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

To all my colleagues I say that the flooding which occurred along the eastern coast of Australia at the end of last year through to January this year, followed by the destructive Cyclone Yasi in early February and a trail of pain and suffering, including in the electorate of my colleague here, the electorate of Canning, in recent times, has had a severe impact on the lives of many fellow Australians. It is a reminder to us that we live in a diverse nation and we often feel the full effects of Mother Nature at her most angry.

As communities are mourning the loss of the people who have died, many Australians have watched on in disbelief at the widespread devastation that has unleashed itself on us this summer. As time goes by, we are beginning to see affected communities rebuild their lives. The Commonwealth government is stepping in and helping with the repair and replacement of damaged infrastructure and with income support for households and businesses. This is appropriate and welcome. The coalition is not opposed in any way, shape or form to the rebuilding and repair of infrastructure. We want to see Australia get back on its feet as quickly as possible. In fact, we believe that the government must do whatever it takes and whatever is required to rebuild infrastructure, rebuild communities and rebuild families as quickly as possible.

What the coalition does oppose, however, is how this government plans to fund the commitment. We also have great concerns about the capacity of this government to administer large sums of money. There are 10 reasons why the coalition is opposing this Tax Laws Amendment (Temporary Flood Reconstruction Levy) Bill 2011 to impose a flood levy on the Australian people. No. 1: the government and the Prime Minister have already called on Australians to donate money and volunteer time. It is unprecedented in Australia’s modern history for us to have a government that begs Australians to donate generously with their time, with their volunteer effort, and then, after they have done so in an extraordinary way, to go and hit those very same people with a new tax, a specific tax to do exactly what they just did, to help those people most in need at this time. It is unprecedented.

In being unprecedented, this government has set a terrible agenda that is going to have an impact on generosity and philanthropy potentially for years to come. In the event of another horrible disaster—and, Lord forbid, but the truth is it will happen again—when the Prime Minister of the time comes out and asks Australians to donate, when the Prime Minister of the time comes out and says, ‘Please, travel from wherever you are to help to rebuild these communities,’ Australians, quite sadly, will think twice. They will think, ‘If it costs me $3,000 and I make sacrifices to help other people, what happens when they impose a levy?’

When I went down to help friends in Rochester, in Victoria, a town that was completely flooded, I did it because that is what mates do, as so many other Australians did. I am not saying anything other than that is what is appropriate. What I found hugely impressive when we were ripping the carpets out of a house on the Campaspe River that was totally flooded, when we were emptying the mud out of the pans and the plates in the kitchen, when, with total sadness, we were taking the drawers of the bedside table out and trying to wipe the mud off the family photos to try and save the photos, when we were emptying the fridges and freezers, there were people who were coming by the house to help who lived hundreds of kilometres away. In fact, I can say to you emphatically that there was a truckie who brought his tip truck from some kilometres away. The fuel cost a lot. He gave up the work that was still available in non-flood-affected areas. He just drove into Rochester to help those people most in need. He gave up days of work, drove outside all the houses and, when there was a pile of rubbish outside, tried to find a local farmer with a tractor who would be able to load up his tip truck so that he could take it to the tip. That volunteer effort cost those individuals a lot of money. They made sacrifices. I constantly think about that truckie, who now, I am absolutely sure, is going to be hit with a flood levy. After giving up days of work, after paying for a huge amount of diesel for his truck, he is now going to be hit with a new tax—a tax that, in our view, is immediately the wrong response to this issue.

The second reason why we are opposing this is the magnitude of the tax. This is a big tax. In fact, it raises on a yearly average more than three times the annual amount of any levy introduced under the previous coalition government. It is far bigger than the Ansett levy, the gun buyback levy and so on, none of which actually amounted to more than $500 million a year. This levy is $1.8 billion in one year. Apart from the Medicare levy, which was introduced by Labor, never before have we had a levy on this scale in one year—and that in itself is a very significant issue. If you look at the levies that had to be introduced under the previous coalition government, it was because we were in deficit—as this government is now. But this government is in deficit because of its own work, while we were in deficit because of the great work of the Labor Party! They know how to create deficits. We had to try and get the budget back to surplus. But even then, when we did have the money—for example, for the East Timor intervention—the levy was never imposed. A levy has to be the last response, not the first response. That is why we believe the magnitude of the levy makes it a very difficult proposal to support.

The third reason why we are opposing this flood levy is cost-of-living pressures. Australians are increasingly feeling the pain of the rising cost of living. If you want any evidence of that, you need look no further than the current debate in the New South Wales state election. Both the Labor Party and the coalition are making the point that the cost of living is the No. 1 issue for the people of New South Wales—and it is the No. 1 issue right across Australia. Why? The Australian Bureau of Statistics recently released information on the cost of living for various household types. This index, which is different from the CPI because it uses different formulas and takes housing costs into account, revealed that, for key groups, the cost of living is rising much more quickly than the official inflation rate. For families the cost of living increased by 4½ per cent over the year to December. That is nearly two full percentage points higher than the official CPI increase of 2.6 per cent. The largest rise was for financial and insurance services, which includes interest rates, with spending on this item alone rising by nearly 20 per cent during 2010. That is a very significant amount of money.

The cost of living for age pensioners rose by 3.1 per cent during the course of last year. Age pensioners lead a day-to-day existence. They do not go out and buy new computers that are cheaper because the Australian dollar is so strong. They do not go out and buy flat-screen TVs all the time because the Australian dollar is so strong and the price has come down. They can only afford the basics of life. Thanks to taxes from this mob, alcohol and tobacco rose by 11 per cent—and you would remember the increase in tobacco tax, which had such an impact. For welfare recipients the increase in the cost of living last year was 4.5 per cent, well above the official inflation figure of 2.6 per cent. Again, this was driven by a big increase in spending on alcohol and tobacco, but also by a rise in spending on bank fees and charges and interest rates.

If you do not have much money in your account, every time you take $50 out of the bank you are paying more. You cannot get any less out of an ATM these days; it is rare to get a $20 note out of an ATM. If you have $96 in your account you can only get $50 out of an ATM. That is very interesting—and, out of that, Australians are paying far more. Welfare recipients are paying 4.5 per cent more, which is well above the CPI. Australian families are struggling with rapid increases in the cost of living, rising interest rates—and they are going higher—and further upward pressure on inflation. As events unfolding in the Middle East start to push up oil prices, that too will flow through to everyday households. I say again that the cost of living is one of the reasons why we are opposing this bad legislation.

The fourth key reason is consumer sentiment. This new tax further erodes household budgets and consumer sentiment at a time when the retail industry is already struggling. This point was reinforced by Russell Zimmerman, from the Australian Retailers Association, who commented:

The flood levy is a tax, and any new tax results in less discretionary spend for consumers. Retailers, including those businesses who may have been affected by the floods, will be hit hard by this tax as consumers tighten their purse strings.

The economy cannot afford this new tax. You can have all the consumer sentiment models you want, but you need look no further than the fact that the new Top Ryde shopping centre, which the Prime Minister so proudly opened during the election campaign, has just fallen over—a brand-new $700 million shopping centre in the middle of Sydney. No-one can remember when that last happened in the middle of Sydney. And then, of course, we see the outcome for Angus and Robertson, Borders and a range of other people that are involved in the tougher end of retail. Yes, a new tax does have an impact on consumer confidence.

The fifth reason is that the coalition believe that this flood levy is poorly designed. Why? A household with two incomes of $80,000 per annum—a combined income of $160,000; it could be a couple of teachers—will pay a total of $300 under the levy. A single-income family on a salary of $120,000 a year will pay more. They will pay $450. So a school principal who earns $120,000 a year and has a partner who is a stay-at-home mum will now pay more in the levy than two working parents who have a combined income of $160,000. How is that fair? If you are a stay-at-home parent your household will pay more even though your household has a lesser income than the place next door.

We have already heard in this House that people who choose to retire in the 2011-12 financial year and receive superannuation payouts with components that are classified as taxable income will be faced with an additional tax burden as a result of the introduction of this tax. We heard the story about the copper—it was raised by one of my colleagues in this place—who is going to have to pay around $6,500 for the flood tax levy. The Prime Minister says it is just the cost of a cup of coffee each week. Well, let me tell you that only in downtown Yarralumla would you pay that much for a cup of coffee. Or only if you were living in an ivory tower close to a sacrosanct place would you be saying that it is only the cost of a cup of coffee. For that copper it is $6,500 out of his retirement income, and I would suggest that he is not a high-income earner.

Moving now to reason No. 6: why are we opposing this flood levy? It is because the government have admitted that further savings can be made. They can find them. So the flood levy was the first act and not the last act. That is the point. The first thing the government defaults to is to introduce a new tax. There was a problem with alcohol, so they introduced an alcopops tax. There was a problem with the sale of Australian cars, so they introduced a higher luxury car tax. There is a problem with people smoking, so they introduce higher tobacco taxes. There is a wane in the terms of trade benefits to Australia, so they slug the miners with a mining tax. We have got a problem with the climate, so they introduce a climate tax. And now Australia is hit with floods, so they introduce a flood tax. Go figure! Why is it Labor’s default to punish people by making them pay more?

Then, come election time in New South Wales, Kristina Keneally goes around and says, ‘Yeah, electricity is too expensive, so we’re going to give you a rebate.’ Hang on, it is Labor that increased the prices and then they come in like Santa Claus and say that they are doing you a favour with a rebate to make it easier. How absurd.

