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(Apr 07, 2011) On March 22, 2011, the Australian Parliament passed the Tax Laws Amendment (Temporary Flood and Cyclone Reconstruction Levy) Bill 2011 and the Income Tax Rates Amendment (Temporary Flood and Cyclone Reconstruction Levy) Bill 2011.
These laws provide for the introduction of a levy that is intended to enable the federal government to implement its AU$5.6 billion (about US$5.86 billion) reconstruction package in Queensland, following major widespread flooding as well as the damage caused by Cyclone Yasi. (Press Release, Hon. Julia Gillard, Flood Levy Passes Parliament Providing Kick Start to Rebuilding Process (Mar. 22, 2011).)
To provide for post-flood and cyclone reconstruction, the legislation establishes a one-year, progressive levy of additional income tax in the 2011-12 financial year on Australian resident and foreign resident individuals. (Parliament of the Commonwealth of Australia, Tax Laws Amendment (Temporary Flood and Cyclone Reconstruction Levy) Bill 2011 and Income Tax Rates Amendment (Temporary Flood and Cyclone Reconstruction Levy) Bill 2011: Revised Explanatory Memorandum 3, Parliament of Australia website (last visited Apr. 7, 2011).)
The levy will be set at the rate of 0.5% for individuals with an income of between AU$50,000 and AU$100,000 (about US$52,300 to US$104,600), and of 1% for those making over AU$100,000. People who have been affected by the natural disasters and are receiving the government emergency relief payment in the 2010-2011 financial year will be exempt from the levy. It is expected that the levy will generate AU$1.8 billion (US$1.88 billion) in additional revenue. (Susanna Dunkerley, Federal Parliament Passes Flood Levy to Pay for Recovery Efforts, HERALD SUN (Mar. 23, 2011).)
As a result of negotiations to obtain support for the legislation, the government agreed to strengthen requirements for states and territories to have in place "adequate capital or insurance to fund the rebuilding of essential public infrastructure." (Press Release, supra; Lauren Wilson, Gillard's Flood and Cyclone Levy Wins Vote, THE AUSTRALIAN (Mar. 23, 2011).) In order to be eligible to receive the maximum level of federal government support, states and territories will need to undergo regular assessments of their insurance arrangements by an independent specialist. (Press Release, supra; Wilson, supra.)
|Author:||Kelly Buchanan More by this author|
|Topic:||Disasters More on this topic|
|Jurisdiction:||Australia More about this jurisdiction|
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Last updated: 04/07/2011