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

So it is your understanding that intrinsically comes to you; it is not something that in the course of your negotiations the government has put to you? I find the proposition that we impose a new tax on all Australians earning more than $50,000—just because it is administratively convenient to whack every Australian earning more than $50,000—to be quite a bad way for us to go.

We are here in a circumstance where the government wants to raise $1.8 billion out of a budget of $350 billion. This is money the government should be able to find by reprioritising its excessive and wasteful spending across this budget. This tax is supposed to come into effect on 1 July 2011. That is after the next budget. We will have a budget in May, when this issue—the funding required for the reconstruction effort—can be dealt with. There is absolutely no need to deal with this now. The reason we are dealing with this now is that the Prime Minister, Julia Gillard, wanted to strike while the iron was hot and get a tax through the parliament while she thought that she could get away with it politically in the court of public opinion. She knows that tax hikes like this are unpopular, so she always is on the lookout for a political strategy to get away with a tax. She is always focused on the spin and the politics rather than on what is good public policy.

This flood tax, this increase in the income tax—to be passed by this parliament less than two months before the budget comes down—is not good public policy. It is not good public policy to set up a tax, supposedly for a one-year period, to raise $1.8 billion when, quite frankly, there would be an opportunity in less than two months to reprioritise our spending commitments in the context of the revised revenue estimates that will be before us at that point of time.