Rowan Ramsey (Grey, Liberal Party) Share this | Link to this | Hansard source

I rise to debate the Tax Laws Amendment (Temporary Flood Reconstruction Levy) Bill 2011 and cognate bill. We are here in essence to debate the government’s proposition that it must have a new tax, a new levy, to fund repairs following a natural disaster—something, as far as I know, that has never happened before in this country. Let me be clear, because the government is not clear on this issue, that our opposition to the levy is not about restricting assistance to those who have suffered flood damage but about how the government chooses to foot the bill.

It has become a disappointing habit of this government to paint resistance to their prescriptions for economic problems as opposition to the general premise that help or change is needed. In fact, it is a case of their way or the highway and the flood levy is just another such topic. I give a couple of examples: first, the NBN mark 1 was principally opposed because of the government’s duplicity on the issue. Remember that the government promised to build a $9 billion fibre-to-the-home network. It was underfunded, it was taking money from the Future Fund—in this case the telecommunication fund—and, as we pointed out at the time, it was commercially unviable. All of these things have proved to be correct, but that did not mean that we in the Liberal Party, in the opposition, did not believe that Australia needed new broadband networks. That is what the government would have you believe. The government paint the picture that if anyone raises concern with the method then they oppose the premise. That is simply not true.

The CPRS is another example. We did not oppose it because we collectively did not believe we needed to reduce our carbon output; we opposed the CPRS because of the method, because of the enormous potential for economic self-harm. They were proposing to move too far ahead of the rest of the world. We were told by the then Prime Minister and his complete team that the CPRS was the only solution and it must be endorsed before Copenhagen. Remember their cry: ‘Just get out of the way!’ Well, guess what—we were right again. The government now believe not only that the CPRS was too early—they abandoned it eventually—but also that the method was wrong. ‘Just get out of the way!’ they said. Being opposed to the method does not mean one is opposed to the premise. Similarly, when we opposed the stimulus package, which included the home insulation disaster, the wastage on the school halls, the Green Loans debacle and $12 billion in $900 cheques, we were told to ‘get out of the way’. It is a pity we were not successful.

The point is that our opposition to wastage did not mean that we were against a stimulus package; we were opposed to a stimulus package which was too big, was badly targeted and would go for too long. It was, inevitably, appallingly managed. We were right in that instance, too. Our opposition did not mean that we were opposed to a stimulus package; it just meant that we were supportive of a smaller, better targeted and better administered package.

Consistently, at least, we now have a misinformation campaign around the opposition’s disapproval of the flood levy. The rebuilding fee for Queensland’s and Victoria’s public infrastructure will be funded under the Natural Disaster Relief and Recovery Arrangements, where the Commonwealth is committed to meeting 75 per cent of the bill. Whether or not we have a flood levy to help pay for this is irrelevant; it is just a matter of how we foot the bill. The government is estimating a total cost of $5.6 billion, but it is early days. They plan to meet around two-thirds from the budget—or from savings, they say—and $1.8 billion from the levy. In total, the government is to raise $350 billion in taxes this year and around $1.4 trillion over the four-year forward estimates, which is likely to match the period it is expected to take to complete and fund the majority of repairs.

I mentioned some examples of their track record of enormous waste, but the big ones are: home insulation, $12 billion in $900 cheques, $6 billion in school halls, Green Loans, GroceryWatch, Fuelwatch, the greater Pacific economic forum—remember that one?—and, now, their intention to spend $50 billion off-budget on the new NBN. Given that record, we in the opposition have no confidence that any new funds raised will be any better spent. The $1.8 billion is just half of one per cent of one year’s budget. Surely any business could recover half of one per cent of budget due to a setback beyond their control. In fact, if we stretch this contribution over the forward estimates, as the spending is likely to go, it will only be a saving of 0.1 per cent. Surely any competent government could meet that infinitesimal saving.

It is often said that a national budget is like a household budget, and the government is very keen on repeatedly saying this levy is only the cost of a cup of coffee a week. They could also have said it is about the price of a light bulb or four rolls of toilet paper. Well, that is right: it is about the price of a cup of coffee, a light bulb or four rolls of toilet paper. But what kind of household are you running if you cannot replace a blown light bulb or buy a four-pack of toilet paper when visitors arrive? That is what this government is incapable of doing. They cannot afford a four-pack of toilet paper for when visitors roll up unexpectedly. It is beyond belief.

In fact, significant natural disasters in Australia are not rare at all. Governments should allow for such events in their contingency funds. Yes, the floods were a very big event. But previous regimes have always managed to meet these kinds of demands without resorting to a new tax. The Labor government inherited a $20 billion surplus and more than $50 billion in savings. They now owe nearly $90 billion, and they blame everyone but themselves.

