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

I move:

That all words after "That" be omitted with a view to substituting the following words:

"whilst not declining to give the bill a second reading, the House condemns the Government for giving a tax increase to low and middle income families, and giving a tax cut to millionaires".

In debating this bill, we are fundamentally debating progressive taxation versus flat taxation. Progressive taxes have a long legacy. In response to the early Napoleonic successes on the battlefield, Prime Minister William Pitt the Younger decided that Britain had to impose the world's first progressive income tax. That tax had rates increasing from one per cent to 10 per cent and put in place a basic principle that has been followed by many countries many times since—that, when you have a higher income, you should not just pay more money; you should actually pay a higher rate.

There are a few countries that levy flat income taxes. In Russia, for example, income taxes are a flat 13 per cent. But, if you look across the advanced world, progressive taxes are the norm. The higher the amount you earn, the higher the rate you pay. In times gone past, that rate has been very high indeed. When the Beatles sang 'Taxman' they were complaining about the fact that the marginal tax rate that they paid on their earnings was 95 per cent.

When we debate this issue of progressive and flat taxes in Australia, it is often surprising to see that those opposite just do not get it. We had Liberal Senator Scott Ryan thundering:

The top tax bracket—$180,000 and above—seven per cent of all income earners or just under, they’ll pay 27 per cent of the increase in the Medicare levy so it is highly progressive.

We had an editorial in the Australian claiming:

… Scott Morrison proposed lifting the Medicare levy from 2 per cent to 2.5 per cent from 2019 to meet the NDIS shortfall identified by the government. However unwelcome for taxpayers, that strategy at least affirmed “we are all in this together”. The levy is a progressive tax.

We even had commentator Mungo MacCallum, who is often sensible on many issues, saying:

… raising the Medicare levy, which in fact means an overall tax increase, is sensible policy, and, crucially it is fair. It is not a flat-rate, across-the-board, slug …

Unfortunately all three of them are wrong. When you ask a hairdresser and a surgeon to pay 0.5 per cent of their income, that is a flat tax. A progressive approach is something different. Helpfully, when he delivered his budget reply at this dispatch box, the opposition leader, Bill Shorten, outlined what a progressive approach would look like. Labor have said that we do not support increasing the flat Medicare levy across the board. We would confine that Medicare levy increase to taxpayers with incomes over $87,000, thereby shielding four out of five taxpayers—around 10 million people—from paying more income tax. To make up the revenue, Labor would maintain the deficit levy for those with incomes over $180,000. Those with incomes over $180,000 currently constitute just two per cent of adults. Nine-tenths of the revenue raised by maintaining the deficit levy would be paid by the top one per cent.

The top one per cent have not had a bad generation, it has to be said. Along with the late Sir Tony Atkinson, we looked at trends in the top one per cent share going back to World War I. The trend since then is a steady equalising from World War I through to 1970, but, since the late 1970s, the top one per cent have doubled their share of national income. That is research that has been confirmed by Professor Roger Wilkins at the University of Melbourne, who has continued crunching top one per cent series since then.

So that top one per cent group that has doubled their share of national income would pay nine-tenths of the income raised by maintaining the deficit levy. By maintaining the deficit levy and restricting the increase in the Medicare levy to those earning over $87,000, over the medium term, Labor would raise more money than the coalition. When we are debating progressive taxes versus flat tax, we should remember that there is nothing inherently left wing about progressive taxes. As I have mentioned before, it is a nominally Communist country—Russia—that has a flat tax, and there are many countries governed by right-wing parties that have progressive taxes. Prime Minister William Pitt the Younger was a Tory.

What progressive taxes do is simply reflect the fact that a billionaire has a greater capacity than a battler to pay for schools, roads and hospitals. When you ask a cleaner to pay more taxes, the result may be that they cannot afford to see the dentist or to pay for Christmas presents. When you ask someone on the rich list to pay a little more tax, it might mean they have to buy a 175-foot yacht rather than a 200-foot yacht. Inequality in Australia is now at a 75-year high. Earnings have risen three times as fast for the top tenth as for the bottom tenth. We have profits rising at record rates and wage growth in real terms going backwards.

And yet this government's strategy would see judges get a $3,800 tax cut and pharmacists pay $350 more tax. The government's strategy would see plastic surgeons get a $4,700 tax cut and aged care nurses cop a $220 tax rise. Those at the bottom are doing it tough in Australia. One in five Australians say they cannot afford a week's holiday away from home once a year. These are the people who Labor wants to shield from paying a higher Medicare levy. Low-income Australians need an approach which is progressive, not flat, and indeed, when inequality rises, our tax system should become more progressive, not less.

