All Savings Options Should Be Exhausted Before a Levy

“Every effort should be made to restore the livelihoods of communities and people affected by the floods,” BCA President Graham Bradley says.

“This should be done through a carefully measured response by government that has the close involvement of affected communities,” Mr Bradley said.

“But the federal government is putting the cart before the horse with a flood levy when the full cost of rebuilding after the floods is not yet known.

“Until we get a final assessment of the rebuilding costs, we can’t gauge the impact on the federal Budget, but the first step should be to reassess spending priorities in preference to raising new taxes.

“Today’s estimated flood rebuilding cost is preliminary because we don’t yet know how much of the reconstruction task relates to public infrastructure, how much is private infrastructure and how much is due to under-insurance.

“We acknowledge that savings measures in today’s announcement by the Prime Minister provide for around two-thirds of the government’s contribution to the rebuilding effort. 

“But the government should go further in the Budget by finding additional savings through reduced or re-sequenced spending on programs and projects with the least economic and social value.

“This includes infrastructure projects that are not part of the flood rebuild and have not been subject to a transparent cost–benefit analysis process.
 
“Options to increase taxes, even temporarily, should only be considered after an exhaustive examination of potential savings on government spending,” he said.

Mr Bradley said a carefully measured approach to flood rebuilding would also minimise the risks of substantial price surges on material and labour costs at a time when skills shortages are already being felt in the economy. 

“We endorse the Prime Minister’s support for quicker approvals for temporary skilled migrants who work on flood rebuilding. 

“The government should expand on this commitment for the wider economy to help address pressing skills shortages,” Mr Bradley said.
 
Mr Bradley also said business leaders continued to support the national effort to rebuild flood affected communities. 

“As the Prime Minister has noted, corporate Australia has already made a generous contribution. 

“As the full financial impact becomes known, businesses are ready and willing to do more by way of direct financial and in-kind contributions,” he said.