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Wednesday, 23 February 2011
Page: 1113


Mr CHESTER (10:46 AM) —I rise to speak in relation to the Tax Laws Amendment (Temporary Flood Reconstruction Levy) Bill 2011. Before I do, I would like to seek a moment of indulgence to briefly reflect on the terrible tragedy which has befallen our New Zealand friends. There is no other nation more closely linked to Australia than New Zealand, and when our Kiwi cousins suffer we suffer with them. The earthquake in Christchurch may have occurred in New Zealand, but it has certainly shaken all Australians as well. As we watched the drama unfold yesterday on our television screens, and again this morning, we could not help but feel the pain of those who have lost loved ones or who have been injured in this terrible disaster. I would like to associate myself and the people of Gippsland with the comments made by the Prime Minister and the opposition leader in this House yesterday.

We must stand ready to help our Anzac mates in their time of need, and I think it is a great tribute to our nation that we already have rescue crews on the ground working through the rubble and doing their best to recover people from this disaster. We hope for miracles today in Christchurch. It is going to be a very difficult time for everyone involved in this rescue effort. We hope for miracles; we pray that they will be safe, and we pray that the rescuers themselves will be safe and given the strength to do the job on behalf of our nation. There are many New Zealanders in my electorate, and I am sure most members would have many Kiwis in their electorates and throughout Australia, and our thoughts and prayers are with them all today.

In relation to the bill before the House, I will be voting against the proposed tax for several reasons. But before I outline my exact reasons I want to clarify a couple of points. First is this Labor myth which has been perpetuated again by the gentleman just speaking: that somehow the coalition is against rebuilding the disaster-hit communities. The coalition stands shoulder to shoulder with all Australians, and we are committed to getting on with the job of rebuilding these communities.

I find it offensive in the extreme that those opposite suggest there is any sense of backsliding in our determination and commitment to help rebuild those communities that have been affected by these events. The people in Queensland who have been hit by floods and cyclones, the New South Wales floods, the Victorian and Tasmanian floods and the Western Australian bushfires show that it has been a terrible summer of natural disasters across Australia. It has been tragic in the lives lost and also in terms of damage to private property and public assets. Quite rightly, the people of Australia look to us in this place to provide some leadership on the rebuilding effort.

I believe that it is reasonable and appropriate for us to agree on the fact that we need to rebuild. But we can have a difference of opinion about how the federal government pays for that and how it should be funded. I take offence on behalf of the member for Brisbane, who is in the chamber today, at the suggestions by the previous speaker that somehow she should hang her head in shame when I know the tireless work that she has done on behalf of her community and that all other Queensland members have done on behalf of their communities to support them in their hour of need. I think the Queensland MPs on both sides of the house have done an extraordinary job in extremely difficult conditions. I find it appalling that any member would suggest that there is any lack of commitment from the coalition in the rebuilding effort. We stand ready to support our fellow Australians and we stand with them shoulder to shoulder on the rebuilding effort. We should be spared the self-righteous indignation we have seen and the aspersions that have been thrown from the other side of the House to suggest there is reluctance on this side of the House to support Australians in their hour of need. We just do not believe that we need to impose another tax to do it. We believe there are other ways to fund the work, and we believe that it is not the time for hitting Australian families with another tax when they are already struggling under the cost of living; this is not the time to slug them in that manner.

I stress also that we are talking about public assets and how the federal government pays its share of the reconstruction bill under natural disaster arrangements. We are not talking about people’s homes. There has been a deliberate attempt to muddy the waters, so to speak, by some of the speakers opposite, to suggest that somehow we are not going to help people in their own homes. The issue of people rebuilding their own homes is quite rightly a matter for them and their insurance company and, again, a lot of local members have worked tirelessly to hold the insurance companies to account in this regard. The issues relating to private property losses are a completely separate matter to the flood levy bill that we are debating here today.

