Treasurer Morrison scraps proposed Medicare levy for NDIS

The previously proposed Medicare levy has been scrapped. Treasurer Scott Morrison said the Turnbull government didn’t need the planned $8 billion increase to fund the National Disability Insurance Scheme anymore.

Last year’s federal budget would have raised $8 billion for the NDIS through an increase in taxes. On Thursday, however, Morrison said the tax hike was no longer needed. The government had instead found another way to source the funding.

“The goal was not to increase taxes; the goal was to fully fund the National Disability Insurance Scheme,” Morrison told Sabra Lane on “ABC AM.” “And tax receipts up to February alone this year are $4.8 billion higher than we estimated back in MYEFO. And so the stronger economy we have been building through our stronger economic policies is actually providing that dividend that enables us to do the job of fully funding the National Disability Insurance Scheme, without the need to increase the levy.”

When asked what he thought of economists saying the booms in revenue were just temporary, the treasurer insisted that it was permanent. He claimed they proposed to hike the Medicare levy last year because they used a conservative calculation.

“A year ago, we took a conservative approach to what we believed the economic performance would be and the receipts that we would come in on taxes. Now that has been better than we had forecast.”

But as Lane argued, many economists said that the sudden recovery in revenue may not be permanent. And if it fell again, the NDIS might suffer because there would be no more money to pay for it.

“That’s why our policies focus on creating a stronger economy. And you don’t create a stronger economy by whacking more than $200 billion of taxes on the economy, or allowing taxes to rise uncontrollably as a share of GDP,” he answered.

If the Medicare levy had pushed through, an average wage earner would pay an extra $375 tax from July 2019, the ABC reports.