If Senator Ronaldson cannot run an argument for 20 minutes about the flood levy, I do not think there is much value in his arguments at all. I rise to speak on the Income Tax Rates Amendment (Temporary Flood and Cyclone Reconstruction Levy) Bill 2011. We all know that Australia has been hit very hard by natural disasters this past summer, with floods occurring across the nation. We have also faced bushfires and a category 5 cyclone, as well as other storms.
Queensland was hit particularly hard by the floods and by Cyclone Yasi. As a result of these terrible floods and cyclones in Queensland, much rebuilding needs to be done. We know that people lost their homes and their businesses, and vital community infrastructure was damaged or destroyed. We all know that rebuilding will take a long time and will be costly. It will require local communities and all levels of government to work together. Just as Australians support each other in times of natural disasters, we need to be there for each other in the rebuilding phase that follows. The Gillard government are committed to rebuilding after this destruction and we are also committed to sound economic management, and that means that some tough decisions have to be made. As is always the case following a disaster or tragedy, Australians have been generous in helping those who are suffering. The money donated by people across the country following the recent disasters has been most welcome and will help provide relief to those affected. This money will help people who have lost possessions or, worse still, their homes or livelihoods. These people will certainly appreciate that financial support and the generosity that it conveys.
However, as generous as Australians are, these contributions alone are not enough to rebuild all that has been lost. The Australian government will foot the largest share of the bill, as we should. We will not shirk our responsibilities and we will not avoid the challenges presented by these disasters. We will face them head on. We need to rebuild and we need to do it as quickly as possible. We need to prioritise the rebuilding so that the most crucial facilities and infrastructure are rebuilt first.
The Australian government estimates that the contribution needed from federal funds is a minimum of $5.6 billion. That is a massive amount of money, as we all know. In fact it is about 30 times the amount that has been contributed to the Premier’s relief fund. As everyone would appreciate, we need to find this money in addition to continuing to fund our regular programs and services; we cannot simply put everything on hold until the rebuilding is complete. The $5.6 billion does not even include the damages from Cyclone Yasi. The government has assessed the damage from the floods and has decided that the best approach to meeting the cost of reconstruction is to find the money in two ways. Some of the money, two-thirds of it in fact, will come from budget savings. Spending in some areas will be cut or deferred, which, unfortunately, is necessary to meet the costs of the floods. However, in order that more services do not have to be cut or deferred, the government is asking taxpayers to contribute by paying a one-off levy.
For those on the other side, who really do not seem to understand, it is a one-off levy; it is only for a year. The government is not prepared to delay a return to surplus. We said that we would return to surplus by 2012-13 and we will meet that promise. Good economic management dictates that it is sensible not to add pressure to areas that are already stretched. Despite the damage inflicted by the floods and Cyclone Yasi, Australia’s economy will be back at capacity in 2011-12. Australia has $380 billion in mining projects in the pipeline, we have a skills shortage on the horizon and our wages are at healthy levels. These are pressures that are likely to be even more pronounced as we enter 2012-13, our projected year of return to surplus. The government has taken a well-informed decision. It is a sensible economic goal.
The government firmly believes in a balanced approach to meeting the costs of the floods, which is why we have chosen to cut some spending programs, to defer some infrastructure and to impose a modest temporary levy. As I said—and I will keep saying it because those on the other side really do not seem to understand it—the levy the government is introducing is a one-off levy which will apply only to people on incomes of more than $50,000 a year. The spending cuts and deferrals combined will raise $3.8 billion, and the proposed levy will raise $1.8 billion. Despite the levy being modest and sensible, those opposite, in their usual fashion, have decided to oppose it. Before we had the theatrics of Senator Ronaldson yelling, getting very vocal and very loud, as though raising his voice will make a difference to what the people of Australia really want—and the people of Australia are quite supportive of this levy. But those on the other side go around scaremongering, trying to frighten people, giving misinformation, using the ‘tax’ word when they know it is a levy. We all know that the opposition love to oppose for opposition’s sake, and once again this is what they are doing. We had hoped that they might see that the levy is necessary for the rebuilding process, but they have failed to do that.
The Australian people have every right to ask tough questions of the government in order that they understand our decisions. Unlike those opposite, most Australians understand that the levy is an important part of the rebuilding. They understand that budget savings plus some moderate contribution from Australian taxpayers is a fair and balanced approach to raising the needed funds. In opposing this levy the opposition have conveniently forgotten their history of imposing levies. They imposed six different levies during their 12 years in government. If raising a levy is, as they claim, a sign of incompetent budget management, then what does that say about the government they ran? They also tried to impose other levies, unsuccessfully. In fact, since being in opposition Tony Abbott has proposed a levy to fund his paid parental leave scheme. They accuse us of being the party of high taxes, yet while we were trying to cut company tax they were trying to raise it. Abbott’s proposed levy was a tax on families at the checkouts at Coles and Woolies to help pay the wages of women taking maternity leave—women who are already earning $150,000 a year.
Tony Abbott has had several different positions on flood recovery. He embarrassed himself by saying that the National Broadband Network could be scrapped to pay for flood reconstruction. He forgot to account for the fact that the NBN is not just an expense; it is an investment with a commercial return. Then, in early February, he made the statement that there were $8 billion in funds, including in the Building Australia Fund, that were uncommitted. Later he had to revise that down to $2 billion. Both statements are incorrect, and it is a shame that Mr Abbott would attempt to mislead the Australian people to make political gain over such a sensitive issue. Tony Abbott finally settled on the coalition’s current policy when he announced that the coalition would propose further budget savings as an alternative to the $1.8 billion raised by the levy. But how could we possibly trust the opposition to make savings? How can we trust Tony Abbott on his promise when he had a $10.6 billion black hole in his 2010 election costings? Of course it took them two weeks after Mr Abbott made that statement to actually come up with their proposals—two weeks, while he had a fight with his deputy and shadow cabinet over what savings to make. That is what the delay was all about: Liberal infighting. It seems that Mr Abbott’s attempts to make political mileage out of this tragedy know no bounds. After all, while Australians were digging deep to help with the flood recovery, Mr Abbott was soliciting political donations to help fight the flood levy.
We know that no-one likes to pay extra taxes; we absolutely know that. However, we also know that most Australian people are happy to pay a modest contribution—the word is ‘modest’—under extraordinary circumstances like those we now face. The Gillard government has received a number of high-profile endorsements for our proposed levy. For example, Colin Barnett, the Premier of Western Australia, has put aside political differences to support the levy.
Senator Crossin —Who?
Senator BILYK —Colin Barnett, the Premier of Western Australia. He said:
I believe most Australians, most West Australians, are willing to contribute a little bit more to help Queensland get back on its feet.
Queensland Premier Anna Bligh said:
… as a nation we have come together in the past to help out the milk industry, the sugar industry, the workers of Ansett and to buyback guns after the Port Arthur tragedy. I think the people of Queensland are at least as important as all of those other levies in the past.
She is right. The people of Queensland are important—just as important as all other Australians in need of support. The government has also received support from the NGO sector. These organisations include the Australian Council of Social Service and the Salvation Army. The Australian newspaper also supported the levy. An editorial said:
… the imposition of the levy is reasonable and responsible.
That sums up what a good government should be. The Gillard government’s approach to funding flood reconstruction is both reasonable and responsible.