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Australia PM Introduces Disaster Tax To Parliament

CANBERRA, Australia (AP) - Australia's prime minister introduced tax legislation to Parliament on Thursday that would help pay for record storm and flood damage, as debate raged about whether the government should instead cut foreign aid.

Prime Minister Julia Gillard said the government's bill for roads, bridges and other infrastructure damaged by weeks of flooding in northeast Queensland state was at least $5.6 billion. Her proposed new income taxes would raise $1.8 billion.

The cost of the damage from a major cyclone that struck Queensland's coast last week - compounding the flood losses and leaving almost three quarters of the state a disaster area - has yet to be calculated.

"In committing to rebuild, we accept that this may well prove to be the most expensive season of natural disasters our nation has ever known," Gillard told Parliament.

The legislation will be scrutinized by a parliamentary committee before lawmakers vote on it in a few weeks. Gillard's Labor Party does not hold a majority in either Australia's House of Representatives or Senate, but the bill will likely pass with the support of independent lawmakers and legislators from the minor Greens party.

The main opposition coalition has dismissed the tax as unnecessary, and called on Gillard's government to find $2 billion from spending cuts, including $448 million promised to build schools in Indonesia.

In proposing the cuts in foreign aid on Tuesday, opposition leader Tony Abbott said the government should give priority to rebuilding ruined schools in Australia.

Thirty-five people in Queensland died in floods that destroyed more than 35,000 homes.

The disaster tax would take effect in July and would apply to people who earn more than $50,000. Disaster victims would be exempt.

The government has proposed to raise the remaining $3.8 billion needed for disaster rebuilding through cutbacks in areas including clean energy programs and by deferring some promised infrastructure projects.