushing cuts to the fuel excise as war jolts the energy supply chain in the Middle East, she said.
“My hope is that fuel prices don’t go completely crazy in the longer term out of what’s happening in the Middle East so we won’t have to consider questions around the excise. But ultimately that’s going to be a question for government when… it comes time for the budget to be handed down in May,” she said.
Asked whether CGT or negative gearing was in her sights, Senator Chandler said: “I don’t think the way to create more of anything, Andrew, is to tax it”.
“The proposals that the government seems to be skirting around at the moment all look to me like taxes on housing… I don’t want to be focused on doing anything that is going to disincentivise the release of more housing into the system,” she said.
Clennell then raised speculation the government may consider reviewing family trust tax breaks which benefit the “rich or at the very least… the upper middle class”.
Ms Chandler said she had not seen the full details but considered the proposal a “cash grab”.
“This government has a spending problem, and when they have a spending problem… they are searching around grabbing at anything that they can potentially tax to prop up their budget bottom line,” she said.
Clennell asked, given the Coalition’s lack of concrete answers, if it too would have a “spending problem” the next time it is elected to power.
Ms Chandler said she would not “rule in or out” the specifics of Coalition policies.
“It is a long time until the next election and I’m very confident by then that our Coalition team will have a full package of properly costed policies developed in the usual way… to take to the Australian people to clearly demonstrate how we will be the party of responsible budget management,” she said.