Fiona Nash (NSW, National Party, Shadow Parliamentary Secretary for Regional Education) Share this | Link to this | Hansard source

I rise this morning to continue my contribution to the debate on the Tax Laws Amendment (Temporary Flood and Cyclone Reconstruction Levy) Bill 2011 and the Income Tax Rates Amendment (Temporary Flood and Cyclone Reconstruction Levy) Bill 2011.

Stephen Parry (Tasmania, Liberal Party) Share this | Link to this | Hansard source

And a fine contribution it was.

Fiona Nash (NSW, National Party, Shadow Parliamentary Secretary for Regional Education) Share this | Link to this | Hansard source

When I left off I was, I believe, talking about the government’s complete inability to manage the economy and about the waste and mismanagement that we have seen from this government since they came to office. I was discussing the different points of view of the two sides of the chamber. Obviously the government think that there should be a whacking great new tax on the Australian people to pay for assistance to the flood victims. We on this side do not. We believe that, with a budget of over $350 billion, this government are surely able to find savings measures to allow them to pay for the flood reconstruction. That would seem a fairly simple equation.

People out in the community certainly believe that the government should have gone down the road of finding those savings. When they look at the wasted money, the waste and mismanagement from this government, people quite rightly say, ‘Why can’t the government find some avenue other than whacking a great tax on us?’ Let us just have a look at a few of the cost blow-outs that we have seen from this government. Remember, colleagues and those who are listening out there across this beautiful land, that this is the reason the government do not have the money to help the flood victims. The reason the government do not have the money to help the flood victims is that they have wasted so many Australian taxpayers’ dollars already that there is simply no money left.

Let us have a look at a couple of those blow-outs. Everybody would be very well aware of the Building the Education Revolution, BER, program. There was a $1.7 billion blow-out on those school halls. That figure of $1.7 billion sounds a little familiar, does it not, colleagues? It sounds familiar because it is awfully close to the $1.8 billion that the government are trying to tax out of the Australian people. Logically, if the government had not wasted that $1.7 billion, they would have the money to assist the flood victims. Those on the other side will, I am sure, have a million excuses for that, but it is not good enough—the Australian people deserve to be treated fairly and they do not deserve to be whacked with another great tax.

Then there was the pink batts disaster. I think the amount that was wasted or mismanaged in that program was around $2.4 billion. It is no surprise that now, when the government is trying to put another great tax on them, the Australian people are saying, ‘We are not in the slightest bit impressed, Julia Gillard, Prime Minister, that you are going to tax us.’ They understand that this government has simply wasted billions and billions of dollars and that that money could have gone to help the flood victims.

The list of ALP cost blow-outs, waste and mismanagement is endless. I am sure, Senator Parry, that we all remember the computers in schools program. That one blew out by $1.2 billion.

Stephen Parry (Tasmania, Liberal Party) Share this | Link to this | Hansard source

Unbelievable.

Fiona Nash (NSW, National Party, Shadow Parliamentary Secretary for Regional Education) Share this | Link to this | Hansard source

It is true—$1.2 billion.

Government Senators:

Government senators interjecting—

Fiona Nash (NSW, National Party, Shadow Parliamentary Secretary for Regional Education) Share this | Link to this | Hansard source

I see my colleagues on the other side of the chamber have woken up. The reason they are interjecting is that they do not like hearing this. They do not like it being on the record—billions after billions wasted and mismanaged. Then, colleagues, we had GroceryWatch. Was that not an absolute stunner of a program? Labor promised ‘practical measures to increase competition and empower consumers’. It was a complete failure and it was abandoned—$7 million was wasted on a completely misguided idea, all part of this government’s grand plan to make groceries cheaper.

The government are hopeless and it is because they are hopeless that they need to tax the Australian people to help the flood victims. The list goes on—the solar homes program had an $850 million blow-out and the Green Loans program wasted $300 million. They have spent over a billion dollars on consultants since coming to government, probably because they do not have a single decent substantive idea of their own.

Stephen Parry (Tasmania, Liberal Party) Share this | Link to this | Hansard source

They need consultants on how to break promises.

Fiona Nash (NSW, National Party, Shadow Parliamentary Secretary for Regional Education) Share this | Link to this | Hansard source

They manage to break promises on their own very easily, Senator Parry. Still the list goes on—stimulus advertising, $50 million wasted; climate change advertising, $14 million wasted. This next one I am particularly interested in: 150 public servants to administer the emissions trading scheme. Last time I looked, we did not have an emissions trading scheme. The Australian taxpayer paid $81.9 million to implement an emissions trading scheme which we do not have. That, to me, should ring alarm bells right across this country—$80 million to administer a program which does not even exist. It is things like this which rile people in the Australian community who are so furious that this government is about to put yet another tax on them to help flood victims. There is not a person across this country who does not want to help flood victims and their communities—not one. Australians object to this government putting another tax on them when their history and track record of waste and mismanagement is there for all to see. If this Labor government had any idea how to manage an economy, they simply would have the money to help flood victims and their communities without putting a massive new tax on the Australian people.

It is interesting to hear the arguments from the other side. It is obvious, from what we have heard so far, that the government do not have any arguments that stack up. Yesterday, I happened to be in the chamber to hear Senator Bilyk’s contribution. She pointed out that the levy will be in place for only 12 months. Please! Who believes the government on that one? With their history of broken promises and Senator Bilyk saying, ‘The levy’s going to be in place for only 12 months,’ who can believe that? You cannot believe this government. A very good example of why you cannot believe this government is the Prime Minister’s backflip on the carbon tax.

Senator Bilyk raised the carbon tax yesterday, so I am really only responding to what she said. Before the last election, this Prime Minister said to the Australian people, ‘There will be no carbon tax under a government I lead.’ What do we have this week? We have the Prime Minister saying to the Australian people, ‘I’m going to give you a carbon tax.’ You do not have to be a rocket scientist to realise that that is a complete backflip. The Prime Minister lied to the Australian people. If the Prime Minister wants to give the Australian people a carbon tax, having told them before the last election that there would not be a carbon tax—and many people based their vote on the fact that the Prime Minister said before the last election that there would not be a carbon tax—then Prime Minister Julia Gillard should take that carbon tax to the people at an election before implementing such a tax. That is the only right, proper and fair thing for this Prime Minister to do because so many believed her when she said that there was not going to be a carbon tax.

Treasurer Wayne Swan even said that the coalition saying there was going to be carbon tax was a ‘hysterical allegation’. Remember that? The coalition were correct. We were absolutely dead right in questioning the Prime Minister. We were absolutely dead right in saying that she would bring in a carbon tax. Look at what she is trying to do now. She is trying to give this country a carbon tax.

A carbon tax will increase the cost of groceries, for families by around $300 a year. It will increase the price of fuel by 6½c a litre and will lead to losses of jobs, sending jobs offshore. The government loves talking about the ‘clean energy economy’—the phrase of the moment. We had ‘decisive action’ last year. I doubt many in the government would be able to explain what they mean by the clean energy economy. They keep talking about jobs from the clean energy economy, but there is no detail. They are not talking about what those jobs will be or where they will be. They are not saying, ‘Farmer Joe from over here will have to go over there to do something in IT. That’s a clean energy job. That’s good.’ They simply have not thought it through. Companies like BlueScope Steel have been talking about the enormous impact that a carbon tax will have on their company. We will see entire businesses forced offshore and Australian jobs will be lost. If we let our industries collapse and rely on imports for things like steel—and that could happen—we will be at the mercy of the countries selling us their product. Guess what will happen then? The price will go through the roof.

