Bernie Ripoll (Oxley, Australian Labor Party) Share this | Link to this | Hansard source

It is a privilege to have the opportunity to speak on these two very important bills, the Tax Laws Amendment (Temporary Flood Reconstruction Levy) Bill 2011 and the Income Tax Rates Amendment (Temporary Flood Reconstruction Levy) Bill 2011, which are about rebuilding the national economy, rebuilding Queensland, rebuilding people’s lives and putting some semblance of normality back into what has been an extraordinary summer, not just in Queensland but right across the whole country. Putting in place a flood levy is of critical importance not only to this parliament—and also that we all support it—but to the nation as a whole. It will enable the government to get on with the job of rebuilding not just in Queensland, where we have been devastated by flood and cyclone, but right across the country, giving us more capacity to rebuild in other areas and support communities and people in rebuilding their lives.

This levy is small. It is very small. A $1.8 billion levy, in terms of the magnitude of a Commonwealth budget, is tiny, and it is something that is well supported and understood in the community—although there have been some who have tried to bring about some misconceptions about what this levy actually represents. But it is well understood and it is well supported. It is certainly supported by the Australian Council of Social Service, by the Salvation Army and by AgForce in Queensland. Brent Finlay, the president of AgForce Queensland, said:

… given the enormity of what’s happened, with this natural disaster, anything that can help to get rural and regional Queensland, back up and running, we would support.

Unfortunately, there is one group of people, the coalition—and it is unfortunate, and I will be as kind as I can be—who object to this bill in real terms. If they had any good reasons I would accept it and I would understand, but there is no good reason—none whatsoever. We are talking about a small levy, but it will make an enormous difference.

The 2011 floods have particularly affected Queensland but have affected other states as well. Anyone in the electorates that have been affected will understand just how bad and how profound the damage has been. It is one of Australia’s biggest natural disasters, and many say it is in fact Australia’s biggest natural disaster in economic terms. The Queensland government estimates that up to 500,000 square kilometres was affected by floodwaters, and in my electorate alone there have been thousands of homes and businesses completely inundated by water. Many will not be able to recover either their personal belongings, their homes, their way of life or the way things were. There are businesses that cannot possibly recover from where they were prior to the floods. Even businesses in areas that were not directly affected by flood are finding it difficult as well. There is a massive task for all of us in this place to assist in any way we can. In broad terms, that is what every member of this House has done. I know that from what I have seen in Queensland from all members.

Estimates of the costs of rebuilding in Queensland are enormous, particularly to the Commonwealth. The Commonwealth has an agreement with the states to cover 75 per cent of the rebuilding cost, which is estimated to be around $5.6 billion, a massive cost. The levy is part of that package. It is designed to meet those costs and help rebuild Australia. For every dollar that we will raise by the levy, $2 will be found in cost savings. We will not do this solely on the back of taxpayers. We will work hard in this place to make the cuts and make the savings so that the taxpayer understands that when they make a contribution, so will we in this place in terms of value for money. We are going to make sure that the projects and the rebuilding effort are done effectively and cost-efficiently and are properly managed and monitored. It is the right way to do it. It is the right thing for any government of any persuasion to do this, and I dare say that, if the roles were reversed and the coalition were in government, they would be putting the same levy forward, perhaps even a greater sized levy. Of course they would.

Not only would they do that, but there would be one stark difference. On this side of the House, we would support it. We would put aside whatever other views we had in the national interest, and I say that with absolute sincerity. It is something I believe in and something I would support. It is something I know my colleagues would support. It is something I know that the Prime Minister, if the roles were reversed, would also support, because we genuinely believe that this is what we ought to be doing as a nation. Australians—right across the whole country, not just those affected in Queensland—have been amazingly generous. We have seen an outpouring of not only courage and goodwill but also generosity. People continue to be generous, including by supporting this levy. Where people have not donated money, they have donated household goods and clothing, not to mention, in some cases, cars, their time, their labour—the list goes on almost endlessly. We will rebuild the roads, the rail lines, the ports, the bridges, the other public facilities—the community infrastructure that is so important—the clubs, the sporting facilities, the things that lift a community and that provide the moral support when people need it the most, particularly now.

The levy that this bill introduces will be a one-off, one-year-only, progressive levy to taxable income in the 2011-12 financial year. It is absolute and specific. It will not continue into the future. It is modest. Individuals with incomes of less than $50,000 will not pay anything. Individuals with a taxable income of between $50,000 and $100,000 will pay only 0.5 per cent—half of one per cent—as part of their taxable income. Obviously, it is progressive upwards from thereon. There will be exemptions, of course. Those who have received a grant or a payment from government because they were affected will not have to pay the levy. In those terms, it is non-discriminatory in the way that it is applied. It is to be applied so as to be fair as possible across the community. Anyone who has been declared as in a disaster zone will not have to pay the levy either. For example, a person earning $60,000 will only pay 96c, less than $1, per week. We are talking about a tin of beans. How could we come into this place and argue over a tin of beans per week when so many people have suffered and we need that contribution to be able to do all of the things that need to be done in the coming financial year? A person earning $80,000 or more per year will pay $2.88 per week: about the price of one cup of coffee a week per year.

As I said when I spoke earlier in this place about the floods, they are a human story. They are about the great courage that all Australians demonstrate, and it makes me truly proud—having just listened to some great contributions from both sides of the House on multiculturalism and what it means to be an Australian—that we continue that great spirit of goodwill right across the board in saying, ‘We can step up, particularly when we talk about something so small.’ My electorate has suffered like yours has, Madam Deputy Speaker D’Ath, and as many others have in Queensland. There was something that I and many others in my community felt it was important to do about five weeks in. For me, that was on Sunday just passed, and it was to hold, as many others have done, a ‘thank you’ barbecue and a concert. It got a bit larger than we had anticipated, and it became a full-blown event and concert with one objective in mind, and that was to thank all the people who helped, to thank the flood victims for what they have done and to get people back together and make sure they understood that, while the cleaners have gone home, while the mud has been washed off the streets, while the big trucks have picked up all the rubbish and while they are sitting, looking at their empty houses which are stripped of walls, ceilings and being liveable, we have not forgotten. There are still people there and they will continue to help them to rebuild.

I want to take this opportunity, in support of the levy, to say a big thank you to a number of people who I think have just been great to volunteer their time. I particularly thank Carol Lloyd, who gave of her time and performed at the concert; the Leaping Lizards; Matt Hollywood; The Volcanics; Denise Drysdale and Ernie Sigley; Nicole Blair; Cash Backman; and the Australian Army Band, a fabulous band which played with Normie Rowe and were just wonderful. The Australian Army Band also played with Rhonda Burchmore, a wonderful performer. I also thank Danny McMaster and friends; Normie Rowe, as I said before; Tony Worsley and the Crawdads; The Wolverines; and so many wonderful partners who we had putting on this free concert. It was really nice to see these great Australians give of their time. There are so many people to thank that I cannot thank them all in the short time I have. I did want to say a special thanks to John Preston and Mal from JPSE Entertainment, to the Goodna RSL, to the Ipswich City Council, to the state government and to Anna Bligh, the Premier of Queensland, who came along on what was a very, very hot day. It was 37 degrees in the shade and about 100 per cent humidity, but people came out and they really enjoyed what was on offer. I also thank all of those fantastic people who donated so many goods, products and things for the day. What that demonstrated to me was that people who had already given so much and already done so much could give even more. That is the great strength of this place, and this parliament should support the tax levy for what it is for: to help rebuild this country.

Bert Van Manen (Forde, Liberal Party) Share this | Link to this | Hansard source

To the member for Oxley and to the other members of this House that have been severely affected by the floods, we are very mindful of those events and we want to see those areas rebuilt. Fortunately, my electorate was not greatly affected at all in the recent floods but, as a consequence, we saw the overwhelming generosity of the residents in their donations—whether it was as clothing, linen, toiletries or donations to the various flood appeals. Those that could not afford to make a monetary donation dug deep into their possessions to give what they could to their fellow country men and women. As with the rest of the country, and in particular those affected by the flooding, residents want to see the reconstruction happening as soon as possible.

The people of Australia in the flood, fire and cyclone affected areas need to know that they have our support in reconstruction. However, the reconstruction must not come at a higher cost than that which those in the flood ravaged communities have already suffered. Through the Tax Laws Amendment (Temporary Flood Reconstruction Levy) Bill 2011 and the Income Tax Rates Amendment (Temporary Flood Reconstruction Levy) Bill 2011 the Prime Minister has proposed a new tax to fund this reconstruction, but this is not what the Australian people need or want. This levy will make things harder not only for those that have already donated but also for those who were hit by the floods. It is unfair to put a new tax and a heavier burden on those already suffering. The people of Australia are concerned about the cost of living pressures that will come with that.

The people of Australia know what it is to cut their expenses and live on a tight budget to make ends meet and, therefore, the government must learn to do the same. If you receive an unexpected bill, you work it into your budget, no matter how difficult; you cannot force someone to pay that bill for you. The flood tax compounded by the proposed mining and carbon taxes will cause many people, including those in areas that have been affected by the floods, the fires and the cyclone, to struggle further and push up their costs of living. The Prime Minister has called this a mateship tax, but mates help each other out; they do not impose an additional tax. I believe the people of Australia have already shown, and are continuing to show, mateship and the true Australian spirit with the generosity they have already shown through this ordeal.

If you force these kind-hearted, hardworking people to pay a new tax, they will not willingly continue to donate and they will resent continuing to help out. Is this the type of community that we want to build, one where residents out of obligation and law rather than out of the goodness of their hearts have to help support these people who have suffered at these times? Let us take a moment to reflect upon the time and energy that were donated to help neighbours and complete strangers to clean up their houses and businesses. You cannot put a price on this community spirit.

This flood tax has the potential to seriously impact people’s desire to act in this manner in the future, and this is despite the fact that the tax will go not to help individual families or businesses but to repair damaged or destroyed infrastructure for which they have already paid a variety of taxes. We should be rewarding the people of Australia for their willingness to give, not penalising them by forcefully extracting a new tax out of them.

I draw to the House’s attention a couple of stories about those in my electorate who donated goods and time when they could not afford to make a monetary donation. An elderly gentleman, a pensioner, who was going through the pain of losing his wife could not afford to donate funds but packed up his wife’s clothes and brought them in hoping to help fellow Australians with his generosity. He knew that through his pain he could bring happiness to someone else’s life. There was also a young family struggling to make ends meet, collecting toys and children’s clothing from their possessions to donate. When they brought the goods in, the children were so proud that they could help, as was the mother for being able to do what she could. These are just two of many similar stories. Although these people could not afford to donate money to the flood relief, they gave what they could from their hearts. This is the Australian spirit at its finest. It is true mateship. It would be a shame to see this ruined by this proposed tax.

On 10 February, the Treasurer stated that the levy:

… is the right thing to do by Queensland and it is the right thing to do by Australia.

How did he come to that conclusion? The levy is merely 0.5 per cent of the government’s annual budget. The government has wasted billions on ill-fated, poorly managed and poorly-thought-out green programs to deal with imaginary global warming that said floods such as these would not happen because it was only going to get drier. How wrong that has been proven. This government’s record is replete with examples of waste and mismanagement of the taxes Australians have already paid. It is this waste and mismanagement which are far in excess of the $1.8 billion being sought to be raised by this flood tax that people are railing against. Now, in a cynical attempt by this government to get this flood tax through the parliament, it has agreed to hand back 24 per cent of the levy to placate the Greens and Independents. It begs the question: why is this levy necessary at all? I repeat the words spoken by the Prime Minister:

… if more money was needed: The money will come from cuts somewhere else.

If the money can be found elsewhere, why impose a new tax on Australians? There is plenty of opportunity to cut the budget, reprioritise and defer spending. The government should impose a tax as a last resort, not as a first. It is not the job of the people of Australia to pay for the government’s mismanagement of funds. This new tax will not contribute at all to restarting the economy and it is going to take from one area of people’s spending and redirect it towards reconstruction. It is just shuffling the deckchairs.

The coalition has articulated a clear and alternative strategy that negates the need for this new tax. The Prime Minister stated that 2011 must be a year for the government to move forward and make decisions, but it also needs to be a year for the government to discover how to live within their means, not a year of imposing new taxes on the hardworking people of this country. The government can start with finding additional savings in the budget and not imposing this new flood tax on the Australian community.

Geoff Lyons (Bass, Australian Labor Party) Share this | Link to this | Hansard source

I rise on this occasion to add my remarks on the Tax Laws Amendment (Temporary Flood Reconstruction Levy) Bill 2011 and the Income Tax Rates Amendment (Temporary Flood Reconstruction Levy) Bill 2011. As floods ravaged Queensland, the nation looked on in horror. We were all searching our hearts for a way to help. Many individuals and businesses donated money. Others, closer to the event, volunteered their time with mop, broom or backhoe to help clean up the mess. As a government, we have much to do to assist in rebuilding Queensland. Prime Minister Gillard has confirmed that we will meet our commitment to the last cent.

We must support our fellow Australians as we rebuild our nation from this unprecedented disaster—a disaster which requires unprecedented action and absolute commitment by this parliament. The Labor government has acted quickly to look at how we are going to fund the rebuilding of Queensland. Rebuilding infrastructure is costly, and we need to make sure we get value for money. I was pleased to hear Prime Minister Gillard outline the mechanisms put in place to ensure that we do.

The reconstruction task is going to take a lot of time and a lot of dollars. Initial estimates put the cost at close to $5.6 billion. We will meet the cost through $2 worth of saving for every dollar of this levy. This is responsible economic management. The costs are being met by spending cuts of $2.8 billion and by delaying infrastructure projects of $1 billion, which will meet two-thirds of the cost. The remainder is met through the one-off levy of $1.8 billion. I stress that the one-off levy will apply for the 2011-12 income year only and will apply to all taxpayers with a taxable income of $50,001 or higher. It will mean $1.74 per week for a taxpayer on average full-time adult earnings of $68,125 per annum. The flood levy is progressive. As you would be aware, the levy will be paid at a rate of ½ per cent for taxable income between $50,001 and $100,000. A rate of one per cent will apply to taxable income of $100,001 or more.

The feedback I have had in my electorate of Bass on this issue is that we should do whatever we have to to support our fellow Australians. Those affected directly by the floods will not have to pay this levy. As Prime Minister Gillard said in the second reading speech on this bill:

This is not just a routine piece of legislation, not just a package of measures to restore bridges and roads, but an expression of goodwill between Australians.

In my local community, far removed from the floods, many were concerned for families and friends who lived in Queensland. We watched on television the frightening footage of cars being washed down roads, community facilities being destroyed, farmers losing crops and families losing their homes. I am proud to say in this House today that my local community, the electorate of Bass, banded together very quickly to do our bit to raise money—people like Danny Gibson, full of enthusiasm, organising a fundraiser which raised $50,000. Local businesses demonstrated their support—businesses such as the Tailrace Centre, Coyote Entertainment, the Examiner newspaper, ABC Tasmania, Southern Cross Television, LAFM radio, J Boag and Son, Tamar Ridge Estates and Theatre North.

Another local star I want to point out is Wendy Summers, the Westpac Launceston branch manager. With her team, including Brooke Johnson and Tony Manson, she cooked up a storm, barbecuing sausages outside the Westpac branch in Launceston to raise money for the floods. I was most impressed to hear that Westpac matched the money raised dollar for dollar. I was happy to don an apron to help out at this event. Next Friday evening there will be a football match organised by the Rocherlea Football Club to raise funds for the ongoing effort in support of disaster relief. I take this opportunity to invite everyone who has the chance to attend this fundraiser, commencing at 6 pm at the Rocherlea Football Ground. There are examples like this all over the country. Each dollar raised is an expression of shared concern—a true expression of mateship. Do you think people would donate money to build roads? No. But will Australians donate to help people get back into their homes? Yes.

The legislative instruments to accompany the bills will ensure that those individual taxpayers who have been affected by a natural disaster in 2010-11 will be exempt from the flood levy. I also point out that the levy will impose only a modest charge on taxpayers. For most Australians it is less than the cost of a takeaway cup of coffee.

To the critics of this levy I say: this is not the first levy to be introduced by a government. It may not be the last, because sometimes unexpected events occur when money is needed quickly for the greater good. Levies that come to mind are the firearms buyback levy, the stevedoring levy, the Ansett levy, the sugar industry levy, the dairy industry levy and the aircraft noise levy—and do not forget the chicken levy. My view is that none of these levies introduced by those opposite were as important as the repair of infrastructure required as a result of these natural disasters. As Anna Bligh, the Queensland Premier, said of this levy:

… as a nation we have come together in the past to help out the milk industry, the sugar industry, the workers of Ansett and to buy back guns after the Port Arthur tragedy. I think the people of Queensland are at least as important as all of those other levies in the past.

Paying for the reconstruction as we go is the right thing to do. As we have heard our Prime Minister say, ‘The impacts of the floods have been devastating, but they haven’t altered the long-term fundamentals of our economy or the long-term challenges we face’. We still have an economy that is testing the limits of our capacity, we still face the challenges of meeting our skill needs across the economy and we still need to attend to our infrastructure constraints over time.

The task of rebuilding after the floods will mean added demands on our capacity, skills and resources. That is why we have made room in the budget through spending cuts and a temporary levy to fund the rebuild. We are a government that is solving problems now as well as preparing for the future. That is why we have made room for the reconstruction work by deferring some infrastructure projects temporarily.

The Gillard Labor government are preparing for Australia’s future. We will not starve Australia of infrastructure like those opposite. We are about creating jobs and advancing our nation, not taxing through the nose and delivering huge budget surpluses at the expense of building much-needed infrastructure. The Labor government are trying to make up for 11 years of infrastructure neglect.

Those opposite were a high-taxing government, boasting about huge budget surpluses, but they did not have the foresight or desire to invest in Australia through infrastructure. That is why we needed plans like the BER projects and the National Broadband Network. We need to invest in our schools because our children are our nation’s future.

Those opposite also need to come to grips with the fact that we need the NBN; it is an investment, not a cost. Tony Abbott said last year that the NBN would be the ‘first to go’ if the coalition was returned to office. We cannot sit back and be left in the ashes of technology by other nations; we should be at the forefront. Those opposite are a risk to our nation. Senator Conroy understands the importance of the NBN:

The NBN is crucial economic infrastructure. Without it, Australian companies will not be able compete with the likes of Japan, Korea or Singapore.

Many of those sitting opposite today were key players in the highest-taxing government in Australia’s history: the Howard coalition government. They were the highest-taxing government in our history. They held government when the world was experiencing high economic growth. Yet despite this flourishing global economy, they actually achieved very little. But that does not stop them from espousing their beliefs that they were good economic managers. They overtaxed, spent little on infrastructure and introduced so many levies, but they still will not support the rebuild of Australia.

Many of those opposite have been very strong critics of this levy. I am concerned for the morals of those opposite who were actively trying to raise party funds to oppose this levy whilst Australians were donating their hard earned dollars to the victims in the floods.

The Liberals were hooked on tax. They were happy to tax Australian working families so they could have big budget surpluses. They wasted the opportunity of a robust world economy and failed to provide Australia with the infrastructure needed for our nation’s future. In 2006 they actually cancelled insurance on Commonwealth public assets to achieve a budget surplus.

The flood levy will go towards a multibillion-dollar package to rebuild bridges, roads, rail lines and schools that have been damaged as the result of natural disasters. I urge this parliament to support this levy. We need to rebuild Australia and we need to rebuild the vital infrastructure to support our fellow Australians.

Lastly, I take this opportunity to say to the people of Queensland that the Australian Labor government will not let them down. I support this bill.

Luke Hartsuyker (Cowper, National Party, Deputy Manager of Opposition Business in the House) Share this | Link to this | Hansard source

I am pleased to have the opportunity to speak on the Tax Laws Amendment (Temporary Flood Reconstruction Levy) Bill 2011 and the related bill, because the Gillard government’s flood levy goes to the heart of Labor’s economic mismanagement.

Labor treasurers all seem to work from the same manual. Chapter 1 calls for a new tax every time the public starts to get concerned about the budget. The only difference between this and other Labor taxes is that the Prime Minister will try to sell this one as a mateship tax. Australians are always willing to help out a mate in trouble, but we help because it is the right thing to do, not because a politician has made mateship mandatory.

Queensland must be rebuilt; eastern Australia must be rebuilt. The Commonwealth has a role to play in this very important reconstruction task. However, the Gillard government’s decision to partly fund the reconstruction through a new tax is the action of a lazy and irresponsible government.

Australians pay tax with the expectation that the government will carefully manage the national budget, just as millions of Australians right around the country carefully manage their household budgets. When unexpected expenses pop up for Australian families, they have to re-evaluate their budgets and cut down on unnecessary expenses until things are back on track. It is no different at a national level.

The natural disasters in Queensland and on the east coast of Australia have certainly put pressure on the federal budget. But instead of cutting back on expenses, the first option for this government—the first part out of the Labor management book—was to introduce a new tax. Even before the Prime Minister had released any details of savings measures, and before Cyclone Yasi had hit in North Queensland, the Prime Minister was already out talking about a new levy.

The Leader of the Opposition even offered to work with the government in a bipartisan way to find the spending cuts necessary to rebuild Queensland and eastern Australia without the need for a new tax. What happened to this offer? It was rejected by this government. The government has announced some savings measures; however, many of the programs cut by the government were already well known as inefficient and wasteful. In many respects, the government was using the opportunity to get rid of some deadwood policies. So they were hardly tough decisions. And in the past few days we have seen that the government has even reversed some of these cuts in order to secure support from the Greens and the independents. The Australian public is entitled to ask what other deals the government has done in order to secure the future of this new tax.

By contrast, the coalition have made tough calls. We have outlined more than $2 billion in savings over the forward estimates which would eliminate the need for this new tax. We have made the difficult decisions. Some of our proposed cuts have been unpopular, but we have demonstrated that we can make hard decisions, unlike this government. If the government was serious about finding savings to pay for rebuilding Queensland, the first place it would look would be the National Broadband Network—a $50 billion white elephant that we cannot afford; a program that could be delivered more efficiently and effectively at a lower cost without the huge levels of waste that are going to be paid for by the Australian taxpayer. Queenslanders who are driving on washed-out roads, across damaged bridges and through devastated towns are more concerned about getting those problems addressed first before we look at increasing the speed that we can download videos. They want things fixed. On the other hand, the government is searching for a political fix.

It is interesting to note that the House of Representatives Standing Committee on Economics heard that introducing a new tax to pay for disaster reconstruction is the least preferred policy response. Professor Warwick McKibbin told the committee:

I think that in the case of a disaster it is almost uniformly accepted by economists, in principle, that a tax is not the best way to fund it.

