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Monday, 28 February 2011
Page: 735


Senator CAROL BROWN (8:43 PM) —I rise to make a contribution on the debate on the temporary flood reconstruction levy. The two bills we are debating here today, the Income Tax Rates Amendment (Temporary Flood Reconstruction Levy) Bill 2011 and the Tax Laws Amendment (Temporary Flood Reconstruction Levy) Bill 2011, do exactly as they suggest in their titles. They impose a small, temporary levy on those earning over $50,000 to assist with the rebuilding and reconstruction of flood affected areas. As everyone in the chamber is aware, over the Christmas and new year period Queensland in particular suffered from some of the worst floods we have ever experienced. This was truly a once-in-a-lifetime natural disaster. City streets turned to rivers, houses were swept away, whole communities were destroyed and people’s lives were changed forever. It is difficult to find the right words to describe the destruction and devastation caused by the floodwaters. The damage sustained was catastrophic. Whole towns and communities were destroyed. People’s lives were torn to pieces.

We have seen the harrowing images of complete towns and communities buried beneath floodwaters and now the waters have subsided we are left with the huge task of rebuilding and reconstruction. We know that this will not be easy; we know it will not be done quickly. A huge amount of work is required to rebuild the roads, railway lines, schools and bridges which have been destroyed. This is all vital infrastructure which we must rebuild, and to complete this rebuilding process we must pass these two bills.

This will be a costly natural disaster. In fact, the recent floods could prove to be the most costly natural disaster in Australian history. The damage caused by the floods is unprecedented. A huge amount of time, money and resources will need to be committed to fully rebuild those areas which have been crippled by the devastating floodwaters. Whilst the destruction in Queensland was devastating, other areas around Australia have not been immune from the destruction of the floodwaters either. Victoria and New South Wales were also severely impacted by the floods, as was my home state of Tasmania, which felt the effects of floodwaters too. I was pleased that the federal government and the Tasmanian state Labor government quickly joined together to provide assistance for Tasmanians affected by the floods. Tasmanian primary producers and small businesses have the opportunity to apply for category C grants, worth up to $25,000, under the Natural Disaster Relief and Recovery Arrangements. The grants, which are funded on a fifty-fifty basis, will help primary producers, small businesses and not-for-profit organisations get back to undertaking business as soon as possible. The Prime Minister highlighted that the assistance is:

… in addition to joint Federal-Tasmanian Government assistance available under NDRRA to restore critical public infrastructure—such as roads and bridges—once certain thresholds are met.

There is no doubting the impact these floodwaters have had around Australia. The damage has been wide reaching and devastating, and the effects on the Australian economy will be vast. Already, Treasury estimates that the floods will take half a percentage point off growth in 2010-11. As the Treasurer pointed out, this is around $6 billion stripped out of the economy. Key economic sectors in Queensland have been severely impacted and this does not include the damage sustained to critical public and community infrastructure, and the damage bill to rebuild that critical infrastructure comes in at $5.6 billion. That is why we have put forward our package of budget saving measures as well as the Tax Laws Amendment (Temporary Flood Reconstruction Levy) Bill 2011 and the Income Tax Rates Amendment (Temporary Flood Reconstruction Levy) Bill 2011.

As the federal government, it is our responsibility to be there ready to help rebuild this critical infrastructure. To rebuild this infrastructure, we have announced a $5.6 billion package made up of a temporary levy and substantial budgetary saving measures. This is a package that we believe is right. Two-thirds of the $5.6 billion package will come from savings within the budget. The government has decided that more than $2½ billion will come from cuts to programs and about $1 billion will come from infrastructure projects that have been identified as projects which can be delayed.

Our entire flood-rebuilding package, including the temporary levy and the savings measures, is fully costed and accounted for. This is in stark contrast to the alternative package put up by those opposite. Whilst those opposite are happy to oppose our package, which includes the one-off, temporary levy, it is important to note that it was they who presided over the gun levy, the Timor levy, the dairy industry levy and the Ansett levy, just to name a few. In fact, those opposite introduced six levies in total during their tenure in government—that is, six levies in 12 years. They were happy to introduce levy after levy when they were in government, but they will not support a one-year temporary levy, a levy to rebuild Australia, a levy to repair affected Queensland communities after unprecedented levels of damage caused by the floodwaters. Those opposite have a history of being very supportive of levies. They introduced six of them whilst in government. Last year, during the election campaign, their leader, Mr Abbott, tried to impose a two-year $6 billion levy on Australian businesses as part of their paid parental leave scheme.