In the lead-up to the 2010 election we on the coalition side outlined $50 billion worth of spending cuts and revenue measures over the forward estimates period. That was a tough thing to do, but we did it because we actually have political ticker. We know how hard it is to run a strong economy. We announced a further $2 billion in spending cuts to show how the levy should be replaced. We have shown the way: $52 billion in cuts out of a total budget spend of $350 billion a year, or $1,400 billion over the forward estimates. They are hard yards, but they have to be done because that is what every Australian household is doing. And do you know what? People agree with us. Commentators agree with us—third parties who have not always agreed with us. They have been coming out of the woodwork to endorse our view that it is so imperative that the government not introduce this tax but in fact cut its own cloth. I refer to the Business Council of Australia, which said:

Options to increase taxes, even temporarily, should only be considered after an exhaustive examination of potential savings on government spending.

In an address to the National Press Club on 27 January the Prime Minister freely admitted that if further funds were needed to pay for the repair bill she would find those funds in the government’s spending. It has been confirmed by the Treasurer, who said that he will find further savings if necessary. So they do a little deal with the Greens and, whoops, there goes a few hundred million dollars. They do a little deal with someone else and, whoops, there goes another $100 million. And all of a sudden the $1.8 billion levy is only going to raise $1.4 billion. And, well, the Treasurer is going to find further savings. But, if it was good enough for them to identify savings on 27 January, why aren’t they identifying those savings now? The Treasury says that he wants to wait till the May budget. It must be the same May budget that Julia Gillard is already speaking to Peter Costello about delivering! She’s tough on you, Swannie! You deserve better than her. So it is patently clear that a new tax to pay for the floods was the first resort and not the last resort.

Reason No. 7: why are we opposing this levy? Simply because it is yet another Labor tax. The Rudd and Gillard governments have been on a tax binge since they came to government. We have had tobacco taxes, alcohol taxes, car taxes and this year we are going to have mining taxes—and how many different versions of that have we had? It is a bit like the Bible. There are so many different versions for each church. Within the Labor Party there are a thousand versions, but we know that in the original one they gave away $60 billion. Remember that? Were you part of that, Swannie? In order to stop a mining advertising campaign, they gave away $60 billion of revenue. That is the greatest sell-out I have heard of. The scale of it is fantastic. They went all the way.

Moving to reason No. 8, there is one thing we know about Labor: they cannot be trusted to spend the money wisely. Why would you give this mob even more tax when they cannot spend wisely the money they have? Kerry Packer said that. Do you remember that famous Senate inquiry into communications some years ago where a rather youthful looking Peter Costello asked some questions. They asked Kerry Packer about tax and he said: ‘Why would I give the government more tax than I should, given that the money I give them is not spent well as it stands?’ He is absolutely right.

Of all the governments in Australia, you look at this mob and ask: why would you give them more money, following the computers in schools program, which had a $1.2 billion blow-out; or the ‘Building the Education Revolution’ school halls program? Now that the leadership of Libya is in a bit of trouble, where are you going to get all these revolutionary terms from? The ‘Building the Education Revolution’ school halls program. You’d better hope that Castro doesn’t die; otherwise you won’t have anywhere to get your vernacular! The revolution must live! And it lives in Julia Gillard’s world in relation to school halls.

Don Randall (Canning, Liberal Party, Shadow Parliamentary Secretary for Local Government) Share this | Link to this | Hansard source

Che Guevara!

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

Che Guevara; that’s right! And who could forget the $2.5 billion on pink batts? What a fiasco that was. How can you trust them with money? There was the Green Loans program: $300 million wasted—a program finally cancelled with allegations of corruption. How can you trust Labor with money? Remember how they promised 36 GP superclinics in 2007-08? There are only eight currently in operation, and we do not even know if they have GPs in them. And this mob are now asking the Australian people for more money, whereas the money they have already been given they cannot spend properly. If the government had not wasted money on those school halls, on those pink batts, on the Green Loans program—had they not wasted money on a scale never seen before in Australia—the money would be in the budget to repair Queensland time and time again, without yet another levy being imposed on the Australian people. It is not just us who is saying this. Someone who has been critical of me, Henry Ergas, observed in the Australian:

… additional taxation allows the government to call itself fiscally conservative without seriously reviewing the efficiency of existing spending programs.

At the same time, by relaxing the government’s spending constraint, the levy reduces the pressure to ensure reconstruction resources are used wisely.

So that is just eight points. Hang onto your seat, Swannie: there are two more to come.

Point 9: Labor could have already paid this levy simply through the interest on its own debt. It will intrigue the Australian people to know the net interest bill on the Rudd-Gillard Labor government debt of $4.4 billion this financial year alone would have paid the flood levy two and a half times over. That is just the interest that this man has managed to accumulate in three short years. The interest payable this year would have paid this levy two and a half times over. It is outrageous. In the 2012-13 and 2013-14 financial years the net interest bill will be $5.9 billion. That amount could rebuild Queensland.

Point 10—and this is perhaps the most significant of all: this government should lead by example. I would not take this government as an example on anything, other than the ability to waste money. But I believe the government should look within their own budget, as they have asked 4.66 million Australians to do—as 4.66 million Australians will have to do. As those Australians seek to try and reduce their household expenditure to save the money to pay for this flood levy, so too must this government have the ticker to start looking within their own ranks to find the money. But every time there is a bit of pushback, be it from the member for Melbourne, the member for Denison or anyone else, they fall over. They are men of straw; they fall over. In a little bit of wind, away she goes—flies out. And why? Because they do not have the ticker to stick with their decisions. That has been in the DNA of this mob for the last four years: no ticker.

How intriguing it was to witness the hearings of the House Standing Committee on Economics inquiry into this flood levy. I remember being here for the introduction of A New Tax System. I think the Labor Party held six different inquiries in the Senate into the GST and into A New Tax System. They went for months and months, and they were crying about the fact that in this place they were not allowed to speak, they did not get the chance to have hearings and so on. Well, because of a screw-up by the Treasurer’s office—

Tony Smith (Casey, Liberal Party, Deputy Chairman , Coalition Policy Development Committee) Share this | Link to this | Hansard source

No! What?

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

I know: it is hard to believe! I could not believe it myself! But because of the screw-up by the Treasurer’s office, it was referred to a House of Representatives committee—the House of Representatives economics committee—and they gave it just one day. For a $1.8 billion levy they gave the committee a one-day hearing here in Canberra to hear evidence. And they had 45 minutes with the Treasury!

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

Mr Ciobo interjecting

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

The member for Moncrieff did an excellent job as the deputy chair of that committee, fighting against the forces of evil who were trying to close him down. He did a fantastic job in seeking to question—

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

He had Tony Abbott trying to close him down!

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

You’ll get your chance in a sec, old son. Ease up, china! My colleague tried to ask questions of Treasury, and of course they shut Treasury down. It would not be a surprise about closing Treasury down—

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

Mr Swan interjecting

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

After the revelations of Treasury on banking overnight, mate, I can understand why you don’t want Treasury appearing before committees! I can understand that. They have just made a fool of you on banking. So it was a case of ‘No, no; we don’t want Treasury to get up and tell the truth at a committee—to tell Australians what the real deal is.’ But in evidence before the committee, Saul Eslake, who was a constant critic of Peter Costello as Treasurer, said that the introduction of the new flood tax was one of ‘political choices rather than economic imperatives’. He went on to say:

My point is simply that the decision to choose to fund a third of the cost through a levy is a political choice rather than an economic one.

Step 1: it is about politics. Warwick McKibbon, who was also a critic of us when we were in government from time to time—and in fact has criticised us recently—said in evidence before the committee:

Most economists who study public finance would support the view that taxation is not the optimum way to finance the reconstruction of infrastructure after a natural disaster. The argument has a long tradition in economics.

          …            …            …

I think that in the case of a disaster it is almost uniformly accepted by economists, in principle, that a tax is not the best way to fund it.

When you have Warwick McKibbin, Saul Eslake, the Business Council of Australia, consumer sentiment, Australian households, the Australian people more generally and the coalition all saying that this flood tax is bad policy, I would say to you, Mr Deputy Speaker: at some point this mob has to learn that you cannot keep going back to the well, because one day there will not be any water left.

If you want to keep the Australian economy strong, you have to create confidence. If at every point in the economic cycle the government comes along to introduce a new tax, and even when its proposal for a new tax has many forms, like the dreaded Hydra, and has many heads, like the old mining tax, with mining tax version 1 under Henry, version 2 under Kevin Rudd—you remember him, Swannie; you haven’t forgotten Kevin Rudd, have you? You haven’t forgotten him: white hair, a fellow Queenslander, used to be Prime Minister?

Tony Smith (Casey, Liberal Party, Deputy Chairman , Coalition Policy Development Committee) Share this | Link to this | Hansard source

Went to school together!

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

School together—Nambour high!

Honourable Member:

An honourable member—They won’t get you to organise their class reunion!

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

That’s right; no class reunion at Nambour. That is it. You would need to have it in the convention centre with Swannie at one end and Ruddie at the other, because you would not want to have them in a room that is any smaller than Parliament House, would you?

But I say to you, Mr Deputy Speaker: the coalition will not support bad policy. The coalition will not support another slug on Australian households. The coalition will not support any attempt to increase the cost of prices for Australians or any attempt to increase the pain associated with an incompetent government, and that is why the coalition will not support yet another bad Labor tax.

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

Before calling the Treasurer, I remind the member for North Sydney of the provisions of standing order 64.

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

We have just had 30 long minutes from the shadow Treasurer demonstrating yet again how unqualified he is when it comes to economic policy and how out of touch the federal coalition are when it comes to the needs of rebuilding Queensland and other parts of this nation which have suffered from natural disasters over the past couple of months. What we got was 30 minutes of politics. We did not get 30 minutes about the people and what they need—yet another demonstration of how the coalition have been prepared to play politics with this issue rather than responding to the needs of the people of Queensland and putting the national interest ahead of their own immediate political self-interest.

