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Monday, 28 February 2011
Page: 623

Senator WORTLEY (1:51 PM) —I rise to speak to the bills relating to the temporary flood reconstruction levy. In doing so I acknowledge the people of Australia for their generous spirit and willingness to help fellow Australians during the natural disasters which have recently beset our nation.

The damage caused by the recent flooding is unprecedented and the task of rebuilding is significant. We all know this. The donations made by generous Australians and the flood levy funding are two very different things. Donations are Australians helping Australians, and they have been generous, from both individuals and companies. The money from these donations will go to helping Australians and Australian families and small businesses rebuild their houses and restart their businesses.

As a nation which does not turn its back on our fellow citizens, our neighbours or shirk the hard yards, we must now fully face the destruction and devastation and rebuild lives, homes, businesses and infrastructure. We want devastated communities to get back on their feet and in true Australian style we are all willing to pitch in. The Commonwealth has an important responsibility to make sure that our essential economic infrastructure is rebuilt. All Australians understand that tough decisions are in order as we work to fix damaged roads, bridges, railways and public infrastructure. That is a different job and we acknowledge that it is a huge and expensive task.

The costs to the Commonwealth from this disaster are expected to be about $5.6 billion. We will need to meet two-thirds of these costs by reprioritising existing spending. The remainder will come through this essential flood levy so that we can properly finance the rebuilding that needs to be done following the floods. This levy is an important part of the reconstruction and it will raise an estimated $1.8 billion towards flood recovery. It will be achieved through 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.

Under the government’s plan, a levy of 0.5 per cent will be imposed in the 2011-12 income year for taxpayers who earn over $50,000. A levy of one per cent will be applied on the part of the taxpayer’s income above $100,000. The levy will be paid through tax taken out of regular pay packets in the same way that people pay the Medicare levy. This ensures that taxpayers will not receive a tax bill at the end of the financial year. Taxpayers who earn less than $50,000 in 2011-12 or who are exempt for other reasons will not pay the levy.

To put the payment in perspective, it is significant to note that 60 per cent of taxpayers will pay less than a dollar a week. A person earning $65,000 a year will pay just $1.44 for the levy. A taxpayer on $80,000 a year will be asked to sacrifice $2.88 a week—less than the price of a cup of coffee in most outlets. Of course, people in flood affected areas who have received the Australian government disaster recovery payment for a flood event in 2010-11 will not have to pay the levy. The levy does not apply to businesses.

It is important to note that the Gillard government has also established the Australian government Reconstruction Inspectorate. This body will oversee strict new oversight and accountability provisions to ensure value for money is delivered in the massive task of rebuilding flood ravaged regions. The Gillard government wants to make sure that every cent of our flood rebuilding package goes where it is needed and we are determined to get value for taxpayers’ dollars.

States will be required to provide independently audited financial statements to support any claim for infrastructure rebuilding, including verification of spending against any advance payments made. The board of the Queensland Reconstruction Authority will also include two federal appointees, and the inspectorate will work closely with state authorities to provide an additional level of checks and balances for the expenditure of funds.

It is evident that the Gillard government is getting on with the very important task of helping fellow Australians through strong leadership and an effective plan for how we can all help. I have to say that I am particularly disappointed that those opposite do not have the same priorities. The opposition is not concentrating first and foremost on those who are suffering and need immediate help. It looks not only disorganised and fragmented but also mean-spirited when it comes to offering a hand to Australians in dire need as a result of these horrendous floods.

In stark contrast to those opposite, I am proud to say that the majority of Australians have opened their hearts and accepted the need to pull together to help fellow Australians. Australians are always happy to help fellow citizens in so many ways: emotionally, financially and physically. It is part of our national psyche to offer a hand. Australians dig deep for each other in hard times and they overwhelmingly know that this levy is needed to rebuild flood affected regions. They understand that the reconstruction is going to take a lot of time and dollars and that even though the federal government has made big cuts to the budget, the levy is essential. They understand that the impact of recent disasters on our farmers and agricultural production has been huge. Queensland is responsible for one-third of our fruit and vegetable production. Our tourism industry was already under pressure as a result of the high Australian dollar and even more so after the floods in Queensland. There are also the flow-on effects on other businesses.

The Gillard government is on track with a mature and effective solution which does not entail absurd and incorrect savings such as those put forward by the opposition. Even the shadow Treasurer admitted his own savings were not enough to cover the estimated damage bill from the January floods. The Liberal Party has suggested cuts to BER projects. Which school project does the opposition think we need to abandon? The opposition also put forward cuts in aid to Indonesia as part of its alternative to a flood levy.

The Gillard government’s view is very different. We say there is no need to cut Australia’s aid program or our spending on defence and counterterrorism because we know that these measures help to keep Australia safe and secure. Our aid program is an investment in Australia’s security. Tackling poverty in our region also means tackling the root causes of conflict and terrorism. Our aid program also helps nations improve law and order, prevent and recover from conflict, and manage a range of transnational threats such as people trafficking, illicit drugs, HIV-AIDS and other communicable diseases. Our longstanding aid program serves our national interest by creating a more secure, stable and economically prosperous region.

Paying for the reconstruction in the considered way outlined by the government is the right thing to do. The impact of the floods is devastating.

Debate interrupted.