Medicare Levy Rises to Fund NDIS

The federal government will increase the Medicare levy by 0.5 percentage points to help fully fund the National Disability Insurance Scheme in a budget move welcomed by the not-for-profit sector.

Treasurer Scott Morrison told Parliament in his budget speech on Tuesday: “The funding gap is currently $55.7 billion over the next 10 years. We have previously sought to close this gap with budget savings that we have not been able to get through the Parliament.

“To ensure the NDIS is fully funded we will legislate to increase the Medicare levy by 0.5 percentage points in two years’ time, when the extra bills start coming in.

“I also announce a commitment of $80 million for Australians with a mental illness such as severe depression, eating disorders, schizophrenia and post-natal depression resulting in a psychosocial disability, including those who had been at risk of losing their services during the transition to the NDIS.”

Minister for Social Services, Christian Porter said the increase in the Medicare levy would apply from 1 July 2019 and would raise an extra $3.55 billion in revenue in its first year, rising to $4.25 billion in 2020-21.

“The increase means that from 2019-20 one-fifth of revenue raised through the Medicare levy, will be placed in the NDIS Savings Fund, currently before Parliament, where it will be protected for meeting the needs of people living with disability,” Porter said.

“At full scheme, the NDIS will support about 460,000 people at an annual cost of approximately $21 billion.

“This budget also provides $33 million to ensure NDIS participants and older Australians requiring aged care services can access quality services in their local area. The Local Care Workforce Package will increase the number of local workers available to meet the demand from new entrants into the NDIS, as well as preparing for an influx of care needed because of the nation’s ageing population.”

In addition, the Turnbull government allocated $209 million to establish an independent NDIS Quality and Safeguards Commission to oversee the quality of NDIS providers and enforce the rights of participants.

Porter said reforms to Disability Employment Services would also be carried out to help more people with disability find and keep jobs.

“Together these measures will guarantee the essential services that Australians rely on, improving the services for people with disability, their families and carers,” he said.

Welfare not-for-profit organisation Mission Australia said it was pleased to see the budget’s inclusion of full funding for the NDIS.

Cutting people’s access to social security
Means forcing them to rely on charity.

Not clever.
Just mean. #Budget2017

— John Falzon (@JohnFalzon) May 9, 2017

“The organisation also welcomed the new funding for people with psychosocial disability who do not meet the criteria for the NDIS and investment in building NDIS workforce capacity,” executive of operations and fundraising James Toomey said.

“While we welcome these measures, Mission Australia continues to be concerned about the gaps that have opened up for people experiencing mental illness. The proposed funding levels are inadequate for vulnerable people who are not eligible for NDIS packages and risk losing the vital mental health supports they currently access.

“We look forward to working with the government to ensure a long-term solution for people experiencing mental illness who need community-based mental health programs as they continue on their journey to recovery.”

Disabled People’s Organisations Australia (DPO Australia) said it welcomed some big wins for people with disability but was concerned by the “punitive approach” to welfare support that “will make life harder for those doing it tough, including people with disability”.

“We are extremely pleased to hear that an increase in the Medicare levy will fully fund the National Disability Insurance Scheme and finally guarantee the support needs of people with disability,” DPO Australia director Therese Sands said.

“The NDIS is a critical investment in our social infrastructure, an investment for all Australians, now and into the future.

“Although we need to see more of the detail, we also welcome the establishment of the NDIS Quality and Safeguarding Commission, which will go a long way to protecting NDIS eligible people with disability from violence and abuse, and providing quality NDIS services.”

Great news that an independent #NDIS Quality and Safeguards Commission is funded, but no substitute for Royal Commission. #Budget2017

— PWD Australia (PWDA) (@PWDAustralia) May 9, 2017

Sands said the disability employment service system needed to better meet the needs of people with disability.

“We are very pleased to see measures in the budget that will increase flexibility for people with disability to choose and change providers, and a greater onus on providers to deliver jobs, including those with significant employment barriers,” she said.

“Young people with disability will also greatly benefit in their transition to employment with a measure to trial disability employment support to a broader group of school leavers.

“We look forward to continuing our work with the federal government on the details of this package of reforms.”

The federal Labor opposition said it rejected the Turnbull government’s claim that the NDIS was not fully funded.

The shadow minister for social services Jenny Macklin said: “The 2013-14 budget clearly shows that the former Labor government fully funded the NDIS for the long-term.

“To pay for the NDIS, Labor increased the Medicare levy by 0.5 per cent, and also introduced a number of savings measures including introducing a means test on the private health insurance rebate.”

“The numbers underpinning these savings were developed and published by the Treasury – led at that time by Martin Parkinson, now the secretary of the prime minister’s own department.

“Unfortunately the Turnbull government continues to tie other cuts to the funding of the scheme – including the axing of the Energy Supplement to new pensioners, people with disability and carers.”