Tony Smith (Casey, Liberal Party, Deputy Chairman , Coalition Policy Development Committee) Share this | Link to this | Hansard source

I rise on behalf of the coalition to speak on the Tax Laws Amendment (2011 Measures No. 1) Bill 2011. The bill before the House today deals with four areas of taxation law across three schedules. I can state in the outset of my contribution that the coalition will be supporting this bill and, obviously, all of the measures within it. The bill deals with minor changes to taxation law and sensible measures with respect to natural disasters that are regular changes that occur in taxation law whenever our country confronts the sorts of disasters that it has faced in recent months. In that vein, I will first deal with the two distinct parts of schedule 1.

The first part deals with a tax exemption for recipients of disaster income recovery subsidies. This schedule of the bill amends the Income Tax Assessment Act 1997 to ensure that people who were affected by the terrible floods that we saw in Queensland, New South Wales, Victoria—my home state—and other parts of the east coast of Australia from 29 November last year do not have income tax applied to their disaster income recovery subsidy payments. This will mean that the tens of thousands of Australians who were affected by that significant flooding will not have to bear any further impost as a result of the assistance with which they have been provided by the government. It will also mean that fellow Australians in North Queensland who, more recently, have been battered by Cyclone Yasi will also be covered in this respect. Clearly the coalition supports this measure and, with the government, recognises the hardships that so many Australians have experienced and are continuing to experience during this time. This amendment backs up the words of this parliament with actions in taxation law.

Schedule 1 also provides for tax exemption for ex-gratia payments to New Zealand non-protected special category visa holders. It amends the Income Tax Assessment Act 1997 for New Zealanders holding a non-protected special category visa, which is a special category of visa that has been issued since the beginning of 2001. The amendment ensures that ex-gratia payments made to New Zealanders who have been similarly caught up in the major disasters which have struck Australia since 29 November last year also have their Australian government disaster recovery payments exempted from income tax.

As I said at the outset, these changes, which are embodied in schedule 1 of this bill, are very much the sort of mechanical changes made to the tax law whenever we confront a disaster of the sort that we have recently. The last time I can recall having done this was immediately following the devastating Black Saturday fires in Victoria. Similar provisions were moved at that time by the then Assistant Treasurer and now Minister for Immigration and Citizenship, Chris Bowen, with the full support of the coalition.

Schedule 2 deals with a tax exemption for recovery grants for the 2010-11 floods and Cyclone Yasi. During the recent disasters, the Commonwealth government and the various state governments provided recovery grants under the natural disaster relief and recovery arrangements to small business and primary producers directly affected by the flooding and Cyclone Yasi. That measure was strongly supported by the coalition at the time because these payments are absolutely essential—and you would appreciate this fact, Mr Deputy Speaker Slipper, as you represent a Queensland electorate—to helping local communities get back on their feet, to repairing the damage from the disasters they have faced and to making a contribution to that in the best way possible. In government, the coalition offered this support to small business and primary producers at the time of Cyclone Larry, a devastating cyclone which destroyed much of Innisfail in Far North Queensland.

Just as the coalition did then, the government is now looking to make these grants, which are paid under the category C natural disaster relief and recovery arrangements, non-assessable, non-exempt income. This will mean that the small businesses and primary producers will not be affected for income tax purposes by the payment. Treating the income as non-assessable and non-exempt will mean that the grant will be treated as exempt income and that any losses brought forward by a primary producer or small business will not be reduced as a result of the payment of the grant. This is particularly important for the recipients of this payment and, as I have said, it is a move that has strong bipartisan support and mirrors the sort of support and assistance that the coalition itself provided when it was in government during previous disasters.

The final schedule deals with an unrelated matter—and that is the way with these tax law amendment bills, which are regularly before the House. It deals with the First Home Saver Accounts. These accounts originated from the government—in fact, from the Labor Party when they were in opposition, as an election promise ahead of the 2007 election. The accounts were designed—the Australian public was told by the then Rudd opposition and the then Rudd government—to persuade individuals, through tax incentives and government contributions, to save for their first home. They have been in operation since about October 2008—so 2½ years.

