(CNN) -- The cost of repairing flood damage in Australia will top AUS $5.6 billion (US $5.58 billion), according to Prime Minister Julia Gillard, who proposed a one-year tax to help fund the reconstruction.
"The great floods of this summer have been a national tragedy, not just a natural disaster, because of the awful loss of human life," Gillard said Thursday. "The great floods of this summer have destroyed billions of dollars of wealth and robbed us of billions of dollars of income. In time they may prove to be the most expensive disaster in Australian history."
Gillard said the money will come from $2.8 billion (US $2.79 billion) in spending cuts, $1 billion (US $995.6 million) in delayed infrastructure projects and $1.8 billion (US $1.79 billion) raised through a progressive, one-year income tax on people earning more than $50,000.
"The levy will apply only in the 2011-12 financial year ..." Gillard said. "People who were affected by the floods will not pay this levy."
Flooding in Australia, primarily in the state of Queensland, has affected more than 3 million people, making it one of the most costly disasters in the nation, the federal treasurer said over the weekend.
The cost of the damage surpasses past tragedies like major bushfires two years ago and floods in the 1970s, Treasurer Wayne Swan said.
The floods have devastated crops, tourism, retail and manufacturing, and have disrupted major urban areas like Brisbane, according to Swan.
"One of the biggest casualties is likely to be our coal exports, with many mines shut down in big coal mining regions like the Bowen Basin, and supply chains severely hampered," Swan said. "While this will be partly offset by higher prices, the loss of production will be hit much harder."
Swan said the government has already made about $227 million in disaster recovery payments to people who have been affected by the floods.