I can tell you that I was in Brisbane and in Queensland the whole time of these events. Before the floodwaters had risen to their peak in Brisbane, the Leader of the Opposition was in Queensland playing politics with this issue, playing politics with the lives of the people that were being devastated at that very time, when his thoughts should have been for the people themselves and what we needed to do as a nation to rebuild that state and help all of those people whose lives have been shattered. I could see the embarrassment on the faces of some Queensland backbench members here today as the shadow Treasurer yet again put politics first rather than the national interest and rather than the needs of Queenslanders, because the devastation of these natural disasters has been immense. They have touched every Australian. The loss of life is seared into our memory. We mourn for those who are lost, and our sympathies go with those who will now go through the terrible task of rebuilding their lives.

We hear yet again today further evidence of natural disasters in New Zealand, and our thoughts go out to all of those people. We hope that there is good news as they go through those events in New Zealand.

Mother Nature in this country has been particularly cruel this summer. It has tested our nation. It has tested us in flood, it has tested us in cyclone and, of course, it has tested us in fire, all in a relatively short period of time. I believe that our people and the nation have risen to the tests of these events. Part of rising to deal with these events is to show the political maturity to put in place the policies that are required not just to deal with these events on the ground but also to strengthen our economy for the long term. We have to do both.

I think Australians understand the need for this. We have seen extraordinary acts of bravery. We have seen the extraordinary acts of people volunteering, travelling thousands of miles to communities to help their fellow citizens. We have seen strangers turning up in gumboots to the houses of people they have never met, and at times they have come a very long distance to do that. But coalition members in this House simply do not get that. The whole nation wants to pull together as we deal with this question, but what we get is the further politics of division from those opposite, putting politics ahead of the interests of all of those people in Queensland.

Yes, there have been extraordinary acts of generosity. Something like $200 million has been raised on a voluntary basis to help people. The generosity here has been overwhelming. It has been an important part of our response. But we are dealing here with a natural disaster which is unprecedented in our history, and I am sure this is not clearly understood by those opposite. Something like three-quarters of Queensland was declared a disaster area. Put that into perspective. That is more than five times the size of the state of Victoria. So what we are dealing with here, in comparison to other events like Cyclone Tracy or the Black Saturday bushfires or the Newcastle earthquake, is something that is quite extraordinary.

We cannot yet say what the full impact is but we do know it is significant. We know, for example, that it will take about half a percentage point off growth in 2010-11. That is about $6 billion stripped out of the real economy. That is no small beer. Queensland’s key economic sectors have been dealt a massive blow, and that does not take into account the critical public and community infrastructure that has been smashed to pieces. We have rail lines to reopen, ports to dredge, bridges to build—a huge amount of rebuilding of public infrastructure. That is why Treasury estimates that repairs to public infrastructure and disaster recovery payments for individuals will cost around $5.6 billion—and that is before the impact of Cyclone Yasi. That is why there has been such extraordinary generosity from Australians. That is why we have responded with emergency support payments.

The fact is that we have to rebuild the critical economic infrastructure of such a large part of Australia. Under our national disaster relief arrangements the Commonwealth rightly picks up 75 per cent of the bill. This is the responsibility of the national government. We have to do this to back up all of the actions of volunteers, all of that community effort and all of the donations that are coming from the business community. We have to be there with our 75 per cent for this critical public infrastructure, because that is what makes the community work. The disaster does not stop at the front gate; it does not stop at the farm gate. What we have to deal with is the essential community infrastructure that makes these communities go around. That is why we have put forward our $5.6 billion package, through the Tax Laws Amendment (Temporary Flood Reconstruction Levy) Bill 2011 and the Income Tax Rates Amendment (Temporary Flood Reconstruction Levy) Bill 2011, to rebuild the essential public infrastructure.

In doing that we also have to be cognisant of where the economy is. We are now dealing with the very important challenges of mining boom mark 2. That is why we decided to fund two-thirds of the $5.6 billion from savings within the budget. More than $2½ billion will come from cuts to other programs, and about a billion dollars has been identified in other infrastructure projects that can be delayed.

The opposition go on as if finding savings in a budget is really easy and as if they are somehow capable of just magically producing $5 billion or $10 billion. They claimed during the election campaign that they had found savings of $50 billion. Their $11 billion costings con job was exposed by the Treasury. They simply are not up to the task of finding savings and we found that out during the election campaign. The next thing we heard from them was, ‘We could fund all of this by stopping the NBN.’ Did you know that when they produced their savings the other day they did not do anything about the NBN? This is because there are no savings that will come from altering the NBN.

When it comes to savings, this government has runs on the board. We understand that as we go through the budget process we will have to make further savings in addition to the savings that we have made in this package. We said that at the time, because we understand that we have to meet our fiscal targets. We do that not for political reasons but because the economy is growing strongly from the mining boom mark 2. As we go through the next couple of years there will be capacity constraints in our economy, so we have to make room to do the rebuilding on the one hand and to make sure that essential investment is going into areas that will increase the capacity to cope with the mining boom mark 2. So we are doing both and we will be finding further savings as we go forward. That is why we need a temporary levy and why we have moved for a temporary levy starting on 1 July this year. It is the responsible thing to do in the circumstances in which we find ourselves.

I am just gobsmacked when I sit in this House and listen to all of the rhetoric from those opposite about how bad a levy is and about how the government always turns to taxing. When they were in government they were the highest taxing government in Australia’s history. On six occasions they found levies that they could support. In fact, they have never seen a levy that they did not support—up until a couple of weeks ago. They had the gun levy and the Timor levy—all of which were much bigger than this. So I am gobsmacked when I listen to them in this House claiming that somehow they can never support a levy even though they supported six levies in their 12 years of government.

What is completely mind-boggling and what demonstrates just how ridiculous, bizarre and crazy the opposition have become is that in the last election they went around Australia campaigning for a $6 billion levy over two years. It was $3 billion per year to fund parental leave. Suddenly, they expect the public to believe that they do not like levies. They do not like this levy because they want to play politics with the reconstruction in Queensland and they think it is in their political interest to do that. But I have a message for them and they ought to hear this loud and clear, particularly all of the Queensland backbenchers over there: Queenslanders do understand the need for this levy. They absolutely support this levy. Australians understand the need for this levy and they support it. What they do not support is the way in which those opposite are trying to be populist about this measure.

It is a modest levy. For a person on average full-time wages of $68,000 the levy amounts to $1.74 per week. This is less than a tenth of the tax cuts that they have received over the past three years. Let’s just put that into perspective: it is less than a bus ticket, less than a packet of Burger Rings, less than a weekend newspaper and less than a cup of coffee.

Andrew Laming (Bowman, Liberal Party, Shadow Parliamentary Secretary for Regional Health Services and Indigenous Health) Share this | Link to this | Hansard source

It is hardly worth having a levy, then.

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

No, this is where you do not understand it and this is where you will be punished by the people in Queensland for playing politics with this: it is the sum of the parts that is important. All of these small amounts of money add up to a substantial amount of money that can rebuild our state. That is the case for this levy. Everybody is contributing. Everybody understands the size and magnitude of the task. If it was good enough to have a levy for Timor or for the gun buyback, why isn’t it good enough to have a levy to rebuild Queensland? They cannot answer that question and it exposes just how bizarre, out of touch and irresponsible each and every one of those members of the opposition is on this issue, particularly the members of the opposition from Queensland.

We are coming at this from the perspective of responsible economic management. We are a government that have got the big economic decisions right. Did you hear the shadow Treasurer go on and on earlier about how we handled the global recession? We absolutely got it right. If those opposite had had their way Australia would have been in recession. Unemployment would be far higher now and we would be in a much weaker position to deal with these natural disasters had they been in government during the global financial crisis.

I have just come from a meeting of G20 finance ministers. They understand how important the response of Australia was to growth in this country compared to what is going on in other developed economies. Go to the eurozone. Unemployment across the eurozone is 10 per cent. Unemployment in this country is five per cent. Part of the reason for that was the very quick response that we put in place to support small businesses, to support employment and to support confidence in our economy. The outcome has been a far stronger economy and one of the strongest developed economies in the Western world.

But of course all of this is opposed by those opposite, because they do not know how to behave when there are big challenges or when there is a crisis. They did not know how to behave during the global financial crisis. They came in here and hacked away at the bank guarantee; they came in here and opposed the second stimulus package. They did all those things because they could not live up to their responsibilities. They cannot live up to their responsibilities because they do not know how to behave in a crisis.

This was demonstrated yet again in their response to the floods in Queensland. They just decided to play politics from the very beginning. This government will deal with this in the way we must deal with it: we are going to deal with it in a responsible way. The responsible way is to put in place a levy which is modest but will fund, along with our savings, a package which will support the people of Queensland and the rest of the country. Paying as you go is the responsible thing to do. The irresponsible thing to do is what the opposition is doing.

With each and every one of us pulling our own weight, we will be back to surplus in a couple of years, we will be setting our economy up for the future, we will be doing the right thing by the people of Queensland, we will be making our economy stronger and we will be helping out all those people who need a helping hand. That is why a modest levy is the responsible thing to do. Those opposite will be condemned by their electorates for not behaving in a responsible way, which is what their electorates expect of them. (Time expired)

Tony Smith (Casey, Liberal Party, Deputy Chairman , Coalition Policy Development Committee) Share this | Link to this | Hansard source

What we have just witnessed from the Treasurer is another pathetically base attack on the opposition. The Treasurer comes into this House, again, and repeats in robotic style, like some sort of battery-operated kids toy, an attack on the opposition, saying that we don’t support his levy and therefore we don’t support the reconstruction of flood affected areas. He mentioned Queensland a number of times—and rightly so. I would say to the Treasurer, as he scurries out the door: it wouldn’t hurt to mention Victoria and reconstruction in the one sentence one or two times. I think if I had to pay him for every time he had mentioned Victoria in the last four or five weeks I would be lucky to be out of pocket $5.

