Wednesday, 3 April 2019
Treasury Laws Amendment (North Queensland Flood Recovery) Bill 2019; Second Reading
That this bill be now read a second time.
I seek leave to have the second reading speech incorporated in Hansard.
The speech read as follows—
The Government stands by those in Queensland as they work to rebuild their properties and communities following the devastating effects of the monsoonal trough earlier this year.
The speed at which the floods hit and spread through north and western parts of Queensland was terrifying, coupled with low temperatures, high winds and extended periods of rainfall. The scale of the damage is immense. We know the number of livestock lost in the floods or through illness is in the hundreds of thousands, with some properties reportedly losing their entire herd. At the same time, crucial and costly farm and business infrastructure has simply been washed away.
The impact socially, economically and otherwise on these communities is devastating. While the Government cannot undo the damage that has been done, we can ensure that farming families and affected communities are well supported as they rebuild.
To this end, the Government has set up the North Queensland Livestock Industry Recovery Agency, headed by the Hon. Shane Stone AC QC. The Agency will not only assist with the delivery of the immediate response, it will work with flood-affected farmers and communities to develop and coordinate a long-term plan for recovery and reconstruction.
We also recognise it is important to make sure that these communities have access to support immediately so they can get back on their feet as soon as possible.
In addition, we have seen severe storms inflict significant damage on primary producers in the Fassifern Valley, Queensland.
This Bill includes three measures all aimed at providing support to those affected by these events.
Schedule 1 to the Bill will make flood recovery grants exempt from income tax.
We have worked closely with the Queensland Government to provide more than $500 million to support flood-affected communities with the cost of recovery, such as clean-up, restocking and replanting and replacing on-farm infrastructure. This support includes:
Government grants are typically counted as assessable income for the recipient, meaning that taxpayers may pay income tax on the grant amount. However, given the exceptional circumstances, these grants are being made non-assessable, non-exempt income which means that:
No taxpayer will be left with an income tax bill as a result of receiving a qualifying disaster recovery grant. Every dollar received can go towards rebuilding and re-establishing operations following the floods.
Schedule 2 to the Bill will make storm assistance grants to eligible primary producers in the Fassifern Valley, Queensland, exempt income for tax purposes.
The Government is providing $1 million to the Foundation for Rural and Regional Renewal, which will work with the Salvation Army and a local community panel to give grants to primary producers that sustained damage as a result of the severe storms of October 2018.
This Bill will make these grants exempt income for tax purposes, meaning that the grants are not counted as assessable income, but will reduce any tax losses that can be carried forward to future years.
This will ensure that no primary producer is left with an up-front income tax bill as a result of receiving these grants, supporting them in their recovery from the storms.
Schedule 3 to the Bill provides a special appropriation of $1.75 billion so that the Government is able to establish and administer a loan scheme that will enable banks to offer reduced interest rate loans to eligible flood-affected primary producers.
The loan scheme, to be administered by the North Queensland Livestock Industry Recovery Agency, will provide participating banks with a reduced cost of funding to be passed through to eligible primary producers in the form of reduced interest loans to help stabilise their financial position.
Together, these measures will provide further support to those affected by the Queensland floods and storms, helping them to recover and rebuild.
Full details of the measure are contained in the Explanatory Memorandum.
The Treasury Laws Amendment (North Queensland Flood Recovery) Bill 2019 clarifies that specific disaster recovery grants that relate to flooding between 25 January 2019 and 28 February 2019, primarily in Townsville, are to be exempted from income tax. It clarifies that specific storm assistance payments relating to storm activity on or around 25 October 2018, primarily in the Fassifern Valley in Queensland, are to be exempted from income tax.
It implements an announcement made by the Prime Minister on 1 March 2019 of a loan scheme to provide financial assistance to primary producers affected by the Northern Queensland floods. According to research from the Parliamentary Library, currently under the Disaster Recovery Funding Arrangements 2018 grants to businesses are taxable but grants to non-profit organisations are not. The North Queensland floods devastated the primary industries surrounding Townsville. It's estimated that half a million head of livestock were killed during the flood event. Small businesses and households in urban areas have also suffered lingering effects.
The bill will clarify that category C or D disaster recovery grants made under the Disaster Recovery Funding Arrangements 2018 to small businesses, primary producers or non-profit organisations within the time period specified are non-assessable, non-exempt income for taxation purposes. The amendments apply to the 2018 financial year and the later financial year for qualifying grants.
