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

After an hour and a half of going around and around in circles in this chamber before question time and going around and around in circles in committee last night, two minutes before question time the minister finally decided to come off his high horse and answer the questions that quite legitimately had been posed by senators. I refer specifically to the question of whether he could give an ironclad guarantee on behalf of the government that all Australians who have been subject to natural disasters and who are receiving natural disaster assistance payments from the Commonwealth will be exempt under this legislation. Two minutes before question time he finally answered, ‘Yes.’ He could not bring himself to resolve that issue earlier.

The reason that the opposition have been persistently asking questions in relation to this is that the information available to the people of Australia on the Treasury website up to this point in time has been saying that an exemption is only available to those who have been the victim of a natural disaster which is a flood event. I am very pleased that finally the minister has provided clarification to the Senate on this. I cannot quite understand why it took him so long. He could not have had that many other legislative priorities to deal with. Having noted the minister’s assurance in the context of the conflicting information that has been in the public domain, the opposition are happy to leave it here.

However, we are obviously not happy with flat tax. We do not support it. We will vote against it. We urge the Senate to vote against it. We think that the way this flat tax is being put forward is not the way to handle our public finances. It is an ad hoc Labor Party tax which will be imposed on all Australians earning more than $50,000 a year, unless they are in one of those areas that are exempt. We do not think that this is the way to run the financial affairs of the nation. To those people who may be listening, I make the point again that Liberal-National senators stand for lower taxes. This government will always look for an opportunity to whack on another Labor Party tax whenever they think they can get away with it politically.

Ian Macdonald (Queensland, Liberal Party, Shadow Parliamentary Secretary for Northern and Remote Australia) Share this | Link to this | Hansard source

In the last couple of days there have been floods in Bega on the South Coast and in the Burke Shire in the Gulf of Carpentaria. Minister, will people in these areas be relieved of payment of this tax? As I understand it, a natural disaster relief declaration has to be made by the state governments. If that is done and payments are made to people in those areas by 30 June 2012, they will be exempted from payment. I seek the minister’s confirmation of that.

I also point out that I asked the minister a question that I have asked him several times. The minister did not want to answer it for some reason. Yet, as Senator Cormann pointed out, it can be very easy for the minister to answer. We have wasted 4½ hours in this chamber asking the minister a question, yet one minute before question time he gave some answers. It was pretty easy when it came to it.

I also want an answer from the minister on the number of individual taxpayers who will contribute to this tax. How many individual Australians earning more than $50,000 will pay the tax and how many of that number does the department estimate will be exempted because of the exemptions in the provision before the chamber?

Nick Xenophon (SA, Independent) Share this | Link to this | Hansard source

I support this legislation. This flood levy has correctly arisen as a result of the actions of the Queensland government in failing to insure the public assets of Queensland, the infrastructure that is owned by taxpayers, because the Queensland government—unlike Western Australian, South Australia, New South Wales, Victoria and the Australian Capital Territory—failed to take out insurance over their assets. As a result of the negotiations I entered into with the government, there is now a new determination in the natural disaster relief and recovery arrangements. These are very significant changes—new guidelines and significant clauses—that will require the states and the territories to go through a very rigorous, robust and transparent process to ensure that they do the right thing when it comes to protecting their assets. Because of those safeguards, I believe that this is going to be the last flood levy we will ever need to pass in this place. I think that is a good piece of public policy. It is a good reform.

As a result of this reform, I believe that the states and territories all have to act to the highest prudential standards and act responsibly when it comes to their assets. Senator Macdonald was quite right when he was very critical of the Queensland government over their abject failure to appropriately insure their assets. That is why there is a shortfall. That is why $1.8 billion needs to be found to cover this—of which Queensland only needs to pay a quarter under the current natural disaster relief and recovery arrangements. That will change as a result of the arrangements in the new determination. That is unambiguously good for the protection of taxpayers’ assets. Ultimately, it is a good thing in terms of ensuring that taxpayers will not have to be looking at flood levies in the future with these new arrangements.

Nick Sherry (Tasmania, Australian Labor Party, Minister Assisting the Minister for Tourism) Share this | Link to this | Hansard source

Yes, it has been a long discussion, and most of the issues were discussed prior to the last four or 4½ hours either in the committee hearings on the bills or the broader debate. Senator Macdonald has asked about two issues, and I understand both were discussed in the committee hearings. At that point in time I understand the witnesses were unable to give a response to him.

