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Monday, 28 February 2011
Page: 610


Senator LUDLAM (12:56 PM) —I am sure that I, along with many other senators, will be watching the clock with interest to see how long Senator Macdonald lasts before interjecting. The clock has started.


Senator Ian Macdonald interjecting—


Senator LUDLAM —Twelve seconds! I found most of Senator Macdonald’s speech incomprehensible and largely forgettable but there are a couple of issues on which we do agree and so I would like to address those first. You quite forcefully raised the issue about how on earth we use a one-off levy to address a rolling series of disasters. I think that is an entirely fair question. Also you raised the issue of compassion. I do not think anybody in here would question the compassion of coalition senators or MPs in the other place. You are from Queensland, Senator Macdonald. I find it difficult to visualise what it must have been like for people who were there or people clearing the mess up afterwards. In Western Australia we have suffered a series of quite horrific rolling disasters as well, not on the scale of what befell Queensland, obviously, but people have been up against it there as well. I do not think anybody here or necessarily even outside this building is questioning your compassion. I think they are questioning your competence to be able, for example, to add up. The $100 million or thereabouts that the government was persuaded by the Australian Greens to return to Solar Flagships amounts, I think, to about 1.7 per cent of the overall package. I will leave it to government senators, if they choose to, to talk about how they made that shortfall up. The $260 million that you rightly pointed out has been returned to the NRAS account, the National Rental Affordability Scheme, is funding deferred, so that actually should not be added to the total of whatever it was you added up because that is funding that will be in the forward estimates post 2014-15 and of course the government then is free to use that money as part of this package for disaster reconstruction. But I would have thought you would be well aware that you should not be adding that $260-odd million to what we took out of the package. That program has been deferred and I think that is a very good thing.

I do not propose to speak at great length on the Income Tax Rates Amendment (Temporary Flood Reconstruction Levy) Bill 2011 or the related bill. I think your reading of it is entirely correct—through you, Mr Acting Deputy President—in that this is not a tax on the mining industry. That was known formerly as the resource super profits tax and now it goes under a different acronym. The government in its negotiations with the big mining companies gave away—I know these are rubbery figures and the secretary of the Treasury pointed that out quite sharply on Thursday—up to $100 billion from the forward estimates, and the opposition wants no tax at all. So being lectured about why we are not taxing the mining industry in a flood levy bill from the side of this chamber that is not interested in chasing any of those profits at all—


Senator Ian Macdonald —Isn’t that a bit inconsistent?


Senator LUDLAM —Four minutes. I think it is quite extraordinary. This was not proposed to be a tax on the mining industry.

While we are focusing, quite rightly, on Queensland and Victoria, I want to point out some of the issues that residents in different parts of Western Australia have been grappling with over this last, disastrous summer. In just two months we have had devastating fires at Lake Clifton, just south of the city, and in Kelmscott and Roleystone at the same time, that really devastated part of the Darling Scarp communities. There have been floods in Carnarvon and the Gascoyne and damage from Cyclone Bianca across the mid-western wheat belt towns. Similarly to Queenslanders, residents of the Pilbara and the Kimberley are fairly familiar with those quite devastating formations crossing the coast. It happened again last week, when a cyclone menaced the Pilbara coast before heading back out to sea. Carnarvon, about 900 kilometres north of Perth, in December got its entire annual rainfall in 22 hours. I think the town was largely saved, but some of the irrigators and pastoralists close to town lost everything. Our hearts are with them. It is important to recognise and remember that this is not affecting anybody specifically; it affects all of us now.

The question that Senator Brown, Senator Milne and all of us have raised, subsequent to those disasters which overtook different communities in Australia is: why is this happening? We know that Australia is subject to frequent capricious weather, whether it be the drought or flooding rains of legend or wildfires. We do live in a country with a pretty violent climate. The question, of course, is: why would we want to make that worse? Climatologists have been telling us for literally decades—quite a long period of time—that in loading up gases that thermally warm the lower atmosphere and the ocean we are effectively trapping more heat in the weather system. That heat has got to go somewhere and it is making our weather more violent. Professor Glikson, from ANU, published material through the latter part of last year that showed that extreme weather events are increasing in frequency and intensity, very much as predicted. It showed that the number of cyclones has increased by a factor of about two in the last 30 years and floods by a factor of about three. This phenomenon is obviously not restricted to Australia. The year 2010 saw a string of extreme weather events, including heatwaves and fires in Russia, severe droughts in Brazil and Mexico, cyclones in the US and the Caribbean and floods in Pakistan, Western China and, of course, right here in Australia. We are all in this together. We have to remember—and this goes to Senator Macdonald’s point about how you use a one-off levy to tackle the rolling series of events that are overtaking us—that this is the age of climate change. This is what climate change is like at the beginning: we have these extreme weather events. It is not a question of whether an individual weather event can be tied to climate change or not. The fact is we are loading the dice and are making these things more frequent. There is no point asking if a particular fire has the fingerprints of climate change on it when we are changing our entire weather system.

