Before we broke for question time I was saying in 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 that I thought most Australians would be happy to pay a modest contribution under such extraordinary circumstances and I was re-emphasising that this levy is a one-off levy. Taxpayers will only have to pay the levy during the 2011-12 financial year. This legislation ensures that this levy will be in place for only 12 months.
The government believes the levy is being implemented in a fair way, because people who earn under $50,000 will not have to pay the levy. This means that 50 per cent of Australian taxpayers will not have to pay the levy. They are the 50 per cent who can least afford to pay it, and we are protecting them. People earning above $50,000 will pay according to how much they earn. So those earning between $50,001 and $100,000 will pay 0.5 per cent. People who earn above $100,000 will pay one per cent. As an example, a taxpayer earning $60,000 per annum will pay 96c per week, which is not much when they have received tax cuts of $25.96 per week over the past three years. They are still coming out $25 in front. People earning $80,000 a year will pay $2.88 per week. Even a cup of coffee costs more than that these days. They will pay 10 times less than the tax cuts they have received over the past three years.
It is also important to note that those people affected by the floods will not pay this levy. That includes those seriously affected by recent disasters, including Cyclone Yasi. Exemptions will be provided to people who received an Australian government disaster recovery payment. They will also be provided to people who were affected by a declared disaster and who meet at least one criterion for an Australian government disaster recovery payment, even if they did not receive a payment. An exemption will also be provided to New Zealand special class visa holders who were technically ineligible for the Australian government disaster recovery payments but who have received an ex gratia natural disaster payment.
This legislation also provides for other exemptions to be made under legislation if they are required. As previously mentioned, the levy forms only one part of the flood rebuilding measures. We have also decided to defer some infrastructure projects to help meet the costs. This will allow us to meet capacity constraints and to redirect funds to the rebuilding process that needs to occur. Deferrals are being made in a number of different areas to ensure that they are fair and that no one program or state is burdened greatly. The deferrals will help to free up skilled labour and building materials for reconstruction that must occur.
The next two years are crucial as we manage the reconstruction process and the mining boom. It is important to note that state governments have agreed or at least accepted the deferrals that have been made. There has also been the need to make spending cuts. This is never an easy process but at times it is necessary, and this is one of those necessary times. The Gillard government has acted decisively and made the tough choices. As a government we have kept spending lower than in any single year under the Howard government. The government has capped the National Rental Affordability Scheme and the LPG Vehicle Scheme to limit the costs involved. We have made the tough decisions to cut some funds from lower education priorities because the outcomes can be achieved through other initiatives. One example of this is the capital development pool. Funds from the Building Better Regional Cities program and the Priority Regional Infrastructure program will also be redirected to the flood rebuilding process.
The government has also made the decisions to abolish, defer and cap access to some carbon abatement initiatives. The Green Car Innovation Fund and the Cleaner Car Rebate Scheme are among these. This has been done because these initiatives are less efficient then a carbon price and will no longer be necessary. Other initiatives are best delayed until the full impact of a carbon price has been felt.
Central to these savings is the government’s commitment to a carbon price. Indirect measures have only ever been a poor substitute for a carbon price. They are not needed if we have a carbon price. The Australian government is legislating for a carbon price this year. The government realises that it is important to taxpayers that we are accountable for our management of their money. The federal government has agreed to make an advance payment of $2 billion to the Queensland government to kick-start the rebuilding process. This will be done in the current financial year and will be done as soon as arrangements can be finalised.
Both the Australian government and the Queensland government are putting in place mechanisms to ensure that the money is well spent and managed appropriately. The Australian and Queensland governments will sign a national partnership agreement to establish rigorous conditions for the use of federal funds. The Gillard government has also appointed the well-respected Major General Michael Slater as Chair of the Queensland Reconstruction Authority. Prime Minister Julia Gillard has also announced that Mr Brad Orgill and Ms Glenys Beauchamp will sit on the board of the QRA. Both Mr Orgill and Ms Beauchamp are experienced and successful in their fields. The Prime Minister has also appointed Senator the Hon. Joe Ludwig as the Minister Assisting the Attorney-General on Queensland Flood Recovery. Senator Ludwig will sit on the Flood Recovery Cabinet Committee of the Queensland government and provide reports to federal cabinet.
The federal government has established a reconstruction inspectorate to increase scrutiny and accountability throughout the rebuilding process. The inspectorate will report to the cabinet subcommittee on natural disasters, which is chaired and deputy chaired by the Prime Minister and the Minister for Regional Australia, Regional Development and Local Government, Simon Crean.
Former Premier of New South Wales and former federal Minister for Finance the Hon. John Fahey has been appointed to lead the inspectorate. He will be supported by Mr Martin Albrecht and Mr Matt Sheerin, who are experienced in building and accounting respectively. The inspectorate will have the following powers: to scrutinise contracts, to inspect projects, to investigate complaints made by the public, to liaise with state agencies and to scrutinise requests by local government for reimbursement. The inspectorate will receive support from experts as needed and will require states to provide independently audited financial statements with their claims.
The Gillard government is committed to rebuilding following the devastating floods. We are committed to it for the long haul. Australians stick together in times of need and I am pleased to be part of a nation that has such pride in mateship. To reiterate, I understand that most Australians are happy to pay the small amount that we will be asking them to pay because these are such extraordinary circumstances. It is a one-off levy and it will be paid during the 2011-12 financial year. The bill will ensure that this levy is only imposed for 12 months. We believe that it is being implemented in a fair way.
Senator Williams —It’ll be there for years.
Senator BILYK —I will take that interjection, Senator Williams. Your side are very good at forgetting that you implemented a number of levies during the Howard government years. In 12 years, there were six levies. For your side to jump up and down and say that if we implement a levy then we have not got any financial accountability is completely hypocritical and completely bizarre. The people of Australia realise how bizarre it is for your side to jump up and down and carry on about it. We had histrionics in here earlier in the day from Senator Ronaldson about the flood levy. He was jumping up and down and getting all theatrical. I am not quite sure which school of theatrics the opposition members come from. It was money that was probably not completely wasted, but in some situations they make too much of a fuss too often. They oppose everything that we put up. They are not interested in anything of significance. They do not support the flood levy. What they are saying to the people of Queensland is, ‘We don’t really care; we’re not willing give up 80c a week to help you guys rebuild your state.’ It is absolutely abhorrent of the opposition to stand up and make such fatuous claims and try to scaremonger so much. They are trying to frighten the people of Australia. I do not think that it does the opposition any good or that it benefits them in any way—which is of not much concern to me, but it belittles the whole concept behind the flood levy and what it is meant to be doing for the people of Queensland and Australia.