On the total number of taxpayers who will pay the levy, we will take that on notice. I can expect to have an answer for Senator Macdonald in the next few days on that issue. On the total number of people who will be exempt from the levy because they are in disaster declared zones, we do not know what the total number is. The ATO will obviously, in their delivery of the tax, carry out that calculation as the tax is implemented and collected. Then we will be in a position to give Senator Macdonald that figure. I will take it on notice and when that figure becomes available through the ATO we will provide it, and we should be able to provide the other figure to you in the next couple of days.

This was all explained to the committee hearings on the legislation, so why we need to go through these issues again today, other than for Senator Macdonald to conduct a filibuster, which has been all too obvious in the last four to five hours, is beyond me.

Ian Macdonald (Queensland, Liberal Party, Shadow Parliamentary Secretary for Northern and Remote Australia) Share this | Link to this | Hansard source

The arrogance of the government comes through again. This may have been discussed at the committee hearing, but I was not at the committee hearing. In fact the majority of senators were not. The rules of Senate debate provide that this is the time when senators can question the minister. In fact one of the questions I just asked was in relation to the floods happening now at Bega on the South Coast of New South Wales and at Burketown up on the Gulf of Carpentaria. They are happening now; they were not happening when the committee met. How could these questions possibly have been answered then? We see this arrogance when the government is dealing with legitimate questions of the Senate—and we are paid to be here on behalf of the people of Australia to ask these questions.

The importance of the question seems to have escaped the minister. We are supposed to be collecting $1.8 billion through this new Labor government tax. But the more people who are exempted from it, and exempted for appropriate reasons, the fewer people will be left in Australia to pay the tax. In fact, horribly as it has turned out, in the last few months there are not many parts of Australia that have not been disaster declared. We might end up finding that there are only 100,000 individual Australian taxpayers who are going to pay this levy, in which case it is not going to raise the $1.8 billion that this government seeks. It may well be that we have been through this whole exercise, this lengthy debate, to recover a pittance of the money that the federal government is expecting.

The minister has now agreed to take my questions on notice—that is great; we will get the answers to them long after the legislation is dealt with by the Senate. That is a great deal of help. I asked him these questions last night, so why could he not have taken them on notice then? He has a department of 3,000 people who surely could have got the answer for him within a couple of hours. But here is the arrogance of the Gillard government.

I would like to know what the government is likely to collect. I know how departments work, and they would have made an assessment. Sure, they do not have all the facts, but they would have had to have made an assessment to brief the minister and say, ‘Look, if you are exempting these people and, given the number of areas that have been declared disaster areas, that will take out X number of Australians and that means only Y Australians will pay, so what chance have we got of collecting the $1.8 billion that the government seems to need?’ As I read the legislation, if there is another disaster, heaven forbid, up until 30 June 2012, the people affected will be exempt too. It may—heaven forbid, as I say—end up that nobody in Australia is paying this levy. It is typical of the government’s shoddy legislation and of the shoddy way that the Gillard government treats the parliament and the Australian people.

In the expectation that the minister, true to the form he has shown to date, will not answer the questions I have raised, I want to make some other remarks before the bills proceed. I remind senators that this is legislation to impose yet another new Gillard Labor government tax. It is absolutely unprecedented in the history of an Australian parliament. Never before have we imposed a special tax to pay for recovery from any natural disaster. Never before has it happened. We have had cyclones, we have had floods, we have had droughts, we have had earthquakes through the whole of our history, but never before have we ever paid a separate tax for the recovery. It has been paid for by governments of the day, Liberal, Labor, Callithumpian or whatever, out of the normal taxation revenue of government.

This government collects something like $350 billion every year in tax. Surely, out of that $350 billion this government collects from taxpayers, they could have found $1.8 billion. We did not have to have another new tax for what started off being a single disaster, the Queensland flood. It just demonstrates that this government’s answer to any issue, any calamity or any policy question is: ‘Let’s impose another new tax.’ The government has already announced that we will be having a mining tax later this year and now we will have the flood tax—all new taxes. And we are going to have a carbon tax as well, a carbon tax from a Prime Minister who solemnly swore before the last election:

… there will be no carbon tax under the government I lead.

So what faith can you put in any promises made by Ms Gillard and her ministers? That is what this bill is about—imposing a whole new tax on the Australian public.

