Disability Advocates ‘Betrayed’ by NDIS Medicare Levy Backflip

Disability groups feel “betrayed and ambushed” by the government’s backflip on a Medicare levy rise to fully fund the National Disability Insurance Scheme, warning that the NDIS now faces long-term funding uncertainty.    

Treasurer Scott Morrison revealed on Thursday that the proposed 0.5 per cent Medicare levy rise to fully fund the NDIS – one of the signature measures from last year’s federal budget – was now no longer necessary due to an improved fiscal position.

“The stronger economy we have been building through our stronger economic policies is actually providing that dividend that enables us to do the job of fully funding the National Disability Insurance Scheme, without the need to increase the levy,” Morrison told ABC Radio.

Morrison added that the future of the scheme would be guaranteed despite the levy backflip.

“Under a Coalition government, it will always be secure because people know that we always focus on running a balanced budget and work towards that balanced budget, which we are doing right now,” he said.

“We always live within our means. We don’t let expenditure run away. We keep focused on growing the economy, because we understand that’s what pays for the NDIS.”

But Morrison’s announcement has not assuaged the fears of disability advocates, who warned that without a Medicare levy there was no ongoing funding certainty for the scheme.

Therese Sands, the Co-CEO of People with Disability Australia, said disability advocates faced having to fight for NDIS funding every year.

“The Medicare levy increase was intended to guarantee funding for the NDIS in the long-term. Now, we are back to the uncertainty around the NDIS, and fighting for funding at every budget,” Sands said.

“Last year, we joined with ACOSS and AFDO to call for secure, sufficient and sustainable funding for the NDIS. A strong, well-funded NDIS benefits our whole community, as people with disability are better supported to fully participate economically and socially.”

Stunned by news the Government ditches $8bn rise in Medicare levy & their commitment to fully fund #NDIS, now & into the future. We are back to the uncertainty around the NDIS, and fighting for funding at every budget. So sick of this! @ScottMorrisonMP https://t.co/tn2QS112On

— Matthew Bowden (@MatthewPWDA) April 25, 2018

Sands said people with disability felt “betrayed and ambushed” by the decision and were worried about other possible cuts in the upcoming federal budget.

“We are sick of what is happening to the NDIS and call on the government to put people with disability back at the heart of every decision that is being made,” she said.

National Disability Services also expressed dismay at the announcement, and called on the government to confirm how it would pay for the NDIS.

CEO Dr Ken Baker told Pro Bono News that NDS was concerned about the lack of funding certainty for the scheme.

“The government has now had three plans. Plan A, which was prior to last year’s budget, was to fund the NDIS through savings,” Baker said.

“It encountered difficulty getting those savings measures through parliament, so I think wisely it turned to Plan B, which was to establish a dedicated revenue stream through the Medicare levy for the NDIS.

“We thought that was a good idea and supported that, and now plan C is to fund it through consolidated revenue. We’ve got no issue with that as long as there is certainty not just this year or for the next few years, but into the future.”

Delivered on the evening of ANZAC Day…….. We continue to play politics and kick the can down the road. This move will not go quietly.. #NDIS https://t.co/V6ubCc4u29

— Kurt Fearnley (@kurtfearnley) April 25, 2018

Baker said he did not want there to be a situation in the future where the budget position was unhealthy, and people with disability faced uncertainty about whether the NDIS would be fully funded or not.

“I don’t have any doubt at this point in time that the government is firmly committed to fully funding the NDIS,” he said.

“I’m just thinking about the future though… [because] there is no guaranteed revenue stream attached to the NDIS as there would have been if the Medicare levy had been increased.

“And I think most Australians are fully behind the NDIS, they want it fully funded and indeed they would be prepared to contribute funding if they knew it was going to be attached to the NDIS.”

Labor had previously opposed imposing the 0.5 per cent Medicare levy increase for all taxpayers, arguing it should rise only for workers earning over $87,000.

But in wake of Morrison’s announcement, Labor confirmed it had scrapped plans to raise the levy all together.

“The government won’t be proceeding with the Medicare levy increase, and therefore the Labor Party will not be proceeding with that increase above $87,000, which was always the government’s idea,” Bowen said.

If Labor hadn’t opposed this, it would now be the law. Libs get the big calls wrong. Royal Commission, negative gearing and now this… https://t.co/BsYbj52RJZ

— Chris Bowen (@Bowenchris) April 25, 2018

However Labor is expected to instead push for a separate 2 per cent deficit levy – first imposed by the Abbott government in the 2014 budget – to apply to those earning above $180,000.

Baker said he did not really care how the NDIS was funded, but that it was up to the government to work out a viable solution to the current impasse.  

“Obviously we wouldn’t want cuts to the [Disability Support Pension] to fund the NDIS, but beyond those sorts of cases it’s up to government to find the money, as they have to find the money for lots of other things,” he said.

“That is the daily business of government and we’re prepared to say it’s government’s responsibility finding the money, but it would help if they had a clear plan they could outline for how they’re going to fund the NDIS into the future.”

The Australian Council of Social Service also weighed into the debate, stating that the abandonment of the levy increase signalled a worrying shift from essential services to tax cuts.

"ACOSS is disappointed the Govt has dropped its Medicare Levy increase to help fund the NDIS. Everyone who can afford to do so should contribute to essential services like the NDIS." Read more at https://t.co/Oz3TIthjHN

— ACOSS (@ACOSS) April 26, 2018

CEO Dr Cassandra Goldie said ACOSS was disappointed by the government’s decision.

“Everyone who can afford to do so should contribute to essential services like the NDIS, and securing the revenue to guarantee essential services like the NDIS should be a bipartisan commitment. Unfortunately that didn’t happen,” Goldie said.

“The decision to drop the levy increase reinforces growing concerns about the quality and certainty of services people receive from the NDIS… People with disabilities should receive the best possible service, not the second best because corners are being cut on NDIS funding.

“More broadly, this decision on the levy signals a worrying direction in budget policy away from strengthening revenue to restore the budget and guaranteeing essential services towards clearing the ground for more tax cuts that we simply cannot afford.”