While this legislation is about the flood levy, I feel it is appropriate to respond to Senator Bilyk’s comments yesterday about the carbon tax. You cannot trust this government. When they say that this flood levy will be in place for only 12 months, you simply cannot believe them. I know my good colleague Senator Mason would agree with me entirely.

Brett Mason (Queensland, Liberal Party, Shadow Minister for Universities and Research) Share this | Link to this | Hansard source

I always do.

Fiona Nash (NSW, National Party, Shadow Parliamentary Secretary for Regional Education) Share this | Link to this | Hansard source

Thank you, Senator Mason—I am not sure that is entirely correct, but close. We simply cannot trust this government. It has lied to the Australian people. It said that we are not going to have a carbon tax. How on earth can we believe them when they say that the flood levy will be in place for only 12 months?

Jan McLucas (Queensland, Australian Labor Party, Parliamentary Secretary for Disabilities and Carers) Share this | Link to this | Hansard source

Because it is in the legislation.

Fiona Nash (NSW, National Party, Shadow Parliamentary Secretary for Regional Education) Share this | Link to this | Hansard source

Ah, because it is in the legislation! The wonderful thing about this place is that we are masters of our own destiny and legislation can be changed. Legislation is often changed, legislation is often amended. While I appreciate your contribution, Senator McLucas, I do not think anyone falls for that furphy either because amending legislation is what we do. I do not think people across the country are going to be comforted by the fact that it says in the legislation that the levy will be in place for only 12 months.

People simply have stopped trusting the Prime Minister and this government—if they ever did—because they know that this government says one thing and does another. They know that the words that come from this government do not translate into action. This government has absolutely no vision for the future. There are no substantive policies, and people out there in the Australian community are waking up to that big time. This assistance for flood victims is a tax that should not be placed on the Australian people—it is as simple as that. The one key thought that the Australian people need to keep in mind is that the only reason this flood tax is even being debated, the only reason that we are discussing it as a mechanism to fund assistance to flood victims, is that this Labor government under Julia Gillard and under Kevin Rudd before her—and who knows who is coming next, maybe Bill Shorten or Greg Combet, maybe Stephen Smith; it could be anyone—has no ability whatsoever to manage the economy. It has no ability to make sure that its finances are in order so that when things like the terrible disasters in Queensland happen they can be funded.

The best way to fund assistance for those people is through a surplus. The best way to fund assistance for those people is to have a government that can manage money, and in this Gillard Labor government the Australian people certainly do not have one of those governments. There is waste, mismanagement of money, broken promises—as we saw from the Prime Minister on the carbon tax—and the Australian people can expect a lot more of those things because leopards do not change their spots and this government is not going to change the fact that it is unable to manage the economy and steer this country to any kind of sustainable future.

Jan McLucas (Queensland, Australian Labor Party, Parliamentary Secretary for Disabilities and Carers) Share this | Link to this | Hansard source

I am very pleased to join this debate on the Tax Laws Amendment (Temporary Flood and Cyclone Reconstruction Levy) Bill 2011 and the Income Tax Rates Amendment (Temporary Flood and Cyclone Reconstruction Levy) Bill 2011. First of all let us remember the extent of the damage that our country has suffered during the horrible summer of 2011. We have had floods in the South-East Queensland area and right up to Central Queensland, we have had floods in northern New South Wales, we have had floods in Victoria and parts of Tasmania, we have had the horrific fires in Western Australia and we have had Cyclone Yasi in my part of the world. They have been a series of events that have truly shaken the people of Australia, but I want to put on record my belief in the resilience of Australians and their ability to get through the situation that we face.

As we know, Queensland has suffered terribly. There have been enormous personal losses in people’s homes and businesses and there have been incredible losses to public infrastructure, particularly in the area from about Rockhampton south and in my region as well. As I indicated to the chamber during the condolence debate, the psyche of our community has been challenged. There are many Queenslanders who are suffering from trauma. There are many Queenslanders who are particularly hurt. There are many Queenslanders who are grieving the loss of family members. That is the situation we have on the ground in Queensland at the moment. So now is the time for political leadership in this country to be shown. Now is the time to stand together with people whose lives and businesses have been broken. Now is the time for our political leadership to commit to being with Australians who have suffered so much, to be with them in the rebuilding task. And that is what we are seeing from our government. We have a plan to work with families and people whose businesses have been lost to rebuild their lives. We have a plan to work with our fellow Australians—a plan to care, to build and to stand with those who have lost so much.

But what we have seen from those opposite is another example of opposition for opposition’s sake, another example of fearmongering, another example of ‘divide with the hope of conquer’. When Australians need personal and emotional support, we have seen those in the Liberal and National parties put their own personal political fortunes ahead of the needs of many Australians. Our government has been responsible in designing the funding of the rebuilding that our communities require. Our government will cut some spending programs and defer some new infrastructure to the value of $3.8 billion and we will apply a one-off, 12-month levy to those who are earning more than $50,000 a year and who are resident outside the disaster zones. In my view that is a sensible balance between savings in the federal budget and the broader community sharing the load of the rebuild.

Can I say that the 12-month levy will have a very small impact on family budgets. People who are on $55,000 will contribute 48c a week to this fund. People on $80,000 will contribute $2.88 a week. This is not a large amount of money. The rate that has been set is appropriate to recognise that we all want to be part of sharing the rebuilding load. Even the Premier of Western Australia said that that state wants to help support the people of Queensland. This is about Australia coming together and saying: ‘Let’s all recognise the hurt and the losses. Let’s come together and make our small contribution to the rebuilding effort that is required.’ Someone on $200,000 a year will pay $24.04 a week, which can be compared to the tax cut that that individual will have had. The cumulative tax cut that that person has had is $116.35 a week, so they are still ahead. The arguments that the opposition are running, I can only say, are based on a desire to divide the nation.

The opposition has lacked the leadership that our community needs at this time. The opposition has intentionally confused the issues to promote its political cause. Australians have been generous in their contributions to the Premier’s disaster recovery fund. It is important to remember—and the opposition has been confusing this issue—that the Premier’s disaster recovery fund will be used for the building and replacement of private property but not public infrastructure. The public infrastructure will be funded by government through, as I said, the deferral of infrastructure spending, savings in the federal budget and $1.8 billion that will be derived from a one-off levy. The opposition has intentionally confused the purpose of each of those two funds in the public’s mind.

I want to take this opportunity to thank the many Australians and the many people from around the world who have contributed to the Premier’s fund. Those funds will be allocated directly to needy families whose losses have not been covered by personal means—either through insurance or the capacity to look after the losses themselves. This is a sensible approach. It is a mix of public and government contributions. It indicates that the rebuild in Queensland will be a shared responsibility. It is time for the political leadership of this country to stand with our fellow Queenslanders who are still battling with the disaster rather than continue to see what we get from the opposition.

Brett Mason (Queensland, Liberal Party, Shadow Minister for Universities and Research) Share this | Link to this | Hansard source

The Tax Laws Amendment (Temporary Flood and Cyclone Reconstruction Levy) Bill 2011 and the Income Tax Rates Amendment (Temporary Flood and Cyclone Reconstruction Levy) Bill 2011 are ostensibly about introducing a flood levy, but they are actually about compulsive behaviour. I recall learning, when I was growing up, that Walt Disney was driven to wash his hands 30 times every hour. Other people have a strange compulsion to collect old newspapers and some people collect empty beer cans, but this government tops them all: they think they have to impose a new tax every week. They are fiscally compulsive. No matter the issue—alcopops, carbon, minerals or now the floods—Labor breaks into a cold sweat and yells and gibbers, ‘Tax it, tax it, tax it, tax it.’ That is what this government does.