I will repeat that: ‘a tax is not the best way to fund it’.

Craig Thomson (Dobell, Australian Labor Party) Share this | Link to this | Hansard source

So is your position to increase debt?

Luke Hartsuyker (Cowper, National Party, Deputy Manager of Opposition Business in the House) Share this | Link to this | Hansard source

It is also reasonable to point out that the government would not need to introduce this new tax if it had not wasted so much money, and let us just chronicle those for a moment. We would not need this flood levy if we had not wasted all that money on pink batts. I don’t hear you speaking now. What about all the waste on pink batts?

Craig Thomson (Dobell, Australian Labor Party) Share this | Link to this | Hansard source

Mr Craig Thomson interjecting

Luke Hartsuyker (Cowper, National Party, Deputy Manager of Opposition Business in the House) Share this | Link to this | Hansard source

We would not need to impose this levy if you had not wasted all that money on the BER. What about the BER? We would not have had to impose this levy if you had not paid double the cost for building school buildings.

Tanya Plibersek (Sydney, Australian Labor Party, Minister for Human Services) Share this | Link to this | Hansard source

Ms Plibersek interjecting

Luke Hartsuyker (Cowper, National Party, Deputy Manager of Opposition Business in the House) Share this | Link to this | Hansard source

We certainly do not oppose investing in schools, but we certainly oppose paying twice the cost to build school buildings. We certainly oppose paying $5,000 a square metre for some slap-up demountables. They saw you coming! The contractors saw you coming and you paid through the nose. Demountable sheds at the price of palaces—that is what we got from this government. That is why we are having to pay this flood levy.

Tanya Plibersek (Sydney, Australian Labor Party, Minister for Human Services) Share this | Link to this | Hansard source

Madam Deputy Speaker, on a point of order: I ask the member, if he is going to make claims about school buildings in his own electorate, whether he would name those schools and mention whether he has reported them to the BER task force.

'ath Yvette (the Deputy Speaker):

That is not a point of order. I ask the member for Cowper to resume.

Luke Hartsuyker (Cowper, National Party, Deputy Manager of Opposition Business in the House) Share this | Link to this | Hansard source

I will just say that I have reported those to the BER task force.

Tanya Plibersek (Sydney, Australian Labor Party, Minister for Human Services) Share this | Link to this | Hansard source

Which are they?

Luke Hartsuyker (Cowper, National Party, Deputy Manager of Opposition Business in the House) Share this | Link to this | Hansard source

Stuarts Point is one. Scotts Head is another. Massive overexpenditure: nearly a million dollars for a shed. Willawarrin is another. Corindi is another. I will speak to the good member after, and I will continue my contribution to this debate.

We have always had to face the prospect of natural disasters. Dorothea Mackellar wrote of ‘droughts and flooding rains’—but she left one out. It is droughts and flooding rains and higher taxes under Labor to pay for it. Governments have to be prepared to pay for such contingencies, and the best way to deal with natural disasters is not with a flood levy; it is to run a surplus. That is what is missing from the mindset of this government: running a surplus. Since coming to power this government has not delivered a surplus, and has very little prospect of delivering a surplus. It certainly scores a B-minus for economic management.

I would also like to reflect on the way that my electorate was treated when it was hit by a declared natural disaster in March 2009. Did my electorate get assistance for the floods of 31 March 2009? No, it did not. Despite it being a natural disaster, your government turned its back on the people of Coffs Harbour in their hour of need. You did not provide them with a Centrelink emergency disaster recovery payment, which is being provided just about everywhere across the country. They were denied that assistance by a government that is out of touch. Now you are going to expect those same people who were denied a Centrelink emergency disaster recovery payment to pay the flood levy. It is absolutely outrageous that you denied assistance to one cohort of people who suffered from a catastrophic flood, a more than one-in-100 year event, but now you are quite happy to whack them with a flood levy. I have to tell you that is not going down well on the streets of Coffs Harbour. They have no problem with paying a flood levy to help people, but in their hour of need they were denied the sort of assistance that has been offered to others. They got 400 millimetres of rain in some areas, and apparently it was not a big enough disaster. Hundreds of houses were inundated, but it was not a big enough disaster. Hundreds of businesses were inundated, but no Centrelink disaster recovery payments were made.

One of the real concerns of Australian people about this flood levy is the issue of how wisely the money would be spent. This government has form on waste and mismanagement, and we have chronicled just a few. We have talked about the BER and about the pink batts program. Let’s not even venture towards the Green Loans program—another little chestnut. People are rightly sceptical about this government’s ability to deliver programs effectively and efficiently. And what did the government do to try and restore some credibility? They called in a Liberal, John Fahey. So devoid of economic credibility were they that they did not call in Penny Wong to ensure that the program was properly managed; they had to call in John Fahey to try and resurrect some element of credibility because the Australian people believe that a dollar given to this government is a dollar wasted. So I have to say it is of great concern to the Australian people that their hard-earned taxpayers’ dollars are being poured down the drain by a wasteful government that cannot live within its means; a wasteful government that cannot make the tough decisions to rebuild Australia as required without imposing a new levy, a new tax. The Australian people deserve better. Australians do not mind helping a mate. They certainly do not like to be taxed unnecessarily. They certainly do not like to be taxed by an ineffective government that cannot manage money and has to try and depend on a former Liberal finance minister to restore some of their economic credibility.

Craig Thomson (Dobell, Australian Labor Party) Share this | Link to this | Hansard source

I rise to speak on the Tax Laws Amendment (Temporary Flood Reconstruction Levy) Bill 2011 and the Income Tax Rates Amendment (Temporary Flood Reconstruction Levy) Bill 2011. I want to start with some of the myths that the member for Cowper tried to perpetuate here, as did the member for North Sydney earlier. This is in relation to who is or was the highest taxing government that we have had in Australia’s history. It is not this government at all. If you look at the years, it is not one year of the Howard government, not two years of the Howard government, not three years of the Howard government and not even four years of the Howard government. Five years of the Howard government have been the highest taxing years of any government in Australia. So the big-taxing government of the last 20 years and since Federation was the former Howard government.

Those on the other side have form in taxation. While they were taxing Australians at record levels, what did they do in infrastructure? Absolutely nothing. They had 19 broadband plans but, you know what, did not quite get around to delivering any of them. They sat on their hands during the first round of one of the biggest resources booms we have had. What did they do with that money? They squandered that money as well. There were no reforms and there was no investment in skills. Instead, we repeatedly had the Governor of the Reserve Bank talking about capacity constraints that were going to cause problems for the Australian economy if they did not redirect some of this tax money—money from the highest taxing government ever in Australia’s history for five successive years—into productive capacity for the Australian economy. Those on the other side have a hide to come to this place and lecture us about taxation when they have the record for not one but five years in a row as the highest taxing government ever.

Did they ever make any of the hard decisions in savings? No, of course they did not. They rode on the back of the resources boom. They let it ride through. They did not do any of the hard work. They never made savings. They had a budget that, if it was not for that boom, was unsustainable. It was this government that had to start to make the hard economic decisions. You only have to look at their economic team during the last election. The opposition had an $11 billion hole and refused to give their costings in for independent assessment, instead going off and doing it privately with an accounting firm that said they were not looking at the costs and relating them to what was being promised. So they were trying to avoid scrutiny, and this is the economic team that says they can do a better job in Australia.

Then when we have Queensland facing one of its greatest challenges ever, with 75 per cent of the state being declared a disaster zone and being inundated with floods, when we have all Australians coming together to try and rebuild Queensland and northern Victoria and make sure we can get those states back together again, what do they do? They do not change their form from any other piece of legislation. For them it is business as usual, ‘Let’s just oppose everything; let’s not be constructive; we are going to oppose the lot.’ It might be helping Queenslanders rebuild. ‘We do not care. We oppose things. That is our mantra. We oppose everything.’ We have seen they have taken that approach here again and it is the Queensland people—if the opposition got their way—who would be missing out. It is the Queensland people who would not be getting the much needed resources.

I should remind any Queensland MP on the other side: vote against this at your peril because the people of Queensland in your electorates will be watching what you do. The member for Moncrieff, the deputy chair of the House of Representatives Standing Committee on Economics, was running a poll on his website to see what constituents in his electorate thought. You know what? Seventy per cent of them supported the levy. You beware out there, Queensland opposition MPs, because you are going to be judged in the way in which you vote on this levy—and so you should be for abandoning the people of Queensland and trying to pay cheap politics in relation to this levy. You should hang your heads in shame.

There are a couple of other things that I want to raise about what the member for North Sydney said. He made some comments about the inquiry that was conducted by the House economics committee. He made a statement that this was rushed through in undue haste, that we had a week to do it and that this was a terrible thing because there was not the ability to hear from people properly. Well, the member for North Sydney should know that it was the deputy chair that moved the motion to set the program for one week with one hearing day. It was the member for Moncrieff who moved that motion, not the Labor Party members, and it was supported unanimously by the committee. The opposition members of the House economics committee voted for that timetable and they knew what was there.

There was also an alleged complaint that they did not have long enough to question Treasury officials. Well, they had two MPs question Treasury officials and so did the government. They had equal time. They only had three people there so two out of three got to ask all the questions they wanted of Treasury. I am not sure whether the member for North Sydney is having a go at the member for Moncrieff and the member for Wright for not asking the questions that he wanted asked, but his criticism is totally unfounded. They had the time and they had two members who were unrestricted in the questions that they wanted to ask of Treasury officials.

Every member of the opposition who says that they oppose this levy suggests we should have been able to pay for it because we should have been in surplus. Every one of them forgets that we went through the global financial crisis and that this government’s performance in the global financial crisis is held up around the world as being the model approach to the global financial crisis. And did it put us into deficit? Yes, it did. But that is what a surplus is for.

When you face one of the worst economic crises since the Great Depression, then of course you use your economic reserves to make sure that people have jobs and that they continue to be productive in the community. For the member for Cowper and his fellow members of the opposition to totally ignore this clearly shows that they are not connected in any way with their communities and do not care about jobs, and they should be condemned for it.

One of the arguments put up—and the member for North Sydney put this up—is that an unintended consequence of this levy will be that people will not donate in future to disaster funds, that Australians will suddenly become hard-hearted and say, ‘We are not going to donate because a levy might come.’ You are misjudging the Australian people. They are generous and always have been generous, and whether it is events in this country or events like the international tsunami Australians always dig deep and always make sure they look after those who are suffering. You have totally misjudged them on that.

Locally, we held a fundraiser at Westfield a week after the levy had been announced. Guess what—we raised over $1,000 an hour from people who knew that they were going to be paying the levy. Your argument simply does not stack up. I pay tribute to the Wyongah Girl Guides, who were there to help out; the firefighters from Berkeley Vale, who went with tins round the shopping centre; and the Toowoon Bay surf lifesavers, who helped and raised money. I also thank Westfield, who assisted with the fundraiser and made their shopping centre available to us. I thank Chipmunks childcare centre, who put up a jumping castle that kids could use for a gold coin donation. People knew their kids were having a good time, but they knew they were also contributing to the raising of money for the flood victims. I also thank the Mariners, the great Central Coast A-League soccer team, who later this year will go on to victory when they make the grand final and win the A-League! They contributed and supported the fundraiser as well. We were also lucky enough to have Australia’s first MasterChef, Julie Goodwin, cooking sausages and raising money for flood victims as well. So I place on record my personal thanks to all of those people who clearly showed the opposition’s arguments to be wrong. We raised over $1,000 an hour on that day for flood victims—a week after the levy had been announced. It shows that Australians are prepared to pay and do their bit through the levy but are also prepared to dig into their own pockets separately for fundraising.

Finally, to put this into perspective, 70 per cent of the people in my electorate will not pay a cent of the flood levy. The next 20 per cent—so that takes us up to 90 per cent of people in my electorate—will pay less than $3 a week. We are talking about very small amounts that Australians are being asked to contribute. Australia-wide, fewer than 50 per cent of Australian taxpayers will be asked to contribute to the levy. When we had the gun buyback levy, one of seven levies that those on the other side put in place, 80 per cent of taxpayers were asked and forced to pay it. The only levy that these people opposite oppose is the one that is helping Queenslanders rebuild Queensland, and it is because it is in the DNA of the Leader of the Opposition. It does not matter what the issue is, he will oppose it. These bills are very important bills. They should be passed, and those on the other side should hang their heads in shame for opposing them. I commend the bills to the House.

Mark Coulton (Parkes, National Party) Share this | Link to this | Hansard source

I rise tonight to speak on the Tax Laws Amendment (Temporary Flood Reconstruction Levy) Bill 2011. Before he leaves, I would like to comment on the predictable speech of the member for Dobell. The Australian people, if they could go back to the days of the management of the Howard government, would gladly do so. I have been terribly concerned about the nature of this debate. The coalition oppose this legislation not because we do not want to help the people of flood affected areas or because we are not compassionate people. Our opposition to this bill is the result of an assessment of the management capabilities of the Gillard government. Rather than the rhetoric and diatribe from the member for Dobell and others, what I would like to hear is the plan for this money. How is it going to be managed? How is it going to be directed to the communities and the people that need it the most? Looking at history—looking at the last four years of the Rudd and Gillard governments—the concern for me is whether this money is going to be used correctly. Is it going to be directed through the state government, where 50 per cent will be wasted?

Of the government money that is allocated to roads in Queensland, nearly 50 per cent is used on administration and 50 per cent goes on roads. Are the people of Australia going to be levied a tax that will swell the bureaucracy of the Queensland government or will it go directly to the roads and communities that need it most? The concern I have is that the issues I have had to deal with over the last few years have been about the mismanagement of funds and the inability of the Gillard-Rudd government to manage programs. In my electorate, a disadvantaged Aboriginal community had their employment program terminated by the government and, in return, they were given a $650,000 cubbyhouse sized tuck shop. That is why the people of my electorate are very concerned about giving the government a mandate to tax them higher to fund the flood reconstruction.

The real issue here is this: how is this money going to be managed? Listening to the member for Dobell speak, it seems like this is a magic pudding levy where most people will not be paying it. So how is $1.8 billion going to be raised if most people are not going to be paying it?

There is another thing about the mismanagement of the people who are obtaining levy exceptions. One of the exceptions is that if you had received the $1,000 emergency payment from Centrelink then you would be excluded from paying the levy. Therefore, if you did not receive that payment then you would pay the levy. As I stand here tonight my electorate is still in flood. The communities of Lightning Ridge, Angledool, Goodooga and Brewarrina are suffering flooding, as they have been for the last six weeks. I have families that have come from Angledool and are paying for accommodation in Lightning Ridge. They were evacuated by helicopter to Lightning Ridge so their children can attend school, but can they obtain the Centrelink payment? Are they eligible for the $1,000 payment? It is my understanding that something like $600 million has gone towards that emergency payment and that people who merely lived in a postcode that had their electricity off for a certain number of hours obtained that payment. Yet the people who are getting flooded now and who are severely disadvantage, the people in the Aboriginal community of Goodooga who are having their supplies flown in by helicopter, are not eligible for this relief payment. So does that mean they are going to pay this levy? Are the flood affected people in my communities who are receiving no help from the government at the moment, are they going to be taxed to pay for reconstruction elsewhere? That is what I am talking about—that is, the mismanagement of this government.

I have been trying to get this rectified for some time. Just because it is not on the news every night, the flood that we all saw, that devastation we saw in Toowoomba, it does not mean that that water is not passing through my electorate now. Three weeks ago I flew with the SES from the town of Lightning Ridge into Queensland and up to Dirranbandi to inspect what was happening with the floodwater. We have an inland sea. I witnessed unharvested wheat crops sitting in water. Worse still, I saw harvested wheat crops where the grain was stored in a bulk bunker under canvas sitting in water. One year’s income totally destroyed, but is there any assistance coming to the people of that area? No. And that is why we need to have a hard look at this.

I want to know why the Prime Minister, when the rain was still falling, announced a need for a levy without first finding out some costings, without first prioritising where that expenditure would go, without first outlining a method of payment that was going to affect the victims of floods without getting eaten up by bureaucracy.

Also in my electorate, we have lost hundreds of millions of dollars through direct flooding and excessive rainfall from the middle of November until today. My electorate, in different parts at different times, has been severely disadvantaged. I was in contact with the agriculture minister, Senator Ludwig, and his office daily for days and days and days trying to get his attention. One of my constituents rang the senator’s office. This constituent was from the town of Trangie who had just lost their crop and the senator said: ‘Why are you ringing me? I’m the minister for agriculture. What have I got to do with flooding?’

But credit where credit is due, the parliamentary secretary for agriculture, Dr Kelly, in January did come to my electorate. He spent two days there and he saw for himself the devastation of the crops and the damage to infrastructure, the hundreds of kilometres of road that have been virtually destroyed by a combination of wet weather and the need to move grain during a very wet harvest period. My hope is that Dr Kelly is getting some form of support from the cabinet to organise some sort of relief for the farmers and the communities in my electorate.

The community of Dubbo, which was pretty well split in half for 10 days and where businesses were inundated, has not been able to get the payment. So while the government members are trying to portray the coalition as heartless in this, that is not the issue. No-one more than I believes that the victims of flood need a fair go, but what they expect of the government is to manage the economy so that when times like this happen there are funds there to meet their commitments. This will not be the last or the only natural disaster we are going to have. Indeed, there was flooding in Queensland in the early part of 2010, and despite the fact that disaster payments were authorised, they are only coming through now—some of them have not even got them! It has taken 16 months to get that relief through. That is the concern. We need to see a plan, we need to see a guideline, we need to see some financial responsibility from the government to take control of the economy. Do the right thing by the Australian economy so that they are in a position to help the Australian people when they are needed.

By opposing this bill, the coalition is saying to the government: ‘Stop. Consider the waste and mismanagement that you have inflicted on the Australian people and the damage you have done to the Australian economy over the last four years and put in a package that will benefit the people in the flood affected areas, but will not slug the Australian taxpayer.’ The Prime Minister was far too quick to announce a levy without giving any justification or rationale behind it.

Steve Georganas (Hindmarsh, Australian Labor Party) Share this | Link to this | Hansard source

I rise to speak on the Tax Laws Amendment (Temporary Flood Reconstruction Levy) Bill 2011 and the Income Tax Rates Amendment (Temporary Flood Reconstruction Levy) Bill 2011. I also wish to put forward statements made by some of my constituents, and observations made more generally, pertaining not only to the bills we are debating here today but also to the spirit behind much of what has been said, seen and heard over the last several weeks. I also want to make some comments about some of the speeches which I have been listening to over the past few hours and some of the statements made by members on the opposition benches. They continuously raised one particular point: the perceived waste that has taken place over the last few years under the Labor government. They raised this point over and over again. They opposed Labor’s infrastructure injection into the economy. They opposed every measure that we took to inoculate ourselves from the global financial crisis. They opposed every single measure.

Looking back at that period when the world’s greatest and harshest economic disaster occurred, had we listened to the opposition then, we would be in a very different position today. All it takes to know that is to talk to economists from around the world. Economists on the left, economists on the right and economists in the middle all say one thing, and that is that we did it correctly, we did it right and we are the envy of every economy around the world. Had we listened to the opposition back then, had we taken their views on board and accepted what they were saying, we would find ourselves in a very different position today. Another 300,000 people would be unemployed and we would have seen misery, destruction and unemployment in many, many families across the country. I raise this because we are debating something very important that is affecting the lives of people in Queensland and Victoria who suffered from the floods and cyclones through the summer. Again we are seeing the opposition say that we should not under any circumstances have this levy for reconstruction and for assistance to people who have suffered so much in the last few months.

And they did suffer. As I did not speak on the condolence motion of early February, can I convey my sympathy and condolences to those who lost loved ones and property and faced the destruction of the floods and cyclones. There is no greater loss than to lose a loved one. I would also like to mark my appreciation for the care that was exercised by so many in making as many people as possible as safe as possible. This applies not only to the floods in both Queensland and Victoria but also to Tropical Cyclone Yasi and the Western Australian bushfires. As many are thanking their lucky stars to have come through one of these ordeals, attention inevitably turns to the other impacts of these natural disasters—the loss of homes, the loss of possessions, the loss of income and the loss of wealth. And, of course, there is the loss of so much around us that we tend to take for granted—the impassable roads, the bridges that have been destroyed, the unusable schools, the unsafe bridges, the loss of electricity and the loss of our usual supplies of fresh or refrigerated food and even safe drinking water. Disaster areas can be reduced to something similar to Third World conditions.

One MP recently spoke of the loss of available cash, the suspension of the ability to conduct simple commercial transactions to acquire what one needs—that is, if one has the cash or credit reserves, and many would not—and people’s potential to simply go back to work and earn the funds they require for their daily existence, let alone re-establishing their lives, which in many cases will be severely impaired. And it is the funds required to rebuild and re-establish these amenities, facilities and capacities that we are principally focused on today. People affected by these natural disasters have been helped to an extent by Centrelink payments, and I congratulate the government for making available this assistance and the staff to administer it. The Premier’s Fund, to which so many people have given and continue to give, and other charitable organisations will directly help people affected by these disasters.

The Brisbane City Council, I understand, has required works worth some half a billion dollars, and they will largely be funding their own work. The state of Queensland and the Commonwealth will be outlaying several billions of dollars to repair, reconstruct or replace much of what has been damaged. As I have already said, and as all members know, this means roads, bridges, electricity supplies, public buildings and social infrastructure—the things that we need just to go about our everyday lives going to school, attending work, catching public transport et cetera.

The government announced that it will fund some $5½ billion of works. This may, I take it, increase, with further damage being done subsequent to the original announcement. Two-thirds of this amount will be redirected from other budget line items. There are critics of what items have had funds redirected. I note that some constituents have been hoping to trade in their oldish car under a new government scheme, and I hope that they have not been too badly inconvenienced by this announced change in policy. But I also note that funds from within the greater climate change package of initiatives have been redirected. In response to any criticism of this fact, may I reiterate that Australia’s continuing increase in greenhouse gas emissions is public knowledge and our current trajectory will see us emitting some 20 per cent more greenhouse gas in 2020 than we are permitted to do under international agreements. We will be 20 per cent over target—a volume of pollution equivalent to that produced in generating three-quarters of Australia’s total household energy use.

In response to critics of the reallocation of climate change funds to their use in the rebuild after these natural disasters I say, ‘Support the ultimate passage of the government’s bill for an eventual, negotiated price signal to the electricity generation sector and the Australian economy more broadly.’ I say to each of them: ‘Negotiate by all means, but do not be a purist who is prepared to see all attempts thwarted for the lack of an absolutist idea of perfection. In this political and economic and environmental battle, do not prefer defeat to a compromised victory.’

