Harry Jenkins (Speaker) Share this | Link to this | Hansard source

I have received a letter from the honourable member for North Sydney proposing that a definite matter of public importance be submitted to the House for discussion, namely:

The failure of the Government to insulate the economy against the risk of natural disasters.

I call upon those members who approve of the proposed discussion to rise in their places.

More than the number of members required by the standing orders having risen in their places—

Joe Hockey (North Sydney, Liberal Party, Shadow Treasurer) Share this | Link to this | Hansard source

I am immensely pleased that the Treasurer has decided to debate me in the chamber on this occasion, because previously he has contracted that out to the Assistant Treasurer, who is mysteriously not here today. It should come as no surprise that much of the work of the Treasurer these days is contracted out. The Prime Minister just contracted out the financial integrity of the recovery in Queensland to a former Liberal finance minister, which must be just a touch humiliating for the Treasurer, but we move on.

Last year the Treasurer said that his banking reforms would deliver lower interest rates over time—‘Banking overhaul will bring down rates, says Swan’. He went on to say that essentially the banking reforms that he announced last year would bring interest rates down. The Treasurer has previously said that consumer confidence is fragile. He has previously said that retail sales are not as strong as we would like. He has also on numerous occasions, in fact on more than 25 occasions, warned that the banks should not go beyond the Reserve Bank in increasing interest rates.

Australia is not immune to the challenge of natural disasters. On this occasion it has come in threes with flood, with fire and with cyclone. But Australia now seems to always, during the Christmas period, suffer some sort of disaster that inevitably will have an impact on the Australian budget. The question is: how prepared are we from a fiscal perspective for this challenge? How prepared are we? Over the next four years this government is going to spend $45 billion on interest alone to repay the debt that has come as a result of deficit budgets over the past few years. And over the next four years this government is going to spend—and hopefully it will not get the opportunity to spend all of it—$1.5 trillion, which is a huge amount of money.

At this crucial moment we are arguing the case that now is not the time to punish Australian households with a flood levy. Now is not the time to raise the burden on everyday households with an additional cost to the rising interest rates that are going to come about, which the government has contributed to with its reckless waste and spending, and the challenges associated with higher inflation, high vegetable prices and higher fruit prices as we have seen in recent months and will see over the next few months. Households are also going to face the impact indirectly, and in some cases even directly, of a mining tax and a carbon tax.

All of these factors coming together over the next 18 months will have a profound impact on the cost of living of everyday Australians. To add to that burden, more and more data indicates that electricity prices are going to rise substantially over the next 12 months, even without a carbon tax. Water prices are going to rise substantially over the next 12 months as states seek to recover some of the costs associated with infrastructure. In addition to that the states themselves, in their ever-growing search for new revenue, will be increasing taxes and charges on everyday Australians.

Even with an unemployment rate of around five per cent, even with a growing economy, the impact on every dollar of everyday Australians matters. It really does matter, because those people are now facing charges that their parents never had to pay—significant toll road charges, for example; additional costs of schooling that my parents, for example, never had to pay, yet my generation and generations beyond will have to pay; even university fees and so on. The additional cost on everyday households is something this government does not understand. That is best illustrated by the fact that when asked the simple question in question time today, ‘How many Australians are going to pay the flood tax?’, the Treasurer did not know. He did not know how many Australian households would be affected and how many individuals would have to pay an additional levy. He is the Treasurer of Australia and he did not even have the brief in his file. He turned to Jenny Macklin and said, ‘Do you know?’ and she shook her head. This guy is meant to be running the country!

No wonder the Prime Minister rang up John Fahey and said, ‘Help us to stop the waste.’ No wonder the Prime Minister rang a former Liberal finance minister and said: ‘Please oversee Wayne Swan. I don’t trust him with the money.’ If the Prime Minister does not trust the Treasurer with the recovery in Queensland, how can she have him deliver a budget in May? We know what is going to happen: ‘Hello, Peter, this is Julia. I need your help. We’ve given you an AC, but we need you to deliver a budget.’ I can see what is going to happen. The Prime Minister is going to be making a series of calls over the next 12 months. She will be ringing the Leader of the Opposition saying, ‘Come back as health minister.’ She will be ringing Peter Reith to come back and fix the wharves. She will be ringing Philip Ruddock and saying, ‘Come back and stop the boats.’ Oh my goodness! If the Prime Minister does not trust her own government, how can we trust her? With $350 billion a year and an economic recovery in Queensland, she proudly announces the Treasurer is going to lead the recovery effort. But because she does not trust the Treasurer, she rings up a former Liberal finance minister to make sure there is no waste. Only the Liberals stop the waste. It is as simple as that. Only the coalition has the courage to stop the waste.

And do you know what? What surprised me most was poor old Lindsay Tanner down in Melbourne with his abacus waiting for the phone to ring. He was the one that rang the bell on the BER, wasn’t he? He was the one that said, ‘Julia, it doesn’t stack up.’ Of course, we know what happened to him. It defies logic to expect that a government would have to revert to the integrity of its political opponents in order to survive on the treasury bench. Can you imagine John Howard after Cyclone Larry ringing up Ralph Willis and saying, ‘Mate, I need your help. I don’t trust my own Treasurer; I don’t trust my own finance minister—I am going to ring up Ralph Willis or John Dawkins or Paul Keating.’ We miss Paul Keating and I bet Julia Gillard does as well.

There are some economic challenges that we have to deal with. The first challenge is to get the budget back to surplus. Why? It is because that takes some of the upward pressure off interest rates. It is because getting the budget back into surplus means that you do not have to spend $45 billion every four years just on interest. It means that for $45 billion you can rebuild Queensland about eight times over. It also means that you can deliver the programs that you really want to deliver. The hypocrisy of this government is exceptional. The Treasurer stands up in this place and talks about our deferred spending cuts. You know what? The Treasurer has $1½ billion of deferred spending cuts as some of his so-called cuts just like the $80 billion of so-called savings when nearly half of the so-called savings from the Labor Party in government have in fact been tax increases.