In recent Senate estimates hearings it was revealed, I am advised, that only 24,000 people had registered for Labor’s first home saver accounts. That is despite the former minister at the time claiming 730,000 people would be stumbling over themselves to sign up. The take-up rate has turned out to be just under seven per cent—hardly something for the government to be proud of. Indeed, we can assume that the measure in this tax law amendment bill, which seeks to make changes and to introduce some flexibility, is of itself a measure and an admission of the government’s failure of their word prior to the 2007 election and the failure of their intent in this policy.

The first home saver accounts have not worked because of their complexity and restrictiveness when it comes to individuals being able to access their savings. Currently, individuals are not able to access their savings for the purchase of a home unless one of several release conditions has been met, and if the savings are not going towards the purchase of a home then the savings must, under the current rules, go to superannuation or the retirement savings accounts. The government, after three years and more than 2½ years of operation, has now, in this bill, put forward some changes regarding the release conditions. We are told in the explanatory memorandum that the changes will allow the savings in a first home saver account to be paid to a genuine mortgage after the end of the minimum qualifying period should the first home buyer purchase a home in the interim. That would currently be in breach of the existing qualifying conditions.

The changes within the bill state that when a dwelling has been purchased prior to the release conditions being met any interest earned on the savings will be taxed at the concessional rate of 15 per cent and no further contributions can be made to the account. At the end of the release conditions having been met, the savings within the account can be put towards the genuine mortgage. Only time will tell whether the changes in this bill will improve the take-up rate of the first home saver accounts. Given that the take-up rate is bouncing along the ocean floor at the moment, at under seven per cent of what was projected, you could assume that the moves within this bill will have some positive effect, but just how much only time will tell. This change—obviously a recognition by the government of the failure and the incompetence of its policy design—although belated, is better than nothing in this area.

This measure, along with the other three measures contained in the first two schedules, we will support. As I said, the first two schedules are schedules that this parliament always speedily enacts in times of natural disaster. The final unrelated aspect is something that the coalition welcomes as a sign of the government’s belated admission of its policy failure, but we will have to wait and see whether any positive effects flow from it in the way the government now says, after three years, they will.

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

I too stand to support the Tax Laws Amendment (2011 Measures No. 1) Bill 2011. This bill will proceed with the three schedules. The first, schedule 1, deals with amendments to the Income Tax Assessment Act 1997 to provide an exemption from income tax for those who received the disaster income recovery subsidy paid to victims of the recent Queensland floods and those affected by Cyclone Yasi. The second schedule will amend the Income Tax Assessment Act 1997 to provide an exemption from income tax for category C Natural Disaster Relief and Recovery Arrangements grants paid to small businesses and primary producers. The third schedule deals with increasing the flexibility of first home saver accounts by ensuring people can commit their savings to a mortgage if they purchase a dwelling within the interim period as prescribed. I will speak on that in more detail later.

I know there have been condolence motions and plenty of discussion in this chamber about a range of things, including, regrettably, a lot of debate about a levy to support recovery efforts in Queensland. The simple thing is that we have gone through the worst natural disaster in this nation’s history, not just in respect of the loss of life but also from the washing away of roads, bridges and, to a lot of people, what they saw as their future, their ambitions and what they held for their kids. Mr Deputy Speaker Slipper, you come from Queensland and know what a high proportion of businesspeople there invest in their businesses. It is not all that easy for someone to say, ‘We’re a stoic people and we’re just going to recover from all this; it will be business as usual come 9 am on Monday.’

A lot needs to be done, and a lot needs to be done with assistance from the Commonwealth, because we do pull together—except for our tribal rivalries when it comes to sport and other issues—when it comes to the crunch. On matters such as disaster relief we do hang together as Australians. We support one another and this is another measure of what we do in giving realisation to that. It is more than just a concept; it is what we are as Australians.

Only yesterday I spoke rather briefly on the condolence motion about New Zealand. I referred to the significance of the emerging Anzac Day. Anzac Day is a lot of things, but for me it defines us as Australians and New Zealanders. It defines how we act in adversity and how we pull together and act as a committed nation as we support one another. That is what we set out to do in schedules 1 and 2 of this bill. We will provide income subsidies to be paid to the victims of the floods—disaster relief payments to those who demonstrate that they have experienced a significant loss of their personal and direct income as a direct consequence of the flooding that occurred. These things need to be taken into consideration in providing those exemptions and ex gratia tax payments.

