Australian PM announces levy to help pay for flood recovery

13:54, January 27, 2011      

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Australian Prime Minister Julia Gillard on Thursday confirmed a one-off levy to help meet the five billion U.S. dollars cost of paying for the devastating floods.

Speaking at the National Press Club, Gillard said the total cost of the disaster to the federal budget would be 5.6 billion U.S. dollars and the cost would be met by the levy and by cuts to government spending.

She said borrowing to pay for the rebuilding of flood-ravaged communities was not an option and warned that Australia's economy must "pay as we go".

"As a nation, we're up to the challenge and we're up to managing the economic strains," she told reporters in Canberra on Thursday.

"Whether with a mop or a shovel or a bulldozer, Australians see what needs to be done and are doing it.

"It is no different for the Government. I see what needs to be done, and I will do it. We will rebuild."

A levy of 0.5 percent will be applied on taxable income between 50,000 U.S. dollars and 100,000 U.S. dollars and a levy of one percent will be applied on taxable income above 100,000 U.S. dollars. Flood victims and anyone earning less than 50,000 U.S. dollars will not pay the levy.

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