On the subject of cutbacks, I would like all to appreciate how readily the opposition undermine the objectives of its very own National Water Initiative and the restoration to health of the river systems which comprise the Murray-Darling Basin. Funds made available for saving the river system from total collapse are finite. They were under the previous government and they are under the current government. There is no recurrent funding for the works or purchases which are required to restore the health of these rivers which give us life and prosperity.

So when the opposition targets cutbacks of $600 million dollars within a finite budget for environmental water and announces they will drain these moneys for use elsewhere, they can only be saying one of two things. They are saying either, ‘We’ll take money now and put it back in in years to come’—new money that has not been budgeted for—or ‘We’ll decrease the total amount of money that was to be spent saving our river system.’ There is no deferral without recurrent funding. Once the money is gone, it is gone.

The opposition desperately wants us to believe it will slash tens of billions from the budget, including the liquidation of the Commonwealth’s own investments and revenue-generating enterprises. Can anyone believe that they will somehow find over half a billion dollars to fund the buy-back which they describe as theft? I do not think so. The opposition wants to bleed the River Murray and the basin again—bleed the water out of it, and bleed funds from its restoration and its very survival as a living river system. I make this point because nobody should have any doubt that the Leader of the Opposition and his colleagues are misrepresenting their current proposal as a deferral of funding and misrepresenting their intentions for the future. The opposition are entirely consistent and honest in indicating that they want to bleed the River Murray dry. They all say, ‘To hell with it’ whether there is acid in there or not, or, in the words of the Leader of the Opposition—I will not say the word—‘S*** happens.’

All South Australians know that the reform of the Murray-Darling Basin is one of the most important policy challenges facing our nation. We have already seen what a dying river system looks like. We cannot allow it to be drained to death. As a nation we can afford to err on the side of decency—and it is decent that we are proposing this levy. We can provide help, even if it is a little more than required, and we can give someone support irrespective of where they are from. We can share people’s pain and ease their burden, however slightly, without fear for ourselves. To me, this is what is decent in our community and our society: the connection that brings us together. I commend the bills to this House.

Sharman Stone (Murray, Liberal Party) Share this | Link to this | Hansard source

I rise to speak on the Tax Laws Amendment (Temporary Flood Reconstruction Levy) Bill 2011 and the Income Tax Rates Amendment (Temporary Flood Reconstruction Levy) Bill 2011. Someone not familiar with this government or this country could be wondering why the coalition is opposing the idea of a temporary levy to raise $1 billion or so to help pay for the worst floods on record. They could be a little bit amazed, but we in the opposition and our fellows across the nation in the communities that are flood affected know better about the outcomes of hollow sayings like, ‘Just a temporary short-term levy with a bit more cash thrown in and the job will be right.’ We know that this government is incapable of functioning in a way that is efficient and effective and delivers best value for money at the end of a program.

We know that this government does not understand the needs of rural and regional Australia, where the flood devastation has been most costly. I only need to point to the previous speaker, who rabbited on about the Murray-Darling Basin water buy-back scheme in a way that made me shudder. He clearly had no idea of what it really means to go into a drought stressed community—now a flood stressed community—and say to a farmer, ‘Look, you still own some water; why don’t you sell it to the government to relieve some debt,’ and then turn around and call that farmer a willing seller. The person who sells that water has simply sold their capacity to produce in the future on their farm. So they have sold their livelihood and their children’s heritage.

We know that this government has a great deal of difficulty understanding exactly what is needed to help this nation recover from these dreadful floods. That is no more amply illustrated than by the fact that on the day the Prime Minister read out her carefully prepared speech about the fact that a levy would be put in place she did not even mention that, as she spoke, Victoria was up to its neck in water. Again today, the Treasurer failed to mention that Victoria is a place that needs a great deal of rebuilding. In fact, very close to my electorate—just next door in Mallee—we have places like Benjeroop and Murrabit, where the water will probably still be lying across farm properties for another 12 months. Those places have water through their houses and across their farms that cannot drain away due to the geography of the area and due to broken levees and broken channel systems. Yet we still cannot get this government to pay attention to the actual cost of washed away infrastructure, lost livestock and devastated lives.

The trouble is that it is not just a matter of how much money is needed to help rebuild, particularly for little shires that do not have the rate base to rebuild their bridges; it is a case, also, of rebuilding a sense of the future—a sense of hope for communities. These communities have been so badly affected, firstly by the worst drought on record, then by some of the worst locust plagues on record and now by the worst floods on record. You need to have some faith in the government of the day if you are to borrow hundreds of thousands of dollars to try, once again, to put in one last crop to try and build a future.

I am afraid the farmers in my area are saying: ‘This government does not care’. It does not understand—or perhaps it does not want to know about—issues of food security or even serious environmental degradation. If you have water lying for another 12 months in places like Benjeroop or Murrabit, right against the Murray River, that will add to a major future problem with saline water tables. Problems that we had dealt with could be reactivated by floodwaters lying across the landscape for perhaps 12 months. Of course, that could be sorted by some expenditure right now going to patch up smashed irrigation infrastructure, but it seems there is no hope for these farmers.

Why is my electorate so despairing of this government’s good intentions? Why is it cynical about a so-called ‘temporary’ levy when they are not even mentioned in the dispatches as needy of some of that cash? One of the problems is Exceptional Circumstances payments, which have really been keeping my communities alive for the last six years, during the worst drought on record. Exceptional Circumstances payments give an interest rate subsidy on borrowings and also a household support income equivalent to Newstart allowance. It is not a great deal of money, but that Exceptional Circumstances program has helped put food on the tables of thousands of families across the electorate of Murray.

Those families had hoped that, with the breaking of the drought and the small window of good season before the locusts and floods came, they would not have to depend any more on those payments to keep them together and put food on the table. But we have now had this incredible, devastating flood. We have lost at least $2.2 billion in livestock and fences across the third of the electorate of Murray that saw floodwaters rush through properties—some for the fourth time in the last three months.

I ask again: why are they so cynical about this government? Because the Exceptional Circumstances payments are due to cease in about four weeks. I have been begging Minister Ludwig and Minister Burke to announce quickly that they will extend that support to those families. After all, how else are they to live? I have been told by a neighbouring member of parliament that Minister Crean said quite boldly to him that they have no intention of continuing Exceptional Circumstances payments because, after all, they were for drought in particular and this was a flood.

How is this government going to address the issues of food security, the environmental degradation, the loss of jobs and the loss of the food manufacturing sector in my part of the world, where we have 23 food factories? We have lost, for example, most of our tomatoes grown for manufacturing. It has been an enormous temptation for our food manufacturers to import tomatoes instead of buying the tomatoes grown locally. With the value of the dollar right now and the enormous losses through the flood, it is cheaper to bring in imported junk paste from other countries. Tomato growers have applied for some of the low-interest loans that are on offer from Rural Finance in Victoria, which is federally funded but whose policy direction involves state government. Most of these tomato growers had multimillion dollar turnovers and used world’s best practice.

They have been told: ‘Sorry, your flood inundation, the loss of your entire crop’—which has happened in many cases, with millions of dollars lost per enterprise—‘doesn’t really fit into the criteria for flood support.’ Because a lot of these farmers rent their land each year—tomatoes are so hungry you only grow a crop in the same place for a couple of years in a row—they are not regarded as real farmers. Secondly, because the water that came over their properties was stormwater, not floodwater—or, in some cases, floodwater, not stormwater—they are being told they simply do not fit the criteria or fit into the definition of who the government can help. This is nonsense when you have communities on their knees who need to get back into business as soon as possible, before our local food manufacturers—all of them multinationals—become permanently hooked on imported ingredients at the expense of local production.

If we are serious about food security, we have to be serious about farm futures. There is no evidence in the flood response from this government—who cannot even get the locations of the flood devastation right—that their billion dollar or so levy will be spent in the right place, in the right way, in a timely manner and for the best value for money. I am afraid we have, through bitter experience, too much evidence of them getting it wrong. I do not really need to remind people of pink batts, cash for clunkers or the $900 stimulus, which was paid to people in New Zealand and paid to the deceased, or put through the pokies or used to buy another flat-screen TV. Then there was the GP superclinics funding, which basically puts local GPs out of business. MySchool, GroceryWatch and Fuelwatch together cost billions of dollars and were just a waste of cyberspace.

We know this government cannot do it, and that is why we are saying: why don’t you take a bilateral approach? Talk to your coalition colleagues in this parliament and we will help you understand where this investment needs to go. We will in fact tell you where you can find savings, in programs which are useless—for example, the Murray-Darling Basin water buyback. The previous speaker, as I said, did not understand a word he was saying about that. My irrigators have sold any water they have been able to to keep going through the last seven years of drought. To put yet another government funded tender out, as I understand is about to happen, is obscene. These are not willing sellers; these are cash-strapped, desperate farmers who have very little left to sell. Their herds, their crops and their fodder have been washed away. Their fences are no longer standing. They lose hope of any future every time they listen to this government. You are coming at them with another tender to buy what water is left on their licences. Shame on you. Forget that nonsense and instead put that cash into flood victim support and infrastructure restoration—that would finally be a decent response from this government.

Andrew Leigh (Fraser, Australian Labor Party) Share this | Link to this | Hansard source

I rise to speak on the Tax Laws Amendment (Temporary Flood Reconstruction Levy) Bill 2011 and the Income Tax Rates Amendment (Temporary Flood Reconstruction Levy) Bill 2011. The recent floods and cyclone had a devastating impact on Queensland and Victoria, with major infrastructure now needing to be rebuilt. In order to fund this rebuilding effort Labor has proposed a $5.6 billion package. Two dollars out of three of this package will be funded by savings measures from the budget while the remainder will be funded by a one-off levy in 2011-12. The levy, as previous speakers have noted, will be progressive, so that flood victims and taxpayers earning less than $50,000 will pay nothing. For most of those who do pay the levy, the cost will be less than a cup of coffee a week.

At the same time we need to recognise that the economic environment is strong. The latest labour force figures show that 62 per cent of the adult population has a job. By contrast the US employment rate has fallen five percentage points translating into millions of lost jobs in that country. Last November when I asked the Reserve Bank governor, Glenn Stevens, about the Australian economy, he replied:

I sit around the table with my counterparts from 40 to 50 countries a number of times a year, and I have not yet found one whom I would want to swap places with.

Yet despite the powerful performance of the Australian economy and the fact that our public debt share is less than one-tenth the average for most developed economies, the Liberal Party seems unable to acknowledge that the fiscal stimulus worked. Perhaps that is because the Liberal Party opposed the second fiscal stimulus package. The modern Liberal Party has become the party of no.

As though that was not enough, the Liberal Party have now decided to oppose a progressive flood levy. Yet again the Liberal Party are the party of ‘no’. While we in the ALP are introducing a modest levy to help rebuild Queensland, Liberals are appalled that we could even consider such an idea. Levies, they tell us, are an unconscionable imposition on the Australian people, except for the ones the Liberals introduced when they were in government.

Let’s go through those levies. There was the superannuation surcharge levy, the gun buyback levy, the stevedoring levy, the milk levy, the sugar levy and the Ansett airline levy—and those levies were imposed by the Howard government against a backdrop of strong budget revenues. The Liberal Party’s opposition to a levy lacks any semblance of principle. Although he was part of a government that enacted six levies, the Leader of the Opposition has opted to oppose the flood levy, dragging out his tired-old ‘big new tax’ line. The Leader of the Liberal Party has argued that circumstances are inappropriate to impose a levy. This despite the fact that, during the election campaign, the Liberal Party itself proposed a company tax levy. Not only would that levy have been effectively imposed on all taxpayers—since company taxes end up being paid by consumers and workers—but it would have been permanent not temporary. In the election campaign it was ‘yes’ to levies but today the Liberals are the party of ‘no’.

What is the Liberal solution to funding the rebuilding of Queensland? It turns out they would rather see us cut spending on unnecessary frivolities—like schools for poor Indonesian children. That is right, those Indonesian kids without education have had it too good for too long. But the Liberals are not hypocrites—they have Aussie kids in their sights as well. They want to cut spending on financial literacy programs for our young people. This of course is from a party whose budget costings were short by a cool $11 billion. Apparently, the Liberals want a nation of young people who understand costings as badly as the Liberal Party front bench. Who knows, maybe it is a party recruitment tool! Even if the Liberals do not manage to cut spending on financial literacy lessons, Aussie kids will not have new places to learn them anyway because the Liberals want to cut spending on building Australian schoolrooms as well. We have no assistance for poor people overseas and uneducated Aussie children. That is the Liberal plan for rebuilding Queensland—stirring stuff!

When we turn to more independent commentators we can find substantial support for this flood levy. CommSec’s Craig James said:

this is the right levy for the times—modest in size, temporary, progressive and applying to those on higher incomes …

                        …                   …                   …

The fact that the Government is cutting spending and applying a new levy on Australian consumers may reduce the need or urgency for the Reserve Bank to lift interest rates over the year.

The ANZ said

this policy change is relatively minor when placed in context of the broader Australian economy. The Government estimates the flood levy will raise $1.8bn, which is equivalent to just 0.12% of nominal GDP.

Christopher Joye, Managing Director of Rismark said:

… if you want the real proof in the pudding of the government’s case, consider this—interest rate futures markets have rallied hard today in response to the package, materially reducing the probability of future rate hikes on the basis that the measures are anti-inflationary.

Let’s move from the levy to what will be done with it. From an economic point of view, what could have a larger pay-off than rebuilding public infrastructure after a flood? From a social point of view, what could be more important than helping communities get back on their feet quickly? From a moral point of view, don’t we have a duty to help our brothers and sisters in Queensland?

The Liberal Party’s stance comes direct from the playbook of the US Republicans, the original party of no. Unlike Democratic senators, who under President Bush opted to negotiate on his top priorities of tax cuts and schools reform, Republicans sought to block President Obama on healthcare, which was of course his signature campaign issue. As former Bush speechwriter David Frum described it:

No negotiations, no compromise, nothing. We were going for all the marbles.

The strategy was pure politics, but even Frum had his misgivings:

Politically, I get the ‘let’s trip up the other side, make them fail’ strategy,’

he told the New York Times.

‘But what’s more important, to win extra seats or to shape the most important piece of social legislation since the 1960s?’

The result of the Republican strategy, of course, is well known. Far from winning all the marbles, the US Republicans got none. The biggest threat to mainstream Republicans today is the Tea Party, who lost their marbles long ago.

Although the Australian Liberal Party may be less right wing than their US counterparts, there are times when the two parties seem to be working from the same playbook. When they were led by the member for Wentworth, the opposition voted against a fiscal stimulus package that saved around 200,000 jobs. The member for Warringah came to the leadership with one promise: he would say no to any sensible policy to tackle climate change. Since the member for Warringah’s ascendancy to the leadership, the blocking game has accelerated. Alongside climate change, the opposition have voted against means testing the private health insurance rebate and have announced that they will oppose the minerals resource rent tax. At every opportunity they criticise the Building the Education Revolution program. This is the ‘party of no’ in action.

Another clue that US Republicans have some close followers Down Under is the fact that the Liberal Party has often sought to cast its position as delay rather than obstruction. In the midst of the US healthcare debate, a key Republican strategy memo argued that the best way to defeat President Obama’s healthcare bill was by putting on the brakes. US Republicans were urged to use the message: ‘Slow down, Mr. President’. If you cannot be the party of no, be the party of later.

In Australia, the Liberal Party has accused the government of moving too quickly on fiscal stimulus, health reform, and an emissions trading scheme. In the short term this may be a cunning political strategy. But delaying would have been absurd in the case of fiscal stimulus, since the very point of that package was timely action. And because the cost of climate change abatement rises over time, the Liberal Party’s decision to block an emissions trading scheme has merely raised the future price tag for businesses and households.

Indeed, it is not even clear whether obstruction serves parties’ long-term political interests. A policy of ‘just say no’ may temporarily fire up the base, but the current chaos in the US Republican Party shows where it leads. Politicians who play obstruction for its own sake merely fuel the rise of radical fringe movements. The more often the Leader of the Opposition reaches for the glib one-liner instead of a sound policy choice, the less likely the Australian people are to believe that he has the skills and temperament to govern the country. And the more the Liberal Party becomes the party of no, the more they will have to deal with the rise of reactionary movements to their right.

Andrew Robb (Goldstein, Liberal Party, Chairman of the Coalition Policy Development Committee) Share this | Link to this | Hansard source

I rise to speak to the Tax Laws Amendment (Temporary Flood Reconstruction Levy) Bill 2011 and the Income Tax Rates Amendment (Temporary Flood Reconstruction Levy) Bill 2011 relating to the government’s proposed flood levy or flood tax. The coalition of course fully backs strong Commonwealth support for the flood reconstruction effort. Every cent committed by the Commonwealth government, the Gillard government, is backed by the coalition. I should not really need to have to say that, but the fact is that the underlying theme politically, in Queensland at least, that the Labor Party is running is that failure to support the levy means failure to spend that amount of money. It is not said explicitly but that political dishonesty is running throughout Queensland fuelled by the Labor Party. It is totally opportunistic—again, a political opportunity being sought by the Labor Party. The fact of the matter is that support can be offered for the full amount of the money to be spent on reconstruction without the imposition of this levy, this flood tax. It is the reason we are having a debate. The whole debate centres on the means by which the money to be spent on the reconstruction is to be raised.

We are opposing this levy. It is just another new tax, and the last thing that Australian families need at this time is another new tax. It is just another tax. It is poor policy. Many commentators and experts have slammed the proposal, not so much for the cost, because they are not sure of it—not sure who will pay, not sure how the money will be spent, not sure how it will be run—but most importantly because it is not necessary. That is why it is poor policy.

Inevitably it is going to be poorly managed. In fact the government expects it to be poorly managed. So unsure is the government that it has had to appoint a de facto finance minister, a former Liberal finance minister, to manage it because the existing finance minister—in the minds of the Prime Minister and the Treasurer, presumably—is not up to the job. Why else would you appoint a de facto finance minister to oversee the spending of these billions and billions of dollars? It just shows that the government is very aware of its incompetence when it comes to managing public moneys.

This levy has come to symbolise the incompetence and the waste of this government. When it was first announced, I thought it would be seen as another symbol of a new tax, and it is. But I think the reason so many millions of Australians have got their noses so out of joint over this proposal is that they are offended by the fact that this government has wasted so many billions of dollars in the space of just three years—millions and millions of taxpayers’ dollars just wasted—and yet at the first sign of some expense which is unanticipated, instead of looking to live within their means, instead of looking to cut or defer expenditure, their first instinct is to go back to the well, to go back to those people who provided the billions of dollars in the first place, that they have wasted. People are offended that the government’s first instinct would be to do this.

It seems quite ironic to me that at the moment we have two concurrent debates going on: one in this chamber and one in the Main Committee. I will leave this chamber, having debated a new tax which will raise close to $2 billion, and head up to the Main Committee to debate two appropriation bills, which represent over $2 billion of moneys not anticipated in the budget. If this government had just stuck with the budget it brought down eight months ago, there would not be a need for this levy. In fact, there are all sorts of ways to avoid this levy, but this levy was an instinctive response. It is in Labor’s DNA. This is a big-taxing, big-spending and big-borrowing government. They have still not made a hard political decision in over three years of office. They will opportunistically grab any chance to introduce a tax. We will see many more in the rest of this year. You watch the budget. We will have the LPG levy, the mining tax and the carbon tax. We will be awash with more new taxes before the year is out.

This levy is simply not necessary. It sets another bad policy precedent. When the Prime Minister was asked at the Press Club how the government would fund any increase in reconstruction costs beyond the anticipated $5.6 billion, she replied, ‘The money will come from cuts somewhere else.’ Just with that simple response the Prime Minister has confirmed that the levy is not necessary. In other words, if the cost is not $5.6 billion and is, say, $10.6 billion, the Prime Minister said they would find it from savings elsewhere, from cuts somewhere else. That is two or three times the amount of the levy. The Prime Minister making that public commitment to an unlimited amount of overspend without going to another levy and without increasing the levy confirms that there is no need for a levy in the first place. That was from her own mouth!

The cuts should have been the first option. If they were, we would not be here debating these bills. The reaction of the public to the waste is starting to convey the public’s enduring attitude to this government. This government is starting to be seen as a government that cannot competently manage public funds, cannot run the shop and cannot do the basic things. We only have to look to Labor’s mismanagement with the surpluses, the squandering of the $30 billion of surplus, and the wasted billions on the pink batts scheme and all the personal consequences that have gone with that. It is far from over. People are still waiting in line for inspections. The pink batts or whatever has been put in the roofs—in many cases you would not know—needs to be attended to. The fear of fire is still hanging over certain people.

Labor wasted $6 billion to $8 billion on the school halls program. It insisted on the second round of the stimulus program—the $900 cheques that still stick in the craw of so many Australians. Of course they accepted them, but so many thought: ‘This is madness. This is ridiculous. We have just had nearly a three per cent reduction in interest rates.’ Many people were seeing themselves through the financial crisis, but still the $900 cheques went out.

We are still borrowing $100 million a day, so every 17 days this government is borrowing the value of the levy, and it will do so for the next 18 months at least. People find this incomprehensible. How could they in their own family circumstances live by borrowing money for years on end in those sorts of proportions? We will be paying $45 billion in interest alone over the next four years. This all stems from there being no strategic fiscal strategy. We know the budget is full of holes. We know it is a house of cards. It is built on the most optimistic of forecasts. Instead of showing discipline, this government again outsources responsibility to the taxpayers. They have a debt heading towards $90 billion and have spending which exceeds their income this year by about $40 billion—it is the second-biggest deficit in history; it is outclassed only by last year’s deficit of over $50 billion—yet they look to put the pressure again on families.

The government always expect somebody else to pay for their mismanagement. This in many ways underscores the philosophical difference between the government and the coalition. We believe in living within your means. We believe in prudent economic management. We expect the community to take responsibility for their own financial circumstances, and they do. The community expects the government to in turn live within its means whereas the Gillard government believes in taxing, spending and borrowing. This is a pattern that has occurred again and again under Labor governments.

The cynical nature of this government was shown by its preparedness to engage the Greens and the Independents in the funding of the flood reconstruction but not the coalition. We were the ones offering to sit down to identify savings in good faith. We were the ones who offered savings and took hard political decisions and will take the criticism of political opportunism over the next three years, as they seek to use the savings we identified in a political way to undermine our reputation and to create fear amongst people, when the fact of the matter is: if the government had taken tough decisions over the last three years then we would not be debating this tax today.

Again, you see a situation. It followed the Prime Minister, Julia Gillard, proudly spruiking a misleading line that the Treasurer, Wayne Swan, had been mouthing for months. Earlier this month the Prime Minister said:

I want to reinforce this point. We have already made as a government more than $80 billion of savings since 2007.

