Prime Minister Medicare Levy Announcement on DisabilityCare (Second Reading)

julia_gillard_ndis.jpgAustralia’s strong economy and Australia’s social safety nets are the envy of the world.

In this Bill, we see Australia at its very best.

In this Bill, we see that we still can be the strong, smart, fair Australia that created the Age Pension and the Pharmaceutical Benefits Scheme, Medibank, Medicare and universal superannuation.

In this Bill, we see that there is still a place for collective action to solve those great pressures of life that are too big and complex for individuals and families to solve alone.

In this Bill, we see a nation united in a spirit of concern to strengthen and extend the fair go, to ensure no one is left behind; we also see a Parliament ready to put the national interest ahead of ideology.

To those who say Australian politics no longer works, I say simply: read the Medicare Levy Amendment (DisabilityCare Australia) Bill.

This is a united embrace of national responsibility and a great act of mutual care and solidarity.

Every week or fortnight, a sliver of the pay packet will go to DisabilityCare Australia: around a dollar a day for the average earner.

But all that money added together from every corner of the nation will be a mighty force for good.

Today we give an assurance to all Australians who live with disability and to those who care for them: DisabilityCare Australia will be here when you need it … election after election, decade after decade, generation after generation.

A new assurance for 410 000 Australians living with significant, permanent disability now and for their families and carers.

Today we also give a new assurance to all those Australians who do not have a disability today but who, through the vagaries of fortune, will come to have a significant, permanent disability in times to come.

For everyone who thinks, “it couldn’t happen to me – could it?” this Bill brings peace of mind, it brings the knowledge that a scheme as well-designed and stably-funded as Medicare will be here when you need it.

Let me turn to the detail of the Bill. 

The Bill will increase the Medicare levy by half a percentage point, from 1.5 per cent to 2 per cent, from 1 July 2014.

The Bill also makes consequential changes to the upper phase‑in amount for low‑income taxpayers with income between certain thresholds – as well as to the formula for calculating the amount of a person’s Medicare levy liability where a person has a spouse or dependants.

These changes reflect the increase in the Medicare levy.

Low‑income earners will continue to receive relief from the Medicare levy through the low‑income thresholds for singles, families, seniors and pensioners. 

The current exemptions from the Medicare levy will also remain in place, including for blind pensioners and sickness allowance recipients.

A number of other tax rates that include a component for the Medicare levy will also increase in line with this change – these include increases in the rate of fringe benefits tax and excess contributions tax.

These bills will be introduced by my Ministers today and further details of these consequential increases are set out in the Explanatory Memorandum.

Every cent raised by the increase in the Medicare levy will be allocated to a special fund over the next decade – the DisabilityCare Australia Fund.

By law, the fund will only be spent on supporting people with disability through DisabilityCare Australia.

The DisabilityCare Australia Fund will be established by the DisabilityCare Australia Fund Bill 2013, which will be put before the House as part of this package. 

Full details of this fund will be outlined in the explanatory memorandum to that Bill which is to be tabled by the Deputy Prime Minister shortly.

Increasing the Medicare levy will raise approximately $20.4 billion between 2014‑15 and 2018‑19 – amounting to approximately 55 per cent of the total cost of funding DisabilityCare Australia over that period. 

The Commonwealth’s share of the fund will go toward our additional contribution to DisabilityCare Australia.

This will cover around 60 per cent of the Australian Government’s net new spending on the scheme over the ten years from 2014-15.

In last night’s Budget, the Deputy Prime Minister outlined that through this increased Levy and other wise savings, DisabilityCare Australia is fully funded.

DisabilityCare Australia is designed to ensure every Australian with significant and permanent disability, regardless of where he or she lives, gets the care and support they need.

DisabilityCare Australia will end the notorious “postcode lottery” for people with disabilities in this country.

I want no more of the unfairness and irrationality by which a person gets vastly different support merely because of where he or she lives or how a disability was acquired.

This requires the commitment and support of State and Territory governments.

The Government will assist the States and Territories with funding their share of DisabilityCare Australia, by setting aside some of the money going into the DisabilityCare Australia Fund.

Over the life of the fund, the States and Territories will be allocated a total of $9.7 billion.

The States and Territories will be able to draw down from the Fund when they meet key conditions for implementation.

DisabilityCare Australia will have full coverage across the Australian Capital Territory by July 2016, in New South Wales and South Australia by July 2018, and Tasmania, Victoria, Queensland and the Northern Territory by July 2019.

These agreements will see the scheme cover around

90 per cent of the total Australian population.

