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Monday, 21 March 2011
Page: 1339

Senator McEWEN (6:13 PM) —I too would like to contribute to the debate about the Tax Laws Amendment (Temporary Flood and Cyclone Reconstruction Levy) Bill 2011 and Income Tax Rates Amendment (Temporary Flood and Cyclone Reconstruction Levy) Bill 2011. Like most Australians, I stared in disbelief at the confronting scenes before me on my television of the Queensland floods earlier in the year and soon after of the flooding in western and central Victoria. It was to be the worst flooding in our history. Homes, businesses, crops, livestock and, most devastatingly of all, lives were lost. To make things worse, after the absolute destruction of the floods Queenslanders had to endure Cyclone Yasi, the second natural disaster to strike the state within a couple of weeks.

We are fortunate to live in Australia but, unfortunately, our country also comes with some of the most extreme and unforgiving weather conditions of any nation; it goes from one harsh extreme to another. It often seems that, while one side of the country suffers through severe droughts, heatwaves and bushfires, the other side of the country is waterlogged and battening down the hatches in fear of tropical cyclones. As a South Australian, as indeed you are, Madam Acting Deputy President Hurley, we know that we have experienced both floods and droughts but fortunately, so far, not cyclones. Through all those times, I am always heartened by the generosity of Australians when they respond to tragedy affecting other Australians. In times of need, the Australian people really do know how to open their hearts and their wallets in order to help others.

In the case of the floods this year, hundreds of thousands of people have pledged their support to the various disaster funds and relief efforts by donating their time, monetary gifts or household items to help others. I think all of those individuals should be thanked for doing so. What has also been wonderful to see is the number of people volunteering in the clean-up efforts. Over 10,000 people arrived at the Brisbane City Council’s four volunteer centres the weekend following the flooding to help clean up in some of the worst-hit flood areas. Another 2,000 volunteers registered to get their hands dirty in Ipswich, and they were joined by thousands of others who did not register but who simply stopped and offered to help people in need. It has been mentioned in this place before that Queensland recorded a shortage of gumboots due to the overwhelming number of people looking to lend a helping hand, and I think that is indicative of the Australian spirit. As well as the volunteers and the people who ran projects to assist others, as I said, there were a great number of Australians who donated money to the relief efforts through the Queensland Premier’s Disaster Relief Appeal. Australian people, businesses and communities reached into their pockets to help others. The tally of donations for that flood appeal surged to well over the $200 million mark, and money is still coming in. So many Queensland residents in particular had little or no time to prepare for the floods and walked away with only the clothes that they were wearing. Many residents lost everything. The Premier’s Disaster Relief Appeal and other appeals like that are there to help those people to replace their day-to-day needs.

Of course, while the generosity and kindness of Australians has been outstanding, we must not forget that the damage to infrastructure that has been caused by the floods is unprecedented and the task of rebuilding Queensland is simply enormous. It may very well be that these floods are the most costly disaster in Australian history. It is in our nation’s best interests, certainly in its economic best interests, to rebuild the great state of Queensland as soon as we can. It is for that reason that the federal Labor government have introduced the package of bills that we are debating here today—the temporary flood levy bills—which will assist so much in the reconstruction process. I know the opposition, as they usually do when they have nothing constructive to say or to contribute to a debate, like to claim as they have done here that this spending initiative is just another tax on the Australian people. Let me tell you right now that those opposite me here today are wrong. This is a one-off levy that is one part of a comprehensive reconstruction effort by the Australian government in concert with the Queensland government, because no single level of government or community sector would ever be able to afford to do this alone. This is why the federal government is choosing through this legislation to impose a modest charge on taxpayers who have not suffered through the disaster. Many of us donated money to the Queensland Premier’s Disaster Relief Appeal and other appeals but we know that that will not be enough. There are roads, highways, ports, railway lines and public facilities which all need to be rebuilt. That reconstruction effort is going take time and is going to need a lot of money. Initial estimates put the cost to the Commonwealth at some $5.6 billion. That is almost 30 times more than the money which is currently in the Queensland Premier’s flood relief fund.

I believe that the coalition is well and truly out of touch with the Australian public on this issue. A good barometer of what the public thinks about something is the traffic to an electorate office in terms of phone calls, emails et cetera. My electorate office in South Australia has not received any negative feedback at all regarding the flood levy being proposed in this legislation. The phones have remained unusually quiet on an issue that will require some taxpayers to pay a small amount of money. The phones have remained unusually quiet, despite the opposition’s hysteria around this issue. Unlike those opposite, I believe a great percentage of the public actually agrees with the flood levy because they know and understand that this is a one-off measure designed for extraordinary circumstances. Australians understand why the government also makes donations to other nations that have suffered disasters, such as its provision of $10 million to the people of Japan to help that poor country deal with the aftermath of the unbelievable devastation there following the earthquake and tsunami. Australians understand that those who have should give to those who have not. So it is always disappointing to see the opposition playing political games, trying to win political points and making political mileage out of the hardship, in this case, of the Queenslanders and, to a lesser extent, the Victorians and the South Australians who suffered from the floods. The federal Labor government is not relying on the implementation of the levy alone to raise much needed funds. We have regrettably had to impose spending cuts and have delayed a number of infrastructure projects to ensure that we do have the financial ability to assist Queensland to rebuild.

