Tax Laws Amendment (Temporary Flood and Cyclone Reconstruction Levy) Bill 2011; Income Tax Rates Amendment (Temporary Flood and Cyclone Reconstruction Levy) Bill 2011
The Senate today is addressing two pieces of law, the Tax Laws Amendment (Temporary Flood Reconstruction Levy) Bill 2011 and the Income Tax Rates Amendment (Temporary Flood Reconstruction Levy) Bill 2011. These bills will put taxes into the Australian system. That is not an unusual thing in this place. If you go back over the history of the Senate, many debates have taken place on tax proposals raised on all sides of the chamber and whether they would be good for the Australian nation. Nobody yet in the history of the Australian Constitution-and I have not checked every debate-has put forward a tax and said, 'I want to harm the Australian economy and I want to harm Australian citizens.'
The three elements that I want to talk about today are three things that should be discussed and debated when any tax or levy or any other proposal is put before this chamber. One is the clarity of the arrangements, with the questions of why there is a need and how it is going to happen answered. The second thing is confidence. The community need to be confident that there are processes in place to ensure that the money that is being raised will be effectively allocated and that there will be reviews into how things are occurring. The last thing, and something which applies particularly to this discussion, is the issue of compassion. The particular payment that is being put before the Senate today is very strongly linked to a need. Governments and communities need to work together and take a compassionate view to ensure that people have fair assessments and a fair response.
From some of the more enthusiastic contributions that we have heard so far in the debate, you might have thought that talking about a tax in this place is unusual. In fact, when I had a look at it, I found that we have spent many exciting hours in this chamber debating whether a tax is a levy or a levy is a tax and how it would operate. I refer anyone interested in those debates to Hansard. You can go back through Hansard and see how much true enjoyment there is in working out a definition in that way.
There has been a request for us to agree to impose a tax for a particular period of time-one financial year. The terms of that tax have been clearly spelt out in the legislation-who will be impacted, how much will be raised and what its impact will be. There is no debate about the way that it will operate. Other senators have looked at the process in great detail. For people who earn less than $50,000 a year, there will not be any payment required. People earning between $50,000 and $100,000 a year will pay 0.5 per cent. People earning over $100,000 will pay one per cent. All of that is clear. People can talk with whomsoever they choose to work out exactly what that will be on a weekly, fortnightly, monthly or annual basis. It will be collected through the tax office, as indeed all other taxes and levies are collected. It is also clear that people who have received a Commonwealth payment because of various disasters will not be subject to this tax.
There will be questions about whether that is appropriate and fair. There have been questions raised in this place and in the wider community about the methodology for allocating the Commonwealth payments. As we have said in this place before, there were no changes to the way that Commonwealth payments were allocated during the recent disasters in Australia. It was done in the way that it has been done in previous times. However, there are always questions about whether everybody who claims should receive the payment or not. There is again clarity here, though. People's claims are investigated. The government has stated that there will be reviews under this Commonwealth process. People who are found to have defrauded the system will be prosecuted-clarity. We believe that people who make claims are doing so in good faith. They tell us their situation and then they receive a payment. Under the proposal before us today, those people will not be affected by the two tax bills that we are talking about.
So we have clarity about who will be able to make claims and who will have the tax put on them, we will be able to clearly work out how much people will have to pay individually and there will be an understanding of the reason this particular tax has been imposed. As a Queensland senator, I am very clear about the need for this particular tax. In the three months that have just passed there has been enormous destruction in Queensland. People are still assessing the impact of both the flooding and the cyclone across Queensland. As at the end of this month we have identified 68 of our local government areas that have been affected by either the floods or the cyclone. Applications for emergent assistance grants from the Queensland government have totalled 39,279 for the floods and 11,390 for Cyclone Yasi; for essential household contents grants, 8,451 for the floods and 2,807 for Yasi; and for the essential services safety and reconnection scheme-another state based program for supporting people at this time-116 for the floods and three for Yasi. As at the end of February, 376,172 claims have been made for the Australian government disaster recovery payment. For the disaster income recovery subsidy, 50, 408 claims have been made. Ex gratia claims for payments to New Zealanders who have been caught up in the disasters total 341.
Behind every one of those claims a need has been identified-some immediate impact on individuals, families or businesses as a result of the recent floods and cyclone. There is no need for debate over the size of the need. It is clear that there is a massive requirement for rebuilding and recovery across Queensland-or, I should say, most of Queensland. It is very difficult to draw lines, but I do not think there are many families across the state who have not been impacted in one way or another. It is essential that there be clarity about how the program will operate so that people will have a sense of security that their governments, at all levels, are responding to the need that has been identified.
The program that the federal government has proposed is, again, very clear: $1.8 billion of the response will come through the taxation legislation that we are debating today; $2.8 billion will come from identified spending cuts, which have been made public; and about $1 billion will come from delaying programs, all of which has also been made openly available to the public. Again, it is clear that the levy is but one aspect of the response. There cannot be a single way of responding to the range of needs that have come forward, but one element that the government has put forward is the legislation we are debating today.