Now the logic of the Labor Party is that if it increases taxes for Australians it increases savings for those Australians. That is as illogical as the rhetoric of the government itself. Out of all of this, even with Australia’s most favourable terms of trade in modern times, even with a strong growth rate, even with an unemployment rate of around five per cent and even with the coalition having the courage to lay down now $52 billion of savings—even with all of that—this government does not have the courage to default to what every Australian family has to do. When it is facing a financial challenge every Australian family has to look at the family budget and work out how it is going to live within its means. That is what Australian families do, but not this government. The Labor Party defaults to a new tax.

That is the Labor way—default to a new tax. Over the last three years they have increased taxes on cars, they have increased the tax on alcohol, they have increased the tax on cigarettes and now, in this year alone, they want to increase the tax on people’s income, they want to introduce a new tax on mining and they want to introduce and increase taxes on carbon and electricity. They want to do that in 12 months.

In the course of four to five years the Labor Party has shown its true colours—increased taxes. This government will be defined by its reckless spending. This government will be defined by its determination to increase taxes. This government will be defined by the fact that it has not got any ticker. The starting point for this government after the floods was not to say, ‘We will cut first.’ Its starting point was to say, ‘We will tax first.’ As the Leader of the Opposition said so eloquently, it has turned out to be a mateship tax.

There is no precedent whatsoever for a government to literally beg the Australian people to donate money to a worthy cause and then afterwards to tax them for the same cause. There are lots of precedents for levies and there are lots of precedents for cuts, but there is no single precedent where you ask Australians to be generous—they were generous and they are generous—and then after they have done that, when they have given their all, to go and hit them between the eyes with a new tax. There is no precedent.

I met a truck driver in Rochester who gave up his fuel and his truck for three days of income to carry away the sodden carpet, the wrecked fridges and freezers and the broken furniture from a home I visited there. That man is now going to have to pay that tax. He has already sacrificed thousands of dollars. As the member for Brisbane said a little earlier, a small business person in Queensland has had their business suffer substantial loss and yet now is going to have to pay the tax on top of that.

What was the reaction of the Prime Minister? She said, ‘This is a personal income tax.’ The Prime Minister was unable to set apart the big impact on a small business that has to pay out from the family income the pain associated with the flood and then has to pay out a tax. There are millions of Australians who do not differentiate between their business income and their personal income because they run small businesses, and that is a constituency the Labor Party will never understand.

We have had the courage to match our words with deeds by laying down a plan to pay for the $2 billion that the government is going to have to raise with its flood levy. We have been fair dinkum with the Australian people. There can be a horde of critics about the composition of it, but we have shown the courage that the government does not have. We have shown a determination to preserve the economic credentials not just of a nation but in particular of the family home because we believe a government should behave no differently in many ways to how Australian families have to behave. When there is a challenge, you have to meet it. When the money is to be spent, you spend it, but, most significantly of all, when you have to make hard decisions about your family budget, it is only the coalition that has the courage to do just that. We will not run away from hard decisions and now we will not let a weak and insipid Treasurer run away again from making the hard decisions that make life a little bit easier for Australian families. (Time expired)

Wayne Swan (Lilley, Australian Labor Party, Treasurer) Share this | Link to this | Hansard source

I relish the opportunity to reply to the bombast and hot air from the shadow Treasurer, because that hot air is no substitute for policy and it is certainly no substitute for character. What we have seen in this House and in this country is a Prime Minister who has the character and the guts, and a government that has the determination, to do the right thing by the people of Australia and, most particularly, the right thing by the people of Queensland. In that endeavour, given all of the hurt and all of the damage, what we have been faced with from those opposite is a negative political campaign, where they have put their political interests ahead of the national interest. That is what this debate boils down to.

To be lectured by the shadow Treasurer about process is truly galling. Yesterday we had the spectacle of a press conference at which the Leader of the Opposition was there with the shadow Treasurer to announce another round of cuts, supposedly to help fund the recovery—and where was the shadow finance minister? The shadow finance minister was banished from that press conference. It reminded us of the farce of the three stooges which occurred with the budget last year, where they were playing pass-the-parcel. Tony said, ‘I’ll do it.’ He did not do it; he passed it to Joe. Joe said, ‘I can’t do it.’ He passed it on to Andrew. Fair dinkum! There is no credibility. This has to be the weakest opposition frontbench when it comes to economics that we have seen in the history of the parliament, and it was on display yesterday when they were announcing cuts which are the responsibility of a finance minister and Mr Robb was not allowed into the press conference.

Ian Macfarlane (Groom, Liberal Party, Shadow Minister for Energy and Resources) Share this | Link to this | Hansard source

Mr Deputy Speaker, I rise on a point of order. I ask that the Treasurer use the proper mode of address.

Peter Slipper (Fisher, Liberal Party) Share this | Link to this | Hansard source

The member for Groom is quite correct and I would draw to the Treasurer’s attention the provisions of standing order 64, which states that no member can be referred to by his name.

Wayne Swan (Lilley, Australian Labor Party, Treasurer) Share this | Link to this | Hansard source

We had been waiting for days. Day after day turned into weeks. The opposition said, ‘The savings are coming; the savings are coming.’ There was leak after leak after leak about the disunity in the coalition about this matter and what it produced was the banishment of the shadow finance minister from the press conference yesterday. After we saw the results of what they produced, I am sure he was pleased not to have been there, because they shone a light on the incompetence of the shadow Treasurer and the Leader of the Opposition when it comes to economics.

What we had was a rerun of the $10.6 billion costings con job that was presented to the Australian people at the last election campaign and declared fraudulent by the Department of Finance and Deregulation and the Treasury. We had a repeat of that. Of course, in the middle of all of that, the shadow Treasurer went to the Sydney Morning Herald and admitted that he only found out about the costings five minutes before they were presented. Could anybody imagine Peter Costello finding out what was in his budget five minutes before he delivered it? Well, that is what actually happened, according to the shadow Treasurer, with their election program in the lead-up to the last election. So we have bumbling incompetence.

