PM Gillard challenges Coalition to voice own plans for NDIS

UPDATE: PRIME Minister Julia Gillard says the Coalition needs to outline how it plans to pay for a national disability insurance scheme after Opposition Leader Tony Abbott refused to say whether he would support Labor's plan to lift the Medicare levy.

Ms Gillard ended days of speculation on Wednesday by revealing she would ask voters to endorse her plan to raise the Medicare levy by 0.5% to 2% from July 1 next year to fund DisabilityCare Australia.

The measure would generate $3.3 billion in its first year and $20.4 billion between 2014-15 and 2018-19, when the full scheme comes into place.

All money raised from the levy would be placed in a special fund created specifically to pay for the NDIS.

Legislation to create that fund and the levy would not be introduced until the next Parliament, she said.

What ensued was a day of political toing and froing between Ms Gillard and Opposition Leader Tony Abbott.

Mr Abbott criticised the fact the levy would raise only part of the money needed to fund the scheme.

He also questioned the government's decision not to take the proposal to the current Parliament.

"The other thing that disappoints me and I'm sure will disappoint people who want the most vulnerable in our community to get better services, is that the Prime Minister is not proposing to legislate the scheme," Mr Abbott said.

"Now, if she's fair dinkum, why not do it in this Parliament? We've got a month of Parliament left after Budget week, why not get the legislation into the Parliament, deal with it in this Parliament, so then we can get on with the job of building the kind of national disability insurance scheme that all Australians would like to see?"

But despite repeated questioning, Mr Abbott refused to say whether he supported the idea of a levy, saying only that he wanted to know where the rest of the money would come from to fund the NDIS.

By mid-afternoon the Prime Minister was attempting to call Mr Abbott's bluff.

"Well, let me say this very clearly to Tony Abbott and to the Australian people - if Mr Abbott says he will support this half-a-per-cent increase in the Medicare levy in order to fund DisabilityCare, then I will bring the legislation to the Parliament immediately," she said.

"If Mr Abbott can't answer that question ... or he says no to this legislation, then I'll ask the Australian people to decide the question in September."

Ms Gillard said she would only seek to legislate before the election with bipartisan support, saying she did not want it to be become a "political play thing"

"It's too serious for that," she said.

Asked how she would make up the funding shortfall, Ms Gillard would not be drawn on detail but said the government would continue to "make responsible savings".

Ms Gillard, who had previously ruled out a levy to pay for the NDIS, said she had been swayed by three factors.

"First it is clear from what I said to the nation on Monday that amount of tax money coming to the government is not what we expected," she said.

"Second ... it has become clearer to me the dimensions of the fiscal ask we are putting on the states and territories and that we will be able to see the national rollout of DisabilityCare occur more easily if there is some more support for the states and territories to get it done.

"And third, I have heard loud and clear the calls from disability advocates, from the disability sector, from people with disabilities themselves, from their family members, their friends and carers, to make sure there is peace of mind and security around funding arrangements for DisabilityCare."

Treasurer Wayne Swan said the states which had so far refused to sign up to the NDIS were "out of excuses".

So far just New South Wales, South Australia and the ACT have agreed to help deliver DisabilityCare, which will launch in July at four test sites around the country.

Mr Swan said the recalcitrant states would have their share of the DisabilityCare funding quarantined until they agreed to participate.



What a 0.5% increase to the Medicare levy would mean for people on the following annual taxable incomes:

  • $30,000 - an extra 41 cents per day, or $150 a year
  • $50,000 - an extra 68 cents per day, or $250 a year
  • $70,000 - an extra $96 cents per day, or $350 a year
  • $100,000 - an extra $1.36 per day, or$500 a year


$300 NDIS levy 'politically risky' for Gillard Govt: academic

LABOR will struggle to sell its proposal to increase the Medicare levy to pay for the national disability insurance scheme, a Monash University academic predicts.

Dr Zareh Ghazarian said a new tax was "never, ever popular" and Labor's plan to take the levy to an election was a "very politically risky".

"It's going to be very difficult for the government to make good political mileage out of this," said Dr Ghazarian, from the university's School of Political and Social Inquiry.

"The (NDIS) policy is ... something voters agree with, but the way in terms of paying for it and the way in which the government has announced the plan to pay for it is not going to go down well."

Dr Ghazarian said the NDIS levy would not be the main issue at the September 14 election.

