21 Jan 2011

Levy flagged by Gillard to pay for flood recovery

2:49 pm on 21 January 2011

Australian Prime Minister Julia Gillard has for the first time raised the prospect of imposing a special one-off flood levy on taxpayers to help fund the rebuilding of Queensland.

Ms Gillard said on Friday that the federal government can help rebuild Queensland and still return the Budget to the black in 2012-13.

However, the ABC reports she said that will involve tough decisions including spending cuts or the possible introduction of a flood levy.

"We will rebuild Queensland and we will bring the budget to surplus in 2012-13 because that's what our economy will require," she told the ABC.

"(But) that does mean we will face a number of tough choices," she said.

Ms Gillard said she cannot say when taxpayers will know whether they will be paying more tax, and if so how much more and what spending will be cut.

"I am working on those decisions now, and, when I'm able to, I will announce them at the appropriate time," she said.

"We obviously have more work to do. We don't have the total damage bill yet.

"We have a lot of flood damage to repair in Queensland - there will be some economic effects... but our economy is strong and we will get through this by pulling together, the same way we got through the global financial crisis," she said.