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Thursday, 24 February 2011
Page: 1375

Mr WINDSOR (10:38 AM) —It was a great pleasure to be in the chamber to hear the member for Wentworth speak so eloquently. Thank you, Mr Deputy Speaker, for the opportunity to speak on the Tax Laws Amendment (Temporary Flood Reconstruction Levy) Bill 2011 and cognate bill. In my maiden speech—and I think I was standing in this very spot—I made the point that Australia should have a national natural disaster scheme of some sort. I think one of the lasting legacies of this debate and the recent spate of disasters and the fact that we are even talking about constructing a levy to assist in paying for overcoming the disasters—particularly in Queensland but also in Victoria—will be that the preparation for disasters has not been adequate.

I do not lay the blame on the incumbent government. I think governments generally have relied on these things not happening too often and having the wherewithal to accommodate them when they do. The floods occurred and there was recognition that large expenditure was required. Then the cyclone arrived and a revisiting of that expenditure was required. Other events will occur and a revisiting of that expenditure will be required. This indicates to me that any prudent government, particularly in light of the prospect of more extreme events unfolding according to the climate scientists’ views of the world, should have some sort of sovereign fund or an arrangement in place that could involve reinsurance at a state level. I think that is one of the question marks that particularly lingers over Queensland but does not impact as greatly on other states. However, we do require some sort of long-term arrangement whereby disasters of this magnitude are catered for and not at the whim of the political cycle. Funds to cover the expenditure need to be available at the time of the disaster.

As sure as the 1974 Brisbane flood occurred and the 2011 flood occurred, there will be another Brisbane flood. Although there is debate about building a dam of that size, as good as it is, and its worth, human beings will never get it completely right. Human beings allowed those people in Brisbane particularly to build in an area where there had been decimation and disaster before. I think some of the people involved in that sort of planning process need to revisit some of their decisions. It is pointless spending $6 billion or whatever the number is going to be, a large proportion of which will potentially be spent in the Brisbane area, on reconstruction and then the event happening again in two years and we do it all again. We have to learn from this. There may be other mitigation issues to be addressed, particularly in some of the smaller towns. To have allowed the proliferation of homes in the Brisbane valley in the full knowledge that a disaster of that magnitude could occur again—as it had historically—needs to be questioned.

Prior to my maiden speech—which I made 10 years ago now—in this parliament I often raised in the state parliament of New South Wales the need for some sort of national scheme so that any events that occurred were not assisted on the back of the political cycle according to the seat in which they occurred and the budgetary considerations of the government of the day. I listened with interest to the member for Wentworth because of the issues he raised about the budgetary cycle and there has to be a recognition that something needs to be put in place for the long term. The planning processes, as I mentioned, need to be reviewed. The way in which Queensland insures itself or does not insure itself needs to be reviewed. I think the government is moving down a pathway to examine some of those reinsurance and cost issues. The massive costs that have been incurred will come from the taxpayer in one form or another. The flood levy may or may not be part of that funding arrangement, but irrespective of whether it is or it is not the money will be found somewhere.

I suggest that it is time that governments and oppositions got off this horse that the only way you can be considered an economically efficient manager of the nation’s money is to run a surplus budget. This issue has been raised over and over again. The member for Wentworth referred to it again, trawling back through the current government’s response to the global financial crisis. I support Ken Henry in the design of the stimulus package, although its administration does leave question marks. It is easy in hindsight to look back and say that we could have done it for about $20 billion less or $15 billion less. The fact is that we got through that crisis and a lot of people can take credit for it. I do not want to take any credit for it but a lot of people can. We did get through it and we are in very good shape.

As an economy, we are the envy of most economies in the world, which leads me to this issue that we are debating today. I cannot see why one of the best economies in the world has to strike a levy to find funds to assist people in a natural disaster. I will not be supporting the legislation that is before the House today, given the economy that we have got and given the way in which we have been able to come through the global financial crisis. As everybody is putting in their bid, the member for Wentworth suggests the National Broadband Network should be obliterated and the money poured into Queensland reconstruction. I would not agree with that, as he would not agree with the baby bonus being thrown out and poured into the reconstruction, but a lot of people would. I am sure we have all got ways in which we would address any budgetary difficulties that the government may have.

