Federal Government announces one-off tax and delays in road spending to pay for flood recovery
By Brad Gardner | January 27, 2011
A one-off flood tax will be introduced later this year and spending on road projects will be delayed to fund flood recovery efforts.
Speaking in Canberra today, Prime Minister Julia Gillard announced a 0.5 percent tax for taxpayers earning between $50,001 and $100,000.
Those earning more than $100,000 will pay an extra 1 percent, while those earning less than $50,000 and those affected by the floods will not pay. The tax will take effect next financial year and is expected to raise $1.8 billion.
“Under this levy, someone who has an income of $60,000 will pay just under $1 extra per week. A person earning $100,000 per year will pay just under an extra $5 per week,” Gillard says.
“Anyone who receives the Australian Government Disaster Recovery Payment for a flood this financial year will be exempt.”
As well as making an immediate payment to Queensland of $2 billion to aid recovery efforts, Gillard says six road projects in the state will be delayed for one to three years.
“This will save $325 million in the Budget period. And these changes have been agreed to by the Queensland Government,” she says.
Minister for Infrastructure and Transport Anthony Albanese is due to name the programs that will be delayed. Projects in other states will also be deferred to save about $675 million.
Gillard says preliminary estimates the national floods will cost the Federal Government over $5.6 billion, with Queensland accounting for $3.9 billion.
“The great floods of this summer have been a national tragedy…In time they may prove to be the most expensive disaster in Australian history,” she says.
GDP growth this financial year is expected to be half a percentage point lower due to the floods.
Gillard says carbon abatement programs will be deferred, capped or abolished such as green car and solar water rebates. The LPG vehicle scheme will be capped.
Businesses aiding in the recovery efforts will receive a boost, with Gillard announcing plans to fast-track skilled labour applicants.
“There will be extra resources, assistance to employers and simpler processes to ensure a five day turnaround for ‘decision ready’ applications for workers in a host of nominated occupations to work on rebuilding Queensland,” she says.
Relocation assistance for people on income support will be doubled and directed to Queensland.
“Up to 4000 eligible jobseekers who want to get a job helping out will now receive support to move to Queensland and make a difference on the ground,” Gillard says.
Leader of The Nationals Warren Truss has rejected Gillard’s decision to introduce a flood levy, saying the people needed to help flood recovery efforts will be burdened by an extra tax. He has also raised concerns over the road projects to be deferred.
“Many infrastructure projects are intended to relieve the impact of flooding and it would be ridiculous if such projects are included on the list to be deferred,” he says.
The floods left 75 percent of Queensland a disaster zone. Flash flooding in the Toowoomba and Lockyer Valley killed more than 20 people, while towns in northern NSW and regional Victoria were also inundated.