Thursday, January 27, 2011

Australian government proposes temporary flood relief tax

Tax would apply to Australians on above-average incomes and raise $1.8bn

The Australian government today proposed a temporary tax to help pay the more than $5bn (�3.1bn) it expects to spend on reconstruction after floods devastated the northern state of Queensland.

The floods, in which 35 people died, caused an estimated $10bn damage, shutting down coalmines, ruining crops, washing away roads, rail lines and bridges and destroying thousands of home and businesses.

The prime minister, Julia Gillard, announced that the tax would apply to Australians on above-average incomes from July and raise $1.8bn.

"As I reflect on these floods and what has happened, I can't escape the sadness," Gillard said. "None of us can.

"But then I look forward and I know what needs to be done ? investing in rebuilding, investing in future growth, managing demand, reforming for the future. That's what we will do."

The tax will need the support of independent MPs to become law when legislation is introduced to parliament next month. The main opposition party opposes it.

Initial estimates of the damage bill and the cost of emergency grants to flood-affected communities for the federal government is $5.6bn.

Gillard said the national government would curb spending on other areas to help patch up its budget and that the governments of flood-affected states would contribute flood recovery funds.

The new tax will only apply in 2011-2012, and those personally affected by the floods will not pay it.


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Source: http://www.guardian.co.uk/world/2011/jan/27/australia-proposes-flood-relief-tax

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