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Monday, 28 February 2011
Page: 581


Senator FURNER (10:36 AM) —I rise today as a Queensland senator to support the Gillard Labor government’s initiative to implement a temporary flood levy to help rebuild the devastated flood and cyclone affected regions of Australia, including in my state of Queensland. In December and January, Queenslanders experienced the worst natural disaster in our state’s history. Lives were lost, homes were lost, schools were lost and infrastructure was lost. The damage bill is now in the billions. To this day, many people are still cleaning up their homes and their businesses and getting their lives back together.

Even though weeks have passed some Queenslanders are not yet able to move back to their homes and in some devastating situations are not able to move back at all. Businesses which were devastated by the floods are still closed. Stamford Plaza, the Jellyfish Restaurant and the Boardwalk Bar and Bistro in Brisbane, just to name a few, are still closed, and in some really sad cases some businesses no longer exist. While people in those areas are trying to get their lives back on track, another natural disaster took place: Cyclone Yasi was one of the biggest cyclones to hit Queensland in recent generations. This is why it is important for all of us to come together today and support these important pieces of legislation: 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. This legislation is necessary to help rebuild roads, bridges, railway lines, hospitals and schools damaged by flooding.

The federal government have estimated it will cost $5.6 billion to rebuild vital infrastructure in our flood affected areas—$1.8 billion will be raised through the temporary flood levy, which will apply to only those who earn an income above $50,000 a year. The federal government have natural disaster relief and recovery arrangements with all state and territory governments and have agreed to meet 75 per cent of the rebuilding cost in declared areas. This is what the flood levy will pay for. The levy will only apply to the 2011-12 financial year and will automatically be deducted by the Australian tax office—in the same way the Medicare levy is collected. It will be charged at 0.5c per cent of taxable income for those who earn more than $50,000 and one per cent of taxable income for those who earn in excess of $100,000. The federal government understand that those who have been directly affected by the floods have already incurred financial costs. This is why they will be exempt from the flood levy. This will be determined by claims made to Centrelink for the Australian government disaster recovery payment. Those who claim an AGDRP will not have the levy deducted from their 2011-12 income.

It is sad to see the opposition still refusing to come on board with this levy to help rebuild those areas affected by natural disasters. Just last week opposition Treasury spokesman Joe Hockey said:

We want to see Australia get back on its feet as quickly as possible. In fact, we believe that the government must do whatever it takes and whatever is required to rebuild infrastructure, rebuild communities and rebuild families as quickly as possible

Contrary to this and directly after this disingenuous claim, he stated 10 reasons why the coalition are not supporting a flood levy—a contradiction in massive proportions. It is also contradictory of the coalition to criticise the flood levy claiming that it is not the right way to raise funds to rebuild. Let us not forget levies are not unprecedented, and the Howard government did not get through its 12 years without implementing its own levies. In fact, every single year the coalition were in government they implemented levies, even though there were surpluses. From 1996 to 2005, a superannuation surcharge levy was implemented to impose extra taxes on the superannuation contributions of high-income earners. It raised $1.4 billion in the first four years. From 1996 to 1997, their gun buyback levy raised $500 million. From 1998 to 2006, their stevedoring levy raised more than $100 million. From 2002 to 2009, an 11c per litre levy was imposed on milk. From 2003 to 2006, a 3c per kilo levy was imposed on sugar which raised nearly $100 million. Additionally, the Howard government’s Ansett Airline levy collected $369 million from 2001 to 2003. Clearly their form on levies shows the coalition do not believe rebuilding infrastructure is worthy enough to impose a levy!

During the last election Mr Abbott promised to implement a paid parental leave scheme and fund it with, yes, a levy—a levy to allow men and women who earn over $150,000 a year to continue to receive full wages while they are on maternity leave. On 9 March, Mr Abbott told ABC AM:

My preference is always to see taxes lower but sometimes for very, very important social reasons, for national interest reasons you have got to say we need the money and we can’t summon the money out of thin air ...

Does he think that rebuilding roads, bridges, railway lines, schools and hospitals is not in the national interest? These people are still in this parliament and they supported the implementation of those levies, yet now they are turning their backs on Queensland communities who are in desperate need of vital infrastructure which was destroyed. But this is what the coalition and their leader, Mr Abbott, say to everything: no, no, no. They take the term ‘opposition’ to the extreme.

What about working families? What about working Australians who need access to roads, bridges and railway lines to get to their employment? If we do not rebuild this vital infrastructure, these working Australians will struggle to buy their weekly groceries and to pay their mortgages or their rent. It is essential to get their lives back on track after these natural disasters.


Senator Ian Macdonald —Ask them about a carbon tax and see what they say.


Senator FURNER —The opposition continue to describe the temporary flood levy as a tax. But once again, with contradiction, Mr Abbott said his own paid parental leave scheme would be funded—


Senator Ian Macdonald interjecting—


The ACTING DEPUTY PRESIDENT (Senator Moore)—Senator Macdonald, you know interjecting loudly across the chamber is non-parliamentary. I am going to call you up on it every time you do it from now on.