I recognise the gravity of the Queensland floods. During the condolence debate I chose not to contribute as I believed that those who represented the worst affected areas should be the spokespeople for those affected physically, mentally and economically. I take this moment to pass my condolences to all of those who have been affected. However, I would like to place on the record that the same weather events and, in some cases, the same water has also been impacting on communities in my seat of Grey. I know you are well aware of this, Mr Deputy Speaker Scott, as you have travelled into the area with me. In the north of the state, for almost 12 months we have been battling a very wet season. Let me say that, after a decade of drought, it has been more than welcome, but the damage to local roads has been enormous. There have been weeks and sometimes months during which many properties and a number of mining operations have been unable to carry on their business.

The Birdsville Track has been closed almost as often as it has been open. Even when it has been open, it has been impassable for a vehicle of more than 10 tonnes, as that has been the maximum weight of the totally inadequate ferry which crosses the Cooper when it has been in flood, as it was between July and February. Incidentally, the crossing is expected to close again soon as the floodwaters surge in from Queensland—the same floodwaters that have caused the problems in Queensland. The Oodnadatta Track, the Strzelecki Track and myriad other major freight routes have been disrupted, degraded and in some cases totally destroyed by the flooding, and the state government, who has responsibility for these roads, says it has no money to reconstruct them. These roads are now closed after a few millimetres of rain or are so rough as to wreck trucks and equipment. The people that live in this area are also victims of the floods.

Since last November we have seen a spate of flash floods cut a swathe through a number of regional towns and centres in the mid-north of South Australia. The Central Local Government Region of SA Member Councils have confirmed that $20 million to $25 million worth of damage has occurred, the bulk of which is to local roads. Quite simply, these repairs are beyond the capacity of these councils. Without assistance, the repairs will take most of the next decade to complete. While I have not yet witnessed firsthand the latest damage, I intend to do so in the next few weeks and will be assisting the councils in sourcing some essential assistance. While the damage is minor compared with that in Queensland and Victoria, the individual impact on small councils and outback communities is very high.

However, the situation brings into question the South Australian government’s commitment to seek assistance through the Natural Disaster Relief and Recovery Arrangements. I have obtained some figures from the National Disaster Relief and Recovery Arrangements program for the last 10 years. Queensland, before this event, had received more than $310 million; New South Wales had received $194 million; South Australia just $17 million; Western Australia $27 million. Victoria had received $323 million, including relief for the 2009 bushfires, which, at least up until now, had been the most expensive and horrific national disaster—in fact, $270 million of that figure related to the year we responded to the bushfire.

These figures pose a number of questions which I think need answers. Firstly, they suggest that perhaps we live in a very safe spot in South Australia, and that is a very good thing. But the figures also raise the question which others have raised before me—just very recently, here in this place, my friend the member for Moncrieff—and that is the Queensland government’s commitment to insuring its assets. I will leave it to others to explore this issue but I ask that everyone concerned look carefully at the figures I have just quoted and at the relative incentives for state governments to insure.

I also raise the question of just how serious the SA state government is when it comes to accessing federal funds which require them to make a contribution themselves. Further analysis of our local disasters would indicate that most of them have occurred in regional South Australia, where the government seems to have little interest.

In closing, let me say that the possibility of a levy—at this stage I would have to say ‘the probability of a levy’—to help fund repairs is irrelevant to this issue of reconstruction. Whatever method the government chooses to finance its obligations—whether by savings, borrowings or by raising a new tax—the result is the same: the taxpayers foot the bill, and they are becoming very sick of the wastage and excesses of this government. That should not be forgotten.

Laura Smyth (La Trobe, Australian Labor Party) Share this | Link to this | Hansard source

I am grateful to be able to add my remarks to what is certainly a very important debate for our community—the second reading debate on Tax Laws Amendment (Temporary Flood Reconstruction Levy) Bill 2011 and the cognate bill.