It is so important that the way the response will operate is made absolutely clear to the community, to the people involved in providing services and to governments at the federal, state and local level. Clarity must be ensured. The next aspect is confidence. The community and governments need to be confident that the federal government is working effectively and cooperatively with the other levels of government and that there will be a process for ensuring that when claims are received they will be reviewed very quickly and that the best method for spending the money will be ensured. There must be confidence in the various programs that have been put in place, including that which Mr Fahey heads up-which we have talked about in this place a number of times-as well as programs at the Queensland state level. These disaster response arrangements have been put in place to ensure that the community can have confidence that their governments are responding, that their governments are working cooperatively and that there is an understanding of what the needs are and how the response will operate.
It is therefore particularly timely to talk about the announcement made yesterday at three levels of government in Queensland about support for local government. There has been a range of discussion over the past couple of months about the way the arrangements for disaster relief between federal, state and local governments will operate. There has always been the understanding that the federal responsibility would be about 75 per cent, but there has been ongoing discussion at the local government level about which of their services would receive federal money and what they would be responsible for themselves. These discussions have been very, very detailed. Yesterday in Queensland an announcement was made that ensured that the federal government, the state government and local councils could be clear about exactly what infrastructure would receive Commonwealth support, what infrastructure would be the responsibility of state governments and what local governments and bodies within local governments with an income base would be responsible for in the recovery process, which will take months and years. I think that announcement was a very important step in ensuring that the various levels of the community, at this time of great need, will be able to see that their governments are able to put aside, as much as possible, political differences. That is always difficult, but it will ensure that people will know exactly which elements of recovery are being carried forward by which level of government.
The other element I want to talk about is compassion. I have mentioned today the number of people who have identified their own needs and the needs of their families and have come to various levels of government and put forward their claims. Each one of those claims has its own story. In the speeches that various senators made in the earlier discussion about the floods, the cyclone and the bushfires in Western Australia, senators were able to make personal comments about individuals they had met and families they knew and to identify the massive impact that this recent stream of natural disasters has had right across the country.
I talked about the sense of deep sadness and loss in Queensland when the raging Brisbane River was going past where I live and you saw people's belongings being washed away. In those moments you could sense the pain that people were suffering, their need for compassion and their need for confidence in feeling that they would have an effective government response in their time of need. That is seen across the state. Rather than having what is for some people seemingly important political bickering, we need an effective, cooperative process that ensures that people have a clear understanding about what will be done to support them. We must not forget that we are talking about people who have lost their futures. All levels of government have to identify the loss and determine an avenue by which a response can most effectively be put in place. That applies across the whole range of government services. Today's discussion is looking particularly at infrastructure and at rebuilding in that way, but I think it is most important that we also look at government responses to individual medical circumstances, including, most importantly, issues around mental health support into the future for individuals and families who have suffered great loss and great shock.
In relation to the compassion element of this debate, I also want to talk a bit about some of the comments that have been made that people are seemingly resentful that they have contributed either in a charity sense or by way of volunteering and that they feel somehow betrayed or angered that their services were not recognised or valued and that they may well be caught up in payment of the tax bills that we are discussing today. I have to admit, in working with a lot of people over the last few weeks, I have not had this issue raised personally with me. I have actually heard people talk about the fact that they gave willingly because they sensed a need. They gave money where they could and they gave personal help where they could. Any expectation that the federal government would put in place a modest tax impost for one financial year was not a reason for them being in any way regretful or angered or upset that they had responded to a need, which had been identified through the media, after seeing what had happened in Queensland through floods and the cyclone. It is certainly worrying that people who, for whatever reason-and mostly I am sure it was just from seeing the shock and fear in the community-made a personal decision to give in some way would somehow feel that that was the wrong thing to do. That has been an argument that has been raised in this place and also in the media over the last couple of weeks. If people do feel that way in terms of their future giving, that is something we would have to consider.
I would hope that every time an Australian citizen sees anybody suffering-in their own state, other parts of Australia or internationally-they would try to find a way in which they could help. We are seeing that now, with the Australian response to the horror that is happening in Christchurch. I cannot remember a time when someone, in their thought process about giving help, would say, 'We must stop because somewhere down the track we might have to pay something in another way.' I have not sensed that. In fact, I think that one of the good things about our community is that there is this sense that people want to cooperate and work together and help. In the number of post-flood recovery events that have been going on across Queensland over the last few months, at no stage has anyone come up and said, 'I am sorry that I gave to the flood appeal, because now I might have to pay 60c a week in a flood levy' or, 'I am very upset that I went out and helped people clear out the mud from their homes or remove timber that had fallen around areas in North Queensland, because I might now have to pay a heightened tax'-which is very modest-'for 12 months.' Some people want to make that argument politically and want to thump the table and talk about slugging mums and dads. I am neither a mum nor a dad and I will be paying this levy should it go through. It is something that never crossed my mind at that stage. So, in trying to draw a differentiation, that could be one political argument you could make. But you cannot make the argument that there is not a need.
You cannot make the argument that there are not processes in place to ensure that expenditure will be made openly and transparently and that people will have the payments and processes reviewed in the following months when anything is made out. And you certainly cannot make the argument that the people who are making the claims, the people who have had their livelihoods, their homes, their schooling and their futures impacted by something over which they had no control-flood and cyclone-should not have an expectation that their governments, federal, state and local, have a responsibility to provide them with service, to make sure that their issues are heard and to make sure that there is a cooperative understanding across all levels of government as part of their job in governing.
