It is supposed to be a tax that the rest of Australia pays for, to help those affected by devastating floods, but it appears that some of the victims will have to fork out as well.
Prime Minister Julia Gillard yesterday announced a levy to pay for some of the loss from floods in Queensland, WA, Victoria, NSW and South Australia.
The levy, which would be for the 2011-12 financial year, is expected to raise $1.8 billion.
Those earning between $50,000 and $100,000 a year would pay an additional 0.5 per cent tax, rising to an additional 1 per cent for those earning more than $100,000.
While those receiving the federal government’s Disaster Recovery Payment – of $1000 for adults and $400 for children – do not have to pay the levy, recipients of another relief measure may still have to pay up.
There was no mention of exclusions for those paid out through the Disaster Income Recovery Subsidy, an ex-gratia payment equivalent to the maximum rate of the Newstart Allowance.
The payment is for those who have lost income as a result of the floods.
A spokeswoman for Ms Gillard said those people were not included in the exemption from the levy because they would not be paying any tax, due to their loss of income.
Some might qualify for an exemption anyway because they received the payment. To be eligible, they have to be “adversely affected” by a disaster, with examples including injury, death of a family member, or major damage to their home.
But federal Opposition small business spokesman Scott Ryan said tens of thousands of employees, small business people and farmers could be affected by not exempting the subsidy.
“It appears that the Gillard government has dumped a new tax on the shoulders of the very people it is supposed to be helping,” Mr Ryan said.
“Julia Gillard promised that she would ensure that those affected by the floods do not have to pay the levy – right now, that claim appears to be false.”
Mr Ryan said those getting the payment would receive it this financial year, but with the tax levied on income the following year, they had an advantage over those only getting the subsidy.
“They could get the subsidy now, but not next year,” he said.
“Small businesses and farmers might get on their feet again in the next financial year, and end up going over the threshold, but why should they pay when Julia Gillard’s promised no one affected by the floods will?”
About $120 million has been set aside for the subsidy, with more than 23,000 claimants so far. The government has budgeted for about 70,000 claimants.
Another $600 million has been budgeted to be paid to about 490,000 people under the payment scheme.