TAX LAWS AMENDMENT (TEMPORARY FLOOD RECONSTRUCTION LEVY) BILL 2011 & INCOME TAX RATES AMENDMENT (TEMPORARY FLOOD RECONSTRUCTION LEVY) BILL 2011

Mr HAWKE (Mitchell) (10:16 AM) —I rise to express my concern about the government’s proposal to tax and impose a levy on all those Australians who have already given generously to the flood relief. I would like to start my remarks on the Tax Laws Amendment (Temporary Flood Reconstruction Levy) Bill 2011 and the Income Tax Rates Amendment (Temporary Flood Reconstruction Levy) Bill 2011 by rejecting the viewpoint of the member for Petrie—in her rose-coloured glasses view of the world—that all you have to do to manage a national economy is accumulate surplus from a boom and it all just automatically happens and it is a wonderful world that we live in. The reality of being good economic managers is that you have to take tough decisions and you have to work at ensuring that you are taking responsible decisions that do not damage our economy and our capacity to function as a society.

What we are talking about here in these flood reconstruction levy bills is a fundamentally different viewpoint of how government operates and how government is supposed to function. We have no difference between us about the fact that government has a role to play here in reconstructing Queensland and assisting those Australians who have been hit by a natural disaster. There is no difference in this chamber in that. Government has a vital role to play in rebuilding critical pieces of infrastructure and in ensuring communities can rebuild in a way that is sustainable for their futures.

What we do have a difference in—and this becomes clear when you listen to the remarks of the member for Petrie—is that the Labor Party seems to have a view that imposing a tax and telling people what to do from a government level is better than the voluntary and natural instincts of Australians to help each other out. Government has a vital decision here. Do we want to encourage our society to be a voluntary society where we care for each other, where we voluntarily come forward and donate our time, money, effort and energy to help each other, because we want to and because it is the right thing to do? Or do we want the government, from its autocratic mechanisms, to tell people what they should do to help others—tell them how much they should help others, tell them that they must help others—because the government has decided it is the best way to proceed? It is not an approach to government that I accept from the Labor Party. When you look at the great stories and examples across this country that members of this place have spoken about, you will see why.

I was in Cowra the other week and I met a 21-year-old girl from the northern suburbs of Sydney. When news of the flood crisis broke, she jumped in her car—her own beaten-up car—and drove to Queensland. She had no plan except to go there to volunteer and help. She got out of her car in Queensland and started helping people. At the time I spoke to her, she had been there for six weeks. She had been taken in by an elderly couple in the Lockyer Valley. Her whole life plan had been interrupted by this one decision to go and help. She has now been offered a paid position in the council up there because she is so effective at what she does. But she had no plan to do that.

In talking to that girl it revealed to me more of why this government’s plan to force taxes and levies upon people is not going to work. She told me stories of individual businesses, contractors and people who owned trucks and heavy-moving equipment donating trucks and labour to man the trucks and to help move all of the damage and debris free of charge to the local council and the government. That has also been going on for six weeks. What we have there is a cost to government that government cannot afford. People have been stepping forward voluntarily. People have been giving their time, their labour, their capital and their vehicles in a way that government could not replicate or reproduce. They have done so without any prospect of reward or thanks—just because it is the right thing to do by their fellow Australians. It is that instinct which I think is under threat from the government’s proposal with this levy. That is why I have such a great concern.

When you look at how much this government wastes—and we have been over all of the arguments over a number of years in this place—you see that ‘billion’ has become the new ‘million’. ‘Billion’ is used like it is going out of fashion—a billion here, a billion there, a billion everywhere. The total amount of money raised by this levy is just $1.75 billion. The member for Petrie is exactly right: it is extremely modest. It is almost like: ‘Why are we doing this?’ We wasted so much money in so many government programs in the last term of government. More money has been wasted on the Building the Education Revolution than is being raised by this levy.

Many great Australians have been prepared to put themselves forward, their money forward and their time forward. The government said, ‘The government needs you to help.’ And we did need them to help. The reality is that so much has been done by ordinary Australians that could never have been done by government. But what I really object to is when government says to these Australians, ‘Help us. Please donate. Please give,’ and then, after they have done all that, it says, ‘Thank you for that. You have been wonderful, but now we’re going to have to tax you. We are going to have to force you to hand over more of your money regardless of what you have given or what you have done’—without any regard. That is another objection I have to this levy. It is a completely blunt instrument. It does not take into regard those who have given more than they could afford to give, those who have given a lot, and those who have suffered or have sacrificed their life plan to do what they could for others. It does not discriminate. It is a very blunt instrument.

Much of the justification, and it is a typical Labor justification for anything, is that this is means tested—that somehow that makes it better; that somehow those who are perceived as being able to afford to pay should pay more. It all sounds lovely in theory, except that the average wage in this country is $65,000. I want to explain to this government a couple of simple things about life in Sydney today because it is clear they have no idea about the reality of an ordinary Australian living in Western Sydney or in most of our major cities today. If you earn $50,000, you are not rich. You are not tapping into some land of milk and honey. If you earn $60,000 and you have a mortgage in Sydney, let me tell you, you are not earning a lot of money. If you earn $70,000, there is the contention from the Labor government that you have somehow struck King Solomon’s mines—you are mining the gold out of the earth and living on a fantastic wage. I want to reject that as completely and utterly false. Families in my electorate earn $80,000, $90,000 or $100,000 and have two, three or four children and a mortgage upwards of $750,000, $500,000 and $1 million.