One of the problems we have in debating this topic is that the full extent of the damage to public infrastructure is still not known. I believe it is almost inevitable that the Commonwealth will face extra costs beyond what are forecast now. As the full extent of damage to public assets becomes apparent in the weeks and months ahead there will be additional costs borne by the Commonwealth. I have had some experience in this regard in my own electorate of Gippsland. We live in a flood-prone area; there are six or seven major rivers flowing through the electorate, and on every occasion where there has been a major flooding event the first assessment of damage has never been accurate. It has never been accurate, and the cost has always gone up when we have started to realise how much of the public assets have been undermined—roads, rail or riverbanks—whatever they may be. I fear that the full cost of this flooding and these natural disasters across Australia, particularly in Queensland and Victoria—where we still have water lying across vast expanses of the north-west—will not be known for many weeks and months. I believe there will be additional costs to be borne by the Commonwealth.

A point I believe is also worth reflecting on is that there is a very real risk of more flooding in the weeks ahead. Our catchments in many parts of Australia are completely soaked. It will not take a rain event of the same magnitude to cause equivalent damage in the future. We have the very real risk of further flooding this year in many parts of Australia, and the Commonwealth must stand ready to accept the fact that there could be a larger bill coming our way. The damage bill could easily escalate in the weeks ahead, and the Prime Minister has said in the past that this levy that is proposed and put before the House today will not be increased and any additional costs will be met by cuts or deferrals to other programs in the budget. So it really does beg the question: why not make that decision now instead of imposing another tax on Australian families who are already struggling under the increased cost of living?

My reasons for opposing a levy come down to a few key points. Firstly, if the government had managed the budget properly in the first place, we simply would not be in this mess. Secondly, any new tax that is imposed will have a definite flow-on impact on consumer confidence, impacting particularly on small businesses in regional communities. Finally, and I believe most critically, there is a genuine risk that any new tax will reduce the community’s willingness to donate in future emergencies that may occur because they fear they will be hit by another government tax in the future. That is a very important point to remember, and I will come back to that in a moment.

The issue of the government’s management of the budget is key to this whole debate. Labor simply cannot manage money. In the past three years they have a record of expensive bungling and mismanagement almost across the board. There is hardly a minister who has not been touched by some example of mismanagement and a failure to deliver value for money to Australian taxpayers. We have had the home insulation scheme, and the great tragedy of that scheme was that young men lost their lives. In economic terms, it was a waste of $2.5 billion.

We had the school program, which the previous speaker was most indignant about. There was a cost blow-out of more than $1 billion before the program even started. We have a $16 billion program, and in my electorate BER now stands for ‘builders’ early retirement’. The BER program has been an opportunity to gouge money out of Australian taxpayers, and the state Labor government failed miserably in its job to be a watchdog and a guardian of taxpayers’ funds to ensure value for money. There was at least $2.7 billion wasted under that program, and I fear that in my electorate the state schools are the ones that fared worst of all. My children attend state schools—and I am a fierce advocate for state schools—in my community, and it is a great irony that this government, which claims to stand up for the state school system, would allow their state government cohorts to see a worse quality result in state primary schools across our nation in comparison to the Catholic and independent sector. I am still receiving reports in my electorate of poor workmanship, almost invariably carried out by building firms which have travelled out of Melbourne to undertake work in my electorate and have no local ties whatsoever. They have undertaken work at inflated prices and left my school communities very bitter indeed.

We also had the government’s appalling effort with the Green Loans program. Too many assessors were trained, and people were out of pocket by several thousand dollars and had their hopes of starting their own small business dashed—another example of a Labor Party which cannot manage money. There was the panicked response to the global financial crisis. There was the handing out of $900 cheques to a total of about $13 billion. It still stuns me that someone—in fact, several ministers on the other side—thought it was a good idea to hand out $900 cheques for people to buy plasma TVs with. That was about all we got out of it. It was a ridiculous policy position, and we find ourselves without any shots left in the locker when it comes to paying for natural disasters when we have spent $13 billion of borrowed money on $900 cheques.

A prudent government, a decent government, would have had plenty of money in the bank if it had not panicked and squandered so much in the previous year, but that is typical of this government. It always panics under pressure. It treats taxpayers’ money as if it is a blank cheque. It has failed to deliver value for money on a wide range of projects and has even had to resort to hiring a former Liberal finance minister to oversee spending on the flood recovery program. It begs the question about the former Labor finance minister: was he busy or something, or was he not even asked? Did they go straight to a former Liberal finance minister to oversee the government’s expenditure in the flood recovery?