Everyone in this parliament knows that Labor are imposing yet another tax because they cannot spend taxpayers’ money wisely. That is the crux of this tax. It is a double whammy; it is worse than you might think. The federal Labor government have to impose a levy because the Queensland state Labor government is totally incompetent. I know Senator Xenophon has said a lot about insurance and the failure of the state government to take out insurance. That is true and I accept that it has cost Queensland, and now the nation, billions of dollars. But it is far worse: the cumulative debt forecasted in Queensland state Labor’s own budget papers will be $83½ billion in 2014-15.

I remember Mr Beazley’s $96 billion black hole in 1996 and how outraged the coalition and the community were about that. That was $96 billion with an Australian population of roughly 18 million. The debt for each Australian was roughly $4,000 per head. In 1996 the coalition was rightly outraged and the community turfed out the Keating government. In Queensland, though, it is far, far worse. We have $83½ billion in debt projected for 2014-15. What is Queensland’s population? It is about 4½ million people. The debt for each man, woman and child in Queensland will be nearly $19,000 in 2014-15. That is absolutely outrageous. The irony of this situation is that the federal government, up to its eyeballs in debt, is bailing out a state government drowning in debt—how appropriate for a flood levy.

We know Queensland is a shambles, but let us not let the federal government off the hook. Labor is borrowing $81 million a week in order to pay the interest on its net debt of $89½ billion and it is borrowing around $700 million each and every week—about $100 million a day—to meet its net interest payments, which will increase to $102 million a week in 2011-12. As Joe Hockey has pointed out:

It is also worth noting that for 2010/11 the interest paid on Labor created government net debt will be $4.38bn.

The interest payments on Labor’s debt will be 2½ times the flood levy. If it were not such an incompetent government there would no need for a flood levy but, of course, the government is incompetent. We have to pay off the $90-plus billion government debt before we even start to reduce interest payments. This all assumes that the terms of trade will remain as they have been and, as Access Economics has said, that cannot be assured anymore.

Mr Acting Deputy President, remind me on how many occasions, upon leaving office, has the Labor Party left our country in more debt. On how many occasions since leaving office, when it was defeated by the coalition, in all its iterations since 1901 has the Labor Party left our country in more debt? Let me give the Senate a clue. Labor has been defeated on seven occasions since Federation. How many times do you think, out of those seven times that Labor has been defeated, has it left this country in further debt? Do you want to take a guess?

Michael Ronaldson (Victoria, Liberal Party, Shadow Minister for Veterans' Affairs) Share this | Link to this | Hansard source

Four?

Brett Mason (Queensland, Liberal Party, Shadow Minister for Universities and Research) Share this | Link to this | Hansard source

No.

Michael Ronaldson (Victoria, Liberal Party, Shadow Minister for Veterans' Affairs) Share this | Link to this | Hansard source

Five?

Brett Mason (Queensland, Liberal Party, Shadow Minister for Universities and Research) Share this | Link to this | Hansard source

No.

Michael Ronaldson (Victoria, Liberal Party, Shadow Minister for Veterans' Affairs) Share this | Link to this | Hansard source

Six?

Brett Mason (Queensland, Liberal Party, Shadow Minister for Universities and Research) Share this | Link to this | Hansard source

No.

Michael Ronaldson (Victoria, Liberal Party, Shadow Minister for Veterans' Affairs) Share this | Link to this | Hansard source

Not seven!

Brett Mason (Queensland, Liberal Party, Shadow Minister for Universities and Research) Share this | Link to this | Hansard source

All seven, Senator Ronaldson. Every time there is a Labor government it leaves the country in more debt. It has been the same since John Christian Watson in 1903 right through to Paul Keating, and it will be the same this time. The one thing we know about this government is that whoever the leader is—I do not care whether it is Kevin Rudd, Julia Gillard, Bill Shorten or Greg Combet—it will leave this country in more debt because that is the historical legacy of the Australian Labor Party and it has never changed in 110 years. It is a perfect record. Every time there is a Labor government there is further debt.

The Gillard government is heading the same way. You cannot even argue that somehow this is nation building. What were the government’s two most recent nation-building attempts? One I recall is the pink batts scheme. What a shambles that was—it cost billions as well. The Auditor-General said that nearly 30 per cent of 13,800 houses inspected as of March 2010 had problems ranging up to ‘serious safety concerns’. That meant that over 300,000 home owners have potentially been left exposed to serious risk in their own homes. What a great scheme! It found that the government was warned about the problems concerning quality, fire, safety, fraud and internal capacity before the commencement of the program, but despite the warnings there were still four deaths, nearly 200 house fires and many, many scams and dodgy installations. It is true, and I accept and I think my colleagues do, that Mr Garrett was not to blame. I do not blame Mr Garrett. Who was calling the shots? Mr Rudd was, from the Lodge. He was to blame for this—parliament’s friend—probably the worst Prime Minister since World War II. At least Mr Whitlam—he may have been a fiscal incompetent—believed in something. Mr Rudd believes in nothing, except Mr Rudd.

The second great nation-building program was the Building the Education Revolution. Mr Acting Deputy President, you will recall that. You might recall too, sir, it cost about $16 billion. The question you want to ask is: how could you spend $16 billion and have so many people be so unhappy? How could you possibly do that? The government did it—and do you know why there are so many people unhappy? Because the federal government let state governments build school halls for state schools. That was the grotesque and expensive failure of this government. Sure, some people liked it. My old friend Senator Carr loved it. He loves the state planning, and the old Stalinism was also apparently attractive—he loves all that. But what happened? In the end those poor schools that wanted a library got a gymnasium and those that wanted a gymnasium got a library.

Stephen Parry (Tasmania, Liberal Party) Share this | Link to this | Hansard source

Or a tuckshop.

Brett Mason (Queensland, Liberal Party, Shadow Minister for Universities and Research) Share this | Link to this | Hansard source

Or a tuckshop that was overpriced. What did the Auditor-General find? The Auditor-General found that the Commonwealth government, in particular the Department of Education, Employment and Workplace Relations, did not have sufficient oversight mechanisms to ensure that the Commonwealth knew that state governments were getting value for money when they were building state schools. They did not have sufficient oversight mechanisms. The result of that has cost this country billions and billions of dollars. Do not believe me; believe Mr Orgill. What did he say in his report? Look at the government’s own data in the Orgill report. Take the states of New South Wales, Victoria and Queensland. If state schools in those three states—the three biggest states with more than 70 per cent of schools—were built as efficiently as independent and Catholic schools in those three states, billions would have been saved. If government schools were built with the same efficiency as independent schools, the government would have saved $2.6 billion. If state schools in Queensland, Victoria and New South Wales were built with the same efficiency as Catholic schools, the Commonwealth government would have saved $1.5 billion and there would be no need for a flood levy. There would be no need for a flood levy if the Commonwealth government had built those schools with the efficiency of independent schools or Catholic schools.

I am told, ‘Brett, you are too negative. The government is doing great things—don’t worry, Senator Conroy has it all under control. The NBN is going to sort it out. That’s going to be the great new infrastructure project.’ Senator Conroy is the great white hope but the problem is that the NBN is likely to be the great white elephant. As the debate in this chamber has so often asked, has the NBN passed a cost-benefit analysis? No, it has not. There is still no cost-benefit analysis. How much is it going to cost? All up, about $43 billion to $46 billion, with a Commonwealth contribution of around $23 billion. There is no cost-benefit analysis even for the expenditure of that much money. Then again, pink batts and the BER would not have passed a cost-benefit analysis either, would they? The irony is that Telstra goes off to Hong Kong and builds a wireless scheme there that is doing extremely well, and in Australia six times as many people are accessing broadband through the wireless scheme as through direct connectivity.