The Leader of the Opposition and every member of this side of the House has made clear from day one that we support the reconstruction of flood affected areas. The issue is how it is paid for. We think it should be paid for out of the budget and we do not think there should be a levy. The Treasurer might adopt the approach that anyone that disagrees with him is somehow against the reconstruction, but I can tell you that most people see through that. They find it offensive. To repeat it over and over again, like some sort of human jackhammer, does him no service and does the government no service at all.

The shadow Treasurer comprehensively outlined the opposition’s approach to this bill and the reasons for our opposition to it. They were compelling arguments—10 of them. I will not repeat each and every one of them, but what I will focus on, which the Treasurer refuses to go near, is how this government came to the levy. When you listen to the Treasurer and you listen to the Prime Minister, apart from repeating over and over again that anyone who opposes their $1.8 billion levy must therefore be opposed to reconstruction—apart from repeating that over and over again; the only difference between him and the battery-operated toy is that at least with the battery-operated toy the batteries run out—when you go to the heart of this matter and you look at how this $1.8 billion levy was conceived and how it has been defended by the government, it is obvious for all to see that when it comes to the Labor Party and this levy their first instinct was, as the shadow Treasurer said, to tax. With the Prime Minister’s announcement—I think it was the day after Australia Day—we were simultaneously told that the cost of reconstruction, whilst it could not be precise, would be, obviously, of a big magnitude. What the government had decided to do was to identify $3.8 billion worth of cuts and $1.8 billion worth of levy. Immediately on that day, when the question was asked, ‘What will happen if the reconstruction bill is greater than the sum of those two parts which you, Prime Minister, have outlined?’ the answer was, ‘More savings will be found,’ obviously indicating that more savings are there in a budget of around $350 billion.

What the Treasurer would have you believe is that he could find $3.8 billion of savings and not one cent more. In his wrap-up to his speech just a few minutes ago he tried to imply that there was some magical economic formula to his two-thirds split of $3.8 billion and $1.8 billion. But, of course, the fact that a levy of $1.8 billion was decided, according to his two-thirds formula, evaporates immediately on the first question from journalists at the National Press Club about what will happen if the bill is more. What will happen if the bill is more, the Prime Minister said, is that more savings will be found. So the government’s first instinct was to construct a levy, to find some savings and, if the bill is more than the sum of those two parts, to find more savings.

When you look at how the government came to this decision and how they have obfuscated since day one, how they have dodged and weaved, it is very obvious to the Australian public that the rigour of their approach was to decide on a levy, try to find a few spending cuts and then attack anyone who said that there might be a better way to fund the thing we all agree on in this House—that is, the reconstruction of flood affected areas in Queensland, New South Wales and Victoria. And as I said before, it would not hurt the Treasurer to mention Victoria every now and again. No-one in this House—major parties, minor party, Independents—disagree on the proposition that every dollar should be spent on the reconstruction. And for the Treasurer to take any criticism, any scrutiny of one of the means he is finding as opposition to that reconstruction is something that belittles him and those that sit with him.

We had the announcement the day after Australia Day. We had the Treasurer on the 7.30 Report that very night. He was asked the same question that was obvious. He was asked by Tracy Bowden:

… So you’re suggesting there could be further spending cuts if necessary, so why not make them now? I mean, is there, as the Opposition Leader Tony Abbott has said, some fat in the budget?

Answer:

WAYNE SWAN:—

the Treasurer—

Well, because it wouldn’t be wise.

Again, no attempt to answer the question, no attempt to join the dots and provide some level of logic.

But of course with that concession by the Prime Minister that if the bill comes in higher then there will be more spending cuts, we have now seen in the past week, with a deal with those on the crossbenches, that there will be, in the Prime Minister’s words, and reaffirmed yesterday by the Assistant Treasurer, ‘further spending cuts of another $150 million’. Now unlike the $3.8 billion, which was identified outright, this $150 million will be identified in the budget. We had all of this rigour upfront, supposedly, on the spending cuts right down to the last dollar—what the programs would be, what would be delayed—amounting to $3.8 billion. The Treasurer was here not more than 15 minutes ago talking about them, the one-third two-thirds formula, but last week we were told about another $150 million and that we will find out about that in the budget.

At every step it has been obvious, as the shadow Treasurer said, that the first instinct of the Treasurer, the first instinct of the Prime Minister was to impose a $1.8 billion levy. Why $1.8 billion? What happens if the bill is more than the $5.6 billion? But then of course we had the spectacle in the last sitting week of the Treasurer in this House being asked the very reasonable question by the shadow Treasurer: how many people will pay the levy? This question could not be answered by the Treasurer. Again, bluff and bluster could not hide that fact. He stood at the dispatch box and told the shadow Treasurer to go and have a look on the website if he really wanted to know. The truth is the Treasurer himself could not have found it on his website. He had not looked; he did not know. Quite rightly, a great deal was made about this by commentators, who said it was somewhat strange that the Treasurer, who had supposedly been looking at all of the detail and had been working out the $1.8 billion levy, did not know how many people were going to pay this levy.

Of course it is strange, and they were absolutely right, but it is interesting at another level, isn’t it? The Treasurer in his mind could be absolutely sure that the government will collect $1.8 billion—not $1.7 billion, not $1.9 billion; he is absolutely sure how much they will collect—and in this legislation we are debating, in the bills that are before us, in the explanatory memorandum that outlines the mechanics of how that money will be collected and the timing of the collection, the government are absolutely sure of precisely how much they will collect but they cannot be sure how many people will pay it. Now that is odd, isn’t it? That is absolutely odd.

Rob Mitchell (McEwen, Australian Labor Party) Share this | Link to this | Hansard source

How many people paid the milk levy? You don’t know!

Tony Smith (Casey, Liberal Party, Deputy Chairman , Coalition Policy Development Committee) Share this | Link to this | Hansard source

The member for McEwen tries to help the Treasurer. The point is the Treasurer had not worked out exactly who was paying it, but he knew $1.8 billion—

Rob Mitchell (McEwen, Australian Labor Party) Share this | Link to this | Hansard source

How many paid the milk levy? The gun buyback levy? You don’t know!

Tony Smith (Casey, Liberal Party, Deputy Chairman , Coalition Policy Development Committee) Share this | Link to this | Hansard source

Mr Deputy Speaker, no amount of bluff and bluster from the Treasurer, no amount of interjections can hide this fact from the government. The reconstruction of the flood affected areas should proceed and should proceed, as we have all said, quickly. It should proceed out of existing budget programs. Now for those opposite to argue they can easily identify $3.8 billion worth of savings but not a dollar more, that it is not wise to identify a dollar more, whoops, until we have to find another $150 million, which we cannot identify but we will by budget time—those opposite should look in their heart of hearts, and some of those opposite should look in their heads. Not all of them, I regret to say, but some of them know in their heads that this is a farcical argument. They know deep down, despite the Treasurer’s bluff we had in here about how he saved Australia from the global recession, the waste that the Treasurer and the Prime Minister have presided over. They know that the levy that is being proposed, which will hurt the pay packets of Australians, equates to the waste just from the Orwellian Building the Education Revolution program.

The Prime Minister, when she was education minister, wasted the equivalent of this levy on the Building the Education Revolution school programs, wasted the—

Rob Mitchell (McEwen, Australian Labor Party) Share this | Link to this | Hansard source

You were there for every BER opening!

Tony Smith (Casey, Liberal Party, Deputy Chairman , Coalition Policy Development Committee) Share this | Link to this | Hansard source

You know the waste is there. I concede that those opposite may consider $1.8 billion to be a rounding error; that is sort of the Labor way—just a rounding error. But that was just in the program alone, before mentioning the other programs the shadow Treasurer ran through in some detail: ceiling insulation and all the other waste on the solar programs. On 10 February here in this House the Leader of the Opposition outlined the opposition’s position very clearly. As he said, everyone wants to see the reconstruction happen, and they want to see it happen right. The difference between this side of the House and the other is that the government wants to see it funded through an unnecessary new tax, and members of this side of the House want to see it funded through affordable, achievable and sensible savings from unnecessary government expenditure. That is our strong view. Those opposite, from the Treasurer down—

Rob Mitchell (McEwen, Australian Labor Party) Share this | Link to this | Hansard source

Mr Mitchell interjecting

Tony Smith (Casey, Liberal Party, Deputy Chairman , Coalition Policy Development Committee) Share this | Link to this | Hansard source

I have to say that the Treasurer is incapable. They should debate the merits, not resort to pathetic, cheap attacks that, if no-one agrees with their levy, therefore they do not agree with the reconstruction. It belittles the Treasurer and it belittles this House, and what this government should do is find the savings that it knows are there in the budget. It has wasted money already, and the Australian public know it. They tell me and they tell every other member of this House. Those opposite hear it as well; they hear about the waste and mismanagement from the Australian public, and they should listen to their electorates and their constituents and stand up to the Treasurer.

