Medicare levy hike axed as Treasurer talks up booming economy

THE Federal Government has scrapped its controversial plan to hike the Medicare levy as part of next month’s Budget.

Treasurer Scott Morrison will use a pre-Budget speech on Thursday to reveal a boost to Government’s coffers from a rosy economy has made the Medicare levy hike unnecessary. Picture: Luis Ascui/AAP

TAXPAYERS have been spared an extra $400 a year with the Government scrapping its controversial plan to hike the Medicare levy as part of next month’s Budget.

Treasurer Scott Morrison will use Thursday’s pre-Budget speech to reveal a boost to the Government’s coffers from a rosy economy.

The bold move will blunt Labor’s attack, with the Opposition having bashed the levy hike as “hitting almost every working Australian”.

In last year’s Budget, Mr Morrison revealed the Government would increase the Medicare levy from July 2019 by 0.5 per cent to 2.5 per cent, raising $8.2 billion over four years to pay for the National Disability Insurance Scheme.

But rising revenue from resources and windfalls from an improving economy will allow the Government to cover the NDIS without tax increases.

In his speech to Australian Business Economists in Sydney, Mr Morrison will reveal this year’s Budget will be about “a stronger economy, to create more jobs, guaranteeing essential services ... while living within our means”.

“Business conditions are also strong, prompting a welcome surge in investment in the non-mining sector,” he will say.

“We are now in a position to give our guarantee to Australians living with a disability and their families and carers that all planned expenditure on the NDIS will be able to be met in this year’s Budget and beyond without any longer having to increase the Medicare levy.”

Two weeks ago Opposition treasury spokesman Chris Bowen flagged that Labor would increase the Medicare levy, but only for people earning more than $87,000 and keep the 2 per cent deficit levy for people earning more than $180,000 a year.