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Gillard's spin on flood levy sucking her into the vortex

By Malcolm Colless - posted Monday, 31 January 2011

Detailing her multi-billion dollar flood reconstruction program Prime Minister, Julia Gillard, said she would not balk at further cuts in Government spending if initial estimates of the damages bill blew out.

That leaves open a very wide window of opportunity because it is not at all clear how the Government arrived at the cost of its $5.6 billion reconstruction plan which is to be made up of a controversial “one-off” taxation levy on middle to high income earners topped up with the cancellation or deferment of some largely green-based programs.

Gillard has seized on the emotive and compassionate national response to the plight of flood victims, particularly in Queensland, to jettison some poorly thought out policies such as the “cash for clunkers” election sweetener while promoting herself as the sort of pull no punches leader that the country needs in a time of crisis.


Her post-Australia Day address to the National Press Club in which she outlined the Government’s response to this crisis was notable for its highly personalised style as was her defence of the strategy in subsequent media appearances.

For example responding to questioning over the decision to fast track the approval of temporary 457 visas to attract skilled workers to help with reconstruction projects and the offer of assistance to 4000 unemployed people to relocate into these areas Gillard made it clear that these were her initiatives. “I want to get this done. I want to get it done quickly, and I want to get it done right,” she said.

Of course we have heard this line before. It is the same argument that was used by her predecessor, to justify pumping billions of dollars into projects such as the home insulation scheme and the building the education revolution which quickly spun off the rails through a lack of proper management.

But Gillard assures us that her Government has learned from past experience and will not allow speed to compromise efficiency. Time will put this assurance to the test.

Meanwhile Gillard argues that the tax levy is unavoidable if the Government is to get the Budget back into surplus by 2013 - coincidentally an election year. She also rejects any suggestions that reviewing the $43 billion National Broadband Network would have any impact on this objective.

So, should the Government’s current estimate of reconstruction costs blow out, or should there be another major natural disaster caused by flood or bushfire in the near future, what areas of spending will Gillard turn to instead of bumping up or extending the life of a levy which is already drawing the political heat from outside and inside the Labor Party before it even comes into force?


The NBN is being treated as an untouchable, ideological, sacred cow. Another big spending area which is on the Government’s protected policy species list is its foreign aid budget.

Administered by the Australian Agency for International Development, commonly known as AusAid and overlorded by former prime minister and now Foreign Affairs Minister, Kevin Rudd, it has a current annual budget or more than $4.3 billion. But this will double by 2015-16 when it will reach 0.5 per cent of Australia’s gross national income.

Suggesting that disasters which affect our country should take precedence over committing millions of aid dollars to policy projects such as building schools in Indonesia brings a sharp politically correct rebuke. But it is an issue that continues to be raised by the public particularly on talk back radio.

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About the Author

Malcolm Colless is a freelance journalist and political commentator. He was a journalist on The Times in London from 1969-71 and Australian correspondent for the Wall Street Journal from 1972-76. He was political editor of The Australian, based in Canberra, from 1977-81 and a director of News Ltd from 1991-2007.

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