In the Hawke-Keating era, inequality was lower than it is today. So, as inequality rises, it is appropriate for us to look at the question as to whether our tax system should become more progressive, not yield to those who say that a less progressive tax system is the answer in Australia. If you are worried about taxes deterring work, as some of those in the right-wing commentariat sometimes claim, then you should be worried about effective marginal tax rates and the combined impact of tax rates and benefit withdrawals on work incentives.

How bad is that problem? A recent report that was compiled by the Australian National University's Tax and Transfer Policy Institute, titled Effective marginal tax rates, authored by David Ingles and David Plunkett, set out the effective marginal tax rates for a range of groups in Australia. Someone on a single disability support pension earning between $20,000 and $50,000 pays an effective marginal tax rate that ranges from 70 per cent to 85 per cent—well above the effective marginal tax rates paid by a millionaire in Australia. When they looked at a couple with children aged eight and 10 and no child care earning between $10,000 to $50,000, their effective marginal tax rate starts at 60 per cent and spikes at certain points to 120 per cent. They are deterred from work to a far greater extent than a millionaire is deterred from work by the top marginal tax rate. If you look at an age pension couple earning between $25,000 and $75,000, their effective marginal tax rate is in the range of 80 to 90 per cent. Again, the work disincentive faced by age pension couples in Australia is greater than for millionaires in Australia. If you look at a single person receiving Newstart allowance, their effective marginal tax rate for earnings between $10,000 and $25,000 starts at 60 per cent and goes to 100 per cent. That is a significant deterrent from moving from income support into work. It is important that we tackle those effective marginal tax rates, but the evidence that high-income earners, and particularly high-income earning men, will be deterred from work if the tax rate for people with million-dollar incomes stays at the rate that it has been for the last two years, is, frankly, farcical. High-earning blokes are not deterred from work on the extensive margin as a result of income taxes. To say otherwise is to misread the evidence on effective marginal tax rates and on the elasticities of labour supply.

We on this side of the House worry too about the gender impact of this. The gender impact ought to have been outlined in the government's Women's Budget Statement—a document produced first under the Hawke government, then under the Keating government, then under the Howard government and then under the Rudd and Gillard governments, but it was scrapped after 30 years. After being produced from 1983 to 2013 without fail every year, the Women's Budget Statement was scrapped. So it fell to Labor to continue producing the Women's Budget Statement and it reveals that the beneficiaries of maintaining the deficit levy will overwhelmingly be men, and yet those who suffer the cost of cuts to income support are overwhelmingly women. There is a gender lens through which we are debating today and, in standing against the increase in the Medicare levy for those earning under $87,000, Labor is keenly aware of the gender impact of this tax change.

If we are worried about what the Liberal Party likes to refer to as 'the forgotten people', then, frankly, we should look back at the words of their mentor, Robert Menzies, who said in that speech 'the rich can look after themselves'. He said that instead his party should be concerned with 'salary-earners, shopkeepers, skilled artisans, professional men and women, farmers and so on'. But the Liberal Party of today has forgotten 'The Forgotten People' speech. They have forgotten that they are raising tax rates on salary earners, shopkeepers, skilled artisans, professional men and women, and farmers. They are focusing on the needs of the rich rather than listening to their founder's words that the rich can look after themselves. If it was true at a time when inequality was significantly lower than it is today, surely it must be doubly true now.

Why do the top end of town, who have enjoyed a disproportionate share of the economic gains in Australia over the course of the last generation, need a tax cut when minimum wage workers are copping a tax increase? It is not just a tax increase: minimum wage workers and average wage workers in Australia have it tough on so many dimensions under this government. We have seen a fall in home ownership. Home ownership rates are now at a 60-year low. We have got penalty rates about to be cut, costing up to $77 a week, ironically on Sunday, 2 July—the day after millionaires get their tax cut. We have got $22 billion of cuts to schools and to universities, which will affect the ability of low-income Australians to attend university.

At the same time, the government is ignoring the opportunity to do something about good tax reform. Labor has proposed cracking down on tax havens. We have recently seen work from Gabriel Zucman and co-authors that has analysed who benefits from tax havens. That has shown very clearly, using evidence from leaked data from the HSBC leaks and the Panama papers, that those who benefit are disproportionately not just the top one per cent, but the top 0.1 per cent. It is the very wealthy who benefit from tax havens. That is why Labor has pledged country-by-country reporting. We are acquiring the public reporting of tax paid in every country by firms turning over more than $1 billion a year. Our big mining companies BHP and Rio Tinto already do this on a voluntary basis. But, for tax integrity purposes, it is vital that all billion-dollar companies comply in the same way.

