Scott Morrison says the NDIS ‘will always be fully funded’

Scott Morrison has cited the support of his brother-in-law who receives support from the NDIS in dropping the Medicare levy hike.

Scott Morrison with his brother-in-law Gary Warren last year. Picture: AAP

Treasurer Scott Morrison has cited the support of his brother-in-law Gary Warren, who has multiple sclerosis and relies on assistance from the National Disability Insurance Scheme in guaranteeing that the scheme will “always be fully funded” under the Turnbull government.

Mr Morrison gave the assurance in a pre-budget speech to the Australian Business Economists in Sydney this afternoon, after revealing the government would dump its planned 0.5 per cent Medicare Levy hike which it had planned to use to fund what Mr Morrison says is a $57 billion funding shortfall for the NDIS.

“The National Disability Insurance Scheme under a Turnbull Government will always be fully funded,” Mr Morrison said.

“We previously sought to do that through other measures, not just the Medicare levy, we’d also previously sought to do it through savings and that hadn’t been supported in the parliament.

“Our plan to focus on a stronger economy is what is going to guarantee the funding for the National Disability Insurance Scheme and not just that scheme, but all other essential services.”

Mr Morrison said Australians had agreed with the government’s policy of increasing the Medicare Levy, but a stronger economy meant it was no longer necessary.

“As my brother-in-law Gary, who has MS, and I introduced to the country a year ago, explained to me last year about living with a disability ... Australians are enormously generous, not just happy to help but keen to help,” Mr Morrison said.

“He said it is not flash being disabled but if there is anything good about it, it is that you are disabled in Australia. An amazing statement of faith in his fellow Australians.

“It was in that spirit that we put that forward last year. Julia Gillard said when she proposed the increase, everyone puts in because everyone takes out. It was a sound principle.

“So we had faith in the bigheartedness of Australian, it was all about helping your mates.

“A year later I’m pleased to say when we first put that forward our fiscal position has improved, the economy has continued to strengthen, the conservative estimates that we prepared at the time proved to be just that, conservative.

“It was always the right thing to do and I’m sure the economists in the room will agree, it is always a good thing to be on the cautious side of that line when it comes to managing your finances, and we have been, when it comes to these issues.

“Our economy is now stronger and it is continuing to strengthen under our national economic plan and this has created more and better options for dealing with this challenge, ensuring that we can guarantee the funding that is needed to deliver this important program.”

Mr Morrison said he had spoken to Mr Warren last night.

“Garry was pleased. Garry wants to see the NDIS fully funded,” he said.

“As I remarked, he has an extraordinarily generous and rightly generous view about his fellow Australians.

“Where we’re able to achieve what people with disabilities need and not have to increase the tax burden on Australians, he is a taxpayer too, so he is happy about that.”

Labor drops plans to increase Medicare Levy for those on more than $87,000

Labor earlier responded to the government’s decision to drop plans for a 0.5 per cent hike in the Medicare Levy to fund the NDIS by dropping its own plans to increase the levy for those earning more than $87,000.

Labor Treasury spokesman Chris Bowen framed his party’s planned increase as a compromise which was now no longer necessary because the government had dropped its levy hike.

“The government asked to meet us in the middle. Malcolm Turnbull even asked how we could look the parents of disabled children in the eye when we opposed the Medicare levy increase,” he said.

“But we indicated to them that we would be willing to support the increase for those earning more than 87,000 in an effort to compromise, in a spirit of compromise to try and give them something that could pass the parliament.

“The government having now dropped the Medicare Levy increase, of course we no longer need to proceed with that effort of compromise for those above $87,000.

“The government won’t be proceeding with the Medicare Levy increase, and therefore the Labor Party will not be proceeding with that increase above $87,000, which was always the government’s idea.”

Mr Bowen said the only reason the Medicare Levy hike was not going ahead was because Labor had opposed it in the Senate.

“What would have happened if Labor had accepted the government’s arguments? If Labor had voted for this tax rise? It would now be the law of the land,” he said.

“Instead we see Scott Morrison dropping this policy today. And there’s only one reason he’s dropping the policy — because he couldn’t get the votes in the parliament because of the Labor Party’s opposition.

“Scott Morrison likes to talk about being a party of low tax when he was proposing to increase the tax on every single working Australian.

“Just as they got the big call wrong on the banking royal commission and refused to hold it, just as they’ve got the call wrong on refusing to reform negative gearing, they’ve got this one wrong as well and Labor has got it right.”

Mr Bowen called for the government to continue its trend of "backflips”.

“They should drop their proposal to increase the pension age to 70. They should drop the proposal to take the energy supplement off pensioners. They should drop their big-business tax cuts as well. If they’re in the business of backflips today, then don’t do half a job, keep the job going,” he said.

Earlier, Mr Bowen refused to be drawn on whether Labor would reverse its decision to impose the budget repair levy on high income earners, imposing a top marginal tax rate of 49.5 per cent, given the improvement in the budget bottom line.

“We’ll look at the detail of what the government says in the budget,” he told ABC radio.

“I’m not going to get carried away with speculation about what’s in the budget. We have been leading the policy debate. We get the big calls right and the government gets it wrong.”

Strong economy will fund NDIS: Scott Morrison

Earlier, Treasurer Scott Morrison said a strong economy allowed the government to dump the Medicare Levy hike, which it had planned to use to fund what he says was a $57 billion funding shortfall for the National Disability Insurance Scheme.