Taking all this levy issue it is a disgrace that the closest the federal government came to seemingly sharing the community spirit—Senator McLucas was right, the great community spirit—was their very crude and jarring appropriation of the word ‘mateship’. They appropriated the word mateship, the use of an iconic Australian term, to spin the imposition of yet another tax. Imagine using the words ‘mate’ and ‘mateship’ to spin the imposition of yet another tax—yet that is what this government has done. Perhaps if the government had properly managed the pink batts disaster and the school halls program fiasco, there would not be any need for this confection of mateship from the federal government. Real mates help each other; they do not tax each other. The government should be building levees, not imposing levies. Let us call this for what it is—it is not a mateship levy; it is a financial mismanagement levy. What people are paying for is not the damage wrought by the flood but the damage that Julia Gillard’s government has done to our nation’s economy. That, plain and simple, is the reason for this levy.

Annette Hurley (SA, Australian Labor Party) Share this | Link to this | Hansard source

The temporary flood and cyclone reconstruction legislation allows for the rebuilding of communities, so life can return to normal as soon as possible. Many lives have been greatly affected by these awful disasters in Queensland, Victoria and Western Australia. It was a devastating summer of disaster which has compelled all Australians to support those affected in many ways. I acknowledge all Australians who have provided cash donations, Shoe Boxes of Love contributions and physical labour or have simply given compassionate love and support. All Australians, including, I know, many in my home state of South Australia, sat and watched what happened with deep sympathy and concern, and felt compelled to give support in any manner possible. Unfortunately the disaster claimed the lives of some Australians and caused utter destruction in many affected areas. The lives of the affected are not going to return to a routine of normality when so much around them is destroyed.

This temporary flood levy is getting lives back on track, getting communities back on their feet and getting vital infrastructure back in place for affected communities. It is estimated that the cost of rebuilding is around $5.6 billion, and the levy will contribute approximately $1.8 billion. The levy will meet 75 per cent of rebuilding costs within the Natural Disaster Relief and Recovery Arrangements. This will rebuild essential infrastructure such as roads, bridges, rail lines, hospitals and schools. This is infrastructure that the affected communities need. Sometimes in our history the government has had to ask the Australian people for financial support, and that is what this levy will do. Levies have been implemented in the past and the government has seen fit to introduce this levy at this time in order to restore the vital infrastructure that has been lost.

This levy will be on a temporary basis, in effect for the 2011-12 financial year only. Nevertheless, the Gillard Labor government has ensured that low-income earners will not have to pay. The levy applies to 0.5 per cent of taxable income in excess of $50,000 per annum and one per cent of taxable income for earners of $100,000 or more. For example, an income earner on $60,000 will contribute 96c per week, and someone who earns $80,000 will contribute $2.88 per week. These are modest costs that will only be in place for the one financial year. The levy is very simple in its application, as the levy payments are made through regular pay arrangements, the same as payments are made for the Medicare levy. The Gillard Labor government has also ensured that the people who have been affected by the floods will not have to contribute to the cost of recovery. Recipients of the Australian Government Disaster Recovery Payment, the people who have been affected by the floods and fires, therefore will not be asked to contribute to the flood levy.

The advantage of a temporary levy is that it avoids cutting or delaying government spending that is vital to Australia’s interests. For one financial year the levy does the right thing for affected individuals and families. It seeks a minimal weekly payment from income earners, with payments often less than the price of a cup of coffee. Australians understand this, and accept that this is only for one financial year. They saw the damage done to their fellow Australians and feel it is a necessary levy that does not unnecessarily stop or delay other programs that the government has implemented or is seeking to implement.

This temporary and modest levy should be supported by the Senate, as the levy will not only rebuild the communities affected but also not delay other essential infrastructure investments. Deferrals in infrastructure spending such as the opposition propose will only result in further restraint on productivity and increasing future costs, and it is vitally important that Australia continue to build productivity and continue with its infrastructure spending. Productivity and spending on infrastructure and education declined during the Howard government. That had adverse results for this country and will continue to have adverse results for this country unless this government continues with its rebuilding program. We cannot rebuild without the necessary expenditure and that should not be delayed.

A responsible response to the recent disasters is to implement a temporary levy to rebuild the community infrastructure that was lost, get the communities back on their feet and not burden the nation, preventing it from moving ahead. Not only would the opposition delay investments to national infrastructure; they would also cut spending in international aid—aid that is in our national interest and that stops radicals getting into schools in Indonesia and determining curriculum. This aid provides Indonesian children with a real education, not a radical ideology.

The Gillard Labor government has already sought where cuts can be made and has made those cuts. As a South Australian I support this levy because, in South Australia, we understand the devastation and understand that the lives of Queenslanders, Victorians and Western Australians should return to normal as soon as possible. South Australians understand that without vital infrastructure, such as roads, rails, schools and hospitals, lives cannot return to normal and that the temporary flood levy would help achieve a return to normality. It is very important in Western Australia and Victoria that community infrastructure be returned. But so much of Queensland was affected by these disasters that we face the real prospect that Queensland will suffer another devastating check to its economic growth. This must not be allowed to happen. The federal government understands that its assistance is required in this instance.

Queensland was already suffering from some checks to its economic growth, partly just through a natural phase of the cycle but also through the effect that the strong Australian dollar had on its tourism industry and other industries. Queensland was just beginning to recover and fight back from that, as well as continuing to build its own state infrastructure to cope with the increasing population and the increasing number of businesses.

Not only is it in the interests of Queensland as a state but it is also in our own interests as a nation that every state in Australia is on a strong economic trajectory. We are not certain that we have recovered from the global financial crisis. There may well be a tail end to that crisis and, if so, it is important that every region of Australia is in the best possible situation to withstand that. The government understands that getting aid into Queensland in the short term is very important. We must get Queensland back on its feet in the shortest time possible.

Despite that and despite understanding that all of Australia should contribute to this recovery, South Australians were alarmed to hear Tony Abbott propose, as part of his budget cuts—which were suggested instead of a levy—a $600 million deferral of water buybacks in the Murray-Darling Basin. We have heard from the opposition some scepticism that the levy may not last for only a year. I think there is some scepticism in South Australia that Tony Abbott’s deferral of water buybacks may well turn into a permanent position. Many South Australians remain unconvinced of the Liberal Party’s determination to fix problems in the Murray-Darling water basin. I think that sentiment was reflected in the vote in South Australia at the last federal election.

Tony Abbott’s proposal will, once again, delay action on the Murray River. My understanding, from talking to fellow South Australians, is that they would much prefer a temporary levy to help the affected communities get back on their feet, without taking such actions which cause us to not only stand still but go backwards again. The concern about the opposition’s proposals is that they would, once again, be taking Australia backwards in terms of productivity, innovation and spending on infrastructure. That is the reason I urge the Senate to support these very important bills.

Eric Abetz (Tasmania, Liberal Party, Shadow Minister for Employment and Workplace Relations) Share this | Link to this | Hansard source

The coalition fully supports the government in providing federal assistance to the large task of rebuilding our nation after recent natural calamities. Rebuilding is a task to which we are all committed. The government has estimated the bill that the Commonwealth faces at $5.6 billion—that is, $5,600 million—a large sum in anybody’s language.

We cannot and do not seek to question the need or the quantum. Indeed, the need is huge; the task is overwhelming. As Australians all, we are committed to the rebuild. The question before us is: how will we fund the task? That is the only issue in dispute. The coalition believes that there are other sources to fund the rebuild rather than by inflicting a new and further tax on the long-suffering people of Australia.