The other aspect is small business. You know, Mr Deputy Speaker, coming from Queensland, about the entrepreneurialism of Queensland when it comes to small business. It is something a lot of people aspire to. They do enjoy the freedom of going out there, particularly in the areas of primary industry and tourism and the downstream activities that support those industries. These are things that should not be lost. It is not about waving a magic wand, conducting all the various donation campaigns. I have got to say that it is very humbling to see in each of our electorates the amount of money that was raised. In my electorate alone, which is the most multicultural electorate in the country, well over half a million dollars was raised. I thought it was very interesting to see all these newly-arrived Australians going out to support fellow Australians. It was a very good, decent and humbling thing to see. But we do have significant responsibilities and we do need the means to do that and to encourage people back on their feet. We talk a lot about mining and the importance of the resource economy that underpins Queensland; nevertheless, the driving aspect for employment in our modern economy is small business. We need to see small business people back on their feet as quickly as possible, and it is part of what we are seeking to do through this provision.

The other aspect of the bill that I particularly support is schedule 3, which makes more flexible the provision of the first home owners grant. The money in the first home saver account will be made available to go into a genuine mortgage after the end of a minimum qualifying period, should the account holders purchase a home and the release conditions be satisfied. The government clearly recognises the difficulties that first home buyers face. The money has to be committed into either a superannuation or a retirement fund, none of which is going to find its way into paying a mortgage. I am actually going through this with my son and his partner at the moment—Jonathan and Kylie. They live at home and, as a caring father, I would like to see them stand on their own two feet at some stage. We are encouraging them to think about going out and using the first home saver account and getting themselves into the real estate market. It does not matter where you come from—the inner city or, where we live, the outer metropolitan areas of Western Sydney.

Affordable housing is something that is fast moving away from our psyche. We know that it is important to be able to get in, if you genuinely want to become a first home owner and have a plan for getting there. Gone are the days when—such as when I was buying a house—you could just roll up to the building society, apply and have the loan that afternoon. You do need, for very good reasons, a savings record. We have just come from the world’s worst economic meltdown, and it is largely attributable to the Americans and their subprime market, which was fuelled by people simply going out and being able to access mortgages which they could never in their wildest dreams ever contemplate repaying. We did see a bit of that start up in this country, where people could go out and borrow 110 per cent of their needs in terms of housing, and you got not only the house but the carport, the driveway and the curtains. We went for a good six months, if not more, with sheets hanging over windows and things like that. The point I am trying to make is that we need a strategy to get there, and this is what we are seeking to do with this legislation. We are trying to make the first home owners grant crucial to making the decision to take up your first home. As I indicated, the price of housing is making it harder for most Australians to realise the dream of owning their first house, and you cannot do that simply by willing it to happen. You need to have a firm strategy, and that is what we are seeking to do.

Currently, where a first home is purchased before the minimum release conditions are met, the first home savers account must be closed and that money goes into your superannuation or a retirement savings account. I have got to say, for a 23- or 24-year-old, it probably does not mean all that much to see the money that you have already saved going away until you hit the wily old age of 60. That is a long way down the track—maybe not for some of us now, but I guess when I was 23 or 24 I thought that was an eternity. The new provisions will allow that money to be paid into a genuine mortgage at the end of that minimum qualifying period. The money can actually be put to use to help sustain the very mortgage that people have entered into.

This change will further assist aspiring home owners by allowing them to purchase their home earlier than they might have originally planned and still be able to put the money towards their new home should their circumstances change. These changes will not do anything to harm the underpinning concessions of the first home savers account. The government will continue to contribute 17 per cent of the first $5,500 indexed to an individual’s contribution made during the year. This means that, if an individual is able to make the maximum contribution of $5,500 into their first home savers account, they will be eligible for the government’s contribution of $935. Where individuals come together to form a couple—as is the case with my son Jonathan and his partner, Kylie—they will be able to pool their first home savers accounts to produce those savings together. Earnings in respect of this are taxed at 15 per cent and the withdrawals will be tax free when used to purchase their first home.