People are already suffering under a burden of government charges and taxes. It is very severe in New South Wales. I take one example: electricity prices across Sydney. If you are in a Western Sydney household with two kids and you earn $85,000, or a combined income of $100,000, you are not well off. For this government to say you are well off and that you ought to be able to pay is, I think, blind and ignorant of the circumstances of so many in our metropolitan areas. I really want to reject the idea that people are wealthy. They live on incomes they work very hard to get and, at the end of the day, the government takes a lot of that money off them for the privilege of working so hard.

I think this policy of the Labor Party makes a great mockery of the last term of government. They handed out $900 to so many people. Once again, the rich people—the people earning so much money, like $75,000 or over, with a $750,000 mortgage and four kids in Western Sydney—did not receive that $900 payment. They splashed money around like there was no tomorrow. A billion dollars was the new million dollars. All this raises is $1.75 billion. It is a pathetic excuse.

I also want to address the arguments of the Labor Party in relation to levies. I was not a member of the Howard government, and my instinct is not to levy Australians when savings and government policy can be found. I am an advocate for the reduction of the size of government. It is very cute of the Labor Party to say in this place that the Howard government levied different sorts of levies on different occasions during its term, and that is why the opposition should be supporting a levy for the flood reconstruction.

The difference—and I think it is an important distinction—is that the Howard government, when there was a need for a levy, did not go to Australians and say, ‘Would you please give us money and donate for Ansett workers? Would you please give us money for the dairy regulation?’ There was no purported effort from government to raise money on behalf of needy people or a needy industry at that time. The government’s plans were clear. It was articulated. There was not this false dichotomy, where the government says, ‘Give us all your money. Do what you can to help. Donate, donate, donate.’ Then the government turns around and says, ‘We are now going to tax you after all that wonderful effort you put in.’ That is a very big difference.

The Prime Minister has failed in her duty in this place to understand the challenges of this issue. She says we are asking Australians to put in a cup of coffee a week. The first point that I would clarify with her is that, by legislating for a flood levy, they are not asking; they are telling Australians that they have to provide this money, regardless. As I said before, it does not discriminate; it does not recognise the contributions of so many.

The member for Petrie said that people in her electorate are continuing to fundraise. I want to thank every constituent in my electorate who fundraises for this flood. I was at a flood benefit the other night. I took a table of key volunteers who had been at the flood and made my contribution by thanking them. We raised $40,000 that night. I want to say to the member for Petrie and those opposite: I have no doubt that more people in my community would give more if a levy was not being proposed by this government. It is certainly the case.

I also want to record that my local council estimated that $10 million would probably come out of my electorate from this flood levy. That is their estimate. What that means for our local economy and for the people who have already given so much is that it will blunt their instinct to help in the future. What kind of system are we creating here? At the next need of ordinary Australians through a natural disaster or other dire circumstance, are people going to hold back and say, ‘Look, the government’s going to do it for us. They’re going to step in and force us to do it.’ That is the danger, that is the difference in approach to government today.

We are not seeking the best in our community, in our people and in our society; we are using government instruments to force people to hand over their money. That is a different approach to government. It is a very stark distinction. I reject that distinction. I challenge the member for Petrie: will she go to her constituents, who she says are happy to pay, and will she hand them their tax bills? Will she give them the ATO letterhead which says: ‘Australian Taxation Office. Here is your bill.’ That is what we are proposing to do to Australians, not say, ‘We have a great challenge in Queensland. We have a desperate need for people. Floods have affected Victoria and New South Wales. A cyclone has hit us. Can we all come forward in the spirit of mateship, in the great Australian tradition of filling a need voluntarily when there is a crisis?’ No—the government says, ‘We are proposing, by legislative instrument, to send tax collectors around.’ I must say, that is an uninspiring scenario for me and it is not reflective of the great Australian tradition of mateship that this country is built on, whether it be the great service from citizen soldiery and people stepping forward to the breach at times of military crisis, whether it be people like Sophie going to Queensland and donating her time or whether it be contractors and businesses giving up what they can. Even my in-laws donated furniture to people who lost all their furniture in the flood. Everybody has stepped forward in this country and has risen to the challenge that has emerged in Queensland, yet now we are using a punitive measure from the federal government and sending a very bad signal to people out there that we are prepared to indiscriminately seek more revenue from people rather than tightening our belt in government, stopping the waste and reducing the excessive and gross expenditure of the federal government.

There is too much money spent, and wasted, by the federal government. There is too much money collected in taxes. We collect $117 billion in individual income taxation every year. We make $114 billion in welfare payments every year. Almost every dollar collected in individual income taxation is sent back out the door by the government. We can do better than that. We are better than that as a country and we can find savings in government—we must find savings in government and we must end the waste that this government has become so renowned for.

Looking at these bills, there are other serious consequences from what has happened in Australia. The natural disasters that have hit us have great and ongoing ramifications for many of the small businesses and enterprises across this country. It is not just about people who have been affected by flooding of their business or properties; there are serious consequences for the operation and ongoing viability of so many businesspeople and entrepreneurs in this country. I think government has a real role in doing something about that, whether by the coalition’s tax concessions—the tax holiday proposed by the Leader of the Opposition—or other measures. If we lose sight of the fact that, beyond today, tomorrow and the day after there will be people suffering from these disasters for a long time to come, we have not done our job as a parliament.