We have called on the government to put in place whistleblower incentives, providing something akin to the US False Claims Act and the British laws, that create stronger protections for whistleblowers and incentives for whistleblowers to do the right thing and speak out on tax fraud. We have said that a Shorten Labor government, if elected, would require firms to disclose to shareholders as a material tax risk their dealings in tax havens, using as a list of tax havens something akin to the EU tax haven blacklist, which 32 countries are currently on.

We have called for AUSTRAC data to be publicly available—not controversial, given that it was released under freedom of information laws. We believe that if you are a firm that is tendering for government work of over $200,000, you should be required to disclose your country of tax domicile. We are not arguing that you ought to be ruled out based on that country of tax domicile, but simply that where you are domiciled ought to be public information if you want to win government work.

Under a Labor government, we would consult with superannuation funds to develop appropriate guidelines around tax havens. We have committed to a beneficial ownership register—a policy that we believed the coalition was committed to, but which they have steadily backed down on since they first spoke about a beneficial ownership register. We have called on the Australian Taxation Office to disclose settlements over $50 million in order to provide greater transparency. This sits on top of Labor's announced policies in the multinational tax space. Our worldwide gearing ratio, as costed at the last election, would raise nearly $6 billion over the medium term.

Our measures on ATO compliance and on tax transparency are important as well. We would put a community member on the Board of Taxation in order to ensure that we get greater tax transparency and a greater say for the community sector in taxation.

Labor does not believe that this is the right time to be raising taxes on middle Australia, as this bill does, while giving a huge tax giveaway to the top end of town. We know already—thanks to Labor's laws, opposed by those opposite—that among large Australian firms one-third do not pay any tax. We know, too, that under their very own analysis any benefits from a corporate tax cut to the top end of town will in the first instance go disproportionately to overseas shareholders, because dividend imputation means that Australian shareholders benefit only through reinvested profits, not paid-out profits.

But I would urge any cheerleader of the government's company tax plans to read their own documents, in particular a document called Analysis of the long term effects of a company tax cut, which shows that under the most likely scenario, in which a company tax cut for big business is funded by higher personal income taxes, the benefit to households is 0.1 per cent—total, not annualised. The total benefit to households of the government's $65 billion company tax cut, if funded through higher individual personal income taxes of the kind in this bill that we are debating, will be a benefit to households of 0.1 per cent—and all this in order to reduce a company tax rate which is, according to the United States Congressional Budget Office, not among the highest in the world.

Those opposite would have you believe that Australia's company taxes are extortionately high. The United States Congressional Budget Office, in its analysis International comparisons of corporate income tax rates, released in March of this year, found that Australia's statutory corporate tax rate of 30 per cent was right in the middle of the G20 range, that our average corporate tax rate—that is, the amount of corporate tax actually paid as a share of corporate income—was 17 per cent, the fourth lowest in the G20, and that our effective marginal tax rate, which is the share of income paid in tax from a marginal investment, is at 10 per cent, which is about the 11th highest in the G20. So, if you compare Australia's company taxes paid with those of G20 nations, we sit in the middle—or, indeed, on some measures, in the lower part of the distribution.

And that is before you get to the fact that Australia has dividend imputation, a system that gives back about a third of company tax revenues to taxpayers through the personal income tax system. A company tax system with imputation means that you raise about a third less revenue. Therefore, a 30 per cent company tax rate with imputation raises about as much as a 20 per cent corporate tax rate without imputation.

This government would seek to raise taxes on middle Australia at a time at which the coalition has set a host of new worst records for economic management. In an article in Crikey on 1 June, economics reporter Alan Austin reported a range of these 'worst ever' records. He reported that the figures of the Office of Financial Management showed total gross debt at a record of $495.5 billion—about to crash through the half-trillion figure. Net debt, according to the finance department, was $317 billion at the end of April. And debt is now increasing at a rate per month of $6.85 billion. The rate at which debt is increasing in Australia is the fastest in Australian history. It compares with the rate of debt increase during the global financial crisis, which was significantly lower. That is right: the coalition are borrowing at a faster rate now than Australia did to ward off the worst global disaster since the Great Depression.