I am not sure how Mr Abbott and those opposite think they can now fool the Australian people by saying they oppose levies, when they have the track record and the history to show that they are more than comfortable introducing levies. They are partial to levies. They have used them before and so their opposition to this levy can be construed as nothing more than an attempt to play politics and try to score cheap political points. How can opposition senators come into this place and tell their constituents that they have been happy to support levies in the past but will not support a levy to rebuild Australia? Maybe it is because they think they are able to pull billions of dollars of savings out of the budget. How wrong those opposite have got it. How wrong they were. Their alternative plan to fund the rebuilding of the areas affected by the floodwaters got it wrong—they mucked up the figures. It is not the first time, mind you, those opposite have put forward an alternative budgetary savings plan that was full of holes.

The opposition Treasury spokesperson, Mr Hockey, along with the Leader of the Opposition, Mr Abbott, tried to pull the wool over the Australian people’s eyes. They were again exposed for counting savings measures which had already been accounted for, double-counting savings and overall just trying to deliver another costings con job. I suppose all these bungles were hardly surprising from an opposition who advocated a wait-and-see approach to the global financial crisis, an approach which we all know would have led to results similar to those experienced by the rest of the world: high levels of unemployment, large amounts of government debt and an economy in recession. This is in stark contrast to the Labor government. We on this side of the chamber have the economic credibility to deliver a package of measured budget savings and a one-off temporary measure.

Our levy will be introduced for the 2011-12 financial year and will only apply to those people earning a taxable income of $50,000 or more. Those people earning between $50,000 and $100,000 will pay a rate of 0.5 per cent as part of the flood levy and those taxpayers earning $100,000 or more will pay the levy at a rate of one per cent. The levy will not apply to those low-income taxpayers with an income of $50,000 or less. There have also been a number of exemptions put in place to ensure that taxpayers who have been affected by a natural disaster during 2010-11 will not have to pay the flood levy. For instance, those people who received the Australian government disaster relief payment will not be required to pay the flood levy, as well as a number of other people who meet specific criteria. The levy will be automatically withheld from a taxpayer’s pay. Employees that are entitled to an exemption from the levy can ask their employers not to withhold the flood levy. Also, businesses will not need to pay the levy but will be required to withhold it from an employee’s pay.

It is worth remembering that this is a temporary levy—it will only apply for the 2011-12 financial year—and that it is a modest levy. In fact, about 50 per cent of taxpayers will pay nothing. Over 60 per cent of taxpayers will pay less than $1 a week. About 70 per cent of taxpayers will pay less than $2 a week and over 85 per cent of taxpayers will pay less than $5 a week. These are modest levels. In fact a person on the average full-time wage of $68,000 will pay just $1.74 per week. The Treasurer has highlighted that this amount is actually:

… less than a tenth of the tax cuts that they have received over the past three years. Let’s just put that into perspective: it is less than a bus ticket, less than a packet of Burger Rings, less than a weekend newspaper and less than a cup of coffee.

The two pieces of legislation we are debating here today form a vital part of the Labor government’s responsible flood rebuilding package. We have made significant savings to the federal budget and we plan to introduce a small one-off temporary levy to fund the rebuilding of vital infrastructure. In fact, for every $1 contributed to the flood rebuilding process via the levy, we have found $2 of savings in the budget. We have found spending cuts of $2.8 billion and delayed $1 billion of infrastructure projects, which is two-thirds of the cost, with the remainder met through the one-off levy of $1.8 billion.

It is time for the political point scoring and mud slinging to end. The time has come to get on with the job of rebuilding Queensland. Australians have responded to the flood crisis with such compassion and kindness. We have heard amazing stories of comradeship and mateship, of complete strangers responding to the distress calls of their fellow Australians, and of everyone pitching in and helping each other out. It is now our turn as the federal government to come to the party and meet our obligation to stand with the people of Queensland and rebuild the communities devastated by the floodwaters. These two pieces of legislation will help with that rebuilding process and I urge all senators to support the bills.