ACOSS supports floods levy but questions proposed spending cuts

27 January 2011

The Australian Council of Social Service welcomes the Federal Government’s prompt action to fund essential work to restore infrastructure damaged by the floods in Queensland, including the imposition of a temporary flood disaster levy, but believes spending cuts in high priority areas such as affordable housing should be avoided.

“Overall we are pleased that the Federal Government has acted quickly to support the vital reconstruction efforts of the Queensland Government and support the idea that all Australians with the means to contribute to this effort do so through a flood disaster levy,” ACOSS CEO, Dr Cassandra Goldie said today.

“This is similar in principle to previous levies for purposes such as the buy-back of guns after the Port Arthur massacre, which were widely supported. An income tax levy with an exemption for low income earners is the fairest approach.

“The main weakness of the proposed levy is that it covers less than one-third of the predicted flood costs leaving the rest to be met through spending cuts in other areas. However, ACOSS supports the use of cuts in poorly targeted spending to assist with the reconstruction effort.

“Indeed we have called for more action to rein in poorly targeted spending in the Federal Budget, including tax concessions that mainly benefit high income Australians. For instance tax breaks on golden handshakes and removal of tax shelters on private discretionary trusts would have raised in the order of $2.5 billion per year.

“ACOSS is disappointed that some of the spending cuts affect programs that are vital to improve the living standards of people on low incomes, especially the National Rental Affordability Scheme which is being cut at a time of great need for affordable housing, both before and after the floods. The axed Greenstart scheme also had the potential to assist low income households to reduce their energy costs.

“ACOSS is supportive of the other proposed cuts to the carbon abatement scheme, which on the whole were not efficient and well directed programs. Nevertheless it is important that the partnership agreement with the Queensland government requires reconstruction to be done in accordance with high standards of energy and water efficiency, and for proofing against future climate-related risks.

“The community and social services sector is playing a crucial role on the ground assisting those most affected by these floods and therefore has a key role to play in the decision making process, including the Flood Taskforce,” Dr Goldie said.

Media Contact: Fernando de Freitas 0419 626 155

Also see ACOSS Opinion piece: ‘Responding to a national crisis: business not the only voice in town’