He said it would be among policies debated in the lead-up to the poll but would not be the issue that brought the government down.

"That was done with the carbon tax. That's going to be the big one," he said.

But the Coalition would almost certainly use the levy to attack Prime Minister Julia Gillard and the government, he predicted.

Dr Ghazarian said it also fuelled the perception the government was untrustworthy and incapable of managing the economy.

"My sense is ... voters don't really believe the line that the government has come up with, that they were suddenly caught off guard, that the economic situation was worse than they thought it was going to be," he said.

"It links in very neatly with what the Opposition has been running, which is, of course, that this Prime Minister is untrustworthy, and this is going to be interpreted ... as yet another lie, another broken promise."

Dr Ghazarian said the proposed levy bore some similarities with the government's decision to put a price on carbon to combat climate change.

"It's the classic public policy conundrum, where people want to do something about a particular problem, but they have different thoughts about whether they should be the ones paying for it," he said.


Average Aussie to pay $300 a year to fund disability scheme

AUSTRALIANS will be asked to pay a levy to fund the national disability insurance scheme if Labor wins the September 14 federal election.

Prime Minister Julia Gillard, who had previously ruled out imposing a levy to fund the NDIS, was joined by Treasurer Wayne Swan and Community Services Minister Jenny Macklin in Melbourne to announce a plan to increase the Medicare levy by 50 basis points to 2%.

Labor will take the plan to the next election and if it retains government the additional levy would come into effect from July 1 next year.

Asked if it was politically risky to take a new tax to an election, Ms Gillard said it was the "right decision for our nation's future".

The Prime Minister, who earlier this week said all options were on the table as the government grappled with dwindling revenue and a widening deficit, said funding "big agenda" policies was all about choices.

"I will be asking the nation in September to make a choice too," Ms Gillard said.

The levy would add $3.3 billion to the budget bottom line in its first year - less than half the predicted $8 billion needed to fund the scheme - and $20.4 billion between 2014-15 and 2018-19, when the full scheme comes into place.

Are you prepared to pay more to help fund the national disability insurance scheme?

This poll ended on 01 June 2013.

Current Results







This is not a scientific poll. The results reflect only the opinions of those who chose to participate.

All money raised by the levy would be placed in a fund specifically for DisabilityCare Australia, which will launch on July 1 at four test sites around the country.

A person with a taxable income of $50,000 would pay an additional $250 per year to help fund Disability Care.

Every Australian taxpayer earning more than $22,000, or seniors earning more than $36,000, already pays a 1.5% Medicare levy, which for someone on $50,000 is $750 per year.

Ms Gillard used the example of someone earning $70,000, who would be asked to contribute $1 per day.

She said  everyone lived with the risk of being affected by disability, describing Disability Care as "important for all Australians".

Mr Swan said state and territory premiers who had resisted signing on to the NDIS had "run out of excuses".

>> Related: Australians fork out $15 billion in fuel taxes

Queensland supports levy move

Queensland has thrown its support behind the Federal Government's plan to increase the Medicare levy to help fund the National Disability Insurance Scheme.

Premier Campbell Newman said he flagged the idea to source the much needed funding for the scheme last July.

"My position has been consistent for the last year and that is this - the NDIS is something that has never been undertaken in Australia," he told media on Wednesday.

"This is a bold, important and new social initiative which provides a level of care and protection for people with disabilities and their families that has never been provided before in Australia's history.

"If you are going to do something like that, then you have to find new money, through a tax or levy, and savings or a combination thereof.

"I did support a levy last year and I am going to support the Prime Minister today."

Prime Minister Julia Gillard announced on Wednesday morning legislation to increase the Medicare levy by 0.5 percentage points to help fund the long-awaited disability scheme would be introduced in Federal Parliament after the election.

Mr Newman said he couldn't see where an extra $200 million the Gillard Government had asked his government to source to fund the NDIS was going to come from.

But now the levy will result in raising the $200 million for Queensland, Mr Newman is hopeful Queensland will ramp up negotiations for the scheme and look at potential trial sites.

"That means if those numbers are all as they are presented to us that we will be able to implement the NDIS in 2018-2019 in accordance with the national schedule," he said.

"I am cautious but very, very pleased about this result."

The Queensland Government had committed to increase its funding on disability services to $1.8 billion over five years.

Mr Newman would not be drawn on whether the Coalition should also commit to the levy rise.

Opposition leader Tony Abbott has not outlined whether he supports the plan.