Senator FURNER —I do not hear him; I block him out. The opposition continue to describe the temporary flood levy as a tax. But once again, with contradiction, Mr Abbott said his own paid parental leave scheme would be funded by a levy not a tax. He said:

The difference between a levy and a tax is that a levy is for a specific purpose and this is for a specific purpose.

Isn’t a flood levy, which is only going to be charged in the 2011-12 financial year and which is to be raised solely to help rebuild infrastructure, for a specific purpose?

Last year Joe Hockey was asked when does a levy become a tax and he replied, ‘When it becomes permanent.’ I understand, the word ‘temporary’ does not mean ‘permanent’. This is the coalition’s definition and is not defined in English. The flood levy has received support from third parties who believe it is necessary to help with rebuilding these affected areas. Agforce president Brent Finlay said, ‘Nobody likes a levy or a tax, but given the enormity of what’s happened with this natural disaster, anything that can help to get rural and regional Queensland back up and running, we would support ... but this is a huge task to rebuild after what has happened.’ Australian Council of Social Services CEO, Cassandra Goldie, said:

Overall we are pleased that the Federal Government has acted quickly to support the vital reconstruction efforts of the Queensland Government and support the idea that all Australians with the means to contribute to this effort do so through a flood disaster levy.

The Premier of Queensland, Anna Bligh, has also given her support for the levy to help rebuild our state and has pleaded with the opposition to see that Queenslanders are just as important as all those industries which need assistance. She said:

… when it comes to the levy I understand that no one wants to pay more but the people of Queensland didn’t want this disaster either. And we as a nation have come together in the past and put on one-off levies for many reasons; the buyback of guns, helping out the Ansett collapse, in relation to the milk and the sugar industry. So as a nation we have come together in the past to help out the milk industry, the sugar industry, the workers of Ansett and to buyback guns after the Port Arthur tragedy. I think the people of Queensland are at least as important as all of those other levies in the past.

The Gillard Labor government is committed to getting the budget back into surplus by 2012-13. By being in the black we can ensure that we have the fiscal means to fight back if we have to face another battle. Our swift action and fiscal discipline to get the budget back into surplus is described by Treasurer Wayne Swan as ‘the biggest positive turnaround in the budget’s position since the 1960s’. Our spending discipline will keep our economy as one of the strongest in the developed world. In January Mr Swan revealed labour force figures showing that unemployment fell from 5.2 per cent to five per cent in December and last year was a record high for job creation, with 364,000 new positions, 80 per cent of them full-time.

The opposition keeps calling for the government to stop our stimulus funding, but already 99.9 per cent of Building the Education Revolution projects have been completed or had construction commence. This project, which was a key aspect of our $42 billion Nation Building and Jobs Plan, helped keep people employed during the global financial crisis and has given our students and teachers new facilities which they never ever thought they would have. I have been to around 30 BER openings since the program commenced and it has been good to see my opposition colleagues as special guests at many of those events, even posing for photographs.

The coalition has also called for a cut to the GP Super Clinics Program. This again is an example of the opposition not being interested in fixing our health system. As Minister for Health and Ageing, the now Leader of the Opposition had no problem with stripping $1 billion out of health. Now that the Labor government is providing facilities for mums and dads and their families to access GPs at extended hours, have blood tests, see specialists, see a diabetes educator or see a physiotherapist, with all Medicare Benefits Scheme items bulk-billed, why would you want to take all of that away or prevent other communities accessing quality health care?

In my duty electorate of Dickson, superclinic nominees have successfully established the Strathpine GP superclinic. Since its first day of operation, on 11 January 2010, the clinic has had 71,176 appointments/consultations for 92,190 items of care. The clinic employs 15 GPs and nine nurses, including an Indigenous health nurse, and provides a whole range of healthcare services for its clientele. The opposition wants to cut this program completely.

The opposition also claims that this levy will push up the cost of living. From memory I recall that the highest tax rate in history honour went to the Howard government and was supported by Tony Abbott, Joe Hockey and Andrew Robb. In fact, it was 24.1 per cent—


The ACTING DEPUTY PRESIDENT (Senator Moore)—Order! Senator Furner, you need to refer to members of the lower house as ‘Mr Abbott’ et cetera.


Senator FURNER —Mr Abbott, Mr Hockey and Mr Robb. In fact, it was 24.1 per cent in 2004-05 and 2005-06. This levy is only a small fraction of—to be more precise, 10 times less than—the tax cuts Australians have already received from the Labor government. That is because we are committed to ensuring our working Australians are better off. In our last three budgets, we have provided tax cuts to individuals, and our tax reforms have reduced income tax, small business tax, superannuation tax and tax on savings. We will have done all this—provided stimulus packages to keep people employed and built much needed infrastructure for our future generations—while still managing to get the budget back into surplus in a couple of years. This shows our strong economic management compared to the opposition’s election promises, which Treasury found to have an $11 billion black hole. Let us not forget that: it was an $11 billion black hole.