Worse than the bumbling incompetence is the insensitivity—the lack of understanding not only about our national economic circumstances but about what has just happened in our country, particularly in Queensland, where it took the opposition days to even get there and to understand the importance of it. It took Mr Hockey himself days and days and days.

Peter Slipper (Fisher, Liberal Party) Share this | Link to this | Hansard source

Order! I remind the Treasurer of standing order 64 once again.

Wayne Swan (Lilley, Australian Labor Party, Treasurer) Share this | Link to this | Hansard source

What was so insensitive about all of that was that, when the Leader of Opposition had arrived, the Brisbane River had not yet peaked before he was playing grubby politics on the spot. He stands condemned for his behaviour. The opposition have not treated this with the seriousness that all of those people who have been affected really deserve. What we have had is a lack of appreciation, socially, of what has occurred dramatically in communities, a lack of appreciation of the size of the economic challenge it presents us with, and not the faintest idea about how you put a budget together and how you deal with these challenges.

Of course, this is not new. The opposition get all of the big economic calls wrong. They opposed in this House tooth and nail our fiscal stimulus, which saved this country and put it in the strong position that it is in now to deal with these natural disasters. We have had strong job creation: over 700,000 jobs created in this country. Compare that to what has gone on in the United States. Compare that to what has gone on in Europe. We have a strong economy because this government had the guts and the courage to put in place a stimulus, to make it work, to keep the doors of small business open and to support households in their time of need. And guess what? We are doing it again in an economically responsible way. We are doing it in the way that the Australian people deserve. We are doing it in the spirit that we have seen in our community over the past four of five weeks, the likes of which I have never experienced.

It has made me proud to be an Australian. Australians out there do not mind paying a modest levy because, unlike the opposition, they understand that this has to be paid for. They know that there is not some magic pudding that those opposite keep recycling so they can pretend there is some way of funding this without a levy. There is no way of funding it without a levy and prudent preparation of budgets. For the reasons which have now been demonstrated by subsequent events in terms of Cyclone Yasi, we have demonstrated our capacity and our knowledge of the economic situation to put in place a responsible approach which will see communities rebuilt and which does the decent thing by those who are affected.

As to the sort of tacky question we had today from the member for Dawson, I could not believe that it came from a Queenslander, in the circumstances that we are in. I simply could not believe it. It was rank, and he will pay an electoral price for that sort of behaviour, given the damage that has occurred in North Queensland and Far North Queensland. This is a modest levy that Australians are willing to pay because they are coming together to help each other. They understand that there is not a magic pudding and that we have to do this responsibility. They understand we have a strong economy. It is going to continue to be strong. We have a problem in the short term. We have to work on that problem. A temporary levy is the way to fund the rebuilding, but we have to make sure our public finances stay strong because the investment pipeline is so strong in this country that we still have an economy which is nearing the limits of its capacity.

That is why a levy is, once again, a responsible thing to do to send a message to the world—to markets—that we mean it when we say that we have strict fiscal discipline in Australia and that we know how to handle recessions on the one hand and natural disasters on the other. On this occasion, what is required is strict fiscal discipline. During the global financial crisis what was required was the courage to put a stimulus in place. What was also required was the courage to put in place fiscal rules to bring us back to surplus when the economy recovered. This is a government with courage. It is a government with conviction. It is a government that puts the national interest before the political interest all of the time.

But sadly we have not seen that in this House today. We have not necessarily seen it in the last week or so. The one thing that demonstrates it more than anything else is the attitude of the Leader of the Opposition to levies. Prior to now there was never a levy he did not support. He has been in this House and supported levies on six occasions. Let us go through them. On 17 June 1996, the Leader of the Opposition stood up in this House and supported a levy for a gun buyback. So, too, I think, may have the shadow Treasurer. On 25 September 2001 there was another levy, to support Ansett employees. Who were standing up in the House supporting that? The Leader of the Opposition and the shadow Treasurer. And there we were again in March 2000. We had the dairy industry levy. Who was standing up to support that? The Leader of the Opposition.

It goes on and on, but what demonstrates just how absurd, how divorced from reality, how stupidly political and how nakedly opportunistic those people opposite are is that they can seriously come in here claiming they are credible and keeping a straight face after they went to the last election campaign with what? A levy. It was a levy that raised $6 billion, partly to fund maternity leave for people on $150,000 a year, and they have the hide to come in this House and claim they are serious about dealing with waste. What fool would put that sort of program together? What fool would then come into the House and claim they do not support levies after only a matter of months? They walked around the country talking about the need for a levy—and it would not have been temporary when it started. It was permanent. It was only during the election campaign, when the heat was turned up, that it suddenly turned into a temporary levy that was going to be matched by a company tax cut. But the Leader of the Opposition had marched around the country, electorate after electorate, asking for a levy. All those members opposite who are now complaining about a levy were supporting him.

The Australian people can see right through the approach that is being adopted by those opposite. A nakedly political approach, it is not one that the Australian people respect. I believe it is not one that the Australian people will support. That is why I say the Leader of the Opposition is all opposition and no leadership. There is simply no leadership. If he has proved one thing during the events of the last week it is that he is absolutely not fit to lead a country during a time of crisis. His judgment has been flawed all of the way through, from his refusal to condemn the letter that went out in his own name to raise money on the back of the flood victims—quite extraordinary that he could not do that—to all of the other behaviours we have seen in recent days. Then there was yesterday. What this shows is that the Leader of the Opposition does not have the judgment, does not have the temperament, does not have the knowledge and does not have the competence to be a leader of a major political party in this country.

If you wanted to see further evidence of that, it was in the press conference yesterday which the shadow finance minister was banned from attending. They were trying to count moneys that they had already accounted for in their previous discredited packages, so we had double counting. Yes, we had deferrals. The reason I raise deferrals is that we were promised a really big, really tough package. It did not come, because they are so internally divided and so without any knowledge of what must be done in circumstances like this that they just cobbled together a few bits and pieces. Most people simply laughed at it because it was not a serious piece of policy.

