Flood levy blues

THOUSANDS of people, including high-income earners whose homes were not flooded, have a ready-made loophole to avoid paying the Federal Government's new flood levy.

And several Queensland projects designed to stop flooding on the Bruce Highway are likely to fall victim to federal spending cuts to help rebuild the state.

The flood levy will not apply to anyone who received the Australian Government Disaster Recovery Payment, which was not means tested. As of last Friday more than 250,000 Queenslanders - one in every eight - had collected the payment of $1000 for adults and $400 for children.

The eligibility criteria was broad and paid out even if residents simply could not access or leave their homes for 24 hours or lost electricity, water or gas for at least 48 hours.

Prime Minister Julia Gillard said the floods posed a massive challenge to build and manage economic capacity. "We're not just going to need money, we're going to need concrete and rubber and steel and more importantly, we're going to need carpenters and bricklayers and road gangs," she said.

However, Opposition Leader Tony Abbott yesterday continued his attack on the levy, calling it unfair, particularly on those who lost their businesses but whose homes remained unaffected. "They obviously face very great reconstruction costs that in many instances won't be covered by insurance and they will still be paying the flood tax under the scheme," he said.

The Government has gone all out to sweeten its levy, restricting its impact to people earning over $50,000 and promising it will not increase and will last just 12 months starting from July 1.

Those earning between $50,000 and $100,000 will pay 0.5 per cent in 2011-12 which rises to 1 per cent on taxable income above $100,000. According to the Government, 60 per cent of taxpayers will pay $1 a week or less and the tax hike only reaches $5 a week when income exceeds $100,000 a year.

But it came under fire for its planned $2.8 billion in spending cuts which hit several projects agreed with the Greens to help Labor form government after the last election.

The federal Independents are also expected to see cutbacks to the $10 billion in regional spending they secured in exchange for supporting Labor.

Queensland Independent Bob Katter has thrown his support behind the levy, saying the precedent was sure to one day benefit North Queensland.

The Greens accused the Government of turning its back on the cause of the disaster climate change. "But it does a disservice to all those tragically affected by these floods . . . to keep insisting that these are one-off events and ignore the role of climate change," Greens Senator Christine Milne said.

Independent Rob Oakeshott said he would examine the package and discuss possible amendments. "On the specific question of flood package impacts on the agreement reached to form Government, I expect that all aspects of the agreement both in writing and in spirit will be upheld," he said.

Agriculture Minister Joe Ludwig the Gillard Government's point man for the recovery told The Courier-Mail the work so far had focused on cleaning up after the floods and the effort would now shift to the bigger rebuilding task. "Queensland needs to be rebuilt and it will be rebuilt," he said.

State Premier Anna Bligh supported the package and thanked Australians for helping Queensland. "I understand that no one wants to pay more but the people of Queensland didn't want this disaster either," she said.

SOURCE