I realise that many speakers have contributed to this debate before me—and rightly so. It is one of the starkest expressions of the difference between the Labor Party and the coalition. The difference is not really about the merits of a levy or whether to impose a levy or not—because we all know very well that the Liberals have supported levies before. We did not seem to go for much more than a year of the Howard government’s period in office without seeing at least one levy being proposed or imposed. We saw the gun buyback levy in 1996, the East Timor levy in 1999, the milk levy in 2000, the Ansett levy in 2001, the sugar levy in 2003 and the stevedoring levy in 2006. Indeed, it was this government which lifted the operation of the last of those levies during its first term. The coalition’s tradition continued last year during the federal election campaign, when the opposition leader discovered a new-found interest in paid parental leave and grasped for a levy in order to fund it. So, no, the difference between the parties is not about whether to impose a levy; the difference between the parties that this debate bears out is that we know that there is a limit to politics—we know when to put politics aside; it is a question of judgment—while those opposite play extreme politics. There are no limits to which those opposite will not go and no depths that they will not plumb. They have no idea about when to say, ‘This is a matter about which we should be making a bipartisan commitment.’ There is a state to rebuild. There are people who are living with devastation and loss who need some practical assistance to recover. Let’s get on with supporting the rebuilding of infrastructure so that they can do just that.

Most of those opposite have no instinct for when it is in the national interest to work cooperatively in this place, and I hope and I trust that this absence of judgment will ultimately be their undoing. The test for all of us in this place is to work out what our limits are—what we are prepared to stand for and what we are not prepared to do irrespective of the political opportunities that may be presented. That is particularly pertinent in this parliament, with its fine balance of representation and the heightened expectations of our respective constituencies that we will work constructively together for the good of the nation.

The Inter-Parliamentary Union has had some fairly useful things to say about the responsible role of an opposition in its Guidelines on the rights and duties of the opposition in parliament. It notes:

… the opposition in parliament must show itself to be responsible and be able to act in a statesmanlike manner … In its action, the opposition must not seek to hinder pointlessly the action of the government …

I cannot think of a better description for this debate, and for the bulk of the recent actions of the present opposition, than an endeavour to hinder pointlessly the action of the government. We have seen the opposition’s displays of opportunism in this debate and in other very important contemporary debates, and it is time for those right-thinking people in the coalition to put the national’s interests before their party’s interests. I know that there are members of the coalition who are having their limits sorely tested by their party’s leadership on a variety of issues. It is time for them to consider whether that is why they have struggled so hard to be in this place and to represent their communities.

It is not the case that the Leader of the Opposition has not ever considered what the national interest might mean; it is just that he puts the blinkers on when it suits him. The opposition’s insatiable desire for political relevance—their sound and fury—seems to have overpowered any sense of rational judgment. We heard the Leader of the Opposition remark during the election campaign, in relation to his own paid parental leave levy, that sometimes for very important social reasons—for national interest reasons—you have to say, ‘We need the money and we cannot summon the money out of thin air.’ So the question for all of us is: is the government’s response to natural disasters such as those that we have seen during this summer in the national interest according to the Leader of the Opposition’s test? Is it a very important social reason? I think that most right-thinking people would probably say yes. Most of us might just consider it the most important current social reason for the introduction of a levy. These bills deal with the consequences of an event that could not be forecast in budget measures and which requires an extraordinary and timely response from government.

I have listened bemusedly to some of the speakers on the opposite side of this debate as they have, so very earnestly, tried to manufacture a logical rationale for not supporting a flood levy. I find it particularly curious that certain of our parliamentary colleagues from Queensland are amongst those opposing this important recovery measure. I think they almost believe their own confection, but then I remember that to believe in the worth and merit of their own position they would need to have in fact reached a consensus position.

This debate is not a true debate—that would imply that an alternative case be put, a substantive case, something that presented some meaningful way of funding the flood recovery. But there is not one, because the coalition is so desperately divided over the nature of the budget cuts it has cobbled together in a politically opportunistic way that there is no meaningful alternative proposal.

When pressed to reveal budget cuts to fund the flood recovery, it should come as no surprise that the first places the coalition looks to are things such as: capital expenditure on schools, local schools programs, GP superclinics and aid commitments within our region. The look to the wholesale slashing of funding to the automotive industry and putting reform of the Murray-Darling onto the long finger—yet again—after they failed to give effect to any meaningful reforms after more than a decade in office. This is a piecemeal approach, which confirms precisely what we have always thought about this opposition: given half a chance they will look to cuts and deferrals in education, health and progressive policies that better support our industries, our environment and our water security.

Still they do not seem to have reached a consensus position about some of these cuts with dissension against the will of the opposition leader coming almost daily and from all angles. Its jumbled approach to cuts and its well reported track record of miscalculating budget cuts means that in effect the opposition is simply saying no to the prompt rebuilding of infrastructure. I hope that all of those who have been affected by the wrath of floods over this summer remember just that.

Paying for the reconstruction as we go is the right thing to do. The scale of rebuilding as a consequence of the floods will mean that there is an added demand on our capacity, our available skills and our resources. It is for this reason that this government has created room in the budget through spending cuts and has proposed the temporary levy to fund the enormous rebuild.

