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Australia flags taxpayer levy for floods

Aussie floods slash $3bn from farm, mine forecasts
Sydney (AFP) Jan 21, 2011 - Australia's vast floods are expected to cost the economy around Aus$3 billion ($3 billion) in lost coal exports and farm production, the national forecaster said Friday. Major bank ANZ has already warned that the floods -- which devastated the northeastern state of Queensland, wiping out crops and swamping coal mines -- could cost Aus$20 billion in rebuilding efforts. The Australian Bureau of Agricultural and Resource Economics and Sciences (ABARES) said the deluge would likely hurt coal exports in resources-rich Queensland by 15 million tonnes.

"This represents a reduction in export earnings of around Aus$2-2.5 billion," on the original forecast for December 2010 and March 2011, it said. Queensland accounts for 56 percent of Australia's black coal production and 62 percent of the country's coal exports and the disruption to supply caused by the floods would likely result in higher prices, the bureau said. "Production and sales of thermal and metallurgical coal will be affected because Queensland produces large quantities of both coal types," ABARES said.

"However, it is anticipated that coal prices could be settled at higher levels, partially offsetting the adverse impact on coal industry revenues." In terms of agriculture, the floods, which have also affected the southeastern states of New South Wales and Victoria, would reduce farm production by at least Aus$500-600 million in 2010-11. The deluge would have "significant impacts" on fruit and vegetables, cotton, and some winter crops although livestock losses were reportedly small. "These costs do not take into account the cost of lost farm infrastructure and assets which may amount to much more," ABARES said.
by Staff Writers
Sydney (AFP) Jan 21, 2011
Australian Prime Minister Julia Gillard Friday raised the prospect of a one-off tax to pay for rebuilding after epic floods, as rising waters prompted more evacuations in the southeast.

Crops, roads and railway lines were washed away and thousands of homes destroyed by vast floods that swamped Queensland state this month in what the government has said could be the nation's most costly natural disaster.

The rolling disaster is now hitting the southeastern state of Victoria, where thousands have been urged to evacuate their homes in scores of towns as swollen rivers cut off entire communities.

Prime Minister Julia Gillard said Australians had pulled together to begin the massive recovery in worst-hit Queensland, as she said was considering a one-hit tax to help pay for the reconstruction.

"There there will be difficult decisions, there will be spending cutbacks, and there may also be a levy to support the rebuilding that we need to do," Gillard told reporters in Adelaide.

"When I make those decisions I fully expect there will be some criticism and there will be some complaint. But I am determined that we make the decisions that are right for the nation and right to rebuild the nation after the devastation that we have been through."

She did not give any details of the levy.

The previous conservative government of John Howard imposed a series of one-off levies, including a 0.2 percent hike to a tax paid by high income earners without private hospital cover to pay for a gun buy-back.

A Aus$10 ($10) levy was placed on plane tickets in 2001 to help recoup worker entitlements after Ansett airline collapsed.

Gillard said the challenge of the crisis was not yet over as the worst floods in recorded history threatened homes and farms in Victoria, prompting officials to warn the 200 residents of Beulah to evacuate.

Nearby Jeparit is also at risk, with river waters rising, while communities between Swan Hill and Kerang are in line for the moving floods which are expected to linger for up to 10 days.

The prime minister has committed herself to bringing the budget back into surplus in 2012-2013, despite the massive floods that wiped out crops and swamped coal mines in key producer Queensland.

Major bank ANZ has already warned that the floods could cost Aus$20 billion in rebuilding efforts while the national forecaster said they would wipe Aus$2.5 billion from coal exports and cut farm production by Aus$600 million.

The prime minister said while the deluge could result in higher food prices and hurt GDP, she insisted Australia's mining-driven economy was resilient.

"We've got to remember our economy is strong with a large pipeline of investment coming through," she told ABC TV late Thursday.

"That means by 2012-13 our economy will be running hot and when your economy's running hot that's the right time to be having a budget surplus and saving for the future."

But the opposition attacked the idea of a flood levy, saying it was an unnecessary tax and called on Gillard to rein in "out-of-control government spending".

"There will have to be very substantial Commonwealth government spending as part of the recovery and reconstruction phase, but there's a right way and a wrong way to find that money," opposition leader Tony Abbott said.

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