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AiGroup flood package warning

03-02-2011
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Business chief Heather Ridout says industry can live with the federal government's flood recovery package, including the levy.

But Ms Ridout reiterated the need for “transparency and accountability of the program.”

Ms Ridout, an appointee to the government's floods recovery business taskforce, says the Federal Government’s package of measures for flood affected communities “strikes a reasonable balance between spending cuts and revenue raising.”

“Transparency and oversight are essential and regular reports should be given to taxpayers on spending on all flood recovery projects, says Ms Ridout.

“We need to be clear on why projects are being selected, how the money is being spent and whether it is being spent well.”

"The doubling of the relocation assistance for moving to Qld and the expediting of 457 visa approvals for flood related work will add to local capacity to deal with the rebuilding effort, she says.

"However, in terms of support for addressing skill shortages and skills development more will clearly need to be done and we will be looking to the Federal Budget for further action.

"In terms of the cuts to green programs, Ai Group has long said that inefficient climate-related spending should be curtailed, particularly if a carbon price is to be imposed. By shaving, slowing and cutting several programs with high abatement costs and low value for money, the Commonwealth has made a step in the right direction.”

Ms Ridout says the states and territories have similar “inefficient” green programs, and they should take similar action.

Ms Ridout was one of ten business leaders hand-picked by the Federal Government to head up a special business task force to help with Qld's flood recovery.

The AiGroup has implemented a number of practical measures to help business get back on their feet.

An Ai Group Industry Connection Directory has been established which connects businesses offering products and services for free or discounted rates, to those companies affected by floods.

This directory is open to all businesses, Ai Group members and non-members, Australia wide to help their counterparts get back to business as soon as they can.

Prime Minister Julia Gillard says the Federal Government must find around $5 billion to help rebuild flood affected areas across Australia, and has detailed its plans for a flood levy.

In a one off levy to most taxpayers, that will apply for one year only, the Government hopes to raise around $1.8 billion.

Those earning more than $50,000 will pay half a per cent those on more than $100,000 will pay 1 per cent.

Ms Gillard says the levy will work like income tax rates, not like the Medicare levy.

"Under this levy, someone who has an income of $60,000 will pay just under $1 extra per week. A person earning $100,000 per year will pay just under an extra $5 per week."

Treasury's preliminary estimates are that GDP growth in this financial year will be about half a percentage point lower due to the floods.

Ms Gillard says borrowing the money to rebuild is a soft option and one she's not prepared to consider, and she's committed to bring the Budget back to surplus in 2012-13

Ms Gillard says the rebuild will begin with an upfront payment to Queensland of $2 billion, which will help more than 60 flood affected communities to start repairs now.

The $5.6 billion funding and skilling package for flood rebuilding includes program cuts, a deferral to some new infrastructure and a one-off levy to most Australian income earners from July this year.

It will not include low-income earners and people affected by the floods.

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