Graham Perrett (Moreton, Australian Labor Party) Share this | Link to this | Hansard source

I rise to support the Tax Laws Amendment (Temporary Flood Reconstruction Levy) Bill 2011 and the related bill before the House. I would like particularly to commend the Prime Minister, Julia Gillard, for her strong leadership—and also Deputy Prime Minister Swan—in the wake of these natural disasters which we have had: floods in Victoria, floods in Brisbane and South-East Queensland, and the cyclone in North Queensland. Queenslanders and Victorians will never forget this courageous rebuilding package.

In these debates there is obviously a bit of lining up on either side of the chamber. It was interesting in the preceding speeches—and people should go to the videotape and have a look—to see the people behind the speakers. It is quite telling. I was sitting in my office getting my speech notes ready, and I looked at the people behind Joe Hockey, the member for North Sydney. It was amazing. There were three new members, all from Queensland: the member for Forde, the member for Herbert and the member for Ryan—my next door neighbour. The only border between us is, in fact, the Brisbane River—that very big river that flooded recently.

I watched the member for North Sydney go through his 10 reasons and the like, but I also looked behind him. I am a bit of an expert when it comes to standing behind people doing talks. Ben Fordham called me the bonehead of the year last year for one of my performances in the election campaign, so I can speak with a bit of authority on this. That is still a drink you owe me, Ben Fordham! I looked at the new noddies—the backbenchers sitting behind the speaker. I thought, ‘They are new MPs; maybe they don’t know,’ so I thought I would give them a bit of a tip, and that is: when the speaker on your side is putting forward an idea—in this case, 10 ideas—it is a good idea to nod. It was as if these Queenslanders had an iron bar for a backbone: they were stock still, not moving at all. They did not want to show anyone that they supported what the member for North Sydney was saying. I thought, ‘Maybe they are new MPs, so let’s have a look at the member for Casey when he talks.’ He had the member for Bonner behind him and the member for Bowman right next to him—two other Queenslanders. But it was exactly the same thing: not a movement—not a single nod in his whole speech. Maybe it was because the 10 reasons from the member for North Sydney were a little bit like David Letterman’s 10 good reasons, but they were not funny—that was the only sad thing.

Certainly, as Queenslanders we know how important this reconstruction is. I can just imagine when the Liberals had their strategy meeting about this legislation: the brains trust would be there and the member for Wide Bay would throw his bid in as a Queenslander. They would sit at Liberal Party headquarters and say, ‘What are we going to do?’ The first thing that the Leader of the Opposition would say is, ‘Let’s call it a big new tax.’ That is his strategy for everything—it is either ‘no’ or ‘Let’s call it a big tax.’ That is his simple strategy.

Then, of course, because there is a bit of competition going on over the other side at the moment, we would have the member for Goldstein saying: ‘We need to do more. Let’s give 10 reasons; one is not enough’—10 reasons why they would oppose the flood levy. Well, I have got 5,200 reasons why we should support the flood levy. That is how many properties in my electorate alone were affected by the floods. And if we go up the river, across the river or up to North Queensland there are many other properties that have been affected. People who have been in the area—not just swanned in, picked up a broom and scrubbed for half an hour—know how much the infrastructure has been impacted on. The reality is that I do not think the member for North Sydney understood that, whilst that will help up to the gate, the Queensland Premier’s flood relief money will go beyond the gate and help out other people.

That is what people need to understand. I think some people have forgotten. It has only been a month or so, but people have forgotten that this was the biggest economic disaster ever. The legislation is not the temporary ‘incident’ reconstruction levy. It is not an incident; it is a flood—a massive flood, a massive disaster. It is not called the temporary ‘hiccup’ reconstruction levy. This had a massive impact on Queensland’s economy—and not just Queensland. It will flow everywhere. Queensland produces a lot of our fresh fruit and vegetables, as I am sure the Leader of the National Party would know. Queensland also has a lot of mining that has been impacted on. I met with the Coal Owners Association yesterday. They were going through some of the impacts that are going to flow throughout the economy. Of course, as every Queenslander knows, tourism has taken an absolute hammering. So I think the Liberals need to go back to their strategy meeting and work out a better way of approaching this.

Let’s have a look. We need $5.6 billion to rebuild major infrastructure in Queensland and Victoria, and we will deliver this funding through $2.8 billion in budget savings—$1 billion in delaying a couple of infrastructure projects and $1.8 billion from the temporary levy. This is the sort of levy that strikes the right balance. No-one will be paying the levy if their income is under $50,000. I know it is not a lot of money for some people opposite, but it is still pitched reasonably. Sixty per cent of taxpayers will pay less than $1 a week and 70 per cent of taxpayers will pay less than $2 a week. Let’s be honest: if we look in our heart of hearts, people earning more than that can afford to pay just a little bit more. The good thing is that those people in the Ryan electorate, Moreton electorate, Oxley electorate, Blair electorate et cetera who were affected by the floods, who received a disaster relief payment, will be exempt. So they will not have to dip into their pockets to rebuild Queensland and Victoria.

So we have two-thirds from savings, and one-third is coming from Australians who earn over $50,000. The opposition from those speaking on the other side of the chamber is nothing more than a political stunt. As I said, you can tell that by looking at the people behind the speaker. It is quite shameful, really, especially when they say they are almost ideologically opposed to levies being used in a time of emergency. During the Abbott and Hockey years, there were six proposed levies: a superannuation levy on high-income earners, levies on the milk and sugar industries and a levy to buy back guns after the Port Arthur incident—a levy which, I must say, took an incredible amount of courage from John Howard because of some of his National Party supporters. I know it took a lot of courage and I commend him particularly for that. There are three things I thank him for and that is one. There was also the levy to help meet the entitlements of Ansett staff, a levy to help rebuild East Timor and that great big mother of a levy—the one to fund the opposition leader’s pie in the sky parental leave scheme.

So I think we understand that this levy is necessary after a great economic disaster. So what do you do? You are sensible and you ask people who can afford to to just dip into their pockets a little bit. It is interesting—I have actually been contacted by a few of my constituents who say: ‘We were affected by the floods but we want to pay the levy. It’s the right thing to do and it would help people.’ For example, Martin Finbow from Chelmer, one of the wealthier areas in my electorate, contacted me. He is exempt because he was affected by the flood but wants—insists—on being able to pay. He wants to be able to opt in to pay. There is another bloke from Coopers Plains who did not want his name mentioned. He earns less than $50,000 a year but also wanted to opt in to pay the levy. I am sure there will be others when they realise what it is going to do and how it is going to help Queensland.

Maybe the Leader of the Opposition is listening to the polling at Liberal Party headquarters or something and putting that before the needs of Queensland. However, I would rather we listened to that strategy rather than turning to the opposition immigration spokesperson, Scott Morrison, to find out how he would respond to the disaster. I imagine his strategy would simply be to rename Cyclone Yasi—to change it to ‘Cyclone Youssef’ and blame it on the Muslims. That would be his strategy.

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

That is low.

Graham Perrett (Moreton, Australian Labor Party) Share this | Link to this | Hansard source

That is not my idea; that is actually Andrew McGahan’s idea in his novel Underground from 2006. It is set in 2011 where Canberra has been taken over by a totalitarian government.

Darren Chester (Gippsland, National Party, Shadow Parliamentary Secretary for Roads and Regional Transport) Share this | Link to this | Hansard source

So much for the high moral ground! You are a grub. Withdraw that!

Graham Perrett (Moreton, Australian Labor Party) Share this | Link to this | Hansard source

Excuse me—

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

The member for Moreton has the call.

Graham Perrett (Moreton, Australian Labor Party) Share this | Link to this | Hansard source

Thank you, Deputy Speaker, and I will be guided by you on these things, if you think I have offended the opposition immigration spokesperson, Scott Morrison. But it is a direct quote from a book called Underground. If it would assist, I am happy to withdraw.

Ms Anna Burke (Chisholm, Deputy-Speaker) Share this | Link to this | Hansard source

It would assist the House if you would.

Graham Perrett (Moreton, Australian Labor Party) Share this | Link to this | Hansard source

I will withdraw, but it would have been nice if—

Ms Anna Burke (Chisholm, Deputy-Speaker) Share this | Link to this | Hansard source

Those on my left will desist from interjecting.

Graham Perrett (Moreton, Australian Labor Party) Share this | Link to this | Hansard source

As I said, in my electorate of Moreton I have had 5,200 properties impacted, and 1,000 of them are businesses. So there are more than just a thousand people. Some of these businesses, like the Rocklea markets, have 3,000 employees. The suburbs of Chelmer, Graceville, Sherwood, Corinda, Tennyson, Oxley, Yeronga, Rocklea, Fairfield, Moorooka, Coopers Plains, Yeerongpilly, Acacia Ridge and Archerfield were all hit hard, and these suburbs that were hit hard understand how urgent it is that we get this infrastructure levy through.

I would just like to thank a couple of the heroes in my electorate who have done some incredible work. I will not be able to name them all, but some are Graham Hodgson, an Oxley electrician; Melinda McInturff at Yeronga State School respite centre; Patrice Cafferky from Yeronga, who organised some community meetings; Joy Vardy from Yeronga with the welcome home baskets; Moorooka Lions, including Robert Johnson, Damien Meeney and the Acacia Ridge and District Community Centre for some of the Rocklea responses; and the Oxley State School P&C. Trish and Patrice have been very active in getting the response together at the Oxley State School. There is the Campbell family as well. Graceville has been fantastic, particularly the state school P&C. Ian Hall, the principal, Wayne Penning and many others have done some great work in Graceville. Corinda’s Dunlop pool organised community meetings. There is also St David’s at Chelmer, with John Corner at St David’s parish drop-in centre. Karen Simons ran a respite centre at her home in Strong Avenue. Then there is George McLauchlan, my 96-year-old hero in Leybourne Street, Chelmer, and the Oxley community flood relief group.