The move, to be outlined in a pre-budget speech to the Australian Business Economists in Sydney today, will spare workers and their families from an added annual tax bill scheduled to start in July 2019 of between $100 for low income earners and almost $1250 at the higher end of the scale.

Mr Morrison said the government would no longer proceed with the $8 billion levy hike, claiming the budget would now be able to absorb the full cost of the scheme which had been left unfunded over the longer term by the former Gillard and Rudd governments when Labor lost office in 2013.

“The win is today is for families and for people suffering with disabilities,” the Treasurer told the Seven Network.

“They are fully funded for the NDIS. We don’t have to do that any longer by increasing the Medicare Levy, so that’s a win for taxpayers, and it’s a win for the budget as well, because we remain absolutely on track to bring that budget back into balance when we said we would.

“When you don’t have to increase a tax, you shouldn’t. When you’re able to achieve the objective of ensuring that people living with disabilities, their families and carers can have the guaranteed funding they need and that was the objective and we are achieving that, we will achieve that, and we don’t need the Medicare Levy to do it.”

Asked whether the backflip meant that the government’s forecasting last year had been wrong, Mr Morrison said he would not apologise for having been conservative.

“We don’t go out there talking up revenue and spend it before we believe it’s going to come in,” he said.

“What’s happened over the last 12 months, and we’ve seen it particularly in the economy, is the economy improving enables us to do this.

“So yes, we are conservative with our forecasts. We don’t spend money that we don’t have and so we do take a cautious approach. That’s what a responsible budget does.

“But what all this means is you can’t guarantee any of these essential services: hospitals, schools, the National Disability Insurance Scheme, aged care, without a stronger economy, and our budget will be focused absolutely on continuing to strengthen the economy because that’s what pays for everything.”

Mr Morrison denied that there had been a public backlash against the increase to the Medicare Levy.

“I got support all around the country for it. That’s where I think the Labor Party pulled the wrong rein,” he said.

“I mean they took a very opportunistic position on this, and I note they still are today, but I mean that’s about politics, this is about supporting people with disabilities.

“Australians were quite prepared to do this. They thought it was a good thing to do to support people with disabilities. But tell you, if you don’t have to do it then you shouldn’t, and we don’t have to do it now and we won’t be doing it.”

Asked where the money would now come from to fund the NDIS, Mr Morrison said all would be revealed in the May 8 budget.

He denied that the government was committing to long term spending based on a windfall which may not last.

“That’s why our policies focus on creating a stronger economy, and you don’t create a stronger economy by whacking more than $200bn of taxes on the economy or allowing taxes to rise uncontrollably as a share of GDP. We don’t have policies to do that,” Mr Morrison told ABC radio.

“We have policies to make sure that the government lives within its means, ensures that we continue to keep expenditure under control, that as we deliver the National Disability Insurance Scheme we do it in the most efficient and effective and compassionate way to ensure that people get the services they need, that it is well run and that means the focus can now, as a result of what I’m announcing today, be absolutely on the delivery of this important scheme. So what we’ve done is kept our eye on the goal of fully funding the NDIS.”

When Mr Morrison announced the Medicare Levy hike last year, he introduced Australians to his brother-in-law Gary Warren, who has multiple sclerosis and relies on assistance from the NDIS.

He said he had spoken to Mr Warren last night.

“I phoned him last night. He was very pleased. Gary didn’t want to see Australians pay more taxes either, but Gary was also keen to ensure that the NDIS was fully funded,” Mr Morrison said.

“Under a Coalition government it will always be secure, because people know that we always focus on running a balanced budget, and work towards that balanced budget which we’re doing right now.”

Government must confirm how it will pay for NDIS

The peak body representing non-government disability service providers said the government had to confirm how it would pay for the NDIS.

“Last night’s announcement raises uncertainties and now the government must confirm how they intend to pay for the NDIS and ensure its funding into the future is beyond doubt,” National Disability Services chief executive Ken Baker said.

“The government must spell out how the NDIS will be funded and reiterate its guarantee to the disability community that it will be funded and fully funded.

“The government must go as far as they possibly can to removing any uncertainty about the security of this funding for this very important reform.

“Implementation of the National Disability Insurance Scheme has not been smooth. The operating environment has presented major obstacles and the pricing continues to be inadequate to allow for high-quality disability services.

“The disability community needs certainty for NDIS funding so we can get on with the job of fixing implementation issues to ensure the scheme will deliver on its great promise for people with disability.”

‘We can give NDIS recipients certainty’: Sukkar

Assistant Minister to the Treasurer Michael Sukkar said the government could give funding certainty to NDIS recipients.

“Of course we can give that certainty,” he told Sky News.

“When we announced this increase to the Medicare Levy last year, clearly based on the budget position, the state of the economy, we felt that Labor’s hole needed to be filled.

“Pleasingly since that time, based on a lot of hard work, a lot of tough decisions, the economic management of the government plus its budget discipline has meant now that as the Treasurer has said we can spare taxpayers that increase in the Medicare Levy, we can simultaneously assure everybody relying on the NDIS that with that strong economy and that budget discipline which we’ve shown over many years we’ll continue to ensure that Labor’s NDIS hole is filled and of course it’s good news for the broader economy too.”