These are things to be encouraged. I know some mocking words were used about the take-up rate being something like seven per cent. If you consider the economic circumstances since 2007 and beyond, it is no wonder that there has been a slow-down in the purchase of real estate generally because of the prices involved. We are trying to do something to make it affordable at that entry level. We do not want to do it in such a way that it overheats the entry-level market; we want to do it in such a way that it actually empowers people to buy their first home, gives them a strategy which can actually help them realise their dream and still enables them to purchase their home without having the price artificially propped up by one-off payments of money. This is a better way of doing it. It actually ensures that couples, when they are moving to buy their first home, enter upon a strategy which is designed to help them not only establish the pattern of saving to attain the mortgage in the first place but also, hopefully, help them establish a long-term pattern of saving. We do need to reduce debt and to do that we need to have a proper saving pattern. I think that is something, coming out of the global financial crisis, that we have all learned and should take to heart.

I think what is being applied here will do wonders for a lot of people, particularly those that I represent in the federal seat of Fowler, which is an area that has much disadvantage in it. For instance, the median household income for Fowler is currently at $51,900, which is considerably below the median household income that applies across the nation at around about $62,000.

The housing prices in Liverpool and Fairfield in outer metropolitan Sydney do not compensate for the lower average earnings. The median house price in Fowler at the moment is $432,500 with a mortgage repayment of $1,796 a month. By my rough calculations, that means that you commit almost half your income to paying your mortgage. That makes it pretty strained. What we are trying to do is establish the entry level strategy for people who are keen to buy their first place and we are also hoping that this will send a message about the value of saving to achieve objectives. I commend all pieces of this bill to the House.

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

I am pleased to speak on the Tax Laws Amendment (2011 Measures No. 1) Bill 2011. I realised when I was preparing for this speech this morning that I have a serious personality flaw: I have had a secret fondness for tax laws amendment bills since I was first elected in 2004. They are generally known in-house as TLABs and we do at least a dozen or so of them every year. Unlike many bills in this House which deal with large policy areas, and if it is an important policy area it will have a bill of its own, TLABs tend to pull a whole range of items together in one bill. They are sometimes quite quirky ones that deal with a whole range of things. They are more about governance than government. They deal with the detail of making things happen and implementation.

This TLAB is quite a small one in that it only deals with three matters, but they are quite different. Schedules 1 and 2 of the bill deal with the detail of the implementation of support the government provided for people who were victims of the recent floods and Cyclone Yasi. They do what perhaps every person in Australia would expect them to do, which is essentially to make those payments exempt from income tax. When I first saw a bill like this it was after the fires in Victoria and it did exactly the same thing. It ensured that payments made to people to help them get through some very bad times and get back on their feet were not later considered as taxable income.

Schedule 1 makes the Newstart-like income subsidies that were paid in the early days to victims of floods and Cyclone Yasi exempt from income tax. The income recovery subsidy provided financial assistance to employees, small business owners and farmers who had experienced a loss of income as a direct consequence of the flooding that commenced on 29 November last year. Those subsidy payments were only claimed between 10 January and 28 February inclusive, so they were well and truly payments made during the worst of times and got people who had lost income through those worst days. As I said, schedule 1 makes sure that those payments are exempt from income tax.

Schedule 2 deals with the clean-up and recovery grants to small businesses and primary producers under the natural disaster relief and recovery arrangements. Payments were made to businesses and primary producers directly affected by the flooding and this schedule makes those payments non-assessable non-exempt income. That is slightly different from schedule 1 because if we did not make these grants exempt those payments would interact with other aspects of tax law. What we would find is that if a taxpayer brought losses forward from a previous year those payments would have to be used to reduce those losses first. This makes sure that payments made to those businesses and primary producers under those circumstances are completely separate from any assessment by the tax office. They are both very good little pieces of detail that needed to be dealt with and they are the kinds of details that are usually incorporated in these TLABs.

Schedule 3 is something that I am very pleased to see. It relates to the First Home Saver Accounts. The First Home Saver Accounts were introduced back in October 2008 in what was a very important announcement at the time. They provided another option for predominantly young people saving for their first home. The First Home Saver Accounts, once set up, brought with them a contribution of 17 per cent from the government on the first $5,500 of individual contributions made each year. That meant that an individual who made a contribution of $5,500—and that is indexed—to the First Home Saver Account was eligible for a contribution of $935.

