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Government Increases Medicare Levy To Pay For Increased Commitment To Timor

The Federal Government today announced an increase in the Medicare levy for people earning in excess of $50,000 to pay for an increased Australian commitment to East Timor.

The levy, to be known as the “Defence – East Timor levy”, will apply for the financial year 2000-01 only. Taxpayers earning between $50,000 and $100,000 will pay an additional 0.5% levy. Taxpayers earning over $100,000 will pay an extra 1%.

Speaking to Parliament today, Prime Minister Howard said that the commitment to East Timor would cost around $1.1 billion dollars in 2000-01. He said that combined with changes to the GST legislation negotiated with the Democrats earlier this year, the budget in the next financial year would record an underlying cash deficit of approximately $500 million. The increased levy is designed to prevent the budget going into deficit.

The Prime Minister also announced the formation of two additional infantry batallions for the Australian Army.

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