We are proud of what has occurred in Australia in recent years. We are proud of the fact that there has been record job creation in this country despite the fact that there has been economic carnage across the developed world. We are proud of what we have been able to do with our public finances. They are the strongest of just about any developed economy. Our net debt is low by international standards—6.4 per cent compared to 90 per cent across other countries. Yes, we went into deficit to support jobs, to support our people and to support our families. Now we are paying it down and bringing the budget back into surplus so we can continue to have a strong economy, so that the investment pipeline remains strong, more jobs are created and more families are secure and prosperous. You need a program in place to support all those things.

In the middle of all of this it came to a head in the last election campaign. They went out and said, ‘We have got $50 billion worth of savings.’ What was the verdict of the Treasury? A $10.6 billion costings con job. Some of it they have had the hide to recycle again. Some of those initiatives are described as ‘savings’ yet again when they are clearly not savings, and that is before you get to the fact that there is about $4 billion or $5 billion of savings they are holding up in the Senate right now. So not only will there be a bigger deficit under what they put forward yesterday; on top of that their starting point is way behind that because they are holding up billions of dollars in the Senate. They are fiscally irresponsible as well as politically irresponsible. What all that proves is that they are the last party you would want in charge in this country when there is a crisis. You certainly could not have had them in charge during the global recession, because if they had had their way our country would have gone into recession and we would not be in the position we are in today to deal with these natural disasters.

They also do not get it when it comes to community. They do not really understand the notion of community—that people want to pull together, people want to help each other and people do not mind paying a modest amount of money to support their fellow Australians who are in distress. But they cannot get over their social Darwinism and they cannot get over the fact that all they care about is the Liberal Party. They will take the cheap route every time. They have done it again and because of all of that they should be condemned and shunned by the Australian people.

Warren Truss (Wide Bay, National Party, Leader of the Nationals) Share this | Link to this | Hansard source

Over the last couple of months, Australians have witnessed flood, fire and cyclones. Their hearts have been touched by the damage that they have seen. The destruction went on for two months and the losses have totalled billions and are in every state—at least $6 to 8 billion in the agricultural sector alone. But perhaps the biggest real disaster that Australians have had to confront over the last two months is Labor’s economic management. The real impact of Labor’s disastrous economic management has been shown up in these days. When there is a need for the government to do something important for the country, to undertake and fulfil one of its core responsibilities to rebuild after a disaster, Labor has no money left in the till—there is nothing there. In spite of its proposals to have new taxes on carbon, new taxes on mining, new taxes on alternative fuels, new taxes on LPG and increases in other taxes, it has to raise a special tax to undertake one of its core responsibilities: to rebuild the country that has been damaged by natural disasters.

Natural disasters are not uncommon in Australia. Indeed, in every federal budget and in every state budget money is put aside in a contingency reserve to deal with the impact of the government’s obligations to rebuild the country in those circumstances. Dorothea Mackellar recalls in her poetry that Australians have to live with disasters; they come almost every year. And almost every year—indeed, every year up until now—governments have responded as they should by funding them from their own budget, making cuts if they have to, but recognising the priority of rebuilding the country.

Previous governments did not require a new tax to fund the aftermath of Cyclone Tracy and previous governments did not need a new tax to repair the damage after Cyclone Larry. There was no special tax to fund the needs of a 10-year drought. There was no special tax to deal with the floods in 1974 or in 1955. They were major disasters and they were dealt with as governments should deal with them. Good governments put aside in the good times so that there will be money for the bad. We save in the good times for the rainy day. We had a very big rainy day and we should have had the money to be able to do the job to make the repairs.

What is worse is that the money was there when this government came to office, the money was there when this government took the reins, but it has been wasted. It has been wasted through mismanagement. We know that this government has been completely incapable of insulating Australia against virtually anything, let alone natural disasters. Waste has been the theme of this government. It has failed in its policy development and there has been very poor administration of the programs that it has implemented. The government has presided over extraordinary waste, extraordinarily poor administration and extraordinarily poor policy. This government has been presiding over one mess after another.

I guess the icons or the symbols of this waste have been programs like the Building the Education Revolution—the overpriced school halls; the insulation programs; Green Loans et cetera. Let me go through some of the already recorded waste of this government since coming to office: $8 billion, including a $1.7 billion blowout in the Building the Education Revolution program; $2.4 billion wasted on the pink batts program; and $850 million wasted on the solar homes program. The laptops-in-schools program blew out by $1.2 billion and it has only delivered half its intended purpose. The Green Loans program saw $300 million wasted and the scheme scrapped. There was $81.9 million wasted on the ETS we are now not going to have. What about the waste that accompanied the government’s laptops-in-schools program? What about the waste that has been associated with its management of so many of its programs?

Labor has wasted seven times the amount of money it hopes to collect from this levy. It has wasted $13 billion and it has the gall to ask the Australian taxpayers to pay up another $1.8 billion to do core business of the government, the very things that the government should have been putting aside for over the years. It has squandered the inheritance and now it has to go and ask for another tax to undertake its basic core duties. The government has a $350 billion budget every year, but it cannot find $1.8 billion to repair the country after a chain of natural disasters; it cannot find $1.8 billion without Australians having to pay another tax?

Who knows how much the government is actually going to collect from this levy? The Treasurer today could not tell us how many people are going to pay. We do know that, since the government announced that it was going to have a $1.8 billion collection from this new tax, it has exempted about half a million more Australians from paying it. How can the government still be going to collect the same amount of money even though it has exempted an extra half a million people from paying this tax? Let us look at those people who are being asked to pay the tax and those who are being exempted. Everyone who received the $1,000 welfare payment will be exempt from the tax. It does not matter how much you have actually lost, it does not matter whether your business is ruined, you have to have received this $1,000 payment; otherwise, you will not be exempted from this tax.