We believe that a reallocation of priorities should and could fund the reconstruction effort. Labor has agreed to junk many of its disastrous policy thought bubbles, such as cash for clunkers. The simple fact is that with sound, judicious economic management this tax would not be necessary. This tax, designed to raise $1.8 billion—that is, $1,800 million—through the Tax Laws Amendment (Temporary Flood and Cyclone Reconstruction Levy) Bill 2011 and the Income Tax Rates Amendment (Temporary Flood and Cyclone Reconstruction Levy) Bill 2011, could have been obviated if Australians were spared, for example, the pink batts debacle, with its blow-out of over $1,000 million, or if the Australian people were spared the disastrous border protection debacle, which has seen that budget blow out by over $1,000 million as well, or Labor’s green loans scandal, which has seen a blow-out in its budget of a mere $850 million, and the list goes on. We could talk about Fuelwatch and about GroceryWatch, and the list goes on and on, with this government wasting money dollar after dollar, thousands of dollars, millions of dollars—indeed, thousands of millions of dollars after thousands of millions of dollars.

The best fund for disaster reconstruction is what we as a coalition had when we lost office—that is, a budget surplus. That was our policy in government and it remains our policy in opposition. But Labor frittered it away with their cash splashes and policy debacles that make the Whitlam era now look quite responsible. But why a special tax to fund reconstruction? Why did Labor not go to the Australian people and say, ‘We had a $1,000 million blow-out in our pink batts scheme and we therefore need a levy to make up that hole in our budget,’ or, ‘Our border protection policy is such a disaster it has blown out by over $1 billion and we now need a special levy’? Why did Labor not do that? Because they saw the politics of it and they made a judgment that here was an opportunity to raise a tax. Labor see a situation, see an opportunity and, with Pavlovian-like instinct, they start salivating at the prospect of another tax. If you mention student services, Labor think tax; mention carbon, Labor think tax; mention resources, Labor think tax; mention LPG, Labor think tax; and mention a disaster, Labor think tax. Labor will think tax even in circumstances where they have solemnly promised otherwise.

Labor went to the last election specifically promising to lower the tax burden for every Australian business. Labor promised no carbon tax to consumers, but now what are they doing? They are introducing a carbon tax, and on carbon tax Labor have had all the positions. It was the ‘greatest moral challenge of our time.’ Then, Ms Gillard oversaw its unceremonious dumping. She then claimed credit for it and said no carbon tax under her government, which we now know was simply a deception to win the last election. A tax that was no good in August 2010 is now allegedly fundamental to our economic wellbeing six months later. Ms Gillard and Labor have had more political outfits on this than Barbie has dresses.

The simple fact is that tax is in Labor’s DNA—the bigger, the better—and a quick $1.8 billion tax dreamt up overnight on the back of a national disaster exposes their thinking. In my home state of Tasmania it will rip a minimum of $25 million out of our small economy. That is $25 million worth of fewer jobs, less economic activity and less income for small businesses, and that in a state that suffers the double whammy of a Labor-Green state government as well as a Labor-Green federal government. No wonder we suffer the highest unemployment, with a six in front of the unemployment figure, in Tasmania. Labor then tells us that taxes are somehow good for jobs. If that logic were right, one assumes that you could gain full employment in the nation simply by taxation measures. I do not think so. The simple fact is that taxes do cost jobs, and that is why we in the coalition stand very proud of our record as saying that, whilst taxes are necessary, they should be minimised.

In recent times mention has been made of a Newspoll on this issue of the flood tax, and with great respect to Newspoll I think that their introductory sentence to that poll was such that it weighted the answers in a particular way. More interestingly, a more robust poll of 1,000 Tasmanians, 200 in each electorate, has been held in my home state of Tasmania. That poll showed that Tasmanians are strongly against this tax. Tasmanians are and are known as a very generous people, but just as they are generous they are also discerning. They reject this tax, like the coalition, because it is seen as unnecessary and another example of Labor mismanagement and waste. In that poll the Tasmanian people were given the opportunity of indicating their support for the tax proposed by Labor or the coalition alternative, and 48 per cent of Tasmanians supported the coalition alternative to 40 per cent for Labor’s alternative. Interestingly, in the marginal seat of Braddon, 55 per cent of Tasmanians supported the coalition policy in this area. So I completely reject the assertion made by the Labor government that if you somehow oppose this tax you oppose the reconstruction that is required by our country and that somehow generosity is not within your soul and spirit.

Indeed you can make that sort of political jibe across the chamber to the coalition and think you can get away with it, but when the Australian people and the Tasmanian people have spoken so emphatically in a poll rejecting this new tax, I would defy Labor to go back into the marginal seat of Braddon—just as one example—and say that the people of Braddon are mean-spirited. I say to you that the people of Braddon, like the coalition, are discerning and do understand the adverse impact of this legislation and this unnecessary new tax.

I will also refect briefly on the impact that this bill is going to have on charitable giving. Australians opened not only their hearts but also their wallets in relation to this natural disaster. They have now given well over $10 per man, woman and child. These same people are now being told, ‘No matter that you gave, no matter that you gave generously, no matter that you gave voluntarily, we will now from on high from Canberra, by a Labor government, tax you as well.’

Any future charitable fundraising for disasters will now be inhibited because people will rightly wait to see if a tax will be imposed upon them. In this cynical Labor manoeuvre, always seeing an opportunity for a new tax, rushing in, they forgot to ask the fundamental question: what will this do in the future for charitable giving? What Labor has done, I fear, is poison the well of charitable giving in this country. The Australian people are well known for their generosity and they have given in excess of around $220 million to the victims of the natural disasters, and now they are going to be taxed.

So in the future when there is a fire or when there is a flood and the Salvation Army, the Red Cross or a Premier has a public appeal and says, ‘Please give generously,’ people will quite rightly, as a result of Labor’s actions here in this parliament, say: ‘No, I’m not going to give. My household budget might allow me to, let’s say, give $100 to the appeal, but if Labor is going to tax that $100 off me anyway, then I am not going to give to the charity; I will wait for the tax to be imposed.’ I say to Labor and the crossbenchers, even at this late stage: think very carefully about this tax in these circumstances.

We have also had the nonsense put to us time and time again that the coalition introduced levies in relation to certain circumstances. Yes, we did. What were the circumstances? When we came to government, Labor likes to overlook the fact that we had to plug a huge budget deficit and repay $93 billion worth of government debt. The budget and our economy were in a mess. It took us year after year to pay off that debt, and we had a budget plan and a strategy designed to make sure that the budget went into surplus and would continue in surplus. So, when we had disasters such as that at Port Arthur in my home state, we did impose a gun levy, but that was in circumstances where the government coffers were already stretched.

I also make the point that there were no charitable organisations like the Salvation Army, the Australian Red Cross or other organisations saying, ‘Give generously to the appeal to buy back guns.’ Nor when we were confronted with the East Timor situation was there a charitable organisation saying, ‘Give generously to the East Timor fund,’ as there is with this natural disaster. Indeed, with the East Timor levy, because we were managing the budget so well, whilst we passed the levy into law, we never had to collect the moneys because the economic good times that we had planned in fact overtook the need for that.

Similarly, people can talk about a dairy levy or a sugar levy. There were no charitable organisations asking to give generously to dairy farmers or sugar farmers. This particular situation that we are debating today is in a completely different realm because the charitable sector had moved in so quickly, so efficiently, to try to assist. But Labor, through its deliberate tax grab here, has now, I fear, poisoned the well.