I believe that most Australians recognise that this is the right thing to do. They know that this is to be a temporary levy with a prescribed end date. They know that it is being applied in a way that is calibrated according to the earnings of each individual and that it is progressive. We know that around 50 per cent of Australian taxpayers will pay nothing additional under the levy proposal. We know that over 60 per cent of taxpayers will pay less than $1 per week. We know that about 70 per cent of taxpayers will pay less than $2 per week and that over 85 per cent of taxpayers will pay less than $5 per week. We know that those people who receive an Australian government disaster recovery payment for a flood event in 2010-11 will be exempt from the levy.

So the levy is appropriate, it is targeted, it is sufficient, it is timely and importantly it is temporary. But it is not just the government which is making those kinds of observations. The levy proposed by the bills before us has been very well received by many in the finance sector and many more in our community generally. CommSec’s Craig James, for instance, has remarked that this is ‘the right levy for the times, modest in size, temporary, progressive and applying to those on higher incomes’.

We know that the damage caused by recent flooding is unprecedented, and the task of rebuilding is significant. We know that the recent floods may well end up being the most costly disaster in Australian history. Now is not the time for opportunism. It is a time to exercise judgment in the interests of the nation. Labor’s package, including the flood levy, has been proposed to respond to the needs of those affected by the natural disasters we have faced while preserving the underlying strength of our economy. It is time that all members in this place put the national interest first.

Warren Entsch (Leichhardt, Liberal Party) Share this | Link to this | Hansard source

I certainly welcome the opportunity to participate in this debate on the imposition of yet another tax on the Australian people. Massive flooding occurred in eastern Australia at the end of last year and through to January this year, followed by Cyclone Yasi on the evening of Wednesday, 2 February. The bottom part of my electorate of Leichhardt fell well and truly in the path of the cyclone, and up until about six hours before the cyclone hit we were very much looking at being in the eye of it. We were fortunate in that we were not as badly affected as those areas a little to the south of us, where of course it was an absolute disaster. It is going to take a significant amount of time for those areas to rebuild.

It had a serious effect on our region, an effect equally devastating from a business perspective. The disaster started of course in December with the first cyclone. While there was not a lot of damage, that was just the start of that huge rainfall that travelled further south and we saw it go right through to Victoria.

The impact on us was that people in Melbourne, Sydney and Canberra could see the floods in Queensland and assumed there would be major damage to all of Queensland and so cancelled any intended visits to Cairns, not realising that they were in fact closer to the affected area than Cairns was. The effect on our economy has been absolutely devastating, and this has come on the back of several years that found us with the highest unemployment in the country and businesses already struggling.

When you look at the grand scale of what Mother Nature has dumped on Queensland and other states—like Western Australia with the floods in the north and the fires to the south—in the last few months, it has caused a hell of a lot of pain. There was a tragic loss of life with an effect that will take many years to recover from. The Commonwealth is stepping in—and that is expected—to repair and rebuild the infrastructure and with income support for households. This is essential and it is absolutely welcomed and expected from both sides of politics.

The coalition are certainly not opposed in any shape or form to the rebuilding and repair of infrastructure. The rebuilding of Queensland is, of course, absolutely vital. What we do oppose is where the money is coming from to fund this rebuilding. The flood tax that the Gillard government is proposing comes on top of what very generous-hearted Australians have already given, and I see this tax as quite appalling on many levels.

We have great concerns for the capacity of this government to administer large sums of money. Again, I will be quite parochial and refer to my area in Far North Queensland. You only have to look at the Building the Education Revolution fiasco and the pink batts. Combined, these programs cost the Australian people massive amounts of money, to the tune of millions. I know that the pink batts fiasco alone cost something like $2.4 billion of taxpayer funds. That is money that could have been used here very effectively and, from early estimates, could actually fund half the rebuild cost without having to go to another tax. Not only did it cost us over $2.4 billion; it also electrified roofs and was linked to the tragic deaths of four installers, including one in the Atherton Tablelands.

I had examples of brand-new $250,000 school halls being delivered to small communities on the same day that it was being announced that the schools were being shut down. You just shake your head in disbelief that such a thing could occur, so you have to ask the question: how in the hell can you actually trust this government to manage this program effectively and not to stuff it up as well?

