Flood levy in Australia criticised

HOLDING BACK WATER: A levee in place around a power substation near the swollen Loddon River at Kerang, Australia, last week.

Australian Prime Minister Julia Gillard on Thursday announced “a one-off levy” to fund, partially, the reconstruction of roads, bridges, and ports which were heavily damaged in the recent floods across the country.

Opposition Liberal leader Tony Abbott criticised “this unnecessary new flood tax” but supported the “urgent spending on reconstruction” from out of the budgetary resources. Opposition Nationals leader Warren Truss said previous governments did “not require a new tax” to meet the cost of reconstruction after cyclones or prolonged droughts.

Ms. Gillard said the levy, applicable for a year from July, would fetch A$1.8 billion. An overall package of A$5.6 billion was envisioned for various forms of economic reconstruction and rehabilitation, especially in Queensland and Victoria states.

Providing for suitable exemptions, especially for those hit by the floods and others in relatively low income brackets, the proposed levy would have rates of 0.5 per cent and one per cent in respect of two different slabs of income, she said.