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

Natural disasters confront Australia and other countries from time to time. In every budget, governments put aside money so that they can undertake their core responsibilities to repair damage after a disaster and to make sure that our economy returns to normal as soon as possible. We have found now that this government actually reduced the amount put aside in the contingency reserve for disasters in its last budget. It has reduced the amount, in spite of the fact that it spent around half a billion dollars last year on recovery from natural disasters, in this year’s budget to just $80 million. Is it any surprise therefore that when the government is called upon to undertake one of its core responsibilities of government—namely, to repair damage after natural disasters—there is no money left in the tin?

This government has been spending the taxpayers’ money, spending the birthright it inherited from the previous government, wasting money on infamous programs like Building the Education Revolution and the Home Insulation Program, wasting money that could have been put aside and could have been ready to fund the government’s core responsibilities in dealing with the cyclones and the flooding we have just experienced. That money has been wasted. Indeed, this government has wasted something like six or seven times the amount of money that it is collecting through this new tax in the Tax Laws Amendment (Temporary Flood Reconstruction Levy) Bill 2011 and the Income Tax Rates Amendment (Temporary Flood Reconstruction Levy) Bill 2011 through its various programs over recent times. If it had saved its money, if it had been prudent managers, it would not have needed a new tax like this to undertake these key responsibilities.

We have had a significant flood. Senator Brown has told us that it is all the fault of the coalminers. Of course, I do not know who was to blame for the floods we had in the 1890s or in the 1950s. The coalminers were not around then, but Senator Brown—who is, after all, the partner in government with the Labor Party—says it is the coalminers that caused this flood. Not many years ago he was saying the coalminers caused the drought. So our coalminers are very versatile. Then, of course, he changes his tune to some extent and says that it is all about climate change; we are having more dramatic events now than we have had in the past. I do not even think the facts support that kind of a claim.

The reality is we have had very significant flooding in parts of Australia in the past. Even though these floods were serious in my own area and in others, the reality is that there are not a lot of places where this was the biggest flooding on record. There were some notable cases, but in many other instances like Brisbane and Rockhampton there have been floods of equal magnitude in the past. So even to suggest that somehow or other climate change is resulting in us having more droughts or more floods is not really supported by the evidence. The reality is that this is something that governments need to plan for. We have had disasters in the past; we will have them in the future. Good governments put aside in the good times so that there is money there when the rainy day comes. Of course, this time the rainy day came in abundance.

So we are going to have a new tax, coming at the same time Labor is proposing a new carbon tax, a supertax on mining, new taxes on alternative fuels, a new tax on LPG and, today even, new taxes on transport. This government is on a taxation binge. It is always looking for new ways to raise a tax and, wow, we have now had a disaster, a flood that has touched the heart of all Australians, so we will have a new tax especially for this flood and the disaster response.

The government have told us they were going to raise $1.8 billion from this tax. The total federal budget is around $350 billion, so surely a good prudent government could find $1.8 billion to spend on this core responsibility of government without having to raise a new tax. It has $350 billion available and at its disposable every year. We need to ask some serious questions about how much this tax will actually raise. The government, when they announced it, said they are going to collect $1.8 billion, but the Treasurer, in question time, could not tell us how many people were going to pay it. How could they possibly know how much it was going to raise if they did not know how many people were going to pay it?

After the announcement of the tax and after we were told it was going to raise $1.8 billion, several hundred thousand extra taxpayers were exempt from having to make the payment—the cyclone victims are now also excluded from making the payment—but there was no downward adjustment in the amount of money the government intends to collect. Was the figure rubbery in the first place or is it wrong today? In addition to that, to get the Independents to vote for this levy, the government had to give a 320-odd million dollar bribe to the Greens and a $50 million bribe to somebody else. The reality therefore is that the savings that the government had put in place are not there. So all of the numbers surrounding this tax, this new imposition on Australian people, are at best rubbery but almost certainly wrong. The government does not know how many people are going to pay this tax. Therefore, how can it possibly know how much it is going to collect?

It is interesting—and I made some reference to this during the adjournment debate last night—that the government is making a $1,000 payment to people affected by the disaster. I estimate that on the eligibility criteria, which means that everybody that was without electricity for 48 hours and everybody that could not get in or out of their home, suburb or town for 24 hours qualifies, at least two million Australians qualify for this $1,000 payment. Many people were embarrassed that they were being offered $1,000 cash when in fact the flood had caused very little inconvenience to them. It had not cost them any extra money and they were still able to get to the shops but they were eligible for this $1,000 payment. So many people did not take it. I even heard the Treasurer say that he ‘hoped’ that people who were without electricity for 48 hours and that was their only problem would not claim this $1,000, but his guidelines said they were entitled to it.

Many people did not bother to claim. However, when the government then said that everybody who gets the $1,000 will not have to pay the tax, why wouldn’t everyone make the claim that they are entitled to? Not only in their goodwill did they turn down $1,000 now they are inviting themselves to be levied a new tax. If the government were at all sincere, they would be grateful to the people who did not claim the $1,000 and not charge them this tax.

What about the people who not only did not accept the $1,000 that they were entitled to but actually made donations to the appeal? Some of them gave very substantial donations to the appeal. They have given already and now the government is going to tax them. They have provided their own equipment and their own personal time. They did not take the welfare payments that the federal government offered them and their reward for that is higher taxes. Tax the people who did the right thing—what sort of logic has this government got?

The reality is that there are thousands of Australians who did the right thing. They did not take the social security payments they were entitled to; they donated to the Premier’s fund—most of which has not yet been distributed. They did all of these things and now their reward for that is a new tax from a government that simply does not care.

It is important that we deliver the kind of rebuilding that is necessary in these difficult times. We have to get business working, we have to provide services, we have to restore housing and we have to rebuild infrastructure. The coalition has a plan to do all of that without a new tax as governments have always done in the past. There was no special tax for Cyclone Tracy, no special tax for Cyclone Larry, no special tax for the 10-year drought—governments just got on with the job and did it. But of course this Labor government is not capable of managing its affairs and, in reality, nothing much is going to happen.

We need to get on with the business of making the repairs. There are important things that need to be done. We certainly need to be continuing to upgrade our highways, but one of the government’s cuts has been to axe four projects on the Bruce Highway which would have mitigated flooding. In other words, when looking for cuts they are actually removing projects from the budget which would have helped us to endure this kind of situation in the future.

Let me say also—and I think this is very important—in February and March 2010 there was some significant flooding in Queensland and New South Wales. It has taken 10 months for the government to give approval for the repair works to commence on that flood damage. Only now are councils getting the approval to undertake permanent repair work for damage done in the 2010 floods. Are we going to have to wait 10, 11 or 12 months for this government to approve repair works on this occasion? The record says the state and federal governments argued, one with the other, and these repair jobs were left undone. We need better performance from the government when it comes to repairs this time round.

We need to deal with issues like confusion about insurance cover. The government assistance programs need to be reviewed and be consistent. The benefits provided during Cyclone Larry for welfare were much more generous. The benefits provided to small business are less generous in areas where flooding has occurred and there is no justification for that.

Then we need to deal with those areas that have exceptional circumstances drought assistance whose assistance is to be terminated next month. No government that cares about people could possibly terminate assistance at a time like this. These people’s recovery has been stalled and halted by the flooding and those EC declarations need to be extended. There are other areas that have had exceptional circumstances, some for six, eight or 10 years. This is a cruel time to take away that level of assistance.

The government must act in those areas and be generous with its recovery effort. It must be prompt, it must give approvals quickly so that people can get on with the job of doing the repairs and it must remember those people who have been suffering from drought and other problems over the last 10 years in determining the level of assistance to be provided in the future. All of this can be done without a tax. It does not need a new tax. Governments in the past have done their job and done it well without introducing special taxes and this government should do the same.

Sid Sidebottom (Braddon, Australian Labor Party) Share this | Link to this | Hansard source

I strongly support Tax Laws Amendment (Temporary Flood Reconstruction Levy) Bill 2011 and the Income Tax Rates Amendment (Temporary Flood Reconstruction Levy) Bill 2011 and indeed believe that the flood levy is right, it is temporary, it is fair and it is full of precedents. I would like to return to the question of precedents to remind those opposite of their record in raising and imposing levies. I would like to quote the words of a very strong supporter of raising levies to tackle the management of national crises. He said:

I am reluctant at any time to add to the financial burden on Australians, but this bill imposes a special one-year impost which I think most Australians will regard as necessary in the circumstances.

…            …            …

The Commonwealth judges it to be in the national interest to offer assistance on such a scale to …

Queensland—

notwithstanding that …

disaster recovery—

falls largely within their responsibilities. National leadership needs to be exercised so that the problem of the …

damaged infrastructure—

is confronted swiftly and adequately.

He also said:

Applying the levy on incomes above $50,000 will protect low- and many middle-income earners.

The quotations above are the words from the former Prime Minister, John Howard, when introducing one or two of several levies raised by his government. I substituted the word ‘Queensland’ for ‘the states and territories’; the phrase ‘disaster recovery’ for ‘gun control’; and ‘damaged infrastructure’ for ‘proliferation of these guns’. The point I want to make is that the rationale, precedents and efficacy of raising a levy to tackle moments of crisis management is well established. Indeed I shall return to this point later.

What is also evident from the above is that the present opposition have selective memories of their own recent history. Most of the leadership of the opposition, if I can be forgiven for using such a word so loosely, actually supported not one, two or three levies during their time in government; I counted nine levies. They did not vote no on at least nine occasions in the past yet now find it convenient to say no on this one occasion when much of our eastern and northern seaboard and hinterlands have been inundated with unprecedented rainfall and winds. They find it convenient to say no to what I regard as a disaster relief fund that is right, fair, affordable and temporary.