The only problem with that quite impressive proposition is that it is not true. It is nowhere near true. It is not even half true. The fact of the matter is that, when the Prime Minister and the Treasurer talk about savings, they include tax increases, dividends and levies, not just cuts in government spending. So you have a Treasurer whose extraordinary lack of substance is exposed so much by the Finance department, who fingered this discrepancy. Of the $80 billion, $41 billion consists of taxes, dividends and levies. Even the mining tax is part of the $41 billion and it has not even been concluded yet. In the months ahead the government will classify the planned flood levy as a saving. What an absurd proposition, what a disingenuous proposition and what a stupid proposition it is: the levy we are debating today is a saving. That is the sort of economic tomfoolery that the population is experiencing. There is general resentment within the community towards the levy because of waste and mismanagement. The first instinct of this government is to raise a tax rather than live within its means.

Families are facing enormous cost-of-living pressures. Food prices, energy prices, petrol prices and water prices—they are all essentials and the costs are going through the roof, yet we have the government introducing a flood tax. The tax is not needed. Millions of Australian families are living within their means. The Gillard government needs to take a leaf out of the book of those families and live within its means. (Time expired)

Jill Hall (Shortland, Australian Labor Party) Share this | Link to this | Hansard source

It is always a pleasure to follow the member for Goldstein. He talked about political opportunism. We have just seen the master manipulator of political opportunism leave the chamber: the man who misrepresents practically every piece of legislation or topic he speaks about; the man in this House coveting the shadow Treasurer’s position. He sees himself as the shadow Treasurer. Who knows—maybe the Leader of the Opposition needs to watch his back, too, because he is probably coveting that position as well. I would have to say that his contribution to this debate on the Tax Laws Amendment (Temporary Flood Reconstruction Levy) Bill 2011 was less than impressive. It was actually unimpressive. He talked at great length about taxes. My understanding is that the opposition went to the last election with a proposal to put a new tax on everything. He talked about the symbols of waste and mismanagement. Wasn’t it the Howard government that imposed six levies in the time that it was in power? He talked about going upstairs to talk about an appropriation because of mismanagement. That is a prime example of how the member for Goldstein distorts facts. Every member in this House and any person who watches the way parliament operates knows that there is always a mid-year appropriation debated in the House. It is not debated in the House because of mismanagement; it is debated in the House because that is the way this parliament operates. So any member who comes in here and tries to put forward a different argument is distorting the facts, misrepresenting the way the parliament operates and trying to distort operations and legislation. It is pure political opportunism.

The member for Goldstein talked about there being no strategic fiscal strategy. I am yet to hear the member for Goldstein put forward any positive fiscal strategy. All I have ever heard the member for Goldstein do is attack and undermine the government and, I might say, people on his own side. ‘People are offended by the legislation,’ he said. I will share with this parliament the kinds of responses that I have been getting in my electorate. I have received some emails from people opposing the levy, but I have been overwhelmed by the compassion of the people who have contacted my office. They have been really moved by seeing their fellow Australians affected so adversely by the floods in Queensland. People in my electorate understand how important it is to rebuild the infrastructure in Queensland—not just for Queensland but for the whole of Australia. It is an issue of national importance.

The opposition probably represents the person who emailed me and said: ‘Those people in Queensland chose to live in Queensland. We shouldn’t have to pay anything. We shouldn’t have to contribute to the reconstruction of Queensland or contribute in any way to helping them get their lives back together.’ The opposition does not stand for the person who stopped me in the street just the other week and said: ‘I think that the levy is probably one of the best pieces of government legislation that I have seen introduced. I really approve of it. The government is acting in the interests of the people of Queensland and the people of Australia.’

We have heard the distortions and the misinformation that have been put forward not only by the member for Goldstein but also by many, many members of the opposition. But we all know that the recent floods may well end up being the most costly disaster in Australia’s history. The reconstruction task is going to be absolutely enormous and it is going to take a lot of money to bring Queensland back to its former glory. It is going to take a lot of investment and a lot of effort by a lot of people.

I want to return to something else that the member for Goldstein said. He referred to the fact that Mr John Fahey, the former Minister for Finance and Administration, has been appointed to oversee the project and said that that in some way showed a failure of the government. To me, what it shows is that the government understands that the role of government is to put in place policy and legislation that will lead to a really positive outcome. It is not the role of government to manage the day-to-day reconstruction of Queensland. The appointment of Mr Fahey is one of the real positives that this legislation will lead to.

The government will be delivering $2.8 billion in budget savings. To listen to speakers on the other side of the House you would not recognise that this was happening. There will be $1 billion created by delaying some infrastructure projects and $1.8 billion raised through the temporary levy. There will be no levy charged where the taxpayer’s income is below $50,000 per year. If you are earning $55,000 a year you will be paying a levy of 48c per week—not very much. If you are earning $75,000 you will be paying $2.40—I am not even up to a cup of coffee. If you are earning $80,000 it will be $2.88—still not a cup of coffee. When you get to $90,000 and $100,000, you are up around the coffee mark.

I think it is really important to place on the record that it is not a big impost. There have been enormous government savings and cuts. This levy will be the final part of the plan that will deliver the rebuilding of Queensland. It is also important to put on the record that 75 per cent of the levy will be used for reconstruction of infrastructure. A number of appeals have been conducted throughout Australia. I thank the people in the Shortland electorate who have already donated to an appeal that I ran through my office, and we will be undertaking another appeal in the coming weeks. The owner of Sesames on the Lake at Belmont has a dinner function on 9 March to raise funds for flood victims. Many, many activities have taken place throughout the Shortland electorate. People throughout Australia want to get behind the people of Queensland and help them put their lives back together. The money raised through those appeals will be used for the reconstruction of people’s personal circumstances.

Australian people are very generous. Australians know that in times of need governments must introduce extraordinary measures. As I mentioned earlier, there were six levies introduced under the Howard government and there was none of the political opportunism that has taken place in relation to this levy. The people of Australia understand that this is a small impost on them and that the money is going to a very good cause. It is going towards the rebuilding of Queensland. It is going towards helping Queensland have a functional economy again and regain the infrastructure that it needs. When Queensland’s infrastructure is renewed, it will be of great benefit to the whole of Australia. Not only Queensland but Australia as a whole has been impacted by the floods. My heart goes out to the people of Queensland, who have had to suffer the most terrible, terrible event. I pass on the feelings, the thoughts and the good wishes of all the people of the Shortland electorate.

John Cobb (Calare, National Party, Shadow Minister for Agriculture and Food Security) Share this | Link to this | Hansard source

Any debate involving the recent tumultuous events in most of eastern Australia, whether you are talking about floods, cyclones or whatever it might be—and obviously tonight’s debate is about the tax contained in the Tax Laws Amendment (Temporary Flood Reconstruction Levy) Bill 2011 and the related bill—is impossible without reflecting on what an event it has been. It is certainly not something I have seen before and I certainly hope I do not see it again, and you cannot debate it without reflecting for a time on the awful effect it has had on people’s homes and lives and on production. I am a farmer and I have always represented people in agriculture—that is my current portfolio responsibility. Agriculture has probably been the most deeply affected area in the cyclones, flooding and rain. The huge amounts of rain, particularly in New South Wales, had as much effect in a lot of cases as the floods, except, thankfully, without the infrastructure damage. This has been an enormous event in a productivity sense and an enormous event for people—for everybody.

So, obviously, it is correct that the Commonwealth government has a role and a duty to get involved to help sort it all out. Most of Australia’s states have been affected, but obviously those three on the east coast have been the most affected. My electorate of Calare has been very affected, not so much by flood—although it has had that—but simply by the sheer volume of rain and the disaster it has caused as far as production. The clean-up and rebuilding process is underway, but the onset of the great big new flood tax has caused a stir right across the country, which is not terribly surprising. While the coalition join the government in offering our full support to the communities affected, we know that there is plenty of scope in the Commonwealth budget to cut, reprioritise and defer spending in order to find the $1.8 billion the Gillard government plans to raise through this tax.

Having lived in the Murray-Darling Basin my whole life and as somebody who has been a farmer, and still is, and sees water as a very productive commodity and not just as something humans live with and wash with, there is an area that is obvious to me—the buybacks in the Murray-Darling Basin. Looking at the Murray-Darling Basin as it is now, I do not think it is going to do anybody any harm to either stop or defer the buybacks in the Murray-Darling Basin. This is a government that will not delay spending $600 million buying water for environmental sites in floods while asking the taxpayer to cough up their hard-earned dollars for flood damage. The irony is extraordinary.

While the government continues with incompetence, ordinary Australians throughout the country are rolling up their sleeves, donating their time, resources and money generously and helping to rebuild after the floods. I will take some time to reflect on my own part of Australia, or the part of Australia that I personally represent. In Calare we have seen individuals rallying together to make donations to the rebuilding efforts despite experiencing their own personal hardships, and I am very proud of them. Last Saturday night in Lithgow at a Lions Club function we were reflecting on what the people have done. As I said, Calare has had huge losses in terms of infrastructure—community infrastructure, roads et cetera—and has experienced probably even bigger losses in the agriculture sector, whether that be in horticulture, serial cropping or whatever, simply because of too much rain. The cherry crop virtually got wiped out because of rain—not because of flooding.

People in the various towns of Calare got together and raised a heck of a lot of money and put in a heck of a lot of effort. But they did not raise that money for themselves, even though they had experienced huge losses and family debt; they raised that money primarily for Queensland, where most of the disaster and the human costs had been so high. I think that is pretty good. The Parkes Rotary Club donated the profits from the canteen takings from the Australian harness race meeting to Queensland, Victoria and New South Wales flood relief. Parkes Harvey Norman held sausage sizzles and generated more than $700 and the store raised over $3,500 in donations during one weekend. But volunteers and donors will be taxed for the flood levy.

Parkes Woolworths hosted a market day in the Parkes Metro Plaza and raised almost $2,000. I think they have raised nearly $7,000 since December. Parkes resident Irene Wennerbom and her family opened their home one week to raise money for the Queensland flood victims, hosting a garage sale which sold donated goods from the Parkes community. Parkes East School students dressed in maroon for a day and raised $200 to go towards assisting Queensland public schools affected by the floods. The Parkes East School families, in fact all Parkes volunteers and donors, will, by and large, be taxed for the flood levy despite having made that rather wonderful effort.

The Forbes Sports and Recreation Club and the Forbes Golfers Association combined to stage a benefit evening for the Queensland flood victims. There are a lot of stories from Forbes, but I will not go through them all. Forbes volunteers and donors will be taxed for the flood levy. The Orange Rotary Club coin collection will be donated to rotary clubs throughout Queensland to allow them to decide how that collection can best be used. All proceeds from the Taste Orange Slow Summer Festival ‘Bark in the Park’ event were donated to the Queensland flood relief. A young group headed by Nicky, Hughie and Dave organised a tent at the Orange races and raised over $3,500 for the Queensland flood appeal. Orange Rotary Club members and all volunteers and donors will be taxed for the flood levy.

In Bathurst, the Bathurst whitegoods Queensland flood appeal collection sent a B-double with over $100,000 worth of whitegoods to Toowoomba last weekend. The Bathurst Regional Council is set to donate $10,000 to the Queensland flood appeal. The Bathurst by the Glass event at Mount Panorama Estate raised a total of $500 to donate to the Queensland flood appeal. Bathurst cricket team the Reece Renegades donated the majority of their first- and second-place prize money to the Queensland flood victims appeal, with other teams expected to follow suit. The Reece Renegades and all Bathurst volunteers and donors will be taxed for the flood levy.

In Lithgow, where I was last weekend, Valley Drive Car Wash donated $345 from a Saturday car wash and staff donated a day’s wages towards the Queensland flood appeal. Portland RSL sports and recreation club held a fundraiser for flood victims, raising $500. Lithgow Workmen’s Club, a very community based club, as most are, held a Mexican night and donated the money from the sale of the first 165 tickets to the Queensland floods. Lithgow Valley Community Cinema held a special Australia Day screening with all proceeds donated to the flood appeal. The Lithgow Flashdragons and the Lithgow Motorcycle Club charity dragon boat regatta at Lake Wallace took place on the weekend, with about $3,000 in donations going to the Queensland flood appeal. The Lithgow Flashdragons and Lithgow Motorcycle Club members and all Lithgow and Portland volunteers and donors now find that they will be taxed for the flood levy.

In Oberon, a lovely town whose economy is based on timber, agriculture and tourism, the Rotary Club of Oberon organised the collection and distribution of fodder to flood affected farmers in Queensland and Victoria. The Rotary Club of Oberon also raised funds at the Highlands Steam and Vintage Fair. The Oberon rotary club volunteers and donors will be taxed for the flood levy.

In Blayney, a group of young Sydney children on holidays and their friends from Neville hosted a ‘Bug fun park’ exhibition at the Neville historical museum and donated over $500 to the Queensland floods. Blayney volunteers and donors will be taxed for the flood levy. In Cabonne—the local government area where Lisa and I live—the Cabonne Council donated $2,000. Some very good friends of mine, Les and Cheryl Birdsall from the Telegraph Hotel, spent their own money on kids’ rides and slippery dips and so on to have an Australia Day fundraiser on a Sunday about a month ago which raised $10,000. They did not take one cent back to pay for the work they had done; all the money that was raised went to flood relief. Les and Cheryl Birdsall from the Telegraph Hotel and all Cabonne resident volunteers and donors will be taxed for the flood levy.

This is just a snapshot of the wonderful work the people of my electorate have been doing in the wake of what has happened in Queensland, New South Wales and Victoria. I take this opportunity to extend my sincere thanks, not just on my behalf but also on behalf of the parliament and the people who will receive the proceeds of their generosity, to all who have lent a helping hand.

The people of Calare, along with a lot of people around Australia, have gone out of their way to donate generously, and all the government has done is turn around and tax for the privilege of having done it the people who have given the most, organised the most and spent the most to raise this money. The flood is a cop-out for a Labor government that has shown over and over again that it cannot manage government money and certainly cannot manage other people’s money. This government is sending the wrong message to the Australian people: ‘In future, don’t donate when Australians are in trouble because we will tax you after you do.’ I think that is about the worst message a government can send. It is just an example of the fact that this government cannot make managerial decisions and cannot prioritise. I still remember the Lord Mayor of Brisbane, Campbell Newman, saying within days that the Brisbane City Council would not raise the rate for ratepayers in Brisbane but instead would prioritise and work within its means. That is the one thing that this government has never learned to do, and you would think by now that it would have done.

My office has had numerous calls from constituents opposing the flood levy. The general feeling is that it is unfair and unwarranted. Most of these calls have not been from people who will have to pay the levy but from pensioners—people who will not have to pay it. People who would not otherwise have applied for the $1,000 for victims of flooding are in fact applying for the money because they have found that they will be taxed to fund the levy. This levy is un-Australian and unwarranted. (Time expired)

Rob Mitchell (McEwen, Australian Labor Party) Share this | Link to this | Hansard source

I speak in support of the government’s Tax Laws Amendment (Temporary Flood Reconstruction Levy) Bill 2011. As members in this place know, we recently stopped to remember and reflect on the Black Saturday bushfires which so tragically devastated my electorate on 7 February 2009. That was a day on which bushfires ravaged communities. It was a fire of a ferocity that we had never seen or experienced before. It claimed on that day 173 lives and destroyed thousands of homes and businesses, schools, buildings, sport centres and communities. Two years on, we are still facing the process of rebuilding and recovering, with signs of the disaster still present both in the trees that will never grow again and in the many homes that will not be rebuilt on the same foundations. Emotions are still raw, but people are battling on in the true Australian spirit.

All levels of government have learnt many lessons from that tragic day, not only about bushfire preparedness but also, importantly, about the process of rebuilding and recovering communities devastated by Mother Nature’s fury. One of the biggest lessons we should have learnt is that we need to support communities—to stand with them to rebuild vital infrastructure, get services back in place and ensure a sense of normality returns as quickly as possible.

The most common message that my community has been telling me is that we need to get to normality—or the ‘new normal’ as it is called—as soon as possible, because it is paramount. But it seems that those opposite have not listened. It is quite clear that without the infrastructure in place you cannot support a community to recover quickly and effectively. That is why this levy is important. Without open, safe roads and bridges, communities remain disconnected. Without local schools being rebuilt, normality and routine are taken away from our children. Without health centres being rebuilt, communities will not recover physically and emotionally. Without information hubs and community centres, people remain uninformed and disengaged. There is a vital need to stimulate the economies of flood affected regions through government infrastructure projects. It is about getting people back into jobs, getting them working again, getting them spending and getting their economies back on the move.

The key to success of any recovery process is the involvement of locals at every step of the way in identification and planning for their future. Survivors in communities do not want a handout; they want us to chip in and give a mate a hand. The Gillard government is reaching out to the people of Queensland, and we will be with them until they can stand again on their own. The flooding in Queensland and other states has been unprecedented, spreading across the state. It is the size of France and Germany combined, or the size of New South Wales. Coal, gas and mining companies have been drastically affected, which is resulting in millions of dollars of lost production and a great loss to Australia’s wealth. Similarly, Australia’s agriculture sector has been severely hit again, with crops destroyed. This means that food prices will rise and farmers will struggle to make ends meet. This will affect every Australian no matter where they live.

The communities in my electorate rallied behind our northern neighbours, with the people of Kinglake raising over $60,000 and the people of Marysville raising over $22,000. And they continue to raise funds and help their fellow Australians. In a local monthly publication in Kinglake, the Mountain Monthly, I came across a letter to the editor which I want to share with members of this place. It reads:

Dear Editor,

Hello to all in the suburbs and surrounds of Kinglake.

My name is Rebecca. I have just come across a news article that your town of Kinglake has raised money and donated it to us up here in Queensland for the current flood crisis.

Speaking for all Queensland residents, I would love you to please extend our thanks to the people in this town for their amazing support and generosity to the people here that have been affected by the floods.

I sat here with a tear rolling down my face, reading the news about what the people of Kinglake have done for us, even when they are still rebuilding from their own disaster. They have opened their hearts to others in such an amazing way.

Please extend the thanks that we, as Queenslanders, feel for these people. As you have stated, the generosity of the Queenslanders will never be forgotten. That goes the same for each and every one of you there.

Thanks again. I cannot say that enough. Rebecca, Queensland.

Although there are many communities better off than mine, they are still supporting those in need. For that I praise them and thank them. Helen Kenney, who is the captain of the St Andrews CFA and is on the St Andrews Bushfire Recovery Committee, said it is crucial that a flood levy is introduced because infrastructure needs to be rebuilt. I agree wholeheartedly with her. That is from someone who lived through the Black Saturday disaster, so she knows exactly what she is talking about. No matter where I travel across the bushfire affected areas, those who are continuing the journey of rebuilding and reconstruction have been unanimous in their support for this levy. Most of these people will not qualify to pay the levy, but they know firsthand the need for public infrastructure to be replaced and for their communities to get back on their feet as soon as possible.

The flood recovery levy will ensure that we can rebuild, repair and recover vital infrastructure that has been damaged as a result of the flooding. To assist in rebuilding Queensland, we will need to invest about $5.6 billion into the regions affected, due to the scale of the destruction and devastation. Two-thirds of this will be delivered through spending cuts and the remaining one-third is to be delivered through a very modest 12-month levy. The government has also made $2.8 billion in budget savings which will also be redirected towards the rebuilding effort. Infrastructure projects worth $1 billion will be deferred, freeing up funds and skilled workers at a time when we have a skilled labour shortage around the country—a legacy of the former government.

The flood recovery levy will be applied at the rate of 0.5 per cent on taxable income between $50,001 and $100,000 in the 2011-12 income year, and a levy of one per cent will be applied on taxable income over $100,000. The recovery levy will not apply to low-income earners with a taxable income of $50,000 or less, nor will anyone directly affected by the floods have to pay the levy. With the indulgence of the House, I want to show what most people in my electorate will be giving up per week: one small tin of Coles tuna. That is what we are asking people to give up—just a small token to help people get back on their feet and get their lives back to normality.

Levies are a common occurrence from the Commonwealth. We are all aware that the previous Liberal government, which Mr Abbott was part of, were the champions with their flood of levies. Prime Minister John Howard imposed six levies in 12 years. We understood it was in the interests of the nation; we supported them. We put politics aside and, for the good of our nation and its people, we stood with the government on many of these levies. As recently as last year, the Leader of the Opposition tried to impose a levy to pay for his election promises. If a levy was good enough for Tony Abbott to pay for his election promises just months ago, how is it not good enough now to help support Australians to get back on their feet?

Mrs Bronwyn Bishop (Mackellar, Liberal Party, Shadow Minister for Seniors) Share this | Link to this | Hansard source

Mrs Bronwyn Bishop interjecting

Rob Mitchell (McEwen, Australian Labor Party) Share this | Link to this | Hansard source

I will run through the list of levies, but we will put it in opposition language; we will call it a ‘tax’ that you guys put in place, introduced by the Howard government. We know that you seem to have forgotten the language. When we do it, it is a tax; when you do it, you call it a levy.

Mrs Bronwyn Bishop (Mackellar, Liberal Party, Shadow Minister for Seniors) Share this | Link to this | Hansard source

We haven’t forgotten the language at all—

Ms Anna Burke (Chisholm, Deputy-Speaker) Share this | Link to this | Hansard source

The member for Mackellar will be warned in a minute.

Rob Mitchell (McEwen, Australian Labor Party) Share this | Link to this | Hansard source

You had a sugar package levy for all sugar sold in Australia. You had an air passenger ticket levy at $10 a ticket. There was the dairy industry adjustment package on market milk sales at 11c per litre. That is what you put in place for every single household. And you still cannot say how much it raised or how many people bought it. There was the stevedoring levy on the loading and unloading of containers and vehicles in Australia at $12 per container and $6 per vehicle, which affected every single Australian, no matter where they lived.

Mrs Bronwyn Bishop (Mackellar, Liberal Party, Shadow Minister for Seniors) Share this | Link to this | Hansard source

Mrs Bronwyn Bishop interjecting

Ms Anna Burke (Chisholm, Deputy-Speaker) Share this | Link to this | Hansard source

The member for Mackellar is warned!

Rob Mitchell (McEwen, Australian Labor Party) Share this | Link to this | Hansard source

I know you are embarrassed about this.

Mrs Bronwyn Bishop (Mackellar, Liberal Party, Shadow Minister for Seniors) Share this | Link to this | Hansard source

I’m not embarrassed at all.

Ms Anna Burke (Chisholm, Deputy-Speaker) Share this | Link to this | Hansard source

You will be embarrassed when I throw you out in a minute.