The scheme was capped; there was a limit of $80,000 on the overall account balance. Once an individual reached that balance, they could not make any more contributions of their own but government contributions and earnings continued to flow into that account. Individuals who were members of a couple were able to pool their first home saver accounts and withdrawals were tax-free when used to purchase their first home.

Last month a young man in my electorate came to see me. He had opened one of these first home saver accounts. He freely admitted that he had not read all of the detail when he went into it and he was surprised to find that, when he wanted to buy a house early, he was not able to use the money from his first home saver account for that. It was not so much that his circumstances had changed; it was that he really did not understand what agreement he had made when he went into it.

It is quite reasonable that there are conditions on these accounts where the taxpayer is contributing 17 per cent to assist you to buy your first home. It is reasonable that you cannot, for example, withdraw that money halfway through and go off on a holiday. It is quite reasonable that the money, particularly the taxpayer contribution, be allowed only for the purpose which was given, which is to buy a home. But, under the current regulations, if a dwelling is purchased before these conditions are met, the home saver account must be closed and the money in the account must be paid to the individual holder’s superannuation or retirement savings account. The money in this young man’s account would have had to have been rolled over into his superannuation, so he would not have been able to use it to help pay off his mortgage. He, of course, started the first home saver account because that was what he wanted to do with his own part of the money.

This amendment to the scheme is really very good. It essentially allows the money in a first home saver account to be paid to a genuine mortgage at the end of the minimum qualified period should the account holder purchase a dwelling in the interim. It means that, if this young man in my electorate buys a house before the minimum period is over, he will at the end of the period be able to transfer his money, the government contribution and whatever earnings there have been on that account to his mortgage. So it is a good outcome for him as a young man and a very good outcome for the government and for taxpayers in general, because we all realise that any time a young person, particularly a person in their 20s or 30s, starts accumulating assets through the purchase of their first home we all benefit because of the increased financial security of families in their later years. So what is good for a young person who is buying a home is eventually good for us all.

I commend the bill to the House. There are three important schedules. Two relate to ensuring that payments given to victims of the floods and Cyclone Yasi are tax-exempt. The third one increases the flexibility for young home buyers who are making use of the first home saver accounts.

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

I speak in support of the Tax Laws Amendment (2011 Measures No. 1) Bill 2011. It is important that all Queenslanders who have had their lives shattered, their farms damaged and their businesses destroyed have confidence that all Australians are behind them in their rebuilding effort. Queensland makes up just over 20 per cent of Australia’s population and certainly contributes more than 20 per cent to the wealth and income of this country. The federal Labor government is stepping in to rebuild Queensland. These were the largest natural disasters in our history: the floods in South-East Queensland and Cyclone Yasi in North Queensland. Without the cyclone’s impact, it is estimated that the cost of rebuilding South-East Queensland and Queensland generally will be $5.6 billion.

My electorate of Blair covers Ipswich and the Somerset region in South-East Queensland. In it I have the Brisbane River, the Bremer River, the Lockyer Creek, Wivenhoe Dam and Somerset Dam. It has been in many ways flood central in the last few months.

The impact on lives is extraordinary. The floods have devastated local communities in the western part of Ipswich, from Rosewood through to Riverview, up through the Brisbane Valley and into the Kilcoy region. Roads, bridges, ports and community infrastructure have been damaged by floods. Just last week I was up in Mount Stanley, which is way north in the Brisbane Valley, where a dozen or more roads were cut off during the flood crisis. The culverts, which were built about 60 years ago, have been damaged. As you drive across in a four-wheel drive, there is still water crossing those areas. Every time it rains, the water comes across. I was up there to visit and speak to some farmers, along with the former deputy mayor of what was then known as the Esk Shire, Simeon Lord. Simeon is not necessarily a card-carrying member of the Labor Party, I assure you. He has strong views and is well known and well respected in the community. He talked to me and some of the farmers in that area of Mount Stanley about what life was like for them in the flood and how we need to rebuild the roads, the bridges and the essential community infrastructure.

