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Tuesday, 22 February 2011
Page: 891

Ms KING (Parliamentary Secretary for Health and Ageing and Parliamentary Secretary for Infrastructure and Transport) (1:48 PM) —I rise in support of the Tax Laws Amendment (Temporary Flood Reconstruction Levy) Bill 2011 and the Income Tax Rates Amendment (Temporary Flood Reconstruction Levy) Bill 2011. I do so as a member of an electorate that was significantly affected by floods, not just once but for the third time now. I do so following the member for Cook. I understand that, in opposition, you need to have something to say about issues and that you need to try to make your mark on things. I think it is unfortunate that the issue the opposition has chosen to make their mark on is this particular one. I think that the politicisation of the reconstruction and the flood levy has been extremely unfortunate and I think it is extremely unfortunate for those communities that I represent that have been affected.

When I spoke in this House recently on the condolence motion for those so tragically lost in the Queensland floods, I concluded with some lines about the obligation we all have to respond in these circumstances. I said that as a government and as a nation we need to stand together for the people so tragically impacted, to rebuild their communities. But most of all we need to rebuild their hearts. While these bills we are debating today are about delivering practical assistance to replace the bricks and mortar, the tar and the cement, they are about much more than that. They are in fact about rebuilding the hearts of those people who need our support right now.

I cannot recall a time on our continent when we have been so wracked consistently over a period of several months with a string of major natural calamities. In the past there have been massive natural disasters: fires like the Black Saturday tragedy and those around Perth just a couple of weeks ago and the serious floods in many parts of the country. There have also been severe cyclone events in our past history, such as Tracy, which tore Darwin apart so many years ago. But I cannot recall a period where such widespread flooding across several states coincided with cyclones lashing at our northern coastline while at the same time other Australians were battling severe heat and bushfires. The combined effect of these has been to put extraordinary pressure on our infrastructure and resources and, by extension, our national economy. We are particularly confronted on this occasion by widespread flood damage, and that is why the government has moved decisively to introduce this one-off levy to help.

Before I address the wider national issues arising from these flood events, it is important to begin at the local level, for it is here where the impact of these events has been so personally felt. In and around my own electorate there are communities that have been hit by flooding three times since September last year. No sooner had people finished the clean-up from the September floods and moved back into their homes than they were hit again in January. Then, as we were resuming parliament in February and beginning to act to fund the recovery from the disasters of the summer, they were hit with a further dose of flash flooding. Towns in my electorate like Creswick and Clunes in the Hepburn Shire have suffered enormously. In Ballarat itself the suburbs of Miners Rest, Delacombe and Alfredton, to name a few, felt the effects of flooding. And the neighbouring towns of Skipton and Beaufort were seriously impacted. Numerous houses and businesses were inundated, along with community facilities, including football clubs, senior citizens centres, a community swimming pool, bowling clubs, caravan parks, community halls and playgrounds.

Roads and other infrastructure have also suffered severely. The shoulders of some sealed roads are dangerous now, and the fast-flowing, high volume of water has swept gravel from many of the unsealed surfaces. There is a great deal of scouring damage on sealed main roads in and around culverts and bridges, and in many locations it is a serious mess with roads continuing to be closed. In the best of times, and despite the fact that this federal government has increased local road funding, the local councils in these impacted regions, operating on very small rate bases, struggle to find the funds they need to maintain local roads, bridges and other infrastructure, let alone to try and deal with disasters. When they are confronted with large-scale damage, of the kind they have encountered from the series of floods throughout this summer, they are placed in an almost hopeless situation. The cost of road damage alone in my own area is significant, not to mention the community infrastructure cost. That is why it is fundamental that these flood affected communities and people on low incomes will not be asked to pay.

The temporary flood reconstruction levy we are proposing through these bills is a one-off recognition of the enormous scale of this disaster. The announcement of the levy recognises the remarkable groundswell of community support for the rebuilding effort. This extraordinary series of disasters across wide areas of the nation required an extraordinary response, and that is exactly what you are seeing from the government with these bills.

The damage that has been caused is, frankly, unprecedented, and the task of rebuilding is significant. The recent floods may well end up being the most costly disaster in Australia’s history. Treasury’s early estimate is that the floods will take half a percentage point off growth in 2010-11. The rebuilding task will add to GDP over time, but that does not dilute the impact felt by many Australian businesses today. There is an obvious impact, for instance, on our farmers and on our agricultural production. The tourism industry, a critical element of the local economy where I live—and obviously fundamental to Queensland—is already struggling under the high dollar, and the flooding only exacerbates the challenges that are confronting this sector.