What people need to be aware of is that there are probably one to two million Australians that are eligible to collect this payment. We saw in Cairns queues three blocks long of people lining up to get the payment. You know, you do not actually have to live in a flood area to get this payment. You did not have to have any water go into your house at all. You did not have to have any damage. You did not have to have any real inconvenience other than that your power was out for more than 48 hours—or your gas or your sewerage. You did not actually have to have any losses to be eligible for this $1,000 payment.

I heard the Treasurer say on one occasion that he hoped no-one would claim the $1,000 just because they were without electricity for 48 hours. If that is what he hoped, his guidelines do not say that. They are all entitled to claim it. But many decent people did not. They did not bother to claim, because they felt they had no losses and were not morally entitled to it. But those people, if they do not claim the $1,000, are now going to have to pay the tax. So that is a powerful incentive for people who are really not entitled to it or ought not to get it to go and claim the $1,000 so that they can get out of paying Labor’s new tax. Of course, that provides all the wrong incentives. Those who have given to public appeals and paid out of their own pocket significant moneys to help their neighbours—as good Australians do and as all of us who care for our fellow man do—will still have to pay the tax, but people who claimed a $1,000 payment even though they had no personal discomfort will be let off paying this tax.

So the government has no idea how much it is going to collect, but what it does know is that, once the money is collected, it cannot trust its own bureaucracy to spend it wisely. It has at least learned that: that no Labor administration can be trusted to spend the money. There have been people in Queensland also worried about the Queensland fund. Anna Bligh has not shown much record in being able to capably manage her budget either, and people have been reluctant to trust the government because of Labor’s poor record. Even Labor now acknowledges that it cannot deliver. So what it is going to have now is a new bureaucracy to oversee the bureaucracy that is going to oversee the bureaucracy that is actually supposed to deliver the repairs. This is the extreme of another round of Labor waste.

The reality is that it is a government’s responsibility to repair the country when there are problems. The government should be putting money aside in good times so that it has the money when it needs it in bad times. A government that has wasted $13 billion of the taxpayers’ hard-earned money has no moral right to ask for another dip from those people who have endured so much already. (Time expired)

Justine Elliot (Richmond, Australian Labor Party, Parliamentary Secretary for Trade) Share this | Link to this | Hansard source

I am very proud to rise today to speak about this government’s economic record—our strong economic record—and what we have achieved to keep our country and our economy strong. So I am very pleased to be participating in this MPI today. It is not just the economic changes we have made since being in government but also our commitment to rebuilding. We have seen the massive devastation over the summer with all of these horrendous natural disasters, and we have a strong commitment and a strong plan when it comes to rebuilding, as opposed to the opposition, who do not have a plan when it comes to that.

Essentially, I want to talk about the strength of our economy and what we have currently: the fact that we are in such a good position. The fact is that our nation beat the global recession. We did that due to this government’s strong action in the face of the worldwide economic downturn. It is because of that that we are in this situation. We took that very strong and decisive action in the face of the global financial crisis. In fact, that action has seen us become a standout performer in comparison with other nations. In 2009 the Australian economy grew by 1.3 per cent while the world’s advanced economies contracted by 3.2 per cent.

Of course, that was because of our stimulus measures, and I would like to just revisit some of those measures for the opposition members across the chamber so they can be reminded of the action this government took during the global financial crisis. We took that action, of course, to keep our economy strong and protect jobs and small businesses. Our nation-building economic stimulus plan was targeted to support jobs right throughout Australia by building new projects and facilities. There were also cash payments to low- and middle-income families and additional investments in schools, social housing and local community infrastructure to support growth and, of course, to keep many tradespeople in work. There were also tax breaks for small businesses to help them grow their business, and there was investment in economic infrastructure. As a result of all that, the Australian economy came through the global recession in a much stronger position than any other advanced economy. We were the only major advanced economy to avoid recession, and it is very important to remember that. Remember the action this government took and look at the result of it. I certainly saw firsthand in my electorate, Richmond, the massive impact of the government’s economic stimulus in protecting local jobs. It was vitally important.

Also, of course, since coming to office we have created 700,000 jobs while other advanced economies shed millions of jobs. We have supported small businesses and families, and some of that support for families is vitally important. We, of course, introduced the nation’s first ever Paid Parental Leave scheme; we introduced the childcare rebate; and we are increasing family support by up to $4,000 a year to encourage teenagers aged 16 to 18 to remain in school or at TAFE. So we have had massive support in that increase for families and also massive support so that people can return to the workforce through our Paid Parental Leave and our childcare benefits.

Our public finances are among the strongest in the developed world. Our balance sheet is strong, which is very important, and our trade performance remains strong. In December 2010 we recorded our ninth consecutive monthly trade surplus. We have had the longest run of monthly trade surpluses since the early 1970s. Of course, as we have said, our budget will be back in surplus by 2012-13. We are getting the budget back into surplus because it is the right thing to do in terms of the longer term challenges facing the Australian economy. We are bringing the budget back into surplus so that it is in a position, we hope, to be able to deal with future events like the floods we have had if we do need to deal with devastating natural events similar to the ones we have seen. Of course, when we look overall at all the action that we have taken, it means that so many people have been able to keep and protect their jobs. That is the action we have taken that is vitally important.

Of course, we are very focused on investing in the future. Of the natural disasters that we have experienced of late, the floods particularly are likely to end up being the most costly disaster in Australia’s history. Treasury’s preliminary assessments are that they are likely to lead to a loss of about one-half of a percentage point of GDP. It will have a major impact on exports through the loss of coal production. We also know that agricultural production has been hit hard as the floods have wiped out a very significant part of the food bowl.

The need to rebuild and to put the infrastructure back in place to support the economy does not alleviate the need to address the long-term challenges faced by the Australian economy. We certainly do acknowledge that. Australia’s story right now is the story of a patchwork economy. Even before the floods and the reconstruction effort were required we were expecting to see the re-emergence of labour shortages and bottlenecks. Our challenge remains to create a flexible, high-productivity, low-pollution economy.