This levy is designed to fund major infrastructure and reconstruction, most especially in Queensland. It is designed to accompany significant budget savings to fund such reconstruction. It is designed to accompany the comprehensive relief and support programs and funds provided by both the Commonwealth and the states to assist individuals, businesses and sector reconstruction. For example, it complements the National Disaster Relief and Recovery Arrangements, the Australian government disaster recovery payment, the disaster income recovery subsidy and the $11 million paid by the Commonwealth government to the Queensland Premier’s relief fund and, additionally, $1 million to the Red Cross Victorian flood appeals. It is designed to accompany the generous donations of so many Australians who have contributed and continue to give to the various relief fundraising enterprises.

These bills are designed to raise $5.6 billion. They will impose a temporary flood recovery levy on taxpayers with taxable incomes of $50,001 or more for the 2011-12 financial year only. It is a temporary levy, bound by and set in legislation. The levy will be applied at the rate of 0.5 per cent of taxable income for those earning between $50,001 and $100,000. The levy will be applied at the rate of one per cent of taxable income for those earning $100,001 or more. The levy will not apply to low-income earners with a taxable income of $50,000 or less. There will be exemptions from the levy for people who received an Australian government disaster recovery payment for a natural disaster in 2010-11 and people who met the Australian disaster recovery payment criteria for a disaster in an NDRRA area in 2010-11, amongst others. The levy will impose a modest charge on taxpayers. About half of taxpayers will pay nothing. Over 60 per cent will pay less than $1 per week. About 70 per cent will pay less than $2 per week for one year. Over 85 per cent will pay less than $5 per week for one year.

The damage that has been done is immense. I do not need to remind this House of the extent of that damage. Indeed, it is not just about the physical damage but the suffering to individuals and to families and the pain that accompanies the loss of life in some instances and of properties and businesses in others. It has been an unmitigated disaster, felt not just by those who directly experienced it but by the nation. Precedent has it that when we manage national crises in this country we attempt to pay in part for that crisis management with levies.

I would like to remind the House that I found nine levies either imposed or considered by the former government. There were nine levies considered—rightly, in many instances—to deal with what were regarded as national crises of one description or another. I will remind the House of them: the aircraft noise levy, the firearms buyback levy, the stevedoring levy, the dairy industry adjustment levy, the Ansett levy, the sugar industry levy, the chicken industry levy, the Timor levy and the superannuation surcharge levy. Each of those nine levies was raised for the particular management of some form of crisis, and many of them were raised at a time when the budget was in surplus, not when the budget was in deficit. So those opposite who use the argument about so-called economic management ought to return to their own history instead of the hand-wringing, unctuous response that we hear from them. This levy is right, it is temporary, it is fair and it is full of precedents, as those on the other side well and truly know.

In my own electorate I have done some preliminary investigations of who might be affected by this levy. I do want to thank people in my electorate for their generous donations to the Queensland flood appeal, to the Victorian flood appeal as well and in the aftermath of the cyclone. My own electorate was not immune to the floods either. I was saddened that when the Leader of the Opposition was commenting on the floods in his address-in-reply speech he did not even mention Tasmania. He did not mention the extensive flooding in Tasmania—and you wonder why they do not hold a Tasmanian seat in the House of Representatives. I found that very sad indeed. The Prime Minister did mention Tasmania and has visited. So that is the interest that the Leader of the Opposition shows.

In my own electorate, out of around 76,000 adults, 10,000 will pay the levy. The actual number of taxpayers is estimated to be about 46,000 out of the 76,000. Of the 10,000 who will pay the levy, only 2,000 will pay more than $5 a week or $250 in total. I remind those opposite—because the Leader of the Opposition did not mention it; indeed, he probably did not even know it from his own senators from Tasmania—that extensive flooding occurred in my electorate. In the Burnie area $2 million to $3 million is required to cover immediate clean-up activities as well as major infrastructure repairs. In the Central Coast region the initial estimate is in excess of $4 million for the clean-up and recovery. To conclude, so that others may speak on this important levy: it is right, it is temporary, it is fair, and I remind those opposite that it is full of precedents. Thank you.

Scott Morrison (Cook, Liberal Party, Shadow Minister for Immigration and Citizenship) Share this | Link to this | Hansard source

I rise 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. It is eerie debating this legislation when we see what is happening over in Christchurch today. Having lived in Wellington, New Zealand, for a few years I know what you go through living in a city like that and always being aware of the possibility of this type of incident. My heart goes out to those in Christchurch today; they are suffering. We think of our Kiwi brothers and sisters and I am sure we will be there to do everything we can for them in the true Anzac spirit. Similarly, the coalition joins with the government in saying that we need to rebuild not just in Queensland but wherever we have had flood, tempest and fire. These things have not damaged our character and they have not lessened our resolve. As with all of these things we come into this place and say, ‘Let’s rebuild.’

There should be no suggestion that people on that side of the House or this side of the House have any disagreement about the issue of rebuilding and standing shoulder to shoulder with our fellow Australians around this country as we undergo that task. The difference of view that occurs here is about how we fund that and how we go about that. It raises some very important questions for this parliament and for the government in how it seeks to go about governing this country. The coalition is making some very important points here in taking the decision to say, ‘Spend the money to rebuild but do not put a levy on Australians to do it.’ Why not? Because it is not necessary to do so.

This levy has been referred to by those on the other side as the ‘mateship tax’. I know that this government is quite keen to nationalise all sorts of things, including telecommunications, but there is one thing it cannot nationalise, and that is mateship. You cannot nationalise something that is endemic to, and within the spirit of, all Australians, no matter where they have come from; you cannot appropriate that for a national tax. I think this is ordinary, because Australians are a generous people. Australians have responded time and again to these crises. And we have seen far too many of these crises. We have seen far too many floods, far too many fires, far too many cyclones and tempests, and they have always brought out the best from Australians in their response. And that is not just when those tempests and things have been in this nation. Who will ever forget the generous response of Australians to the tsunami that swept across nations all around the Indian Ocean? That was an extraordinarily generous response from Australians. That is the normal response of Australians.

As my colleague and good friend the member for North Sydney, the shadow Treasurer, said, when the government seeks to appropriate the sentiment of mateship with these types of initiatives and have it legislated in a tax, that goes beyond what Australians think is a good thing. I think it is not a fair dinkum thing for a government to take that sentiment and tell Australians, ‘You know, next time something like this happens, just be aware that you’ll probably get taxed on it as well.’ We have heard this from charities and others all around the country. They are saying, ‘We all want to help but we are little worried that, with what the government has done, in the future, when we really need people to put their hands in their pockets and turn up and provide support through the community and voluntary organisations which are the heart of this country, they will say, “I don’t know if I can afford to do it, because maybe the government is going to hit me with a tax’’’.

I do not think the government has thought this through in terms of the impact on the philanthropic nature of people in this country. That is why it is important that, when things like this happen, the government has to look inwards at its own spending, its own programs and its own capacity to fund these types of initiatives and make the decisions that are necessary to do it. The Prime Minister herself said this is what she was going to do. Those were her own words. But then she decided not to and to go the soft option and put a levy on her fellow Australians for something she was not prepared to do—get her own spending under control. There is an important principle here. We do not think the inherent principle of mateship in the Australian people should be nationalised and appropriated by this government and called a mateship tax. That is not what it should be about.

Secondly, throughout the course of this debate I have heard those opposite talk about the levies that have been introduced before, and I heard the shadow Treasurer remind them that this one measure alone is worth three times the annual amount raised in previous levies, with the exception of the Medicare levy. I think that puts it into some perspective. But here is another thing to put it into perspective: when I talk to people out in the community they tell me that this government has not earned the right to put this sort of call on the Australian people. Why? Because they have not controlled their own spending. Because they have not done the hard things in their own administration of taxpayers’ money to give them the right to impose a levy and to give them the credibility that former Prime Minister John Howard and former Treasurer Peter Costello had. The Australian people knew that the former coalition government was doing everything it could to deliver surplus after surplus after surplus, to spend taxpayers’ money wisely and to ensure that they did all the hard things that have to be done before taking a decision such as this.

The Australian people have no confidence in this government when it comes to these matters—absolutely none. This is a government that has set new records for deficits. This is a government that is taking us back to the road of high levels of debt. This is a government that is going down the low road of tax, whether it is a flood levy, a carbon tax or a mining tax. Whether it is any of these things, this is a government that would rather tax more than spend less.

That is a fundamental question confronting governments all around the world. In the United States they are confronting this issue in their parliamentary equivalent as we speak here today. They have to make decisions about their budget. Let us hope they make good decisions, because the decisions that are taken in the United States congress and Senate, and by their President, will have implications all around the globe in terms of their fiscal position.

But let us not go down that road that they have been down. Let us make sure that we stand in this place and say, ‘This government cannot go to the Australian people and ask for a levy until they have done all they can to restrain their own spending.’ Much has been spent in the last few years. Much of it has been spent, according to the government, in the name of jobs and all number of other things. But the Australian people just do not buy it, because they have seen the waste, the mismanagement, the rorts and the consequences of this government’s failed programs and failed expenditure. They are saying, ‘Why can’t this government get its act together on spending rather than tax us?’ That is fundamentally what this debate is about. The government is saying, ‘We are coming back for more and we want it now.’ The coalition is saying, ‘You need to get your house in order. You need to make decisions about your own expenditure and you need not to lean heavily on the Australian people when it comes to taxation.’