While we will raise $1.8 billion from the levy, savings from the budget will make up the rest of the $5.6 billion to rebuild flood affected areas. Yes, we have made tough decisions, but we have had to do so, and I commend Prime Minister Julia Gillard and Deputy Prime Minister Wayne Swan for their leadership and decisiveness in ensuring Queensland and Victoria will have vital infrastructure rebuilt. The ability to make tough decisions is exactly what a leader needs and something the coalition lacks.

Senator Xenophon said he may not support this legislation unless the states take out natural disaster insurance. I understand that the Queensland Treasurer is currently seeking quotes to test the market and to ensure that coverage includes roads. However, state Treasurer Andrew Fraser said most state insurers do not include roads in their coverage and that Queensland differed from other states due to its large size. He said:

… getting reinsurance coverage for Queensland is an entirely different proposition than it is for any other state.

Our state is prone to natural disasters, and the decentralised nature of our population means we have many government buildings and major roads spread across vast areas.

Queensland government Under Treasurer Gerard Bradley told the House of Representatives Standing Committee on Economics on 16 February that the Queensland government had looked at reinsurance for major events; however, they found that it would not be value for money. He said:

We looked at the case of the Queensland Government Insurance Fund and looked at the availability of reinsurance to cover major events. We sought reinsurance advice from our broking advisers and we did take that to the international insurance industry. But the costing of that and the risk provisions that they proposed did not represent value for money for the state in terms of the deductions for events and the exposures they were willing to cover. They did not, for example, cover natural disaster.

Mr Bradley stated that roads were not covered in other states’ insurance policies, and the fact that 80 per cent of the cost of this natural disaster is for road infrastructure, he believed, meant that:

… the availability and cost of seeking reinsurance for that infrastructure would be a major challenge.

So even if the state government had taken out insurance, we would still be in the same situation we are in now. We would still be here in this chamber looking for funds to pay for the roads—vital infrastructure needed for Queenslanders to get to work and school and needed to help businesses to conduct their daily operations.

The Sydney Morning Herald reported on 22 February that Anna Bligh said the last time the state government looked into reinsurance was in 2004. The story stated it ‘was offered a policy of more than a couple of hundred million dollars that did not cover roads and was therefore not good value’. A couple of hundred million dollars seems like a lot of taxpayer funds to pay for a policy which did not insure for the cost of this natural disaster.

On 23 February, the Brisbane Times reported that a University of Queensland professor supported the state government’s view that insurance would be hard to obtain. Professor John Quiggan said:

It’s also going to be difficult to get agreed opinion on assessments of damage (after disasters) …

It’s difficult enough for an individual ... there would be much bigger difficulties for the state … There are few companies big enough and expert enough.

Professor Tim Robinson from the Queensland University of Technology said he could see problems with getting insurance. He said:

The risk with insuring in the private sector is ... what’s to say an insurer wouldn’t go into liquidation and be unable to meet the claims the government was making?

Another heartbreaking tale I discovered while door-knocking in Brisbane and Longman was that some of those who were inundated by the floods were not covered by their insurance companies. Some policies covered clients for flash flooding from a storm but not flooding from a river. This is why it is important there is a standard definition for flood cover.

I am also fed up with the scaremongering the opposition are basing their arguments on. This levy will not stop people from donating or raising funds. Even as we speak, there are fundraising activities happening all over Queensland. On Sunday I attended the Family Fun Day fundraiser at the Caboolture Neighbourhood Centre. This Saturday I will be attending another fundraiser that the Ethnic Communities Council of Queensland is having for flood victims. We also had the fantastic fundraiser at Club Pine Rivers in January which raised more than $25,000 for the Premier’s disaster relief appeal. These two events occurred even after the flood levy was announced.

I think the opposition has underestimated the compassion that Australians have for their fellow countrymen and women. Volunteers came out in masses to help fellow Queenslanders in the days after the floods. When the water levels had receded and people were able to gain access to their homes not only did they have to sort through belongings but also they were greeted with layers of mud. But because of the Australian spirit, strangers pitched in and helped those who had been affected. It is our nature. Everyone lends a helping hand, and that is exactly what the nature of this levy is. For less than the cost of a cup of coffee, we can help rebuild much-needed infrastructure which was destroyed in this natural disaster. In fact, the member for Blair said last week that more than 85 per cent of people will pay less than $5 a week and half of all taxpayers will not have to pay the levy at all.

In conclusion, I believe it is important that the opposition puts aside politics and votes for this important piece of legislation to allow Queenslanders and Victorians to get their lives back on track. In a plea from Queensland, Premier Anna Bligh said:

I think it would be a great pity if every Queensland Senator, regardless of their politics or their background didn’t support the flood levy … Sometimes it’s important to put politics aside and put people first, and (I say to) Queensland Senators let’s put Queensland first.

I commend the bills to the Senate.