Our policy settings are already addressing the challenges through our record investments in training and infrastructure. Education is a principal driver of prosperity; a carbon price will encourage investment in renewable energy; and, really importantly, the National Broadband Network will boost the digital economy and build productivity. The NBN is so vital for our nation’s future, and it is the Gillard government that is committed to making sure that we have a National Broadband Network to address all of those issues.

The government has a commitment to reforming the economy to make it even stronger as we rebuild after all these terrible disasters that we have faced in the recent months. We can just compare that for a minute to the opposition and the way they approach all these issues. They constantly engage in cheap political stunts that have no credibility whatsoever. We know that the opposition’s $11 billion worth of savings that were proposed during the election campaign were found to be fraudulent, and they have no credibility when it comes to making any comments about the budget or about any economic matters at all.

I would now like to turn specifically to the government’s response when it comes to the natural disasters we faced. Our response was very swift, with our disaster recovery payments and our plan to rebuild after the devastation. Our plan is very balanced and very appropriate. The Prime Minister has outlined the one-off temporary levy that will be in place. When we look at what we need to rebuild and at the extent of the devastation, it is estimated that the government will need to invest $5.6 billion in rebuilding. As we have said, we will deliver this funding through the following measures: $2.8 billion in budget savings, $1 billion by delaying some infrastructure projects and $1.8 billion from the temporary levy on people earning over $50,000.

Of course, no levy is payable where the person has an income of $50,000 or less. As we have said, in fact, 60 per cent of taxpayers will pay less than a dollar a week. Those who receive an Australian government disaster recovery payment for a flood event in 2010-11 will be exempt from the levy. When we look at that amount and we look at people’s responses, many people have told me that they do consider it a minor amount when they look at the extent of the devastation, at what is required for rebuilding and at how important it is for our nation’s future.

We have heard so much from the opposition in their political stunts and their whingeing and whining about this. There is a very strong history of levies being used by the Australian government, and I think that for the opposition members we should outline the six that were proposed during the course of the Howard years. There was a levy on superannuation for high-income earners, levies to restructure the milk and sugar industries, a levy to buy back guns in the aftermath of Port Arthur, a levy to help meet the entitlements of former Ansett staff and a proposed levy to help the people of East Timor to rebuild. Then, of course, no-one can forget the Leader of the Opposition’s proposed levy on Australian business to fund his paid parental leave scheme.

If a levy was good enough to pay for the coalition’s election promises last year, and if it was good enough for those six levies to be proposed under the Howard government, we want to know why a levy is not good enough to support rebuilding these regions that have been devastated so much. It is just pure political hypocrisy at its absolute worst. That is all we see time and time again from the opposition—just their pure political hypocrisy.

In the deferral package that they released yesterday they just seem to be chopping and changing all over the shop with the different things they are saying. Part of that does not make any sense at all. In fact, what was most bizarre was the Leader of the Opposition, who, in his election campaign speech, described water as probably the most urgent environmental challenge facing our country. But what did we see yesterday? Yesterday, he proposed to defer water buybacks.

They are all over the shop; they do not know what they are doing with this. When we look at the comparison, it is the government that is in a very strong, committed position to rebuild this country. The Gillard government is focused on doing that. We have had a strong economic record since we came into government, and we are very much focused upon rebuilding for the future of our nation. I will repeat the words of the Treasurer, who spoke earlier. He really summed it up when he said that the Leader of the Opposition is not fit to lead the country in a time of crisis. He is not fit, and does not have the skills or ability to do that.

Bruce Billson (Dunkley, Liberal Party, Shadow Minister for Small Business, Competition Policy and Consumer Affairs) Share this | Link to this | Hansard source

We have just heard quoted verbatim Labor caucus talking points on these issues but very little engaging with the subject that we are here to discuss today. This was about our economy’s ability to handle and to respond to natural disasters. This is about the way in which the Gillard-Rudd Labor governments have run down our nation’s capacity to have the resources to respond to these unexpected, although almost certain to arise, natural disasters that our vast nation faces.

This is what this is about, and you did not hear anything from the speakers about the mere fact that our capacity has been diminished, and that the government has now had to turn to a lazy new tax to prop up its response to these recent disasters. You did not hear anything about the 300,000 jobs that have been lost in small business over the last three years. They are quick to mention jobs growth, but you do not hear them talk about how 300,000 fewer Australians are now securing their livelihoods through employment in small business because small businesses are doing it tough.

These are small business people, not some distant enterprise, which the government seems to think they are. These are small business people—people who invest, take risks and provide opportunities for themselves, for their communities and for people to pursue their livelihoods. That capacity has been run down. Just as our fiscal capacity has eroded under this government, our capacity to work with the small business community to bounce back and support livelihoods has also been eroded.

And the government is continuing to do it. You have heard the shadow Treasurer talk about this government still borrowing $100 million a day to feed its spending binge. That spending binge and bad debt binge are also undermining our nation’s capacity to respond to and deal with natural disasters. The small business community struggle to get a hearing in that kind of debt environment, where the government is the gorilla in the room soaking up available resources to feed its spending spree.

We hear case after case, and we have heard some today. Even the Prime Minister herself has acknowledged that the package the government has put forward to support small business is not responding to the needs of many. But that is not the only problem we face. Small businesses are hurting, and they will hurt more as this nation responds to these natural disasters. They will hurt as the government crowds them out in their ability to access finance. They will hurt more as consumer confidence takes a hit from yet another tax at a time when they are struggling to balance their own budgets.

Households around Australia are adjusting their spending patterns to respond to the times, but this government will not. This government reaches into people’s pockets to pull out more tax to respond to this disaster when it is are not looking hard enough at its own budgets and spending priorities to respond to those needs. So what we are going to see is a nation that has been battered by natural disasters now having its confidence further eroded by bad policy-making and bad decision-making from this Gillard Labor government.