There are a number of reasons the coalition is opposing this flood tax that is being imposed on the Australian people. I have to remind the government that the Prime Minister has already called on Australians to donate generously and to volunteer their time. The level of generosity and the amount of money that has been raised has been amazing. Hundreds of millions of dollars have been raised. Before the cyclone occurred in my area, pensioners were putting $10 or $100 into accounts and sending it down to the area. People were sending all sorts of things down there. We had lots of builders and lots of other people travelling down to the area—not to sell their time but to give freely of their time and resources to help immediately, as is the Australian way. We see it happening all the time, and I think the enormous volunteer effort that we saw was nothing short of inspiring. There were literally armies of hundreds of people rolling up their sleeves and helping those in greater need than themselves. In many cases the people who were helping were equally affected.

Even after Cyclone Yasi, people from affected areas in the southern part of the state were coming up into some of the worst affected areas in the far north to assist them, even though in their own areas they were still a long way from rebuilding their own homes. They did it willingly, because it is the Australian way. It is what mates do when the chips are down. If someone owned a truck or a skip bin, or if they had food or other products available, they would just hand them over. They did not expect anything from it, and neighbours really got to know each other and they really appreciated the outstanding effort.

This is not a small tax; it is a very significant tax. I know there have been references to similar levies that were raised by the Howard government, when I was a member of that government, but they pale into insignificance in comparison. If you look at the gun buyback levy, which I do not think anybody would argue was necessary, and even the Ansett levy protecting the entitlements of Ansett workers, none of those amounted to even half a billion dollars—let alone the $1.8 billion that this is intended to raise.

We raised levies in the early days of the Howard government, there is no doubt about it, but when we came into government in 1996 there was an appalling deficit. Remember the Port Arthur incident happened in the same year that we came into government. There were massive deficits there that we had to try to clean up from a previous Labor government. We were trying to get the economy and the financial affairs back in order. If you compare that with 3½ years ago when the Labor Party came to government, there was a $20 billion surplus, there was zero net debt and $60 billion in the Future Fund. Have a look at that: three and a half years later we are talking about a net debt approaching $100 billion. Little wonder we are concerned about the motives of the government raising this as another tax. One thing you can be sure about a Labor government: they are seriously great at creating deficits.

When you have a look at some of the history, they have got serious form here. They have a problem with the sale of Australian cars, so they put up a higher luxury car tax. They have an issue with the miners, so they whack them with a mining tax. They have a problem with alcohol, so they introduce an alcopops tax. They have a problem with people smoking, so they introduce a higher tobacco tax. They are introducing a climate tax through the carbon tax, and now we are hit with a flood; so instead of looking around at what they can do, they go out there and whack on another tax. How can this possibly be seen as good financial and economic practice? It seems that Labor’s default is to punish people by making them pay more, because they simply cannot make up their finances.

The waste just seems to be endless. The Gillard government should bow its head in shame because of this disastrous record of waste. We have a massive NBN program that is going to take forever to deliver and it will not be effective. Surely to goodness there could be something coming out of that. There were thousands of dollars going up to some areas of my community for the flood—to communities in the middle of Cape York. There has been such absolute waste. If they had managed things properly, they would have found considerable savings.

Abusing the generous spirit of the Australian people is not an honourable way to dig yourself out of a financial big black hole. Making the tough decisions to cut spending and do the right thing by a country is the way you should do it, in my view. We should be looking at doing that before we even start considering the levy. To suggest that we take on another type of tax as a first option of dealing with the problem—when they do not even know the size of the problem or what they are going to be faced with—is a reflection of the overall thinking of that mob on the other side. They need to seriously reconsider this. There are certainly other ways that should be considered before they have a levy. It should be used only as a last resort.

Ed Husic (Chifley, Australian Labor Party) Share this | Link to this | Hansard source

It gives me pleasure to contribute to the debate on the Tax Laws Amendment (Temporary Flood Reconstruction Levy) Bill 2011 and related bill. At the outset, I want to acknowledge that I, along with other Australians, had the opportunity to hear reports directly from the member for Leichhardt at the onset of Cyclone Yasi. I was very pleased to hear that he, his family and his community were able to come through that safely—and I note that he had the benefit of the stabilising and calming effects of red grape juice. It was enormously heartening to hear that he and his community pulled through. We had the opportunity through the condolence motion led by the Prime Minister and followed up by the Leader of the Opposition to hear firsthand the impacts on local communities and we were able to appreciate the depth of the human cost that these terrible natural events had on Queensland.

We have had reason to reflect in the past 24 hours on how harsh Mother Nature has been on both sides of the Tasman—to both Australians and New Zealanders. I was moved by the words of the Prime Minister today when she rightly remarked that New Zealanders are our family and that we should provide them with support in this difficult time. I certainly extend to New Zealand our best wishes during what is truly a terrible and burdensome event.

