Labor will oppose a 0.5% increase in the Medicare levy to help pay for the National Disability Insurance Scheme (NDIS), arguing only people earning more than $87,000 a year should be subject to the tax.
In his budget reply speech last night Opposition Leader Bill Shorten argued the 2% “temporary deficit levy” imposed on people earning more than $180,000 by former treasurer Joe Hockey in the 2014 budget should continue. That tax is due to end on July 1.
“We’ll back the Government’s 0.5% increase in the Medicare Levy, but only for Australians in the top two tax brackets,” Shorten said last night.
The Opposition leader denies there was a $55 billion funding shortfall for the NDIS, but nonetheless wants the top 20% of taxpayers to pay the Medicare increase.
“Labor cannot support making people on modest incomes give up even more of their pay packet. Especially when this budget is going out of its way to give taxpayer money to millionaires and multinationals,” he said.
When the NDIS was first proposed during the Gillard government, with Shorten as minister, Labor increased the Medicare levy by 0.5% in 2014 to help fund the scheme.
After announcing it in Tuesday’s budget, treasurer Scott Morrison called the 0.5% Medicare increase the “Senate tax”, blaming the failure of previous budget savings to pass in the senate as the reason for the increase to pay for the NDIS.
“This is basically a tax for things not going through,” the treasurer said.
The additional charge is expected to generate $3.55 billion in 2019-20 and $4.25 billion in 2020-21.
But Labor’s plan was mocked by social services minister Christian Porter on the ABC TV’s Lateline last night.
“Why do you need to raise money to fill a funding gap you say doesn’t exist?” he said.
Responding to other measures announced in Tuesday’s budget, Shorten said Labor would oppose the government’s plan to let first home buyers save for a deposit by taking a salary sacrifice of up to $30,000 into superannuation, saying it offered “microscopic assistance for young people.”.
“The sad lesson of first-home owner grants is that any extra cash in the pocket of people looking to buy is eaten-up by price rises,” he said.
But Labor will support Scott Morrison’s plan to tax the nation’s five biggest banks via a levy expected to raise $6.2 billion over four years, but Shorten said his party was “deeply sceptical” that it wouldn’t result in higher fees and charges for customers. of a banking culture that takes every opportunity to hit customers with higher fees and charges.
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