We have seen the reports about what is going to happen to our broader economy. The Reserve Bank has predicted a contraction of about half a per cent of GDP in 2010-11. Some people think that half a per cent is not much, but it is a very substantial amount of economic activity and it will hurt small business most. The small businesses are the ones that will hurt when consumers in this country hesitate to spend. It is the small businesses in our nation that will hurt most when people enter their enterprises demanding discounts and savings. There is one reason that the inflation rate is not higher than it is, and that is that small businesses have been absorbing cost pressures and consumer uncertainty in their margins. There are no sloppy profits around for small business. There are no easy sales. It is hard work. In the retail space the big guys, to maintain their turnover, have driven higher volume sales at lower margins, and small businesses are left to respond to that.

This disaster will see many of the inputs into small businesses become more expensive. But do you think small businesses will have the capacity to push up their prices? No. They will not be able to pass those increases on to customers. Customers are already wary about their own economic circumstances and economic future. They have already had their confidence damaged by some of the decision-making of this government, which has made it all the more difficult for those directly affected by the floods. This is a time when confidence is crucial, and the last thing a national government should do is take further action to undermine that confidence. But that is precisely what this government has done. Those with a capacity to contribute have voluntarily donated to the relief effort. But now those who are struggling to pay their mortgages after, I think, seven interest rate rises under this government are going to have to face paying more tax to a government that has shown itself to be incapable of being resourceful with the funds it already has.

We heard the Deputy Leader of the Opposition, the Leader of the National Party, outline the waste, the misuse and the abuse of taxpayer resources by this Labor government. And do you know what those people who are prepared to make a further contribution are anxious about? They are anxious about how the government will use it, because this government has got form in misusing and underutilising the resources it has available to it. Those who are struggling to meet the rising cost of basics—electricity, housing, food, water, transport, sending their kids to school and paying higher and higher internet charges while waiting for the real peak to come along when the NBN arrives—are the ones who are going to be wondering how they are going to find the extra money. And when they find that extra money, small businesses will not have that money coming through their front door, as it will be going into Treasury’s front door here in Canberra.

As we respond to this disaster, we need to reflect that we are responding off the back of a diminished capacity to respond because of successive decisions, waste and misuse of resources by this Labor government. And if the government has to resort to an extra tax to respond to this disaster, where is the capacity to respond to the next disaster going to come from? Indeed, if the estimates that the government has produced are not right, where are the extra resources going to come from? The government says it has the capacity to cut spending. Why not do that work now so Australian households and small businesses right across this country can see that the government is reordering its priorities and better utilising the resources available to it to live within its means, as everyone else is expected to do, and not go and touch up the taxpayer for a bit more dough coming through the front door?

This is on the back of the Treasurer’s dubious and, to quote the economists, highly risky mining tax—a mining tax that has written $7.4 billion into the budget. Economists rightly describe this as a highly risky revenue scheme. The mining tax has been botched once, reborn and put back on the table. There is uncertainty about its application and who will pay. It is uncertain in terms of the international commodity market and what revenue streams will come. If that is uncertain you can kind of understand why the Treasurer is uncertain about who is going to be receiving money from the government to support the rescue after these natural disasters and who will be expected to pay the flood tax. These guys just do not know what they are doing, Mr Deputy Prime Minister—

Peter Slipper (Fisher, Liberal Party) Share this | Link to this | Hansard source

I thank the member for Dunkley for the promotion!

Bruce Billson (Dunkley, Liberal Party, Shadow Minister for Small Business, Competition Policy and Consumer Affairs) Share this | Link to this | Hansard source

I dare say you would probably do a much better job, sir; and may I compliment you on your taste in your attire as well. These guys do not know what they are doing. The Gillard Labor government—and this is the underlying concern of the Australian public—do not know what they are doing. So why would people want to give them more money to misuse in the way that they have done? This is a time when small business is looking to have confidence built. Small business is suffering and finding it difficult—and, as the Prime Minister conceded today, small business is having its needs overlooked in some of the design of the support packages.

So what does the government need to do? The government can be just as lazy as it has been in the past and pick up the coalition’s agenda to revitalise small business. We took to the election more than a dozen initiatives that would build confidence, vitality and viability in the small business community to put ‘business’ back into small business. That is why the electorate overwhelmingly endorsed the coalition, well and truly, in the best interests of the small business and family enterprise community. But you do not have to take it from me. The Australian Financial Review released FOI documents—the blue book, the incoming brief for a new government. Do you know what they said? ‘Implement your small business plan; it will generate innovation and economic vitality.’ This lazy Gillard government should at least follow the lead that has been set by the coalition and do something to help small business.

Peter Slipper (Fisher, Liberal Party) Share this | Link to this | Hansard source

Order! Given the compliment paid to me by the honourable member for Dunkley, I am reluctant to ask him to resume his seat, but his time has well and truly expired.

Shayne Neumann (Blair, Australian Labor Party) Share this | Link to this | Hansard source

It is in times of crisis and controversy that politicians and political leaders show their true spirit, their true integrity and their true character. I did not always agree with former Prime Minister John Howard on industrial relations, on the local issue of the Ipswich motorway and on other issues in South-East Queensland. There are a lot of issues that I did not agree with him on, but at times of crisis both locally and internationally, such as when the tsunami hit our friends in Indonesia, he was there and we supported bipartisanship. When it came to crises in our country, the former Prime Minister, to his credit, showed leadership and there was a bipartisan approach.