I want to speak briefly about one of the funding proposals which the government put forward to help put together the package. The levy is only part of it; in fact the bulk of the funding is made up elsewhere. One of the more curious decisions, and one which we were very happy to see the government give a bit of ground on, was the proposal to cut the National Rental Affordability Scheme by almost a third, in order to fund five per cent of flood reconstruction costs in Queensland. That really came out of left field. I must admit we did not see that coming. Hidden in the fine print of the government’s reconstruction package was the inclusion of about $264 million swiped out of the budget for the National Rental Affordability Scheme. That was achieved by cutting the original target of 50,000 affordable properties to only 35,000. The proposal sparked an outcry in the affordable housing sector, and that was followed by a determination to have the program restored. We achieved that goal about a fortnight ago. How the proposal to kill NRAS came about in the first place is still a bit of a mystery. It was in contrast to the government’s original promise to treat NRAS as though it was a 10-year project and to double the target to 100,000 if the scheme was successful.

We thought it was a surreal proposition that we should be raiding funds for two of the most important emerging industries in Australia in this generation—that is, large-scale solar energy and affordable housing—for relatively minuscule budget savings. That is not to mention the irony of taking money out of one pot for building housing for the vulnerable and putting it into another pot ostensibly for building housing for the vulnerable. We know that the housing crisis and the housing shortage is just as sharp in Queensland as it is anywhere else. We strongly argued that more significant savings could be made in other areas of the budget, but in the end the proposal that we took to government was a fairly simple one: keep the target of 50,000 homes—50,000 incentives or residences—but extend the target date. The affordable housing sector stormed this building about a fortnight ago, during the last sitting week, and pointed out the happy coincidence, if you could call it that, that the construction timetable for NRAS was wildly ambitious and somewhat behind target. It can take up to two years for NRAS applicants to get approval and funding from the department and another two years to get planning approval for an inner city, high-density or multi-unit dwelling through state and territory planning systems. So the NRAS was actually subject to a delay not because it was failing but because it was succeeding and because applicants had started to hit something of a critical mass. The program is, therefore, a couple of years behind schedule, simply because of the long lead times involved in assembling project finance and planning approvals. That is not the sign of a failing program. We read it as a sign of success.

By simply extending the target date to 2015 the government will use funds earmarked for NRAS for disaster reconstruction and then restore NRAS funding from 2014-15 to achieve the original target of 50,000 dwellings. That is the agreement we reached with the government. It is not correct for Senator Macdonald to be adding that to some kind of imaginary total of funding that we clawed back from the government. We have restored the program and we have delayed its final implementation, but that is not a problem because this is a scheme that was running somewhat behind anyway. This has given us the opportunity to articulate the distressing level to which our housing system is simply broken: the current gap in affordable rental housing is roughly half a million dwellings, the achingly long waiting list to access social housing is just short of a quarter of a million dwellings, and the number of people who are currently homeless is perhaps 105,000 people, in one of the wealthiest countries in the world.

Something hidden in these figures that is well worth remembering is that this scheme was established to help an entirely new class of people who are now falling through the gaps: essential workers. NRAS was not a homelessness scheme. We are no longer just talking about our most needy or vulnerable when it comes to the housing crisis in Australia. We are talking about our nurses, teachers, and many other people earning under $60,000 who can no longer afford the average priced rental property. That is partly why this thing is such an important part of the housing landscape.

The community sector and private housing sector came out side-by-side for the same thing. In the last fortnight I was very pleased to stand alongside the Australian Council of Social Service, National Shelter, the National Affordable Housing Summit, the Housing Industry Association, the Community Housing Federation of Australia, the Combined Pensioners and Superannuants Association, the Benevolent Society, Mission Australia, the Property Council, BGC, a number of private affordable housing developers, and even former ANZ Chief Economist Saul Eslake.

While we can remind the government of the merits of long-term memory and of sticking by a fundamentally useful program, we also need to remember that in the scheme of things the $1 billion investment in NRAS, which is extremely welcome, vanishes in comparison to the more or less $50 billion spent annually on tax breaks provided to housing owners and investors through capital gains exemptions, negative gearing and so on. We have got this structural imbalance in the housing market and that is why we are having to work so hard to shorten these waiting lists. Add to this another $13 billion spent by the Commonwealth, states and territories on the first home owners grant in the last decade, and you can see how far we have dug ourselves into a structurally unfair system in which the demands of investors seeking increasing returns are pitted directly against the human right to affordable housing.

The Gillard government, to its credit, has listened to the considerable evidence that the scheme is working, that an affordable housing industry is emerging in Australia, and that the human right of an affordable home for all is well worth protecting. With those remarks I will close my comments on the flood levy. I look forward to participating, and the Australian Greens look forward to participating, in the inquiry into these bills, but we are hoping for a relatively speedy package so that the Commonwealth can do its bit to fund reconstruction in the disaster hit areas of Queensland and elsewhere.

(Quorum formed)