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Government drops Medicare levy rise ahead of Federal Budget

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The Government has scrapped its plans to increase the Medicare levy 0.5 per cent, despite having earlier said it needed the extra money it would raise in order to fully fund the National Disability Insurance Scheme.

Following last year’s budget, legislation was introduced in August for the levy hike, with the Government insisting it was needed in order to fund a $57 billion NDIS shortfall.

But on April 26 this year, just 12 days before handing down the Federal Budget in May, Treasurer Scott Morrison announced a reversal and explained the reasoning behind the decision.

He said the Australian economy was in a better than anticipated position.

“Our economy is finally shaking off the dulling effects of the downturn in the mining investment boom,” Mr Morrison told a business conference.

He suggested the Government was now confident that more revenue from economic growth will fund the NDIS and pay for the assistance scheme 440,000 disabled Australians are depending on.

The move adds to rising speculation that the budget is going to be kind to taxpayers and therefore an election primer.

“Over the last 15 months or so we have seen the economy improving,” Mr Morrison told Network Nine.

“Over the early part of this year and the latter part of last year we started to see the tax collections that were coming from companies doing better, come into the coffers, we could have greater confidence about revenues into the future.

“As this continued to confirm as we prepared the budget, it’s clear we no longer have to do this. I’m pleased as punch we don’t have to do it and pleased as punch for people with disabilities.”

The Opposition has claimed a win, saying the Government was only dropping the levy hike due to pressure from Labor.

But it will now scrap plans of its own to impose the increase on Australians earning more than $87,000.

Shadow Treasurer Chris Bowen said it was Labor’s refusal to support the Government’s intended rise that has killed it.

“I welcome the fact that finally Malcolm Turnbull and Scott Morrison are dropping this tax increase on Australians,” Mr Bowen said.
“They never should have proposed it in the first place.
“The Government now having dropped the Medicare levy increase, of course we no longer need to proceed with that effort of compromise for those above $87,000.
“It was simply the Labor Party proposing to meet the Government in the middle.”
AMA President Dr Michael Gannon said he didn’t care where the money came from, but wants to see bipartisan political support for the NDIS funding model.
“Australians with a disability don’t deserve to be political footballs,” Dr Gannon said.
“Australians with a disability are deserving of this ambitious scheme, but if it’s not fully funded, then there’s concerns about its future.
“We want this ambitious, fabulous program fully funded and reliably funded. It’s not our job to tell Governments how to fund it, but what we will say is Australian families need that certainty.”

CHRIS JOHNSON

 

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