Flood Levy : For or Against?
- Image by Getty Images via @daylife
Australia is currently abuzz with the announcement that our Government plans to introduce a Flood Levy through our tax system to help pay for the flood damage that has occurred throughout 75% of Queensland and has affected other states as well. From what I understand, they’re estimating it will cost in excess of $5 billion just to repair and replace infrastructure (I don’t think this includes the cost to private homes and community groups but I could be wrong).
I can’t make up my mind whether I’m for or against the idea but here are my thoughts:
FOR
1. EVERYONE contributes so it’s a more “fairer” system, which fits with Australia’s basic “ethos” (not all Australians seem to live by the basic ethos that everyone pitch in and help during a crisis - although many still do.)
2. It will reduce the amount of debt our country may have to go in to recover from the flood damage.
3. If you’re on $50,000 - $100,000 a year, we’re only talking $1-$5 a week.
AGAINST
1. Is the Government spending our money all that wisely? Is there more that could be cut in the spending to fund this recovery (I know the Government is still contributing a significant amount on top of what the Levy will raise).
2. Is it true that the Government could afford to pay for this BUT it would hinder their chances of bringing forth the promises surplus by 2013 (and so more of a “politic stunt” than a “need” per se).
3. What about those who have already been extremely generous and given out of the goodness of their heart? Is it fair that they give twice. Will it make people reluctant to be so generous in the future, for fear of a similar thing happening again? (and yes, I know that the money is going to 2 separate recovery efforts but will others know this?).
4. Will the Government keep to their promise that it’s a “once-off” levy? We have other levies (like the fuel tax) that apparently don’t always get used for what they’re collected for.
5. It’s a significantly higher amount for those on higher incomes. It’s easy to think “they can afford it” but bear in mind, they already pay more tax and many don’t have any more $$ left over at the end of their pay than anyone else does.
HOW DOES IT AFFECT US?
I don’t really mind having to pay it. I doubt many people do. Those not affected are so thankful they aren’t in the same boat that they’re more than happy to help out. Unfortunately the cost of such a large natural disaster can’t help but affect everyone in one way or another (whether it’s spending cuts or more tax - the money has to come from somewhere).
Unfortunately for us, it’s going to cost us a lot more than it really “should”. This year is the first year in 8 years that we’ll actually make an income. During that time we accrued a MUCH larger than normal level of working debt (we have plenty of other debt on land and machinery but this is just debt that covers the cost of putting a crop in). Based on what we live on, our contribution would be about 48c a week. Based on what we’ll need to “earn” in order to repay said debt, we’ll have to pay around $15 a week. Such is life when you run a business eh?
At the end of the day, I don’t think I’m really against the idea as such, I’m just not really sure about it. How’s that for sitting on the fence? I do think we’re all going to have to “tighten our belts” in the coming months though as combined with the extra cost of recovery is the extra cost of living (through food prices etc) as a result of this disaster. Whether we like it or not, this affects each and every one of us and will continue to do so for some time.
What’s your opinion and how will it affect you?
Are you worried about how your finances will cope with the extra strain of more tax as well as rising food prices?
Related articles
- The package as summarised by Gillard: (petermartin.com.au)
- Flood bill: rich pay more (theage.com.au)
- Gillard flood levy runs into rough water (theage.com.au)
- Flood levy ‘just plain dumb’: Hockey (theage.com.au)
- Levy ‘will cost jobs’, says retail body (theage.com.au)
- Abbott repeats opposition to flood levy (news.theage.com.au)
- ‘All should pay as all are affected’ (theage.com.au)
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I’m in two minds just like you. I don’t mind paying because the money is for a good cause and will help people rebuild their lives.
BUT, there wasn’t a levy suggested for the Victorian bushfire victims, or for any other recent disaster. And the River Murray levy has been paid into for years and was supposed to save the Murray, but hasn’t.
Also, we’ve been a country of droughts and flooding rains forever, yet no government will commit to the most sensible solution of building dams and other catchments all over the country and connecting all of them with giant pipelines so that when one area has flooding type rainfalls, the water can be directed to other drier parts of the countyr instead of being allowed to destroy towns, homes and lives. With dams and pipelines, all of Australia could have water. Unlimited water, since QLD annually has enough rainfall to supply the whole country. I read that somewhere in a newspaper once.
For.
No questions asked or needed. It’s about $10 a week for us (I think, if those tables are right). That’s less than I spend on coffee each week. That’s less than the packet of cigarettes the bloke doesn’t realise I know he buys each week. That’s less than half the Transformer the kid desperately wants… In the scheme of things, it’s nothing. We can afford it. We can also manage the increase in vegie costs (although the wastage is already doing ma head in - the stuff we’re buying NOW isn’t lasting us a week, and shopping for F&V more often than weekly is not really possible)
And yes, we are a land of floods and fires - there will be more floods and more fires and some floods and fires (and some pestilence as well, I imagine). More dams and more pipes makes sense - but they also need to be funded. Maybe a dam levy as well (or a damn levy…)
While I don’t think the amount to pay is a big issue - not going to put me in the poor house or anything like that, I do have to question the management of the taxes we already pay to the government. And the governments job, and why we pay tax, is to look after infrastructure. I know this is bigger than normal and at one time, but surely it will be bringing forward some things that would have been needed in the future.
Living in the government heartland of Canberra, the government waste is clear to be seen - there are so many big big beaurocracies here. A lot of public servants do work hard, but there is a lot of systemic rorting of employment conditions (go back to work for 3 months, before you get your next 6 months on half pay paid mat leave??? Switching from part time to full time work a few months before you go on mat leave???) and waste in all government departments. At one stage the dept of defence couldn’t even find some of their big ticket assets!
Also the governments track record on managing big projects hasn’t been too great - insulation? school buildings?
I completely lack confidence in the government to be able to manage the funds they raise through the levy effectively and efficiently - that is my biggest gripe against the whole idea.
I’m like you. No question about the idea of the levy per se, but lots of questions about how it’s going to be distributed and managed, and if the government will be responsible with it.
I agree with Kelli here about our taxes being mismanaged and infrastructure being ignored.
If a dam and pipeline levy were to be implemented I’d pay, but I’d want to be seeing some results pretty quickly. Of course I realise these things would take time to build, but if I didn’t see any dams or pipes in 5-10 years I’d be pretty pissed off and wonder just where my money was going.
Like the River Murray levy, which seems to have gone to pay consultants and bureaucrats, while the Murray still struggles.
Its something you are always going to struggle with and you have my deepest sympathy from over here in the UK.
Although the banking crisis is in noway comparable to the disaster that you have and still are by all accounts going through, the lack of forsight from people in authoritive positions has put the UK in a position where the UK tax payers is having to cover the mistakes of the major UK banks and previous goverments.
At the end of the day Australia is one nation and the only way the people affected are going to recover from this disaster is if people the entire nation bares the cost of the recovery.
Craig
What I don’t like is that the government seems to be reluctant to dip into the overseas aid fund and I know it sounds selfish but if there was a disaster in a foreign country tomorrow would it be right to give them a wad of cash from that fund while our own citizens are struggling.