Australia flood tax

The Australian government has
proposed a temporary tax to help pay the more than $5 billion it expects to
spend on reconstruction after floods devastated the northern state of
Queensland.

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

Prime Minister, Julia Gillard,
announced that the tax would apply to Australians on above-average incomes from
July and raise $1.8 billion.

“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 $5.6 billion.

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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