Tony Abbott (Warringah, Liberal Party, Leader of the Opposition) Share this | Link to this | Hansard source

It is good to have the chance to discuss this important piece of legislation and also to place this legislation in the context of the terrible disaster which has befallen so many areas of our country. Over this summer of disasters we have seen appalling damage first to the crops and settlements of the Riverina before Christmas, then in Central Queensland in the early part of the new year we saw the explosive floods in Toowoomba and the Lockyer Valley behind Brisbane. Brisbane itself along with Ipswich suffered major inundation and much of northern Victoria was an inland sea in the middle of January. Finally, we had the devastation of Cyclone Yasi, which almost blew to bits the town of Tully and other settlements in Far North Queensland.

It has been a shocking summer. In addition to the disasters that I have mentioned there has been serious flooding in Western Australia and significant flooding in northern New South Wales and in other parts of the Murray-Darling Basin as the floodwaters pass from Queensland over the border. But, while we saw terrible damage from nature, as always we saw the grit and the stoicism of the Australian people and we saw the professionalism of the emergency services aided and assisted by various municipal offices and the city and local councils of the affected areas. It has well been said that, over this summer of disasters, we saw the worst from Mother Nature but we saw the best from human nature.

Unfortunately, in the aftermath of the disaster we have also seen a federal government acting in character. The character of this government is when it sees a problem to reach for a tax. Plainly, the Commonwealth government must spend what is reasonably necessary to assist flood reconstruction and to assist the victims of these terrible floods and storms. On that point this House is entirely united. We must spend the money. The only difference between the government and the opposition is over how that money is raised. The government believes that the money should be raised through a tax—a new levy to raise $1.8 billion. The opposition believes that the money should be raised through additional savings. Plainly, savings are available. When the Prime Minister went to the National Press Club to first announce this measure she conceded when asked a question by a journalist that, if the costs ultimately were more than $5.6 billion, further savings would be found. So there is a clear admission by the Prime Minister and other senior members of the government that there is scope for further savings.

The coalition did not shrink from the task of identifying savings that would have saved Australians from this additional tax. We were criticised for it but still we held firm in our resolve to find the appropriate savings. The government was not so resolved. As soon as people started to criticise the savings measures that the government had announced, they were dumped. On the one hand, you have an opposition which does not shirk the task of finding savings and having found savings sticks with them; on the other hand, you have a government which will not find the full quantum of savings and the instant it is subjected to pressure goes to water and dumps the relevant savings.

One of the worst aspects of this tax is that it came in the wake of the most impassioned pleas by the Prime Minister to millions of Australians to give generously. She asked the Australian people to give of their hearts to the suffering people of Queensland. Having told them that they should give generously, she then proposes to coerce them with a new tax. That is so contrary to the normal Australian spirit. The concept of mateship that the Prime Minister evoked was simply out of place in the consideration of a new tax. Mates help each other; they do not tax each other. Mateship comes from people; it does not come from governments. Mateship is what people choose to do; it is not what they are forced to do.

I would be the last person to attribute bad faith to any member of this parliament. I would be the last person to bandy accusations of bad faith against the government. But it is hard to avoid, in this case, the suspicion that what the government has tried to do is exploit people’s goodwill towards flood victims to help it out of a fiscal hole. If there is any grounds to that suspicion, it demonstrates that this is a government that is not worthy of the trust and confidence of the Australian people.

The Prime Minister’s speech introducing this new tax was really quite remarkable. She claimed that in some way this new tax was honouring the victims of the floods. Really and truly, we honour the victims of the floods by rebuilding Queensland and the other states and the other communities that have been impacted. We honour the victims of the floods by being a competent parliament and a competent government. We do not honour them by imposing an unnecessary new tax. The Prime Minister in her speech spoke of the levies that had been introduced by a former government. Let me say this: there is a world of difference between a levy imposed by a government striving to achieve and maintain a budget surplus and a levy imposed by a government which has been recklessly spending taxpayers’ money and has given Australians the biggest deficits on record. There is a world of difference between a levy imposed by a government that could be trusted with the taxpayers’ money and a government that cannot.

This is a government which is already notorious for its waste of public money. The blow-out in the school halls program exceeds the total quantum to be raised by this new tax. This government has become an absolute byword for waste and mismanagement, and it knows it. That is why, along with announcing this new levy, the government announced the appointment of former finance minister in the Howard government Mr Fahey to oversee the spending of this money. They knew that the Australian public would not trust them to handle money, so what did they do? They resorted to appointing a Howard government minister to lend some respectability to their spending program. What is wrong with Lindsay Tanner? What is wrong with another former Labor finance minister to help—

Joe Hockey (North Sydney, Liberal Party, Shadow Treasurer) Share this | Link to this | Hansard source

Ralph Willis!

Tony Abbott (Warringah, Liberal Party, Leader of the Opposition) Share this | Link to this | Hansard source

Ralph Willis: he must be one of the most humiliated men in the country, passed over—Peter Walsh; all of them—by his current parliamentary colleagues because the gold standard for fiscal responsibility was the Howard government. The gold standard for fiscal responsibility is provided by this coalition.

Obviously in most parts of Australia the floodwaters have receded, the clean-up has been largely completed, the reconstruction is underway. But the emotional scars will remain with the people who have been through this experience for many a long time. The physical scars on the land may be healing, but the emotional scars remain. It is important that members of this parliament do not forget the people who have suffered just because the cameras have moved on. And we will not forget them. We on this side of the parliament will not forget them. If there is any difficulty that people are having accessing reconstruction grants, we want to know about it. If there is any difficulty that they are having accessing the reconstruction loans, we are with them in pleading for justice. If they are having trouble with their insurers, we are on their side because it is very important that all institutions work with people rather than against them at a time like this. People are understandably conscious at a time like this of just how unfair life can be, and we do not want any sense of unfairness made worse by an unfeeling or an uncaring government, unfeeling or uncaring financial institutions.

While the opposition have naturally supported relief measures by all levels of government, we think this government could have gone further to assist people. We particularly think that this government could have gone further to assist the small businesses which are the lifeblood of our economy. You cannot have a community without a strong economy to sustain it, and when communities are suffering then it is urgent and important that the small businesses that are the lifeblood of their economies are succoured and sustained.

In order to help the small businesses of flood ravaged areas we have proposed a three-month tax holiday. I call on the government, even at this late stage, to adopt that idea of the coalition. We have also called for the extension of concessional loans to businesses that have been flood impacted but not actually physically damaged. We all know that there are many, many businesses in flood impacted areas that have not been physically damaged. Their premises were not inundated. They did not lose their roofs. Still they have lost business. There is no produce for them to carry. There are no customers for them to serve. Those businesses should also be assisted and that is why it is very important that those concessional loans be made available to them.

The problem with this tax is that it hurts people who have already suffered enough. The tax will fall on the shoulders of donors; the tax will fall on the shoulders of the volunteers who flocked to help their friends, their neighbours, their fellow Queenslanders and Victorians in trouble. And, despite the denials of the Prime Minister, this tax will also fall on victims. There are many people who have lost property, who have had loved ones placed into all sorts of difficult circumstances who are still paying this tax. The only people who will not pay this tax are people whose homes have been impacted and therefore are getting the Centrelink payment. So this is a fundamentally unfair tax as well as being wrong in principle, as well as being bad public policy.

This legislation and the respective attitudes of government and opposition to Queensland flood reconstruction has yet again highlighted a fundamental difference between the two sides of this parliament. We think that government should live within its means; members opposite think that government should put its hand deeper and deeper into the people’s pockets. This is not the way to go. On this bill, as so often will happen in the course of the coming year as the government bids in this parliament to impose tax after tax, the battle lines will be drawn between a government which is addicted to tax and a coalition which is always searching to ensure that government lives within its means. As each day passes, it is clearer and clearer that we have a Prime Minister who has never seen a tax she did not like and never had a tax she would not hike. That is the truth and that is why we should oppose this bill.

Yvette D'Ath (Petrie, 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, which seek to amend the Income Tax Assessment Act 1997, the Income Tax Rates Act 1986 and the Income Tax (Transitional Provisions) Act 1997 to introduce a one-year progressive flood reconstruction levy in the form of an additional income tax on Australian residents and foreign resident individuals in the 2011-12 financial year. These changes will ensure that those with a greater capacity to pay make a larger contribution to the rebuilding of disaster affected regions of Australia through revenue raised by the levy.

It was only in the last sitting week of this parliament that many people in this chamber from both sides stood up and gave their condolences to families and friends of the victims of the Queensland floods. Those left behind have started to rebuild their lives; they still have a long way to go in those rebuilding efforts, but it is time to start rebuilding Queensland and its economy. To do that we need to rebuild our major infrastructure that has been devastated by these floods.

We have heard many arguments from those on the other side in relation to why this flood levy should be opposed. We just heard the Leader of the Opposition talking about the history of this Labor government and taxes. Let us put some facts around these debates on taxes. The fact is that this federal Labor government since coming into office in 2007 has provided three rounds of tax cuts for individuals. It is this Labor government since 2007 that has adjusted the tax scales to provide a lower income tax offset and thresholds. For those who will be paying this levy who are earning above $50,000, this is what they have achieved under a Labor government: a tax deduction of $29.81 per week over the tax cuts—a cumulative tax cut of $29.81 per week since Labor came into government. Per annum, these people are now paying $1,550 less per year than they did under the Howard government. In return, what is being asked of these people who earn $80,000 a year is that they pay $2.88 per week to help rebuild Queensland and to help strengthen our economy.

We have just heard from the Leader of the Opposition that to strengthen an economy you need to support business. That is absolutely true. But you support business by ensuring that the infrastructure is adequate, that the roads, rail and ports are operating to their maximum capacity. You do not do it by making cuts or taking away important infrastructure or stopping major infrastructure development.

We heard from a number of members that one of the proposed cuts should be the National Broadband Network. We heard previously from the Leader of the Opposition that, as far as he is concerned, the National Broadband Network is just about getting your emails downloaded faster. We heard from the member for Cowper yesterday that it is just about being able to download your videos faster. This once again shows how much the Leader of the Opposition and the opposition as a whole underestimate the importance of the National Broadband Network and the impact it will have across this country not just for businesses but especially in areas of education and health. That is why important infrastructure such as the National Broadband Network must continue to be rolled out across this country. You cannot just take it away and expect to see the economy continue to grow.

We heard the claim that we should scrap superclinics. The cuts that have been announced by the opposition to pay for the reconstruction are, not surprisingly, not new ideas. This has not come about because the opposition sat down and gave serious thought to where there could be cuts so that the funds could be found to reconstruct Queensland. All of the announcements they have made are announcements they made in 2010 as part of their election commitments: they would scrap the National Broadband Network, they would scrap future superclinics, they would scrap important school infrastructure. These are exactly the same announcements they made in 2010 during the election period and they have rolled them out again and said they should be scrapped to pay for the rebuilding of the Queensland economy.

I will not be surprised to be in this chamber sometime over the next 12 months or the next couple of years and hear once again that these things should be cut to pay for something else, because this is what the opposition’s real objective is all about. We have heard about the tax cuts. We know it is a complete furphy and that in fact it is the Labor government that has provided three lots of tax cuts and changes to the thresholds that have delivered real benefits to households across this country.

We have heard the baseless scare campaign that, because of this levy, people across Australia are going to stop making donations when there are natural disasters. We have heard a number of members on the other side run this scare campaign. This truly underestimates the Australian people. We know that the Australian people come out at times of need and they help. Whether it is financially or physical help, as we saw with the Queensland floods, or donating goods, they are out there helping. I expect we will see that same compassion in relation to what we have witnessed in the last 24 hours in New Zealand.

We do not just need to stand here and say, ‘We think the Australian people will keep donating and keep helping even if there is a levy implemented.’ This is not hypothetical. It is fact. It is happening in our communities right now. I can inform this chamber that since the Gillard Labor government announced that we would consider introducing a bill to introduce this flood levy to apply for the 2011-12 financial period, my electorate has not stopped fundraising. My electorate has not stopped collecting goods. They have not slowed down. In fact, they have increased. There are functions happening all over the electorate of Petrie to raise funds. We had seen the Kippa-Ring Lions Club and their jumble sale, the CIRP and the Golden Ox helping those most in need, and the Redcliffe Community Association Support Crew have held functions. Last Friday I had the great pleasure of going to pick up a donated electric piano to the value of about $3,500 to $4,000. It is in beautiful condition. A couple who heard me speak at a function about the schools affected by the Queensland floods wanted to donate this electric piano. We picked it up, with the help of the Redcliffe Leagues Club. They donated their trailer for us to use and we drove it down to Ipswich East State School, who had lost all of their music equipment, and we donated the piano to them. People are still donating. People want to help. That is the Australian spirit, and people will continue to provide this help.

After the government announced that it would be introducing a flood levy, I received a phone call from a lovely lady in my electorate who is a pensioner living in one of our retirement villages. She wanted to know how long the Premier’s flood relief fund was going to go on for and how long people would be able to donate. She wanted to know this because she was not going to be liable to pay the levy, and she wanted to do her fair share. She was asking how she could donate $20 a month for the next 12 months so that she could contribute like all of those in the workforce will contribute through the levy. To stand in this chamber and to argue that this levy will stop Australian people wanting to donate and to offer support in times of need is, to be honest, utter rubbish. Those on the other side should go out and talk to their communities; because clearly, if they are running this argument, they have not.

We have heard from the member for Cook and we have heard a bit from the Leader of the Opposition that under the Howard government they believe they earned the right to impose levies, because they created a surplus and so this somehow gives them the right to impose a levy. So what we say to the Australian people is that by being a government that has a surplus that could potentially absorb the cost of an initiative like this, ‘We are not going to touch the money in the bank. We are going to go and put our hand in your pocket.’ That is okay in those circumstances. As a government that spent 11 years getting a surplus because they squandered the boom and they chose not to invest in infrastructure, that is why they had a surplus. The Australian people are meant to believe that in fact they earned the right to impose a levy on people.

Let us compare that with the actions of the Labor government since coming to office in 2007. It is this government that dealt with the global financial crisis, that acted quickly and decisively to support jobs across this country. It is the Labor government that is now the envy of the developed world in relation to managing the economy through the global financial crisis. If you want to talk about the right to go to the Australian people and say, ‘We need your help. We need to rebuild Queensland, we need to do it quickly, we need this major infrastructure rebuilt’—

Andrew Laming (Bowman, Liberal Party, Shadow Parliamentary Secretary for Regional Health Services and Indigenous Health) Share this | Link to this | Hansard source

Mr Laming interjecting

Yvette D'Ath (Petrie, Australian Labor Party) Share this | Link to this | Hansard source

I certainly would challenge the views of those on the opposite side and their recollections of the Howard government and their right to impose levies on people.

We also need to deal with this issue of who is actually going to be paying the levy. We heard from the member for Forde yesterday. He gave a couple of examples of who is going to be impacted by this levy. The example he gave was of a pensioner whose home was flooded. Once again, those on the opposite side of this chamber do not understand this levy. They have not bothered to read any of the detail of who actually pays. To stand here and say that a pensioner is going to be liable: is that pensioner getting an income of more than $50,000? I doubt it. The reality is that the examples that the other side are throwing up are ridiculous examples with no basis to them.

We have just heard from the Leader of the Opposition, who actually said that the only people who will not pay this levy are the people who had their homes inundated and claimed relief. Once again: have they read the bills? In fact, those earning $50,000 or less will not be paying this flood levy. I ask those who are to speak after me on this flood levy to please read the bills. If you listened to the statements of those who have spoken before me you would think that they do not know who this levy applies to.

The fact is that this levy is modest, temporary, sensible and responsible. It is important that we rebuild the major infrastructure in Queensland. The Premier’s relief fund will assist those individuals to rebuild their homes, but we need to get the major infrastructure in Queensland repaired as quickly as possible to help the local economies, the state economy and the national economy. That is what this levy will do.

I am very proud to be standing here as part of a Labor government that saw this country through the worst financial crisis that this country has ever seen and now is willing to make the tough decisions to rebuild Queensland after the most devastating floods that our state of Queensland has ever seen. I support these bills before the House.

Alex Hawke (Mitchell, Liberal Party) Share this | Link to this | Hansard source

I rise to express my concern about the government’s proposal to tax and impose a levy on all those Australians who have already given generously to the flood relief. I would like to start 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 by rejecting the viewpoint of the member for Petrie—in her rose-coloured glasses view of the world—that all you have to do to manage a national economy is accumulate surplus from a boom and it all just automatically happens and it is a wonderful world that we live in. The reality of being good economic managers is that you have to take tough decisions and you have to work at ensuring that you are taking responsible decisions that do not damage our economy and our capacity to function as a society.

What we are talking about here in these flood reconstruction levy bills is a fundamentally different viewpoint of how government operates and how government is supposed to function. We have no difference between us about the fact that government has a role to play here in reconstructing Queensland and assisting those Australians who have been hit by a natural disaster. There is no difference in this chamber in that. Government has a vital role to play in rebuilding critical pieces of infrastructure and in ensuring communities can rebuild in a way that is sustainable for their futures.

What we do have a difference in—and this becomes clear when you listen to the remarks of the member for Petrie—is that the Labor Party seems to have a view that imposing a tax and telling people what to do from a government level is better than the voluntary and natural instincts of Australians to help each other out. Government has a vital decision here. Do we want to encourage our society to be a voluntary society where we care for each other, where we voluntarily come forward and donate our time, money, effort and energy to help each other, because we want to and because it is the right thing to do? Or do we want the government, from its autocratic mechanisms, to tell people what they should do to help others—tell them how much they should help others, tell them that they must help others—because the government has decided it is the best way to proceed? It is not an approach to government that I accept from the Labor Party. When you look at the great stories and examples across this country that members of this place have spoken about, you will see why.

I was in Cowra the other week and I met a 21-year-old girl from the northern suburbs of Sydney. When news of the flood crisis broke, she jumped in her car—her own beaten-up car—and drove to Queensland. She had no plan except to go there to volunteer and help. She got out of her car in Queensland and started helping people. At the time I spoke to her, she had been there for six weeks. She had been taken in by an elderly couple in the Lockyer Valley. Her whole life plan had been interrupted by this one decision to go and help. She has now been offered a paid position in the council up there because she is so effective at what she does. But she had no plan to do that.

In talking to that girl it revealed to me more of why this government’s plan to force taxes and levies upon people is not going to work. She told me stories of individual businesses, contractors and people who owned trucks and heavy-moving equipment donating trucks and labour to man the trucks and to help move all of the damage and debris free of charge to the local council and the government. That has also been going on for six weeks. What we have there is a cost to government that government cannot afford. People have been stepping forward voluntarily. People have been giving their time, their labour, their capital and their vehicles in a way that government could not replicate or reproduce. They have done so without any prospect of reward or thanks—just because it is the right thing to do by their fellow Australians. It is that instinct which I think is under threat from the government’s proposal with this levy. That is why I have such a great concern.

When you look at how much this government wastes—and we have been over all of the arguments over a number of years in this place—you see that ‘billion’ has become the new ‘million’. ‘Billion’ is used like it is going out of fashion—a billion here, a billion there, a billion everywhere. The total amount of money raised by this levy is just $1.75 billion. The member for Petrie is exactly right: it is extremely modest. It is almost like: ‘Why are we doing this?’ We wasted so much money in so many government programs in the last term of government. More money has been wasted on the Building the Education Revolution than is being raised by this levy.