Queenslanders and people across the country have been extraordinarily generous with their time, effort and money. Contributions to the Somerset Regional Council’s flood relief appeal and to the Ipswich mayor’s flood relief appeal have been in the hundreds of thousands of dollars. Indeed, the mayor’s appeal in Ipswich is edging close to $1 million now. And the Premier’s flood relief appeal is in the millions of dollars. But we need billions of dollars to rebuild Queensland. At the time of the flood, Centrelink and the ADF, two great arms of the federal government, came in and gave great assistance. I pay tribute to Centrelink, as I did in a speech last night when the relevant minister—Ms Plibersek, the Minister for Human Services—was here. There was great work done by Centrelink locally. We need to rebuild Queensland. The payments that were made during the time of the flood put money back into the hands of people. I want to note that the councils also have received significant assistance from us. The third-quarter financial assistance grant for Somerset Regional Council was brought forward by this government. That totals $611,237. Ipswich City Council received a $1,127,394 grant—money brought forward to assist them to rebuild. And we put $2 billion into Queensland government coffers to make sure that they can do work to rebuild Queensland.

The flood affected areas in South-East Queensland are truly devastated. My estimation is that around 90 per cent of people who have been flood affected in my electorate are still living away from their homes—in caravans, in tents, in motels or bunking with people. They are not back in their homes. If I drive at night through places like North Booval in Ipswich or some of the country towns in my electorate, there are hardly any lights on, because people are not back in their homes. So any way we can give them assistance to mitigate the circumstances that they find themselves in will be beneficial for them, their families and the local communities.

This legislation exempts from taxation the disaster income recovery subsidy payments made to victims and the funding given to New Zealand residents. This benefits my local community because it puts money back in people’s pockets and they do not have to pay it to the Australian Taxation Office. I did not realise there were so many New Zealanders living in South-East Queensland. There are about 180,000 people from New Zealand living in South-East Queensland. Put that in context. The member for Herbert says it is more people than live in his city. It is more than the number of people who live in Ipswich and more than the number of people who live in Toowoomba. You can see why, when New Zealand play the Wallabies or the Kangaroos at Lang Park, so many New Zealanders turn up to watch them play. We provided help during the flood in terms of our disaster relief recovery payments to them. This legislation makes sure that we do not take money out of their pockets.

I think our proposal with respect to the response in South-East Queensland in particular—the way we have structured the raising of the money, investment of the money, the application and the rebuilding—is the right thing to do. We found savings of $2 for every $1 we raised for the levy, so it was the right way to go about responding to an unprecedented natural disaster.

Faced with such a big challenge, it is extraordinarily important to provide help, and I think one of the biggest helps we can provide is the granting of up to $25,000 and offering of low-interest loans of up to $250,000 to small businesses. The assistance we are providing to local NGOs we are doing in consultation with the states. The states are rolling it out through the departments of communities, particularly the Queensland Department of Communities. I know a number of sporting organisations in my electorate have received that assistance. Everything from the dog obedience club in Ipswich through the Ipswich Basketball Association have received assistance through money from the Department of Communities in Queensland—money that is given by us, as well, through our levy and what we are doing to assist the Queensland government. This is important legislation. It is important for local areas as well.

I must say that those opposite have adopted what I think is a simply bewildering response with respect to the flood crisis in South-East Queensland. At a time when Australians stick together and expect bipartisanship to prevail, I am flabbergasted by the response of those opposite to the flood ravaged regions of South-East Queensland. I say this genuinely and personally. I could not believe that they would do that. They have so many members from the area: the member for Ryan, the member for Longman, the member for Maranoa. They have members from all throughout Queensland and Brisbane as well representing the LNP, and yet they opposed what we were doing with the flood levy. It was hysteria. It really was a slap in the face for South-East Queensland and Queenslanders generally. You did not need a poll to know that Queenslanders wanted other Queenslanders and the federal government to give them a helping hand and stick together in this matter.

I was shocked at the response of the coalition. Their lack of preparedness was shown by the response of the Leader of the Opposition when he tried to find savings. His idea was to cut back the NBN funding, and that was the very organisation that people were crying out for in places like Toowoomba, Ipswich, the Lockyer, the Scenic Rim and the Somerset regions. They are crying out for the NBN, and his idea was to delay and cut it back. His idea was to shave money off the BER funding that provided the very multipurpose halls which were used as evacuation and recovery centres in the flood crisis in places like Fernvale and Esk. It was a bewildering and flabbergasting response from those opposite.

