This Bill legislates a small cut to personal income tax—$5 a week next year and then $10 a week the year after that. We rely way too much on personal income tax. A big driver of this overreliance is bracket creep. These tax cuts are a one-off way of addressing bracket creep, but there's a simple way to stop this getting worse and make both sides of politics accountable for their spending decisions. There's only one honest, long-term way to address bracket creep, and that's to index our tax brackets.

In Australia, you pay more tax when you move into a higher tax bracket. So, when you get a raise to cover increasing living costs, more of your income is taxed at a higher rate. That means people pay higher average income rates every year. That's right—more tax every year. This is bad news for taxpayers and good news for whoever's in government. It means the government gets a slush fund each year of extra tax that they can spend on whatever they want. Every Australian loses because of this. In lots of other countries, tax brackets are indexed with inflation and so you only pay a higher average rate of tax if your pay goes up more than the cost of living. But, unfortunately, because indexing tax brackets serves neither major party, you won't hear much about it unless there's pressure from the crossbench and from the public. Both major parties value the fact that they'll be given access to additional tax revenue when it's their turn in government.

I've asked the Treasurer about this in question time, and there's not much enthusiasm for it. With indexed tax brackets, successive governments wouldn't be able to treat the hidden additional revenue as accountability-free pocket money or demonstrate periodic confected largesse. Any decision to spend more would need to be made explicitly, with clear trade-offs and with the permission of the electorate.

A stalemate over genuine tax reform has evolved between the major parties over the last 30 years, with ideology overriding facts and evidence. Political leaders are hamstrung by their legacies of promises not to touch anything, so we end up tinkering around the edges like this. Tax policy cannot be taboo. We must design a tax system for future decades. Now, I will back these tax cuts because they're better than nothing. They're one short-term way to address bracket creep. But, if the government were serious about transparency and tax reform, it would be going further and prioritising longer-term fixes.