The bill will also make grants to primary producers non-assessable, non-exempt income if the grants are for repairing or replacing farm infrastructure, restocking or replanting and if they are made as part of an agreement between the Commonwealth and state or territory governments. This covers agreements entered into between 1 February 2019 and 1 July 2019 that are outside the Disaster Recovery Funding Arrangements 2018.
Schedule 2 of the bill deals with the damaging storms of 25 October 2018. Those are the storms that hit the towns of Oakey and Boonah in South-East Queensland and in the Fassifern Valley and Darling Downs region. Primary producers in the Fassifern Valley estimated that the hail cost was $10 million worth of damage to crops on more than 20 farms.
The bill makes payments made through the Foundation for Rural and Regional Renewal—a private, not-for-profit organisation that is based in Bendigo, Victoria—exempt from income tax. The payments have been made by the foundation, under grants totalling $1 million from the Commonwealth, to support primary producers in the Fassifern Valley. The amendments apply to the 2018-19 financial year and later financial years for qualifying grants.
On schedule 3, the Prime Minister on 1 March 2019 announced:
… the Government has offered ADIs low-cost loans which they would be required to pass on to eligible farmers in lower interest rates. This will help those farmers to stabilise their financial position—and is estimated to be worth up to $2 billion.
The bill implements a loan scheme that will see the Commonwealth give a total $1.75 billion in loans to participating authorised deposit-taking institutions. The bill makes a special appropriation for that money from the Consolidated Revenue Fund for the purposes of making loans to financial institutions under the program, known as 'Urgent assistance for eligible primary producers affected by floods in Northern Queensland'. According to the bill's explanatory memorandum, the money will be given to the ADIs as a low-interest loan, which will enable the ADIs in turn to offer low interest on new and existing loans to eligible primary producers. It's estimated that the impact on the underlying cash balance between 2019-20 and 2022-23 will be $0.7 million.
Labor supports this bill. We want to ensure that as much assistance as possible is provided to these communities in North Queensland who have suffered terribly because of the ravages of the floods. This is an extremely important bill. It's a bill that will provide assistance, and that's why Labor supports this bill. We are seeing too many storms, too many floods and too many droughts in this country. The sooner the coalition actually get on with dealing with climate change, the better it will be for this country.
Obviously, I support the Treasury Laws Amendment (North Queensland Flood Recovery) Bill 2019. As most senators will know, I'm based in Townsville, I live in Ayr and I treat Northern Queensland as my electorate. I'm very, very familiar with the cattle industry, the pastoral industry, in western Queensland, stretching from Charters Towers out to Mount Isa and beyond Camooweal to the border. It's a remarkable industry. It's a wealth creator for Australia. It has its difficult times. We saw the horrific pictures of cattle dying. Some were caught in trees as a result of the flood. I think, Mr Acting Deputy President O'Sullivan, you were out there not long after the floods themselves. You would be well aware of the distress, the hurt and the loss of income.
I thank the government for introducing this bill. Senator Cameron has explained it, and the second reading speech of the minister has explained in detail what the bill is about. I just want to use my contribution to say thank you on behalf of the people of north-west Queensland who were in the floods and also the people of Townsville who were inundated by floodwaters—and some of them are still suffering—for the enormous government expenditure, the grants which have been generously given by the government and supported by every parliamentarian. I just want to express my thanks.
Whilst it's very much alive in the minds of Queenslanders, I also want to thank those who live in the capital cities in the south for their forbearance. Very often some might say, 'Why is all this money going to these industries far away?' But I know that people in the cities of Melbourne, Sydney and Adelaide—every capital city—support the work of the government in trying to ameliorate as best the government can and as best the taxpayer can some of the impacts of the flood. I can only feel for the pastoralists and other primary producers in the north-west. They do face droughts regularly. There have been floods of this magnitude before, and in relatively recent times they've had floods that were not quite as bad and not quite in the same area—but they are part of life out there. Then, of course, these pastoralists had the live cattle export ban, which perhaps did more economically to destroy them than these floods have done. So they've had a pretty rough time. They're just coming out of that live export ban. They were dealing with the drought, and then these floods came. So can I, on their behalf, thank the government and also thank those who live in other parts of Australia for their support at this very difficult time.