After a devastating 2 months in Eastern Australia which saw much of rural Queensland, Victoria and New South Wales affected by floods that also found their way into the Queensland capital of Brisbane, the Australian Prime Minister Julia Gillard announced her intention to create a Flood Levy through the tax system to raise some A$1.8bn to go towards the cost of rectification.
This is the first time an action of this type has been required and is meeting with mixed views on the merit of making this part of the political power in case it becomes a regular feature in our tax system.
The new levy is set to be income based, costing 0.5% of your taxable income if you earn over A$50,000 in the 2011 Financial year.
The may mean some A$250 to A$500 charge imposed against many Australian taxpayers unless they were personally affected by the flood themselves, in which case they may be exempt from the levy.
Imposing a levy through the tax system may have the unwelcomed effect that people will be less likely to give to approved charities that are helping flood victims such as the Premier’s Disaster Relief Appeal , as they feel the tax may be more than their generosity can afford.
We are also yet to see the potential administration costs or full detail of how the funds will be applied to the affected communities.
For many overseas based Australian taxpayers, there is little likelihood that a levy will be imposed as most would not have a taxable income in Australia of the A$50,000 threshold.
We would recommend that you do you part and make a voluntary contribution to this valuable cause, perhaps by a direct contribution to the Premier’s Disaster Relief Appeal.
