Australia imposes new tax to fund flood recovery

James Grubel and Rob Taylor in Reuters: Australia imposed a temporary new tax on Thursday to help fund a multi-billion-dollar rebuilding program after floods devastated infrastructure and ruined thousands of homes and businesses across the eastern seaboard over the past month.

The floods shut coal mines, ruined crops, washed away roads and rail lines, damaged bridges and destroyed thousands of buildings across three major states, killing 35 people and causing damage estimated at up to $10 billion or more.

Prime Minister Julia Gillard announced a new income tax to raise A$1.8 billion, at a rate of 0.5 percent on annual income exceeding A$50,000 ($49,900) and 1 percent on income over A$100,000. Flood-stricken households are exempt.

…Gillard said the national government would also curb spending on other areas to help patch up its budget, which faced flood costs of around A$5.6 billion. The governments of flood-affected states will also contribute flood recovery funds…