The Treasurer has put himself in a difficult position with this legislation, because by his own admission—and the opposition have trapped him, in a sense, in the politics of surplus and deficit budgeting—unless he is in surplus he will be judged as a poor economic manager. That is not the correct way to look at our economy. Over the last decade we have had these machinations around surplus and deficit. For an economy of our size and scale and because of its health, there is nothing wrong with being in deficit for a short period of time. We did it to overcome a crisis. We can argue about the administration of some of those moneys, but the fact is that the whole intent of the massive amount of money that was spent was to keep the economy pumped up when the private sector had left the building for a short time, and it achieved that end. The private sector is back and the economy is running again. We did that through deficit budgeting. No-one suggested that that was the wrong thing to do at that time—there was a crisis. There has now been another crisis—a crisis in one of our states. I do not see why the same logic does not apply again.

There are a number of ways of doing this. One way the government is suggesting is to impose a levy to pick up part of the bill. If there is another disaster tomorrow, do we strike another levy to pick up part of the bill? I think not. Other ways of doing it are either to run a deficit or to pick it up in the budgetary process. I would have opted for the last two rather than the levy. Therefore, I will not be supporting the legislation before the House today. I know members of the government and various ministers are going to look at this, but I think the parliament should have a good close look at it. I do not think it is good enough to say, as some have suggested, that if you have got a healthy budget you can deal with any of these disasters. If you look back over the various disasters that have occurred, there have been different responses.

In the north of my electorate in New South Wales there is a very small valley which is right on the Queensland border. Some of the properties are on either side of the river that demarcates the Queensland border. They had 22 inches of rain in 24 hours. It was an extraordinary disaster for that particular valley. The Minister for Agriculture, Fisheries and Forestry took the time to come up and have a look. New bridges were virtually washed away and blown apart. It was a mini-Grantham, in a sense, without the loss of life that went through that area. It is the only part of my electorate and New South Wales that can really say that an extraordinary event occurred. Those people should be treated as the Queensland people are being treated in any assistance that is available.

We have farming interests and we were flooded twice. My son lost a large area of crop—probably about half a million dollars worth of income. But he lives on a flood plain and we bought the land because it is a flood plain. People live on flood plains. It is good land because it floods. We have to be very careful that we do not extend the argument that any event of nature that occurs should be treated in an extraordinary way. I am quite happy to treat exceptional events, absolute disasters, with some form of assistance. I do not argue about money being spent, but I do argue about a flood levy being struck. I argue—and some farmers would disagree with me—that every time a flood occurs on a flood plain there should not suddenly be some kind of recompense made available to those people who happen to live there. The beauty of a flood plain, as I said, is that it tends to have the best soils agriculturally and it gets wet occasionally. That is why people pay more money for it, but there are risks in being there.

The final thing I would like to say is that the people of Queensland do need assistance. The governments of Queensland and local governments, in my view, probably did not do their jobs correctly in the past in preparing for a disaster. There have been arguments about the rate at which you could insure against—particularly—cyclone damage, because that part of the world is very prone to cyclones. But I think we have to make sure when we work through this process that all of the state governments are involved, or the national government can strike a national scheme where there will be some degree of cross-subsidisation in the risk assessments of disasters in various states.

It is important that at the end of this process we are not back here next year having this same debate about whether we strike a flood levy to fund a disaster. We have to actually define what an extreme, extraordinary event is, and then have a set of guidelines that kick into gear on day one that assist with whatever it is—the reconstruction process, the assistance to individuals or whatever it is under the guidelines that are struck. But to have this ad hoc arrangement that we have had in the past is something that does need to be redressed. In conclusion, I announce again that I will not be supporting this legislation.