The Treasurer detailed quite graphically the impact of these natural events on Queensland, with three-quarters of Queensland declared a disaster area and floods covering an area five times the state of Victoria. When we take a look beyond the immediate to what the impact will be, we see that it will take about half a percentage point of growth in the 2010-11 financial year. That is the equivalent of about $6 billion stripped out of the real economy. Clearly, Queensland’s key economic sectors have been dealt a significant and massive blow. As you can imagine, the infrastructure has been severely impacted—rail lines, ports, roads, schools and community infrastructure. I remarked upon this during the condolence motion. From the stories my friends the member for Blair and the member for Oxley have recounted to the House and also individually, you can tell that a massive rebuilding effort is required.

The cost of repairs to public infrastructure and the disaster recovery payments for individuals tally up to around $5.6 billion. Importantly, under our natural disaster relief arrangements the Commonwealth rightly picks up about 70 per cent of the cost of the rebuild. It is rightly a major responsibility for the Commonwealth. These two bills, the Tax Laws Amendment (Temporary Flood Reconstruction Levy) Bill 2011 and the Income Tax Rates Amendment (Temporary Flood Reconstruction Levy) Bill 2011, are critical in helping us engage in the massive task of rebuilding essential public infrastructure. I am proud to say that the levy has been constructed with a progressive element at its core. When you look at the way it is structured, you see that people with a taxable income under $50,000 a year pay absolutely nothing, recognising that those on higher incomes have a greater ability and capacity to assist in terms of this temporary level. I think it is important to emphasise that it is a temporary levy that sits for one year only. For those people on taxable incomes of $55,000 pay less than 50c a week. Those on $60,000 a year pay less than $1.

I got the updated figures today from the Parliamentary Library in terms of the impact this may have on the electorate that I am proud to represent—the electorate of Chifley. The median annual income in Chifley is a shade over $61,000 and close to $66,000 for families. So families will be contributing between $1 to $1.50 per week to assist those people to the north of them, in the state of Queensland, who have lost so much. As I previously commented, we are obliged nationally to do what we can to ensure that Queensland can get back on its feet and become the great state that it was and that it should be.

I believe many in the community have donated generously. Again, it is indicated that $200 million has been raised through the fundraising efforts of people in communities across the country. I was proud to see the fundraising drives in the Chifley electorate by local Rotary clubs, like the ones in Mount Druitt, through to the massive Filipino community fundraising effort that took place in Blacktown recently which managed to raise $15,000 in one day to be directed towards Queensland. People are chipping in of the own accord. I got a cheque this week for $10,000, which we will be presenting to the Queensland government, from another group in the Chifley electorate, the Ahmadiyya group from Marsden Park. They financially chipped in themselves. Members travelled to Queensland, provided their own labour and, importantly, consoled people and provided support to people greatly in need during that time. The way that Australians joined together in a combined task in order to help was a truly great thing to watch. As much as we are able to reflect positively on that, we note yet again that the opposition have been unable to bring themselves to the national task of unifying for the purpose of rebuilding Queensland. I have no problem with alternatives. I actively seek other ideas because, frankly, we have a responsibility within this chamber to tease out alternative options to be able to determine the best course of action in deploying government funds or making savings and then using those savings for the purpose that has brought us here this evening.

After beating their chests continually, saying that they would be able to come up with a package that is an alternative to what the government has put forward, and after saying, before parliament resumed, ‘We will be able to define in our own way a savings package free of a flood levy but that can meet the $5.6 billion repair bill to help get Queensland back on its feet,’ they were unable to meet their own deadline. I note, for example, that the member for Wentworth was going around the country indicating that they would be able to find a way to save money by deferring the NBN, which neatly fit within the political agenda of the opposition, which is to do whatever they can to delay the NBN. When it came down to it, they were not even able to put forward the savings task. They did not do anything about the NBN. There are no savings to come out of altering the NBN and they were not able to save a single dollar from deferring any spending on the NBN.

When they were unable to find their own savings, they effectively outsourced policy. They were unable to detect the savings themselves. They basically outsourced their policy ideas to One Nation. We all got those emails going around suggesting that foreign aid be cut or that we cut back the programs that are designed to provide support and provide development of education in Indonesia—something that was started by the Howard government and rightly supported by this government, and it is still supported by previous members of the Howard government. The current opposition, in its recklessness, basically figured, ‘If this is the base level of argument that exists out there and we know it will get support, and we are unable to find the savings ourselves, we will just go ahead and promote that as policy.’ Frankly, it is a disgraceful position and a slight on the opposition that they would have to rely upon those so-called savings efforts with the consequences that flow from it.

