Shorten under pressure as Social Services reveals gaps in Labor’s NDIS funding proposals

Bill Shorten is under pressure to support the Turnbull government’s plan to fully fund the NDIS.

Bill Shorten is under pressure to support the Turnbull government’s plan to fully fund the ­National Disability Insurance Scheme, which would face a $6.9 billion annual shortfall within a decade without extra funding raised through the Medicare Levy.

Figures from the Department of Social Services show that without the 0.5 per cent increase in the Medicare Levy announced in the budget last week, the country faces an annual shortfall of $4bn a year in 2019-20, growing to $6.9bn a year in 2027-28.

This means the proposed ­increase in the Medicare Levy, which will rise from 2 per cent to 2.5 per cent in July 2019, will cover less than half of the commonwealth’s annual contributions to the NDIS at full rollout. The government plan to increase the Medicare Levy by 0.5 per cent will raise $8.2bn over the four years to 2020-21. The Labor plan to increase the Medicare Levy by 0.5 per cent for those on incomes of more than $87,000 a year would raise $4.85bn in the same period.

Labor says the extension of the 2 per cent deficit levy on high-­income earners would raise $2.95bn over the next four years.

Once Labor’s Medicare Levy and deficit levy policies are combined, it claims its “fair tax policy” would raise $7.8bn across the next four years, $400 million less than the amount the government estimates it will raise.

The Opposition Leader yesterday accused Malcolm Turnbull of trying to “bully” Labor into supporting a rise in the Medicare Levy to pay for the NDIS, saying again that the program was fully funded.

Rejecting calls for bipartisanship on the levy increase to pay for the NDIS, Mr Shorten said the money was already in the budget and called on the government to tax “millionaires” and big business to fund the insurance scheme ­instead.

Labor has said it will support an increase in the levy only for those in the top two income tax brackets and wants to increase the tax rate for those earning more than $180,000 permanently to 49.5 per cent.

“Mr Turnbull is trying to be out there and saying the Labor Party should support income tax increases for people under $87,000 a year because otherwise he won’t fund the National Disability ­Insurance Scheme,” Mr Shorten said. “Labor knows the money is there to fund the NDIS. I have a great free tip for Malcolm Turnbull. Don’t give $65bn away to the largest companies in Australia. Use some of that money which you are robbing from the budget to pay for the NDIS.

“We do not support millionaires paying less and 10 million people paying more.”

The disability sector and ­Deloitte Access Economics have cast doubt over Labor’s costings, saying the opposition has not identified where it will find sufficient other savings to meet the $55.7bn shortfall.

Mr Turnbull turned on Mr Shorten for opposing the levy, urging him to be “statesmanlike” and seize the “great historic opportunity” to fully fund the scheme. “We call on him to capture the statesmanlike qualities he showed some years ago and once again support funding the NDIS.’’