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Monday, 28 February 2011
Page: 606


Senator IAN MACDONALD (12:36 PM) —It is very important that we return some honesty and truthfulness to the debate before the chamber on 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 2011. From listening to the Labor and Greens senators speaking, you would think that all compassion lies with them and that, for some reason, the opposition does not want to help in the flood and cyclone recovery in my state and in the recovery from the natural calamities that have happened in other states. Nothing could be further from the truth. The coalition has shown time and time again that it is prepared to assist with these natural and, indeed, other calamities. You have only to go back as recently as Cyclone Larry that hit and devastated Innisfail four or five years ago to see the extent of the support given by the then Commonwealth government—a scheme of support which, gratefully I say, has been replicated by the current government in relation to Cyclone Yasi.

But this is not about compassion and helping people. You would think from the speeches in this debate from Labor and the Greens—and the last speaker in this debate was a typical example when she talked about people’s belongings floating down the flooded Brisbane River; people who have lost their futures—if you did not look at this closely that the money being raised here was going to go to those people. Nothing could be further from the truth. The Greens and the Labor Party would have you believe that it is all about helping out people. This money, when it is raised, will go to wasteful profligate state governments that have spent everything they have ever had—state governments that are technically broke, like the government of Queensland. It will go to them to prop up the Queensland government for things which the Queensland government should have been planning for in any case and should have insured against. This is not about helping particular individuals, as the fine speeches and the fine words of Labor and Greens speakers would have you believe. It is all about propping up state Labor governments that could not afford to do the work that they should have expected.

This bill is dishonest in itself. It is called the Tax Laws Amendment (Temporary Flood and Cyclone Reconstruction Levy) Bill. I will guarantee that this will be anything but temporary. It is simply another tax for a political party running a government that cannot handle money and cannot handle spending. If this is a temporary levy for a major natural disaster that is happening this year, what are we going to do for the major natural disaster which will happen next year and the following year and the following year? We all know, living in this wonderful country of Australia, that every year there will be at least one major natural disaster. You can bet your last dollar that the Labor Party will come to us this time next year and say, ‘Oh, we have another major disaster in a part of Australia. We will just continue this temporary levy for the Queensland floods and Cyclone Yasi on for another year.’ Because there will be disasters every year, because there have been disasters every year since European settlement—and I am sure a long time before that as well—governments put money aside as they expect to have to look after recoveries from these natural disasters.

I have already tabled in the Senate a list of natural disasters which have occurred since the mid-1800s. Was there, in any of those, a special levy arranged by the government to pay for reconstruction of infrastructure in the states or territories where those disasters occurred? Of course there was not. How much did we spend on drought relief? How much have we spent on Cyclone Larry alone? How much have we spent on floods and fires? We have spent billions and billions of dollars, and so we should. Governments are expected to anticipate and plan properly for this expenditure. But because the Labor government has wasted so much of its money on so many failed schemes, because it has wasted the $20 billion surplus handed over to it when it got into government, we now find the Labor government has no money left and so have to put on a new tax to help pay for recovery, a new tax called the mining tax and a new carbon tax simply to try to compensate for its profligate spending.

I listened with some interest to Senator Bob Brown and Senator Milne railing against the carbon producers—the coal companies, big mining companies, those huge multinational companies that send all of their profits overseas and therefore they have to be bad; that is the sort of thing that you used to get from eastern Europe and in communist Russia in years gone by—but, for all this concern about letting these multinational companies work, let us have a look at this bill. It says in clause 4-10(1), ‘Temporary flood and cyclone reconstruction levy’:

(1)   You must pay extra income tax ... for the 2011-12 financial year if:

(a)   you are an individual; and

(b)   your taxable income—

is such and such. Can I see anywhere here in this bill where these multinational mining companies that are making these huge profits and sending all the money offshore are mentioned? Surely, Senator Ludlam, interject and tell me that I am wrong, that I have misread it.


Senator Ludlam —I have 20 minutes.


Senator IAN MACDONALD —You have got 20 minutes. Good, I shall listen intently to Senator Ludlam, on behalf of the Greens, telling me why the multinational coal companies are exempted from this tax, or perhaps I am misreading it. This bill—the bill we are voting on—clearly says ‘if you are an individual’. As Senator Cash very perceptively pointed out, too, the bill goes on to say that you do not have to pay:

(2) ... if you are a member of a class of individuals specified in a legislative instrument made by the Minister for the purposes of this subsection.

(3) The Minister may only specify a class of individuals for—

that purpose—

if the Minister is satisfied that the class was affected by a natural disaster that happened in Australia ...

That gives a lot of power to the minister. Taking the example to the nth degree—and I am sure this would not be allowed to happen in Australia—does that mean that the minister could say, ‘If you are a class of people that happen to belong to a union then you don’t have to pay’?


Senator Feeney interjecting—


Senator IAN MACDONALD —Is that what it says or not? Give me an interpretation, Senator. As I indicated, I doubt that the minister would ever do that, but that is how sloppily this has been drawn up. Which is the class that can get out of this? The whole thing has been quite poorly done, as you would expect. It again demonstrates that the Labor Party can simply not be trusted with looking after money.

I have also heard the Greens raving about the fact that because the coalition says that this should be paid from the general revenue of government then that in some way means the coalition is attacking lower income families, whereas this levy goes only on what they think in their minds are wealthy families—those who earn $50,000 or more. If the Greens believe that our general taxation system is so bad that it impacts on the poor and lets the rich off, why don’t they do something about fixing the general taxation system? Why don’t they introduce a bill? Why don’t they convince their coalition partners in government, the Labor Party, that the whole tax system should be changed? Why should the people they refer to as ‘poor’ escape only flood levies? Why do they have to pay for what some call middle-class welfare? Senator Ludlam agrees, so why isn’t he doing something? Why is he supporting this particular flood levy that exempts so-called poor families and taxes so-called rich families when it is apparently okay if all the other expenditure of government burdens the so-called poor people in Australia? Come on—let us have a bit of truthfulness and honesty in this whole debate.