If Labor had not wasted so much money over the past three years, there would have been plenty of capacity to manage a disaster of this magnitude—and I accept these were major disasters, right across the nation; everyone accepts that. But a decent government which had been prudent with the Australian taxpayers’ money would have been in a position to fund this recovery effort. That is what people expect governments to do with their taxes: manage the economy well, achieve value for money with every project, and put some money away for the proverbial rainy day. This government inherited a set of budget books which were in great shape, and it has destroyed them. Labor’s first response is to introduce a tax. In a $350 billion budget, it is hard to believe that the $1.8 billion to be raised from this new tax could not be found in budget savings measures. But avoiding the hard decisions is the Labor way.

As I said earlier, I am also concerned that any new tax will have a flow-on impact on consumer confidence and affect small business owners, both within the disaster areas and beyond. A lot of members have tried to downplay the significance of the tax by running through the income thresholds and indicating that many taxpayers will only pay $5 per week. That has been their claim, and I do not have any reason to doubt their word on that, but the Treasurer has not even been able to tell us how many people will pay the tax in the first place. He has not even been able to tell us that most basic of all facts. How can we sure that it will secure the $1.8 billion that they have talked about? Maybe it will be more; maybe it will be much less than that. How would we know? The Treasurer himself does not know.

In any case, I believe that taking any disposable income out of the economy at a time like this is a bad move, and I detect a real softness in the Australian economy at the moment in terms of the retail sector and the hospitality industry. Small businesses are doing it pretty tough at the moment. I am not sure that those on the other side actually realise that. There is a real softness in the market in terms of retail and hospitality. Small business people are struggling, and anything which damages consumer confidence at a time like this will be bad for small business and bad for employment, particularly in regional communities like mine. Consumer confidence, as we all know, is a very fickle beast, and this new tax will undermine that confidence and have a negative impact on spending in the small business community in particular.

Finally, I believe—and I think this is the most contentious point of this whole new tax—that there is a risk that any new tax will reduce the community’s willingness to donate in future emergencies, because people will fear that they will be hit by another tax. I think that is a key point and is the big difference between the government’s levy and those that have been introduced in the past and by the Howard government in particular. Those opposite have had a field day, running through previous levies and pretending that they were all the same. But the key difference is that with the previous levies—whether for the gun buyback, the dairy industry or others that have been raised—no-one was actually asked to make a personal donation in advance of that levy. Former Prime Minister John Howard did not go out into the community and say, ‘Here, donate some money and I am going to buy back some guns.’ He just introduced the levy, and people had not made a personal commitment of any funds at all.

I think there is a fundamental difference between this levy and the previous levies that members have talked about. I believe there will be a genuine reluctance in the future for people to donate, and it is disappointing, because people throughout Australia—in response to the Black Saturday bushfires and these most recent disasters—have been extraordinarily generous in giving their hard-earned cash over to community organisations to help with the recovery effort. They give because they want to give, but I worry that in the future they will say, ‘I was going to give $100 but, hang on, I might just give $50 because chances are I’m going to be hit with a tax down the track,’ and they will hang onto that fifty bucks. I think that is a real problem for us with this new tax.

The other issue is that, even if you have already donated your time, goods or cash, you will still have to pay this tax if you exceed the income thresholds. Many members on this side have talked about that issue, and I think it is a fundamental difference that the members opposite need to understand. You cannot tax the Australian ethos of helping out a mate. You do not tax the Australian spirit out of existence, and I fear that is what we are doing with this new flood levy. People have already given, and they are going to be hit with a tax and will be reluctant to give in the future.

My final word of warning is to Queenslanders: watch very closely how the Labor Party administers the donated funds. After the bushfires in 2009 the Australian community donated about $380 million, and that $380 million was so heavily politicised by John Brumby’s government it was an absolute disgrace. John Brumby as Premier issued media releases from his office, on his letterhead, pretending the money had come from the Victorian government when it came from donated funds from bushfire contributions. So I appeal to the Queensland government not to make the same mistake and politicise the donated funds.

This flood tax is another Labor failure and it should be voted against in the House. (Time expired)