Well, here comes another great big new tax, a wrecking ball through our economy. Right?

  • Impact of the Medicare levy increase to pay for disability services, on a person earning $75,000: $375 pa
  • Impact of the carbon tax on a person earning $75,000: $277 pa

This morning, Prime Minister Julia Gillard announced what is effectively a new tax to pay for better services for people with a disability. The Medicare levy would increase by 0.5% to 2% from July next year; the amount raised would cover some (but not all) of the cost of the NDIS (now called DisabilityCare).

The move has generally been greeted by praise or caution, but not with howls of protest.

Compare this to the carbon tax. When Gillard announced a new tax to tackle climate change, there was a prolonged storm of criticism which caused a fatal haemorrhage of political capital for Labor. It appears to be the single biggest issue which will force Gillard from the Lodge come September.

The difference? There’s broader public support for spending more on disability services than there is for cutting greenhouse pollution.

But interesting political lessons can be learned. Like don’t call a tax “a tax”. The brutal fact is that how a policy is framed and branded is crucial to its success.

Another? Political parties need to be smart about getting an initiative off the ground. Set the agenda first; make the case for reform, and make it well. Then come up with a way to fund it in which you do not create a chink of opportunity for your political opponents to scaremonger about “great big new taxes”. And it helps if you don’t flip-flop on whether you’re going ahead with the program. John Howard knew all this.

Labor might do well to mull over these lessons, but it’s probably academic. The party is likely to lose in September — perhaps taking the carbon tax, and the disability levy, with it.