A new federal levy to pay for post-flood reconstruction may be unpopular but necessary, Queensland Premier Anna Bligh says.
The state and federal oppositions have condemned the announcement of a federal flood levy to be imposed on people who earn more than $50,000 next financial year.
Prime Minister Julia Gillard yesterday unveiled a raft of spending cuts and details of the one-year levy to pay for an estimated $5.6 billion bill from the flood devastation across Australia this summer.
Ms Bligh said taxpayers who earned between $50,000 and $100,000 would pay a 0.5 per cent levy on any income above the $50,000 in the 2011/12 financial year.
Those earning over $100,000 would also pay an additional 1 per cent on the portion of income above $100,000.
Ms Gillard, who also flagged delays to Queensland road projects and cuts to federal climate change programs, said the levy would equate to about $1 a week for someone earning $60,000 a year.
She also announced the federal government would make an immediate $2 billion payment to help kick-start rebuilding work in 60 Queensland flood-affected communities.
Ms Bligh welcomed the $2 billion transfer, saying it would give the state government confidence to do its own budget calculations and kick-start the rebuilding work.
The Premier said the Queensland Reconstruction Authority – which would decide how to spend the $2 billion – would be a “completely transparent, fully audited and legislated body”.
“When it comes to the levy, I understand that no one wants to pay more, but the people of Queensland didn’t want this disaster either,” she said.
Ms Bligh said the nation had come together in the past and imposed levies for various reasons, including the gun buyback levy after the Port Arthur massacre in 1996.
A levy was also imposed on plane tickets to cover workers’ entitlements after the Ansett collapse, while an extra cost was added to milk between 2000 and 2009 to fund a dairy industry assistance package.
Ms Bligh thanked the nation in advance for helping Queensland through paying a levy.
“We as a nation have come together in the past and put on levies for many reasons,” Ms Bligh said.
“I think the people of Queensland are at least as important as all of those other levies in the past.”
However, the state opposition branded the levy as “another kick for Queenslanders”.
Opposition Leader John-Paul Langbroek called on the state and federal governments to fund the reconstruction without bringing in new taxes.
Mr Langbroek said householders were already struggling with increases to the cost of petrol, electricity, water and vehicle registration.
“The response to a flood that caused so much economic damage to Queensland is not another tax,” Mr Langbroek said in a statement.
“The last thing that Queenslanders need is a flood tax on top of the other effects of the floods.”
Mr Langbroek said retailers and small businesses would directly feel the impact of the reduction in consumers’ take-home income.
Australian residents and businesses have already dug deep to support the Queensland flood appeal. Total donations stood at $176 million yesterday.
Ms Bligh brushed off suggestions the levy would see donations to the flood appeal dry up and said she hoped Australians understood funds donated to the appeal would help flood-affected mums and dads, while the levy would fund major infrastructure rebuilding work.
A federal government statement said people who had received an Australian Government Disaster Recovery Payment for a flood event in 2010/11 would be exempt from the levy.
Those eligible for the payment of $1000 per adult and $400 per child included people whose homes was destroyed or sustained major damage.
Payments were also made to people who could not gain access to their principal place of residence for at least 24 hours, were stranded in their home for at least 24 hours, or went without essential services such as electricity for at least 48 hours.
These people will not have to pay the levy.
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