A levy to help pay for disability insurance doesn’t obviate the need for the government to continue to look for “structural savings” in the budget to address the scheme’s long-term sustainability. But by locking in partial funding for the national disability insurance scheme — now, mysteriously, renamed DisabilityCare — and, as Bernard Keane points out today, slightly reversing the increased reliance on corporate tax revenue that was a feature of the fiscal policies of the later Howard and Rudd governments, Labor’s proposed levy is worthy of support from the opposition.
Indeed, from a purely self-interested point of view, Tony Abbott is likely to be the beneficiary of the additional revenue the levy will generate — without having taken any of the political risks of advocating it.
But despite the pressure from the opposition and the media, it is not clear that the public interest will be served by legislation being rushed through Parliament before it rises for the winter recess and politics switches into election mode. There are questions that need to be addressed, including where the remainder of the additional funding required by an NDIS will come from.
Why has the government opted to increase the Medicare levy, rather than establish a new, separate levy, as recommended by the Productivity Commission? How can we ensure the split of funding from the Medicare levy between health and disability services — bearing in mind it is insufficient to fund either — remains at a guaranteed level? What will be the formula for allocation between states?
All important questions that a Senate committee could resolve, if there was time.
Not that I object to the scheme, but it isn’t insurance when it’s paid for by OPM. And I’d rather they fully fund it from the levy rather than this.
The economic debate is central when discussing the National Disability Insurance Scheme (NDIS). There is no doubt that the NDIS is overdue for individuals with a disability, to provide choice and control over their own lives, however the decision to fund the scheme through an increase in Medicare levy should not be taken lightly.
Julia Gillard’s announcement of a permanent increase to the Medicare levy from 1.5% to 2% on taxable income may provide an extra $3 billion for the scheme however it will not cover the entire cost. The Gillard Government need to develop a stable and securely funded scheme, the Medicare levy alone will not cut it. Australian taxpayers may not receive substantial gain from the increase in Medicare levy to fund the NDIS but it will enable a positive change for one of Australia’s most vulnerable groups. Therefore, the scheme should be put into action as soon as possible.
Gillard has been criticised for using the scheme for political gain in the upcoming election by the Australian Greens. However, has stated that she does not want to take the legislation to parliament before the election if passing it depends on consulting with the Greens and the crossbench. Opposition Leader, Tony Abbott, has confirmed that he will pass legislation if a stable, secure and responsibly funded scheme is put before parliament. The Gillard Government need to put the future election aside and put some serious thought into the funding of the NDIS.
The issue of funding for the NDIS needs to be on top of the Gillard Government’s priority list to enable people with a disability to live independently, receive the necessary education and individualise care they deserve.