In terms of the opposition’s performance, it has been reflected on by many of my colleagues and by others that the Liberal and National parties have used levies as a feature of raising funds from time to time. In particular, I make reference to an article that Peter Hartcher penned back in late January. I think some of his remarks are noteworthy. He rightly points out that the Liberals and the Nationals have had no problem in using a standard tool for managing all sorts of demands and exigencies. Tony Abbott proposed, as has been remarked upon by the Treasurer, a levy to fund his program for paid parental leave. Peter Hartcher reported:

The opposition says it wants the Gillard government to instead pay for the flood damage by making cuts to other government spending. In other words, the opposition is trying to force the government into a difficult position. It has urged Gillard to dump the national broadband network to find the savings, for instance.

Peter Hartcher then makes the point:

The opposition, in short, is playing pure, unadulterated, 100 per cent politics with the recovery from a national, natural disaster. This is an error of judgment.

A number of remarks have been made that, frankly, need to be taken on. There is the idea of a contingency fund. We had some comment from members opposite about a contingency fund. They propose that we lock up billions of dollars. Instead of spending it on need, they propose that we lock up billions of dollars and use that for, effectively, a rainy day. Regarding the billions of dollars that could be used on vital infrastructure, health programs, schools, roads and whatever the government believes is reflective of the demands of communities, those opposite believe we should lock it up and not touch it at all.

One of the good things as a member is that you get good analysis provided from time to time. The Australian Strategic Policy Institute, in its February 2011 issue of Special report, said this on the front page, headed ‘Sharing risk—financing Australia’s disaster resilience’:

On average, the Australian community spends $1.58 billion each year in recovering from natural disasters …

Effectively, they want us to lock up $1.58 billion every year, but they have a problem with us raising, for one year alone, $1.8 billion from a flood levy.

The other thing that is supposed to count as analysis by the other side is this idea, put forward earlier in the debate, that a government budget is like a household budget. It is simplistic in the extreme when you consider that governments fund roads, schools, hospitals, research and the Defence Force. The types of responsibilities placed on government that require us to be able to step forward and fund programs, with the complexity involved, cannot be likened in any way, shape or form to a household budget. These are tough decisions that need to be made but that the opposition were unable to make, even when they set their own deadlines, and yet they come in here and spout this type of stuff.

Similarly, they lectured us about fiscal responsibility while going into a federal election campaign knowing that they had an $11 billion hole in their own costings. I am sorry, I am never going to be lectured by the opposition about fiscal responsibility when they propose a series of programs to win office and know in their heart of hearts that they cannot even fund them properly. By the way, if the opposition has a problem with the BER, as I have heard a number of members say here and in other places, why don’t they hand back the BER spending that took place in their own electorates? They do not, they cannot and they are not up to the task that is required of this legislation. (Time expired)

Paul Neville (Hinkler, National Party) Share this | Link to this | Hansard source

Despite the very engaging title of this bill, Tax Laws Amendment (Temporary Flood Reconstruction Levy) Bill 2011, it is plainly and simply a flood tax. It does not meet the standards of former levies on several fronts. Before I outline where it fails, let me first say this: I have no objection to paying levies that are just, necessary and uniformly applied—note ‘uniformly applied’. Here again, this particular tax, or levy, if you want to call it that, does not meet those requirements.

The first thing is its size: $1.8 billion. Medicare aside, that is 3½ times the size of the previous largest levies, such as the dairy levy and the gun buyback levy. The second thing is the precedent. We have never before in Australia’s history, certainly not in recent memory, used levies for natural disasters. They have always been funded through consolidated revenue. You can look back at precedents such as Cyclone Tracy and the 1974 floods in Brisbane and come all the way through to Cyclone Larry and the Victorian bushfires and you will find that levies have not been imposed. They have always been funded from consolidated revenue. The third thing is its application. Is it applied uniformly across the country to all people according to their means? No. People who have already received various forms of flood payment will not be required to pay the levy. There is an unintended downstream consequence of that. The member for Page proudly told us that this would only be applied to 50 per cent of the population, as if there were some virtue in that. There is no virtue in that. She mentioned that one of the more recent levies, the gun buyback levy, was applied to 80 per cent of people—and so it should have been. If we have a levy it should be applied according to means, uniformly across the spectrum to all Australians.

