18-Feb-2011

The flow of flood recovery discussion in federal parliament has been steady since it resumed in early February, but a flow of funding has been less than forthcoming for devastated South-East Queensland.

In the wake of the floods, the damage bill remains, as parliament questions the viability of a one-year $1.8 billion flood levy payable by taxpayers earning over $50,000.

The House Economics Committee is currently examining two pieces of legislation introduced by the government in relation to the temporary flood reconstruction tax, with some economists labelling the levy as an expensive option.

Reserve Bank board member Warwick McKibbin told the parliamentary enquiry that the levy would incur additional administrative costs and could slow down economic activity.

"I think the decision (to impose a levy) was of a political nature, not an economic nature, because the simple decision would be to borrow," Mr McKibbin said.

Prime Minister Julia Gillard needs the support of four crossbenchers in the lower house and both independent senators to get the flood levy through parliament.

Ms Gillard has secured the backing of north Queensland independent Bob Katter, West Australian National Tony Crook and Family First senator Steve Fielding.

New England independent Tony Windsor has indicated he will vote down the levy while other decision makers remain on the fence.

Senator Fielding pledged his support after securing $500 million in flood reconstruction payments for Victoria.

"We can't leave these flood-affected communities hanging any longer. All sides of politics acknowledge we need to get on with the rebuilding process and I believe that sharing the load is the best way forward," Senator Fielding said.

Meanwhile, SEQ Mayors in flood affected communities are seeking clarity over what will be covered by the Natural Disaster Relief and Recovery Arrangements.

“Essential public infrastructure” repairs are said to be covered by a 75 per cent contribution from the Commonwealth and 25 per cent from the State.

While the definition of “essential” is debated, South-East Queenslanders can only hope it will be enough to get the region back on its feet.