Rob Mitchell (McEwen, Australian Labor Party) Share this | Link to this | Hansard source

There was the Medicare levy and the gun buyback scheme, with increases to the Medicare levy that you put in place. There was the aircraft noise levy for jet aircraft landings at certain airports. That was $155, adjusted for inflation and imposed on the operator of the aircraft. That is the opposition’s flood of levies.

Our flood recovery levy is modest when you reflect on what previous, coalition governments have done over the years. It is modest, but the difference it will make to the lives of so many is immeasurable. Contrast our plan to the half-constructed, rushed, short-sighted plan of the opposition—a headline rather than a real plan—which consists of deferrals and will leave our budget with a $1 billion hole in the next financial year. But who is surprised? During the federal election, the opposition put forward promises that were uncosted and would have left us with an $11 billion black hole.

It seems that the Leader of the Opposition and the shadow Treasurer have yet to learn anything about economics, after unveiling their $2 billion in spending cuts and deferrals. The cuts to programs in this ‘plan’ were part of the $50 billion budget cutbacks the opposition took to the election. More than half of the spending cuts proposed by the opposition are deferrals. Mr Abbott’s plan is a big risk, particularly to our national security and our national growth.

The lack of compassion and the lack of common sense and decency shown by the Leader of the Opposition have come at a time of devastation. We all know Mr Abbott will do and say anything to become Prime Minister of this country, but why would you do it during a time of national disaster, when people have lost lives, homes, friends and family? Instead of supporting those in Queensland, the Leader of the Opposition’s first thought was to try and persuade the Independent members to make him Prime Minister, telling the Sunday Age that the Independents should ‘start to reconsider their decision’ to support Labor. This was while most of Queensland was under water.

As Cyclone Yasi bore down on Queensland, Tony Abbott’s signature appeared on an email that asked for donations—not for support for the victims, not even for the Liberal Party, but purely to campaign against the government’s flood recovery levy. It was a request for donations directly to the Liberal Party, rather than for those who need our full support and attention. I am astonished and shocked that a levy supporting Australians, the people those opposite claim to represent, is being used as political ammunition by the opposition. The Prime Minister recently referred to Mr Abbott as having a tin heart, and I am starting to think that it is a prerequisite for Liberal Party preselection. A levy no different to the ones established by previous governments is being opposed for nothing more than political gain. But at what cost? The only people the opposition want to benefit are themselves, not the many Australians that truly need our support. You could say they are Liberals first and Australians second.

My advice to those opposite is: drop the politics. As leaders of communities and elected representatives we should be standing together, uniting to rebuild together. Let us put the politics aside and work together for the sake of not just the people of Queensland but all the people affected across our nation. Let us do them proud, as they do us proud every day when they are out there working and rebuilding.

When one Australian falls, we all fall. But what is unique about the people of this country is that we help each other get back up again. This is why I give my full support to the flood levy, because like many other Australians I feel it is my duty to give to the communities that need help and need it now. We are with you, Queensland. My community is with you, all Australians are with you and this government is with you all the way.

Bruce Scott (Maranoa, National Party) Share this | Link to this | Hansard source

I rise this evening to voice my opposition to the Tax Laws Amendment (Temporary Flood Reconstruction Levy) Bill 2011 and the Income Tax Rates Amendment (Temporary Flood Reconstruction Levy) Bill 2011 proposed by this government.

Before I go to the substance of the bills, I wanted to say a couple of things about the devastating earthquake in Christchurch. I watched the evening news, and it was absolutely horrifying to see what is happening there. There are already 65 deaths and perhaps up to a couple of hundred people still missing and unaccounted for. It is devastating to know that our Anzac cousins across the Tasman have suffered yet another disastrous earthquake in that beautiful city of Christchurch. I want to extend my sympathies to the families, relatives and friends of those who have lost their lives. We can only hope that the teams there are able to move quickly to identify others who can be saved.

I also mention Christchurch because Queensland are sending our urban search and rescue team over to New Zealand with some paramedics. It is important that we do that. The Prime Minister made some comments after question time, supported by the Leader of the Opposition, and I would like to associate myself with the comments made by both of them. It is important that as a nation we make sure we support our Anzac cousins. I know that in my own electorate we have many New Zealanders who work in the area, particularly in the oil and gas industry. Only a couple of weekends ago, when I was catching the flight from home to return to Canberra for the sittings, two-thirds of the plane, a 50-seater DASH8, would have been New Zealanders. I asked them where they were going and they said, ‘We’re going back to New Zealand.’ They were operating two and three weeks on, and one and two weeks back home. I only hope that, if some of those people live in Christchurch—I did not ask whether they did—they are safe. I know that we are all thinking of our cousins and friends across the Tasman at this dreadful time.

The nation’s farming families and rural communities—and I say ‘rural communities’ because it is not just the farmers but also the communities that depend so much on the income that farmers derive—have just fought through a 10-year drought. More recently, some of the worst flooding in decades has hit south-west Queensland. The last thing that our food producers and our rural communities need is another tax, in the form of this proposed flood levy. Australian farms and their closely related sectors in Australia generate something like $155 billion of food each year, which underpins something like 12 per cent of the nation’s gross domestic product. In Queensland alone—and I go to Queensland because well over two-thirds of the land mass of Queensland was affected by the floods—they contribute something like $3.4 billion in cattle production, in beef; $1.015 billion in grain; $968 million in sugar, for cane and for crushing; $952 million in vegetables; and $86.9 million in wool and lamb production. That is a total of $6.422 billion of food production, without going into the wine, stone fruit and other products that the farm sector produces in Queensland—a staggering $6.422 billion a year contributed to the Queensland economy.

Farmers are struggling to keep their staff employed as they pull up fences, repair dams and repair the infrastructure on their properties. We are short of skills out in my part of the world—that is why the New Zealanders who I met on a plane a couple of weeks ago are over working in the oil and gas industry—and the farmers are struggling to keep their staff on their farms as they rebuild and get back on their feet. The last thing they need is to be slugged with another tax. I will give you an example in the dairy industry. There were dairy farmers out there during these devastating floods walking cows through water which was quite often up to their udders to get them into a safe place and the milking areas. If they were not able to get them in there and milk them twice a day, the cows would lose their lactation and it would be 12 months before they could produce again. The milk that the cows could produce was then thrown away because the farmers could not get it out of the dairy farms as the roads were closed; they were flooded. They were not paid for that loss by some of the insurance companies, as they are saying it was not insured. That gives you an example of the hardship and struggle they have been through to try and save their animals and keep their production going amongst the worst of nature that has been thrown at them. Yet, they too will be paying this levy.

It seems that the only way Labor knows how to solve a problem is to introduce a new tax or, as the government is calling it, a levy. Well, if it looks like a duck, quacks like a duck—in this case, it is a tax. This Labor government follows on from the previous Labor government, led by the now Minister for Foreign Affairs in that everything should be fixed with a new tax. I remember, just three years ago, there was the problem with alcohol abuse where young people were binge drinking. So what did they do? They brought in a new tax, the alcopops tax. That was to fix binge drinking. Then, people were smoking too much, so there was an increase in tobacco taxes. Car sales were down, so what was the response from the Labor government? It was to increase the luxury tax on motor vehicles. Some of those vehicles that have been impacted on are vehicles that are used by veterinarians and doctors in my electorate, not because they are a luxury item; it is just that they come above a threshold where the tax cuts in. These are four-wheel drives, Toyotas in most cases. They are an essential item when you are on some of the Western Queensland roads that I drive on regularly, and these are people like veterinarians, doctors and nurses who have them out of necessity, not for luxury. But who pays the increased tax on those? It is those people as well as those who may have been buying them in a city in a perhaps a genuine case of what we might class as having a luxury car. It is just another example of Labor, when there is a problem with their budget and their mismanagement of their economy, looking around to see where they can introduce a new tax. It is about time that this government took some tough decisions, rather than just always taking the easy way out and buying votes from the Independents and the crossbenchers here. There is no doubt in the world that they are going to be bought off, one way or another, to get this levy through. We have already seen some of the announcements and I do not want to repeat them here tonight, but I have been around here long enough to know that when someone is being offered something, it is an inducement to vote for the government—in this case, for this new tax.

As to the question of the exemptions that Labor has imposed on the levy, the levy has the potential to hurt the very same people it is supposed to help. Labor has stipulated that people earning under $50,000 or those who have claimed the Australian government disaster relief recovery payment—and I was very supportive of that recovery payment; I worked with the Prime Minister’s office on that to ensure that it was targeted and it would meet a very genuine need in my electorate—will be exempted. What about the people who have been affected by these floods who chose not to claim that payment? They will pay this tax. What about the farmers and small business owners who have lost income as a result of the floods but did not have destruction of some of their property, such as small businesses in the town of Dalby and one that I know of in Surat that was hit in March last year but received not $1 of assistance from the federal government? They employ 20 people in a town of 700. If they cannot keep those employees there and they have to wind that business back, you know what will happen to that town of fewer than 700 people. Those workers will leave town and it will be the start of the end of that town. Yet they will be paying this tax. The Prime Minister promised that she would ensure that the levy would not be paid by those affected by the floods, but it seems that people who have been affected by the floods in a secondary way will. There are certainly businesses out there—and I am sure that members on the other side of the House could recognise that—who have not had government assistance, but they too will be paying this tax.

Then there are those people who have already donated to the flood relief effort, either through volunteering or monetary contributions. We have had contributions from both sides of the House on the wonderful philanthropy that has come from people all around Australia. My concern, as it is for many on this side of the House, is that if this tax goes through, next time we have a natural disaster, why would they want to give as generously as they have as a result of this natural disaster across Australia? They will say: ‘Well, I’ll hang off because there’s going to be a levy; there’s going to be a new tax. I’ll pay it that way and give up my philanthropy and my volunteering that I have done in the past.’ When it comes to spending money wisely, whether it is the Labor government down here or the Labor government in Queensland, they just do not know how to manage an economy. They do not know how to manage money. Have a look at the Bligh Labor government in Queensland. They have been through the biggest mining resource boom that we have had in this country, and all they have been able to do is rack up debt on debt on debt. In fact, the state of Queensland has lost its AAA credit rating. I am ashamed to say that I am a Queenslander. Even New South Wales still has a AAA credit rating. But the great state of Queensland, with the mining boom and the resources behind it and the royalties that have flowed from that, under the leadership of Premier Bligh has been put into such a debt situation that its credit rating has been downgraded to AA. I think it is the first time in history—certainly in the last 30 or 40 years—that Queensland has been put in that position.

That is what we find when we look at the record of Labor governments. There are always new taxes. They cannot manage the economy and they cannot manage programs. When the government tried to sell free insulation programs, including the pink batts program, in a hot summer in western Queensland when the temperatures soar above 46 degrees Celsius they could not even sell that program to the people out there and manage it properly. Labor governments cannot manage budgets. They cannot manage money. This is a case of going back to the people with another new tax and it is reckless spending. If they would only listen to the side of the House and the suggestions from the shadow Treasurer, the Leader of the Opposition and others on our front bench, there are savings that could be made. If in a budget with $350 billion of revenue you cannot find another 0.5 or 0.6 per cent of savings or deferral of expenditure in the next 12 months, really you should not be occupying the government benches.

There are families out there who believed they had insurance cover on their property. Many have lost their homes, but because it is considered flood insurance rather than stormwater cover they will not receive an insurance payout. I have many of them in my home town of Roma where they are running a class action against the insurance companies. Those people will be paying the flood levy. They have had to rebuild their homes out of their own resources. Some charities have been very supportive of them and local businesses have helped a lot of our older people and senior citizens and have helped to re-establish the town, but they will be paying this tax as well. They have not received insurance payouts—and I condemn those insurance companies for the way they have treated people under these circumstances—and they will also be paying this new tax.

There is a better way. The government should listen to the suggestions from this side of the House on deferring expenditure and postponing non-priority expenditure. I am opposed to this new tax. It is yet another example of a government that cannot manage money. Whenever it runs into a budget problem it goes back to the people and introduces a new tax. I am opposed to this levy.

Chris Hayes (Fowler, Australian Labor Party) Share this | Link to this | Hansard source

I rise to speak on the Tax Laws Amendment (Temporary Flood Reconstruction Levy) Bill 2011 and cognate bill. During late December last year and the early part of this year, significant flooding occurred in many parts of Queensland and unfortunately followed fast on its heels by Cyclone Yasi. Like most people and probably everyone in this place, in our electorates we watched in horror as towns were engulfed by water and three-quarters of Queensland was declared a disaster zone. This covers areas three times the land mass of Victoria. It is extraordinary that the roads, rail systems and power systems have to traverse that sort of land mass and it was completely devastated.

I do not mind admitting I watched TV coverage of the floods in horror and disbelief. My heart went out to all those families, particularly those that lost loved ones, those whose loved ones were missing for a significant time and those Queenslanders that stood and watched their houses, their dreams and everything floating down a swollen river. I admit an intense feeling of sadness filled my home, my office and my community. I would say that goes for every member of this place if we want to be honest with one another. Thinking of those images now upsets me to the same extent as when I recall seeing the 9-11 attack. It occurred, we could not stop it, but we could feel it was real and quite palpable. I had the feeling at that stage, on seeing the enormity of the damage, that we as a Commonwealth now had an obligation to look after our people in need.

It ought to be said that the people of Queensland were courageous and stoic. They came together as an extended family and lent emotional and physical support to one another. Over that whole period differences were set aside and the people were united in a common interest to help the recovery efforts in Queensland. Heroes emerged from all quarters, people willingly putting their lives on the line to bring other people to safety. I recall vividly seeing that SES worker floating down a swollen creek to rescue a person who, unfortunately, had been washed down there. These were extraordinary acts of bravery. We all owe a debt of gratitude to the men and women of the police, to the emergency services, to the volunteers, to the military, to all those that decided to put the community first, to get involved, to do something to save property and to rescue life and limb—not simply those directly affected by the floods.

I know members on all sides have referred to heroes such as Jordan Rice, the 13-year-old who told his rescuers, ‘Take my brother first.’ Unfortunately, Jordan Rice did not survive. Those were four extremely courageous words. I think those words will live for a long time with all of us who have made condolence speeches on the Queensland floods.

The Queensland floods are being seen as the country’s worst natural disaster. Thirty-five people have lost their lives since late November, and we have had a level of physical damage to infrastructure unprecedented in our country’s history. It is certainly a very cruel blow that has been rendered by Mother Nature—a blow which has affected the Queensland community. But, as I said, all of our communities are our communities, because we are all Australian.

What has occurred—it is absolute fact—is that this has meant billions of dollars are necessary to rebuild the damaged roads, bridges, railways and essential infrastructure. Money is definitely needed to get our communities back on their feet. For that reason, I support the flood levy, because I know that a third of the $5.6 billion necessary to rebuild flood affected Australia will be provided through this modest one-year levy; the remainder will be met through a range of budgetary cuts.

Clearly Australians have shown absolute generosity in their support for Queenslanders during the course of this devastation. The levels of donations and fundraising that have occurred have been extraordinary. But the fact remains, as I said, that billions of dollars are still necessary to fix up the infrastructure, such as roads, bridges et cetera. That is why this flood levy is crucial for the recovery of our nation.

Bear in mind that people with incomes below $50,000 and those who are flood victims themselves will not be affected by the levy, which means 60 per cent of taxpayers will pay less than a dollar a week, with people earning $80,000 paying only $2.88 per week. By the standards of those opposite, they would have to say that these are modest figures. This will provide for only one year. It is not just a matter of politically assuring people of how the money is going to be spent. I think it is beyond doubt—it has not been questioned here, at least—that every cent that is raised through this levy will go directly to flood affected regions across Australia to help repair critical infrastructure.

It is important to note that already there has been a significant amount of money donated from all areas and all walks of life to assist people in Queensland in particular. A number of community groups, particularly in my electorate, started fundraising in, I think, the first week of January; it might have been the last week of December, but certainly I attended a number of functions in the first week of January. Various groups were involved, including the Chinese, the Vietnamese, the Cambodians and the Croatians—those are just the groups whose events I have actually attended. At the events that I have personally attended, I can say that over $500,000 has been raised through community groups in my electorate alone. I am sure that has been replicated by many other groups in my community whose events I have not attended, and no doubt that sort of activity has occurred right across this nation. It has shown great goodwill. In electorates such as mine—which according to the ABS is the most multicultural electorate in the whole country—it shows the extent of what people who would ordinarily be regarded as new Australians have done to look after and protect their fellow Australians. I think that is something that should not be missed, particularly when we talk about the people from Vietnam. They have been here only since the fall of Saigon, which was 35 years ago, yet they were one of the first groups who started to organise significant fundraising to assist the people of flood affected Queensland.

Although these contributions from various community groups are certainly very commendable and have made a significant contribution, that is only one part of the issue. Most of the money that they and other community groups have raised will go a fair way to helping individuals to manage their day-to-day costs and to providing immediate relief with some of the essential things, such as food and clothing. The proposed levy, on the other hand, is critical for raising funds to rebuild the infrastructure, to assist entire communities to get back on their feet and to assist the productivity basis of Queensland to start moving. Mr Deputy Speaker Scott, I am very familiar with your electorate of Maranoa, having had a son work up in Blackwater. I know how devastated the surrounds were up there. But these things do not fix themselves. If we are serious about ensuring the economic footing of one of our country’s largest mining states and bringing it back to full export capability—which we all benefit from—we have a role as a Commonwealth to do that. This levy will help the flood affected communities to rebuild. It will certainly bring back a sense of normality. It will help ease the constant pain of these Australians, which they have undeservedly had to suffer.

Regrettably, it gets to a situation like this. While the floods are on, we can all sympathise and be affected by what we see on the television about these matters, but inevitably and regrettably we eventually get back to real politics. I do not think, and I cannot recall, any member from a particular party going up there and making statements like, ‘Queenslanders are in this; they are on their own.’ I think that the view was that we are here as a Commonwealth and we are here to help. But as the argument matured there did seem to be some political gain in who gets to pay. No doubt, there is a level of motivation from the other side that it is good to actually try to force the government to make very unpopular cuts to budget—to take things out of communities and welfare payments, and to sharpen the guidelines leading into another election.

Stuart Robert (Fadden, Liberal Party, Shadow Minister for Defence Science, Technology and Personnel) Share this | Link to this | Hansard source

Hear, hear!

Chris Hayes (Fowler, Australian Labor Party) Share this | Link to this | Hansard source

The member for Fadden confirms that. It is not a matter of just looking at what we have to do as a community; they want to slice away at issues such as welfare and commitments that we make to communities. I know that my electorate has a high proportion of welfare recipients, and whilst it is the most multicultural electorate in the country it is also an area of great challenge in levels of income. It certainly has a high proportion of new arrivals, who are trying to make their way in the world and trying to do what is necessary to integrate into our community. Is it going to be one of these areas where we should make cuts?

Regrettably, politics does get into it. It was far better when we sat back, looked at the extent of the damage and all put our hands on our hearts and said that we would have to do whatever was necessary to make Queensland right. Apart from assisting members of our Commonwealth, what we do in Queensland is certainly significantly important to us all because of its income generation for this country through mining and tourism.

It is just something that we should do; but they come here now and have the audacity to start talking about what cuts we should make. I know that the member for Fadden was not in the parliament—he was a loyal member of our military—in the days of the Howard government, when it decided to put six levies on. I did not have a rifle, and I had to pay a levy for the gun buyback—but I thought that was for a good purpose. If you look at Labor’s record on the imposition of temporary levies you will find that we were very supportive, whether they were for the gun buyback, East Timor or a range of other areas; but when it comes to something as crucial as rebuilding Queensland, the push back now is simply to try to put budgetary pressure on the government. This is something they are embarrassed about; they want to blow the budget out and simply get to a stage of forcing the government to borrow in order to rebuild Queensland. (Time expired)

John Alexander (Bennelong, Liberal Party) Share this | Link to this | Hansard source

Every Australian has been moved by the scenes of devastation to property and families in distress, and the tragic loss of life. At the very same time we celebrate those heroes found amongst us under nature’s fire, on a different battlefield to where our heroes have previously been found under enemy fire, but made of the same stuff that sees these men and women—fearless in the face of overwhelming odds—putting their mates or a younger brother who was frightened first. We honour those great people who possess the national traits we admire most. So often it is the average Australian who becomes a hero in these exceptional circumstances.

The Tax Laws Amendment (Temporary Flood Reconstruction Levy) Bill 2011 we are discussing today seeks to force the average Australian—the possible hero—to fork out to assist this government to repair the critical and heart-wrenching damage caused by the devastating floods.

Nobody disputes that these are vital repairs and that those impacted deserve our utmost sympathy and support. The question that arises from this, and which should dominate the thoughts of policymakers in this place is: did these people have to endure such suffering, or could we have implemented measures to mitigate against this?

We live in a country that will be impacted by floods, fire, cyclone and drought. We always have, although not always occurring at the same time. This truly was a terrible summer, yet not entirely unexpected. It is apparent that this is the nature of nature in the sunburnt country.

Good government would use the events of this summer as a trigger to commence long-term planning to prevent damage, and then implement those plans. The people of Queensland need permanent mitigation measures, not taxes spread out during the night because of the threat of flooding rains. This bill is a symbol of economic mismanagement by the Rudd and Gillard governments. With the outrage of waste still echoing around the nation from the pink batts program, school halls and the $900 flat screen TV subsidy, and with a budget of $350 billion, the government cannot find 0.5 per cent of that to help people in this time of national need without slugging our constituents with a brand new tax.

The government has the ability, but not the inclination, to make prudent cost savings to cover the vital rebuilding. But such decisions must be born out of a provision for Australia’s long-term prosperity and development, not out of short-term electoral gain. The coalition believe that the government can pay for the repairs without fleecing the Australian public. We are willing to provide costings on how this can be achieved.

However, this is a reactive government, not a proactive government. This is a spectator government. This government has watched nature take us down with a left hook and then whack us again while we are down on the canvas. Now this government tells us that we are all heroes and mates and that we must get up and go, bandaged and bruised, back into nature’s boxing ring. This government has shown no interest in mitigating injury to us. It has not detailed any plan to arm us with visionary infrastructure development, whether it be dams, levees, roads, rail or other infrastructure needs—development which will mitigate future damage to life, property and our economy. This government’s only salvo is the imposition of l-e-v-y levys, rather than adopting the mindset of an l-e-v-e-e proactive vision to protect and encourage Australia’s development.

Where are this government’s clear-headed plans for the development of regional growth centres in Australia which will take the pressure off our overburdened major cities? Where are the regional transport hubs that could provide the economic drivers for these cities? Where are the visionary networks that can rise like a phoenix from the ashes of this tragedy to intersect road, rail and air freight to serve our country’s commerce and trade needs—not this year’s needs, but the needs of future generations? We know that nature will soon enough unleash her fury upon us again. Where are the master plans in anticipation of this?

