Peter Dutton (Dickson, Liberal Party, Minister for Revenue and Assistant Treasurer) Share this | Hansard source

The Tax Laws Amendment (Medicare Levy and Medicare Levy Surcharge) Bill 2006 gives effect to the budget announcement to increase the Medicare levy and Medicare levy surcharge low-income thresholds in line with increases in the consumer price index. This bill ensures that low-income individuals and families are not disadvantaged due to small increases in taxable income. If the thresholds were not increased then low-income individuals and families whose income had only increased in line with the consumer price index would face a Medicare levy liability even though they had not in previous years.

These changes ensure that low-income individuals and families will continue to be exempt from paying the Medicare levy or surcharge. From the 2005-06 income year, the Medicare levy low-income threshold will increase to $16,284 for individuals and to $27,478 for families. The additional amount of threshold for each dependent child or student will also be increased to $2,523.

This bill also increases the Medicare levy low-income threshold for pensioners below age pension age. The Medicare levy threshold for pensioners below age pension age will be lifted to $19,583. This threshold has been increased each year since 2001-02, when the government substantially increased the pensioner tax offset, which meant that the level of taxable income where these pensioners started to pay income tax also increased. The increase will ensure that pensioners below age pension age do not face a Medicare levy liability where they do not have an income tax liability.

In conclusion, I would like to thank members who have contributed to the debate on the Tax Laws Amendment (Medicare Levy and Medicare Levy Surcharge) Bill 2006, and I commend this bill to the House.

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