Australia unveils new tax to fund rebuilding flood-affected regions

[News_Editor]

Australia unveils new tax to fund rebuilding flood-affected regions

2011-01-28 00:40:48 GMT+7 (ICT)

SIDNEY, AUSTRALIA (BNO NEWS) -- Australia's Prime Minister Julia Gillard on Thursday unveiled a new tax as part of the government's strategy to fund rebuilding of flood-affected regions.

Gillard said that following consultation with the Queensland Government, it was determined that $5.6 billion are needed to rebuild the flood-affected regions that are mainly in need of essential infrastructure.

Two-thirds of the multi-billion funding will be delivered through spending cuts while the remaining third will be provided by a one-year progressive tax. The PM remarked that such levy will not be paid by people directly affected by the floods or by low-income earners.

According to the government's plan, spending cuts will allow $2.8 billion to be allocated to the flood-recovering efforts. The cuts will be made by removing industry assistance and abolishing the Green Car Innovation Fund and the Cleaner Car Rebate Scheme.

An additional one billion will be freed up by delaying some infrastructure projects and other green programs. To start recovery efforts as soon as possible, the Australian Government agreed to make an advance payment of $2 billion.

The progressive tax will raise with an estimated $1.8 billion. The levy will be imposed on citizens earning over $50,000. The PM said that every cent raised through these measures will go directly to flood-affected regions across Australia.

Gillard remarked that the people in flood affected areas who have received the Australian Government Disaster Recovery Payment this financial year will be exempt from the levy.

According to government's figures, someone who earns around an annual wage of $68,000 will pay $1.74 a week while someone earning $100,000 a year will pay $4.81 per week.

"The recent floods across Australia pose a unique challenge. This is likely to be the biggest natural disaster in Australia’s history in economic terms," said Gillard. "In times of crisis Australians see what needs to be done and we do it."

Severe flooding affected many regions of Australia last year, killing dozens. In addition to the victims, around 22,000 homes in Brisbane, Ipswich, Queensland, and Lockyer Valley were affected.

-- © BNO News All rights reserved 2011-01-28