In total, this government has cut $450 million from regional infrastructure programs, including a 50 per cent cut in the Building Better Regional Cities Program, and cut $350 million from the Priority Regional Infrastructure Fund. Yes, that is correct—it is called the Priority Regional Infrastructure Fund.

There must be a better way. We could choose to establish this new tax and use that money to rebuild it as it was before, and then get comfortable and wait for it all to happen again. The definition of insanity is to repeat the same behaviour time and again but expect a different result. The alternative is to be proactive, to make long-term plans, to assess the ways in which nature can affect us and to build mitigation measures into the new construction in order to limit the impact of future events.

In response to the 1974 floods the Bjelke-Petersen government implemented a flood buyback scheme with shared funding from federal, state and local governments. The Queensland government also commissioned the Wivenhoe Dam as a future mitigation measure. A second initiative, the Wolfdene dam, was proposed by the local council at a later stage but rejected by Premier Wayne Goss, back when the member for Griffith was his chief of staff. It is commonly accepted that had the Wivenhoe been at its recommended 30 per cent capacity, the flood damage would have been markedly reduced. Without the flood mitigating effect of Wivenhoe, even taking into consideration the alleged mismanagement of the dam, last month’s flood might have been as much as three metres higher, causing significantly more devastation.

Good governments should act—not just say or do what is necessary to maintain office for the day, but act responsibly in the country’s best interest, for now and into the future. This is not a new philosophy, and the local knowledge of the need for construction of mitigation measures is nothing new. In fact, I have a copy of a letter here from the Brisbane Lord Mayor to the federal MP for Griffith requesting support to implement the recommendations of the Lord Mayor’s Taskforce on Suburban Flooding ‘to solve or mitigate the many flooding problems experienced in Brisbane’. This letter is dated 7 October 2005 and was sent to all MPs in the region. No responses were received from the member for Griffith, the member for Brisbane or the member for Oxley, whose electorate office was devastated in the most recent floods.

Several years later the same member for Griffith was the Labor Prime Minister. Under his stewardship, none of these recommendations were implemented to protect the constituents in his home electorate and no further funding was given for this flood mitigation initiative. In desperation, Brisbane City Council needed to act unilaterally to implement their own self-funded flood buyback scheme.

The need for mitigation measures was also referenced in great detail in the recent 24-month report developed by the Victorian Bushfire Reconstruction and Recovery Authority, which showed a clear recognition of the need to invest in mitigation measures to ensure history does not repeat with the same level of devastation to human life.

We need real action towards nation building in the form of a strategic program of flood mitigation that will protect life and property when nature shows its power once more. This does not happen overnight. As a nation we need to make a concerted effort to prioritise and to set funds aside. The construction of dams not only serves to protect life and property but also provides life-giving water during times of drought—another cyclical reality of the Australian climate. To respond to this devastation with the implementation of a new nationwide tax, instead of an infrastructure plan, is the epitome of government negligence. The savings to afford this plan are available and would be double or triple in size if it were not for this government’s waste and economic mismanagement.

We are at a crossroad. Do we repeat the behaviour of the past and embrace the definition of insanity, or do we learn from the harsh lessons and become, in peacetime, the heroes that those who elect us would choose to have? The great tragedy of humanity is that it often takes a war to find a hero. The heroes in this place need to act, to take real action to commit to the necessary infrastructure and to build greater value in our towns and cities through appropriate flood protection. If this is done, then the most heroic act of our youngest hero would not have been in vain.

Sharon Grierson (Newcastle, Australian Labor Party) Share this | Link to this | Hansard source

I too rise to speak in support of the Tax Laws Amendment (Temporary Flood Reconstruction Levy) Bill 2011 and the Income Tax Rates Amendment (Temporary Flood Reconstruction Levy) Bill 2011 and offer my support for them. As a nation, we have truly witnessed this summer some of the harshest realities of the Australian climate. Sadly, that other great south land, New Zealand, our neighbour and friend, is experiencing a disaster and calamity which will take all efforts for them to recover from. I express here my sympathy and support, my best wishes to the people of New Zealand and my best wishes to the parliament. May they conduct themselves in an exemplary way that shows people do need to pull together.

As families in Queensland recovered from unprecedented flooding, thousands of families in Far North Queensland nervously awaited in evacuation centres as Cyclone Yasi devastated their homes and workplaces, while in Perth families fled their homes threatened by bushfires. Meanwhile, flooding in Victoria served to mark the two-year anniversary of the devastating bushfires there in the worst way possible.

Here in the parliament we have heard from members and colleagues on both sides of the House of the human and economic cost to their communities. They were very sad speeches. In times of profound loss such as these, all members do play a very important role in giving voice to and helping to overcome the suffering and grief in their communities. I pay my respect to all members who have served this role so admirably and wish them continuing courage and compassion as they support their affected communities.

Indeed, in Newcastle we very well know the human cost of environmental disasters. It is not until you go through it that you really understand the impact. People who are vulnerable or infirm, whether through mental illness, age or chronic illness, will suffer much more acutely. Among older people the incidence of strokes and heart attacks will increase. The incidence of mental illness hospitalisation will increase. There will be financial pressure on families trying to struggle with insurance companies and building firms while they are holding down jobs. They will have relationship problems and it will go on for a long time. It is a time when we need to be together. We do not need pettiness. We do not need people to be small and paltry. Unfortunately, the debate on this levy should not be happening. We should all be speaking with one voice—anything it takes to help those people rebuild their lives. It is a pity to have to say those things, but it is very true and very important.

Again this summer, we have also seen, as many members have spoken of, ordinary people doing extraordinary things—and thank goodness. It is at these times when you see the best and worst of people and in Australia, hopefully, it is always the best. But we were reminded by the Prime Minister so eloquently of what it does mean to be Australian—that we are a nation that has suffered adversity and that has a special quality of resilience and even a stubbornness to never give in. That is what has made us tough, generous and resilient and we hope it will continue. We want those people to be tough, even though they are going to face a very hard time.

It is a hard time and it is that spirit and commitment of goodwill that underpins the package of reconstruction measures set out in this legislation. Initial estimates by the Treasury indicate that the floods will cut half a percentage point from GDP growth in 2010-11. The floods will continue to have a particularly acute impact on our farmers, tourism operators, small businesses, the mining sector and also the supply chains that support all those businesses and enterprises. It is estimated that 15 million tonnes of coal production equating to several billion dollars was lost in addition to around a billion dollars lost in the agricultural sector, $300 million in the tourism industry alone, and half a billion dollars in the manufacturing, retail and transport industries combined.

The introduction of this one-off levy now will go a long way to rebuilding the damaged infrastructure of Queensland. It is staggering to think of 75 per cent of a state so large covered in water and damaged by that water. To restore the commerce and confidence in the agricultural, mining and tourism industries will take a significant investment. To reduce the cost of fruit and vegetable produce nationwide in the long term will be one of the benefits. In the face of these circumstances, the federal government has no choice but to act and to act decisively. Let us not quibble; let us do something.

These natural disasters will have a significant impact on the federal budget to the tune of $5.6 billion. That was the figure before Cyclone Yasi, so we are going to see a huge task undertaken. It is not just an economic issue. It is about sustaining communities and doing what is right for those who are experiencing this misfortune. That is why the levy is supported by the Australian Council of Social Service, by the Salvation Army, by AgForce, by the Australian Industry Group, and that is why it is supported too by the President of the National Welfare Rights Network, Maree O’Halloran, who said, ‘Political opposition to the flood levy is wrong-headed and hard-hearted.’ It sure is.

In my electorate, we have a very busy electorate office. People love to tell me what they are thinking, whether it be by email, by phone or by dropping in our main street office. I have had fewer than 10 people make any complaint about the levy. That is pretty impressive, but that is Newcastle. They know tough, they know struggle and they also know you have got to share something around when you have something and someone needs it. It is very easy to give it away. I am very proud of them. But the levy is deliberately designed not to impact unfairly on struggling low-income earners or victims of the flood. Because this is a progressive levy, as it should be, every Australian earning less than $50,000 per annum is exempt. As a result, it is true that over 60 per cent of taxpayers will pay less than $1 per week and over 85 per cent of taxpayers will pay less than $5 a week. That is small change. It is small change that will equate to real change in the lives of hundreds of thousands of Queenslanders living and working in those flood affected areas.

Introducing this levy is not just the right thing to do but also the fiscally responsible thing to do. As the Prime Minister has made crystal clear, every cent raised will be spent on reconstruction only. For every dollar raised by the levy, the federal Labor government has identified at least $2 of budget savings to help fund reconstruction. Increased fiscal austerity and the reprioritisation of existing spending programs have necessitated some tough choices. Given the magnitude of the Queensland flood disaster, we do not resile from that. The federal Labor government has to make those choices and we have made them. Six Queensland road projects will be delayed and three projects in New South Wales and Victoria will be delayed and reduced with a total saving of approximately $1 billion.

It is rather amazing to hear members on the other side saying: ‘What about rebuilding regional Australia? Where is the infrastructure money?’ After 12 years of neglect, the OECD report of 2010 still points to the significant deficit in Australia’s infrastructure. We have spent so much, but we have so much more to do. The other side should think about that. Let’s get on with the building of Australia—a nation we want to be proud of.

I must be frank in acknowledging that some of these decisions affect my electorate—for example, the $100 million for the northern Sydney freight line upgrade to separate rail and passenger. As the local member, I will track that project very closely. It has been deferred. I understand that. I support the broader national priorities at stake. Queensland’s infrastructure needs are now greater, but it would be irresponsible for the federal government to unnecessarily add to aggregate demand at a time when the economy is in full steam and potential skill shortages and resource shortages loom large. We just have to even it out. We have to catch up where we need to catch up most, and that is in our flood affected areas.

I acknowledge that the funding cuts for carbon and green initiatives have affected some residents in my electorate. After all, we have the largest coal export port in the world and we have a key role to play in Australia’s inevitable transition to a low-carbon economy. But I know, and my electorate knows, that the federal Labor government’s determination to place a price on carbon will have a far more wide-ranging and positive impact on climate change and our economic future than any of those programs ever could.

I implore all members of the House to support this bill and to do so without delay, but, sadly, that is not happening. Rather than supporting efforts to help Queensland and other flood affected states to get back on their feet, the opposition leader, Tony Abbott, has elected to play politics. How paltry; how small. We hear the same mantra: waste, tax. Three per cent of all BER projects had difficulties, and you call that waste? Catch-up infrastructure—you have the hide to call it waste. A mining tax—come to my region and see the impact of mining. See it growing from 100 million tonnes exported to, potentially, 300 million tonnes in the next few years. That has to be managed. Those people have to help pay for that. We cannot all put on extra levies, as those opposite would say, for those sorts of initiatives. We have to plan for our future. We have to make the best of good economic times. ‘A big tax on everything’—what rubbish. It is just fiscally irresponsible to inflate these things incorrectly and lead the Australian public to not having confidence in the economy. It is not going to work. The Australian public know better. I sometimes wonder what happened to fairness and honesty on the other side.

More recently, the Leader of the Opposition advocated a permanent levy on business to fund his ill-fated parental leave scheme. Electors are entitled to ask: if it is good enough for one, why isn’t it good enough for the people of Queensland? Why isn’t it good enough to plug the hole in their lives, in their economy and in the national economy? The simple answer is that the mantra is all the opposition leader knows. It is wearing very thin with people who can think bigger and understand that this is a time of great need. Disasters are real; they impact for decades. When floodwater struck Newcastle in 2007—people will remember the coal ship washed up on Nobbys Beach—the then Labor opposition leader, Kevin Rudd, visited our city. He put political pointscoring aside, as he should have. He did all that he could to support the people of Newcastle and the government’s efforts to support the people of Newcastle. We have never quibbled over the payments for other cyclone damage in Queensland or for any other disasters, and the opposition should not quibble now. The people of Queensland deserve much better. They are getting it from all Australians. They deserve it from Mr Abbott as well. I hope he changes his position soon.

Stuart Robert (Fadden, Liberal Party, Shadow Minister for Defence Science, Technology and Personnel) Share this | Link to this | Hansard source

Before I make some comments on the flood levy, with the concurrence of the government I wish to acknowledge some new student leaders within schools in Fadden. I believe it is quite important, especially at a time when we are debating large national issues, that the Commonwealth recognises the roles and responsibilities of young leaders as they seek to represent our nation and, in the future, make some of the big decisions that we debate here. These leaders in Fadden have been selected by their schools for their potential to make a positive and lasting contribution to their school and to the wider community. These young leaders play an important role. Their actions have the potential to influence their peers and that influence should not be understated within the school community. I encourage these new leaders to recognise the need for true leadership and to view the opportunity they have been given as a stepping stone to a greater and broader role in our community.

Great leadership is at the heart of all achievement, all advancement and the betterment of society. Nothing will ever replace great leadership and nothing can fill the void that the absence of leadership creates. I urge these students, as Australia’s young and emerging leaders, to strive to achieve their very best in their current roles. Through their influence they will carry the responsibility.

Winston Churchill once said to his old school in 1941:

Never give in—never, never, never, never, in nothing great or small, large or petty, never give in except to convictions of honour and good sense. Never yield to force; never yield to the apparently overwhelming might of the enemy.

I say to these young student leaders in northern Gold Coast schools: do not give in; give it your all; you can do it. Above all, I say to these young leaders: remember well that you can only truly lead by serving those you represent. This rule is universal and without exception. I regularly visit the schools of leaders whose names I am able to table today. I welcome members of the school leadership group. I am universally impressed by the young people of these schools. The calibre of the young people of this nation and, indeed, the northern Gold Coast is of an extraordinarily high level. I am proud of each of them. I am pleased to seek leave to table the names of Fadden school leaders today, knowing they have an important task ahead of them. I look forward to watching their leadership journey with interest.

Leave granted.

I thank the Parliamentary Secretary to the Treasurer for granting leave. I now move on to lend some comments to the Tax Laws Amendment (Temporary Flood Reconstruction Levy) Bill 2011 and the related bill. I am a Queenslander and a proud Queenslander at that. We were all touched by these events, especially since my electorate is only some tens of kilometres from where much of the devastation occurred. I was recently speaking in the House about the role our military played, especially on that fateful night of Tuesday, 11 January. Black Hawks 201 and 220 and two Sea King helicopters conducted the most amazing rescues, rescuing some 300 people, with Black Hawk 201 rescuing 146 people. Up to 1,900 Defence Force personnel, fighting men and women, came to the aid of our communities over the entire period of the Queensland floods and more assisted further south, in Victoria.

There is no question that we as a parliament seek to help, serve and mend the people of Queensland. We seek to do all we can. The federal government has announced that $5.6 billion will be required as it matches the states’ 25 per cent of funding with 75 per cent of funding to assist the recovery. There is no quibble from the opposition as to the quantum of funds—no quibble at all. We wish to see the money spent quickly, wisely and with great accountability to go to those most in need. We are thankful for the likes of Major General Mick Slater, DSC, who was put in command of the recovery task force. He is a man of great honour, great courage and great capability. He is a wise choice as leader. There is no dispute from the coalition as to the need for funds, the need for leadership and the need for speed in the operation ahead. There is only one point with which we beg to differ: how the funds are to be raised.

The coalition has indicated its support for the reconstruction and repair efforts. We have further offered to have the Leader of the Opposition work in a bipartisan manner with the Prime Minister to find necessary cost savings. The government has rejected the offer, as is its wont. We have also released $2.065 billion of potential savings in our own forward estimates as an alternative to $1.8 billion being raised by the flood levy. We have sought to be responsible and to show alternatives. We do this based on the premise that we do not believe another levy or tax is warranted. We believe the Commonwealth government should rise to the occasion and realise its responsibilities to assist the states when they have encountered natural disaster, but we believe that this is best done through proper, sound fiscal management.

I can draw a simple analogy: if my washing machine suddenly blows up, the tyres on my car go bald or something goes wrong in my house, I do not go around and tax the neighbours to fix it; I use savings—I use spare capacity in my household budget to do it. I always say to the young school leavers and those at school in the electorate of Fadden that a budget of a nation runs not dissimilarly to that of a home. We live within our means. There is a time and a place to borrow money for assets that will achieve and significantly increase worth and for that to be paid off quickly. There is a limited time for significant asset borrowing—but it is limited. There is no time for reckless spending. There is no time for continual and sustained budget deficits. There is a time for repaying debt quickly and living within your means. For, if you are within your means, you have the capacity to address issues.

Here we have a need for $1.8 billion that the federal government is taxing Australians to raise. What happened to a contingency in the budget to deal with such circumstances? What happened to a budget surplus and money in the bank to deal with these issues? What happened to having a capacity to deal with these issues? I do not begrudge the quantum of the expenditure, but I do take issue with the government that it is not doing enough hard yards to cut its expenditure to deal with the critical needs of the nation at large.

The economic consensus, I believe, is quite clear. When considering this bill, the Standing Committee on Economics heard from the likes of Mr Eslake and Professor McKibbin, who were clear in their view that the government’s new tax was the least preferred policy response. Professor McKibbin, member of the board of the Reserve Bank, said:

I think that in the case of a disaster it is almost uniformly accepted by economists, in principle, that a tax is not the best way to fund it.

He further said:

I am sure that there are Queenslanders out there who had no insurance, who incurred significant damage and did not receive any assistance from the government. They will now be hit with the levy.

The levy is payable in the 2011-12 financial year—$1.795 billion across the forward estimates. The point, though, is that in question time the Treasurer was unable to say exactly how many people would be paying the levy. I find it difficult to know how he can come to the quantum of $1.795 billion when he does not know the number of people who will be paying for it.

If the question is asked, ‘How should the government fund this?’, the average Australian is quite clear. The government has recklessly spent billions and billions of dollars. Right now it is borrowing $100 million a day. Eighteen days of government borrowing would cover the levy; 2½ weeks—that is all it would take. You can look at the wasteful spending, including $2½ billion on pink batts, with 150 houses burnt and four people tragically killed. You can look at the school halls programs, with estimates that up to half of the money was wasted. If you looked at the work that Brad Orgill did in reviewing that program and at the difference in what private schools and public schools got by way of funding per square metre, you would see that the difference was $2.7 billion. The tragic thing about the school halls program of waste is that the Labor Party, which stands there and says, ‘We are here for public education,’ allowed the state Labor governments and bureaucracies to gouge those schools to the point where it is beyond doubt, according to the government’s own task force, that state schools got a much lesser deal than private schools. Those the Labor government sought to serve they indeed screwed over a barrel. It is truly one of the great tragedies and travesties of public policy. A minimum of $2.7 billion was wasted.

If we look at the National Broadband Network, something like $50 billion of public funds is about to be spent, some of which, with half a billion dollars in the budget for the NBN presently, could be used for the levy. Yet, in the United States, President Obama has announced spending of $7 billion on a 4G network with a wireless solution. Vietnam is moving to an advanced 4G network, but, even though take-up of broadband technology in this country is seven to one in favour of wireless over fixed, we are still pursuing the solution that was hatched in a plane between Senator Conroy and the former Prime Minister, Kevin Rudd, because the $4.7 billion solution had folded and Labor quickly needed a patch-up job.

We need look no further than the budget blow-out in the immigration department. On 10 February 2011 the government introduced a bill to provide an extra $290 million for operational costs associated with the management of offshore asylum seekers. The new spending represents a budget blow-out of more than 60 per cent on the $470 million already budgeted for in the current year. In 2010-11 the government will now spend $760 million on people arriving illegally in Australia. This compares with the less than $100 million in annual expenditure when the Howard government left office in 2007. The total budget blow-out since Labor rolled back the strong border protection regime in August 2008—and this is a statement of fact—is more than $1.4 billion and counting. If you are an Afghani in a camp on the border of Kazakhstan you have a one in 10 chance of your application to come to Australia being received and processed. If you come by boat you have a 97 per cent chance. That is a statement of fact. So we have a $1.4 billion budget blow-out because this government rolled back the border protection policies. If the spending continues at the level announced on 10 February 2011 over the forward estimates for the next three years, that will mean an additional $1.9 billion in expenditure—enough to cover the flood levy.

I could go on and on and speak about the disastrous Green Loans program and the Solar Flagships program, overblown by over a billion dollars—and the list of waste and mismanagement continues ad nauseam. Rather than address the issue of waste and mismanagement, this government has taken the easy route. It has taken the route of a tax. That is what is most disappointing here. The coalition has no issue with funding the quantum. The issue we have tonight as we debate this bill is that we do not believe that Australians should be taxed because a government cannot control its budget.

Julie Owens (Parramatta, Australian Labor Party) Share this | Link to this | Hansard source

I rise to support the Tax Laws Amendment (Temporary Flood Reconstruction Levy) Bill 2011 and the Income Tax Rates Amendment (Temporary Flood Reconstruction Levy) Bill 2011. There have been many speakers on this bill, with many more to come tonight, and many of the speakers have spoken of the devastation, the grief and the heartache of people who lost not only their possessions but also in some cases people they loved. I will not be focusing particularly on that tonight; I would rather leave the time in this debate for people who represent electorates where those losses were experienced. I represent the electorate of Parramatta. We are probably one of the few areas in the country that did not experience some of the extreme weather events or inundation that the rest of the country experienced.

What we have to focus on now is the recovery, and I would urge those on the other side to focus very much on that. The Australian government is looking at an amount of $5.6 billion to pay for our share of the recovery. There are of course also contributions from the state governments and the local councils on top of that. There are the personal rebuilds—much of which will be paid for by insurance but much will not. There are businesses that are rebuilding. There are also community organisations that will make far greater contributions of time and energy in assisting people who suffer from some of those non-tangible tolls that such a tragedy takes on the spirit of victims and the emotional wellbeing of those who experience these kinds of tragedies. Many, many people in the community are contributing in many ways to help rebuild. We saw the armies of volunteers who turned up in the days following the flood and we all know that many, many people are still contributing their time.

I have been to a number of fundraisers in my electorate. A couple of weeks ago I attended a dinner for the Queensland flood relief held by the Pakistan Association of Australia. This Saturday I will attend one by the Burmese Medical Association Australia. At the Nan Tien Temple, where I went to celebrate Lunar New Year, they too were raising funds. In fact at the moment it is very rare that I go to an event in my community where they are not raising funds. The Sri Lankan community held a walking event at Lake Parramatta to raise funds for the flood victims.