Many great Australians have been prepared to put themselves forward, their money forward and their time forward. The government said, ‘The government needs you to help.’ And we did need them to help. The reality is that so much has been done by ordinary Australians that could never have been done by government. But what I really object to is when government says to these Australians, ‘Help us. Please donate. Please give,’ and then, after they have done all that, it says, ‘Thank you for that. You have been wonderful, but now we’re going to have to tax you. We are going to have to force you to hand over more of your money regardless of what you have given or what you have done’—without any regard. That is another objection I have to this levy. It is a completely blunt instrument. It does not take into regard those who have given more than they could afford to give, those who have given a lot, and those who have suffered or have sacrificed their life plan to do what they could for others. It does not discriminate. It is a very blunt instrument.

Much of the justification, and it is a typical Labor justification for anything, is that this is means tested—that somehow that makes it better; that somehow those who are perceived as being able to afford to pay should pay more. It all sounds lovely in theory, except that the average wage in this country is $65,000. I want to explain to this government a couple of simple things about life in Sydney today because it is clear they have no idea about the reality of an ordinary Australian living in Western Sydney or in most of our major cities today. If you earn $50,000, you are not rich. You are not tapping into some land of milk and honey. If you earn $60,000 and you have a mortgage in Sydney, let me tell you, you are not earning a lot of money. If you earn $70,000, there is the contention from the Labor government that you have somehow struck King Solomon’s mines—you are mining the gold out of the earth and living on a fantastic wage. I want to reject that as completely and utterly false. Families in my electorate earn $80,000, $90,000 or $100,000 and have two, three or four children and a mortgage upwards of $750,000, $500,000 and $1 million.

People are already suffering under a burden of government charges and taxes. It is very severe in New South Wales. I take one example: electricity prices across Sydney. If you are in a Western Sydney household with two kids and you earn $85,000, or a combined income of $100,000, you are not well off. For this government to say you are well off and that you ought to be able to pay is, I think, blind and ignorant of the circumstances of so many in our metropolitan areas. I really want to reject the idea that people are wealthy. They live on incomes they work very hard to get and, at the end of the day, the government takes a lot of that money off them for the privilege of working so hard.

I think this policy of the Labor Party makes a great mockery of the last term of government. They handed out $900 to so many people. Once again, the rich people—the people earning so much money, like $75,000 or over, with a $750,000 mortgage and four kids in Western Sydney—did not receive that $900 payment. They splashed money around like there was no tomorrow. A billion dollars was the new million dollars. All this raises is $1.75 billion. It is a pathetic excuse.

I also want to address the arguments of the Labor Party in relation to levies. I was not a member of the Howard government, and my instinct is not to levy Australians when savings and government policy can be found. I am an advocate for the reduction of the size of government. It is very cute of the Labor Party to say in this place that the Howard government levied different sorts of levies on different occasions during its term, and that is why the opposition should be supporting a levy for the flood reconstruction.

The difference—and I think it is an important distinction—is that the Howard government, when there was a need for a levy, did not go to Australians and say, ‘Would you please give us money and donate for Ansett workers? Would you please give us money for the dairy regulation?’ There was no purported effort from government to raise money on behalf of needy people or a needy industry at that time. The government’s plans were clear. It was articulated. There was not this false dichotomy, where the government says, ‘Give us all your money. Do what you can to help. Donate, donate, donate.’ Then the government turns around and says, ‘We are now going to tax you after all that wonderful effort you put in.’ That is a very big difference.

The Prime Minister has failed in her duty in this place to understand the challenges of this issue. She says we are asking Australians to put in a cup of coffee a week. The first point that I would clarify with her is that, by legislating for a flood levy, they are not asking; they are telling Australians that they have to provide this money, regardless. As I said before, it does not discriminate; it does not recognise the contributions of so many.

The member for Petrie said that people in her electorate are continuing to fundraise. I want to thank every constituent in my electorate who fundraises for this flood. I was at a flood benefit the other night. I took a table of key volunteers who had been at the flood and made my contribution by thanking them. We raised $40,000 that night. I want to say to the member for Petrie and those opposite: I have no doubt that more people in my community would give more if a levy was not being proposed by this government. It is certainly the case.

I also want to record that my local council estimated that $10 million would probably come out of my electorate from this flood levy. That is their estimate. What that means for our local economy and for the people who have already given so much is that it will blunt their instinct to help in the future. What kind of system are we creating here? At the next need of ordinary Australians through a natural disaster or other dire circumstance, are people going to hold back and say, ‘Look, the government’s going to do it for us. They’re going to step in and force us to do it.’ That is the danger, that is the difference in approach to government today.

We are not seeking the best in our community, in our people and in our society; we are using government instruments to force people to hand over their money. That is a different approach to government. It is a very stark distinction. I reject that distinction. I challenge the member for Petrie: will she go to her constituents, who she says are happy to pay, and will she hand them their tax bills? Will she give them the ATO letterhead which says: ‘Australian Taxation Office. Here is your bill.’ That is what we are proposing to do to Australians, not say, ‘We have a great challenge in Queensland. We have a desperate need for people. Floods have affected Victoria and New South Wales. A cyclone has hit us. Can we all come forward in the spirit of mateship, in the great Australian tradition of filling a need voluntarily when there is a crisis?’ No—the government says, ‘We are proposing, by legislative instrument, to send tax collectors around.’ I must say, that is an uninspiring scenario for me and it is not reflective of the great Australian tradition of mateship that this country is built on, whether it be the great service from citizen soldiery and people stepping forward to the breach at times of military crisis, whether it be people like Sophie going to Queensland and donating her time or whether it be contractors and businesses giving up what they can. Even my in-laws donated furniture to people who lost all their furniture in the flood. Everybody has stepped forward in this country and has risen to the challenge that has emerged in Queensland, yet now we are using a punitive measure from the federal government and sending a very bad signal to people out there that we are prepared to indiscriminately seek more revenue from people rather than tightening our belt in government, stopping the waste and reducing the excessive and gross expenditure of the federal government.

There is too much money spent, and wasted, by the federal government. There is too much money collected in taxes. We collect $117 billion in individual income taxation every year. We make $114 billion in welfare payments every year. Almost every dollar collected in individual income taxation is sent back out the door by the government. We can do better than that. We are better than that as a country and we can find savings in government—we must find savings in government and we must end the waste that this government has become so renowned for.

Looking at these bills, there are other serious consequences from what has happened in Australia. The natural disasters that have hit us have great and ongoing ramifications for many of the small businesses and enterprises across this country. It is not just about people who have been affected by flooding of their business or properties; there are serious consequences for the operation and ongoing viability of so many businesspeople and entrepreneurs in this country. I think government has a real role in doing something about that, whether by the coalition’s tax concessions—the tax holiday proposed by the Leader of the Opposition—or other measures. If we lose sight of the fact that, beyond today, tomorrow and the day after there will be people suffering from these disasters for a long time to come, we have not done our job as a parliament.

Shayne Neumann (Blair, Australian Labor Party) Share this | Link to this | Hansard source

I support the Tax Laws Amendment (Temporary Flood Reconstruction Levy) Bill 2011 and the Income Tax Rates Amendment (Temporary Flood Reconstruction Levy) Bill 2011. In my electorate of Blair, farms are destroyed, roads are ripped up, bridges are gone and homes have been inundated—vital community infrastructure has been damaged. Indeed, the electorate of Blair and the whole of the West Moreton region, Ipswich, the Lockyer Valley, the Brisbane Valley and adjacent areas have experienced the most destructive force that nature can offer.

In Queensland we have suffered dreadfully and our economy will suffer. Coal exports may be down by as much as $5 billion, rural production may be down by $2 billion and I shudder to think what it will be like in the Brisbane Valley and the rural parts of Ipswich. There is a damage bill of about $300 million to the tourism sector and of the remaining industries manufacturing and retail has lost $500 million. That is before we really look at the impact of Cyclone Yasi in North Queensland.

This is a terrible tragedy. Just today I visited the website of the Somerset Regional Council and obtained the list of the roads that are closed and the bridges that are down in my electorate. At the height of the flood the list was two pages long. Neurum Road is closed between Villenueve Quarry and Villenueve Road. Gregors Creek Road is closed at the Brisbane River because the bridge is lost. Patrick Estate Road is open with caution, only because the culvert structure has been lost. Strassburgs Road is closed. At Minden Village, Zabels Road North is closed. The Esk Hampton Road is closed. Across my electorate of Blair roads are closed everywhere and bridges are gone. Sure, we have seen wonderful communitarian spirit, with neighbours helping neighbours and strangers helping newly acquainted friends. We have seen wonderful volunteerism. The loss will be incalculable and the damage immense. It is estimated at $5.6 billion before the impact of Cyclone Yasi.

We will deliver the funding required to rebuild not just Queensland but Victoria, Western Australia and Tasmania. We will deliver this funding by making $2.8 billion in budget savings, saving $1 billion by delaying infrastructure projects and raising $1.8 billion through this temporary levy. The member for Mitchell talked about those people in his electorate earning $65,000 a year. If they were not flood affected, as they would not have been, they would be paying $1.44 per week to help their fellow Australians. If they were earning $75,000 a year, as he mentioned, they would be paying $2.40—less than a cup of coffee would cost in any of the cafes in his electorate. This is important legislation and it is important to recognise the fact that the levy is very modest. Over 85 per cent of people will pay less than five dollars per week. Fifty per cent of taxpayers will pay nothing.

Yet we hear sanctimonious sloganism and sentiment uttered by the member for Mitchell. We have the unctuous, righteous sanctimony from the Leader of the Opposition, saying he wants to support business, but what about the global financial crisis? The coalition opposed the very measures that would have supported the 1.5 million Australians working in the retail sector. He has come into this place twice and said he opposes the flood levy, but at the last election, six months ago—and I understand it is still coalition policy—he wanted to slug Australian consumers with a $6 billion paid parental leave business impost indefinitely, forever. He could not give a date when it would stop. If you thought that would not have been passed on through the prices paid by consumers in suburbs of my electorate, like Brassall, Bundamba, North Booval, Lowood and Fernvale, which were hit by the floods, you would be kidding yourself. This proposed coalition program was all in favour of helping the rich. It was all to make sure that people earning more than $150,000 a year would get paid parental leave, and the coalition proposed it knowing full well Labor had a scheme, a historic reform, ready to operate from 1 January this year.

We have seen what those opposite will do with respect to costings. They allege they are the party of the market, free enterprise and economic prudence. It is a nonsense. Historically, the Labor Party—we saw it during the governments of Hawke and Keating and we are seeing it now with this government—is the party of reform. It is the party that makes the difficult decisions that need to be made. The coalition claim they are supporting regional and rural Australia, but they voted against measures to provide $37 billion for roads, ports and railways in regional and rural Australia. The opposed the provision of $22 billion for those areas in the west, in rural parts of Queensland and Western Australia, which have been so much affected by natural disasters.

They claim here, and I have heard it time and time again, that they are opposed to the BER. Their proposal in opposition to it was announced after much agitation and procrastination and cogitation and meditation. The member for Warringah, the Leader of the Opposition, went on for day after day saying he could find savings easily until the point he said ‘It’s difficult to find them, but we’ll do it anyway.’ But that would have left a $1 billion black hole—if his costings were accepted—as a result of the deferrals, and he knows that it is against the national interest to cut funding to poor Indonesian schools. It was straight from the textbook of One Nation. I was the Labor Party’s campaign director in Ipswich at the height of One Nation’s popularity, so I know a bit about them. The same people who were handing out stuff for the Libs and the Nats at the polling booths in the Ipswich and West Moreton region before 1998 did the same thing for One Nation after 1998, and you see them these days doing it for the Libs and the Nats again. In my area, One Nation and the LNP are indistinguishable—the same sentiment, the same ideas, the same philosophy and the same notions. You can see it, of course, in those opposite and hear it in the words they utter. You can tell that they get the ideas from Mr Ian Nelson of One Nation, and that is why Mr Nelson is the spiritual leader of the Liberal Party across there.

They are opposed to the BER. They say they will defer $150 million from the BER—that is their alternative to raising the flood levy. List the projects in your schools and that you do not want. You say, ‘Give the money to us; we’ll use it in our schools.’ You say, ‘It’s a waste of money.’ But come to my electorate and tell the people in Esk, where the multipurpose hall funded under the BER acted as the evacuation and recovery centre in which hundreds of people got fed every night during the height of the floods and dozens of people stayed, that it is a waste of money. Tell the people in Fernvale who have the BER funded hall which I opened at Fernvale State School. That hall was the place where the people stayed and got fed. It was the place where they slept and the place that they broke into, and that place was needed by Fernvale and its area. You claim the BER is a waste of money. Did you ever read the report of Brad Orgill’s BER task force? Did you ever read the Auditor-General’s report? I guarantee that you did not, because the report of the BER task force said that 97 per cent of the projects were without complaint. That is exactly what it said.

They said also that they would cut funding for the GP superclinics. That is what they proposed to pay for their flood fund. But guess what the GP superclinic did in my electorate. The GP superclinic in Ipswich, located at the University of Queensland adjacent to the evacuation centre at the showgrounds, along with St John’s Ambulance provided medical assistance to hundreds and hundreds of people at the height of the flood. Yet those opposite say that they would cut the funding for the GP superclinics—they oppose them. Also, the doctors from the GP superclinic went down to Riverview Neighbourhood House, where there was an evacuation and recovery centre feeding hundreds of people every night, to help workers and volunteers make sure that people had a place to stay. Those opposite would cut the funding for the GP superclinics that have helped out people in my electorate. That is the reality of those opposite, and they should know it.

I think that, in their heart of hearts, they know this is the right thing to do. I think that, if John Howard were the Prime Minister now, he would be putting in place a levy for the floods, just as he introduced levies on many other things. He raised $1.48 billion through the superannuation surcharge levy, $500 million through the gun buyback, $1.74 billion through the milk levy, $100 million through the sugar levy and $269 million through the Ansett airline levy. He did all that while running a surplus, and we supported him on those sorts of things. Yet those opposite will not support us—and that is the truth. Come to my electorate and see the 700 streets in Ipswich that were inundated. Go and talk to the thousands of people who are no longer living in their homes but living in caravans and tents and say to them that you will not provide the funding, you will have a black hole and you will put the economy in a worse place.

The Leader of the Opposition knows very well that the proposal to cut funding to Indonesian schools is wrong. The Leader of the Opposition came in here to speak on the condolence motion on the flooding and started listing electorates that were hurt by the flooding. He understands neither electoral demography in Queensland nor flood geography, because he did not mention my electorate. He did not mention the member for Oxley’s electorate, nor that of the member for Moreton. But he did mention the electorate of the member for Petrie. He does not understand that the member for Petrie’s electorate was not flooded—he claimed that it was flooded. That is how much he understands and likes Queenslanders. The truth is that we are seeing opposition from the coalition to important income-raising measures and saving measures which are extremely important for Queensland.

Those opposite claim that we are a high taxing government. Let us have a look at the record. Apparently, they do not know that we have saved $83.6 billion in the last three years and do not know that we are the envy of their Western world because of that. They claim that we are a high taxing government, yet currently the tax-to-GDP ratio is 20.9 per cent. The Howard government got nowhere near that. Under the Howard government it was in the mid-20s all the time. Those opposite are addicted to tax. They claim that they are the party of low taxation, but they never once found a levy that they did not like when they were in power. If those opposite want to help Queenslanders, they need to support this levy. This levy is particularly important for South-East Queensland, and those opposite know we need it. They know in their heart of hearts that their position is wrong. They know their leader is opposing the levy because he is engaged in opportunism—opposition for opposition’s sake. All he is trying to do is to relive the last election. If they had won the last election, they would have brought this flood levy in. They would be asking for our support, and we would give it. This is not the time to argue; this is the time to agree. This is the time for bipartisanship. This is the time to rebuild; it is not the time to break down. It is the time to help, not the time to hinder.

Those opposite do not realise that this is so important. Through the mayor’s fund in Ipswich and particularly the Somerset Regional Council fund we raised tens of thousands of dollars, and today I thank James Hardie, which has contributed $250,000 to the Ipswich mayor’s flood fund and the Premier’s flood fund in Ipswich yesterday.

The Premier’s fund in Queensland has raised hundreds of millions of dollars. But we need billions of dollars because we need to rebuild the bridges, roads, ports and essential community infrastructure that those opposite do not like. There has never been a bill in this House in the last three years in relation to roads affecting my electorate—whether the Ipswich Motorway or any other road in my electorate—that those opposite have not voted against. They voted against all the nation-building funding and legislation that provided the funding for Roads to Recovery black spots in my electorate. That is the reality of those opposite. They will not vote for roads funding to build the roads, and now they will not vote for the funding to rebuild the roads. That is the legacy of those opposite. The members for Ryan and Brisbane in this chamber should hang their heads in shame for their failure to support their fellow Queenslanders. They should have a word with the Leader of the Opposition and say: ‘Tony, it’s time to fess up; it’s time to do the right thing by Queenslanders and it’s time to do the right thing by the flood victims of Queensland. It’s time to rebuild Queensland, it’s time to be bipartisan and it’s time to get with the program.’

Darren Chester (Gippsland, National Party, Shadow Parliamentary Secretary for Roads and Regional Transport) Share this | Link to this | Hansard source

I rise to speak in relation to the Tax Laws Amendment (Temporary Flood Reconstruction Levy) Bill 2011. Before I do, I would like to seek a moment of indulgence to briefly reflect on the terrible tragedy which has befallen our New Zealand friends. There is no other nation more closely linked to Australia than New Zealand, and when our Kiwi cousins suffer we suffer with them. The earthquake in Christchurch may have occurred in New Zealand, but it has certainly shaken all Australians as well. As we watched the drama unfold yesterday on our television screens, and again this morning, we could not help but feel the pain of those who have lost loved ones or who have been injured in this terrible disaster. I would like to associate myself and the people of Gippsland with the comments made by the Prime Minister and the opposition leader in this House yesterday.

We must stand ready to help our Anzac mates in their time of need, and I think it is a great tribute to our nation that we already have rescue crews on the ground working through the rubble and doing their best to recover people from this disaster. We hope for miracles today in Christchurch. It is going to be a very difficult time for everyone involved in this rescue effort. We hope for miracles; we pray that they will be safe, and we pray that the rescuers themselves will be safe and given the strength to do the job on behalf of our nation. There are many New Zealanders in my electorate, and I am sure most members would have many Kiwis in their electorates and throughout Australia, and our thoughts and prayers are with them all today.

In relation to the bill before the House, I will be voting against the proposed tax for several reasons. But before I outline my exact reasons I want to clarify a couple of points. First is this Labor myth which has been perpetuated again by the gentleman just speaking: that somehow the coalition is against rebuilding the disaster-hit communities. The coalition stands shoulder to shoulder with all Australians, and we are committed to getting on with the job of rebuilding these communities.

I find it offensive in the extreme that those opposite suggest there is any sense of backsliding in our determination and commitment to help rebuild those communities that have been affected by these events. The people in Queensland who have been hit by floods and cyclones, the New South Wales floods, the Victorian and Tasmanian floods and the Western Australian bushfires show that it has been a terrible summer of natural disasters across Australia. It has been tragic in the lives lost and also in terms of damage to private property and public assets. Quite rightly, the people of Australia look to us in this place to provide some leadership on the rebuilding effort.

