Australia Mulls One-Off Flood Tax

Residents struggle to rescue their cars as flash floods sweep through Toowoomba in Queensland . Photo by EPA/BGNES

Australia’s Prime Minister Julia Gillard has proposed the introduction of a one-off tax to help pay for the damages caused by the devastating flooding.

The flooding in the worst-hit Australian states of Queensland and Victoria would cost at least AUD 3 B in local coal exports and agricultural production, according to estimations by economists, the BBC reported.

According to the ANZ Bank, reconstruction would cost another AUD 20 B.

At least 30 people have died since December when tropical storms began and caused huge floods in some parts of Australia.

Gillard spoke on the national television and vowed to balance the budget and rebuild shattered communities.

“We don’t have the total damage bill yet but I want to be very blunt with Australians – we have a lot of flood damage to repair in Queensland, there will be some economic effects,” she said, as cited by the BBC.

She added that there will be spending cutbacks and there is also the possibility of a levy. However, the opposition attacked the idea of levy as unnecessary, adding that the government should cut back its own spending before taxing Australians.

According to the Australian Bureau of Agricultural and Resource Economics and Sciences (ABARES), the floods would probably cut 15 million tones of Queensland’s expected coal exports.

More than half of Australia’s black coal production, and 62% of the country’s coal export, comes from Queensland.

Although livestock losses were reportedly small, national forecaster estimated that the impact on farm production would cost at least AUD 500-600 M.

The devastating floods caused the washing away of roads, railway lines and tens of thousands of homes.

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