There are also of course other ways that people will contribute in supporting local businesses to a greater extent—for example, going to North Queensland instead of Bali for our next holiday and even small things like buying fruit that is less than perfect in support of our farmers. As well as the costs themselves, there are losses in revenue that are not included in these figures. There are losses from mining, from tourism, from agriculture, from many small businesses that were out of action for periods of time and from workers on casual wages who lost work hours. There are many, many ways that people have lost revenue as a result of this catastrophe.

What we are in here arguing about today is how to fund just the federal government’s component—the $5.6 billion—of the rebuild. Essentially, there are three ways to fund that: cuts to expenditure, debt or some sort of levy. To assume that we can experience tragedy and loss on this scale without some sort of cost is absurd. There is a cost when tragedies like this happen, and it is our duty here in this place to find a way to cover that federal government cost. We have as a government chosen what I think is quite a balanced approach. There is $3.8 billion of that $5.6 billion being found in cuts or deferrals of expenditure and $1.8 billion is being found by the levy.

The opposition’s approach is to fund the entire amount by cuts to expenditure. Rather than looking for $3.8 billion in cuts to expenditure, they are looking for $5.6 billion, and I point out that they found it quite difficult to agree among themselves on how that additional $1.8 billion might be found. The opposition make an interesting argument that cuts to expenditure are always a good thing. They have argued ad nauseam, for example, for cuts to the Building the Education Revolution program. In my electorate of Parramatta, shortly before the election last year, and even as the Building the Education Revolution program was winding down, there were 1,800 construction workers working on Building the Education Revolution projects. We got that figure by phoning the construction companies that were handling the projects. In fact, the figure was probably slightly higher in my community, because we have some very large construction companies based in Parramatta that were employing off-site staff.

Those branches of the construction industry that were not involved in Building the Education Revolution at the time were already on four-day weeks and heading down to three-day weeks, so it is extremely unlikely that if Building the Education Revolution had been scrapped—if the opposition had had that power—those 1,800 workers would have been absorbed by what was still a very stagnant construction market. There were another 300 workers on public housing projects and about 500 apprentices. If you add those up, you get three per cent of my workforce. Three per cent of the workforce in Parramatta just six months ago was still working on Building the Education Revolution and social housing stimulus projects for the local council. If that three per cent of workers were taken off those projects and put on unemployment benefits, unemployment in Parramatta would have risen to around 10 per cent. That is before you take into account that those workers would not have been spending their wages in local businesses. So I am sure we would have seen that 10 per cent rise even further.

I sat down and worked out once what it might have cost us in unemployment benefits not to spend the $120 million that we spent on Building the Education Revolution. I worked out that on unemployment benefits alone we would have spent about half of that $120 million. So, while we spent $120 million on building school halls, we would have had to spend at least half that on unemployment benefits over that two-year period. Also, of course, the workers would not have been paying tax, they would not have been spending and we would have seen a flowthrough. Sometimes, cutting expenditure is not necessarily a good thing, and I would say the same thing about the proposal of the opposition to cut funding to Indonesian schools.

The funding of Indonesian schools was a project started by the Howard government. I was lucky enough to be on a few delegations in the region last year, and a number of governments talked to me about how extraordinary that Indonesian schools program is. Cutting the money from it might give a better snapshot, but sometimes value is not in the snapshot. If you do not fix your leaky roof or decide not to go to university, your bottom line might look a bit better for the snapshot on that day, but over time you will not get the benefit of that investment. Cutting an investment does not necessarily make you better off, but I am yet to see evidence that the opposition understand that. They seem to be quite fixated on the snapshot, but most of us who actually live in the world know that most things of value unfold over time. Things you invest in or do not invest in today impact positively or negatively in the future.

Some people in my community and in my electorate want to talk about longer term solutions at this point. There are debates going on in the community now at both government and personal levels about insurance—about the effectiveness of insurance et cetera. There are people talking now about whether or not we need to have longer term funds to deal with natural disasters. They are all extremely valuable discussions that we need to have at some point. There are also people already looking for someone to blame, but our job at this point is to rebuild. There are those who want to step over the recovery and start focusing on what might have been done better or how we might prevent our being in this situation again in the future, but that is a luxury that those of us who are not personally affected have. People who have been personally affected by this appalling summer that we have just lived through need to focus on one thing at the moment—that is, the recovery.

Every day that we do not start building is a day on which those losses continue to grow. The physical damage might be done, but the loss of income, the loss of revenue and the loss of capacity in communities continue to grow for every day that we do not focus on the recovery. So again I urge everybody out there who has a view on what we should do in the long term or what we might have done differently to put it aside for a little while—I put mine aside in what I call my ‘ideas file’, which I can pull out at any moment—and to focus on the job of getting some of these communities up and running. Let us focus on those other issues later on.

I also want to deal specifically with one issue that comes from my community. Contrary to the opposition’s focus on cutting spending, a small number of people who believe that we should increase the debt to cover the rebuilding have contacted my office. A number of other people have also expressed this view, including one economist that addressed the House of Representatives Standing Committee on Economics into the flood levy bills. In fact, a number of witnesses suggested that we should increase the debt. At the moment, Australia has a very small public debt relative to other countries in the world. Most people do not know that we have actually had very small public debt relative to other countries in the world for about the last 30 years. We had 120 per cent of GDP debt in World War II. Most countries in the world had massive debt at the end of World War II, and most of them proceeded to pay it off over the next 20 to 30 years. A lot of the countries in the world stopped paying their debt off when they got to about 20 per cent; Australia did not. Our debt kept getting smaller so that by the time we hit 1970 we had one of the smallest debts in the world.

Our debt level went up and down; I think it averaged around five per cent. There was a period in the 1980s when there was a bit of a global crisis and governments again started going into debt. But in the late 1980s, when that crisis started to soften, the government of the day paid back six per cent of GDP in debt in just three years. So we have had this habit over the last 30 years of going into debt when we need to and then proceeding to pay it back. Australia has been, I think, among eight countries in the OECD with the lowest debt for the last 30 years. It is one of the things that makes us strong, and it is one of the reasons that we as a nation are able to respond to crises like we faced with the global financial crisis a couple of years ago. It is very important, but it is also important for a government to stick to a fiscal strategy when it commits to one. It is incredibly important that we do that. Belief in strategy is an important signal that we send out. Our commitment is incredibly important as well.

Personally I am getting a little bit risk averse. We have been in government for 3½ years and we have had the global financial crisis, the bushfires in Victoria and then the floods, and then there were more floods, and then there were more floods. I was trying to camp around Australia at the time. I was heading up to Carnarvon Gorge, just inland from Rockhampton. We had been completely out of circulation in the national park. Actually, I am running out of time so I will not tell that story. Essentially this levy, as a combination of levy and cutting of expenditure, is a very valid and balanced approach. I commend the bills to the House.

Nola Marino (Forrest, Liberal Party) Share this | Link to this | Hansard source

I rise to speak on the Tax Laws Amendment (Temporary Flood Reconstruction Levy) Bill 2011 and the Income Tax Rates Amendment (Temporary Flood Reconstruction Levy) Bill 2011. People in my electorate are like the majority of Australians in that they believe in helping out a mate who has struck hard times, or families and communities as we have seen in Queensland, New South Wales, Victoria and Western Australia. I want to personally express my condolences to the families and communities who are mourning those who died in the recent floods. There has been and still is almost immeasurable goodwill and support being offered by people from the south-west of WA. We all understand that the people of Queensland, New South Wales and Victoria need support to rebuild their infrastructure, their local economies and the communities that were so devastated by the floods of last month and by Cyclone Yasi.

We also want to support those in states like Victoria who have suffered over and again with floods, those in our own Gascoyne and Carnarvon areas who suffered flooding in December and January and those in the electorate of Canning who lost homes and property in recent bushfires. We understand and readily accept that some of our taxpayer dollars should go towards this massive rebuilding process right across our nation.

It is entirely appropriate that Commonwealth funds are spent on rebuilding lives and communities. However, I disagree with this government on where those funds are derived from. We are almost punch-drunk with the list of taxes that this Labor government is either inflicting or proposing to inflict on the people of Australia. And if we are not punch-drunk with the government’s new taxes to date, by the time the government has introduced its carbon energy tax, its mining tax and the flood tax, taxpayers will well and truly be tax-punch-drunk. If we had a fiscally responsible government, this tax would not be necessary.

My family runs a small business, like millions of other Australians. We have a dairy and beef farm, and like everybody else in business we have to allow for and manage the many contingencies—those unexpected things that happen in the running of our business. It is something that is faced by small businesses constantly. For instance, last year was the driest year I can remember since I was married and started farming, and we received only half our average annual rainfall. As a result, the water levels in our water storage dams in the hills were extremely low. There was very little run-off into these dams and, as a result, we were effectively receiving only 34 per cent of our annual irrigation allocation to water our pastures over the summer months that we are now going through. This is a major issue on an irrigation farm.

What did we do? We dealt with it and it has cost our business to do so. We had to increase the frequency of our fertiliser applications, which was more cost, manage our pastures extremely efficiently and, when additional water was released by the state government, choose to buy additional allocation to use in our irrigation program. Other farmers—small business people just like us—had to make a range of decisions that best managed the problem in their own individual circumstances. Some, like us, bought additional water, some bought more grain or dairy rations to feed their cows, and others cut back production to match the feed they had available. All of them, however, took some action to deal with an unforeseen circumstance that was impacting on their business.

The decision to buy more water cost individual businesses anything from five per cent and upwards of their annual gross milk income to simply produce the same amount of milk as they did the year before. These businesses had to absorb at least that five per cent or more cost to generate the same revenue. Whether it was paid for as extra grain or forgone in reduced production, the cost to farmers was similar. How does this parliament think we achieved this? How does the parliament think a million other small businesses across Australia absorb costs like this that go hand in hand with managing a business?

According to the Australian Bureau of Statistics, there are about two million businesses in Australia, of which more than half are classed as sole traders. They do not employ other people, and there are plenty of Australian farmers in this group. Of the other ‘employing’ businesses, some 70 per cent have between one and four employees, and 90 per cent have less than 20. These business owners—the backbone of the Australian economy—cannot just put up their prices every time something unexpected happens. If you are a dairy farmer you are an absolute price taker. That is how it is. And if you are in Western Australia, you are at extremely serious risk at the moment of even lower milk returns because you are caught in the middle of the current market share war between Coles and Woolworths.

So how does the government think business owners manage contingencies? We do it by reworking our budget. We have to cut our spending and reprioritise what we are going to do. That is what is expected of a couple of million Australian small businesses. They do it on a regular basis. There are always contingencies. How does this compare with the Australian Labor Party, which is currently in the business of running the Australian government? When a contingency arose—the storms, the floods, the fires—this Labor government announced a $5.6 billion package. That is just 1.5 per cent of the budget available to the government—and certainly not the five per cent, at least, faced by irrigation farmers—and the government cannot manage it. They will not make the tough decisions that businesses across Australia have to make all the time to manage their business. Instead, they are taking the easy way out. They are imposing another tax to cover their weakness.

On behalf of the couple of million small businesses like mine that regularly have to absorb contingency costs of five per cent at least when things get tough, I want to express to this parliament the anger and disgust felt in the community towards a government that is incapable of simply doing what good governments are expected to do: to make tough decisions when the situation calls for it, as this one does. I understand why the government might not understand this message. I do not know how many of the members opposite, particularly on the front bench, have personal experience of running a business, be it large or small, and I am not sure how many have actually filled out a BAS or another GST type statement. You have to make tough decisions when you are in that position. But when you are in government it is your job to manage these types of contingencies. That is why we have a government. The Australian community expect this government to do what they themselves as small business people have to do.

The tax proposed is clear evidence that this government is a ‘tax first’ government. Their first, knee-jerk reaction is a tax. There was an editorial in the West Australian that expressed what I believe to be a genuine community view, and that is:

Many reasonably believe that the Government, which takes a healthy slice of our incomes in taxes, needs to find a way of paying for reconstruction without taking more. That, after all, is what governments are elected to do, manage taxpayers’ funds prudently and make sure they can meet national contingencies.

I will repeat that:

That, after all, is what governments are elected to do—

and what this government was elected to do—

manage taxpayers’ funds prudently and make sure they can meet national contingencies.

Unfortunately, there are words in this paragraph that are anathema to this government, and they are clearly the words ‘manage taxpayers’ funds prudently’. Unfortunately for Australians, particularly for those generous Australians who have already donated to the flood and cyclone relief efforts, this government has not, can not and will not manage taxpayers’ funds prudently. This is just further evidence of that.

As a community volunteer for a lot of my life, one of the things that most disturbs me about this knee-jerk-reaction tax is the effect it may have on the future generosity that Australians are well known and well respected for. In my electorate, people collected clothing and goods and sent them off to Queensland. On a personal level, they donated extremely generously, as people right around this nation did.

There have been many phone calls to my office. One of the many complaints was from a small business man in my electorate, who rang to tell me that the moment the government announced the tax he cancelled his $1,000 donation to the flood appeal. He was so angry that the government took for granted his donation and his goodwill. He even asked me why he should donate to other charities, like the Salvation Army, if this was what was going to happen in this nation. This is a story that I have heard over and over, and as a community volunteer I am seriously concerned about it.

I say to this government: Australians are generous, community minded people, but you should not take their generosity for granted or abuse their natural kindness and community spirit. Do not put this at risk. Do not make people question their very natural generosity and their community spirit. What really annoys people the most is that they are well aware of this government’s wasted billions in the BER, computers in schools, home insulation and countless green programs. The list is growing. The most damning thing of all is that people know that the government’s interest bill alone this financial year would have paid the levy at least twice over. What a wasteful, dreadful government. For people in my electorate facing cost-of-living pressures, this is almost unbearable—a government addicted to wasting taxpayers’ funds but at the same time increasing taxes on a regular basis. The Australian community should not have to keep paying more and more taxes simply because this Labor government cannot properly manage the business of government. Thank you.

Stephen Jones (Throsby, Australian Labor Party) Share this | Link to this | Hansard source

I rise to speak on the Tax Laws Amendment (Temporary Flood Reconstruction Levy) Bill 2011 and cognate bill. We are joined in this debate because of the staggering dimensions of the floods in Queensland, the floods affecting northern New South Wales, the floods affecting north-west Victoria, and Cyclone Yasi, events that occurred between November and January-early February this year. Combined they quite possibly represent our most extensive natural disaster. The way that we respond to a disaster defines us as individuals, but it also defines us as a nation. It also defines us here as a parliament: it defines our humanity, our capacity to manage the recovery and our capacity as leaders.

It is appropriate to start my contribution to this debate by expressing my condolences to the families and friends of the 35 people who lost their lives in the flooding that occurred of the Lockyer Creek and the Bremer and Brisbane rivers between 10 and 12 January; the unfortunate loss of one life in Cyclone Yasi; and the terrible destruction of properties and communities in northern Victoria. I can only imagine the trauma experienced by the people in each of these regions and everyone else who faced the full force of this unprecedented natural disaster.

Like everyone in this place, I was deeply moved by the stories of courage and endurance and also by the remarkable community spirit that many Australians showed in the aftermath of the floods and the cyclone by joining in the clean-up effort and generously donating money to the Premier’s flood appeal. Many thousands of dollars, goods and materials were donated by people from my electorate of Throsby, and I pay tribute to the generosity and the volunteering spirit of those people who donated their time, effort and money to the recovery effort. In this place, many fine, heartrending speeches were given by members on both sides of the House, and I pay tribute to the members who, through great difficulty, have attempted to represent the feelings, the emotions and the people of their region in this place.

The damage that has been caused by the recent flooding is unprecedented, and the task of rebuilding is indeed significant. While the damage to roads alone is yet to be precisely determined, local governments estimate that some 90,000 kilometres of roads have been damaged and will need to be repaired or rebuilt. This figure does not include federal highways, state roads or railways. These recent floods and the cyclone may well end up being the most costly disasters in Australia’s history. The Queensland Treasury told the recent inquiry that they estimate that economic growth in that state alone for 2010-11 will drop by 2.5 per cent to 1.25 per cent. Our own Treasury’s estimate is that the floods will take up half a per cent of growth from our 2010-11 estimates.

The reconstruction task is going to take a lot of time and a lot of money. Initial estimates put the cost to the Commonwealth budget at somewhere close to $5.6 billion and, as the Prime Minister and the Treasurer have told members in this place, the risks are on the upside. Our challenge is how we rebuild Queensland, Northern Victoria and New South Wales at the same time as ensuring the rest of the economy continues to recover from the global financial crisis, the worst crisis to grip our country in over 100 years and one that many parts of the world have yet to recover from. It is also to ensure how we rebuild these regions at the same time as we manage an economy which we are sometimes told is running at two speeds but which I believe is probably more accurately described as running at three or even four speeds—that is to say, the economic growth and the capacity constraints that we are feeling in some areas of our country are not evenly spread.

We have some capacity constraints on the economy; that is true. In the mining states, including flood affected Queensland, there is an unprecedented level of capital investment in mining and related infrastructure. This draws down on the limited pool of skilled labour that is available and capital equipment that is drawn to the task. Some areas of the economy, however, are still sluggish. Over the Christmas period we were reminded of that by the below average returns in the retail sector, and in some states housing itself has not yet recovered either. We also need to manage the rebuilding effort at the same time as we keep our faith as a government with our commitment to manage the budget back into surplus by 2012-13, consistent with our election commitments.

So we have three options. We can go into further debt, we can find all of the $5.8 billion or more from within the budget or we can find some savings from the budget and others by legislating for a modest and temporary levy. The bill, which would give force to the third of these options, the one the government has chosen, was referred to the Economics Committee, who heard evidence from two independent economists and also received evidence from others. Both gave evidence to suggest that the government should foot the bill by increasing debt. This is not an option preferred by either the government or the opposition. We do not agree with the proposition, and the reason is simple—that is, the debt is in effect a deferred tax. The money will have to be repaid at some point in time, and that money comes from tax revenue. Faced, quite simply, with the choice between paying the money now or paying the money later, we have opted for a very targeted, temporary levy which will enable us to pay the money now and, as the Prime Minister has said, pay as we go.

The position of the coalition on this matter is at best confused and at worst plainly dishonest. They cannot have an in-principle objection to a levy because in government the coalition had no hesitation in raising a levy to support a whole range of measures. In all, there were six levies raised by the coalition on measures such as gun buybacks, the support of Ansett employees, the superannuation surcharge levy, the stevedoring levy, the sugar levy, the dairy industry restructuring levy—and others were proposed. The Leader of the Opposition is on the record as supporting all of these six levies, and what is remarkable about the coalition position on most of these levies is that they were imposed at a time when the economy was growing and the budget was in surplus. So the logic and the lesson we are supposed to draw from the coalition on this matter is that you tax us more when you have more, and you oppose the imposition of a modest, short-term levy when the budget is in deficit and we are recovering from the worst crisis to hit our economy in over 100 years—a perverse logic, which is disputed by most economists and, I suspect, even disputed by many on the opposition benches.

We have heard a number of times in this debate allegations raised about the level of taxation under the Gillard Labor government. I looked at this because it seems to have gained some currency amongst those on the benches opposite. The sad news for them is that taxation has actually dropped under the Labor government. In fact, if you look at the tax to GDP ratio, you will see it was highest under the Liberal government. It peaked at around 25.5 per cent of GDP in 2006-07 and dropped to 22.7 per cent of GDP in 2009-10. So when the member for Forrest is talking to those small businesses that she spoke of so passionately earlier she might care to remind them that it is this government that is committed to reducing the burden of taxation on small businesses. In fact, we went to the election with a proposal to cut the tax on small business, not to increase it, as was the proposal of the coalition. As a percentage of GDP, taxes are decreasing under this government.

We have also been treated to the wisdom of the members for Goldstein, Warringah and North Sydney claiming that flood reparations could be paid for out of cuts to the budget. Interestingly, this was a proposition rejected by all of the economists who appeared before the committee. They said that this is contrary to all orthodox economic thinking and that the government were on their own when it came to this proposition. It also sits very ill with the track record of the opposition. This is a coalition which had an $11 billion blow-out in its pre-election funding. This is a coalition which over the last week has operated like a bunch of fiscal vandals when it comes to the current budget. It has moved legislation in the upper house which would have the effect of punching a $400 million hole in the budget with absolutely no regard for the financial impact that that would have on the budget.

We do not take economic lessons from the coalition because, quite frankly, they are at best confused, at worst incompetent. If we were to have listened to the prescriptions of those opposite they would have had us running unemployment levels in excess of 10 per cent as we moved through the global financial crisis. They would have had us cut spending when every economist around the country and around the world was saying we needed to inject fiscal stimulus into the economy. They would have had us do nothing about the $46 billion deficit in infrastructure—and it is this $46 billion deficit in this country’s infrastructure which is the greatest problem we have in dealing with future inflationary pressures. If those opposite want to start pointing a finger at the inflationary pressures that are building up in the economy and the risks to future infrastructure rises, they should point a finger nowhere else than at the previous government’s frontbench that bequeathed Australians a $46 billion infrastructure deficit with the resultant skills deficit and bottlenecks which are increasing inflationary pressures and making it that much harder to deal with the crisis to rebuild Queensland in the wake of these floods.

It has been said that the government should find the money from savings. All I can say is that the opposition have zero credibility on this issue. They went to the last election proposing an increase in taxation, a new levy of their own to fund the opposition leader’s thought bubble on paid maternity leave. They were the only party going into the last election proposing to increase taxes on businesses when we were proposing to decrease taxes. They had an $11 billion blow-out in their funding proposals for their budget. They have a poor track record when it comes to dealing with unemployment and infrastructure. So we will have no truck with the economic lessons of those opposite.

We, in contradistinction, have a proposal to impose a very modest tax on those who have a taxable income of over $50,000 a year. It will result in a small contribution equivalent to around the cost of a cup of coffee per week for one year. It is a small contribution which is in line with the underlying values of the Australian community—that when one of our states is in trouble we should all pitch in to help. I commend the bill to the House.

Sussan Ley (Farrer, Liberal Party, Shadow Minister for Childcare and Early Childhood Learning) Share this | Link to this | Hansard source

I think it is important that we talk about what this debate is about and what it is not about. The Tax Laws Amendment (Temporary Flood Reconstruction Levy) Bill 2011 and the Income Tax Rates Amendment (Temporary Flood Reconstruction Levy) Bill 2011 are about the government’s decision to impose a $1.8 billion tax on a portion of the country’s taxpayers to raise a third of what the government has articulated to be the $5.6 billion total cost of the flood reconstruction in Queensland and Victoria. On that note, it took the Prime Minister a while to bring Victoria in; in her first remarks at the Press Club, I do not believe she mentioned Victoria once. But it is to rebuild Queensland and Victoria following the devastating floods. Those with taxable incomes between $50,000 and $100,000 will pay a 0.5 per cent levy and those earning over $100,000 will pay a one per cent levy temporarily for 12 months.