I believe that it is reasonable and appropriate for us to agree on the fact that we need to rebuild. But we can have a difference of opinion about how the federal government pays for that and how it should be funded. I take offence on behalf of the member for Brisbane, who is in the chamber today, at the suggestions by the previous speaker that somehow she should hang her head in shame when I know the tireless work that she has done on behalf of her community and that all other Queensland members have done on behalf of their communities to support them in their hour of need. I think the Queensland MPs on both sides of the house have done an extraordinary job in extremely difficult conditions. I find it appalling that any member would suggest that there is any lack of commitment from the coalition in the rebuilding effort. We stand ready to support our fellow Australians and we stand with them shoulder to shoulder on the rebuilding effort. We should be spared the self-righteous indignation we have seen and the aspersions that have been thrown from the other side of the House to suggest there is reluctance on this side of the House to support Australians in their hour of need. We just do not believe that we need to impose another tax to do it. We believe there are other ways to fund the work, and we believe that it is not the time for hitting Australian families with another tax when they are already struggling under the cost of living; this is not the time to slug them in that manner.

I stress also that we are talking about public assets and how the federal government pays its share of the reconstruction bill under natural disaster arrangements. We are not talking about people’s homes. There has been a deliberate attempt to muddy the waters, so to speak, by some of the speakers opposite, to suggest that somehow we are not going to help people in their own homes. The issue of people rebuilding their own homes is quite rightly a matter for them and their insurance company and, again, a lot of local members have worked tirelessly to hold the insurance companies to account in this regard. The issues relating to private property losses are a completely separate matter to the flood levy bill that we are debating here today.

One of the problems we have in debating this topic is that the full extent of the damage to public infrastructure is still not known. I believe it is almost inevitable that the Commonwealth will face extra costs beyond what are forecast now. As the full extent of damage to public assets becomes apparent in the weeks and months ahead there will be additional costs borne by the Commonwealth. I have had some experience in this regard in my own electorate of Gippsland. We live in a flood-prone area; there are six or seven major rivers flowing through the electorate, and on every occasion where there has been a major flooding event the first assessment of damage has never been accurate. It has never been accurate, and the cost has always gone up when we have started to realise how much of the public assets have been undermined—roads, rail or riverbanks—whatever they may be. I fear that the full cost of this flooding and these natural disasters across Australia, particularly in Queensland and Victoria—where we still have water lying across vast expanses of the north-west—will not be known for many weeks and months. I believe there will be additional costs to be borne by the Commonwealth.

A point I believe is also worth reflecting on is that there is a very real risk of more flooding in the weeks ahead. Our catchments in many parts of Australia are completely soaked. It will not take a rain event of the same magnitude to cause equivalent damage in the future. We have the very real risk of further flooding this year in many parts of Australia, and the Commonwealth must stand ready to accept the fact that there could be a larger bill coming our way. The damage bill could easily escalate in the weeks ahead, and the Prime Minister has said in the past that this levy that is proposed and put before the House today will not be increased and any additional costs will be met by cuts or deferrals to other programs in the budget. So it really does beg the question: why not make that decision now instead of imposing another tax on Australian families who are already struggling under the increased cost of living?

My reasons for opposing a levy come down to a few key points. Firstly, if the government had managed the budget properly in the first place, we simply would not be in this mess. Secondly, any new tax that is imposed will have a definite flow-on impact on consumer confidence, impacting particularly on small businesses in regional communities. Finally, and I believe most critically, there is a genuine risk that any new tax will reduce the community’s willingness to donate in future emergencies that may occur because they fear they will be hit by another government tax in the future. That is a very important point to remember, and I will come back to that in a moment.

The issue of the government’s management of the budget is key to this whole debate. Labor simply cannot manage money. In the past three years they have a record of expensive bungling and mismanagement almost across the board. There is hardly a minister who has not been touched by some example of mismanagement and a failure to deliver value for money to Australian taxpayers. We have had the home insulation scheme, and the great tragedy of that scheme was that young men lost their lives. In economic terms, it was a waste of $2.5 billion.

We had the school program, which the previous speaker was most indignant about. There was a cost blow-out of more than $1 billion before the program even started. We have a $16 billion program, and in my electorate BER now stands for ‘builders’ early retirement’. The BER program has been an opportunity to gouge money out of Australian taxpayers, and the state Labor government failed miserably in its job to be a watchdog and a guardian of taxpayers’ funds to ensure value for money. There was at least $2.7 billion wasted under that program, and I fear that in my electorate the state schools are the ones that fared worst of all. My children attend state schools—and I am a fierce advocate for state schools—in my community, and it is a great irony that this government, which claims to stand up for the state school system, would allow their state government cohorts to see a worse quality result in state primary schools across our nation in comparison to the Catholic and independent sector. I am still receiving reports in my electorate of poor workmanship, almost invariably carried out by building firms which have travelled out of Melbourne to undertake work in my electorate and have no local ties whatsoever. They have undertaken work at inflated prices and left my school communities very bitter indeed.

We also had the government’s appalling effort with the Green Loans program. Too many assessors were trained, and people were out of pocket by several thousand dollars and had their hopes of starting their own small business dashed—another example of a Labor Party which cannot manage money. There was the panicked response to the global financial crisis. There was the handing out of $900 cheques to a total of about $13 billion. It still stuns me that someone—in fact, several ministers on the other side—thought it was a good idea to hand out $900 cheques for people to buy plasma TVs with. That was about all we got out of it. It was a ridiculous policy position, and we find ourselves without any shots left in the locker when it comes to paying for natural disasters when we have spent $13 billion of borrowed money on $900 cheques.

A prudent government, a decent government, would have had plenty of money in the bank if it had not panicked and squandered so much in the previous year, but that is typical of this government. It always panics under pressure. It treats taxpayers’ money as if it is a blank cheque. It has failed to deliver value for money on a wide range of projects and has even had to resort to hiring a former Liberal finance minister to oversee spending on the flood recovery program. It begs the question about the former Labor finance minister: was he busy or something, or was he not even asked? Did they go straight to a former Liberal finance minister to oversee the government’s expenditure in the flood recovery?

If Labor had not wasted so much money over the past three years, there would have been plenty of capacity to manage a disaster of this magnitude—and I accept these were major disasters, right across the nation; everyone accepts that. But a decent government which had been prudent with the Australian taxpayers’ money would have been in a position to fund this recovery effort. That is what people expect governments to do with their taxes: manage the economy well, achieve value for money with every project, and put some money away for the proverbial rainy day. This government inherited a set of budget books which were in great shape, and it has destroyed them. Labor’s first response is to introduce a tax. In a $350 billion budget, it is hard to believe that the $1.8 billion to be raised from this new tax could not be found in budget savings measures. But avoiding the hard decisions is the Labor way.

As I said earlier, I am also concerned that any new tax will have a flow-on impact on consumer confidence and affect small business owners, both within the disaster areas and beyond. A lot of members have tried to downplay the significance of the tax by running through the income thresholds and indicating that many taxpayers will only pay $5 per week. That has been their claim, and I do not have any reason to doubt their word on that, but the Treasurer has not even been able to tell us how many people will pay the tax in the first place. He has not even been able to tell us that most basic of all facts. How can we sure that it will secure the $1.8 billion that they have talked about? Maybe it will be more; maybe it will be much less than that. How would we know? The Treasurer himself does not know.

In any case, I believe that taking any disposable income out of the economy at a time like this is a bad move, and I detect a real softness in the Australian economy at the moment in terms of the retail sector and the hospitality industry. Small businesses are doing it pretty tough at the moment. I am not sure that those on the other side actually realise that. There is a real softness in the market in terms of retail and hospitality. Small business people are struggling, and anything which damages consumer confidence at a time like this will be bad for small business and bad for employment, particularly in regional communities like mine. Consumer confidence, as we all know, is a very fickle beast, and this new tax will undermine that confidence and have a negative impact on spending in the small business community in particular.

Finally, I believe—and I think this is the most contentious point of this whole new tax—that there is a risk that any new tax will reduce the community’s willingness to donate in future emergencies, because people will fear that they will be hit by another tax. I think that is a key point and is the big difference between the government’s levy and those that have been introduced in the past and by the Howard government in particular. Those opposite have had a field day, running through previous levies and pretending that they were all the same. But the key difference is that with the previous levies—whether for the gun buyback, the dairy industry or others that have been raised—no-one was actually asked to make a personal donation in advance of that levy. Former Prime Minister John Howard did not go out into the community and say, ‘Here, donate some money and I am going to buy back some guns.’ He just introduced the levy, and people had not made a personal commitment of any funds at all.

I think there is a fundamental difference between this levy and the previous levies that members have talked about. I believe there will be a genuine reluctance in the future for people to donate, and it is disappointing, because people throughout Australia—in response to the Black Saturday bushfires and these most recent disasters—have been extraordinarily generous in giving their hard-earned cash over to community organisations to help with the recovery effort. They give because they want to give, but I worry that in the future they will say, ‘I was going to give $100 but, hang on, I might just give $50 because chances are I’m going to be hit with a tax down the track,’ and they will hang onto that fifty bucks. I think that is a real problem for us with this new tax.

The other issue is that, even if you have already donated your time, goods or cash, you will still have to pay this tax if you exceed the income thresholds. Many members on this side have talked about that issue, and I think it is a fundamental difference that the members opposite need to understand. You cannot tax the Australian ethos of helping out a mate. You do not tax the Australian spirit out of existence, and I fear that is what we are doing with this new flood levy. People have already given, and they are going to be hit with a tax and will be reluctant to give in the future.

My final word of warning is to Queenslanders: watch very closely how the Labor Party administers the donated funds. After the bushfires in 2009 the Australian community donated about $380 million, and that $380 million was so heavily politicised by John Brumby’s government it was an absolute disgrace. John Brumby as Premier issued media releases from his office, on his letterhead, pretending the money had come from the Victorian government when it came from donated funds from bushfire contributions. So I appeal to the Queensland government not to make the same mistake and politicise the donated funds.

This flood tax is another Labor failure and it should be voted against in the House. (Time expired)

Bob Katter (Kennedy, Independent) 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 have been the responsible member of parliament through some 35 cyclones. A lot of cyclones are very small beer indeed, but a lot of them are very serious. The town of Innisfail has been wiped out completely twice. Thanks to excellent building codes—I think every member of parliament in Australia can hold their heads up high on this one—and particularly the builders themselves who have implemented those codes, the vast bulk of the homes stood up to 200- to 300-kilometre-an-hour winds. They stood up very well, with very little damage at all. There were maybe a few broken windows.

In order of priority, I think, food is the first thing that you require when the cyclone hits. In Cyclone Larry we put out 24-hour ration packs on day 3 or day 4 and water bottles from distribution points in key areas all over the area involved. We put up tarpaulins because people were just sitting there in teeming rain—almost invariably there is heavy rainfall that comes with a cyclone. There is a money issue, strangely enough. It is not that people are broke; it is just that they cannot get money. The ATMs go down and all of the plastic magic ceases to function because there is no power. I must single out for the highest possible praise Ergon Energy and the Ergon workers. I have said before that every morning at sun-up they seem to be out there, and every evening, when you are going to bed, they still seem to be working. Nothing ever seems to be a problem for them. None of them are ever standing around either; they are just working and working hard in extremely dangerous conditions.

So you have the money problem and you need the money for food. On the second day of Cyclone Larry I went hungry because plastic magic was worth nothing and I had run out of cash. I was fortunate to have a car with petrol in it. An awful lot of people in Innisfail did not have those things, and an awful lot of people in Cardwell and the other towns that were badly hit this time did not have cars. I do not know, but I think that, when we look at the figures closely, there may have been one or two deaths that resulted from the lack of phones and mobiles. There is, of course, no maintenance being done on telephones now. When the power goes off you move onto the batteries. For boosters in the telephone system the batteries run down after about a day or two of not being recharged because the power lines are down, and then the phones go out.

As for mobiles, I can only say that I am very, very disappointed with the performance of Telstra, but that is a story for another day. The mobiles, as it has been explained to me, are not a very great problem. You just go up with a generator to recharge the batteries, drive to another site and drop off another generator to recharge those batteries. They are about 2,000 bucks. You come back after you have dumped six of them, pick up No. 1 and go to another six. As I have pointed out to the powers that be, on day 5 and day 6 it seemed to me that most of the areas were without mobiles. Mine most certainly would not work. I must greatly praise Optus. They had mobile towers on the ground and free telephones distributed. In places like Mission Beach I used the Optus free telephones. It was the only way I could call out and get very important services back in.

With the issue of roads the tarpaulins have been a terrible problem, because people have been so worried about public liability that they are telling people not to climb up on roofs. Heavens! We are grown people; if you can see a roof is dangerous, you do not climb up on it. But there were terrible problems in the distribution of tarps. As for the roads, the 300-odd thousand of us who live in Far North Queensland have only one highway that can get us in and out, and if it gets cut we are in a terrible position. I cannot prove this and do not think I will be able to, but it seemed to me that the main highway was closed for about 85 per cent of the first four or five days, when it needed to be closed for about 15 per cent of the time. The argument was that there was a foot and a half of water across the road. In Townsville, when you get heavy rain people will have to drive through a foot to a foot and a half of water. That is just life. It is similar in Cairns and on my street in Charters Towers if you get any sort of rainfall. There is one particular road there that we drive out of town on and you have to drive through a foot to a foot and a half of water. But that is the artery—if you cut that off it would create so many more problems further down the track.

Having said all that, I steeled myself not to say very much about this cyclone and the way things were handled, but I would be very remiss in my duty if I did not refer to the fact that on day 3 after Cyclone Larry the Premier of Queensland, Peter Beattie, and the Prime Minister of Australia, John Howard, engaged Peter Cosgrove. Things did not run well, but they were a thousand times better than if there had been no central controller. It was on day 8 we had a central controller this time. I do not know whether we have a clear situation and still have a central controller, but I am assuming that we do, on the information that I hold. We praise Michael Keating very much for the job he is doing there.

I would bring to the attention of the House the nature, size and scope of what we are talking about. The main northern arterial highway runs between the beach and the shop frontages in Cardwell—there may be about 50 metres between the sea and the shop frontages. It is a beautiful drive as you look out on Hinchinbrook Island in that brief period when you can see the ocean. I think it is one of the very few parts of the entire Queensland coastline where you can drive on the main highway and see the ocean. That highway is now completely wrecked and extremely dangerous to drive on. Part of the foreshore has gone completely.

We need safe anchorage and the government has agreed to that. We thank the government very much for safe anchorage because we have not had it. We have gone through state instrumentalities, but they consist of people who put more faith in ridiculous considerations than in the boating safety of the public of North Queensland. There are 55,000 registered boats between Mackay and Cairns and you are lucky if you are within three hours of safe harbour. Whenever a squall comes up, the boats run for safe harbour. I do not know anyone who has beached a boat in North Queensland. There must have been some, but I am not aware of them, and I was the person responsible, as I said before, in 35 cyclones, some of them not much more than storms. There is no safe harbour. At the present moment you can go from Townsville—Moor-In-Jin has no tie-up facilities, so I do not know that I would consider it a safe harbour—to Cairns because Port Hinchinbrook is out.

That brings me back to Cardwell. You would have seen on the television the terrible scenes from Port Hinchinbrook where the boats—giant launches 40, 50 and 60 feet long and worth millions of dollars—were picked up and dumped 20 to 50 metres inland and smashed to pieces. There is debris and siltation off Port Hinchinbrook and it needs to be cleaned out. This is the sort of work that needs to be done. I think we will need a new rock groyne along the front at Cardwell, but it is up to the people of Cardwell to make that decision. It seems to me that is where they are headed at the moment. It costs a lot of money to put up a rock wall that is two, three or four kilometres long. Behind that there is no ground now, so those rocks will go into the water and then behind those rocks ground will have to be put. The obvious thing to do is to take the siltation from cleaning out Port Hinchinbrook, move it around with a dredge and put it behind the rocks on the foreshore to build up the foreshore. Then we can rebuild the road where it is at the moment. It is a beautiful highway and it would destroy the town if the road were moved because most of the businesses in that town depend upon that roadway.

I do not know how badly the prawn farms were affected, but one of the biggest pawn farms in Australia is situated there. There is another pawn farm beside it—I think the second biggest or third biggest in Australia. There will be very serious damage indeed and I would be very surprised if they have not lost their income for the next year at the very least. Something like $30 million comes in from those prawn farms and there will be no money coming in this year.

At the present moment, the highway and the businesses along those highways have a very serious threat hanging over their heads. Many of them have had no income for the last three weeks and it will probably be some weeks yet before they are in a position to have any income. Just that loss of income will place them in a terrible financial situation. The cost of reconstructing Cardwell to anything like the way it was will run into $10 million, $20 million or maybe $30 million. We thank John Hoare, Lindsay Hallam, President Smith of the Cardwell Chamber of Commerce and all the other people of Cardwell that have been working very hard to draw up a plan for the reconstruction of Cardwell.

Dunk Island—and I am just picking out some features—is really a town of 200 people. There are normally about 100 workers there and maybe 140 or 150 guests living there at any one time. Everything on Dunk Island has been destroyed. The jetty is completely destroyed, as are all of the big buildings and facilities for the tourists. I would say there would be accommodation there not for 250 people but for about 20. You can work out the size of the destruction, but I do not think $50 million would be unreasonable and it may take considerably more than that.

The banana industry is worth about $500 million a year to the Australian economy. It has not been as badly affected as it was by Cyclone Larry because we now have a lot of bananas on the tablelands area and further north. There will not be the same great shortage as the one that occurred after Cyclone Larry—that will not occur ever again. By the same token, of that $500 million, probably about $350 million will vanish, and about 4,000 or 5,000 people depend upon that income. Fortunately, the damage was not as severe as in Larry; I think we will be back to fairly big production within four or five months. In the meantime, the backpacker numbers will go down completely. That is the sort of sector that will not be re-employed. So there will be no backpackers, and there will be no tourism. We have been in a terrible plight with tourism after the GFC in Cairns, and this will make it infinitely worse. With losses to the banana farmers and, more importantly—and I do not mean to denigrate the farmers by saying this—the banana workers, including backpackers, which will take down the tourism industry, we are talking about $400 million or $500 million. The sugar industry will take a hit of $200 million or $300 million. I hope we will only be down by about 60 or 70 per cent, but that 30 or 40 per cent—and it may be much higher than that—is still very serious. It has occasioned the closing of a mill, which has meant 700 or 800 people out of work.

You can start adding up the sorts of figures I am putting through here. You simply cannot ask a government to suddenly pull $2,000 million out of a budget. I am sorry; I do not expect that to happen. I am disappointed in the government. I think the funding should be ongoing. Everyone gets their turn with these diasters, whether it is fire and earthquakes at Newcastle or the recent disasters. With the present disasters, politicians are dropping out of the skies like Santa Claus, making big heroes of themselves and getting themselves on television continuously. The classic example is in Queensland, where two areas where a category 3 cyclone went through are still not declared a disaster zone. (Time expired)

Mark Dreyfus (Isaacs, Australian Labor Party, Cabinet Secretary) Share this | Link to this | Hansard source

There is an urgent, pressing need to repair the immense damage that has been suffered in the state of Queensland. There is indeed an urgent, pressing need to repair the damage from natural disasters that have been suffered in other states of the Commonwealth. There is going to be a huge drain on the budget of the Commonwealth. There is no doubt about the extent of the damage that has been suffered, particularly in Queensland. We just heard in some graphic and moving detail from the member for Kennedy about the damage that has been suffered from recent disasters in his electorate and we have heard from many other speakers in this debate about the damage that has been suffered right across the country, particularly from the devastating floods in Queensland, which have prompted the Tax Laws Amendment (Temporary Flood Reconstruction Levy) Bill 2011 and the cognate bill before the House.

