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Tuesday, 22 February 2011
Page: 966


Mr ROBB (7:17 PM) —I rise to speak to the Tax Laws Amendment (Temporary Flood Reconstruction Levy) Bill 2011 and the Income Tax Rates Amendment (Temporary Flood Reconstruction Levy) Bill 2011 relating to the government’s proposed flood levy or flood tax. The coalition of course fully backs strong Commonwealth support for the flood reconstruction effort. Every cent committed by the Commonwealth government, the Gillard government, is backed by the coalition. I should not really need to have to say that, but the fact is that the underlying theme politically, in Queensland at least, that the Labor Party is running is that failure to support the levy means failure to spend that amount of money. It is not said explicitly but that political dishonesty is running throughout Queensland fuelled by the Labor Party. It is totally opportunistic—again, a political opportunity being sought by the Labor Party. The fact of the matter is that support can be offered for the full amount of the money to be spent on reconstruction without the imposition of this levy, this flood tax. It is the reason we are having a debate. The whole debate centres on the means by which the money to be spent on the reconstruction is to be raised.

We are opposing this levy. It is just another new tax, and the last thing that Australian families need at this time is another new tax. It is just another tax. It is poor policy. Many commentators and experts have slammed the proposal, not so much for the cost, because they are not sure of it—not sure who will pay, not sure how the money will be spent, not sure how it will be run—but most importantly because it is not necessary. That is why it is poor policy.

Inevitably it is going to be poorly managed. In fact the government expects it to be poorly managed. So unsure is the government that it has had to appoint a de facto finance minister, a former Liberal finance minister, to manage it because the existing finance minister—in the minds of the Prime Minister and the Treasurer, presumably—is not up to the job. Why else would you appoint a de facto finance minister to oversee the spending of these billions and billions of dollars? It just shows that the government is very aware of its incompetence when it comes to managing public moneys.

This levy has come to symbolise the incompetence and the waste of this government. When it was first announced, I thought it would be seen as another symbol of a new tax, and it is. But I think the reason so many millions of Australians have got their noses so out of joint over this proposal is that they are offended by the fact that this government has wasted so many billions of dollars in the space of just three years—millions and millions of taxpayers’ dollars just wasted—and yet at the first sign of some expense which is unanticipated, instead of looking to live within their means, instead of looking to cut or defer expenditure, their first instinct is to go back to the well, to go back to those people who provided the billions of dollars in the first place, that they have wasted. People are offended that the government’s first instinct would be to do this.

It seems quite ironic to me that at the moment we have two concurrent debates going on: one in this chamber and one in the Main Committee. I will leave this chamber, having debated a new tax which will raise close to $2 billion, and head up to the Main Committee to debate two appropriation bills, which represent over $2 billion of moneys not anticipated in the budget. If this government had just stuck with the budget it brought down eight months ago, there would not be a need for this levy. In fact, there are all sorts of ways to avoid this levy, but this levy was an instinctive response. It is in Labor’s DNA. This is a big-taxing, big-spending and big-borrowing government. They have still not made a hard political decision in over three years of office. They will opportunistically grab any chance to introduce a tax. We will see many more in the rest of this year. You watch the budget. We will have the LPG levy, the mining tax and the carbon tax. We will be awash with more new taxes before the year is out.

This levy is simply not necessary. It sets another bad policy precedent. When the Prime Minister was asked at the Press Club how the government would fund any increase in reconstruction costs beyond the anticipated $5.6 billion, she replied, ‘The money will come from cuts somewhere else.’ Just with that simple response the Prime Minister has confirmed that the levy is not necessary. In other words, if the cost is not $5.6 billion and is, say, $10.6 billion, the Prime Minister said they would find it from savings elsewhere, from cuts somewhere else. That is two or three times the amount of the levy. The Prime Minister making that public commitment to an unlimited amount of overspend without going to another levy and without increasing the levy confirms that there is no need for a levy in the first place. That was from her own mouth!