This debate is not about the need to rebuild Queensland and Victoria. It is not about the level of sympathy or empathy that members of parliament supposedly do or do not have for those who have been affected. We all grieve for those who have lost loved ones, livelihoods, homes and businesses. We all care deeply when we hear those personal and heartbreaking stories. It is disingenuous at best and dishonest at worst for members opposite to suggest that opposing the levy is opposing the reconstruction and the recovery.

In managing or mismanaging this economy, this Labor government, like other Labor governments both state and federal, reaches for three things which are quick, easy and designed to manage a short-term fix to solve the problem of the 24-hour news cycle and present a happy face to the Australian people. The three tools are: tax, spend and interfere. The spending we certainly saw during the global financial crisis. The previous speaker said that we in the opposition did not support stimulus, and that is not correct. We supported the first stimulus package: a modest, careful approach and then stopping, listening and seeing where the world economy was going. We certainly did not support the ‘jump in boots and all’ excessive and reckless spending that followed. But we as a nation saw that excessive spending, and we are still seeing it.

The irony is that, well after the Reserve Bank and monetary authorities had declared that the crisis was over in Australia, at least half of the stimulus spending remained unspent. So we cannot even let the government off the hook by saying they did what they thought was best and it turned out that maybe we did not need that much, because at the point where it was obvious that that level of stimulus and spending was not required the government could have said, ‘Stop; we’ll reprioritise and we’ll take the spending away.’ But that would have been unpopular and politically difficult and it would have required some courage, and that was not evident. So it is ‘tax, spend and interfere’. The taxing we are seeing now. We will always see higher taxes under Labor governments. We are seeing this flood levy tax, which is an easy, quick fix. I mentioned that Labor governments interfere, and as an aside I will mention that there is no more classic example than the internet filter.

The important thing that we have to focus on here is how the money will be raised, how it will be spent and what it will achieve. The Prime Minister has called on well-known Liberal John Fahey to head an outfit that is being described as the reconstruction inspectorate. This, of course, will be a great big new bureaucracy. If we donate to charities, as we all do, we choose carefully, because we want to make sure that our money hits the ground. We do not like money being frittered away in administrivia. We know that it happens, but we would prefer that the help went to the people who need it. But we as taxpayers are being asked to contribute to the reconstruction inspectorate. What will be the running costs of this organisation? We do not know. How can we be confident about the distribution of this $5.6 billion levy when it arrives? How, in fact, do we know that $5.6 billion is the right figure? Cyclone Yasi—which was a terrible tragedy that will involve great capital and asset replacement—had not happened when the flood levy was announced. Presumably it will also be included. How do we know if $5.6 billion is too much or too little? How was the figure arrived at?

The Treasurer was asked in question time how many Australians would contribute to the levy. The answer was actually in the Australian newspaper that day, not that it was any big secret: 4.8 million Australians. The Treasurer could not answer the question in question time. He fluffed the answer, and I think he added to his answer later; perhaps somebody handed him a copy of the Australian newspaper. But he should have known that. Does, in fact, the Treasurer know where the money will go? It will go to consolidated revenue, where, as we know, it will be at the government’s disposal anywhere, anytime. So, if the Treasurer does not know how many Australians would pay the levy and he knows that it is all going into consolidated revenue, that gives you a flavour of the way this fund is going to be managed. We cannot be confident.

Psychologists will tell you that the best predictor of future behaviour is past behaviour. Do not expect this government to change; they have form. The form is their wasted stimulus payments, their roof insulation tragedies and disasters, their school building rip-offs, their Solar Flagships and Green Loans mistakes and their undelivered computers in schools.

Today I was drawn to perhaps the best example of why I do not believe in this flood levy. Of course it will raise the money. Governments can always raise taxes. As I said, it is easy and quick. But we have an example here of why this will not work. We look no further than Infrastructure Australia. I quote from an article by Richard Allsop in today’s Australian:

Set up, with great fanfare, to “develop a strategic blueprint for our nation’s infrastructure needs”, the whole rationale of Infrastructure Australia was that it would be national, scientific and impartial. A body of experts would weigh the merits of competing infrastructure proposals from across the nation and pick those that would deliver the greatest benefit for the taxpayer dollar.

It sounds good. It would have been good. But, three years after its establishment, this body has demonstrated irrelevance and incompetence. We probably should not blame it or the good chairman, Sir Rod Eddington, because today the minister stepped in once again, usurped the entire process—his process—and declared that Infrastructure Australia would fund the Epping-Parramatta railway line. It is a project that has not even been identified by Infrastructure Australia as recommended for funding and had not even been considered a strong enough proposal to form part of the New South Wales government’s submission seeking federal funding. So that is one example of how the minister stepped in and simply said, ‘This is where we’re going to allocate infrastructure funding for political purposes and political gain; never mind that we set up these bodies and they are all over the place’—because the previous Prime Minister set them up and the current Prime Minister has continued them. They cost a lot of money and they are there for appearances, but they are not delivering the goods.

The other thing I want to say about the levy is: if it is so important, why has $450 million of it already been spent just on securing its own existence—if you like, a 25 per cent commission? I can remember the Prime Minister saying:

The Government will make $2.8 billion in spending cuts, with the funding to go towards the recovery and reconstruction effort, including:

                        …                   …                   …

• Reducing and deferring spending on the …Solar Flagships programs …

                        …                   …                   …

• Discontinuing funding for the Australian Learning and Teaching Council
• Reducing the National Rent Affordability Scheme dwelling target …

But on Wednesday the Prime Minister had to pay the Greens for their vote: $100 million to restore the cuts that had just been announced to the Solar Flagships program. There was another $264 million for the National Rental Affordability Scheme that the Prime Minister had just said she would cut, and the member for Denison, who shares the balance of power in this House, demanded his piece of the action. That was another $88 million for the Australian Learning and Teaching Fund. That is a total of $452 million already spent just to win the votes for a levy to raise $1.8 billion.

So 25 per cent of this money has already gone to secure the existence of the fund in the first place. We have no confidence that when this fund exists that it will be administered in a way that delivers the best value for taxpayers or that the best cost-benefit analysis will be applied to it. We can all talk about good projects and the need to rebuild, and from this distance it is fine. But when it comes down to where the rubber hits the road it is about what everything we do is about: the allocation of scarce resources according to cost-benefit analysis. I have no confidence that that will be done in a way that makes sense to the people of Australia.

I turn to my own electorate of Farrer and the circumstances we face. I do represent one of the forgotten flood regions of Australia—we are not Queensland and we are not Victoria. But for us in the electorate of Farrer, through the south-west and far west of New South Wales, these weather events have provided an enormous challenge for hundreds of local farmers and property owners.

Between Broken Hill and Wilcannia local stations had walls of water sweeping through homes, outbuildings, sheds and paddocks. There were reports of decaying wildlife stuck in tree branches metres off the ground. Some of these properties are still cut off by road more than a month later. In the Riverina, record rainfall since the latter part of last year has made it near impossible to complete or even contemplate a harvest. Home owners flooded out in October last year are still waiting to get back into their houses four months on. Along the Murray Valley many vignerons and fruit growers have had their entire season decimated by continued and unrelenting water coming from both the sky and swollen rivers.

Just last week on a visit to the northern end of my electorate in and around the Broken Hill area, drought- and now flood-weary constituents came up to me on the street asking about a continuation of exceptional circumstances funding to help them get through this period. What can I tell them? I can tell them the truth: I am sorry, but the government has run out of money. They might ask where it has all gone, and I can tell them: the Building the Education Revolution, the pink batts fiasco, the cash for clunkers exercise that never actually eventuated and fancy new websites—the list goes on and on. But my people in New South Wales are being further disadvantaged by this deficient Labor Party.

New South Wales Labor is not even prepared to pay its fair share of the fifty-fifty natural disaster relief arrangements. In Queensland and Victoria, eligible recipients can be given up to $25,000 in order to rebuild—and, gosh, $25,000 does not go very far, but it is something when your livelihood is destroyed or on the line. But the limit in New South Wales is only $15,000. There is actually no reason for the $10,000 discrepancy; there is no reason why it should not also be $25,000 in New South Wales other than New South Wales does not have the money, which is a bit of a familiar refrain. But in upping the amount that New South Wales says that it could pay, they only actually have to pay half that amount; the other half is matched by the federal government. It is pretty stingy of them, and I have been calling on them for a while now to increase their cash payments to flood affected small businesses and farmers from $15,000 to $25,000.

It demonstrates again a basic incapacity of government to effectively manage the needs of the people that they claim to represent. That has a knock-on effect on many other hard-working people and taxpayers from my region: retailers, manufacturers and service industries who derive an income from a flood affected area. Their own home may not have been directly flooded and their property may not have lost stock and fences, but they are affected and will continue to be affected by a downturn in rural customers and income. And what does the government do in acknowledging their circumstances? It tosses on a brand new tax. These same agricultural communities, so recently afflicted by drought and now devastated by floods, will again be forced to dig into overdrafts and debt to restore and recover. After factoring in their flatlining budget, rising costs of living, rising prices for basic commodities and rising interest rates, now there is a flood tax—yet another impact onto their quality of life because the Rudd and Gillard administrations continue to fail the most basic of tests for credible financial management.

John Murphy (Reid, Australian Labor Party) Share this | Link to this | Hansard source

I join with my colleagues on this side of the House this evening to speak in support of the Tax Laws Amendment (Temporary Flood Reconstruction Levy) Bill 2011.

I begin by commenting on the contribution made earlier today in this debate by my colleague the member for Dobell. He made a very good point: while those opposite like to point the finger and argue that it is an unfair levy, he reminded them that the Howard government was the highest-taxing government for five consecutive years. While those opposite make claims that our government has mismanaged the Australian economy, again the truth is that our economy is one of the most advanced economies not to have suffered a recession during the worst global financial crisis since the Great Depression, and we still enjoy one of the lowest unemployment levels of all advanced economies.

That is the truth. And just as the Labor government acted decisively in the face of the worst global recession since the Great Depression and delivered one of the strongest economies in the developed world, again we are acting decisively in the face of what is likely to be the most costly natural disaster we have endured in Australia’s history. While the immediate beneficiaries of the recovery efforts will be the communities directly affected, including the 75 per cent of Queensland declared a disaster zone, the scale of the disaster is far reaching and has adverse impacts for all Australians—but I will come back to that point later.

Only in our last sitting week we remembered the victims of Queensland and Victorian floods, Cyclone Yasi and the more recent bushfires in Western Australia. There were sincere condolences from both the sides of the House, with some very personal stories and heartfelt reactions. There was, however, a very clear message from all our contributions that Australians all pull together in times of need. There can be no doubt that we all witnessed the full force of nature when nearly every state experienced flooding. After so many years of drought, it was a cruel blow for farmers who have already struggled with extreme climatic conditions. The footage we all witnessed on our televisions gave an extraordinary picture of havoc wreaked by the torrent of water flooding homes, farms and businesses. Initial estimates place the Commonwealth expenses of the damage at around $5.6 billion. That is a cost that we must all share.

As the bridges collapsed, the ports and rail lines closed, the markets flooded and the livestock drowned, many businesses were brought to an alarming halt. This of course has flow-on effects for the people unable to work and pay their mortgage and pay for food, with an incredible loss to small business and larger industries alike. The flow-on effect to our Australian economy will be significant, but it is the intention of the government to mitigate the effects through decisive action, which we are taking tonight. It is vital that we address this problem as soon as possible.

Today we are looking at the government’s plan for the recovery effort. Broken down, the government is tackling the issue with three main measures: (1) spending cuts to government initiatives, saving $2.8 billion; (2) delaying certain infrastructure projects, to a total of $1 billion; and (3) introducing a one-off progressive levy with contributions from taxpayers with taxable incomes over $50,000. In light of the immediate demands on the government to assist the recovery effort, these measures are very important to keep our excellent economy in good shape. While we acknowledge that our $2.8 billion worth of cuts to certain programs will disappoint some, these are the difficult decisions we face in the wake of possibly the worst natural disaster in economic terms that our country has ever experienced.

The second measure, to delay infrastructure projects, is made with the intention of freeing-up funds as well as skilled workers. The Prime Minister has expressed the difficulties Australia is already experiencing with skills shortages. With the additional capacity requirement we will see with the rebuilding effort in Queensland, the shortages may worsen. To alleviate the pressures on skilled labour, it is a sensible and economically responsible approach to reduce demand on both labour and materials by delaying a billion dollars worth of government infrastructure projects. The government does not wish to compete with or delay the recovery effort so urgently needed in Queensland. The Queensland government has already outlined its $325 million worth of infrastructure project delays, and other states and territories will outline their respective project delays. This is not to say, however, that the projects are shelved forever. On the contrary, it is important to stress that these projects have only been deferred, not abolished, and they will commence as soon as practicable.

It is the federal Labor government which understands the importance of infrastructure, more than doubling the Commonwealth investment in transport infrastructure compared with under the Howard government. Yet again, the opposition ignores these figures. However, in light of the changing circumstances we are very sensitive to the changing needs and priorities. In recognition of the additional pressures arising from skills shortages, the government is also proposing to establish a special team within the department of immigration to help deliver employer sponsored temporary visas, 457 visas. Mr Speaker, as you know, applications that are considered decision ready will be processed within five days for employers who are genuinely involved in the rebuilding effort. Due to the demand of the rebuilding effort, remembering the area affected is larger than the state of New South Wales, the government will double the number of places in the job seeker relocation pilot program to help job seekers fill the job opportunities.

It is important to note that the 457 visa program is demand driven. These measures simply make it faster for employers to get the workers they need to rebuild. All workers seeking a 457 will still be subject to strict skills tests. I note the Minister for Tertiary Education, Skills, Jobs and Workplace Relations, Senator the Hon. Chris Evans, made a statement last week concerning Australian jobs and foreign workers. He reiterated that the government will not tolerate Australians being forced out of work as a result of illegal and exploitative practices. Further, the minister noted that overseas workers play a critical role in meeting skills shortages but they cannot be used as a source of cheap labour and must not be paid less than an equivalent Australian worker. The minister also made it very clear that reports of exploitative practices will be properly investigated and we will not tolerate companies attempting to exploit foreign workers and undermine the conditions and wages of Australian workers. This, I feel, is important to clarify. The 457 visas are specifically to assist critical skills shortages where suitably skilled Australian workers are not available to fill those jobs. I know many people in the building and construction industry will understand the sense in these measures and I trust they will benefit value for money and timely rebuilding efforts.

Turning to the financial costs as the government seeks to raise two-thirds of the funds needed to rebuild flood affected Queensland, the other third will come from the proposed levy. Treasury estimates that $1.8 billion will be collected from taxpayers earning more than $50,000. It is a progressive levy based, as I said, on taxable incomes above $50,000. Firstly, it is important to stress that the levy will not affect low-income earners on $50,000 or less, pensioners, DSP recipients or carers. People who have claimed the flood recovery assistance payment will also not pay the levy. Those earning between $50,000 and $100,000 will pay 0.5 per cent. To give some idea of what that will mean in the hip pocket, a person earning $60,000 will pay 96c a week while a person earning $80,000 will pay $2.88 a week under the levy. The levy will increase to one per cent of taxable income over $100,000.

What is noteworthy about the proposed flood levy is the limited impact it will have on taxpayers. If you look at the raw figures, about 50 per cent of taxpayers will not pay anything, about 60 per cent of taxpayers will pay less than $1 a week and around 70 per cent of taxpayers will pay less than $2 a week under the levy. These figures are not as alarming as the opposition would have us believe. And if we take into consideration the three consecutive tax cuts that Australian taxpayers have received under our government, as other members have already pointed out, the figures clearly indicate that most taxpayers are still way ahead even after the levy. For example, people with taxable incomes of $60,000 will pay 96c a week for the levy for one financial year; however, after three consecutive tax cuts, delivered in 2008, 2009 and 2010, the same person has received a total of $25.96 per week in cumulative tax cuts. This means that they are $25 better off than before 2008 even after paying flood levy. The savings made by the three consecutive tax cuts far outweigh the cost of a one-off flood levy and I think we should bear this in mind.

Our challenge as a government is to provide further opportunities to help industry meet its needs and boost living standards for Australians. Queensland produces about one-third of all our fruit and vegetables and is also an important tourism hub as well as a major mining state. Due to the recent floods, the damage and restrictions across those sectors will indeed have a negative economic impact. That is why it is so important that such an important trading state is fully functional again as soon as possible.

One senior in my electorate told me that he could not understand why some people were opposed to the levy. He openly declared that the levy would not affect him, because he was a pensioner, but he would be willing to give up a cup of coffee a week for the victims and businesses in Queensland. Other constituents have even raised their concern that we do not have a natural disaster relief fund sufficient to deal with these extraordinary events. I note that, while these funds are set aside for emergencies, they do not have the capacity to cover events on the scale that we have just experienced.

After such events as the Queensland floods, we have to think about these measures as we look forward to an uncertain climatic future. Australians affected by the floods need to rebuild and move on from the floods, and the sooner the better. It is in times of disaster that a government must make the tough decisions in the best interest of the people, and that is exactly what we are doing. Not surprisingly, there are strong indicators that, despite the fear mongering of those opposite, most Australians support the flood levy.

In conclusion, we know that the Australian taxpayers expect value for money. We know that the taxpayers expect the job to be done properly and we are ensuring that we fulfil those expectations and take responsibility for appropriating taxpayers’ hard earned dollars very seriously. Right now, flood affected communities need our immediate assistance. Their homes, schools and businesses and lives will not rebuild themselves. It will be a group effort with individuals, businesses and each level of government providing the necessary assistance.

I believe the bills meet the needs of the recovery effort and the needs of the communities affected. I commend the bills to the House.

Michael McCormack (Riverina, National Party) Share this | Link to this | Hansard source

I rise to speak on the Tax Laws Amendment (Temporary Flood Reconstruction Levy) Bill 2011 and the Income Tax Rates Amendment (Temporary Flood Reconstruction Levy) Bill 2011. The best levy for any disaster relief is to have a surplus. The Rudd-Gillard Labor government had a $20 billion surplus when it came into government in 2007; it also had two infrastructure funds. One was the Education Investment Fund and the other the Building Australia Fund. These totalled $50 billion between them and Labor, in typical Labor fashion, has squandered the money—the money set aside for the nation’s future.

The Prime Minister and her Labor colleagues can stand in this place and harp all they like about the global financial crisis and use any other excuse for their own woeful mismanagement. The fact of the matter is this government is not good at handling money. Unfortunately in this case, it is the Australian people’s money, and Labor has frittered it away. This government’s fiscal record is abysmal. You only have to look at the Building the Education Revolution blow-outs, Home Insulation Program, Green Loans Program, GroceryWatch and Fuelwatch. The list of wanton, wilful waste just goes on and on.

In principle, these ideas had some merit, some substance and some initiative. But this government cannot and will not carry anything through properly. It cannot and will not deliver. With government, everything is a blow-out—not just a blow-out but invariably one of massive proportions. If members of this Labor government were running their own business—which not many of them have—they would know that you cannot spend more money than you bring in. If you do or if you want to, you have to take money from elsewhere in your budget.

The greatest worry is that, if and when this temporary flood reconstruction levy is introduced, it will be just another Labor blow-out. Of course, Labor has perhaps avoided a repeat of its recent litany of disasters by appointing former coalition premier of New South Wales, ex-federal finance minister John Fahey, to head up the new reconstruction inspectorate. Question: how does Labor avoid waste and overruns? Answer: get someone from this side to run the show.

Of course, a levy—another tax on Australian families—should not have been needed had the government not been asleep at the wheel. Given that the government has little or no concept of economic delivery, the concern is that the money accrued from this tax needs to be spent where it is most needed. Mr Fahey, I am sure, will do his best, but this is a big task and one the government will need to exercise more care in delivering than it has in all of its other failed schemes since 2007.

The opposition is not against supporting Queensland and Victoria in their time of need. Our members have, as many have on the government benches also, been out helping in the crises and supporting their own flood stricken electorates. We realise roads, bridges and other infrastructure have to be rebuilt, hope restored. We are also aware that there was no levy—no tax on Australian families—for Cyclone Tracey, which devastated Darwin at Christmas in 1974; Cyclone Larry which, caused $1.1 billion worth of damage to Northern Queensland in March 2006; or for the 10-year drought—the worst on record—which caused such widespread heartache and economic loss to rural and regional Australia.

The Commonwealth government has charge of a $350 billion budget. How the government cannot find $1.8 billion to shave from programs which many Mr and Mrs Average Australian would easily deem unnecessary is breathtaking. We are not talking forever—just 12 months. Scrap some of the waste, trim some of the fat and find $1.8 billion to help pay for the Queensland and Victorian recovery. But, no, the government will instead make yet another imposition on hard-working Australian taxpayers. The government is not even quite sure how many people will be taxed because the Treasurer was unable to come up with the number of people who will be taxed when asked during question time.

The tax will force many people in other states who were also flood victims to foot the bill. This will force many Australians who already dug deep to voluntarily and generously offer their charity and time to help in the relief efforts to again carry the can. This burden should have been borne by government. It should have been ready and available in a heartbeat once the torrential rain, the floods and the effects of Cyclone Yasi disappeared from the radar, leaving a huge clean-up operation and states which were definitely down but definitely not out.

Parts of the Riverina have also been sent reeling from flooding of the Murrumbidgee River and local creeks. Farmers hopeful of bumper crop yields after enduring a decade of devastating drought had their hopes dashed by torrential rain. Communities at Adelong, Uranquinty and Tooma in my electorate of Riverina had walls of water rushing through their homes. At Tooma, the bridges were absolutely washed away by the rain and the flooding of Mannus Creek dam. But there has been little or no offer of special assistance made available to them. The opposition, as I say, is not against supporting the flood victims.

At times such as these, the government should be reprioritising its spending. This is a time when Australians certainly need to pull together. Maybe this is a time when, as some have argued, we need to look at our level of foreign aid and really start to take a close examination of where and why we give money out. Certainly Australia needs to provide foreign aid—no-one is or should be disputing that—but sometimes charity should begin at home. New Zealand, tragically hit by an earthquake today, has a disaster fund, which it has had for more than 65 years. The initial onus is on the average New Zealander to take out adequate insurance.

There are valuable lessons to be learned from all of this. We need plain-speaking terms in insurance contracts so Australians know precisely what they are covered for and what they are not. Thankfully, that process appears to be happening. We also need a government to be there to shoulder its share of responsibility when the demand arises, not to heavy-handedly hit ordinary, everyday Australians with another tax to make up for its own shortfalls.

Debate interrupted.