Those devastating floods, as we have heard from many speakers, are rightly described as, if not the worst, certainly among the worst disasters that have been suffered by our country. There is agreement on both sides of the House about the need for a funding package, for the Commonwealth to come to the aid of the people of Queensland and of other states that are suffering from these natural disasters. Regrettably, we have not had agreement on the mechanism that is to be used to fund the Commonwealth’s assistance, which, there is no doubt, will be a very high level. The $5.6 billion in this package is based on initial estimates of the level of assistance that the Commonwealth is going to be called on for.

On past occasions that there has been an unexpected hit on the Commonwealth budget, when the Commonwealth has been called on to fund unexpected expenses, one of the mechanisms that have been used has been the imposition of temporary, and sometimes not so temporary, levies; sometimes those levies have been in place for several years. I want to mention some levies that have been used since 1996 by the Commonwealth to raise money for various purposes, to fund programs and expenditures without hitting the budget bottom line.

I will start with the Howard government’s superannuation surcharge levy 1996. That levy introduced extra taxes on the superannuation contributions of higher income earners. It was introduced as a temporary measure to tackle budget deficits and was supported by the Labor Party in opposition. It raised $1.48 billion in its first four years and more billions of dollars over its life. It was not until July 2005 that it was finally removed. A little while after that, also in 1996, the government introduced a 0.6 per cent increase in the Medicare levy to fund the cost of the gun buyback scheme. That was a temporary levy which ran only for the 1996-97 financial year. It raised an estimated $500 million and, again, was supported by Labor in opposition.

The stevedoring levy was introduced by the Howard government in 1998-99. It was a levy on the unloading of containers and vehicles in Australia, at $12 per container and $6 per vehicle, to meet the cost of redundancies resulting from the restructure of the stevedoring sector. We opposed that from opposition, but that levy lasted until May 2006 and raised $100 million. We could point to the milk levy, which we suggested from opposition should be amended but which we ultimately supported. That was imposed in 2000. It was an 11c per litre levy on consumers for all drinking milk, to fund an assistance package for the dairy industry. That levy ceased under our government in February 2009 but raised some $1.9 billion over its life.

The sugar levy was another Howard government levy. It was introduced in 2003 and opposed by us in opposition. It was a levy of 3c per kilogram of sugar. Like the milk levy, it was to fund an assistance package, this time for the sugar industry. It was abolished in November 2006 and raised some $97 million over its life. The Ansett airline levy was introduced by the Howard government in 2001. It was a $10 levy on plane tickets to recoup funds for worker entitlements after the collapse of Ansett airlines. That levy lasted until June 2003 and collected an estimated $369 million.

Lastly, I should mention the East Timor levy proposed by John Howard as Prime Minister, at 0.5 per cent for those earning between $50,000 and $100,000 and one per cent for those earning over $100,000 for the fiscal year 2000-01, to fund Australia’s defence commitment to East Timor. Like some of these other costs that levies were introduced to meet over the term of the Howard government, this levy was to meet an unexpected expense to the Commonwealth budget. That levy, which again Labor supported from opposition, was projected at the time of its proposal to raise some $855 million. In the end it was not proceeded with because of the state of the budget by the time the funds were required.

I mention these levies simply to make the point that the use of a levy as part of a means of raising funds for unexpected expenses by the Commonwealth is far from unprecedented. Far from it; it has been a regular tool of the Commonwealth in managing its financial affairs. Nor should it be thought that levies were only used by the Howard government at a time of deficit. The stevedoring levy was imposed when the budget was in surplus by $3.9 billion in 1998-99. The milk levy was imposed when the budget was in surplus by $13 billion. The airline levy was imposed when the budget was in surplus in 2001-02 and the sugar levy was imposed when the budget was in surplus in 2002-03. It can be rightly said that Mr Howard had a levy in each and every single year of his government.

Lest it be thought that the Liberal Party of Australia stopped proposing or favouring levies when they moved into opposition, we need to bear in mind that the current Leader of the Opposition, Mr Abbott, also favours levies, because he proposed last year a $2.7 billion levy on business to pay for the opposition’s very expensive paid parental leave scheme.

The modest, progressive levy is part of the government’s package. It is a $1.8 billion levy that is going to be funded just over the 20011-12 year. Very similarly to the proposed East Timor levy, it will be 0.5 per cent of taxable income in excess of $50,000 and one per cent of taxable income in excess of $100,000. No levy will be payable where a person has income of $50,000 or less. They will be very modest amounts indeed. For someone with an income of $60,000 the levy will be 96c per week. For someone with an income of $80,000 the levy will amount to $2.88 per week. It is a very modest levy indeed. One is forced to conclude, from the extraordinary level of opposition by those opposite to this modest, progressive levy, that as usual the opposition are simply playing politics—and petty politics at that.

This is a levy. Indeed, the whole package has been supported by a very large number of economists across the country. A number of speakers who have preceded me in the debate have referred to the levels of support from economists and, one could add, other political leaders across the country—notably the Liberal Premier of Western Australia, who said in very clear terms:

I believe most Australians, most West Australians, are willing to contribute a little bit more to help Queensland get back on its feet.

Instead of the decency and good sense that has been demonstrated by the Liberal Premier of Western Australia, what we have seen from this opposition is petty politics, crude slogans—as usual their ‘great big tax’ has been rolled out in opposition to this very modest, progressive levy—and mean-spirited whinging. It is inconsistent and hypocritical for this opposition, in the face of that long list of levies that were imposed by the Howard government, to come into this place and suggest that there is anything at all wrong or untoward with our imposition of this levy. It is the kind of hypocrisy and inconsistency that we have come to expect from this opposition.

Craig Kelly (Hughes, Liberal Party) Share this | Link to this | Hansard source

I rise today in this debate on the Tax Laws Amendment (Temporary Flood Reconstruction Levy) Bill 2011 and the cognate bill to voice my opposition to this unnecessary temporary flood reconstruction levy. But before I do, on indulgence, I would like to reflect on the earthquake in New Zealand. I have many friends in the great city of Christchurch and as we stand here today many of our Kiwi cousins lie trapped under rubble and in buildings, with rescue teams battling for their survival. We pray for their rescuers; we pray for those trapped in buildings and our thoughts are with them.

There are many reasons why the government’s latest raid on the taxpayers’ wallets and purses, through this so-called flood levy or ‘mateship tax’ as the Prime Minister likes to call it, is misguided and should be opposed, but I would like to concentrate on the damage that this tax will do to the tradition of Australian mateship. Mateship is an Australian and New Zealand tradition that makes us great nations. It involves the deepest bonds of generosity, sacrifice, community spirit and the ability to deal with hardship in the face of adversity. It is an ethos that pre-dates Gallipoli and the Kokoda Track. As the recent Victoria Cross recipient Corporal Benjamin Roberts-Smith said when asked what triggered the action that led to his decoration:

Mateship. I think the biggest sin in life is to let your mates down.

There are some in our society today that seek to reject, ignore, denigrate and deny our Australian tradition of mateship. To those people I would like to quote from a letter I received only yesterday from a constituent from the suburb of Engadine in my electorate:

Being from a European background and arriving in Australia 8 years ago, two things impressed us greatly: Australian ‘mateship’ and volunteers.

I’ve visited quite a few countries, throughout Europe and the USA for study and work, but not one has these two things.

They continue:

They are unique to Australia and touch everybody’s heart. In these 8 years we became Australians with the same beliefs and lifestyle. My husband and I both obtained local education, are working full-time, paying a mortgage and with our kids enrolled in local primary and high schools.

To tell the truth, the ‘flood levy’ upsets us greatly.

Everybody gave generously to the Flood appeal. We are also regular donors to the Cancer Council and the Stroke Foundation.

But it is very different when it becomes obligation rather than good will.

They say they already see one-third to one half of their salary taken by this government, “which cannot manage its funds”. They go on to say:

And yet again the same working people will be punished for the fact that this Government has spent billions on failing projects and didn’t make a decent reservefor emergency situations like the Queensland floods.

I could not have said it better. The community spirit in the aftermath of the recent flooding in Brisbane, compared with that during the flooding in New Orleans, further demonstrates that the Australian ethos of mateship is alive and well. In 2005, when Hurricane Katrina flooded New Orleans, the city plunged into lawlessness. Anarchy and chaos reigned as armed gangs roamed the streets, preying on the helpless, pillaging and looting homes, committing murder and rape. In the aftermath of the flooding in New Orleans, a tourist asked a police officer for help and reportedly got the reply: ‘Go to hell. It’s everyone for himself.’ In contrast, following the recent floods in Queensland and Victoria there were armed gangs roaming the streets but these gangs were made up of thousands of ordinary mums and dads and volunteers from all walks of life. They were armed with mops and buckets and brooms, but most of all they were armed with their Australian ethos of mateship. It made you proud to be an Aussie.

But now, the very concept of mateship is being shamelessly exploited by this government as a smokescreen to slug Australian families with a new tax to prop up a budget bleeding red ink for reckless and extravagant spending, with billions wasted on misguided schemes such as GroceryWatch, the pink batts fiasco, the BER and a list that is too long to mention here.

The real danger of this unnecessary flood tax—or ‘mateship tax’ as the Prime Minister likes to call it—is the harmful effect it will have on the Australian tradition of mateship. Millions of Australians have donated generously to assist victims of the floods, simply because they did not want to let their mates down. Now they feel doublecrossed, with this government saying they will be forced to pay an additional, compulsory donation in the form of a new tax.

If this new flood levy goes ahead, next time a major disaster happens—and history tells us it will—many other generous people will simply say to themselves, ‘Why should I give voluntarily when the government is going to make it compulsory for me to give?’ Therefore, next time we face a major disaster, the memory of this unnecessary flood levy will weaken our Australian spirit of generosity and mateship, and that is why I oppose it. It is understandable that those who sit opposite, who have witnessed the Sussex Street death squads executing no fewer than two New South Wales premiers and a Prime Minister in less than two short years, have not got a clue about mateship.

Further, and what is very concerning, is that this government do not have a clue about fundamental economic principles. Earlier this week we heard the Assistant Treasurer claim that adding a new tax to electricity would somehow make electricity cheaper. Now we have them failing to understand a second fundamental economic principle: if you tax something you get less of it. Therefore this unnecessary mateship tax will simply result in less mateship and will thereby undermine one of the building blocks that makes Australia the great nation it is.

On the other side, speakers have made the point that the previous Howard government imposed several levies. That is correct. But they conveniently forgot to mention that these levies helped pay off $96,000 million worth of debt that the previous Labor government left, which the Howard government turned into a $20 billion surplus, every cent of which has already been spent by those on the other side. These are all facts conveniently overlooked by speakers on the other side. However, the big difference is that none of the levies under the previous Howard government were for causes that the general public had already donated generously for, like they did for the Queensland floods. That is my point and that is why I object to this levy.

I am not against the concept of levies in general; I am against this particular one being imposed when there is so much reckless spending going on and when it is for a cause that the Australian people have already so generously donated for. In an attempt to justify this new tax, I have heard speakers from the government claim that the recent floods were the biggest economic disaster ever. But they are wrong. The biggest economic disaster that this country has experienced is the waste, mismanagement and incompetence of this government. It is only slightly ahead of the previous high-water mark for waste, mismanagement and incompetence set by the Whitlam government.

This is not the time to introduce a new tax. Small businesses throughout Australia are doing it very tough. I have heard government speakers say that it is only a cup of coffee a week. I would like them to go and say to the thousands of small-cafe owners throughout Australia and the tens of thousands of employees that those cafes rely on that it is ‘only one cup of coffee a week’, because those cups of coffee create thousands of jobs throughout the economy which small businesses rely on.

Graham Perrett (Moreton, Australian Labor Party) Share this | Link to this | Hansard source

We meant money not actually coffee, you know.

Craig Kelly (Hughes, Liberal Party) Share this | Link to this | Hansard source

You have no idea about small business.

Here is my suggestion: if the government is not willing to show some discipline and rein in their reckless spending, let’s simply change the name of this levy. Rather than call it a flood levy, let’s name it after one of the many other disasters that this country has suffered in recent times. How about the ‘pink batts fiasco’ levy? Or the ‘glorious revolution in education’ levy? How about the ‘green loans debacle’ levy? Or even, to borrow a phrase from the Prime Minister, the ‘we have lost our way’ levy?

My suggestion is simply to call it the ‘Labor waste and mismanagement levy’, because the waste and mismanagement of this government has caused far more economic damage to this nation than any flood possibly could. After all, but for a range of government debacles and waste—a list too long to mention here—we would have the funds, and more, for all the reconstruction work needed in Queensland, Victoria and elsewhere throughout Australia.

In conclusion, if the government are determined to go ahead with this new tax, I would ask them to simply have the honesty to rename it. Change the name. Do not call it a flood levy tax; let’s just call it the ‘Labor waste and mismanagement levy’. You may get some more acceptance from the public if you do that.

Gai Brodtmann (Canberra, Australian Labor Party) Share this | Link to this | Hansard source

I rise today to speak in favour of the Tax Laws Amendment (Temporary Flood Reconstruction Levy) Bill 2011 and a related bill. Before I start to talk about that, I would like to express the sympathies of the people of Canberra for those in Christchurch. It has been dubbed the most dreadful day, and I would just like the people of Christchurch and New Zealand to know that the thoughts and prayers of Canberrans are with them today and over the coming weeks as they work through the rubble and destruction and try to come to terms with their loss.

In speaking in favour of the bill, I want to acknowledge that most of the people I have spoken to in my electorate support the levy. They embrace the spirit of mateship. They support the rebuilding, they support their fellow Australians and they want to help them succeed in the future.

What we have seen in recent months has been disaster on a scale unprecedented in our nation’s history: three-quarters of a state underwater, dozens killed and many thousands of people whose homes have been destroyed or damaged. Vital infrastructure has been destroyed or damaged—the roads, rail and ports that literally feed and power this nation. The scale of damage to infrastructure is also enormous. Ninety thousand kilometres of road are in need of repair. Queensland is in need of help. This is a fact beyond any debate; both sides of the House agree. What is being debated is how best to respond to this disaster.

On one side, you have a proposal to introduce a limited short-term levy to pay for a reconstruction effort—I say ‘reconstruction effort’ because those on the other side do not seem to understand what that means—so that we can address the issues of the destruction on a scale that could not be planned for. This is brought to you by a government that steered this nation away from the massive economic downturn that was felt so intensely by almost all other nations.

On the other side you have a proposal to cut or defer $2 billion of expenditure from vital programs, brought to you by people who failed to notice an $11 billion black hole in their so-called election spending cuts. These cuts include a decision to end a program to fund schools in Indonesia. These are cuts that are against our national security and economic interests, against the future interests of thousands of Indonesian children, and against the right thing to do.

This short-sighted approach to foreign and defence policy is truly gobsmacking, because it overlooks the fact that we are a wealthy nation. It overlooks the fact that, as a wealthy nation, we can support those in need in Australia and at the same time support those in need in our region. It also overlooks the fact that poverty breeds terrorism. What is the best way of eliminating poverty and the cycle of disadvantage? It is education. Education is the great empowerer. It opens up opportunities like nothing else. It builds self-esteem. It provides choice. Not that that is a message terribly dear to the coalition’s heart, given its track record in education when it was in government.

On one side you have a government that is prepared to make the tough decisions—decisions that may not be popular at the time but are nonetheless absolutely vital to the national interest. I commend the Prime Minister for having the commitment to make that tough decision. On the other side you have an opposition that is prepared to say and do anything to win. No three-word slogan or one-line sound bite is off limits to win their game. The problem is: their slogans are without policy backbone, they are uncosted and possess no vision beyond tomorrow’s headlines. To every problem they have an answer which is quick, easy to understand and ultimately wrong. That is what we have been presented with by the opposition: a quick, populist answer which is just plain wrong—wrong for Queensland and wrong for Australia.

The opposition stands here and speaks about the cost of living and the effect on families. This is rich coming from a side of politics that was the highest taxing government in history and that has previously proposed no less than six levies. Tony Abbott went to the last election promising a $3 billion a year levy on business to pay for its parental leave scheme. Contrast that with our parental leave scheme: introduced on 1 January, fully funded by the government without slugging business or taxpayers. Two thousand new parents are now receiving the benefit and there are 22,000 applications waiting.

Then there was the Howard government’s addiction to levies. I find it interesting when members opposite suggest that they have difficulty in understanding the word ‘levy’, given their addiction to it in the past. There was the gun buyback levy, the Ansett levy, the East Timor levy, the milk levy and the sugar levy. Let us explore a few of these. The gun buyback scheme started in October 1996 and ended in September 1997. The Commonwealth funded the scheme through a one-off 0.2 per cent increase in the Medicare levy to raise about $500 million.

Then there was the milk levy of 11c a litre that raised $240 million a year to fund the industry’s adjustment to deregulation. It lasted eight years and was abolished by Labor in 2008. Then there was the Ansett levy, which was imposed after the collapse of that airline in 2001. The $10 levy was imposed on plane tickets in October 2001 to help recoup worker entitlements after the airline’s collapse a month earlier. It was scrapped in June last year after nearly $300 million was collected—but not before the Howard government used $100 million of that money to pay for aviation security before many former workers had received their full entitlements.

The criticism of this temporary, one-off levy, which does not affect anyone earning less than $50,000 and does not affect those who have been affected by the floods, is a bit rich—because, in government, this opposition was absolutely addicted to levies. It is also a bit rich that the opposition criticises the levy because it says it is concerned about the lives of Australian families—this, from the architects of Work Choices, the worst piece of legislation to hit Australian families. Where is the consistency? Where is the long-term vision? Put simply: there is none.

This temporary, one-off levy is a limited and responsible response to the issue before us. It will apply only to incomes over $50,000. In fact, 60 per cent of taxpayers will only pay an extra dollar a week, which will contribute directly to the cost of rebuilding the damaged infrastructure—the roads, the bridges, the rail and the ports. It will directly contribute to rebuilding Queensland and the basic fundamentals of the economic fabric and productivity of the country. It is not a frivolous expense to rebuild the foundations on which we feed and power the nation. It is not a frivolous expense. We are talking about the underpinnings vital to the survival of our exports, industry and trade, and the framework for Queensland’s growth and prosperity in the future—and through it our nation’s.

Let me turn to those opposite again. What is the essence of the opposition’s argument—if we can dignify their claims with this term? Essentially, all the opposition can do, like a toddler in a tantrum, is bang away on its toy drum pretending horror at the idea of the levy. Childish exaggeration is very much a central characteristic of the sloganeering of the opposition. But, back in the adult world—where we, the Gillard government operate—we do not have to look far to find independent commentary endorsing the flood levy as economically responsible, and we particularly get that from the Australian. The levy is widely recognised for what it is: modest, temporary and progressive. And it is the right thing to do—the right thing for a government that is serious about bringing the budget back into surplus. But, like those little toddlers, the opposition cannot even put forward an alternative without holding their breath until they are blue or descending into bickering, as we saw last week. Their sad efforts at scaremongering have no credibility.

