Tony Abbott rules out tax hike to fund Iraq mission

MELBOURNE: Australian Prime Minister Tony Abbott today ruled out tax hike to pay for the country's contribution to the Iraq war expected to run into millions of dollars.

The Prime Minister told reporters in Canberra that although the costs of the war were high they were still manageable.

"We think we can afford it. I do not want to underestimate the budgetary challenge that we are facing, but I do think that you should see the costs of this commitment in perspective and they are manageable," Abbott said.

Abbott has previously said the cost of military missions total roughly a quarter of a billion dollars every six months and the mission in Iraq could stretch for "many months".

Earlier, Finance Minister Mathias Cormann had refused to "rule anything in or rule anything out," when asked if the government was considering new taxes to pay for the military mission.

"This is a Government which believes in lower taxes, not higher taxes. We will pay what we must to do our duty by our country and by the wider world. Just at the moment, national security and international security are indivisible," Abbott said.

"In a budget of something like 400 billion Australian dollars a year, we can manage these things," he added.

The Prime Minister further said that "Australian special forces were ready to go" to Iraq as soon as legal documentation is complete.

"We are finalising the legal documentation," Abott said, however he did not specify how long that would take.

"We have written to the Iraqis, the Iraqis have written back to us, and now we need to consider their response to finalise our considerations," Abott said, underlining the need to have legal sanction before sending Australian forces to Iraq.

Interestingly, no permission was sought from Iraq before the 2003 invasion. US had argued that it had the approval under a UN measure and Australia had used the same argument.