Mr TURNBULL (Wentworth—Prime Minister) (14:35): I thank the honourable member for his question. I think it may be helpful if I explain for honourable members some of the complexities in this tax debate. Compared with other countries, Australia has in its revenue mix a very large proportion of income tax levied on both individuals and companies; and, of course, average wage earners are moving into higher tax brackets. Those are issues that need to be addressed. Some economists and, indeed, politicians—including the Labor government, in its 2010 budget, and the shadow Treasurer last year—have argued that cutting company tax would boost investment and real wages and ultimately benefit workers. And there is merit in that contention. At the same time, we need to constrain government expenditure. As the Treasurer has just reminded us, there is around $20 billion of savings held up in the Senate by the Labor Party's refusal to assist in cleaning up the fiscal mess they left us. The only realistic option for very significant income tax cuts is by changing the tax mix, and that is why a number of people have advocated increasing the GST for the purpose. Of course, there are people in the Labor Party—the South Australian Premier and the New South Wales opposition leader—who have argued that the GST should be increased in order to pay for additional government spending in terms of health and education. Indeed, Paul Keating advocated a 2½ per cent increase to do that. Raising the GST and reducing income taxes— Mr Mitchell interjecting— The SPEAKER: The member for McEwen! Mr TURNBULL: would mean of course that a person who receives an income tax cut and has more money in his or her pocket will also face a higher cost of living, and those people who are entirely dependent on welfare payments would need to be fully compensated, although their pensions would go up with the CPI. Many of Australians—part pensioners, self-funded retirees—have incomes that either are not taxed or are taxed at very low rates, and they would need to be compensated. But compensation is a complex issue, and honourable members opposite understand that; they addressed that with the compensation for the carbon tax. Now, any changes to the tax system, from our perspective, have to achieve at least three things. Firstly, they have to drive growth and jobs—that is No. 1. Secondly, they have to be fair—that is absolutely critical. And, thirdly, the complexity associated with them has to be justified in terms of a productivity output. The position of the federal Labor Party, on the other hand, in refusing to participate in this debate, means that we are having a national debate in which the alternative government does not play a part. We are seeking to have a considered discussion on tax reform. It is a very big lever affecting the economy. We are determined to ensure that it works effectively.