Julia Gillard today announced a 33 per cent hike in the Medicare levy to fund part of a national disability insurance scheme (NDIS).
The 0.5 percentage point increase will take the levy from 1.5 per cent to 2 per cent in July 2014, raising an extra $3.2 billion a year in revenue – about $365 a year for workers on average wages of $70,000, according to the Prime Minister.
The Prime Minister, her Treasurer Wayne Swan and the Minister for Disability Reform, Jenny Macklin, made the announcement at a press conference in Melbourne earlier this morning.
“[For] an Australian who is on an average income of, say, $70,000 a year … they would be asked to contribute around $1 a day in extra Medicare levy to create disability care,” Ms Gillard said.
The total cost of an NDIS, now known as DisabilityCare Australia, is estimated at $8 billion a year. “All of the money raised will be put in a special fund for disability care… and only spent on disability care and its creation and the roll-out of services,” Ms Gillard said.
Mr Swan said it was vital the NDIS had a “stable, secure funding scheme”.
“We are asking people to pay a little more to do a little more for those with disabilities that have been left behind.”
The Opposition Leader, Tony Abbott, yesterday criticised plans to fund the NDIS through a Medicare-style levy, arguing that if the budget were under control the scheme could be funded from general revenue.
“The problem is the cupboard is bare. And now the government is coming after you for yet more money to fund its schemes,” Mr Abbott said. “It’s a question of priorities.” – Kaycee Shingles-Moore