Putting forward a new levy, no matter how modest it is, does invite the risk of unpopularity. But this government does not count the polls or shy away from tough decisions when it comes to doing the right thing. In the last week we have seen the opposition attempt to pander to what it shamefully thought would be xenophobic and selfish instincts by making much of cutting aid to Indonesian schools—an attempt, I am happy to see, that was completely ill-founded in its contemptuous and cynical view of the tolerance of the Australian people. You think the opposition would have learnt after Lindsay. The opposition does not truly seek to make the right decisions; it seeks only to scaremonger, to appeal to what it hopes are prejudice and mistrust.

The devastation wrought in Queensland will not be easy to redress—nor does the government try to pretend it will be. But the bills we are debating are part of its careful, responsible and measured response. I call on all members, including those opposite, to support these bills.

Don Randall (Canning, Liberal Party, Shadow Parliamentary Secretary for Local Government) Share this | Link to this | Hansard source

I am very pleased to speak on the Tax Laws Amendment (Temporary Flood Reconstruction Levy) Bill 2011 and related bill, because there are some local implications for my electorate and I want to reveal to the House the feedback from my electorate. I have great admiration for the member for Canberra, who spoke previously, but I wish to comment on the Orwellian speak that the others are using on this issue about a ‘temporary’ levy—the same as their ‘temporary’ budget deficit. There is nothing temporary about this. The history of these sorts of levies is that they continue and that they will be morphed into something else at some time in the future.

What we are dealing with here is one of the worst governments ever in Australia’s history to be in this House. It is probably not quite as bad as the Whitlam government, but it is a mess. When I outline some examples in my speech you will see how this government is mismanaging this economy and why this levy is turning into a mess for this government. The problem is that the government does not know how many people are involved. It is drunk on taxes. As a Western Australian I object to the fact that this year this government wants to impose a carbon tax—when Julie Gillard said before the election that she would not have a tax—and it wants to impose a mining tax on Western Australia, and now we have got another tax.

I have constituents contacting me about this. Steven Pin, from my electorate, from Buckingham Road in Kelmscott—where houses were burnt down—rang about the Queensland levy. Mr Pin’s home was badly affected by the Kelmscott fires and is facing huge costs to rebuild parts of his house et cetera. He feels that he should not have to pay the levy. Michael King, from Mount Richon, said: ‘I really don’t support this levy.’ Dave Gossage says: ‘As a volunteer firefighter, I have an issue with being taxed again by this government.’ I could go on and on but, because of time constraints, I will limit it. At the end of the day, this is a bad tax.

Gary Gray (Brand, Australian Labor Party, Minister for the Public Service and Integrity) Share this | Link to this | Hansard source

Mr Gray interjecting

Don Randall (Canning, Liberal Party, Shadow Parliamentary Secretary for Local Government) Share this | Link to this | Hansard source

Absolutely. There are misguided people all around Australia on this issue. At the end of the day, this tax is misdirected and misguided. The number of people to be affected is not known and the amount is not known. The problem is that the Prime Minister is not even sure who should be paying the tax.

My electorate has been affected by bushfires on two occasions recently. In the Lake Clifton bushfires, 11 houses were burnt and there were 72 houses burnt in the recent Roleystone-Kelmscott fires. Interestingly—to show you just what a mess this is—Senator Cormann in estimates yesterday asked Treasury official, Mr David Tune—

Gary Gray (Brand, Australian Labor Party, Minister for the Public Service and Integrity) Share this | Link to this | Hansard source

Finance official.

Don Randall (Canning, Liberal Party, Shadow Parliamentary Secretary for Local Government) Share this | Link to this | Hansard source

I appreciate your help—Finance official, Mr David Tune.

Gary Gray (Brand, Australian Labor Party, Minister for the Public Service and Integrity) Share this | Link to this | Hansard source

Mr Gray interjecting

Don Randall (Canning, Liberal Party, Shadow Parliamentary Secretary for Local Government) Share this | Link to this | Hansard source

If I can continue—

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

The minister will desist so that the member can be heard in peace. Do not respond to interjections. The member for Canning has the call.

Don Randall (Canning, Liberal Party, Shadow Parliamentary Secretary for Local Government) Share this | Link to this | Hansard source

In estimates yesterday, the finance official, Mr David Tune, was asked a question regarding natural disaster relief payments to disaster declared areas. He was asked whether people in those areas would be paying the levy. His answer was quite interesting. Senator Cormann asked:

People like those in Kelmscott that was subject to those bushfires will be exempt from the flood tax?

The finance official answered:

No, no. Not necessarily, no.

Senator Cormann: Why is that?

The official answered:

Well, the government’s decision at the moment is that those who are subject to the floods are exempt from the levy. It would require another decision for that.

In other words, whether or not people affected by fires would be paying the levy. Senator Cormann continued:

So … if the natural disaster you are subject to was a flood you will be exempt from the flat tax. If it is any other natural disaster you are not exempt from the tax?

The official answered:

That is the situation at the moment.

Let’s talk about real, live action on this issue. This is what I am asking: how many people are going to be exempt, how many people will not be exempt?

I put out a press release, which was picked up by the West Australian newspaper, saying that people in my electorate would be hit with this tax, as per the description from the finance official. Interestingly, by the time the West Australian had finished talking to the Prime Minister’s office, things had changed. A spokesman was reported in the West Australian:

A spokesman for Ms Gillard said victims of this year’s WA bushfires would be exempted.

“As the Prime Minister has made clear, if people have been hit hard by natural disasters in the last few weeks, then it’s only fair that they do not pay the levy …

Well, they were going to pay the levy yesterday, but they are not going to pay the levy today? What a mess. The official declared to Senator Cormann in estimates—

Gary Gray (Brand, Australian Labor Party, Minister for the Public Service and Integrity) Share this | Link to this | Hansard source

Mr Gray interjecting

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

The minister has had his fun.

Don Randall (Canning, Liberal Party, Shadow Parliamentary Secretary for Local Government) Share this | Link to this | Hansard source

I have great regard for the member opposite, but I would hate to have to call a quorum on the next speaker from the Labor Party because of time taken. So, people who were going to be hit yesterday are not going to be hit today. That is all I am saying. But it goes further. This sort of ad hoc decision about those who are going to pay the levy is further exemplified in the article by Andrew Probyn in today’s West Australian:

Discrepancies in the treatment of WA disaster victims emerged … this month when the West Australian revealed Gascoyne flood victims were denied emergency relief payments from Centrelink …

After the West reported, Ms Gillard and Attorney-General Robert McClelland announced those affected by the Gascoyne flood would be eligible for payments.

Here are two occasions when those who were affected by natural disasters were going to be left high and dry—that is probably not the right term for people in the Gascoyne, because they now have their third flood coming through, and I understand that Cyclone Carlos is hanging off Carnarvon today—but, when the media gets on to the Prime Minister when she feels some sort of sensitivity towards this, she changes her mind. Is this how decisions are being made by this terrible government that is going to impose another tax on us—ad hoc decisions? If you go to the media and make a fuss about it, the Prime Minister backflips.

We have seen her backflips in this place. She announced that she was going to cancel several green programs. We know there is a green alliance with the government in this House, and the tail is wagging the dog. Along comes Senator Brown, some of the Greens say they have some leverage over the Prime Minister and they reintroduce some of the green initiatives that she had already cancelled. So, cancel it one day and reinstate it the next. Along comes the member for Denison—the same thing: lean on the Prime Minister, she changes her mind and reinstates it. Is this how we have government in this country? Is this how this levy will be applied, depending on who makes the most noise and who does not? Will it apply to people affected previously? Will it apply to any future disaster in Australia? God forbid we have another event—another cyclone. The member for Paterson is sitting here—there was the Newcastle earthquake. Will those people be exempt? Is it going to be months ahead or years ahead? It is so sloppy and out of control that we have a situation where we are governed by press release and media embarrassment of the Prime Minister.

In the short time allotted to me, I am pleased to say that I wrote to the Prime Minister previously—certainly well before yesterday—on this issue, and that saved some of the 72 people who lost their homes in my electorate and some of the 30-odd people whose homes were partially damaged from having to pay this levy. As I said, the problem is that the government have decided that they will find $1.2 billion from a levy and the rest from cuts. The cuts have been reversed and they do not know how much it will actually cost. They then say, ‘We’ll find some further budget cuts.’ Government has the capacity to pay for and deal with natural disasters. This government should do that. They should talk about spending priorities. For example, the $960 billion spent on illegal arrivals to this country over one year is the amount that was spent by the Howard government over its entire term. If you stopped the boats, you could find most of your spending from the illegal migration program, yet as a priority they still allow illegal arrivals to come. There is no hesitation in paying all the costs associated with those arrivals, yet they are willing to tax the Australian people with another levy because they do not want to attack some of their sacred cows, like the illegal migration program.

David Bradbury (Lindsay, Australian Labor Party, Parliamentary Secretary to the Treasurer) Share this | Link to this | Hansard source

It is a privilege to contribute to the debate on the Tax Laws Amendment (Temporary Flood Reconstruction Levy) Bill 2011 and the Income Tax Rates Amendment (Temporary Flood Reconstruction Levy) Bill 2011. It is a key debate that is at the centre of the discussion about the future of this country. Obviously, we have been through a summer of extraordinary natural disasters. I want to take this opportunity, as I have done in the House previously, to convey my condolences to those who have been impacted by the natural disasters in this country. I would also like to take this opportunity to acknowledge that, just across the Tasman, our neighbours—our brothers and sisters in New Zealand—have been so deeply affected by the earthquake in Christchurch. They have already, of course, suffered the devastation of the earlier quakes, but with what has occurred over the last 24 hours or so, having gone through what we have been through as a nation, our hearts certainly go out to those across the Tasman. Indeed, the Australian government has already made various announcements around how it intends to provide assistance to the New Zealand government.

As I indicated, I have spoken at length in the House previously about the devastating natural disasters that we have faced in this country. In that respect, I wish to contain my comments principally to the debate around how we as a nation intend to fund the recovery effort. That is what these bills are about. They go to how we as a government and how the Australian people intend to ensure that we do not leave those affected by these natural disasters behind but that we step up to the plate and do what is required to rebuild these communities. There are clear and obvious reasons as to why that is important. It is important not just to those communities, though clearly it is; equally it is important to communities all around Australia. There are and will continue to be flow-on effects that will be felt in supermarkets and across lounge rooms and dinner tables around this country. There are very pressing and urgent needs of Australians in the areas that have been affected by those disasters, but there are equally important but more wide-ranging impacts to be felt right across the country.

The scale of what is required has been set out by many speakers in this debate. The early estimates are that the cost of rebuilding will be somewhere in the order of $5.6 billion—that is what will be required from the federal government. That does not include the effects of Cyclone Yasi, so, obviously, the task that lies ahead is significant and it requires us as a nation to work out how we intend to fund that. There are a range of options around how we may seek to fund that. The government has embarked upon the course of determining that some of those funds could be raised in the form of a flood levy. Also, we are deferring some infrastructure projects and embarking upon some expenditure cuts. We believe that this is an appropriate, fair and balanced mix of measures to address the need for us to raise this $5.6 billion to rebuild communities in the areas affected by the natural disasters.

There has, of course, been a lot of debate around whether or not this is an appropriate means through which the government should be funding the recovery effort, and that is a debate that we very much welcome. We think it is entirely reasonable for Australians to ask the question: is this the most appropriate way for us as a nation to make our contribution towards the rebuilding effort? It has been said by many in this debate that the Australian people have been very generous in their private donations. That needs to be acknowledged. We should not be surprised by it, because the Australian people have always shown a preparedness to step forward to help out—

Bob Baldwin (Paterson, Liberal Party, Shadow Minister for Tourism) Share this | Link to this | Hansard source

As we will donate to New Zealand.

David Bradbury (Lindsay, Australian Labor Party, Parliamentary Secretary to the Treasurer) Share this | Link to this | Hansard source

Indeed, as the shadow minister for tourism indicates, we will all step forward and make contributions to assist those in New Zealand as well. I think it is beyond contention that we as a people are generous in our private donations, but, whichever way you look at it, the total amount of donations that has been raised through the Queensland Premier’s Disaster Relief Appeal is somewhere in the order of $200 million. Those moneys will be applied to certain purposes, but that amount falls significantly short of the overall rebuilding cost. We can think about it in these terms: $5.6 billion is almost 30 times the amount donated through the relief appeal. We welcome the donations and thank everyone who has dug deep to assist those in the areas affected by the natural disasters, but as a government we have to find the funds to do what every Australian should expect—that, if they were in a similar situation, the government would step in and ensure that that rebuilding effort was facilitated.

In raising these funds, most of the discussion has centred on the flood levy. I have to say that I am surprised that the opposition has gone down the path of opposing this levy.

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

No, you’re not!

David Bradbury (Lindsay, Australian Labor Party, Parliamentary Secretary to the Treasurer) Share this | Link to this | Hansard source

I am surprised because I know that on many occasions in the past when levies, particularly directed towards confronting challenges in the national interest, were proposed by those on the other side when they were in government they were able to rely on the support of the Labor Party.

Bob Baldwin (Paterson, Liberal Party, Shadow Minister for Tourism) Share this | Link to this | Hansard source

The community weren’t donating of their own free will at that time.

David Bradbury (Lindsay, Australian Labor Party, Parliamentary Secretary to the Treasurer) Share this | Link to this | Hansard source

The community were donating in other ways in respect of some of those levies—for example, through the prices that consumers were paying—but can we just have a look at this question of levies. There is almost a religious fervour in the way in which people on the other side are opposed to the imposition of a levy. You would be forgiven for thinking that this was the first levy to be imposed on the Australian people, but indeed it is not. In recent history we can see that the coalition in particular has made an art form of introducing levies.

There was the gun buyback levy, for example. I am not disputing the merits of some of these levies, because they were applied to confronting some challenges in the national interest. There was the East Timor intervention—the subject of a levy which was not implemented because it was not required by the time it was set to come into effect. There was the dairy industry restructure, the payout of the Ansett staff, terrorism reinsurance and the sugar industry restructure. Those opposite—who say ‘It is almost criminal for a government to come forward and do such an outrageous thing as to impose a levy on the community’—had great form on this in government. There was not one levy, not two levies, not three levies but six levies—you could call it a bevy of levies—and the mother of all levies, in a sense, was the one proposed by the Leader of the Opposition at the last election. We know that those on the other side do not really like to talk about this because it was a matter of some division—

Bob Baldwin (Paterson, Liberal Party, Shadow Minister for Tourism) Share this | Link to this | Hansard source

Mr Baldwin interjecting

David Bradbury (Lindsay, Australian Labor Party, Parliamentary Secretary to the Treasurer) Share this | Link to this | Hansard source

No. In fact, not only—

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

The member for Paterson will desist, and the parliamentary secretary will stop responding to interjections.

David Bradbury (Lindsay, Australian Labor Party, Parliamentary Secretary to the Treasurer) Share this | Link to this | Hansard source

I make the point that not only is the government not opposed to paid parental leave but also we proudly stand here as the first government in Australia’s history to implement a paid parental leave scheme. An alternative scheme was proposed which sought to raise the funds to deliver the scheme by way of an impost—a levy, as I recall. I do not want to go through the entire history of that, but we all remember that the first thing that the Leader of the Opposition said when he came into that role was that he was not going to increase taxes; yet the first policy he announced was an increased levy. There was a bit of a fudge during the election campaign suggesting that it was not a levy at all or was only a temporary levy, but at the end of the day it was a levy.

Those on the other side proposed a levy for a worthy cause. We believe that paid parental leave is a worthy cause, but it was not something that required an immediate and urgent response. Indeed, I think there is a much stronger argument that those sorts of expenditures should be covered through general expenditure restraint or expenditure cuts, but that levy was not going to be covered that way. So on the other side we have those who supported six levies—in fact, they supported seven levies, including the levy that we never got because the Australian people got in the way of it—yet they are opposed to this levy. I think the truth is that they are opposed not to levies in general but to a Labor levy. Liberal levies are good; Labor levies are obviously not so good.

A stream of economists have come forward to indicate that they believe that this levy is a balanced package. Craig James from Commsec said it best:

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.

There is an important element in the government’s response to the disaster relief effort—that is, the way in which the infrastructure deferrals that have been put on the table will not only reduce the expenditure of government and give us the capacity to meet the rebuilding task but also take some of the pressure off the capacity constraints that the Australian economy is facing and thereby take some pressure off interest rates. The opposition’s response to the floods was, ‘We’re going to make a whole series of cuts.’ In fact, they were not cuts; they were all deferrals. They are unlike the deferrals that we have proposed, however, which are specifically infrastructure deferrals, the purpose of which is to take some of the heat out of the economy so that where there are capacity constraints and skills shortages we will not as a result of the rebuilding effort put more pressure on interest rates, inflation and the cost of living.

That is a sensible, rational approach to economic policy, and I think that the underlying rationale of the response from the opposition falls a long way short. A number of the cuts, particularly those to the aid funding to Indonesian schools, were not motivated by anything other than some of the more malicious intent that we have come to know about thanks to leaks. We now know that there was a discussion going on in the shadow cabinet around what might be in the national interest, and that discussion had nothing to do with the rebuilding effort but a lot to do with stirring up resentment and sensitivities in communities that may well be very far away from the areas affected by the floods.

This is not only a temporary levy but also a modest one. A bit earlier, I heard the member for Mitchell’s contribution and was intrigued by it. On the one hand, he complained that higher income people did not receive handouts when the government made its stimulus payments and, on the other hand, said that he is a great advocate of small government. Somehow he wants to reconcile a commitment to small government with big, fat, middle-class welfare contributions. His contribution was interesting, but thankfully for the Australian people he is a long way from the Treasury bench—in fact, he is a long way from his party’s front bench. That is probably a good thing for the debate around the management of economic policy in this country.

As I said, this levy is of a modest nature. The point has been made that those earning under $50,000 will not pay anything, while those earning above $50,000 will pay incrementally. But one of the points that has not been made very clearly throughout this debate is the relationship between the tax cuts that have been delivered over the last few years and the modest, temporary amount that will be required over the coming year. For example, someone on $120,000 a year will pay $8.65 per week under the levy, but through the tax cuts of 2008, 2009 and 2010 they have received a cut of $52.88. This levy is temporary in nature, and people will not be subjected to that imposition at the end of the following financial year. So we think it is an important measure and a sensible one as well. On 9 March 2010, the opposition leader, in defending his paid parental leave scheme, said:

Sometimes, for very, very important social reasons, for national interest reasons, you’ve got to say, ‘We need the money.’

If a levy was good enough then, it is good enough now. (Time expired)

Bob Baldwin (Paterson, Liberal Party, Shadow Minister for Tourism) Share this | Link to this | Hansard source

I rise today to oppose vehemently the Tax Laws Amendment (Temporary Flood Reconstruction Levy) Bill 2011 and the Income Tax Rates Amendment (Temporary Flood Reconstruction Levy) Bill 2011. As the Leader of the Opposition said in this chamber today, ‘We have a Prime Minister who has never met a tax she didn’t like or a tax she couldn’t hike.’ This new Julia is no different from the old Julia, and like her predecessors—Rudd, Keating, Hawke and Whitlam—

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

Order! The member will refer to members by their appropriate titles.

