The strain on families will be second to none other shortly IMO, full article below
Emergency Medicare hike expected to raise $3.5bn flood funds
By Dennis Atkins From: The Courier-Mail January 26, 2011 1:00AM 3 comments Increase Text Size Decrease Text Size Print Email Share
Prime Minister Julia Gillard is expected to use an address to the National Press Club to make the case for a levy on Medicare to raise flood relief funds. Picture: Ray Strange Source: The Daily Telegraph
Workers to pay more tax under temporary levy Small increase in Medicare favoured option Tax?would pay for essential flood repairs Interactive: How floods left devastation Latest news: Flood updates in Victoria AUSTRALIANS will pay more tax under a temporary flood recovery levy set to be announced by Prime Minister Julia Gillard in Canberra tomorrow.
Watch Play 0:00 / 1:06Scrubber mute Share Fullscreen Floods to cause inflation spike in March Federal Treasurer Wayne Swan says inflation will spike in the March quarter due to the impact of the floods. 25 January 2011Sky News WATCH MORE VIDEO Ms Gillard and senior ministers, including her deputy and Treasurer Wayne Swan, Infrastructure Minister Anthony Albanese and Finance Minister Penny Wong, met yesterday to sign off on a new levy expected to raise $3.5 billion. It is understood the favoured option is to increase the existing 1.5 per cent Medicare Levy.
The levy was expected to be announced next week after Mr Swan outlined expected flood damage costs in a speech on Friday, but ministers yesterday agreed to get the decision out "as soon as possible".
Related Coverage Interactive: Floods devastation
Ms Gillard is expected to use an address to the National Press Club to make the case for a levy.
While government sources were tight-lipped about the level of any increase, it is understood ministers are keen to keep the rise as small as possible and for it to be accompanied by significant savings from scrapping or deferring billions of dollars worth of spending proposals.
One suggestion is that the increase would be 0.5 per cent or less, which would take the current Medicare Levy to 2 per cent or below.
If it was 0.5 per cent, it would cost an average salary earner about $5 a week and give the Government just under $3.5 billion in a full year to be spent on rebuilding damaged infrastructure, such as roads, bridges, rail and other essential community amenities.
Applying the increase to the Medicare Levy would mean single taxpayers earning less than $18,488 and couples on $31,196 would be exempt. Each dependent child or student would add $2865 to the threshold.
Mr Swan yesterday made his most forceful case yet for a levy, saying: "The only responsible thing to do is to have all options on the table."
He also said cutting spending could only provide so much.
"In responding to this crisis . . . we will have to make further savings but I don't think the Australian people would want us to respond by hacking into essential expenditure in health or education, sacking teachers or nurses," he said.
Mr Swan said the Government was determined to return the federal Budget to surplus as soon as economic growth returned to normal levels and this was not "some vague objective", but rather "the responsible thing to do".
While the Government expects general community support for a levy, especially in those states hardest hit by the floods, ministers are ready for a fierce political battle with the Opposition, which has been ramping up its rhetoric against "another great big new tax".
Opposition Leader Tony Abbott says any levy is unnecessary and the costs could be funded by cutting fat in the system, such as scrapping the "cash for clunkers" car scheme, redirecting remaining stimulus money and taking money out of the funds for the National Broadband Network.
Shadow treasurer Joe Hockey said the Government would be "crazy" to introduce a new tax on the back of fruit and vegetable price rises.
Mr Swan criticised the Opposition for "playing politics", which he said the country could not afford.
He said any decision would be discussed with the Opposition and other parties and Independents in Parliament.
"When the Government takes its decisions we will naturally consult with all of the parties in the Parliament, we'll put it forward and we'll have hopefully a very productive and intelligent discussion about what the options before us are."
