Spending cuts better than levy
Posted on Saturday, 29 January 2011
THIS summer we've all been shocked by the flood disaster that has hit Queensland and Victoria, but inspired by the efforts and generosity of tens thousands of people who have pitched in to help their fellow Australians.
The Coalition strongly supports urgent spending on flood reconstruction, but we also strongly oppose Julia Gillard's unnecessary new flood tax.
We must pay what's needed to rebuild roads, bridges, rail track and other infrastructure in Queensland and Victoria and to support local communities after these terrible floods.
But the fact is that the reconstruction work can be paid for without a new tax.
The people of Queensland and Victoria have suffered enough without having to suffer yet another new tax on top of the mining tax and the carbon tax that the Government has already promised for 2011.
The $1.8 billion that Julia Gillard's new flood tax will raise should be met through further Government spending cuts, not a new tax.
A government that has wasted as much money as Julia Gillard's has more than enough expensive spending programs that can be cut or put on hold for a while to meet this urgent and unavoidable expense.
Spending cuts might be unpopular, but they are the necessary tough decisions that a responsible government would be prepared to take.
In fact, we know there is enough fat in the Budget to do this because Julia Gillard said so yesterday.
When the Prime Minister was asked at the National Press Club if she would increase her new tax if the costs from the floods exceeded $5.6 billion she said: "No, we will find further spending cuts."
In other words, there is more fat in the Budget that can and should be cut, instead of rushing into a new tax.
If this Government wasn't so addicted to taxing and spending, it would see that this is the better way forward.
Two years ago, the Government sent out $900 cheques to nine million Australians. Now, it's effectively asking for the money back.
If the Rudd-Gillard Government hadn't so recklessly squandered the surplus left to it by the Howard government, it would now be in a position to respond effectively to the floods without a new tax.
At the end of the day, the best disaster relief fund is a Budget surplus.
The second point to make about Julia Gillard's flood tax is that many people who shouldn't have to pay will be hit by the new tax.
Donors will pay the new tax, volunteers will pay the new tax and many victims of the floods will pay the new tax, particularly people whose businesses have been wiped out by the floods but who didn't qualify for the Centrelink payments.
Families that are already struggling with higher grocery and electricity costs are going to be hit again and again by tax increases.
The flood tax will also be bad news for the Queensland and Victorian economies as they start to recover from floods.
One other major concern is that the flood recovery effort will become another Government spending program for which no one Federal Government minister is going to be held accountable if things go wrong.
When the Prime Minister was asked at the Press Club yesterday who would be responsible if there was waste or mismanagement, as there has been in so many previous Gillard and Rudd Government spending programs, she couldn't identify a particular minister.
From a Government that has a poor track record of program delivery (think BER and roof insulation), this is very worrying.
Julia Gillard has described her flood tax as a "mateship" tax, but mateship is about helping people, not taxing them.
Mates choose to help; they're not made to.