A new flood tax will be levied on Australians earning more than A$50k, Prime Minister Julia Gillard announced yesterday. The tax will go towards the A$5.6bn ($5.6bn; £3.5bn) needed for reconstruction in the wake of Australia’s devastating floods.
30 people were killed in the floods, which have been called the worst natural disaster in Australia’s history.
Much of Queensland and Victoria have been inundated by flooding. Agriculture, mining and transport infrastructure have been badly hit, along with the massive damage to private homes.
Money raised from Gillard’s flood tax will be spent on rebuilding roads, rail and port facilities.
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The PM said that jobs would be created in the rebuilding effort and unemployed Australians who want to relocate to reconstruction jobs will receive financial support.
The flood tax will charge an extra 0.5% on those earning A$50,000-A$100,000 and 1% more on those earning more than A$100,000.
It is expected to raise about A$1.8bn. An initial payment of A$2bn from the government will go to Queensland, the worst-hit state.
The 12-month tax will not be imposed on those affected by the floods.
“We should not put off to tomorrow what we are able to do today,” Gillard said.
“Solely borrowing to rebuild Queensland is a soft option I am not prepared to consider.”
The government is likely to experience a backlash against the new tax.
Opposition leader Tony Abbott said he opposed the tax and warned that victims of the floods would end up paying.
“This is another government spending programme for which no-one is going to be held accountable if things go wrong,” he said.
Gillard announced that a number of environmental programmes will be scrapped a move which has angered Green Party which said that although it supports the new flood tax, it should not come at the expense of climate change initiatives.