These floods, as we have heard mentioned often in this place, brought about the absolute best in Australians, again exposing our great generosity. Australians’ donations to the flood appeal have reached some $180 million to help individuals. But what we are talking about in terms of what is needed for reconstruction is 30 times that, some $5.6 billion—needed to rebuild roads, bridges and ports, and to get the economy up and running again in those local communities. That is what the flood levy is helping to do. Under this package 60 per cent of taxpayers will pay less than $1 a week. We are asking someone on $80,000 to sacrifice $2.88 a week. We have made big cuts to the budget, but the levy is needed to rebuild flood affected regions.

These bills impose a temporary flood levy on Australian residents and foreign residents, individual taxpayers, with taxable incomes of $50,001 or more in the 2011-12 income year alone. The levy will be applied at the rate of 0.5 per cent of taxable income between $50,000 and $100,000 in the 2011-12 income year. The levy will be applied at the rate of one per cent of taxable income of $100,000 or more in the 2011-12 income year. The levy will not apply to low-income earners with a taxable income below $50,000 in the 2011-12 income year.

The bills will make provisions for exemptions from the levy for people who were affected by the natural disaster. The legislative instruments that accompany these bills will ensure those individual taxpayers who have been affected by a natural disaster in 2010-11 will be exempt from the flood levy. It is important to re-emphasise that the levy will impose only a modest charge on taxpayers. About 50 per cent of taxpayers will pay absolutely nothing, about 60 per cent will pay less than $1 a week, about 70 per cent will pay less than $2 a week and over 85 per cent will pay less than $5 a week.

The reconstruction task is going to take a lot of time and a lot of dollars, so the levy alone cannot and will not cover it. The government is making $2 in savings for every $1 of the levy. There are spending cuts of $2.8 billion and savings through the delaying of infrastructure projects of $1 billion, which meets two-thirds of the cost of rebuilding. The remainder is met through the one-off levy.

Paying for the reconstruction as we go is absolutely the right thing to do. While the impact of the floods has been devastating, they have not altered the long-term fundamentals of our economy or the long-term challenges that we face as a country. The task of rebuilding after the floods will mean added demands on our capacity, skills and resources now. This will impact on everybody. Those businesses, councils and individuals in the communities affected in my electorate do not need the added burden of greater economic strain as a result of the floods. That is why we have made room in the budget, through spending cuts and the temporary levy, to fund the rebuild. And it is why we have made room for the reconstruction work by deferring some infrastructure projects temporarily rather than crowding out private sector projects. Applying fiscal restraint now means we can rebuild the flood devastated parts of this country without further compounding pressures in our growing economy.

These bills will provide the government with funding to assist in rebuilding or repairing essential infrastructure that has been damaged as a result of flooding. Infrastructure will need to be rebuilt or repaired in urban, regional and rural areas across this country. I know Australians will understand the need for this levy, and they are willing to contribute—unlike those opposite, unfortunately. They will want to ensure that their fellow Australians who have suffered so much in this summer of natural disasters can rebuild their lives as quickly as possible. They will also want to ensure that this strong economy, the envy of much of the rest of the world, which this government has managed to sustain through one of the most critical financial downturns, will continue to move forward. They will also want to ensure that the initial, spontaneous response of Australians to this unprecedented flooding is consolidated to ensure every prospect of a sound recovery. They will recall the lines of volunteers registering to go out and assist people, whom they have never met before, to clean up their houses. They will note the high level of financial support already provided through the appeals launched in response to the flooding. They will remember the outstanding work, during the flooding, of our great national and local organisations like the SES, the CFA, Red Cross, St John’s Ambulance, the Salvation Army, Victoria Police, service clubs, local councils and the ADF and of the many kind-hearted locals who just got stuck in and helped. They will also note that the opposition has attempted to frustrate the initiative at every possible turn, in the face of the obvious need, and they will not forget that either. They will know that this community support was destined to continue and, as a matter of necessity, will have to continue long after the floods had subsided. They will know that the challenge now is not as it was in the immediate aftermath of the flooding. The challenge now is, as I have stated before, providing the financial capacity to rebuild our communities while maintaining a strong national economy. It is a shame and an indictment of the opposition that they will not do the same.

The SPEAKER —Order! It being 2 pm, the debate is interrupted in accordance with standing order 97. The debate may be resumed at a later hour.