The best method of ensuring that you have a natural disaster fund is to have a budget surplus. There is the old saying—and it is now very true, given the events of Queensland—that any prudent management sets aside money for the proverbial rainy day. Queensland had a rainy day and another day and another day—many days of rain—but had they set aside money? No. It seems now that the Queensland state government made a deliberate choice not to insure. Should the people of Queensland suffer as a result of that? Absolutely not. But should the Queensland government be brought to account for noninsurance? Absolutely yes.

Ms Bligh, while she fronted the cameras very well during the disaster—and I have already said publicly in this place that Ms Bligh performed exceptionally well—might now like to front those cameras yet again and explain to the Queensland people why she did not get insurance for her state like Western Australia, New South Wales and Victoria have. Prudent management requires you to do such things and the fact that we are now debating a new tax, on top of all the other taxes Labor wants to inflict on us, is an example of both state and federal Labor mismanaging their budgets and mismanaging taxpayers’ money. As a result, they want to inflict greater pain.

I repeat again that the coalition fully supports the huge task that faces this nation in rebuilding after the natural disasters. There is no question from our side that it needs to be done, that it should be done quickly and that moneys should be made available. But when you see the record of this government with the pink batts and border protection—each blowing out their individual budgets by over $1 billion—when you see the green loans scandal costing us $850 million, when you see a couple of tens of millions of dollars wasted on Fuelwatch and GroceryChoice, when you see the waste that continually comes from this government, you ask, ‘Could the budget be reprioritised to avoid this tax?’ We as a coalition emphatically say yes. The funds and the budget can be redistributed. Indeed Mr Hockey and Mr Robb have indicated to the Australian people how that could be done to save the $1.8 billion and, as a result, obviate the need for this tax.

It is very interesting that in the last few days we are seeing how the Greens are driving this government. On the day that $1.8 billion was absolutely essential in relation to the funding of the huge task that we have, the Greens were able to come along and demand a couple of hundred million dollars for this and Mr Wilkie from Denison was able to demand tens of millions of dollars for something else, and all of a sudden we ask, ‘Are we going to increase the levy as a result?’ No, it is not necessary. So one wonders where that extra money is going to come from. To sum up, we in the coalition fully support the reconstruction effort. The money is there. The money should be made available without the extra tax burden being inflicted upon the people of Australia.

Nick Xenophon (SA, Independent) Share this | Link to this | Hansard source

I would like to start my contribution to this debate on the Tax Laws Amendment (Temporary Flood and Cyclone Reconstruction Levy) Bill 2011 and the Income Tax Rates Amendment (Temporary Flood and Cyclone Reconstruction Levy) Bill 2011 by reflecting on the impact of the floods and cyclone in Queensland. In human terms they have been devastating. Lives have been lost. Families have been torn apart and communities have been scarred forever. Like so many of us, I have been inspired by the people of Queensland and the way they have come through these incredible disasters. Let me be clear on this: we must find the funds to help Queensland rebuild. We must give Queenslanders everything they need to rebuild their lives and their communities.

Some politicians in Queensland have opportunistically tried to make out that I have some beef with Queensland. I do not. I have great affection for Queensland and its people. My beef, for want of a better term, is with the Queensland government, which gambled with billions of dollars of our money and lost. The first thing we need to ask ourselves is: why do we need to have a levy in the first place? It is quite clear that one of the key reasons this levy is being sought by the government is that Queensland failed to take out natural disaster insurance. Under the current natural disaster relief and recovery arrangements the federal government is obliged to pay 75 per cent of the costs of rebuilding infrastructure after a disaster and the state or territory picks up the remaining 25 per cent. The problem is that, unlike Western Australia, Victoria, New South Wales, South Australia and the ACT, Queensland decided to save money and not take out insurance. That is the only reason the federal government has to find $5.8 billion.

Queensland claims to be self-insured. It is not. If it were, it would not need $5.8 billion from federal taxpayers. There is another term for Queensland’s so-called self-insurance; it is called not having insurance. It is claimed that Queensland currently has a fund of around $700 million, which is well short of the almost $8 billion it would require if it were not for the federal government’s funding of $5.8 billion, leaving Queensland to fund $2 billion given the current federal-state relief arrangements, which split a recovery bill 75 per cent and 25 per cent respectively. The problem with the current arrangements is that the 75-25 split applies regardless of whether a state has insurance or not.

Victoria also got flooded, but because it has insurance the cost to the federal taxpayer will be a fraction of what it would have been had the Victorian government not sensibly taken our disaster coverage. It is a point that is not lost on Victorian Premier Ted Baillieu. It is interesting to note that the Victorian Managed Insurance Authority has a level of transparency and accountability far superior to similar bodies in states such as Queensland. It is also interesting to note that the Victorian Premier, Ted Baillieu, was reported in the media just yesterday as saying, ‘This is something that we all have to pay for. It is something that needs to be sorted out.’

You only need to look at the annual reports of the various state insurance authorities to see the difference in levels of transparency and how little transparency there is with the Queensland fund. Last week Premier Bligh claimed on ABC TV’s Q&A program that disaster insurance was not available for Queensland. It is a strange thing to say given that insurance was available to Queensland. A decade ago it was offered multibillion dollar disaster insurance for infrastructure, including roads, for two events per year. The cost for that was less than $50 million a year. They had senior officials working on this, including Queensland Under Treasurer Gerard Bradley. They sent officials overseas to negotiate with global reinsurers, as I understand it. Then at the eleventh hour the decision was made not to take out the policy so the Queensland government could save $50 million a year, knowing that the federal government under current arrangements would pick up the bulk of any multibillion-dollar bill.

I mention Mr Bradley in particular because he recently gave evidence at the House Standing Committee on Economics inquiry into this levy and his evidence also seems to contradict the known facts in this area. When asked why Queensland did not have insurance, Mr Bradley said:

As I mentioned in my opening comments, the NDRRA is the established mechanism by which the Australian federation manages the risk of catastrophic events. The Queensland government has considered its insurance arrangements in the context of those NDRRA arrangements. We do have in place appropriate insurance through our Queensland Government Insurance Fund, which is a captive insurer.

Also, for infrastructure and other matters that fall outside the parameters of the NDRRA arrangements, for example our major utilities in gas, water and energy and public transport, the authorities who are involved in provision of the infrastructure do consider their appropriate insurance arrangements.

Mr Bradley went on to say:

Indeed, there are insurances in place for certain assets that have been impacted by the floods but do not quality for NDRRA arrangements. We have considered the issue or reinsurance for our captive insurer, but at the time that we considered that we did not consider that that represented value for money for the state. It is the case that some other states do have reinsurance arrangements in place. I am advised by them that generally they do not cover road infrastructure. As I have mentioned, 80 per cent of the cost of this natural disaster relates to roads, so the availability and cost of seeking reinsurance for that infrastructure would be a major challenge.

Listening to that, you could be forgiven for thinking that Queensland could not get disaster insurance that covered roads. But in fact they were offered it and rejected it. I have repeatedly challenged the Queensland government in recent days to deny that they were offered this level of insurance, that they were offered significant, substantial insurance in the billions of dollars to cover their assets, including roads, for a premium of less than $50 million a year.

When pressed about the claim that the insurance did not offer value for money, the Under Treasurer went on to say:

We looked at the case of the Queensland Government Insurance Fund and looked at the availability of reinsurance to cover major events. We sought reinsurance advice from our broking advisers and we did take that to the international insurance industry. But the costing of that and the risk provisions that they proposed did not represent value for money for the state in terms of the deductions for events and the exposures they were willing to cover. They did not, for example, cover natural disaster.

