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Wednesday, 23 February 2011
Page: 1232

Mr MARLES (Parliamentary Secretary for Pacific Island Affairs) (6:45 PM) —After the last contribution I thank heavens that we are dealing with the big issues in this chamber today. I start, on indulgence, by expressing my condolences to the people of New Zealand, particularly Christchurch. They have gone through a terrible tragedy. We know there are people from my electorate in Geelong who have been caught up in that, and that is reported in today’s media. My thoughts go out to their families, friends and loved ones.

We are debating today the Tax Laws Amendment (Temporary Flood Reconstruction Levy) Bill 2011 and the Income Tax Rates Amendment (Temporary Flood Reconstruction Levy) Bill 2011. As members in this place will know, this bill provides for a one-year, one-off levy in the financial year 2011-12 of 0.5 per cent of income on those earning between $50,000 and $100,000 and one per cent on income for those earning more than $100,000. Those earning less than $50,000 will not pay the levy, and of course those who have been affected by the terrible floods which affected many parts of Australia over the summer will also be exempt.

This levy forms part of a much larger piece of architecture dealing with the reconstruction of the parts of Australia which were ravaged by the floods over the summer. I take this opportunity to thank all of those around Australia and those in my electorate of Corio and in Geelong who have made such generous contributions to those who have suffered as a result of these floods. And it was not just financial contributions; it was also offers of help, assistance and volunteering to friends, business colleagues and ordinary Australian citizens in Queensland. It makes one feel proud of the country in which we live to see Australians helping Australians in times of need.

I attended an ecumenical service on 16 January which was emblematic of the sense of solidarity that was being felt in Geelong for all of those who have suffered as a result of these floods. It would be nice to feel that the money raised through those donations would be enough to deal with the reconstruction bill associated with these floods, but of course we know that that is simply not the reality. To date $222 million has been raised in the Premier’s fund, and that is a fantastic achievement by the people of Australia, but the initial estimates of the bill to reconstruct Queensland and other parts of flood affected Australia is $5.6 billion. So it is the responsibility of government in those circumstances. It is obviously completely unreasonable to expect, as we have heard some of the speakers on the other side suggest in this debate, private donations to deal with the reconstruction of the flood affected parts of this country.

The levy is not the sum total of the architecture that is being put in place to raise the money; indeed, the levy will raise $1.8 billion of the $5.6 billion, which means that, roughly, for every dollar raised by the levy $2 is being raised through difficult budget cuts—which I will come to in a moment—and delayed infrastructure. The delaying of the infrastructure is important both to save money and to make sure that the resources exist to put towards the building of the infrastructure in Queensland and other parts of flood affected Australia. The levy component of this package is very modest. For somebody on $80,000 we are talking about $2.88 a week—the price of a cup of coffee. And, by the way, the same person who would be paying that has received the better part of $30 worth of tax cuts since this government came to power. So this is a balanced and sensible package of which a levy is a part.

From the other side during this debate you have heard a sense that levies are almost per se evil. But we know that when the Liberal Party were in power under John Howard we saw the gun buyback levy, the superannuation surcharge levy, the milk levy, the sugar levy, the stevedoring levy and the Ansett Airlines levy, the last four of which were introduced in years in which the federal budget returned a surplus. So there is nothing wrong with putting in place a levy, and one suspects that if John Howard were the decision-maker in this instance he, too, would be entertaining a levy of the kind being put in place now. But, of course, because of the debate that we now find ourselves in and because the opposition’s political strategy, as we have seen, is to pick a fight wherever and whenever they can—which is a real disappointment in the context of such an important issue as the reconstruction of this country in the aftermath of these terrible floods—we find ourselves in the unfortunately partisan debate that we are having now.

It raises the question: if there were not a levy, what ought we to do? What is being put forward by the opposition is that, rather than having a levy, there should be further cuts. We have heard lots of speakers talk about the fact that there is plenty of money there in the budget and it is an easy thing to find the entire $5.6 billion through cuts to the budget, yet we also know that when the shadow cabinet met to work out exactly where those cuts would occur we saw it fracture and atomise. It has been as if a hammer has shattered the glass pane of the solidarity of the shadow cabinet when they have had to come up with an answer to the difficult question of where those extra cuts would come from. So we have had crazy ideas such as cutting the aid budget by $450 million to remove a specific program which was implemented under the Howard government to provide money to schools in Indonesia and which Alexander Downer described as one of the most important counterterrorism programs that the Howard government put in place. All of that, of course, was done under the inspiration of a viral email campaign.

There is one other cut that I want to spend a moment talking about because it is very relevant to the seat of Geelong that I represent. It is the cut in relation to the car industry. As part of the cuts that we are putting forward in the overall package to raise the $5.6 billion, we are proposing a $400 million cut to the Green Car Innovation Fund. The Green Car Innovation Fund has been a wonderful success. To date, $500 million has been committed, which in turn has leveraged $2 billion worth of investment in the car industry. It is really important investment, not the least of which is a commitment of $42 million towards the Ford EcoBoost engine, which is very important in my neck of the woods.

Clearly we would not want to see a cut in the Green Car Innovation Fund, but we did not want to see the floods in Queensland either. When a tragedy of this kind occurs the pain needs to be shared across all sectors and so this difficult decision is being made. It is really important that people understand that the cut being proposed relates to uncommitted funds within the Green Car Innovation Fund. It does not affect any of the funds committed to date, which means that all the projects, including the Ford EcoBoost project, will be honoured to the last dollar. That is to say, the cut that we are proposing to the Green Car Innovation Fund will not affect a single activity within the car industry and it will not affect a single job within the car industry.

This government has been a massive supporter of the car industry. In Geelong, we all remember back in July 2007, in the dying days of the Howard government, the disappointment when Ford made its decision to close its engine plant. We also knew the joy that was experienced just over a year after that, in November 2008, when a new federal government was in place with new partnerships and new support for the car industry and we saw that decision turned around. It is important for people to understand it was not turned around by virtue of a commitment from the Green Car Innovation Fund; it was turned around through automotive program funding and it was fundamentally turned around through the ongoing support which this government has provided to the car industry.

The Green Car Innovation Fund is just one part of A New Car Plan for a Greener Future, which is in turn a $5.4 billion program. The vast bulk of that is unaffected by the cut we have proposed to raise the money for the flood affected parts of Queensland and other parts of Australia. However, the same cannot be said of what is being proposed by the opposition in the event that this flood levy is not approved by this parliament. The other side is proposing all the cuts that we have been putting in place plus $500 million through the Automotive Transformation Scheme.

The Automotive Transformation Scheme is an entitlement based scheme which helps R&D, plant and equipment and production within the car industry. The point is that this is a scheme which is built into the budgets of the car companies. If you cut that, then you affect the jobs of people in the car industry, and there is absolutely no doubt that if this flood levy is not passed and the opposition has their way in putting in place the cuts that they want to put in place there will be job losses in Geelong as a result. That is why I am so passionate about seeing this flood levy passed. This flood levy forms part of a balanced program. It is a fair and balanced program, which includes the levy, and importantly sees the rebuilding of the flood affected parts of Australia right now. For all those reasons it very much deserves this House’s support.

Debate interrupted.