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Thursday, 24 February 2011
Page: 1392

Mr SOMLYAY (11:59 AM) —I acknowledge the member for Capricornia, whose electorate was devastated by the floods in Central Queensland. Many of us a little further south than her watched on television as the floods unfolded and the Fitzroy River devastated Rockhampton. That storm then moved out to sea and rejoined the coast between Wide Bay and the Sunshine Coast. It then moved on towards Toowoomba and inland again to Grantham, and we all know what happened in Brisbane.

I was lucky that my area was relatively unscathed. We had a little bit of local flooding but nothing like the devastation of Central Queensland, Grantham, Toowoomba and Brisbane. To give some indication of the seriousness of the floods, between the Sunday afternoon and the Tuesday morning at about 11 o’clock, when all this devastation was underway, the rain gauge in my backyard showed that we had had 505 millilitres of rain. That is an amazing amount of rain to have dropped on South-East Queensland.

The only reason this Tax Laws Amendment (Temporary Flood Reconstruction Levy) Bill 2011 is before the House today is the fiscal irresponsibility of the Labor government under Prime Minister Rudd and Prime Minister Gillard. In my memory, no government has imposed a special tax to finance a recovery after a natural disaster. When Cyclone Tracy destroyed Darwin on Christmas Day in 1974 the natural disaster organisations swung into action. I happened to be in Canberra at the time. I went to the NDA headquarters on Northbourne Avenue for the morning to help set up the rescue effort and I finished up getting home three days later. But even the Whitlam government, which was in power at the time—that basket case of fiscal irresponsibility—did not introduce a new tax to fund the reconstruction of Darwin and the Darwin Reconstruction Commission.

Prime Minister Rudd inherited a healthy economy and a $20 billion surplus, and that is on top of the accumulated surpluses and proceeds of asset sales and other things that put $60 billion into the Future Fund. I can distinctly remember Peter Costello telling the House and people outside the House that it was necessary for Australia to put money away for a rainy day, hence the establishment of the Future Fund. The fund was set up for the unfunded contingent liabilities of Commonwealth Public Service superannuation and other things.

If the Queensland floods do not qualify as a ‘rainy day’ then I do not know what does. The point I want to make is that Coalition governments, traditionally, have a savings culture. We on this side of the House argue that flood reconstruction should be funded out of savings, not tax hikes. But how does a government produce savings? It is very simple: do not spend more than you earn, live within your means and do not waste the money you have earned. Other speakers have talked about the devastation of the floods and Cyclone Yasi—the physical losses and the loss of life. The coalition have clearly stated that the government should do whatever it takes for reconstruction, recovery and the rebuilding of Queensland. There is no lack of compassion on this side of the House towards those affected by the devastation.

I was the Minister for Local Government, Territories and Roads in 1998 when that huge flood devastated Katherine. I walked among the ruins of small businesses and saw the despair on the faces of small business people. I saw the difficulties encountered in restocking this remote community which relied on Adelaide for stock. The Howard government did not have a tax to rebuild Katherine. This debate is not about compassion, it is about the realities of hard-nosed economics. Before the 2007 election, Prime Minister Rudd told the world that he was an economic conservative. Sitting at his shoulder was his loyal deputy, the now Prime Minister, nodding furiously, saying, ‘Me too, I’m an economic conservative.’ It was only a matter of time before the old Labor way emerged—deficit and debt.

Prime Minister Rudd said in this House that we needed to borrow $315 billion. That figure rocked the socks off the coalition. That sort of borrowing was completely foreign to those on this side of the House. We were told that this money was required for economic stimulus so that Treasurer Swan could avoid the R-word. We opposed the spending spree that followed. I and others on this side of the House warned taxpayers that the $900 the Prime Minister was handing out to people would cost them $4,000 by the time they paid it back through taxes and interest. We saw a succession of failed government programs where there was so much waste of taxpayers’ money.

We now have government members opening school halls, as beautiful as they are, that are monuments to waste. I never miss the opportunity of saying that an 11-year-old in grade 7 will be 35 years old before the debt on the new building will be paid off, as beautiful as that building is.

With this record of careless, incompetent and wasteful government why should we agree to introduce a new tax to get the Gillard government out of the fiscal hole that it has dug for itself? The shadow Treasurer, the member for North Sydney, mentioned Kerry Packer’s appearance before a Senate committee. It was actually a House of Reps committee, not a Senate committee. I was on that committee when a Labor member asked Kerry Packer about the extent of his personal taxation. Kerry Packer denied that he had a tax problem. He said that he paid his lawful tax—not a penny more and not a penny less. He added that, given the way Labor wastes money, no-one in their right mind would want to pay more tax than they had to.

By opposing these bills, we on this side of the House are putting a challenge to Labor: fulfil your broken promise to be an economically conservative government and live within your means. Show Australians that there will be no more waste and that your government can live within its means. Do not bring in a flood tax, but find savings to end Labor waste. I oppose this bill and the unnecessary Labor tax it imposes on Australians. The Labor government—I am sorry for the interruption; it is my mobile phone.

Mr Bradbury —That’s Top Gun, isn’t it?

Mr SOMLYAY —I do recognise the tune. If you have a look at the amount of money that the Labor government is borrowing you can see that it is $711 million per week. At that rate of borrowing, do you know how long it would take to raise the funds—the amount to be raised by the levy is $1.5 billion—under the current borrowing program? It would take 2.5 weeks. For the total reconstruction $5.5 billion is needed. At $700 million per week, that would take 7.7 weeks of borrowing.

The Prime Minister says that this new tax is needed to bring the budget back into surplus by 2012-13. Until then, the borrowing that I have mentioned continues. We are told that all our troubles will then be over; we will be back in surplus. That is right, but it is wrong that our troubles will be over. This is the great Labor spin. If Labor ever achieves a surplus, that is when they will start to pay off the debt that they have accumulated. In the meantime the interest payments continue. This is why we on this side of the House are saying that the reconstruction of Queensland after the floods should be paid for by savings by the government and not by a new tax. I oppose this bill.