I am going to try one more time and ask the minister why it is that this tax is only being paid by individual taxpayers. If it came out of the general revenue, out of the $350 billion collected each year, then BHP, Rio Tinto, Xstrata, Coles and Woolworths would all pay their share of the tax. And that seems fair in Australia—companies pay tax and individuals pay tax. But this tax, for some reason which nobody can explain to me—I have asked and asked and asked—is not being levied on these big multinational companies, these giants of Australian industry. It is only being levied on individuals. So I repeat: the butcher and the baker will have to pay the tax from their hard earned income, but Coles and Woolworths, with whom they compete, will not have to pay the tax. Coles and Woolworths get off scot-free. What is it about Coles and Woolworths that makes the Labor Party not want those companies to pay their fair share? Xstrata, BHP, and Rio Tinto are all very big investors in Australia. I am very grateful they are here, these multinational companies, and I am pleased that they make good profits, but why are they being let off scot-free? What is it between the Labor Party and those multinationals that they are allowed to escape this disaster recovery levy or tax without putting in a cent? Individuals—the people in here, the attendants, senators, people listening to this broadcast—have to pay the tax, but Coles and Woolies, BHP, Xstrata and Rio Tinto do not pay a cent. Tell me the sense of that.

I simply cannot believe it. I can believe the Greens would vote for that—because they are an absolute policy vacuum. But I am absolutely amazed that the Independents have fallen for this. What rationale do you have for charging individuals and not the corporate giants? When I have asked Senator Sherry this before, he has not answered the question. All he has done is get up and say, ‘Your government put a levy on containers.’ Yes, they did. ‘They put a levy on milk bottle sales.’ Yes, they did. ‘They put a levy on pounds of sugar.’ Yes, they did. ‘They put an Ansett levy on airfares.’ Yes, they did that—but everybody paid that, whether a corporate giant or a little person using the airline or using a container. Mind you, there were not too many ordinary Australians using containers. Those levies were across the board. This levy, which could easily have been imposed on everyone through the general taxation regime, is not being imposed on the corporate giants. How does that make sense? If only someone could explain to me what the policy rationale for that is. That is why the coalition is totally opposed to this new tax of the Labor government. The Labor government is addicted to taxing and addicted to spending.

This all comes about because a state Labor government, regrettably the Labor government in my home state of Queensland, was so bad at financial management that it is broke and it cannot pay for the recovery. Senator Xenophon very skilfully extracted, during the course of this debate, the admission that the Queensland government could not pay the $50 million to $55 million needed for an insurance premium. So they went uninsured and, as a result of that, the Queensland government cannot afford to do what governments are supposed to do. But their mates in the federal Labor Party have come in and whacked this tax on individual taxpayers—not on the corporate giants but on individual taxpayers—and we have to fork out.

I hope that the people of Australia understand that this tax is unnecessary. Reconstruction should have been paid for out of general revenue. This is a new tax, but it is not a tax like other taxes, which are levied across the board, including on corporate Australia—the big guys. It is only going on the individual Australians who earn more than $50,000. You do not have to be in a very highly paid job these days to get $50,000. Those individual Australians have to pay this new tax of the Gillard Labor government because the Gillard government is simply incapable of managing money. So I ask the minister yet again what that is all about.

I repeat my question: what were the department’s estimates of who would be exempted from this and did they take into account the floods happening as we speak in two parts of Australia and—I hope this does not happen—the other disasters that could well happen between now and 30 June 2012? As I say, I hope further disasters do not happen, but it could well be that not one Australian is paying the tax. This is, again, typical of the incompetence and stupidity of this Labor government that cannot be trusted with money.

Nick Sherry (Tasmania, Australian Labor Party, Minister Assisting the Minister for Tourism) Share this | Link to this | Hansard source

Although all of these points have been answered well in previous hearings, debate contributions and committee hearings, Senator Macdonald chooses to persist on a couple of specific points. On the Bega issue, if in fact the Bega area is declared a disaster zone, it would be exempt from the tax. My advice from Treasury is that, despite the exemption in this case and in previous exemptions, it is estimated that it will not materially affect the estimated revenue collection of $1.8 billion.

The tax is a progressive tax and is income based. It is fair and equitable and efficient. That is the reason the government is determined to use that as the tax base in the same way as the guns levy and the East Timor levy were applied. We considerably debated other levies under the previous Liberal-National Party government. There were levies that did not affect everyone as applied by the previous Liberal-National Party government. The Ansett levy applied to tickets. Clearly, many people in the community would not have flown and, therefore, would not have paid the levy. Not everyone drinks milk, surprisingly. The superannuation surcharge, through definition, did not apply to everyone.

There is a mixed record, but on this occasion we believe that the base of the tax is fair, equitable and efficient. I have taken the two questions on notice. Clearly—and this is obvious, Senator Macdonald, from the Bega example—we are not in a position to give the total number of people exempt. We cannot do that today but as soon we have the figure from the ATO we will provide it for you on notice.

Bills agreed to.

Bills reported without amendments or requests; report adopted.