Andrew Leigh (Fraser, Australian Labor Party, Shadow Assistant Treasurer) Share this | Link to this | Hansard source

This bill increases the Medicare levy low-income thresholds for individuals and families, along with the dependent child and student components of the family threshold. Also, for single taxpayers who are eligible for the seniors and pensioners tax offset, they will not have a Medicare levy liability where they do not have an income tax liability. These movements are generally in line with increases in the consumer price index, although not in every case. Why that is remains something of a mystery. I hope that during the course of the debate the government might enlighten the House as to why it has chosen to increase some thresholds in line with inflation but not others.

It comes in a context of significant cuts to health. We have seen the $80 billion of cuts to health and education under this government. The shadow health minister has just spoken articulately about the state of health in this country under the Abbott government. Labor will support the bill. It represents a rare outbreak of decency, it must be said, from this government amidst an unfair budget. This is a budget which still continues so much of the unfairness of last year's budget, such as the $80 billion of cuts to schools and hospitals, $100,000 degrees and the cuts to family payments. All of those things are still there in this year's budget.

It is a budget which fails the coalition's own test of debt and deficit, with the deficit having been doubled over the course of the last year. It is a budget which fails the coalition test that Tony Abbott spoke of in August 2013, when he said:

… taxes will always be lower under a coalition government.

But this is a budget that has 17 new or increased taxes. In August 2013, the then Leader of the Opposition, Tony Abbott, said that there would be no overall increase in the tax burden whatsoever. But the tax-to-GDP ratio in this year's budget is higher than in any year under Labor. It is a budget which too fails the—

Tony Smith (Casey, Liberal Party) Share this | Link to this | Hansard source

Mr Deputy Speaker, I raise a point of order: whilst there is always some latitude in debates, the speaker is now straying entirely from the subject of the bill. He is just reverting to a speech that he has given many times this chamber. He needs to confine himself, as he well knows, to the substance of the bill.

Ross Vasta (Bonner, Liberal Party) Share this | Link to this | Hansard source

I call the honourable member for Fraser.

Andrew Leigh (Fraser, Australian Labor Party, Shadow Assistant Treasurer) Share this | Link to this | Hansard source

I can understand that those opposite are sensitive about being reminded that the budget fails their tests as well as our tests. But an increase in the Medicare levy thresholds is to be welcomed; I make no secret of that. It enjoys bipartisan support in this House. One cannot consider that measure in isolation. A sensible debate over the Medicare levy thresholds needs to take into account the NATSEM modelling, which shows that nine out of 10 of the poorest families are worse off under this budget, with a family with school-aged children losing $6000 a year, yet nine out of 10 of the households at the top are modestly better off. We have unemployment going up and confidence going down. We have debt going up and growth going down. The numbers that should be going up are going down. The economic numbers that should be going down are going up. The change to the Medicare levy thresholds—

Tony Smith (Casey, Liberal Party) Share this | Link to this | Hansard source

Mr Deputy Speaker, I raise a point of order: all speakers have to remain on the subject of the bill. It is not a matter of opinion, it does not matter how strongly the member feels about a subject and it does not matter how verbose the member is; he straying from the bill. If he is incapable of moving from his typescript, which is not on the substance of the bill, he should sit down.

Ross Vasta (Bonner, Liberal Party) Share this | Link to this | Hansard source

I thank the honourable member for Casey, but the member for Fraser has the call. The member for Fraser will be relevant to the bill.

Andrew Leigh (Fraser, Australian Labor Party, Shadow Assistant Treasurer) Share this | Link to this | Hansard source

As I was saying before I was interrupted, the change to the Medicare levy thresholds is one which is welcomed. But one cannot look at an increase in thresholds without also considering what this government is doing to the health budget. This government, which has come to office on a promise of no cuts to health, has ripped another $2 billion from health this year. One billion dollars will be cut from programs that fund measures such as preventative health care, drug and alcohol rehabilitation, mental health programs and other crucial health programs. I can see why those opposite do not want to consider the impact that these cuts will have on vulnerable communities, but it is something that must be taken into account.

While an increase in the Medicare low-income thresholds is an appropriate, welcome and bipartisan measure, it is a measure which needs to be considered in the context of a budget that rips money away from health and takes money away from the most vulnerable. This particular measure enjoys bipartisan support, but the unfair measures in this budget most certainly do not.

Josh Frydenberg (Kooyong, Liberal Party, Assistant Treasurer) Share this | Link to this | Hansard source

I would like to thank those members who contributed to this debate. The Tax and Superannuation Laws Amendment (Medicare Levy and Medicare Levy Surcharge) Bill 2015 amends the Medicare Levy Act 1986 to increase the Medicare levy low-income thresholds for singles, families, single seniors and pensioners in line with increases in the consumer price index.

For individual taxpayers, no Medicare levy will be payable for those with income under $20,896 in 2014-15. Single seniors and pensioners with no dependents who are eligible for the seniors and pensioners tax offset will not incur a Medicare levy liability if their income is less than $33,044 in 2014-15. Couples and families who are not eligible for the seniors and pensioners tax offset will not be liable to pay the Medicare levy for 2014-15 if their combined income is less than $35,261, plus $3,238 for each dependent child. The amendments to the Medicare levy low-income thresholds apply to the 2014-15 year of income and future income years.

Couples who are eligible for the seniors and pensioners tax offset do not incur a Medicare levy liability when their combined income is less than $46,000. The low-income threshold for seniors and pensioners in couples will not be increased at this time, as this threshold remains sufficient to ensure that senior and pensioner couples who do not otherwise pay tax will not be liable for the Medicare levy. Full details of the measures in this bill are contained in the explanatory memorandum. I commend this bill to the House.

Question agreed to.

Bill read a second time.