Once again, this testimony seems to be at odds with the information I have received from a number of sources over the insurance dealings of the Queensland government. That is why I believe we need to look at the insurance arrangements in Queensland. Clearly there is such a large gap between claim and counterclaim that an inquiry is needed to get to the bottom of it.

In due course the Senate will also need to seek the key documents so that we can see what was offered, when and for how much. That is very much in the public interest. It should never be good enough for a state or territory government to say, ‘Trust us, we tried to get insurance; now give us billions of dollars.’ Had Queensland taken out the policy, the bill faced by the Commonwealth would be a fraction of what it is now. Ultimately, the Queensland government decided to gamble with billions of dollars of Australian taxpayers’ money and we all lost.

The Queensland government has argued disaster insurance did not represent good value for money. The question is: for who? It might be cheaper for Queensland to gamble with federal money, but it has left the Australian taxpayers with a repair bill that is billions of dollars more than it needed to be. You also need to ask the question: why is it that private householders and corporations in this country can get disaster insurance on the private market—on the global reinsurance market—for the same sorts of events that the Queensland government could have got insurance for?

Certainly Queensland Treasury gets to save $50 million a year or a similar amount for a reasonable premium, but now we have a situation where the federal taxpayer has to find 120 times that amount. Think about that—120 times the annual premium to honour the grossly deficient state and federal funding arrangements. When you look into those arrangements, the deal gets even better for uninsured Queensland and a lot worse for those governments that do have disaster insurance like Victoria, New South Wales, South Australia, Western Australia and the ACT. That is because, under the current GST arrangements, Queensland gets up to 80c in the dollar back of the 25 per cent share they have to pay through increased GST revenue, so state governments that took out insurance lose GST money in order to prop up a state government that did not bother to take out insurance. That compounds the moral hazard. There is a huge moral hazard here when it comes to the issue of taking out insurance, given the current arrangements. There is a positive disincentive, in a sense, for state governments to do the right thing when it comes to insurance.

Some have argued the federal government cannot force the states to take out insurance. I am not suggesting they can. But the federal government can tell the states the consequences of not taking out appropriate insurance. The federal government can withhold federal disaster relief if a state does not take out insurance or it can reduce access to relief if a state or territory underinsures. That is clear, given the grants arrangements under section 96 of the Constitution.

If I support this levy, I want to ensure this is the last disaster levy Australian taxpayers ever need pay, and the federal government should not be expected to reward bad behaviour. I am not suggesting these changes should be retrospective. But I am saying that we should learn from the mistakes of the past—multibillion dollar mistakes. The federal government should never again be signing a multibillion dollar blank cheque to a state or territory that did not do the right thing. We should look after Queensland this time, but we should also have to say, ‘If you don’t get appropriate cover you can’t get federal funds next time.’ If it is good enough for Victoria and New South Wales and South Australia and Western Australia and the ACT, it should be good enough for the Queensland government.

I can indicate that, whilst I will support the second reading stage of this bill, I will reserve my position in relation to the third reading, to the final stage of this bill. I will not be supporting this levy unless changes are made to current arrangements so that states are given strong incentives to seek appropriate disaster cover and strong disincentives if they do not.

Steve Fielding (Victoria, Family First Party) Share this | Link to this | Hansard source

It has been a very tough start to the year for many Australians as we have been hit with devastating floods, cyclones and bushfires. The loss of human life is tragic and is very hard to accept. Also, the trail of destruction that these natural disasters left behind and the damage caused to people’s homes, property, businesses and stock is devastating. Australia has taken a massive hit, including in my own home state of Victoria. In Victoria alone, the losses to the farm sector as a result of the flooding are tipped to reach $2 billion. This is enormous, and it comes on the back of a decade battling the worst drought and bushfire that the state has ever witnessed. I recently went to visit the northern parts of Victoria to see the flood damage firsthand and to speak to those affected. Places like Echuca, Rochester, Kerang and Horsham all bore the brunt of Mother Nature. As a country it is important that we stand behind our fellow Australians and help rebuild those places that were badly affected. On this issue there should be no debate.

The government has proposed a combination of budget cuts and a means tested flood levy, while the opposition has been calling for deeper spending cuts but has had trouble agreeing on exactly what areas should be cut in the budget. Others have suggested we just extend the number of years the budget will be in deficit. Personally, I am wary about going down a path that extends the number years we are in budget deficit. All sides of politics acknowledge that we need to get on with the job of rebuilding our devastated communities and I believe that sharing the cost of rebuilding is the best way forward. Australians have a proud history of coming together and helping each other out in tough times, and that is exactly what is needed in this case. I am also pleased that the proposal from the Gillard government does not ask those earning less than $50,000 to contribute to the levy. That makes sense.

In regard to the discussion about the budget, I believe that the best way to insure against future disasters is to ensure we have future budgets in surplus and, in the longer term, to create a national disaster fund. Given the importance of helping communities to quickly recover, I do not believe we can leave flood, fire and cyclone affected communities hanging in limbo any longer, and we should not let the politics of parliament stand in the way of rebuilding all those communities that have been devastated by natural disasters. I am happy to say that after productive discussions with the Prime Minister, I have negotiated a $500 million prepayment for Victoria for recovery and reconstruction. This $500 million in funding is a huge boost for Victoria. Victorians will now be able to get on with the job of rebuilding the state and restoring things to how they used to be. It will give Victorians some peace of mind. It means the recovery can get underway immediately. It will be used for measures such as restoration of essential public assets and infrastructure, personal hardship and distress assistance, concessional interest rate loans for eligible small businesses and primary producers, and clean-up and restoration grants for small businesses, primary producers and not-for-profit organisations.

I have also raised with the government the important broader issue of the Commonwealth creating a national disaster fund. It makes sense that we learn from these events and make sure we have the appropriate safeguards in place so that we have funds to deal with these issues in the future—funds that could come from such a national disaster fund. I am pleased the government has assured me that it will take steps to examine whether the introduction of a national disaster fund would be appropriate. Family First will be supporting these bills and will continue to work hard to ensure the rebuilding process goes ahead without delay.

Penny Wong (SA, Australian Labor Party, Minister for Finance and Deregulation) Share this | Link to this | Hansard source

Can I make clear at the outset that I am not summing up for the government yet. I understand Senator Sherry will do that on a later occasion, but I thought it was important that I take the opportunity to speak on these important pieces of legislation, the Tax Laws Amendment (Temporary Flood and Cyclone Reconstruction Levy) Bill 2011 and a related bill. I also take the opportunity to thank Senator Fielding for his contribution and for his responsible discussions with the government on this issue.

As the Senate would know, today is the second day of autumn. We saw a summer which was a difficult one for this country, a summer where natural disaster hit many corners of our nation. We saw floods of devastation in Queensland and Victoria, cyclones in Northern Queensland and the northern part of WA, as well as fires in Western Australia. As a nation we have lived through the enormous human tragedy that these disasters have regrettably brought to too many Australian families—people who are dealing with loved ones missing forever, and homes, businesses and livelihoods destroyed. But as Australians we have all risen to the multitude of challenges. We have given generously. We pitched in to help others get through the crisis—sometimes people we know, sometimes people we do not. As has been said by my colleague Mr Swan, this was demonstrated best by the fact that Queensland was running out of gumboots simply because too many people wanted to help. That is perhaps a great testament to the capacity of Australians to lend a helping hand. There was nothing more inspiring, I believe, than seeing so much of the true Australian community spirit—people, sometimes strangers, saving others, helping people, being prepared to work together to help their community and their neighbours.

