Turnbull Gov. drops plan to increase Medicare Levy

26 April 2018

Turnbull Gov. drops plan to increase Medicare Levy

Treasurer Scott Morrison has backed down on plans to raise the Medicare levy by $8 billion in order to fund the National Disability Insurance Scheme (NDIS).

The Government says it will be able to fund the NDIS due to greater revenue from economic growth.

The Treasurer told Today this morning that the Liberal government would be discarding the plan from the budget, which he stated he stood by “absolutely” when he first revealed the measure back in 2017.

Mr Morrison accused Labor for leaving a $57 billion shortfall in funding for the NDIS when it left office, saying, “The reason we proposed to increase the Medicare levy was only to fully fund the gap left behind by Labor on the NDIS. We no longer believe we need to do this.”

The increase in the levy from 2% to 2.5% was projected to raise $8 billion dollars in revenue over two years starting from July 2019, but is now no longer needed due to unpredicted increases in company revenues, temporary boosts in commodities and extra income tax from hundreds of thousands of new employees.

“Over the early part of this year and the latter part of last year we started to see the tax collections that were coming from companies doing better, come into the coffers, we could have greater confidence about revenues into the future,” Mr Morrison said.

When questioned how he could be so sure of the forecasting this time when it was inaccurate 12 months ago, Mr Morrison replied, “We were conservative 12 months ago, we didn’t over assume on the revenue, now things are better than we thought they were and that’s the better place of that argument to be on.”

The federal budget is expected to be announced in 12 days.