The amendments to the existing legislation that we are debating here tonight are not going to affect each and every taxpayer in the same way. To reduce any financial stress on those who have already been involved in the floods, the bills ensure that those people affected by natural disaster will not have to contribute to the levy. Therefore, taxpayers who have already received an Australian government disaster recovery payment for a natural disaster in 2010-11 and those people who did not receive an AGDRP but who meet at least one of the criteria and live in a natural disaster and recovery zone will be exempt from the flood levy. Additionally, New Zealand special class visa holders who are ineligible for the AGDRP but who still received an ex gratia payment from the government as a result of the natural disasters will also be exempt from the flood levy.

For those people who are not exempt from the levy, I must say that the impost is very reasonable. For most taxpayers, it will be a very modest charge. The levy takes into account people’s different earning capacities and subsequently their capacity to contribute to the flood reconstruction. Approximately 50 per cent of taxpayers will not have to contribute to the levy whatsoever. The levy will only be applicable to those taxpayers earning over $50,000 in the 2011-12 tax year. Of those people, over 60 per cent will pay less than $1 a week, over 70 per cent of people will pay less than $2 a week and over 85 per cent of people will pay less than $5 a week. So, an Australian earning the average adult full-time wage of approximately $68,000, will pay $1.74 each week. That is a lot less than a cup of coffee each week. As we can see, it is a very moderate, reasonable and—importantly—one-off temporary measure to assist in rebuilding not just Queensland but the whole nation.

Applying this flood levy will mean that we can rebuild Queensland without compounding the stresses on our growing economy. I note that the task of rebuilding this state is set to increase demands on our capacity, our skills and our resources. Those are just some of the things that we are going to have to deal with as we take on the issue of rebuilding Queensland.

I noted earlier this month that the Deputy Prime Minister, Mr Wayne Swan, together with Queensland Premier Anna Bligh, announced the signing of the national partnership for natural disaster reconstruction and recovery. In signing the agreement, Mr Swan said that $2 billion of Commonwealth funding will go out the door right now and straight into needy Queensland communities. Included in the agreement is $50 million specifically aimed at the facilitation of the recovery process in North Queensland following Cyclone Yasi. Additionally, in line with the government’s resolve to see that infrastructure is rebuilt appropriately and efficiently, there are strong auditing and reporting requirements in place to monitor the spending of taxpayer’s funds. The government does not want to see any waste whatsoever and the agreement provides for the Reconstruction Inspectorate, led by Mr Jon Fahey AC, to oversee reconstruction activity. That will provide assurance that value for money is being achieved across the board for the disaster response.

The opposition’s knee-jerk response of trying to find funding for the disaster recovery is a far cry from this well-thought-out plan of the government’s. Many people were very alarmed to hear the Leader of the Opposition, Mr Tony Abbott, say that the coalition would fund the rebuilding of Queensland through the deferral of some funding as well as through a great many funding cuts rather than introduce a sensible, temporary, one-off levy. We are grateful—and I am sure that the people of Queensland are grateful—that the opposition is not in government. After over a decade of spending cuts at the hands of the former coalition government, Mr Abbott has angered many Australians by proposing a range of new spending cuts to offset the need for a temporary levy. Should, heaven forbid, the coalition ever secure government, those funding cuts would never be reinstated.

The opposition, for example, has suggested cuts of $500 million to the automotive industry, an industry that employs hundred of thousands of people across the country. In an echo of the policies of One Nation, the opposition has also said that it would defer some $400 million in overseas development aid. Overseas development aid—foreign aid, as it is usually known—as even Mr Alexander Downer, a former Leader of the Opposition, said, is in our national interest, particularly when we are spending it in Indonesia, a region targeted for aid cuts by the opposition.

In Senate estimates earlier this month, I had the opportunity to discuss our foreign aid budget and, in particular, our aid to schools in Indonesia with representatives from AusAID. I learnt that so far our Australian aid has contributed to the construction of more than 2,000 schools. AusAID anticipates that a similar number will be constructed with continued funding generating more than 300,000 new school places. Those are new school places for Indonesian students in areas where the only other alternative for eduction would be in radical religious schools. We are all well aware of how important it is for our neighbours in Indonesia to ensure that their students—their young people—have the opportunity for a decent education, not a radical education. We know how important it is for them to ensure that girls in particular in Indonesia are able to attend school and undertake a curriculum that will set them up for life, either in occupations or in further education. This point was reinforced in the discussion with AusAID at Senate estimates. It is a great shame that one of the first things that the opposition put forward as a way to fund the reconstruction of Queensland was to cease funding for that very important Australian aid initiative.

The point was made that another item that was immediately targeted for funding cuts by the opposition was water buybacks in the Murray-Darling Basin. That did not go down too well in South Australia, where we are very concerned about the future of not only the river but the communities that rely on the river for their livelihoods. To have this off-the-cuff ill-thought-out proposal from the federal opposition to get rid of, or defer for however long, the opposition proposed, $600 million of water buybacks did not go down too well in South Australia. It was typical of the lack of planning and lack of thought that the opposition have in regard to the Murray-Darling Basin. For them, it is just an expendable thing. They have no intention of seriously addressing the problems with the basin.

While the opposition is focusing its attention on trying to cut money from areas of need in the Australian community, the government is instead continuously thinking of ways to improve the lives of all of those affected by the recent disasters. Earlier this month, the Deputy Prime Minister, Premier Bligh and the Minister for Tourism, Martin Ferguson, launched ‘Nothing beats Queensland’, an aptly named marketing strategy to promote the state to Australia and to the world in these difficult times.

Sitting suspended from 6.30 pm to 7.30 pm