Shorten ploy undermines NDIS funding principle

From its inception, the National Disability Insurance Scheme was built on the principle of a fair go. It was envisaged as a practical means to relieve the heavy burden carried by profoundly disabled Australians, and their loved ones, to be paid for by all, according to their means.

As Bill Shorten said in May 2013 when Julia Gillard proposed increasing the Medicare levy by 0.5 per cent to help pay for the scheme, average wage earners would make “a modest contribution of around 96c a day’’. Those earning less would pay less. The return would be “peace of mind to all of us that if we or a loved one acquire a disability, we will be supported’’. He was right, then. It is inherently fair, as Health Minister Greg Hunt said on ABC television yesterday, “that in an insurance scheme, each person contributes a proportionate component for something that could benefit them, assist them, if they are in deep extreme’’. The Medicare levy is a progressive tax, and higher income earners will always pay more. In its budget, the Turnbull government faced up to the cost of the NDIS, announcing it would be paid for through an increase in the Medicare levy from 2 per cent to 2.5 per cent from July 2019.

By arguing that the increase in the levy should be restricted to those earning above $87,000 a year, the Opposition Leader, irresponsibly, is playing havoc with the budget in the Senate, for no good reason. It is hardly surprising that some on his front bench, reportedly, disagree. He is also undermining the key principles of the NDIS, which he championed in office. Under a Shorten government, high income earners pay an extra 2.5 per cent of their incomes towards the NDIS — the 0.5 per cent Medicare increase and 2 per cent via the budget repair levy he would retain. The government is due to abolish it on July 1. The 49.5 per cent top marginal tax rate Mr Shorten wants would be one of the most punitive in the world, a disincentive to hard work, and far above the 39 per cent rate, “at the most’’, advocated by Paul Keating. An ongoing “temporary’’ deficit levy is no long-term answer to the challenge of funding the NDIS.

Voters, Newspoll shows, are worried about the potential for NDIS costs to spiral. They also favour restricting the Medicare levy increase to those on incomes above $87,000. Given the complexities of the NDIS, their concerns about costs are well founded. While almost 80,000 disabled people already have plans in place under the scheme, the rollout is already 20,000 plans behind. The workload of the NDIS will more than triple in the next three years. For the benefit of severely disabled Australians, strict cost and eligibility controls are vital to prevent the scheme being overstretched. The severity of autism symptoms and the degree of disability, for example, vary widely. Anxious parents, understandably, seek whatever help is available. But priority must be given to the most profound cases. The size of the challenge in coming years underlines the need for a steady, reliable income stream. A broadbased increase in the Medicare levy would provide it.