Mathias Cormann (WA, Liberal Party, Shadow Assistant Treasurer) Share this | Hansard source

On behalf of the opposition, I thought I would put a few things on the record again. When we started this debate Senator Xenophon had not made up his mind yet about how he was going to approach this piece of legislation—I think the negotiations with the government were furiously ongoing—so I thought I would just go back to what this is all about.

What we are dealing with here is yet another ad hoc Labor Party tax, which quite frankly should not be required. We are dealing with this tax because the government has fundamentally mismanaged our public finances. Any government that has its public finances under control should be able to fund the important reconstruction effort in Queensland, which we of course strongly support, without having to resort to an ad hoc tax introduced in this fashion.

I draw the attention of the chamber again to the fact that we are having a budget in May. This particular tax is supposed to come into effect on 1 July 2011. The proper process to pursue the necessary Commonwealth funding contribution towards the reconstruction effort in Queensland would have been to assess all of the revenue and spending priorities in the budget and to reprioritise those spending commitments. The point has been made that our annual budget is about $350 billion. This increase in the income tax for all Australians earning more than $50,000, unless they are exempt, is supposed to raise $1.8 billion out of a budget of $350 billion. The point has been made that if you had $350 in your pocket and you had some spending commitments do you think you could find $2 in order to deal with an urgent priority? Any Australian knows that they would be able to do so.

Why is the government bringing this tax on now? It is politics. They know that they can take advantage of people’s goodwill towards the people of Queensland, even though this is not going to do anything to rebuild any houses or anything—this is all about rebuilding the infrastructure for which the state Labor government in Queensland did not take out proper insurance. The Commonwealth government wants all Australians earning more than $50,000 to pay more tax because their finances are out of control and they cannot reprioritise their spending to find $1.8 billion, and because the state Labor government in Queensland did not take precautions by taking out appropriate levels of insurance.

What is becoming obvious is that only the Liberal and National parties will stand up for lower taxes in this parliament. Only the Liberal and National parties will be voting against this tax because we do not think this is the way to run the finances of the Commonwealth. In a $350 billion budget this government should have been able to reprioritise all of its wasteful and excessive spending in other areas to find $1.8 billion, particularly if you consider the $2.4 billion wasted on pink batts and all of the money wasted on school halls. With the money that is being wasted day-in and day-out by this government they cannot find $1.8 billion to help fund the necessary and important reconstruction effort in Queensland.

We think it is quite disgraceful that it has come to this. We are very disappointed that Senator Xenophon has finally succumbed to the Prime Minister’s overtures on this. We think that this is a bad way to run fiscal policy in Australia. We think the proper way to run fiscal policy in Australia is through a proper budget process. Given the fact that this tax is not to come into effect until 1 July 2011, the more honest and more proper way to deal with this would have been through the budget process when the government should look through all of their spending commitments.

Bear in mind that the expenditure for the Queensland reconstruction effort has not been properly quantified yet. It is said to be about $5.6 billion or thereabouts, but that did not include Cyclone Yasi. It is a rough estimate and it is likely to be more. When we asked the finance minister during recent estimates about what the government will do if the actual spending will have to be more than the initial estimate, she said, ‘We will just save some money.’ If you can save money then, why can you not save money now? That is a very important question.

We are dealing with this tax because the Labor Party instinct is to go for a tax whenever they think they can politically get away with it. They want to whack it on because they know of people’s goodwill towards the people of Queensland and they think this is a tax they can politically get away with. They are bringing up all these cuddly names for it, such as ‘flood levy’ and ‘mateship tax’, but it is all politics. It is all about going ahead with this con at the expense of the Australian people. Every person across Australia earning more than $50,000 will have to pay the price for Labor’s mismanagement of our public finances.