Mathias Cormann (WA, Liberal Party, Shadow Assistant Treasurer) Share this | Hansard source

Today we are debating yet another tax from a high-taxing, high-spending, wasteful Labor government. We are debating an increase in income tax rates for all Australians earning more than $50,000 a year unless they qualify for the specific exemption. So why do we have to debate this tax in the Tax Laws Amendment (Temporary Flood Reconstruction Levy) Bill 2011 and Income Tax Rates Amendment (Temporary Flood Reconstruction Levy) Bill 2011? We have to debate this tax because, after three years of Labor waste and mismanagement, our public finances are in such bad shape that, faced with an unexpected disaster, the government feels it has no choice but to whack on another tax. Let us be absolutely clear: if it had not been for the Prime Minister’s waste and mismanagement as Minister for Education with her school halls program, if it had not been for the waste and mismanagement with the pink batts program and with one program after another being maladministered by this Labor administration, there would be no need for this latest income tax hike.

This is the latest in a long list of new Labor taxes. Currently we are debating the flood tax, the mining tax, the carbon tax and student taxes—which of course come after the alcopops tax, the luxury car tax increase and the tax on the North-West shelf gas projects—a whole plethora of new and increased taxes introduced over the last three years of this Labor government. In fact, over the last three years more than $40 billion in new or increased taxes have been introduced by this government. This government has so lost touch with the Australian people that it does not even know a tax when it falls over one. The Prime Minister, the Treasurer and the Minister for Finance and Deregulation again and again went out there in radio land, in 7.30 Report land or on the news and Meet the Press and so on and claimed $40 billion worth of new and increased taxes as what? As savings.

This government thinks that when it whacks another tax onto the Australian people it is actually saving money. No doubt this is because this government thinks that all the money is the money of the government and that the government through its largess makes a decision as to how much it allows people to keep. So this Labor government thinks that, whenever it whacks on another tax on the unsuspecting Australian public, it saves some money for the government. It is a disgrace. Just to put it very squarely on the record, the coalition stands for lower taxes, the coalition stands for fairer and the coalition stands for simpler taxes. The coalition does not support this latest increase in the income tax rates applying to people across Australia.

In 2007 this government inherited a budget that was in very good shape: no government net debt, a $20 billion surplus, $60 billion’s worth of investment in the Future Fund—money put away for a rainy day—and what have we got now? We have had deficit after deficit. We have, as I mentioned, $40 billion’s worth of new and increased taxes and $94 billion’s worth of government net debt, yet still this government cannot find $1.8 billion to help fund the reconstruction effort in Queensland. This reconstruction effort is very important of course and is supported by the coalition. However, it should be able to be funded without having to go back to the Australian people in this ad hoc fashion, whacking yet another tax onto them.

The coalition has taken a very constructive and very bipartisan approach to this. We offered to sit down with the government and find the necessary savings. But that offer was not taken up. Whenever this government is faced with a challenge, whenever this government is faced with a problem, its first response—and instinct—is to go for another tax. This government never makes the tough decisions. This government does not do what is required to keep our public finances in healthy shape. If this government had its finances in order, there would be no need for this tax.

I will talk a little about the reconstruction effort. The Treasury tells us that current estimates are that the Commonwealth contribution to the reconstruction effort will be roughly $5.6 billion. That was an estimate identified before Cyclone Yasi, so chances are it is going to be quite a bit more. So we asked the government: ‘Given that chances are that your exposure is going to be quite a bit more than the $5.6 billion, what are you going to do if you do not have enough money? Are you going to whack on another tax? Are you going to increase it by more? Is the tax in these bills going to run for longer?’ ‘No,’ we were told, ‘there is no way we would do that.’ Of course, the Australian people know that they cannot trust this government when it says that there will not be another tax. ‘There will not be a carbon tax under the government I lead,’ the Prime Minister said. We know what happened to this. So we were a bit suspicious as to how credible these commitments were, but here we are—the government says: ‘No, no, we’re not going to increase this tax any further; we’re not going to make it run any longer. We’re just going to save some more money; we are going to cut some more spending in the budget.’

If you can cut some more spending down the track, if the expenditure will be more, why can you not do it now? In two months time we will have the budget; you can take a strategic approach to all of this. If you can make some more savings now why do you not do that now, and why not look at your revenue and spending commitments holistically in the budget in two months? The Commonwealth budget is $350 billion a year and you cannot find $2 billion out of $350 billion to help fund the necessary reconstruction effort in Queensland? This government is a joke. It is completely reckless when it comes to the management of public finances and that is the reason it nearly lost the election on 21 August last year and was only able to scrape back in with the support of two conservative Independents from New South Wales.

What sort of precedent has been set through this tax? Every time we have a natural disaster will the government come out and say, ‘Let’s have another tax’? We are going to have the bushfire tax and the flood tax and the—