Bob Baldwin (Paterson, Liberal Party, Shadow Minister for Tourism) Share this | Link to this | Hansard source

she is addicted to putting up a tax as a means of solution. It just shows a lack of management understanding

This Labor package will place further burdens on Paterson residents who are already dealing with skyrocketing living costs. Budgets are stretched to the limit because of recent increases in the price of power, water, rent, interest rates, groceries and fuel under the Gillard Labor government. Because our Treasurer, Wayne Swan, cannot manage a budget, local families have to rework theirs time and time again—and he is supposed to be a leader.

As Peter Martin wrote in the Sydney Morning Herald on 15 February:

IF YOU think your cost of living is rising faster than what official figures seem to say, you are probably right.

Living cost indices published by the Bureau of Statistics yesterday show the increases facing working families, age pension households and welfare beneficiaries have all outpaced the consumer price index.

In the year just gone, working households faced extra costs of 4.5 per cent, aged pensioners 3.1 per cent and welfare recipients 4.5 per cent. The CPI grew 2.7 per cent.

The bureau says there are different reasons for each of the rises. Aged pensioners spend a relatively high proportion of their income on utility bills and fruit and vegetables, the cost of which shot up.

As a group, welfare beneficiaries spend more than most on alcohol and tobacco, which rose sharply in price largely as a result of the 25 per cent increase in cigarette tax.

Working families are highly likely to face mortgage payments, which rose by 30 per cent over the year as a result of four Reserve Bank rate rises and one imposed by the banks themselves.

This just about sums it up and it just is not good enough. Why not? Because this Labor government cannot get its spending under control. It is not that it cannot; it is a fact that it refuses to do so.

The coalition had more than $20 billion in the bank when Labor took over power. Now we have a debt which will peak at $94.4 billion according to the Mid-Year Economic and Fiscal Outlook. Because of our Treasurer’s and Prime Minister’s reckless spending, Australians have been paying for Labor to borrow more than $100 million every single day. That places upward cost pressures on just about every single product you can buy.

The spending and the debt would not be as shameful if the money had been spent wisely. But just look at our Prime Minister’s long list of failures. There was the school halls rip-off; that wasted an estimated $8 billion, which was half of what the entire program cost. Worse still, it left some schools with more inferior buildings than they had actually started with.

The border protection failure means there have now been more than 200 illegal boat arrivals under Labor, and it will cost taxpayers more than $760 million in this financial year alone. Rather than doing what is necessary to stop people smugglers putting lives at risk, Labor is building more facilities to house asylum seekers on Australian soil. They have actually put up the sign ‘open for business’.

The dodgy home insulation tragedy cost $2.4 billion, and was finally shut down after more than 190 related house fires—not to mention the deaths. The $50 billion National Broadband Network will take at least eight years to roll out and will not even reach all of the population. A paper released on 9 February this year by the Economist Intelligence Unit, one of the world’s most respected research organisations, shows that the NBN will cost Australian taxpayers 24 times as much as South Korea’s cost South Korean taxpayers. Despite the excessive cost, it will only deliver one-tenth the speed.

I have to mention GroceryWatch, Fuelwatch and the bank switch, all of which were supposed to help Australian families deal with the cost of food, petrol and lending. All those promises were abandoned, and now all of those things cost more. GroceryWatch alone saw this Labor government waste $7 million in taxpayer money.

I could go on, but there is not enough time. It makes you wonder: are Treasurer Wayne Swan and Prime Minister Julia Gillard really so incompetent that they cannot roll out a successful program, or do they just not care about wasting money and forcing up costs for everyday Australians? I think it is the latter. After all, a government with a $350 billion budget should be able to find $1.8 billion—the amount it hopes to raise through this flood levy. That is like having $350 in your pocket and asking someone for $1.80.

As Derek from Tuncurry, in my electorate, commented in a letter to me about the flood levy:

We are taxed enough, I am a single parent who receives no government support, pays most of my income in child support, escalating electricity costs, food etc. Now to lose several hundred more dollars a year because the Rudd/Gillard governments have wasted the national savings on insulation bats and blatant wasteful spending on ridiculous tin sheds for schools is totally unacceptable.

Labor seems to think that a tax is the answer to everything. If the Labor Party has its way, 2011 will be the year of the mining tax, the carbon tax and the flood tax, and that will mean higher prices, as history shows. In 2008, when the Labor Government introduced a new tax on alcohol, the price of alcohol went up; when it introduced a higher tax on cars, the cost of cars went up; and when it turned its focus to private health insurance, the cost of health care went up. As has been said, our Prime Minister has never met a tax that she did not like, or a tax that she was not prepared to hike.

The only way to stop history repeating itself this time is for Labor to get its spending under control. The coalition offered to help out. In fact, despite being in opposition, it was the coalition that was able to identify over $2 billion in savings over the forward estimates—enough to mean that a flood levy would not be needed. We were able to do so because we understood that in government you have to make tough decisions to protect your citizens. The coalition demonstrated that when last in government, with a clean record of fiscal responsibility. Then Treasurer Peter Costello entered government with a massive $100 billion debt from the previous Labor government, but he made the gutsy decisions he was elected for. Like any responsible person running a household or business budget, Peter Costello and Prime Minister John Howard not only paid back Labor’s debt; they also put some money away for a rainy day. That is the coalition way.

Since Gough Whitlam, the Labor way is to spend as if there is a money tree at the Lodge, when in fact the money tree is made up of hardworking taxpayers who will pay for Labor’s ineptitude for years to come. Labor’s failure to make tough decisions is nothing more than political cowardice. Today I oppose a legislation package which is unprecedented in this parliament. Never before in Australian history have people been asked to donate, responded to that call with overwhelming generosity and then had more of their money forcefully stripped away. I have received dozens of letters at my office on this very issue. Jo-Anne from the town of Paterson summed up her feelings when she wrote:

I cannot believe that we are being forced to contribute to the rebuilding of Queensland by the Gillard government. Is it likely that this is going to pass through parliament? Sadly, it has made friends and acquaintances of mine not privately donate, and long term I think it will make a lot of people think about whether to donate to other disasters in the future.

Australians are a generous people. I see it every day when travelling in my electorate. As soon as the floods hit, my office was overwhelmed with offers of money, goods and time. A number of local events were also held to raise money, including a fundraiser organised at Salamander Bay Shopping Centre which raised in excess of $15,000. Of course, that was just one of a number of local events. There was also a lunch at Corlette, a barbecue at Bulahdelah and a bucket collection at Australia Day celebrations in Maitland, to name just a few. It is amazing to see that when people are struggling with their own finances they still find a way to give. In punishing them afterwards, by making tax time more costly, Labor is delivering a slap in the face to those generous Australians.

I join the government in offering my sincere condolences to those who suffered in the floods: those who lost homes, businesses, loved ones and friends. I also join the government in thanking the amazing volunteers and charities who have worked tirelessly to help affected residents. They have been supported in their work by the provision of public donations. They have been helping our neighbours, which I believe is our moral duty. But it is a government’s duty to supply infrastructure. It is a government’s duty to ensure that the roads are maintained, levee banks are constructed and bridges are built. It is a government’s duty to ensure that it handles public money with the respect it demands. Labor has not done that and it does not deserve to be trusted with further public money, garnered through another new tax. These are completely unnecessary bills, which could easily be made redundant if the Gillard Labor government made a few tough decisions. I urge the Prime Minister to do the job she was elected for: to cut spending, instead of introducing a great big new tax. That is the best way to help our fellow Australians—in fact, all Australians. You will not maintain faith in the Australian spirit of helping your mates out with the Labor way of forcing people to do what is in their nature. Accordingly, I vehemently oppose this package of bills.

George Christensen (Dawson, National Party) Share this | Link to this | Hansard source

I rise to join the condemnation of this bill, the Tax Laws Amendment (Temporary Flood Reconstruction Levy) Bill 2011, and I also join in the condemnation of this flood tax that the Gillard Labor government is going to slug many Australians and Queenslanders with. I have said it before in this chamber, but I will say it again: in the wake of this massive flood disaster and cyclone disaster that we have had in my home state of Queensland, which has impacted or will impact on just about every Queenslander in one way, shape or form, the answer that this government has given is an answer that only a Labor government could give—‘Let’s bring in a new tax.’

When people are doing it tough in the community with the rising cost of living, these guys are going to slug them again. Make no mistake: it will hurt everyday people in my electorate of Dawson. The other side seem to think that anyone earning $50,000 or over is on a good wicket and so they should pay through the nose. The reality is something altogether different. Just in case they haven’t got out into the real world lately, outside caucus, let me give an illustration of an average young couple from my electorate. This is a real couple from my electorate, Matt and Casey. He is a miner; she is a counsellor at a crisis centre. The flood tax to be taken from them is literally hundreds of dollars, roughly a bit over $550.

All the Labor spin doctors and apologists are coming out with these cheap lines about the levy being just the cost of a tin of bins, a cup of coffee or a piece of cake. A piece of cake? Get real! This young couple that I mentioned, Matt and Casey, have a large mortgage, costing them about $700 a week—but they should not worry; it is just a tin of beans extra! Their grocery bill is $200 a week and rising—but do not worry; it is just a cup of coffee extra! Matt and Casey’s electricity bill is nearly $300 a quarter and rising, and Labor are going to add to it with their carbon tax—but it is just a piece of cake extra! Their rates are nearly $3,500 a year, their phone bill is $200 a month, their fuel bill is $150 a week and rising, their home insurance and car insurance are nudging $3,500 a year, and their private health cover is $2,000 a year—and Labor are going to get rid of their rebate—but it is just a cup of coffee more, they say. Each month, Matt and Casey pay a combined $4,000-plus in tax to the federal government already. It is just a piece of cake, isn’t it? And now you guys want more. What has made it even worse is that they want more when these people have already given. Like many others who may soon find themselves having to put their hand in their pocket to pay this flood tax, Matt and Casey have actually already donated to flood relief efforts. And guess what: they actually went through Cyclone Yasi. They had to have their yard cleared of branches, debris and rubbish that were blown about from the cyclone, yet they are still going to have to pay. That is what is so bad about this flood tax. It hits those who have already suffered. As I said before, the floods and cyclone have impacted on nearly every Queenslander in some way, shape or form and now the Gillard Labor government is going to tax them in order to somehow help them out.

I want to refer to Mitch Clarke, a Proserpine local who owns Fresh Network Whitsunday, a fruit and vegetable company that sells its produce at the Brisbane markets. Mitch had tens of thousands of dollars worth of stock wiped out in Rocklea at the markets and he had equipment completely ruined, all a direct result of flooding, and yet he still has to pay the flood tax. I also want to refer to Bowen residents Rob and Cheryl Vennard, mango farmers, who had their entire year’s produce destroyed, also at the Brisbane markets. They lost $400,000 in produce when the markets at Rocklea were flooded, and because they go to the effort to process their mangoes, the government classifies them as manufacturers and so they miss out on any assistance provided to primary producers. That loss caused these hardworking farmers to deregister vehicles and, unfortunately, lay off staff. And yet it seems Rob and Cheryl are still going to have to pay this flood tax.

Then there are the many tourism operators throughout the Whitsundays—motel owners, charter boat operators and restaurateurs—who have suffered from record cancellations over the Christmas holiday period and record low numbers of tourists. These people have felt the brunt of the indirect impact of the floods. At a time when they should have had a massive influx of tourists, a time that should have been the best for the tourism industry in the Whitsundays, they have had record losses. These people have felt the effects of the flood, indirectly, and yet they will still be slugged with Labor’s flood tax.

There are the commercial fishermen from Bowen. These guys may not have had boats destroyed or equipment ruined, but they have had their fishing waters from Cairns through to Mackay all churned up. They tell me that there are sand and coral islands out there that a few weeks ago did not exist. That shows the level of disturbance Cyclone Yasi caused to their fishery. But more concerning is the fact that there is now next to no catch of consequence between the bottom end of Cairns and the top end of Mackay and yet, while they have had their crop per se ruined, they are not eligible for any assistance either through a grant or a concessional loan under the current arrangements. What some of them do find themselves eligible for is the flood tax. These are salt of the earth people, cut down by Mother Nature, and now the government wants to get in a free kick. These are but a handful of examples of this disgraceful situation. There are many families in Dawson and elsewhere in Queensland who are struggling in the wake of the economic effects of the floods and Cyclone Yasi.

The other side talk about ‘mateship’ when they talk about this tax. All through this debate and in the media, members of the government have been selling this flood tax as if it is going to somehow rebuild people’s homes and livelihoods. In fact it was the Treasurer who deceptively tried to tie this new tax to the rebuilding of Queenslanders’ homes. The flood tax is not for rebuilding homes; the reality is that the money collected from the flood tax is going to be used for things which would normally be funded through contingency funds that are available when governments have a budget surplus.

The problem is the cupboard is bare. Labor destroyed that budget surplus through the disastrous pink batts program and other failed schemes, not to forget their $900 cash giveaway. Most disturbing to me is the fact that people who, according to the government, earned too much to receive one of those $900 cheques—people like Matt and his partner, Casey, from my electorate that I mentioned earlier—now have to fork out hundreds of dollars a year in ‘flood tax’. The last Liberal-National coalition government had billions of dollars in the kitty for rebuilding after events such as the Queensland flood disaster and Cyclone Yasi. Now, because of Labor’s short-sightedness and lack of ticker to make the hard decisions, we, the people, have to pay once again.

There is no way you can say this tax is about mateship. You do not tax your mate when he is down. It is not mateship at all; it is bastardry—an act of bastardry. The argument we are having here today is not about whether we should rebuild Queensland or not. Of course it needs to be rebuilt. The Liberal-National coalition is committed to the rebuilding of Queensland’s infrastructure. The argument we are having here today is whether you tax people when they are already doing it tough, when they are already struggling with the rising costs of living and when they are suffering the indirect and in some cases—as I have outlined—direct effects of Cyclone Yasi and the floods.

Sadly, those opposite are trying as much as they can to deceive the electorate into thinking the only way that Queensland can be rebuilt is by this tax. The bile that has been spewing from some of those opposite, particularly the Prime Minister and the Treasurer, against those of us on this side of the House about that point has been absolutely disgraceful. To claim that we do not care about Queenslanders because we oppose their tax that is going to hurt Queenslanders and to claim that we want to leave things the way they are in Queensland because we do not support a new tax on families—and they have all made these kinds of claims—is dishonest and unethical. To be honest, it sticks in my craw, because I was there, like so many other representatives on this side of the House. I was there in Brisbane when the floods hit. I joined ‘Can Do’ Campbell Newman’s 20,000-strong volunteer army and helped people clean up their yards. I was there in North Queensland, in Bowen, when Cyclone Anthony hit. And when Cyclone Yasi hit I was there helping out my constituents to get the SES to fix a tarp on a roof. I was there in the Burdekin and in Townsville, going door to door, street by street, talking with residents whose homes were damaged or whose yards had become an absolute mess because of the cyclone.

I dipped into my pocket to help out with the relief efforts. I would be interested to see how many on the other side did likewise. They claim we have no compassion for Queensland victims of the floods and cyclone disasters because we do not support this tax. You could not get any more dedicated to the cause of flood victims than the member for Wright has been. This guy worked his guts out day and night. He was at the evacuation centres, he helped organise relief efforts and fundraisers and he was there with the family members of those who did not make it. He was typical of many on this side of the House—working with their local residents who were hurting from this disaster, working on the ground. He was not coming into this place crying crocodile tears one minute and spewing venom at us for apparently being heartless the next.

The thing is we do not need a tax in order to rebuild communities throughout Queensland and elsewhere in the nation that have had to suffer natural disasters. Don’t take it from me; take it from Saul Eslake, former chief economist with the ANZ, who told a committee of this House that this tax was a political decision rather than an economic one and this could be done another way. Take it from economist Professor Warwick McKibbin of the ANU, who also said this decision for a flood tax was of ‘a political nature, not of an economic nature’ and could be done another way. Take it from the Australian Industry Group, the Australian Chamber of Commerce and Industry or the Australian Retailers’ Association.

We in the Liberal-National coalition have outlined more than $2 billion in further savings that the Gillard government could adopt instead of its flood tax. We have a plan they could adopt which would pay for the $5.6 billion cost of rebuilding Queensland without this tax. We start with saving the funding that Australia sends overseas to Islamic schools in Indonesia. I mean, half of this Labor lot and its Green cohorts do not even want money spent on private schools here in Australia, but they get their backs up when we talk about cutting funding to private schools in Indonesia. We have savings from pulling back on the Murray-Darling Basin water buybacks and from lowering welfare to the motor industry. These are sensible budget cuts at a time when so many people have been affected by these disasters. I say ‘sensible’ particularly because we in the Liberal-National coalition would not cut funding of flood-proofing projects on the Bruce Highway in North Queensland as Labor has proposed to do to fund the recovery. How stupid. How ironic. How short-sighted is it to cut funding to flood-proofing projects in North Queensland—two in my electorate of Dawson and one in Kennedy? You not only want to tax us up in the north but want to hold us down by allowing a situation to continue where the artery of North Queensland towns, the Bruce Highway, is cut off whenever there is a greater than average rain event.

The Prime Minister had the gall to get up and say in this House a week or so ago when moving this bill that her flood tax was going to repair the Bruce Highway between Brisbane and Cairns. Her plan involves cutting funding to flood-proofing projects on the Bruce Highway. North Queenslanders will not tolerate this. We in the Liberal-National coalition had managed to find the savings without making a savage cut, without the need for a tax, and so Labor should be able to as well.

This is all just a sign of a government that is out of touch, has lost its way and just wants to tax more and more. It thinks it can peddle a tax when the price of everything is increasing. It thinks it can get away with making false claims—that this tax is going to help rebuild people’s homes and lives. It thinks that it can continue to screw people down time and again with tax after tax—a carbon tax, a mining tax and now this flood tax. It had better think again. Australians will not wear this for much longer. We will not tolerate it on this side of the House and we can only hope that when this bill goes to the vote we jettison this flood tax and adopt sensible savings measures to deal with this natural disaster crisis, as a decent government would.

Adam Bandt (Melbourne, Australian Greens) Share this | Link to this | Hansard source

The recent extreme weather events across the country, particularly in Queensland, have been unprecedented in their force, scope and damage. The loss of life, harm to livestock and damage to buildings and infrastructure has been appalling. In my own state of Victoria, as in Queensland, there has been enormous damage to agricultural land and to current crops. Unfortunately, as we have seen this week in Western Australia, in the Northern Territory and again in Queensland, damage from extreme weather continues and is likely to continue throughout the wet season. We know, because the climate scientists tell us, that these types of extreme weather events are only going to become more frequent and more severe as global warming exacerbates storm systems, fuelling them with more moisture and energy. It is possible that the unprecedented warming in our oceans has supercharged the recent storms—storms that are triggered by the La Nina period, which always brings greater rain and storms—and has made them worse and full of more energy.