The fourth thing is how it was imposed and how it was characterised. It was imposed after the Premier’s appeal in Queensland began. The Premier’s Disaster Relief Appeal, which to this point has received about $220 million, was at about $180 million to $200 million before the Prime Minister announced this levy. In my view, that was cynical. If you had intended to impose the levy, why would you have not imposed it earlier? I will tell you why: because a lot of people would not have donated. One of the downstream effects of this is going to be the impact on philanthropy. Will people be as willing as they were literally in their tens of thousands to sweep streets, wash down houses and help people? Will they donate generously if they know there is going to be a tax imposed to do that sort of work? It is creating a precedent for a disaster tax. Once you have done this once you can always go back a few years later and say, ‘Oh, well, we had to do it for the Queensland floods; I suppose we can do it now.’ Then, as I said, the effect on philanthropy could have long-term impacts that you cannot foresee at this stage.

Then there is its credibility. Hardly an economist in Australia said it was a good idea. People like Saul Eslake and Professor McKibbin said that it was not necessary—it was one, but the least favourable, of the alternatives that the government could have chosen. It was, might I say, the easy way out. As the member for Higgins characterised it, it is the makings of a disaster tax.

There is plenty of scope for the government to be able to handle about $5½ billion worth of debt. If you have a look at the direct tax income in the budget papers—things like income tax, super tax, company tax and GST—from about 2009 through to 2014, you will find that from 2009-10 through to 2010-11 there was a growth in income of $28½ billion. The next year, 2011-12, there was another $28½ billion. The year after that, in the forward estimates for 2012-13, there is $22 billion. In 2013-14, there is $20 billion. In total, that is near enough to $100 billion. Are you seriously telling me that a government that is concerned with people’s futures and believes all its own rhetoric, which we have heard today, about the poor people of Queensland, Victoria and Western Australia could not find $5½ billion out of $100 billion in the four years from last year onwards? What sort of managers do we have here?

Have a look at some of the things that were cut to make up that amorphous $5.6 billion. Quite apart from the $1.8 billion, $1 billion is going to come out of infrastructure works across Australia. But the greatest irony of all, if Queensland is the great concern of this government, is that the government has taken $325 billion—nearly a third of the money—out of the very state that needs it most, and it has largely taken it out of roadworks and floodplains. The greatest systemic failure during the flood crisis, and to some extent during the cyclone crisis that followed, was the Bruce Highway. My colleagues here from North Queensland and from the Riverina, on the border with Victoria, know all about this. The Herbert River flood mitigation plan cost $40 million and it was deferred.

I might be a cynic, but I would like to think that when these things are imposed, if the government is going to cut or defer six infrastructure projects, it would try to do it fairly. But—surprise, surprise!—five of the six projects are in coalition seats. Even more surprisingly, three of those five were firm, hand-on-heart promises of sitting Labor members who have since been defeated. I might be cynical, but why would you cut those projects? I add that the sixth project is in the seat of the Independent member for Kennedy.

The other thing I put to the government about management and the question of why it could not find $5.6 billion is that one of the things that we did was to create the Future Fund of $70 billion. We created a communications fund, which has been raided, of $2½ billion. We had $6.5 billion in an education endowment fund for our university research into the future. The Future Fund was going to be able to fund the long-term superannuation needs of the Public Service. In all, we had put aside about $100 billion by the time Labor came to power.

Michael McCormack (Riverina, National Party) Share this | Link to this | Hansard source

Where is it now?

Paul Neville (Hinkler, National Party) Share this | Link to this | Hansard source

My colleague the member for Riverina says, ‘Where is it now?’ It has gone, and in its place is a debt of $79 billion. So we have gone from $100 billion in reserves to $79 billion in debt. That is truly extraordinary. I stand to be corrected, but I think that would amount to about $4½ billion of interest—that is, twice what the levy is going to raise.

You can look at this from any angle, but I think the worst thing of the lot is that the Prime Minister tried to characterise this as ‘mates looking after mates’. It is nothing of the sort; it is pure, unadulterated spin by a government that cannot manage and did not want to delve into its reserves properly or plan over a period of three or four years to put sufficient funds aside to look after eventualities like this. Where flooding has occurred, even some of the $1,000 community grants have been badly administered. In fact, the Treasurer said that anybody who applied for one of those and did not need it was ‘low-life’. Even if you met the guidelines, you were still ‘low-life’. But the only low-life are the people who make rules that cannot be adhered to properly or who are cavalier and then try to pull the thing back when it gets out of control. That is where the low-life lies. This is a bad tax. It could have been funded much more easily from another source. It is a disgrace and it is an insult to impose it in the name of mateship on the backs of people who have suffered tragedy.

Debate adjourned.