The other point I want to make is that I understood that the government had decided that it needed a certain amount of money and so was going to make a certain number of cuts to its bloated expenditure which even the Prime Minister indicated would be able to be cut. The government said: ‘We’ve got bloated expenditure in these areas. We’ll cut that to help with the recovery and in addition to that we’ll recover some additional money through this flood levy.’ I may be incorrect on this, but I think the figure they were looking to gather through additional taxation was $1.8 billion. The government said, ‘There will be $1.8 billion from additional taxation plus these savings and that will help us deal with the recovery.’

But, having said that, to get the votes necessary to get this $1.8 billion deal through the parliament the government then went out and said, ‘Of those savings we were going to make, we are actually going to pay the Greens $100 million to restore the Solar Flagships program.’ That is okay, but what happened to the $1.8 billion? The Greens demanded $100 million of it for the return of one of their pet projects. The Greens also demanded for their support for this flood levy another $264 million for the National Rental Affordability Scheme. It is probably a good idea but—hang on—we were collecting $1.8 billion and already Ms Gillard has paid out $100 million and $264 million just to get the votes to get the new tax through parliament.

Then she went to Mr Wilkie, who had a real issue with the fact that Ms Gillard was going to get $88 million in savings from the Australian Learning and Teaching Council fund to put into the Queensland flood recovery. But—hang on—to get Mr Wilkie’s pretty expensive vote, she said, ‘Okay, you can have $88 million for that.’ That is a total of $452 million that Ms Gillard paid out to get the votes to get the new tax through this parliament.

She promised Senator Fielding for his vote $500 million for Victoria. Senator Fielding, do you really think that the reconstruction effort from the Commonwealth taxpayer would have excluded Victoria? Do you seriously think that even Ms Gillard was going to say, ‘We are only going to spend the money we collect in Queensland, Western Australia and New South Wales and not in Victoria’? Of course they were always going to spend it in Victoria as well. Well done to Senator Fielding, I guess, for getting a confirmation from this government that $500 million will be spent in his home state. I wonder if that perhaps makes people in New South Wales and Western Australia a little bit nervous that they will not get anything because their vote was not needed to get this through the parliament.

One wonders what sort of money the Labor Party will be throwing Senator Xenophon’s way to get his vote to support this. I know Senator Xenophon is an honourable man. I know he will not be bought off by any sorts of bribes or inducements. But I emphasise to Senator Xenophon the uselessness and futile nature of promises made by this government. We all remember Ms Gillard saying a few days before the last election with hand on heart, ‘I promise that there will be no carbon tax under a government I lead.’ How much more of a promise could that be? What more could you say? I am sure many of the people of Australia foolishly, as it turned out, believed her. Yet here we are a few short months later with the Prime Minister introducing the tax she promised not to introduce.

Time unfortunately does not permit me to go through any more of the rather shallow, if I might say somewhat euphemistically, contributions made by Labor and Greens senators in this debate. But I come back to the point I made right at the beginning, that this is not about helping individual people in Queensland, Western Australia and Victoria who have suffered as a result of natural calamities. I have heard a lot of stories about people who have had interactions with those who suffered, and they are not on their own. Compassion and concern do not rest with Labor and the Greens. I have been up in the cyclone areas a number of times and in fact sat through the fringes of it. We do this every second or third year. It is a disaster, it is a huge impact on people’s lives, but it happens. We live in the north knowing that cyclones will come every couple of years. It is such a great place to live that cyclones, floods, even droughts, will not send us away, but we know that those natural calamities will come. The fact that people have been hurt and will suffer for many years to come is not a reason for a new tax which will make their recovery and their futures even more difficult.

My colleagues have at some length gone through the flaws in this bill where people who have suffered but not directly, people who have contributed an enormous amount in time and effort which is even greater than money, will be penalised again by this new flood tax. We perhaps have not heard the stories of many people who I have become aware of who did not really want the $1,000—in fact they had made a decision not to go and get it—but who then said, ‘Well, it is not the $1,000 we are concerned about; it is the fact that if you get the payment then you are not subject to this levy.’ That was their issue in doing that. A lot of people might have thought that. Those same people, I might say, got the $1,000, gave it away to someone else and continued on. But this sort of stupid legislation brings out all these anomalies, these inconsistencies.

I raise again that these bills that the government is asking us to support in the Senate—and I hope that Senator Xenophon and Senator Fielding have looked at this—indicate that the minister can exclude different classes of people from payment of the levy. One would assume that the minister would do the right thing, but why wasn’t the legislation drafted in such a way that might have addressed that issue? Perhaps we can take this up further in the committee stages of the debate. I am waiting for Senator Ludlam to tell me that I am wrong in the fact that only individuals pay this tax. I am waiting for him to tell me about the multinational profit-making companies that send all their profits overseas, as the Greens, as Senator Brown and Senator Milne, kept telling us about in their contributions. I am waiting for him to tell me if these bills do in fact address those issues. Perhaps it is in another piece of legislation that is not before me at the moment. But I look forward to that.

In the end result, these flood levy bills are not about raising money for individuals; they are about raising money for governments like my own state government, the Queensland government, which is broke through its own inefficiency, and bailing them out of a political problem. (Time expired)