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Monday, 21 March 2011
Page: 1333


Senator RYAN (5:47 PM) —Debate 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 was adjourned to allow the Senate Economics Committee to look into this legislation and I note its report was tabled earlier today. I will not cover in detail all the many highly credible arguments raised by my colleagues with respect to the reasons these bills should be opposed—ranging from the lack of ability of this government to spend money effectively and the priorities of this government, to the enormous amount it has wasted in only 3½ short years.

Today, I want to address the priorities of this government. What happened in Queensland, in my home state of Victoria, as well as in Western Australia was indeed a tragedy, not just in human terms, although that is most important, but also in the damage done to property. I fail to understand why we would introduce a levy like this to pay for what is a basic function of government. The government has not sufficiently articulated the reasons. Why do we have government? Philosophically, it is partly to civilise us. Is it because, as Thomas Hobbes said, ‘Our life in nature would be solitary, poor, nasty, brutish and short’?

In essence, we have government to perform basic tasks which we, as individuals, cannot perform as effectively on our own. It is to create a common wealth and to create certain public goods, among which are emergency services, defence forces, courts, police and a legal system, all of which allow us to live in some degree of freedom from the harshness of nature or the arbitrary actions of others. At its most basic, providing basic infrastructure is a core function of government. It is not an additional extra. It is not something for which people should have to dip into their pockets and pay more. This government has run an extraordinarily large budget but to justify that it needs an extra levy to perform what should be the first task of government, to allow us to share some of the risk that the natural disasters of this continent can impose upon us as individuals, to build common infrastructure, shows that this government does not have its priorities right.

When this government is faced with a problem, an opportunity or a challenge, no matter what the situation, the opportunity is always there to resort to new taxes. It is a habit. It is an addiction. The first step for this government to not continually increase the burden upon the Australian people would be to realise it has a problem. Off the top of my head I can name six new or increased taxes in three short years. We had the alcopops tax. We had the luxury car tax increase, which this government cares to forget. We have had increases in tobacco excise and tobacco tax and now we have the mining tax, the carbon tax and, with respect to this bill, we have what is colloquially know as the flood tax. This government always resorts to taxes. In a massive budget it cannot perform the most basic tasks of government—rebuilding infrastructure from unforeseen and unforeseeable natural disasters. It has to levy the Australian people an extra cost.

The truth is that this tax is so small that it betrays the true agenda of this government. This government wanted an excuse to create a new tax. You know that in essence you do not need it. It represents less than half a per cent of the government’s annual expenditure. It represents well under that when you consider the period over which this money will be spent. This tax is simply not needed. Over the past three years, this government has shown its willingness to fling money around. It spent it on pink batts, on green loans and on shonky and shabby builders. Yet, it has to dip into Australians’ pockets when it wants to do the first most basic of functions. What are we to see next? Extra charges, extra levies to deal with security, to deal with courts, to deal with police? These are the functions of government which should come first. These are the core functions; they are not the ‘nice to have’. What does this say about the priorities of this government? More importantly, what does it say about this government’s lack of ability to prioritise?

Why should taxpayers be asked to fork out extra? The government has completely failed to answer that question. It has shown, however, that its priorities are all wrong. In a budget of more than $350 billion this year and, without any shadow of a doubt, of substantially more than that next year, why is there no scope for savings of under one per cent to perform the first tasks of government? But no—this government wanted to contrive a tax argument because it loves nothing more than a ‘Let us try and soak the rich; let us try and turn some Australians against other Australians.’ That is what it is doing with the carbon tax. Some Australians are worthy of being punished with punitive tax rates; other Australians are worthy of government largesse. In this case, it has again drawn the line at $50,000 or $100,000 and said that those below that are worthy Australians. The class war rhetoric from the Labor Party does not die—this government wants to turn some Australians against other Australians.

That has been the one consistent theme of the Australian Labor Party going right back to the days when it opposed Federation and right back to the days when it was the true intellectual father of the White Australia policy. It has always sought to turn some against others. All this trouble, all of this division, all of this wish to turn some Australians against each other—for $1.8 billion. I consider that to be a lot of money, but that is half of what they spent on an insulation program which they were warned was not going to work. And it is less than what they are spending to fix the problem they created—the problem that now we have dangerous roofs. Four people who were working in electrified, foil insulated roofs have died, and there have been house fires. I am yet to see, for those four people, the contrived outrage about occupational health and safety that I see in New South Wales at the moment.

The truth is that there is a little hook to this tax that the government does not tell you about. The Prime Minister promised that no-one impacted by the floods would pay the levy. I suppose that promise will soon go the way of the ‘there will be no carbon tax under the government I lead’ commitment that Prime Minister Gillard made before the last election—because it is simply not true. Those receiving the disaster income recovery subsidy are not exempt from the tax. Those receiving the Centrelink payment for temporary accommodation—those who could not access their houses or who had lost power—are exempt. But those receiving the business recovery grants, whether they be farmers, small business people or business employees who could not work—those people are not exempt from the tax. The payments they receive are exempt from the tax. But in the next financial year, if those Australians—particularly those in Queensland—earn more than $50,000, they are going to be stung with the flood levy. Yet again, the Labor Party is seeking to turn some Australians against other Australians. There are thousands of Queenslanders who are going to pay this levy who might have lost business stock or who might not have been able to work. Because they did not lose access to their home for 24 hours, they are not exempt from paying the flood levy.

To thousands of small business people who suffered, perhaps because they or their employees could not get to work due to transport in South-east Queensland not functioning for that short period, and to the farmers who lost crops—and the people I have spoken to are hoping that they are back on their feet come next financial year—this government is going to do what it is doing with every other tax. It is planning to take with one hand and give with the other, because those small businesses, those farmers and those employees are going to be stung with this flood tax if they earn more than $50,000. That, quite frankly, again betrays the doublespeak of the Labor Party on this issue. You promised that no-one impacted by the floods would pay the levy and that is objectively a false statement—many thousands of Australians who were directly impacted by the floods will pay the levy. Only those who had restricted access to their homes or damage to their homes are exempt from this levy. That leaves thousands of community leaders, small business people and farmers to be hit with a tax burden in the year they need it least—when they are recovering from the natural disasters that we saw in Australia earlier this year.

This government’s lack of priorities about the very basic functions of government is betrayed by this tax. Rather than pull out the budget and a red pen—in $350 billion it cannot find $1.8 billion to ensure that it can perform this basic task of government without levying an extra tax—this government hits Australians. It then hits Australians with the class war rhetoric that we had really thought was a remnant of university political science departments, a rhetoric that has no place in modern Australia. As people, many of whom were directly impacted by these floods and many of whom suffered significant financial loss, get these tax bills next year, this government will be held to account for this flawed policy and its complete lack of ability to prioritise its own activities.