We now face the bill for repairing the vital infrastructure. As we watched on our television screens or, for those communities who lived through these crises, as we saw firsthand, we saw the enormous destruction and devastation of so many of our communities and, as importantly, so much of the vital infrastructure which enables not only our economy but our community to continue to operate—the roads, rails, ports and bridges that keep this nation ticking. That is what is of importance as we debate this legislation. The Commonwealth government has an important responsibility to make sure the rebuilding occurs, and we know that ahead of us we have a huge task. In economic terms, the Queensland floods represent one of the most costly natural disasters in our history. My colleague the Treasurer has made clear that the floods are anticipated to take about half a percentage point off growth in the current financial year. That has been echoed in public statements by the Reserve Bank. In the short term, we are also likely to see a reduction in coal exports, crop damage of perhaps around a billion dollars, and a hit to our tourism industry and other industries.

The cost of the rebuild task pre-Cyclone Yasi, the government indicated, was in the order of $5.6 billion. The government have made clear that we will find the majority of this cost to the federal budget through spending cuts but that the remainder will be provided by this temporary levy which is before the parliament. The government are taking this approach because we were extremely mindful of the economic and fiscal circumstances the nation faces when we designed this response to this costly set of natural disasters. We are of the view that you have to think not only in the shorter term but also in the medium term. We know that the outlook for the Australian economy continues to be strong. Ours is an economy that is nearing full capacity, and in those circumstances it is economically and fiscally responsible for us to pay as we go.

The Prime Minister announced in late January her package for the rebuild. To meet the rebuild, the government has found cuts in the budget that will contribute around $2½ billion in saves with more to come in the budget process. We have also sought to delay some $1 billion of infrastructure projects. This is again a decision driven by a very keen understanding of the economic circumstances in which the nation finds itself. Where you do have a substantial amount of construction and an economy nearing capacity and where capacity constraints in terms of skilled labour and the availability of capital are present, the government has to be mindful of this when putting its reconstruction package together. We believe it is sensible to defer these infrastructure projects to ensure we give ourselves the room, the space and the capacity to do the rebuilding task. In addition, we propose to fund some $1.8 billion through a progressive levy applicable only to those people earning more than $50,000 a year and only on the income they earn over that amount.

It is true that Australians have already played their part and have given many dollars to help individuals. These are important and generous donations. They help families and individuals get back on their feet. They are about the short-term task of helping people rebuild homes, restart businesses and buy goods to replace those that have been damaged in order to get them through this crisis. This is a very different economic task to the task which is the subject of the legislation before the Senate, because this legislation is about rebuilding essential economic infrastructure—our roads, our rail, our ports. It is a different job. Those on the other side, who I notice have now gone significantly quieter on this issue, who have said it is not a good thing to have a levy to rebuild Queensland because people have already donated money to charities and so forth, are not really being upfront with the Australian people because they know two things: first, that money is for a different purpose and, second, the amount of money we have to find to do this rebuild is some 30 times what has been donated. There has been enormous destruction of infrastructure and that is why the government has announced these plans. That is why we are proposing a modest and progressive levy.

The levy is proposed to apply in 2011-12 for a finite period ending in June 2012. It is a levy proposed to deal with a significant one-off cost to the federal budget and it is a levy that recognises the capacity to pay. As I said, it applies only to people with an income over $50,000. For those on $60,000 a year, the levy will mean they pay less than a dollar a week. If you are earning $80,000 a year, the cost of the levy is less than a cup of coffee a week. The government has also put in place arrangements to ensure that those who were affected by the floods and who receive federal government assistance will not pay this levy. The government is making around $2 in savings for every dollar raised by the levy. We have made a range of tough decisions, some of which have caused some concern in some sectors. We have made some tough decisions and some tough calls to fund some two-thirds of this rebuild, but we think the right thing to do is to take a fiscally and responsible approach to what is a national challenge of rebuilding Queensland and other flood affected areas.

It is disappointing in these circumstances, in the face of these disasters, that the opposition is still clinging to its only strategy, which is to oppose everything. It seems that no is the only word that the opposition understands. Even in this time when one would have hoped the national interest would be put ahead of political interest, we see again the opposition putting politics, or its perceived political advantage, ahead of the national interest—their self-interest ahead of the national interest. We saw a remarkable approach where Mr Abbott beat his chest over a number of weeks about how savings were so easy to find but then had to be dragged unwillingly to the point of announcing those savings. What did we get? We got a series of deferrals, a lot of double-counting and a whole range of backflips. Perhaps the most important point to make is that the opposition has double-counted some $700 million in its savings—$700 million double-counted by an opposition that asserts that it is fiscally responsible. It has claimed savings that it has previously claimed to fund other spending priorities, so essentially it is trying to count savings and spending it twice. You cannot do that in the federal budget, and no responsible opposition should be putting that forward.

The opposition have also taken an interesting position on foreign aid. We know what Mr Downer thinks of that, but interestingly we also know what Mr Briggs and even Mr Abbott’s deputy, Ms Julie Bishop, think of that. There has been much discussion in this place and in the other chamber about the similarity between what the opposition has proposed and some One Nation ideas that were made public. The other aspect of the opposition savings, which I am sure you will not hear Senator Joyce talking about, is that it is quite clear that Mr Truss has been rolled, because a range of the infrastructure saves that Mr Truss opposed are now being supported by Mr Abbott.

Perhaps the most unseemly aspect of the discussion about the levy and the way to fund the floods was seeing Mr Abbott’s emails on this issue in which he sought contributions from Australians to the Liberal Party. At a time when Cyclone Yasi was bearing down and Queenslanders were trying to start the rebuild after the enormous natural disaster, we saw the Leader of the Opposition seeking to use the opportunity to ask people to donate to the Liberal Party. It was really quite an extraordinary act.

The opposition have again said that they are going to oppose this. I think the question the opposition have never answered is why they believe that the levies that they initiated were somehow okay but the levy the government is putting forward to rebuild Queensland is not. Let us remind ourselves of the levies which were initiated under the Howard government: the gun buyback levy, the superannuation surcharge levy, the stevedoring levy, the milk levy, the sugar levy, the Ansett Airlines levy and the proposed East Timor levy. There was also a proposed cleaner fuels levy. And of course Mr Abbott himself during the last election proposed another levy to fund a scheme to see women on high incomes receive their full wage while on leave. So a levy is good enough for Mr Abbott when he wants to buy back guns or help the sugar industry, but it is not good enough to rebuild after the most costly natural disaster that we have seen. The reality is that any analysis of the opposition’s position on this issue would show that they put their political interests above the national interests.

As the Prime Minister said, there was a lot of scepticism from commentators when the government first put forward this package. There were those on the other side who said that no-one would accept it, no-one would ever pay it and it was the wrong thing to do. Over the last weeks what we have seen is the soundness of the argument for the government’s package becoming much clearer in people’s minds. We are pleased that some of the Independents in the House have seen fit to support this legislation and that this has received good consideration by the crossbenchers in this Senate.

It has been an interesting debate. We have heard a lot of rhetoric and fierce opposition from the coalition senators. I notice that the sting has gone out of that now. But I think the political question which really arises in the context of this debate is on Mr Abbott’s fitness to lead the Liberal Party, let alone to put himself forward as the alternative Prime Minister. I am interested to know whether senators on the other side from Queensland are really going to step up and say, ‘We oppose a levy to help rebuild our communities. We oppose a levy that is about providing the support necessary to deliver critical infrastructure and to help our fellow Australians.’ This has been a summer full of tragedy; it is time for us to work together with those communities who have been so badly affected to rebuild their homes, their communities and their lives. I commend this legislation to the Senate.

Debate (on motion by Senator Wong) adjourned.