I think the legislation here is important. It exempts the funding in relation to the DIRS. To put it in context, the information I have in relation to this is that, to date, Centrelink has processed over 664,000 claims for the Australian government disaster recovery payment in Queensland for floods, paying almost $715.1 million. It is an enormous amount of money. It has processed just under 72,000 DIRS claims in Queensland for floods, totalling over $54.9 million. That is why these payments are important. It is a huge amount of money going into the hands of individuals. In Ipswich about 3,000 homes were inundated. In the Somerset we are talking about 600 homes inundated—or pretty close to it. They are people who receive money whether they are New Zealanders or Australians. They receive money to help them because so many people lost everything. They lost their furniture, they lost their clothes, they lost their possessions, they lost their mementos—the things that they found important.

That money—the $1,000 per adult, the $400 per child and the $170 per person given by the Queensland Department of Communities—was absolutely vital not just to stimulate the economy but to give people some hope, some chance in life to rebuild. I am on the record as being critical of the means testing that the Queensland government has done in relation to this. I have been pushing the envelope on this issue, trying to advocate for my community in terms of our response on this issue. In fact I have been critical of all levels of government, but I do honour and thank all those levels of government—Centrelink, Ipswich City Council workers, the ADF, Somerset Regional Council workers and the Queensland Department of Communities. We have had a fantastic community response, a coordinated effort, to try to rebuild South-East Queensland, particularly in my electorate of Blair.

I am convinced that this government is on the right track towards recovery for South-East Queensland. I cannot say the same for those opposite, particularly when the Leader of the Opposition started listing off the flood affected electorates in Queensland and actually listed your electorate of Petrie, Madam Deputy Speaker D’Ath, where there was not any flooding. He could not even work out the electorates which had been flooded. That is the extent of the concern and consideration the Leader of the Opposition has for the people of Queensland—he did not even know which areas were flooded and what electorates people were harmed in. He did not understand the flood geography of Queensland, and he did not even understand the electoral demography of Queensland. That is the extent to which the Leader of the Opposition has concern for helping the people of South-East Queensland rebuild their lives.

This is good legislation; it will help my community and I warmly support it. I commend the government for being on the right track with flood recovery in South-East Queensland.

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

I thank all of those members who contributed to the debate on the Tax Laws Amendment (2011 Measures No. 1) Bill. In particular I acknowledge the contribution of the member for Blair, who was a very strong and effective advocate for the people of his community. I think that came through very clearly in his contribution today.

Schedule 1 introduces taxation measures to alleviate the financial hardship being felt in communities affected by the disasters that have devastated Australia over the 2010-11 summer. These amendments exempt from income tax the disaster income recovery subsidy payments to victims of the recent floods and Cyclone Yasi and the ex-gratia payments made to certain New Zealand visa holders affected by a disaster where the Australian Government Disaster Recovery Payment has been activated. Exempting these payments from income tax maximises the amount of payment that individuals receive and is consistent with the exemption provided for equivalent payments made in response to other disasters, such as the devastating Black Saturday Victorian bushfires.

Schedule 2 exempts from income tax category C payments made to flood affected small businesses and primary producers under the Natural Disaster Relief and Recovery Arrangements. This measure recognises the hardship suffered by small businesses and primary producers in affected areas and provides certainty for recipients in terms of tax treatment at a time when they should not need to worry about tax matters

Schedule 3 amends the tax laws to allow the money in a first home saver account to be paid to a genuine mortgage after the end of a minimum qualifying period should the account holder purchase a dwelling in the interim. This increases the flexibility of first home saver accounts by allowing individuals to purchase a home earlier than planned and still be able to put the money towards their new home.

Currently, if a first home is purchased before certain minimum release conditions are met, the first home saver account must be closed and the money in the account must be paid to the individual account holder’s superannuation or retirement savings account. First home saver accounts are designed to encourage individuals, through tax concessions and government contributions, to save for their first home over the medium to long term, and have been available since October 2008.

The government has consulted on these changes and the measure applies for houses purchased after royal assent. This bill deserves the support of the parliament. I commend this Bill to the House.

Question agreed to.

Bill read a second time.

Ordered that this bill be reported to the House without amendment.