Australian gov't move to introduce floods levy receives heavy criticism

16:27, January 27, 2011      

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Australian federal government's decision to introduce new flood levy, as well as to scrap greens program in order to pay for floods reconstruction on Thursday received wide-spread criticisms throughout the society.

Speaking at the National Press Club in Canberra, Prime Minister Julia Gillard on Thursday 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 a levy and by cuts to government spending.

Flood victims and anyone earning less than 50,000 U.S. dollars are exempted from the levy, which will apply only in the 2011/12 financial year and raise 1.8 billion U.S. dollars for the federal government.

Gillard also flagged cuts to spending greens programs and caps on others to deliver the billions needed for the rebuilding effort.

While a price on carbon remained the key plank to fighting climate change, Climate Institute's John Connor said it was critical to maintain other climate-friendly programs, like the ones being dumped.

"It's too early to say what this says about (Labor's) commitment (to climate change)," he told Australia Associated Press on Thursday.

"But some of those spending cuts are short-sighted. The prime minister knows that there's money there ... they know there's fat in the budget."

Nationals leader Warren Truss said it was ridiculous for the government to be deferring infrastructure projects actually designed to relieve the impact of flooding.

The Australian Maritime Workers Union (AMWU) called the government's stance on the surplus deadline an "obsession", saying that the government should "adapt the budget to the circumstances created by the Queensland floods, rather than altering the future of our economy to suit the nominal goal of a surplus".

The World Wide Fund for Nature has also criticized the cuts to green programs, saying that "taking money away from climate change programs in the absence of a price and other climate measures will only further delay action and put our economy, lives and environment at more risk".

Meanwhile, leading industry body, the Australian Industry Group, welcomed the axing of "inefficient" green programs, but aired concerns about the lack of accountability for spending overall.

The United Retail Federation said the flood levy will cost jobs, slow the economy and destroy households that are hanging on by "a very thin thread".

Federal Opposition Leader Tony Abbott repeated his opposition on floods levy, and said the government should be looking at spending cuts and its own budget to fund a flood damage repair bill.

The Victorian government also shared Abbott's stance, saying that infrastructure projects should be deferred instead of hitting households with a levy to rebuild flood-affected communities.

Meanwhile, Treasurer Wayne Swan told Sky News that the government is prepared to make further cuts to the budget if the flood recovery bill escalates.

Swan said the government had been able to make "difficult savings" already, but was prepared to go further.

Swan said he was confident there were accountability measures in place to ensure the money was spent wisely.

Source: Xinhua


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