We have a government with serial deficits and serial debt and with policies failing from one end of the portfolio spectrum to the other. This is no less so in my portfolio, where this government has asked for $290 million extra this year alone. That $290 million, combined with the $1.5 billion they are likely to overspend in the next three years if spending stays at the same level, would pay for the full cost of this levy. But they do not change their policies and they do not change their spending. They do not make any of the hard decisions necessary to avoid the consequence of yet another tax on the Australian people. They go back out there and seek to wash away their failed administration in the name of mateship and a mateship tax.

This is a government—under Labor at a state and federal level—that has taken the art of spin to levels unimaginable in this country. Soon, the voters of New South Wales will deliver their verdict on this. I can only say that what I am seeing of this federal government is the New South Wales state government on fast forward. What I have seen in New South Wales over 16 years I have seen almost all of here in just the short period of time this government has been in office. So we stand here and say, ‘Stop the taxes, get your spending under control and get your house in order and then the Australian people might take you seriously.’

Ms Catherine King (Ballarat, Australian Labor Party, Parliamentary Secretary for Health and Ageing) Share this | Link to this | Hansard source

I rise in support of the Tax Laws Amendment (Temporary Flood Reconstruction Levy) Bill 2011 and the Income Tax Rates Amendment (Temporary Flood Reconstruction Levy) Bill 2011. I do so as a member of an electorate that was significantly affected by floods, not just once but for the third time now. I do so following the member for Cook. I understand that, in opposition, you need to have something to say about issues and that you need to try to make your mark on things. I think it is unfortunate that the issue the opposition has chosen to make their mark on is this particular one. I think that the politicisation of the reconstruction and the flood levy has been extremely unfortunate and I think it is extremely unfortunate for those communities that I represent that have been affected.

When I spoke in this House recently on the condolence motion for those so tragically lost in the Queensland floods, I concluded with some lines about the obligation we all have to respond in these circumstances. I said that as a government and as a nation we need to stand together for the people so tragically impacted, to rebuild their communities. But most of all we need to rebuild their hearts. While these bills we are debating today are about delivering practical assistance to replace the bricks and mortar, the tar and the cement, they are about much more than that. They are in fact about rebuilding the hearts of those people who need our support right now.

I cannot recall a time on our continent when we have been so wracked consistently over a period of several months with a string of major natural calamities. In the past there have been massive natural disasters: fires like the Black Saturday tragedy and those around Perth just a couple of weeks ago and the serious floods in many parts of the country. There have also been severe cyclone events in our past history, such as Tracy, which tore Darwin apart so many years ago. But I cannot recall a period where such widespread flooding across several states coincided with cyclones lashing at our northern coastline while at the same time other Australians were battling severe heat and bushfires. The combined effect of these has been to put extraordinary pressure on our infrastructure and resources and, by extension, our national economy. We are particularly confronted on this occasion by widespread flood damage, and that is why the government has moved decisively to introduce this one-off levy to help.

Before I address the wider national issues arising from these flood events, it is important to begin at the local level, for it is here where the impact of these events has been so personally felt. In and around my own electorate there are communities that have been hit by flooding three times since September last year. No sooner had people finished the clean-up from the September floods and moved back into their homes than they were hit again in January. Then, as we were resuming parliament in February and beginning to act to fund the recovery from the disasters of the summer, they were hit with a further dose of flash flooding. Towns in my electorate like Creswick and Clunes in the Hepburn Shire have suffered enormously. In Ballarat itself the suburbs of Miners Rest, Delacombe and Alfredton, to name a few, felt the effects of flooding. And the neighbouring towns of Skipton and Beaufort were seriously impacted. Numerous houses and businesses were inundated, along with community facilities, including football clubs, senior citizens centres, a community swimming pool, bowling clubs, caravan parks, community halls and playgrounds.

Roads and other infrastructure have also suffered severely. The shoulders of some sealed roads are dangerous now, and the fast-flowing, high volume of water has swept gravel from many of the unsealed surfaces. There is a great deal of scouring damage on sealed main roads in and around culverts and bridges, and in many locations it is a serious mess with roads continuing to be closed. In the best of times, and despite the fact that this federal government has increased local road funding, the local councils in these impacted regions, operating on very small rate bases, struggle to find the funds they need to maintain local roads, bridges and other infrastructure, let alone to try and deal with disasters. When they are confronted with large-scale damage, of the kind they have encountered from the series of floods throughout this summer, they are placed in an almost hopeless situation. The cost of road damage alone in my own area is significant, not to mention the community infrastructure cost. That is why it is fundamental that these flood affected communities and people on low incomes will not be asked to pay.

The temporary flood reconstruction levy we are proposing through these bills is a one-off recognition of the enormous scale of this disaster. The announcement of the levy recognises the remarkable groundswell of community support for the rebuilding effort. This extraordinary series of disasters across wide areas of the nation required an extraordinary response, and that is exactly what you are seeing from the government with these bills.

The damage that has been caused is, frankly, unprecedented, and the task of rebuilding is significant. The recent floods may well end up being the most costly disaster in Australia’s history. Treasury’s early estimate is that the floods will take half a percentage point off growth in 2010-11. The rebuilding task will add to GDP over time, but that does not dilute the impact felt by many Australian businesses today. There is an obvious impact, for instance, on our farmers and on our agricultural production. The tourism industry, a critical element of the local economy where I live—and obviously fundamental to Queensland—is already struggling under the high dollar, and the flooding only exacerbates the challenges that are confronting this sector.

These floods, as we have heard mentioned often in this place, brought about the absolute best in Australians, again exposing our great generosity. Australians’ donations to the flood appeal have reached some $180 million to help individuals. But what we are talking about in terms of what is needed for reconstruction is 30 times that, some $5.6 billion—needed to rebuild roads, bridges and ports, and to get the economy up and running again in those local communities. That is what the flood levy is helping to do. Under this package 60 per cent of taxpayers will pay less than $1 a week. We are asking someone on $80,000 to sacrifice $2.88 a week. We have made big cuts to the budget, but the levy is needed to rebuild flood affected regions.

These bills impose a temporary flood levy on Australian residents and foreign residents, individual taxpayers, with taxable incomes of $50,001 or more in the 2011-12 income year alone. The levy will be applied at the rate of 0.5 per cent of taxable income between $50,000 and $100,000 in the 2011-12 income year. The levy will be applied at the rate of one per cent of taxable income of $100,000 or more in the 2011-12 income year. The levy will not apply to low-income earners with a taxable income below $50,000 in the 2011-12 income year.

The bills will make provisions for exemptions from the levy for people who were affected by the natural disaster. The legislative instruments that accompany these bills will ensure those individual taxpayers who have been affected by a natural disaster in 2010-11 will be exempt from the flood levy. It is important to re-emphasise that the levy will impose only a modest charge on taxpayers. About 50 per cent of taxpayers will pay absolutely nothing, about 60 per cent will pay less than $1 a week, about 70 per cent will pay less than $2 a week and over 85 per cent will pay less than $5 a week.

The reconstruction task is going to take a lot of time and a lot of dollars, so the levy alone cannot and will not cover it. The government is making $2 in savings for every $1 of the levy. There are spending cuts of $2.8 billion and savings through the delaying of infrastructure projects of $1 billion, which meets two-thirds of the cost of rebuilding. The remainder is met through the one-off levy.

Paying for the reconstruction as we go is absolutely the right thing to do. While the impact of the floods has been devastating, they have not altered the long-term fundamentals of our economy or the long-term challenges that we face as a country. The task of rebuilding after the floods will mean added demands on our capacity, skills and resources now. This will impact on everybody. Those businesses, councils and individuals in the communities affected in my electorate do not need the added burden of greater economic strain as a result of the floods. That is why we have made room in the budget, through spending cuts and the temporary levy, to fund the rebuild. And it is why we have made room for the reconstruction work by deferring some infrastructure projects temporarily rather than crowding out private sector projects. Applying fiscal restraint now means we can rebuild the flood devastated parts of this country without further compounding pressures in our growing economy.

These bills will provide the government with funding to assist in rebuilding or repairing essential infrastructure that has been damaged as a result of flooding. Infrastructure will need to be rebuilt or repaired in urban, regional and rural areas across this country. I know Australians will understand the need for this levy, and they are willing to contribute—unlike those opposite, unfortunately. They will want to ensure that their fellow Australians who have suffered so much in this summer of natural disasters can rebuild their lives as quickly as possible. They will also want to ensure that this strong economy, the envy of much of the rest of the world, which this government has managed to sustain through one of the most critical financial downturns, will continue to move forward. They will also want to ensure that the initial, spontaneous response of Australians to this unprecedented flooding is consolidated to ensure every prospect of a sound recovery. They will recall the lines of volunteers registering to go out and assist people, whom they have never met before, to clean up their houses. They will note the high level of financial support already provided through the appeals launched in response to the flooding. They will remember the outstanding work, during the flooding, of our great national and local organisations like the SES, the CFA, Red Cross, St John’s Ambulance, the Salvation Army, Victoria Police, service clubs, local councils and the ADF and of the many kind-hearted locals who just got stuck in and helped. They will also note that the opposition has attempted to frustrate the initiative at every possible turn, in the face of the obvious need, and they will not forget that either. They will know that this community support was destined to continue and, as a matter of necessity, will have to continue long after the floods had subsided. They will know that the challenge now is not as it was in the immediate aftermath of the flooding. The challenge now is, as I have stated before, providing the financial capacity to rebuild our communities while maintaining a strong national economy. It is a shame and an indictment of the opposition that they will not do the same.

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

Order! It being 2 pm the debate is interrupted in accordance with standing order 97. The debate may be resumed at a later hour.