RESERVE Bank board member Warwick McKibbin has slammed as political opportunism the government's planned hike to the Medicare levy to pay its $5 billion share of Queensland's repair bill, warning that the tax increase could deliver another kick to an economy already hit by the floods.
Federal cabinet will sign off this morning on a preliminary package of measures to cover the cost to the commonwealth of repairing Queensland's infrastructure before Julia Gillard announces the details in a National Press Club address in Canberra.
The expected rise in the Medicare levy from 1.5 to 2 per cent, if agreed, would hit middle-income earners the hardest, wiping out the gains made from the 2010-11 tax cuts for people earning between $60,000 and $100,000.
The increased levy, to apply from July 1, would raise about $3bn and is likely to be supplemented by $2bn-$3bn in spending cuts to allow the government to fund reconstruction work while honouring its election promise to return the budget to surplus in 2012-13. Read more.
The expected rise in the Medicare levy from 1.5 to 2 per cent, if agreed, would hit middle-income earners the hardest, wiping out the gains made from the 2010-11 tax cuts for people earning between $60,000 and $100,000.
The increased levy, to apply from July 1, would raise about $3bn and is likely to be supplemented by $2bn-$3bn in spending cuts to allow the government to fund reconstruction work while honouring its election promise to return the budget to surplus in 2012-13. Read more.