The Western Australian allocation from the Fund will be quarantined until we reach agreement with the State.

We encourage the Western Australian Government to join the cause.

All our people deserve the best.

To ensure that DisabilityCare Australia is fully funded, the Government has implemented a number of other savings measures.

Part of the savings from reforms to the Government’s assistance for private health insurance announced in the 2012-13 MYEFO which have not been allocated to the Government’s dental package will support DisabilityCare.

Funding will also come from reforms to retirement incomes policy, the phase out of the net medical expenses tax offset and other long-term savings decisions now announced as part of the 2013-14 Budget.

Making a new call upon the finances of Australians is not something that is done without care in this country – the fact is when a levy does happen, there is rightly a very good reason.

Bob Hawke with the Medicare levy.

John Howard with the levy for gun buy-backs.

This Government’s flood levy which rebuilt Queensland.

Now, this increase in the Medicare levy to support DisabilityCare.

Ours has been a fiscally-responsible government.

Offsetting all new spending since 2009, holding expenditure at a level lower than the average seen over the past 25 years.

A levy was not our first choice of funding vehicle for DisabilityCare.

But with the high dollar and the historic anomaly of nominal GDP growth falling below real GDP growth for a sustained period, the revenue write-downs have been unprecedented ... $17 billion for this financial year since the last budget update alone.

In short, the facts have changed.

I am also deeply conscious that the States and Territories face their own fiscal pressures arising from these same complex economic circumstances.

So we want to be able to offer them more support to pay for the scheme – which is why a substantial share of funds raised by this levy will go to the States and Territories.

Most importantly, we’ve listened to the sound case made by disability support groups for secure, ongoing funding for the national disability insurance scheme.

In a time of burden sharing and wise savings, they are right to want to ensure that DisabilityCare has a sustainable and stable funding stream ...  in order to guarantee the security DisabilityCare is designed to bring.

The President of People with Disability Australia, Craig Wallace, has summarised the argument well – the levy will be “An insurance premium for good times and bad ... people's disabilities will not go away the next time we have a surplus.”

That’s the backdrop against which I introduce this Bill.

That’s why the Government not only has bipartisan support for this Bill, we have near-nationwide agreement on this scheme.

Following the ground breaking agreement with New South Wales last December, the other jurisdictions have joined the cause, one by one: South Australia, the ACT, Tasmania, Victoria, Queensland and most recently the Northern Territory.

That means 90 per cent of Australians are now part of the plan  ... leaving only the people of Western Australia still waiting for a decision by their Premier.

People with disabilities and their families have campaigned so long to design and fund a national disability insurance scheme.

Many of those advocates are here with us today – I want to take the time to welcome and acknowledge you all now – and to acknowledge the passion and dedication of so many people with disability, so many families and carers, who have brought the campaign to this point.

In recent weeks, as the momentum you have built has broken through, as we have struck agreements with States and Territories and announced details of the funding, I have seen the hope and anticipation which Australians with disability, particularly young Australians, now share.

The Saturday before last, I travelled to Melbourne to meet Premier Napthine and sign up Victoria to DisabilityCare.

In Melbourne, I saw Sophie, a twelve-year-old girl who lives with Down Syndrome.

As her parents describe her, Sophie “reads and writes, mucks around on the monkey bars, can be well behaved and badly behaved, runs like a billy goat, and is a budding photographer”.

She took my photo while we were there.

Last week I travelled to Brisbane to meet Premier Newman and sign up Queensland to DisabilityCare.

While I was there, I met Sandy, who is 17 and lives with a physical disability similar to cerebral palsy.

Sandy has big dreams for his future, like any teenager, but his future also has some big needs: mobility aids that cost tens of thousands of dollars, personal care to maintain his hygiene, physical therapy to maintain his muscles and his health.

When I met this young man he handed me a card signed by him and his mates to say thanks for what we are doing for people with disability – a card illustrated by the photo Sophie had taken a week before.

In years to come, DisabilityCare Australia will ensure Sophie and Sandy and so many other young people with disability will have the security and dignity every Australian deserves.

This, above all, is why Australians so overwhelmingly support DisabilityCare.

Over the past six years, the idea of a national disability insurance scheme has found a place in our nation’s heart.

In March, we gave it a place in our nation’s laws.

Today we inscribe it in our nation’s finances.

The people who’ve gathered here today from around the country to witness this debate, know what this means.

There’ll be no more “in principle” and no more “when circumstances permit”.

There’ll be launches, not trials; permanent care, not temporary help.

DisabilityCare Australia starts in seven weeks – and there will be no turning back. 

I commend this Bill to the House.