Australia has always been a land of extremes, but what the climate scientists are telling us is that these extremes are likely to become more frequent and more severe. Certainly, there is growing evidence that climate change and extreme flooding are linked. Two recent studies, published in the prestigious scientific journal Nature, laid out the empirical evidence for linking flooding and global warming. One study looked at the whole of the Northern Hemisphere and another examined a specific weather event in Wales. We will need to continue to monitor the scientific research that is developing in this area but, for now, we can say with certainty, although we may not be able to link specific events here in Australia to climate change, that we will face more and worse extreme weather in the future because of climate change.

It may be, as I have said in this place before, that soon the term ‘natural disaster’ will no longer describe what is happening, that in fact something very unnatural and human-made is occurring. Regardless of where you stand on this issue, it is absolutely clear that there is now extensive established scientific research, looking at the whole of Australia as well as particular regions, which points towards extreme weather because of climate change. In my own electorate of Melbourne, I received a briefing from Melbourne Water about a study that they had released which suggests that some areas—even in the inner city of Melbourne—may be facing up to a 30 per cent increase in flooding because of climate change. At the same time, other studies point to increased extreme weather events in South-East Queensland.

How we respond to this current emergency and how we deal with reconstruction is important not only because we are dealing with the desperate needs of the families, individuals, communities and businesses who have suffered so much but also because it may establish a template for our future actions. That is why it is so important that we get this task right. That is why we, the Australian Greens, support the move towards an extreme weather or disaster fund. We also believe that we need to get to a situation where the insurance question is resolved. I welcome the move by the Queensland government on this issue and the move by the federal government to begin to address the problem.

For now, the immediate task of reconstruction and recovery must begin, and this is an enormous task. The rebuilding of infrastructure and community facilities and the provision of assistance to residents and businesses will require significant resources. It will be important for this parliament to closely examine how those resources are spent, to make sure there is value for money. There is no doubt that the requirement for reconstruction placed a particular stress on the budget and required the government to define a strategy for financing the reconstruction. The government, as we know, has adopted the strategy of a one-off levy and making certain cuts. It is this strategy that I want to discuss today in debating the Tax Laws Amendment (Temporary Flood Reconstruction Levy) Bill 2011 and the Income Tax Rates Amendment (Temporary Flood Reconstruction Levy) Bill 2011.

Faced with the task of financing the reconstruction, the government has put on a self-imposed political straightjacket designed by the doctors of neoliberalism. The obvious alternative strategy—and that is supported by many businesses, union leaders and economists—was to allow a short-term nominal increase in the budget deficit. This would have allowed the reconstruction to proceed quickly and the target of returning the budget to surplus could have been extended by a year. This would have enabled the reconstruction to proceed without the requirement of a levy or cuts to programs. But a government caught in this arbitrary, economically unfounded and unnecessary promise made at the last election has lacked the political courage to say that the changed circumstances mean this goal should be pushed back. The Greens, along with many in the business community and many economists, would have supported such an approach. Another approach would have been to say, ‘Because of these extraordinary circumstances we need to revisit the original proposed mining superprofits tax.’ As we have seen in recent weeks, by revising the original superprofits tax the Australian taxpayer is standing to lose in the order of $60 billion that would otherwise have been raised by the tax over the coming decade.

This means that, because of the government’s backdown and its failure to use this very real and very legitimate opportunity to reconsider the question, $60 billion a year is going to have to be found by ordinary Australian taxpayers to fund education, climate change programs and schools, while the mining companies will continue to enjoy superprofits by selling off minerals, which we only get to sell once, without a fair return to the Australian taxpayer. We the Greens are very pleased to see that our proposal to have some of this money put into a sovereign fund that could be used for spending on infrastructure and projects like this is now being picked up by business leaders around the country.

Another option that was open to the government but again rejected out of hand was the proposal from the Greens to delay tax cuts for the big end of town. This government is proposing to introduce tax cuts that will apply from 2013-14 to Australia’s biggest businesses. On our figures, which have not been refuted by the government, these tax cuts are going to cost Australian taxpayers—the rest of us—somewhere in the order of $1.7 billion in the budget bottom line. We could have deferred these cuts for a year or two and said it was time for the top end of town in Australia to make a substantial contribution to reconstruction, but the Labor government failed to do that.

Adopting any combination of these strategies would have meant that the flood levy and the cuts to programs adopted were unnecessary. Unfortunately, as we know, the government has refused to take off this self-imposed political straitjacket. The government is unwilling to deal with the reality of the incredible mining boom and has been scared into an emaciated mining resources tax by a campaign from the big miners. It seems it will not defer tax cuts for big business, preferring to impose a flood levy on middle-income and higher income Australians.

Given the situation across the country and the need to move ahead with reconstruction, the Greens have been unwilling to hold up this levy; therefore, we are supporting this legislation. We do so in the knowledge that the structure of the levy will be progressively imposed, in part because of the position of the Greens that lower income earners should not be hit and those who can afford to do so should mainly shoulder the burden.

We have heard a lot from the coalition about how unfairly this tax is going to be imposed. What that shows is whose interests in particular the coalition really has at heart, because the figures show that nearly half of the money, 49.1 per cent, that will be raised from the levy is going to be raised from people who are earning over $200,000 a year, while people who are on less than $80,000 a year will contribute only around 10 per cent to the money raised. It is a progressively imposed levy, consistent with the principles of progressive taxation, and that goes a very long way towards explaining why the Greens will be supporting this. It also goes, as I said, a very long way towards explaining on whose behalf the coalition is opposing this flood levy. It is this principle of progressive taxation that should be the foundation on which the upcoming tax summit is centred.

The levy is temporary and will not be imposed on those impacted by the disasters. It will not affect the poor and the vulnerable, and it will not unduly affect those on middle-level incomes. It is not the best way to fund reconstruction. But, given that the government has gone down this route, the manner in which it has been reformulated reflects the Greens’ approach to progressive taxation and it is therefore something we can support.

However, in announcing this levy, the government also announced cuts to programs as part of the reconstruction package—in particular, cuts to climate programs, housing measures and higher education. The Greens said at the outset that such cuts could not be justified, particularly when there are other funding alternatives. It made no sense to us—nor, I think, to most Australians—to cut climate programs at the same time that scientists are telling us that these kinds of extreme weather events are likely to happen more often and are likely to be more severe.

For instance, the scrapping of the National Rental Affordability Scheme, NRAS, could not be justified given the housing crisis we face in this country, particularly for those on low incomes and the homeless. So we entered into discussions and negotiations with the government and, thankfully, we were able to reach an agreement on a number of these programs.

A hundred million dollars in funding was restored to the Solar Flagships program, and a number of measures, including industry consultation, will be put in place to ensure that we can have in this country the development of a large-scale solar power industry and that the program will do what it was designed to do. That is a significant win for common sense and the recognition that, in addition to putting a price tag on pollution, government investment in research, development and .commercialisation of renewable energy technologies is a necessary part of a pathway to a clean energy economy.

We were also able to help save the NRAS, with funding deferred until after the forward estimates but still able to be allocated to new projects, and get a commitment from the government that the scheme would continue and the original number of dwellings would be built.

As part of the agreement, we were also able to secure a guarantee that the core functions of the Australian Learning and Teaching Council, the ALTC, remain separate from the government’s proposed quality framework. This is important because, following the government’s announcement that it planned to roll the ALTC into its proposed Tertiary Education Quality and Standards Agency, TEQSA, many leading academics and universities expressed concern that the core functions of the ALTC would no longer be able to be performed separately. It is our view that it is not appropriate for academics to lose the scope to encourage excellence through a review and awards program that was at arm’s length from the government’s proposed regulator; these are two separate functions. We strongly oppose the key functions of the ALTC, such as citations for excellence in teaching and peer review acknowledgements, becoming absorbed by TEQSA. So we are happy that, through our negotiations with the government, we have ensured that peer review and the fostering of excellence are not simply rolled into the government’s quality standards body. Rather, they will remain separate functions, performed under the administration of the Department of Education, Employment and Workplace Relations.

So, as a result of these discussions and the government’s adoption of the Greens’ proposal for a progressive levy, we are able to support the bill. The repair and reconstruction tasks facing the nation are enormous, and the Greens are right behind the federal government and state governments as they proceed with these efforts. We will continue to urge all governments and all Australians to heed the warning that these latest weather events represent what could be our future if we do not take drastic action on climate change.

We need to see these disasters as an opportunity to prepare for what is coming for Australia down the line. We also need to put in place better arrangements for funding the response to and reconstruction following such disasters in the future. It is disappointing that the opportunity the government had to shrug off its self-imposed political straitjacket on the budget surplus and big business tax has not been taken. It is with some irony that in the case of a financial crisis the government is prepared to throw out its commitment to neoliberalism and economic rationalism and rediscover the Keynesianism that once beat at the heart of the Labor Party, but when faced with a climate crisis they are not willing to do so. Nevertheless, this levy is a step towards a progressive approach to taxation. So the Greens will support this levy going forward through this place and we will focus our attention on ensuring the money is properly spent. I commend the bills to the House.

Teresa Gambaro (Brisbane, Liberal Party, Shadow Parliamentary Secretary for Citizenship and Settlement) Share this | Link to this | Hansard source

I rise today 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. The coalition, which I am very proud to be a part of, will do everything necessary to rebuild our communities hit by the devastating floods and cyclone last month. Locally, in the community of Brisbane, we were very hard hit by the surge of waters that started in the Great Divide and swept through the Lockyer and eventually found their way to the Brisbane River and to my beautiful suburbs of Milton, Rosalie and New Farm and Brisbane city. Who will ever forget the images of the destruction brought by the waters to the hundreds of houses and shops in Baroona Road and Nash Street, Rosalie, and in Albion, and the restaurants and skyscrapers along the Brisbane reach of the river, or the streets and the parklands and houses in my beloved suburb of New Farm? Just as for over two decades we remembered the 1974 floods—its inundation, its slow rise, its recession and then the rebuild—I know the residents and small business owners in these area will never forget what we have just been through.

But for me it is on the basis of the vast majority of feedback that has been forwarded to me that I rise today to speak to these bills. I am certainly not of a mind to support the unfair tax grab that the Gillard government proposes to help rebuild communities in Queensland. If there is one major concern for flood affected businesses—and I have visited many over the past weeks—and residents in my seat of Brisbane, it is that they seek some improved business conditions in the Brisbane area. They need sensible answers from governments, ones that improve our national economic standing and increase the prospects for all future business success. What they do not need is an increased tax burden that cripples local economic conditions, particularly when locals are already struggling with flood affected price rises. There are very sound reasons why I and my coalition colleagues are against these bills that will result in an unnecessary flood levy being imposed in the wrong way, at the wrong time.

It is notable that the Gillard government has already received objective advice that it should dump its planned flood levy and instead fund rebuilding efforts by ditching wasteful spending programs. Members of the Institute of Chartered Accountants have also been urging the government to better plan for an increased and continuing disaster funding approach. A one-off levy will not provide a sensible conclusion to the required planning. A better funding approach would reduce the need for one-off and temporary levies to meet short-term funding shortfalls. The institute, in its own budget submission, also recommends that the government introduce a targeted investment allowance for businesses hit by the recent flood crisis. This would provide an effective kick-start to business activity when the economy needs it most.

Why will this government never consider sensible and practical solutions? It is their hallmark to embark on unpopular and very damaging programs and decisions, and the Australian public and business community are often left bewildered and appalled by government at its worst. They are taxed to the hilt and this government continues to tax them. The nation already has its hands full with increased grocery prices, increased water and electricity prices, with a proposed carbon tax and a mining tax. The result will be the same—there will be less money in people’s pockets and less spending in the community. I do not believe that is the outcome that the business community is looking for.

Recently I was in the Chermside Shopping Centre. I went to pay a bill, as you must do, and I was quite amazed—I was able to get a car park. I have been visiting that shopping centre for many, many years and I was very excited that I got a car park immediately. I went into the shopping centre and I could not believe what I saw. It was absolutely deserted. I walked into an area of Myer’s and I think I was there with about four shop assistants. I got plenty of attention, I must say. I highlight this because there is already a dampening of business conditions and consumer confidence and the last thing that we need right now is another tax in the form of a levy. Furthermore, a real consequence of the government’s new flood levy is that it will create a disincentive for people and companies to donate in the future to any other disaster relief that might come along. They will say, ‘If I donate, the government is going to tax me again. What other levy are they going to pull at the next disaster?’ and there has actually been a decline in donations as charities have been reporting since the levy was introduced. So it does have an impact on people’s ability to donate in the future.

Many people in Brisbane do not consider it fair that they were encouraged to donate, as I said. They did that so willingly, and they donated not just money. We have heard many speakers speak of the wonderful volunteer workforce that went out there and donated and worked hard, and I am very proud of my children who did the same. Many members of the Brisbane community went out there and cleaned up. But will people be willing to do this in the future if the federal government is taxing them with an extra levy instead of providing a much more considered approach and reprioritising government spending?

We in the coalition are genuinely committed to the necessary reconstruction and recovery that is required after the natural disasters of this summer period in 2010-11. We do not underestimate these requirements. But we truly believe that if you want to inspire the quickest of recoveries the best way to do that is to avoid a further tax on the community. That is absolutely imperative. It is businesses like Cuttings Wine, at Albion, who will suffer the most from this tax. They have suffered damage to the value of $100,000. Yet, because their owner’s home was fortunate to escape damage, they will have to pay the levy. At a time when they can least afford it, they will have to pay a levy. Businesses like Apex Smash Repairs, in Milton, who have lost more than $200,000 in assets and equipment, will have to pay this tax. At a time when they can least afford it, they will have to pay another new tax. Businesses like O’Brien Pizzato & Graff, chartered accountants in Newstead, lost power for 10 days and were unable to work. They are not eligible for QRAA assistance. It is people like these accountants who will have to pay the levy. The owners of ABC Printing, in Milton, will have to pay the tax. They had to lay off staff and they did not have power for 10 days but, because they do not fit the definition of a small business, they have received no help and will have to pay another tax when they can least afford it.

The costs of both repair and reconstruction should be met from consolidated revenue and the reprioritisation of spending. We are very sceptical about the political manoeuvrings that seem to underpin this decision by the Gillard government. The Gillard government have imposed a new tax on the people of Brisbane, the business owners of Brisbane, without first explaining how they will spend the money. Lord Mayor Campbell Newman is yet to receive a response from the Prime Minister as to whether or not they will assist the Brisbane City Council and its ratepayers. The rebuilding component of the council’s NDRRA funding claim includes a repair bill of over $137.3 million for the road network; $75 million for the floating river walk in New Farm; $70 million for the reconstruction and replacement of ferry terminals; and over $38 million for the rejuvenation, clean-up and repair of local parks. And the list goes on and on.

Despite this list, and even though the Prime Minister has announced yet another new tax, the Prime Minister has still not advised whether or not these assets will be covered under the NDRRA funding. It is also worth highlighting the inescapable reality that, had there not been a significant waste of taxpayers’ money on a number of government projects that have been poorly administered, including the $2.6 billion blow-out on the Building the Education Revolution, there would be no need to impose this tax on hardworking Australians. The levy does not even raise the amount of that blow-out. Quite simply, there is very little trust in the community that the Labor Party can successfully operate government programs, and one wonders whether there is any chance that the revenues raised from another levy will be spent sensibly by the government.

As the economic expert Mr Saul Eslake has already highlighted to the government, there is strong evidence that the introduction of a new flood tax represents political choices more than economic imperatives. What seems very obvious is that the coalition can highlight necessary savings so that no levy is required. But the Gillard government, and Treasurer Swan, refuse to consider these savings. They are sensible and, in many cases, important cuts that can be made to avoid the burden of higher taxes.

I do not support this levy; neither does the coalition. What we do support, however, is a change in spending decisions, not new taxes. The community demands that government increase the incentives for people to work, save and invest. Further taxes merely cripple these concepts. The people in my electorate expect governments to make the hard decisions if necessary, because they desperately seek to avoid any further hindrance to what are already very tough economic and business conditions. Businesses are already struggling to stay afloat and some have been doing it tough for a very long time. These bills represent a complete lack of interest in the business environment that currently exists for the Australian public. The flood affected businesses in Albion, Milton, New Farm, Rosalie and other areas of my electorate expect more from their government than these inhibiting legislative mistakes. The government is out of touch, and the coalition will vote against these bills.

Dan Tehan (Wannon, Liberal Party) Share this | Link to this | Hansard source

I also rise to oppose the Tax Laws Amendment (Temporary Flood Reconstruction Levy) Bill 2011 and the Income Tax Rates Amendment (Temporary Flood Reconstruction Levy) Bill 2011. Following the devastating floods, a government levy would just add another unnecessary financial burden on those residents, businesses and farmers affected by those floods and the cyclone. The government’s only idea to raise the expected $10 billion—maybe $20 billion—cost of the floods and cyclone is to introduce a levy that will cut people’s incomes. This approach will not help those who have been affected by the floods, in some cases twice or three times in the last four to six months. It will not only directly impact on the cash-poor farming communities, poor small businesses and poor rural communities but add to cost of living pressures for residents and reduce their ability to buy goods from flood affected businesses.

Here is an idea instead: why don’t the government, like they have in Queensland, now concentrate on a plan for flood recovery in Victoria? They seem to have devoted the last fortnight to trying to get their flood levy in place, rather than concentrating also on the areas of Victoria which have been impacted by flood and putting together a plan which would help those communities recover. We have local government areas in western Victoria stretched to the limit by trying to deal with the damage and devastation which has been caused by the floods and we have a federal government which has in no way yet shown how it is going to help.

As a matter of fact the only thing we have seen is a leaked report saying that the government will commit $500 million. What we need to know now is: where will that money go, how will it help and will there be payments to local governments to help with not only repairing the bridge and road infrastructure but improving that infrastructure so that when the rains come again—and they will—they can withstand the floods next time?

Responsible governments, such as the Howard government, put money aside for a rainy day. If the Gillard government were a responsible government they would not be in this position where they now need to raise $10 billion to $20 million immediately. The government have plenty of programs they could scrap or redirect funding from to fund the flood reconstruction. There is the cash-for-clunkers scheme, the National Broadband Network and water buybacks in the Murray-Darling Basin to name just a few.

The feedback I am getting from local people and businesses is that they do not want to be hit with yet another tax in the form of a levy after all they have been through in recent months. Cheryl Schuyler from Halls Gap runs Grampian Gifts and Souvenirs, a business that suffered in the Victorian floods. I was speaking with Mrs Schuyler last month when I was in Halls Gap surveying the flood damage, which has been devastating for that small community. She said:

We have only been affected by loss of trade and downgraded income—many families and businesses have lost loved ones and have no income at all and yet the Federal Government’s response is to kick people while they are down by proposing another TAX. It never fails to amaze me that a lazy government’s easy solution is just to add another Tax! People are hurting badly; adding to their burden is not the right or just solution.

I could not have put it better. Flood victims will not benefit from extra taxes imposed on them.

The government should be helping those affected, not taxing them. The coalition are committed to doing everything necessary to rebuild and repair communities hit by floods and Cyclone Yasi. We know there is a better way to go about it than the lazy option of hitting Australians with another tax. In fact, last year the coalition set out $50 billion worth of savings and cuts to the Rudd-Gillard government’s reckless and wasteful spending. Earlier this month the coalition outlined more than $2 billion in further savings measures that the Gillard government should adopt instead of its flood tax.