The cuts should have been the first option. If they were, we would not be here debating these bills. The reaction of the public to the waste is starting to convey the public’s enduring attitude to this government. This government is starting to be seen as a government that cannot competently manage public funds, cannot run the shop and cannot do the basic things. We only have to look to Labor’s mismanagement with the surpluses, the squandering of the $30 billion of surplus, and the wasted billions on the pink batts scheme and all the personal consequences that have gone with that. It is far from over. People are still waiting in line for inspections. The pink batts or whatever has been put in the roofs—in many cases you would not know—needs to be attended to. The fear of fire is still hanging over certain people.

Labor wasted $6 billion to $8 billion on the school halls program. It insisted on the second round of the stimulus program—the $900 cheques that still stick in the craw of so many Australians. Of course they accepted them, but so many thought: ‘This is madness. This is ridiculous. We have just had nearly a three per cent reduction in interest rates.’ Many people were seeing themselves through the financial crisis, but still the $900 cheques went out.

We are still borrowing $100 million a day, so every 17 days this government is borrowing the value of the levy, and it will do so for the next 18 months at least. People find this incomprehensible. How could they in their own family circumstances live by borrowing money for years on end in those sorts of proportions? We will be paying $45 billion in interest alone over the next four years. This all stems from there being no strategic fiscal strategy. We know the budget is full of holes. We know it is a house of cards. It is built on the most optimistic of forecasts. Instead of showing discipline, this government again outsources responsibility to the taxpayers. They have a debt heading towards $90 billion and have spending which exceeds their income this year by about $40 billion—it is the second-biggest deficit in history; it is outclassed only by last year’s deficit of over $50 billion—yet they look to put the pressure again on families.

The government always expect somebody else to pay for their mismanagement. This in many ways underscores the philosophical difference between the government and the coalition. We believe in living within your means. We believe in prudent economic management. We expect the community to take responsibility for their own financial circumstances, and they do. The community expects the government to in turn live within its means whereas the Gillard government believes in taxing, spending and borrowing. This is a pattern that has occurred again and again under Labor governments.

The cynical nature of this government was shown by its preparedness to engage the Greens and the Independents in the funding of the flood reconstruction but not the coalition. We were the ones offering to sit down to identify savings in good faith. We were the ones who offered savings and took hard political decisions and will take the criticism of political opportunism over the next three years, as they seek to use the savings we identified in a political way to undermine our reputation and to create fear amongst people, when the fact of the matter is: if the government had taken tough decisions over the last three years then we would not be debating this tax today.

Again, you see a situation. It followed the Prime Minister, Julia Gillard, proudly spruiking a misleading line that the Treasurer, Wayne Swan, had been mouthing for months. Earlier this month the Prime Minister said:

I want to reinforce this point. We have already made as a government more than $80 billion of savings since 2007.

The only problem with that quite impressive proposition is that it is not true. It is nowhere near true. It is not even half true. The fact of the matter is that, when the Prime Minister and the Treasurer talk about savings, they include tax increases, dividends and levies, not just cuts in government spending. So you have a Treasurer whose extraordinary lack of substance is exposed so much by the Finance department, who fingered this discrepancy. Of the $80 billion, $41 billion consists of taxes, dividends and levies. Even the mining tax is part of the $41 billion and it has not even been concluded yet. In the months ahead the government will classify the planned flood levy as a saving. What an absurd proposition, what a disingenuous proposition and what a stupid proposition it is: the levy we are debating today is a saving. That is the sort of economic tomfoolery that the population is experiencing. There is general resentment within the community towards the levy because of waste and mismanagement. The first instinct of this government is to raise a tax rather than live within its means.

Families are facing enormous cost-of-living pressures. Food prices, energy prices, petrol prices and water prices—they are all essentials and the costs are going through the roof, yet we have the government introducing a flood tax. The tax is not needed. Millions of Australian families are living within their means. The Gillard government needs to take a leaf out of the book of those families and live within its means. (Time expired)