Higher taxes to pay for boosted aged care funding not on the table, PM says

Scott Morrison rules out lifting taxes in the upcoming budget to help fund additional spending on aged care.

“Our plan to grow our economy has always been about getting off peoples’ backs, not getting on them”, said Scott Morrison, who has batted away suggestions the government will lift taxes in the upcoming budget to help pay for additional spending in the aged care sector. Picture: NCA NewsWire / Martin Ollman

Scott Morrison has ruled out lifting taxes in the budget to help fund extra spending in the aged-care sector, saying it would undermine government efforts to stimulate an economic recovery.

While refusing to engage in “speculation” about what the Oct­ober 6 budget will or won’t contain, the Prime Minister said raising taxes was “not our plan, it’s never been our plan”.

“The one way you build your economy back is you don’t hit it with higher taxes,” Mr Morrison said. “Particularly in the middle of a pandemic, particularly when we’re seeking to rebuild our ­economy.

“Our plan to grow our economy has always been about getting off peoples’ backs, not getting on them.”

Modelling by Deloitte Access Economics, commissioned by the aged-care royal commission, has suggested higher costs associated with improving the sector’s standard of care could be paid for with a 1.01 per cent increase in income taxes, or a 0.89 lift in the Medicare levy.

Health Minister Greg Hunt has previously said the government was not planning to lift the Medicare levy to fund changes to the aged-care sector. That followed modelling commissioned by the Health Services Union that supported its call for a 0.65-­percentage-point increase in the levy surcharge to help pay for 600,000 new aged-care jobs.

Economists increasingly expect a big-spending budget when it is released in just under a month’s time, and Josh Frydenberg has said he was “considering” fast-tracking legislated income tax relief as part of the budget package.