In addition to this, Julia Gillard must reverse her decision to cut funding for flood mitigation works on the Bruce Highway and the Herbert River flood plain. Funding flood recovery through cuts to flood mitigation works makes no sense whatsoever, and that is why the coalition found savings, cuts, in areas which would not impact on infrastructure that can actually help when we receive further rains.

There is also a need for increased flood monitoring funding to the Bureau of Meteorology to ensure that substandard flood-monitoring equipment in rivers is improved as a matter of urgency. Again this funding should not be raised by adding another tax on people and communities that are already strained. What we need to see is a redirection of the Bureau of Meteorology’s budget so that they focus on doing this important mitigation work.

This debate, as with so many being brought before the House these days, comes directly back to Labor’s gross mismanagement and waste. If Labor had been taking proper care of their finances, as the Howard government did for years before them, they would not have been in the position where they were caught off guard and felt they needed to add another tax to dig themselves out of their budget black hole. Instead of a new tax, the government need to cut wasteful spending, such as on government advertising, to reduce consultancy expenses, to put a freeze on Public Service recruitment and to cancel the National Broadband Network. It is important that they do this.

We have heard in this House that the main reason the government thinks it is justified in putting a levy in place is that previous governments have also put in place levies. But there is one important difference. Before those levies were put in place the government had not called for the community to give, and give generously, their money and their time to help. The Australian community did that and did that in spades. Their generosity was outstanding. It made us all on both sides of this House proud. The way people contributed their time was also outstanding and made every member of this House proud.

The government encouraged people to do this. It went out and asked businesses to give generously and members of local communities to give generously. Then, after doing that, it hit them with a levy. No government has done that before. When previous levies were introduced, governments said to the people, ‘We need to raise money for these particular causes.’ They did not go out to the community and say, ‘We want you to give and give generously,’ and then, after the Australian people had done that, impose a levy on them. This levy is wrong. People in my electorate think it is wrong. That is the feedback I have had on it. People tell me that we should vote against it, and that is exactly what I am doing today.

Ewen Jones (Herbert, Liberal Party) Share this | Link to this | Hansard source

Before I address 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 associate myself with the words of the Prime Minister and the Leader of the Opposition in relation to our New Zealand friends, particularly those in Christchurch. That is the home of the mighty Canterbury Crusaders. I come from a state in which rugby is very important. I have played against a number of junior All Blacks trialists. To a man they have been good blokes, but please do not misunderstand me: when it comes to the Bledisloe this year, there will be no excuses. We will be up you. You would expect nothing more of us and we expect nothing more of you. Our hearts go out to you.

When the Victorian bushfires hit, the Townsville firm for which I was working, Ferry Property, had a young girl working for them called Jaime Skiller. She came from a Victorian town that was affected by the bushfires. She got everyone at work together, we all brought in a plate of food and we paid for the privilege of eating it. We raised in excess of $500 and we put together care packages to send down to those Victorians. We got a letter back from Jaime’s aunt which expressed her heartfelt thanks that someone so far away from Victoria would care what was happening to them. She also told us of the trouble her chooks were having getting back on the lay and that made the letter even more special. You see, they did not ask for it, we gave it. They did not expect it, but they received it with a deflected smile of thanks. And they would do the same for us.

So when the floods and Cyclone Yasi hit Queensland, people like Jaime in offices across Australia did exactly that. They gave. The Prime Minister asked them to give and they gave nearly $200 million to help out. Now they are being taxed as well. My problem with this is: what happens next time? Do we jump in, do what Australians do in times of need and help with the heavy lifting or do we wait until we find out whether or not we are going to be taxed to make it happen?

I am from Queensland and we have a state government which has squandered all the money from the GST, introduced by the Howard government, as well as all the money from the greatest mining royalty boom of all time. This Queensland government has done such a poor job with the state’s finances that not only have they lost their AAA credit rating but they have no infrastructure insurance at all. What amazes me even further is that the Queensland Minister for Main Roads was incensed that insurance companies would not take calls from people chasing policies as the cyclone was hitting that afternoon. This was in the full knowledge that his government had no insurance on his state’s infrastructure whatsoever. I could just see the minister at the TAB on a Saturday afternoon trying to get a bet on as the horses hit the 100-metre mark, trying to bring it in. He would be climbing out of a wreck and ringing Suncorp Insurance to say: ‘Can I get the cover? I’ll pay for anything, I’ll take the lot. Give it all to me. Just bring it on in because I need some insurance and I need it now. Can you backdate the policy about 15 minutes?’ He was very quick to kowtow to the wishes of his Prime Minister and he let the federal government pull flood mitigation work on the Bruce Highway in North Queensland to aid flood mitigation work on the Bruce Highway in the south-east corner. I suppose it was the only option that he had to take. I mean, the Queensland government is so broke, it could hardly say it would stand on its own feet and do the right thing.

But that is not the cruellest irony. That belongs to the Prime Minister herself. When she stood there and implored all Australians to share the load and look for extra money to assist with the crisis, some would have been left with the impression that our own Prime Minister would do her bit. But our Prime Minister’s first response was to tax. She said, ‘Oh, if it cost more than that, then we would have to look for savings in the budget.’ My problem is that we would probably not even be discussing this tax or levy if those budget cuts had been visited as a first option. The Prime Minister’s second option was to deal with the Greens and the Independents to buy her way forward with the levy. Looking inward at savings came a long way third.

The savings can and should be found. I challenge every member in this House to find a saving of some kind in their electorate and make this happen. In my own electorate of Herbert, both sides promised a PET/CT scanner in the 2007 and 2010 election campaigns. The Labor government has promised one at the Townsville General Hospital by the end of 2012 at a cost of nearly $9 million. We, the coalition, in a public-private partnership with Queensland X-Ray would have had our PET/CT scanner up and running now, today, at a cost to the government of $2.5 million. That is a saving of $6.5 million with an increase in service level, bringing the product to the market sooner, and spending less. This would also result in reduced airfares and accommodation into the future as people needing PET/CT scans have to travel to Brisbane sometimes immediately after radiation, which requires them to travel with a partner and thus doubling the costs. I know it is simplistic to say it, but it does hold water that if we found $6.5 million in each and every seat in this House, that would result in a $975 million saving across the country—without a drop in service. That is without a budget cut. It can be done.

Whether you call it a tax or a levy, I am so over the talk about how righteous we all are on each side of this argument. We rail at the tax and you call it a levy. We say it is wrong and you say we have done it before a number of times. You quote the guns buyback and the Ansett workers levy as examples of why we should support this tax. You cannot see the difference. Well, in my electorate office, I have one person consistently supporting this tax—mind you, he would probably support a buyback of Mars from the Greens if the Labor Party proposed it. Almost to a person, the feedback to my office has been consistent. This tax of a taxing government comes on top of a charity supported by and called for by big-spending governments. Never before has a government proposed a tax or levy after already calling for the rest of the country to give generously to support our fellow Australians, and that is my problem. It is un-Australian to ask a mate for help and then send him a bill for your time. It is un-Australian to tell your mates that you will be there with them and then leave them alone with the bill. This levy is akin to skipping out on a shout in a pub. You just do not do it, and those who do end up friendless and shift from group to group trying to find a new mark—but once bitten, twice shy.

Again, if this government stood side by side with all Australians and said, ‘We will also help with the heavy lifting; we will do our bit because we are in there with you,’ we would not be having this argument. If this government stood in front of all Australians and said, ‘Look, we can find two-thirds in budget cuts but we want to do this properly, so we are asking for you to help some more,’ then we would probably not be having this debate. If the government did it this way then they would not have to skulk down the halls to the Independents and Greens to buy support, and the money they have had to expend to secure that support could have gone toward the recovery effort. They could have been straight with the people of Australia at this time, but the government just could not do it.

I spend a lot of time talking to my children about the unintended consequences of their actions. I tell them that what looks like something that may cause no harm may have implications down the track that they could not have foreseen. So I say to the government, ‘Go and pass this legislation, but you will be setting a precedent for which the consequences may be that the next time a disaster hits, a levy may be the only way to get Australians to give.’ I just hope that that is not the case and that the goodwill of all Australians toward each other is not affected.

Alan Tudge (Aston, Liberal Party) Share this | Link to this | Hansard source

I rise to oppose the Tax Laws Amendment (Temporary Flood Reconstruction Levy) Bill 2011 and the Income Tax Rates Amendment (Temporary Flood Reconstruction Levy) Bill 2011, and I do so as a member of an outer metropolitan seat in Melbourne in which families and members of the community are feeling the increases in the cost of living, with many already in distress.

I say at the outset that, along with my coalition colleagues, I am committed to doing everything necessary to rebuild communities tragically hit by floods and cyclones. There is no debate about the need to rebuild. There is no debate about the need for the Commonwealth to spend significant resources to assist in the process. The issue here is purely how to raise the money necessary for the rebuild. The government believes it should be raised through a tax. We believe it should be raised through making savings. A tax should be a measure of absolute last resort, not a thing that is reached for as the first item. Unfortunately, however, this is the pattern of this government. If they see a problem, they raise a tax.

There are savings to be made in the budget. The shadow Treasurer, Mr Joe Hockey, has outlined more than $2 billion in savings that could be made. An offer has been made to sit down with the government to go through the budget and to find saving measures in a bipartisan fashion. The government itself has admitted that savings can be made. It has said that if the reconstruction bill is higher than forecast then it will find the additional money from savings. This is an admission in and of itself that there are savings to be made. Our argument is that these savings should be made first, as the first measure, not down the track if, all of a sudden, we need to find further money.

The tax in question here is not an insignificant one. It is going to be imposed on every single individual earning more than $50,000. People in my electorate are already feeling cost-of-living pressures, people who are earning not much more than that. This will just add to their burden. I have talked in this parliament in the past about the price rises that are occurring: electricity has risen 42 per cent since 2007, gas prices are up 29 per cent, water is up 46 per cent, interest rates continue to go up. These things are going up faster than wages or the pension.

I have voiced in the parliament before my concern about Labor’s plans for the Murray-Darling, which will increase food and grocery prices. I have voiced my concern about their mining tax, which will have a flow-on effect on every single product that uses those materials, including electricity generation. I have voiced my concern about the National Broadband Network which, according to Optus, will increase the cost of basic telephony charges. I have voiced my concern about the proposed carbon tax, which will increase electricity prices by 25 per cent. And now I want to add my concerns about the floods tax.

People in Aston are very generous people, they have given generously for this cause, but they are feeling the pinch. For example, Danielle Scorer, from Wantirna South in my electorate, is a single mother. She represents the views of many when she says:

I feel as though the government and big companies … are taking everything they can. I actually feel like I will never be able to get ahead … My financial pressures are mounting with dramatically rising living costs. My gas, electricity and water costs are sky high and I am trying to reduce my bills wherever I can … I would like the government to understand that they have got things very wrong if they think someone on $50,000 [per annum] is well enough off to afford their flood levy.

Similarly, Mark Maloney from Ferntree Gully states:

We are a single income house hold. We have three children 3 years and under … We have next to no spare income as it is and now we will find ourselves with 450 odd less per year [due to this proposed tax].

It is families like these ones that will be hurt by this levy. It will put extra strain on them at a time when they are already hurting from the rises in electricity and other costs that I have talked about.

The Prime Minister says that only those who can afford it will be paying this tax. She implies that it is only for the rich, but of course that is not the case. The tax will come into play for every single individual earning above $50,000. The average salary in Australia is $65,000. People in our communities who are earning $50,000 are not rich, particularly those who are trying to raise a family. They are paying for petrol. They are paying for toll roads, for child care, for uniforms. These people are not those who can afford it, as the Prime Minister would say.

We also need to be mindful that this new tax is a disincentive to all Australians to donate to disaster relief efforts in the future. As many other speakers before me have pointed out, the government, before suggesting the need for this tax, was calling on Australians to be generous and to donate generously—and indeed they did. But what will occur in the future, the next time the government calls on Australians to donate generously? In the back of their minds they will be thinking, ‘We’ll do that but then the government, a couple of months later, will come in and slug me in any case, so maybe I’ll just wait to see if they’re going to do that.’

The Labor Party consistently raises other levies which the Howard government introduced and which, of course, the coalition supported. We introduced those levies when we were in government and we did, indeed, support them. But when we introduced a levy—say, for the gun buyback—it was at a time when no-one would have argued that there was significant fat in the budget. It was at a time when we were trying to reduce the enormous debt left by the previous Labor government. Aggressive savings had already been made in the budget by the government in previous years. Further, we were not raising other taxes at the same time. People were not feeling the pinch to the same extent that I believe they are today with cost of living pressures. Today, few people would argue that there is not fat in the budget. Indeed, the government itself says that savings can be made if necessary. Few would argue that the government has not wasted billions upon billions of dollars on pink batt disasters, on Green Loans schemes and on other green schemes. Countless billions of dollars were wasted through the Building the Education Revolution program with overpriced school halls. This new tax, additionally, comes on top of all the other new taxes that the government introduced last year and the proposed new taxes that the government is going to be introducing this year.

The federal government has an obligation to assist with funding for the repair and rebuilding of public infrastructure as well as providing financial assistance to people in need. The coalition stands shoulder to shoulder with the government in the commitment to do so, but we do not need a new tax which will hit those who have already donated, those who draw from their retirement funds to live, those who are flood victims themselves and those who simply cannot afford more taxes.

Paul Fletcher (Bradfield, Liberal Party) Share this | Link to this | Hansard source

The debate in the House today about the Income Tax Rates Amendment (Temporary Flood Reconstruction Levy) Bill 2011 and the Tax Laws Amendment (Temporary Flood Reconstruction Levy) Bill 2011 is not about whether Australia, particularly Queensland, and the people of Australia, particularly the people of Queensland, have suffered a devastating impact from the floods of the 2010-11 summer. Of course the people of Australia and Queensland have suffered a devastating impact. The debate in the House today is not about whether infrastructure in Queensland and around Australia needs to be rebuilt. Of course it needs to be rebuilt. The debate in the House today is not about whether the Commonwealth should pay on behalf of the people of Australia a large part of the cost of that rebuilding. Of course it is appropriate that the Commonwealth government should allocate the people’s funds towards the reconstruction effort when you have, as we have here, a disaster of national significance. Nor is the debate about how much the Commonwealth government should be paying. We do not contest the conclusion that the government has reached. We say that the government, with all of its resources, is best placed to assess how much needs to be spent. So the quantum that needs to be spent is not part of what is contested in this debate.

This debate is about one thing and one thing only: how should the amount to be expended by the Commonwealth be funded? We are told by the government that it estimates that $5.6 billion needs to be spent. As I have indicated, we do not contest that estimate. We say that the government, with all of its resources, is best placed to develop that estimate. We are also told by this government that it will fund this amount in part from reallocating other expenditure and in substantial part by whacking on a new tax. Of course, since the government made the announcement of how it planned to deal with this expenditure and how, particularly, it planned to fund this expenditure, it has already thrown in the towel on some of the savings it said it would be obtaining in other areas. But that does not change the central issue of contention in this debate in the House of Representatives today: how ought this expenditure to be funded? More specifically, is there any justification for funding any of this expenditure through the imposition of a new tax?

I put to the House three simple points. Firstly, this money which is to be expended should be found through offsetting savings in other expenditure. Secondly, in a budget of over $350 billion it ought not to be beyond the managerial competence of a capable government to find the amount which needs to be spent, which we are told is $5.6 billion. Thirdly, to use this natural disaster as an excuse to whack on a new tax is bad policy and sets a very bad precedent.

Let me turn first to the proposition that the money should be found through offsetting savings. Let us think for a moment about the nature of constructing a budget. When you construct a budget, what you are doing is laying out your plans for the coming period—typically a period of 12 months. Of course, you cannot know the future with perfect foresight. Even as you are developing your budget you must take account of the possibility that the unexpected will come along. Inherent in the way you devise your budget must be the capacity to deal with variations in what you have planned for, because unexpected expenditure arises all the time.

In my years as a member of the senior leadership team of a large corporate, I participated in many discussions where we sat around the management table, we looked at the amount that we had budgeted to spend during the year and then we looked at the change in circumstances and said we needed to spend more on something we had not anticipated. As a corollary of that decision, we then needed to find areas where we would spend less; we then needed to find offsetting savings. That is good budgetary practice, that is good management practice and that is what this government ought to be doing if it were capable of managing its budget in a competent fashion.

The second proposition is that the magnitude of the task of finding offsetting savings is to be determined according to the scale of the offset which is required and the proportion which that comprises of the budgeted expenditure. The amount that the Commonwealth is budgeting to spend in 2010-11 is $354 billion. I could spend some time talking about the fact that that is more than $100 billion a year greater than the Commonwealth was spending only four years ago. I could spend some time discussing what a disturbing indication of profligate spending and lack of fiscal discipline that demonstrates, but I will not because I want to make another equally important point—that the $5.6 billion which needs to be found is around 2.5 per cent of the annual budgeted expenditure this year of $354 billion. It is a very modest percentage.

It is a test of basic managerial competence as to whether, in the face of unexpected expenditure which makes up a small percentage of the total amount you were previously planning to spend, you are able to find such offsetting savings. If the amount required to be found were 30 per cent, 20 per cent or even 10 per cent of the amount that the Commonwealth had previously budgeted to spend, then it may be the case that the proposition that alternative sources of funding would be required could be put in a plausible fashion. But when we are talking about a mere 2.5 per cent of the total budgeted expenditure of the Commonwealth for 2010-11 it is an indictment of the managerial incompetence of this government, its lack of capacity to manage its budget and its lack of basic fiscal discipline that it is unable to reallocate spending priorities so as to come up with offsetting savings.

It is even more of an indictment when you consider that the calculation I have just cited in fact flatters the government because it can spread the funding over more than one year. While the number required is roughly 2.5 per cent of the $354 billion budgeted to be spent, you could achieve it through smaller percentages by spreading it over one or more years. Indeed, I note that is precisely what the government is planning to do. It is spreading the savings that it is claiming over a number of years.

The third proposition is that it sets an exceptionally bad precedent to be whacking on a tax as the means of funding this amount of extra unanticipated expenditure. What is the principle we are to draw from what has occurred here? Is the principle that, every time you incur an unexpected expense which exceeds your budgeted expenditure by more than two per cent, that is somehow an excuse to whack on a new tax? I think in reality the principle we can draw from what has occurred is a very obvious one—Labor love to tax. They love nothing more than whacking on a new tax. It is in their DNA and they find any excuse to do so. They really enjoy the notion of taking an urgent short-term spending need and locking it into a longer-term framework for tax. That is precisely what has occurred here.

One of the extraordinary propositions from what is occurring here is that Labor have rushed to commit to this new tax even before we know with any precision what the actual final expenditure on reconstruction is going to be. You would search in vain through the material published by this government to understand with precision what that final expenditure is going to be. But the conclusion you can reach is that this lot love nothing more than whacking on a new tax. They are not troubled by the disincentive effects this might have on people making a voluntary contribution in the future. They are just keen to get a new tax out there.

There is no dispute that we need to rebuild. There is no dispute that the Commonwealth needs to spend several billion dollars on rebuilding. But there are alternative ways of coming up with the money. The way that this Labor government has chosen to proceed is ill disciplined, fiscally profligate and falls prey to the temptation, whenever it can do it, to whack on a new tax. We say that if this government had the most basic managerial competence it would have found the offsetting savings and it would not be imposing a new tax on the Australian people.

Debate interrupted.