All advanced countries put in place fiscal stimulus when the global downturn came. There was bipartisan consensus that it was important to take on debt to shield ourselves from the crisis. No-one thought the razor-thin surpluses that were left by the Howard-Costello government could have gotten us through the crisis. But the question is: why are we borrowing at a faster rate now than we did during the global financial crisis?

The government has also set a record for the number of people unemployed. There are 700,000-odd people unemployed. Full-time jobs have fallen to below 68 per cent for only the third time. We have seen hours worked per adult per month dropping to 83.8, the lowest since February 1994—significantly lower than it ever reached during the great recession. Hours worked per adult per month is the lowest it has been in more than two decades. The share of jobless women is 6 per cent, which is a higher figure than we have seen since the late 1990s. Underemployment is up to an all-time high, and has recently reached one million people. New housing approvals are significantly down. Infrastructure is declining again: according to Allen Austin, infrastructure has declined in 12 of the last 14 quarters, the worst result in Australian history. Annual wages growth is just 1.9 per cent, the lowest since records have been kept, and below the inflation rate of 2.1 per cent. Retail sales are up just 2.6 per cent, a real decline once you account for inflation and population growth. The only worst first quarter on record was 2.5 per cent in 2010. Interest rates are still low. There are record profits, yet record tax dodging.

When the Prime Minister took over from the member for Warringah, he said that his reason for doing so was to provide economic leadership. But we have seen now in Australia anything but that. We see real wages falling; we see debt at record levels; we see home ownership at a 60-year low and inequality at a 75-year high. This bill does nothing to address those challenges. It slugs Australian households with higher taxes. Middle Australia will pay higher taxes under this government, which is why Labor have said that we prefer a progressive approach. Make no mistake: what we are debating is an increase in a flat tax. Labor's approach is a progressive approach. This is the right strategy at any time of the economic cycle, but it is particularly the right approach when inequality is at a 75-year high. Labor believe that we need less inequality, not more. That is why Senator McAllister has announced today that a Shorten Labor government would task the Productivity Commission to inquire into the issue of inequality and ways we can reduce inequality in Australia. We cannot just sit back on our hands as inequality rises. We need to take action.

Labor has also announced that we will crack down on dodgy directors—another way in which workers and decent small businesses are diddled out of their rightful entitlements. I am pleased that the shadow minister for employment is here in the chamber, because he has been a powerful voice for cracking down on dodgy directors. Labor's plan on exposing fraudulent directors will tackle a problem which cost the economy $3 billion five years ago, and surely more now. We believe that we need a director identification number, stronger penalties and the right standard of proof to crack down on the scourge of phoenix activity. We are supported in this by the Productivity Commission, by the Australian Institute of Company Directors. We are supported by the Australian Council of Trade Unions, and we are supported by almost by almost every independent body apart from the Turnbull government, which is yet again sticking its head in the sand when it comes to tackling the critical issue of dodgy phoenix directors.

Labor has a plan to tackle multinational tax avoidance. Labor has a plan to tackle tax havens. Labor has a plan to tackle phoenixing. Labor has a plan to tackle inequality. The coalition only has a plan to raise taxes on middle Australia. Labor will not have a bar of it.

Steve Irons (Swan, Liberal Party) Share this | Link to this | Hansard source

Is the amendment seconded?

Brendan O'Connor (Gorton, Australian Labor Party, Shadow Minister for Employment and Workplace Relations) Share this | Link to this | Hansard source

I second the amendment.

Steve Irons (Swan, Liberal Party) Share this | Link to this | Hansard source

The original question was that this bill be now read a second time. To this the honourable member for Fenner has moved as an amendment that all words after 'that' be omitted with a view to substituting other words. The question is now that the amendment be agreed to.

Ted O'Brien (Fairfax, Liberal Party) Share this | Link to this | Hansard source

It is not infrequent that the member for Fenner quotes Robert Menzies in this chamber. You would think the member for Fenner might be a closet Liberal until you hear the substance of his speeches and you realise that he reflects the same creeping to the left—the same socialist hysteria—that the Labor Party has fallen into with their allies the Greens. His speech was full of the rhetoric of 'tax the rich' until he started quoting international figures, suggesting, if you look at Australia compared to the rest of the G20, there is scope to tax everyone in Australia more. Let's just tax everyone more. That is the proposal of the Labor Party.

The finale of his speech was how Labor has a plan for addressing phoenixing activity, when in truth he knows that the coalition has a Phoenix Taskforce and that the coalition is now addressing these very issues. When you are on the Socialist Left and you see a coalition government actually taking action on something you should have been taking action on when you were in government—the Rudd-Gillard-Rudd era—what do you do? You get on the bandwagon. That is all they have to offer.

