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?
