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April 30th, 2013 
Peter Nolan
Updated
Prime Minister Julia Gillard is today expected to confirm a half a per cent increase to the Medicare levy to fund part of the National Disability Insurance Scheme (NDIS).
Ms Gillard has reversed her opposition to a special tax to pay for a NDIS in the face of a $12 billion budget deficit.
Ms Gillard, Treasurer Wayne Swan and Minister for Disability Reform Jenny Macklin are expected to make the announcement in Melbourne later this morning.
The ABC understands the Medicare increase – from 1.5 per cent to 2 per cent – will take place from July 2014 and would see the Government raise around $3.2 billion a year.
But the total cost of an NDIS is about $8 billion a year, so the ABC understands the Government is also planning cuts to the disability support pension to find further savings
AM has been told by sources close to the Government that everyone on a disability support pension will be reassessed and given a rehabilitation plan, a return-to-work plan, or both.
One insider says unlike most changes to welfare benefits, this one will not be grandfathered, labelling the crackdown “potentially heartless” because he says it risks penalising the most vulnerable.
Another warns it also risks taking the gloss off Ms Gillard’s NDIS levy announcement.
Former treasurer Peter Costello has called for the NDIS to be delayed until the budget is in better shape.
“I wouldn’t be introducing it in this form at this time,” he told 7.30 last night.
“The budget’s in deficit.
“To fund it you’ll have to borrow more money and wouldn’t you say, seeing as we’re in deep deficit, seeing as we can’t afford to pay for all the spending we’ve currently got on the books, why should we actually spend more?”
Mr Costello says he would be looking at ways to reduce spending.
“Julia Gillard says we’ve got a structural deficit, and so what’s her response? New spending,” he said.
“We’re going into the NDIS, we’re going into the Gonski spending.
“Wouldn’t you sit back and say ‘we’ve had five budget deficits in a row, we’re heading for an other one’ – you shouldn’t be introducing new spending.”
Mr Costello has also suggested the Coalition defer plans for its paid parental leave scheme and direct action policy.
Woodside and National Australia Bank chairman Michael Chaney agrees with Mr Costello.
He says the Government’s NDIS and the Coalition’s paid parental scheme are worthy ideas, but they cost a lot of money.
“The problem I have is that these sort of decisions tend to be made on the run or that’s the perception, they’re terrific ideas and no-one would argue with many of them, but we need to be able to pay for them and you can’t just keep spending money without getting the revenue,” he told Lateline.
“In the end you end up like the countries we’re seeing now in Europe that have were high levels of debt and very few ways of getting out of it.”
He says he is concerned about the level of government spending.
“My concern is that announcements are made about new programs on the assumption that revenues will be forthcoming, and then there is a discovery that revenues won’t be forthcoming and then there is a scramble to make up the difference,” he said.
“I think that what is needed is for somebody in leadership to stand back and commission an independent, objective review of the size of government, its scope and efficiency, with some sort of long-range plan.
“For example, government has grown from 25 per cent of GDP to 35 per cent since the 1970s and if it keeps going it will be at an unsustainable level – maybe 50 per cent according to some estimates.”
Finance Minister Penny Wong confirmed yesterday the Government was considering a levy to fund the NDIS.
The Coalition strongly supports the NDIS, but is not saying whether it would back a levy.
Opposition Leader Tony Abbott says a Coalition government would fund a disability insurance scheme “over the long run” by “building a strong economy” and said it would be best to fund it through general revenue.
Disability advocates strongly back the extra levy as a way to safeguard funding for the NDIS.
The Parliamentary Secretary for Disabilities, Amanda Rishworth, has been holding forums around the country about the scheme.
She says people want certainty.
“People aren’t really fussed about how it’s funded, what they want is to see the scheme in place,” she said.
“We need to make sure that this scheme is sustainable into the future, which means it needs to be funded into the future.”
Liberal Senator Sue Boyce is concerned a levy will not raise enough money to fully fund the scheme.
“I’m highly suspicious of why the government has come up with this idea now,” she said.
“This may be used as a way to underfund the NDIS.”
Trial sites and trial programs for an NDIS are already underway around the country.
With just five weeks of parliamentary sittings left, it is not clear if the Government will manage to legislate the tax increase before the September election.
But as the May 14 budget looms, the Government is struggling to create an image of economic management that it believes the public will be willing to accept come September.
Topics:
disabilities,
federal-government,
budget,
government-and-politics,
australia
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Source Article from http://www.abc.net.au/news/2013-05-01/ndis-levy-details-expected-to-be-announced-today/4661660
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