At the time of the greatest natural disaster in South-East Queensland, when so much of the Brisbane, Ipswich, Lockyer and Brisbane Valley communities are devastated, you would expect more from that person who sits in the chair just opposite and who wants to go across the table. You would expect more. You would expect that he would come and give a plan that he thought was good, appropriate and fair to the Australian community. You would not expect the procrastination we saw in the last few weeks. You would not expect ructions, rancour and rumblings in the coalition that you saw in the last few weeks on deferrals and spending cuts. You would expect there to be bipartisanship, and people in South-East Queensland, certainly in my electorate of Blair, would expect the opposition and government to come together to work in the national interest for the benefit of South-East Queensland. But what do we see? We see an argument today, raised as a matter of public importance, about the floods. I did not think I would see that happen. I thought there would be grace and humility from those opposite. Sadly, we are let down. The opposition alleges that we are a government of waste and big taxes when in fact it is not true. Those opposite know this is a government that has invested in their communities because they attended the opening of school halls in their electorates under the BER program and they know their communities supported the investment.

In this proposal from the Leader of the Opposition he wants to cull the money for those programs. I will tell you what those programs did. In the Brisbane Valley, in my electorate, the school hall in Esk and the school hall in Fernvale acted as evacuation centres. Without those school halls, built under the Building the Education Revolution, the people of Fernvale and Esk would not have had a place to go. In fact, they broke into the school in Fernvale because they were fleeing the floodwaters. Yet those opposite criticise us and purport to cut the funding for the BER. They would prefer to defer the funding to Indonesia when they know very well this was a bipartisan approach—an initiative of those opposite. They know after 10 years of drought in this country that this is the right time to do the water buyback. They know it very well. They know in their party room that they would blow a billion dollar hole—an economically irresponsible billion dollar hole—in the budget if the measures they announced just before the condolence motion yesterday were implemented. We also know that at the last election they came up with another black hole of $10.6 billion. They said they could find easy cuts in the budget just a few weeks ago. Guess what happened? We saw the Leader of the Opposition on Insiders last Sunday. I came back from a run—I was not inspired by him to go for a jog—and sat in my house with a cold glass of water and looked at the Leader of the Opposition being interviewed. There he was saying it was ‘hard’. The debate in the shadow cabinet in the coalition party room must have been very hard. He looked like a man under stress. Three times he was asked by Barrie Cassidy whether it was more important to donate to the flood victims or to the Liberal Party. Three times there was obfuscation and equivocation. Yet he comes in here and gives these political speeches at a time of national crisis in Queensland.

The record of those opposite is an absolute and utter disgrace. They know very well that when it comes to levies they have form. They have a record on levies. For example, the 1998-99 stevedoring levy surplus was $3.9 billion, in 2001 there was the dairy levy at $13 billion, in 2001-02 the airport levy was $5.9 billion and in 2002-03 the sugar levy was $7.4 billion. Then came the Paid Parental Leave Scheme. They are outrageous and extravagant and it was an attack on business that would have been passed through Woolworths and Coles to the average person. That was their Woolworths and Coles tax. What about the level of tax as a percentage of GDP? In this financial year it is 20.9 per cent.

They criticise us for being irresponsible when it comes to tax, but never once in the 11 years of the Howard government was tax revenue as a share of GDP below this. When Mr Abbott, Mr Hockey and Mr Robb—the Leader of the Opposition and his economics brains trust over there—were in power the highest tax rate was 24.1 per cent of the economy when it came to a percentage of GDP. It never, ever got as low as we have it now. We have stimulated the economy to save jobs. There are about 1.5 million people who work in the retail sector and about 250,000 who work in the construction sector. How many people in the construction sector have said to you that without the BER, without the roads funding, without all those stimulus proposals and programs they would have been out of work?

There was $37 billion in rail, road and port infrastructure in Australia, and $22 billion went to rural and regional areas, including many in National Party seats. That is the reality; that is what happened—investment to get rid of capacity constraints, investments in important infrastructure, in coal towns, in mining towns and in rural parts of Queensland that are currently under flood. We did it because it was in the national interest—not necessarily because it was in our political interest but because we knew it was good for the national economy. But guess what? Those opposite are not prepared to put the national interest ahead of the political interest, and that is why the flood levy email is so outrageous and disgraceful, and that is why those opposite know in their hearts that ours is a modest levy.

If you were a public servant in the Ipswich City Council on 80 grand a year and you were not affected by the flood, and you came, for example, to my electorate, you would pay about $3.50 at Cactus Espresso Bar or one of the other coffee shops. The truth is that, if you paid that for a cup of coffee, that is more than you would pay for the $2.88 weekly flood levy. But you would be doing it to help your fellow Ipswichians and the people in the Lockyer Valley, in the Somerset region and in Toowoomba. You know you would do it, because it is a mateship levy. It is helping out fellow human beings who have suffered. It is a show of compassion and charity.

Many people have made great donations. Millions of dollars have been raised. But we need billions of dollars. It is going to cost us $5.6 billion to get the economy back up and going. We know how important it is, and that is why those opposite are really acting irresponsibly when it comes to this. They were not prepared to support the stimulus to sustain jobs, to keep the economy going, to invest in roads, rail and infrastructure, and now they say they will not get on board in a bipartisan way to support people in the flood-affected areas of South-East Queensland. They have no charity in their hearts, no compassion and no humanity with respect to this issue. They are not prepared to put affection for their fellow Queenslanders front and centre. That is the reality of what we are seeing from those opposite. They are not prepared to do it.

The Leader of the Opposition has been all over the place. I just cannot understand his attitude. Sometimes, I have to say, the Leader of the Opposition makes good speeches. Sometimes he makes fairly good speeches. But those opposite know very well his performance in the past 48 hours shows he is not fit for the role he is currently in. And many opposite would like to sit in the chair that the member for Bowman is sitting in and would argue that they are better performers, are better prepared and would make better leaders of the opposition. They know in their hearts that is the case. The Leader of the Opposition is not fit to sit in that chair because of his attitude with respect to the people of South-East Queensland.

I say to those opposite, the members for Ryan, Wright, Groom and Maranoa: tap him on the shoulder, tell him he is wrong and make sure he gets with the program in a bipartisan way. Put Queenslanders front and centre, put the economy of Queensland front and centre, put the Queensland community front and centre and support the flood levy.

Bruce Scott (Maranoa, National Party) Share this | Link to this | Hansard source

The discussion has now concluded.