Steven Ciobo (Moncrieff, Liberal Party) Share this | Hansard source

I am certainly pleased to speak on the Tax Laws Amendment (Temporary Flood Reconstruction Levy) Bill 2011 and the Income Tax Rates Amendment (Temporary Flood Reconstruction Levy) Bill 2011, which you could call ‘the flood tax bills’. For me, this is an important piece of legislation because I have had a unique insight, as a member and deputy chair of the House of Representatives Standing Committee on Economics, to actually hear all the evidence that was put to the committee by the various witnesses over the course of the single day of inquiry that the committee had. Really, the arguments against this new tax are compelling and overwhelming.

But personally I find that the single most compelling argument against the way in which Labor has conjured up this completely arbitrary flood tax has been one simple fact: the tax that the House is discussing this evening and that has been the subject of parliamentary debate for around one day—and it will no doubt go on into late this evening and possibly even tomorrow—raises for the Labor Party $1.8 billion. The estimated cost of repairs as a consequence of these awful natural disasters is around $5.6 billion. So they are raising $1.8 billion of the $5.6 billion, and the connection between the two numbers is completely arbitrary—there is none.

Most compelling of all is one simple fact: if it had not been for Building the Education Revolution, if it had not been for the failed pink batts scheme, if it had not been for the so-called green assessors scheme and if it were not for Fuelwatch or the money wasted on GroceryWatch or just about any other program you want to talk about, this government would have had $1.8 billion, plus some. There would have been absolutely no need whatsoever for the Australian people to reach into their pockets and pay another so-called mateship tax, as the Prime Minister quaintly likes to put it.

They are masters of spin on that side of the chamber, but they are not masters of finance. If they had any ability whatsoever to actually ensure that taxpayers got value for money and that their initiatives did not blow up into money pits, they would easily have been able to find $1.8 billion and avoid the necessity for the Australian people to pay a new tax. Typically of the Labor Party—consistent with Labor DNA and absolutely consistent with its past form—every time they get their hands on the Treasury benches this Labor Party does what just comes naturally to it: tax and spend.

It has always been a party of taxing and spending and it always will be a party of taxing and spending, because that is what the Labor Party does. It taxes when there is a problem and it hopes that by spending as much money as possible it will overcome the problem. Once again, we find ourselves with the Labor Party conveniently saying to all Australians, ‘Look, it’s not that we’re useless as a government; it’s just that we want to look after those Australians who have been adversely affected,’ and the way to do it is through a so-called mateship tax. There is no mateship involved in this tax; all there is is fiscal ineptitude.

I think it is a great shame that Australians are led down the garden path by this government. Australians do instinctively try to do the right thing. At this time of incredible tumult and tragedy—a time when so many Australians were truly suffering—we saw the resilience and the shine of community spirit as people rose up to lend a hand, to put their hands into their pockets and to help make a difference. And this completely fiscally reckless government has now tapped into that sentiment and said, ‘We need you to do it one more time; it is only for the cost of a cup of coffee’.

It may only be a cup of coffee a week that is at stake, but there is something much more fundamental at stake than that, and that is a principle: the principle that for the first time in recent memory that I am aware of—in fact, it may be ever—a government is responding with a new tax to help pay for a natural disaster. That is despite the fact that we also know that under the gaze of economic experts such as Mr Saul Eslake and Professor Warwick McKibbin the evidence is very clear. There is no economic rationale for this new tax. Not only could it have been funded by a government that was more in control of its spending but it could also have been done through other mechanisms.

Effectively, the economic experts who appeared before the committee outlined three pathways: debt financing, a new tax or cutting spending. But one thing that both Mr Eslake and Professor McKibbin were clear about was that the very worst of the three pathways was the approach the government was taking. It is not even a case of taking my word for it as a coalition member of parliament; you can rely on two of the foremost economic commentators in Australia, who are not members of the political process, who actually bring a level of objectivity to this debate and who made it clear that Labor’s approach is the worst approach to take.

There are other reasons why you would not support this tax. The reality is that there are also very significant risks—that there will be what is termed by Professor McKibbin and touched upon by a number of others as the unintended consequences of this new tax. There are two in particular that I would like to touch upon as part of the debate this evening.

The first is the unintended consequence that as a direct result of Labor imposing this new tax we will potentially create the situation that when there is a future natural disaster—and unfortunately this country has a long history of being prone to natural disasters—Australians will say, ‘Well, I’ll just hold off donating, because chances are that the government’s going to introduce a new tax.’ That does not sound that implausible. If we talk about a very significant natural disaster, something equal in terms of the magnitude of damage to what we have just seen off the back of Cyclone Yasi and the floods, then we know that it is not implausible in the slightest for Australians to say: ‘Last time this happened Labor introduced a new tax to help pay for it. Why wouldn’t they do it again?’

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