National 3:42 pm AEST November 23 1999 Howard announces Timor tax AAP -- Middle and high income earners will pay a special levy to cover the $1 billion a year cost of Australia's troop deployment to East Timor, Prime Minister John Howard announced today. And the government has announced plans to recruit an extra 3,000 soldiers to form two new infantry battalions to help Australia's defence needs due to the East Timor crisis. Mr Howard said without the special levy, the $3.1 billion budget surplus for 2000-2001 would turn into a $500 million cash deficit for the year. The new levy will increase the Medicare levy by 0.5 per cent for people who earn more than $50,000 a year, and increase the Medicare levy by 1.0 per cent for people who earn more than $100,000 a year. It will come into force from July 1, 2000, and will remain for only 12 months. The levy, similar to the one-off levy which paid for the guns buy-back scheme in 1996, will raise $900 million over 12 months and will leave the budget with a small surplus in 2000-0001. The government said the cost of East Timor could be absorbed in this year's budget surplus and in surpluses forecast beyond 00-01. Mr Howard has also announced the full cost of his GST deal with the Australian Democrats, where the government agreed to remove fresh food from the GST net. Mr Howard said the GST changes knocked $1.8 billion out of the 00-01 budget. He said East Timor was an unexpected cost to Australia which was impossible to predict in the lead up to the budget in May. Government insiders said the levy was similar to the guns levy and was the only way to avoid further government spending cuts. They said further cuts to health, welfare and education would not have been fair. But the levy on the wealthy was a fair and decent way to pay for the commitment to East Timor. They said a person who earned $60,000 a year was already due to receive a $62 a week tax cut under the GST package. The new levy will take $6 a week from the tax cut. The full cost of Australia's East Timor commitment in 2000-2001 would be $1.066 billion, but the United Nations would reimburse up to $120 million. In the current financial year, the full cost of Australia's commitment to East Timor would be $1.028 billion, including almost $900 million for the Defence Force and money for aid and safe haven programs. The recruitment drive for the Australian Defence Force will take total troop numbers from 23,000 to 26,000 and will be aimed at boosting the 4th Battalion of the Royal Australian Regiment (4RAR) and 6RAR based at Holsworthy outside Sydney and Enoggera near Brisbane. The recruitment drive will take the number of active battalions from four to six. The RAAF will also recruit an extra 555 people, largely to work on airport duties and security patrols. ------------------------------------------------------- RecOzNet2 has a page @ http://www.green.net.au/recoznet2 and is archived at http://www.mail-archive.com/ To unsubscribe from this list, mail [EMAIL PROTECTED], and in the body of the message, include the words: unsubscribe announce or click here mailto:[EMAIL PROTECTED]?Body=unsubscribe%20announce This posting is provided to the individual members of this group without permission from the copyright owner for purposes of criticism, comment, scholarship and research under the "fair use" provisions of the Federal copyright laws and it may not be distributed further without permission of the copyright owner, except for "fair use." RecOzNet2 is archived for members @ http://www.mail-archive.com/recoznet2%40paradigm4.com.au/
