AUSTRALIA'S planned new flood levy is sound fiscal policy, a senior analyst at Moody's Investors Service said today, flying in the face of a barrage of criticism for the measure from opponents who say it is an unnecessary burden on taxpayers
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The comments by Steven Hess, a New York-based senior credit officer in Moody's sovereign risk group, runs counter to a storm of opposition to the government's $1.8 billion tax designed to offset reconstruction costs after flooding wrecked swathes of Queensland.
The state of Queensland makes up some 20 per cent of Australia's $1.3 trillion economy and supplies close to two-thirds of the seaborne trade in the high-grade coking coal used for steelmaking, and the floods have already punched a $5.6bn hole in the federal budget.
Says Mr Hess of Moody’s:
“The levy shows the strong fiscal discipline in Australia.”
Mr Hess, who is Moody's top analyst for the US and Australia, was speaking with Dow Jones Newswires in an interview.
“The Prime Minister's commitment to returning to a balanced position is evidence there is a very strong discipline in Australia,” he said.