Australia to cut spending, raise taxes to pay for floods

Australia wants to tax those not affected by massive flooding and cut spending to pay the more than $5 billion bill it is anticipating after weeks of rain swamped much of the eastern half of the country.

The government says it hopes to avoid borrowing to pay for rebuilding after what could prove to the country's costliest disaster.

Prime Minister Julia Gillard announced that the temporary tax would apply to Australians with above-average incomes and would exclude those who were affected by the floods.

A vast inland sea of floodwaters is continuing to move across southeastern Australia.

The flooding has so far claimed 35 lives, damaged or destroyed 30,000 homes and businesses and caused at least $3 billion in damage to crops and lost coal exports.

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