We are here today to talk about something that the member for Fenner did not really want to speak about, and that is the Treasury Laws Amendment (Medicare Levy and Medicare Levy Surcharge) Bill 2017. They ignored that. Labor like to ignore this bill because, firstly, while they support the increase in the Medicare levy, they have no intention of using the increase in funds to pay for the NDIS, which is the coalition's intent. Instead they will just take the money and use it elsewhere.

The second reason I suspect the member for Fenner did not want to address the bill that we are here to speak about today is that, despite his words, he knows that the bill being discussed today in fact helps those people in Australia who are most vulnerable. It is a broad-based levy based on the principle of the more you earn, the more you pay, and the most vulnerable in Australia need pay nothing at all.

This bill ensures that $180 million will remain in our community and in the pockets of those most in need—the families and individuals on the lowest incomes, those unable to work, and our pensioners and seniors—with $60 million in 2017-18 alone to be retained in the community. The bill ensures low-income earners will continue to receive relief from the Medicare levy through the low-income thresholds for singles, families, seniors and pensioners.

By maintaining thresholds in line with the rise in the CPI—the consumer price index—we ensure our most vulnerable Australians are treated fairly and protected from paying the Medicare levy through either a complete exemption or a phased discount system. Thresholds are also applied to ensure that people who pay no personal income tax due to their eligibility for structural offsets, such as the low income tax offset or the seniors and pensioners tax offset, do not incur the Medicare levy. These thresholds, which come into effect on 1 July this year, will directly benefit around one million Australians.

The government is setting these new thresholds for one reason, and that is to ensure fairness. Fairness is a word that has become synonymous with this Turnbull government. The Medicare levy is fundamental to sustaining our healthcare system—a healthcare system that guarantees Medicare, which is, in itself, an essential part of a modern, caring society. Indeed Medicare directly enables the concept of a shared wellbeing, a common good. That is why this government is committed to fully funding the Medicare Benefits Schedule and the Pharmaceutical Benefits Scheme, the PBS, through the Medicare Guarantee Fund, and, most importantly and significantly, the National Disability Insurance Scheme, the NDIS.

Unlike the opposition, this statement recognises the full cost of supporting all Australians who are living with or supporting those with disabilities. The 0.5 per cent increase in the Medicare levy to be implemented in two years time will ensure the NDIS is fully funded. We are closing the $55.7 billion gap left by the previous Labor government, giving assurance to all of those who are living with a disability—assuring them that they matter, that we recognise and support their wellbeing as fellow citizens and as members of our community, giving assurance to all Australians that if they or a loved one are born with or acquire a permanent and significant disability they too will get the support that they need. These are assurances that the Labor opposition has failed to provide—assurances they continue to evade. How can Labor continue to deny the obvious—that they have not fully funded the NDIS? I just do not know. There are some good people on the other side—there are some very good people in the Labor Party. I believe that. How can good people continue to deny the fact that they are leaving the NDIS short-changed? It is an absolute disgrace. That is why it is so important that we get this Medicare Levy change through parliament.

The government's objective is clear: to fully fund the NDIS by increasing the Medicare levy—a broad-based levy. As I said earlier in response to the member for Fenner's comments, if you are on a high income, quite simply you pay more. If you earn less, you pay less. Basically the more you earn the more you pay—it is simple and it is fair. As we see in this bill, there are clear provisions for our most vulnerable, for our lowest income earners, to pay nothing—as should be the case. That is the coalition's plan. Labor on the other hand, sadly, will be happy for the Medicare levy to rise but, unlike the coalition government, they do not plan to allocate the money raised to the NDIS. As always, Labor are happy to take the money but they will not use the money to help the people in need. They would rather, and quite irresponsibly, leave the scheme critically short-changed. Under the government's plan, in 2016-17 it is anticipated that 10 million Australians will pay into the Medicare levy. This is surely a fair and reasonable ask of a sophisticated, caring society—a fair and reasonable ask for an insurance scheme for all Australians as a safety net against the crippling costs of living with permanent and significant disability.

Disabilities can affect anyone at any time. In fact, every single week five Australians suffer a spinal cord injury and 10 to 15 Australians sustain a severe brain injury. Every 13 hours an Australian child is born with cerebral palsy. For those Australians the NDIS will be there to support them. Over 460,000 Australians under the age of 65 will rely on the NDIS to build skills and capability to participate in the community, to participate in employment and sporting activities. I know in my part of the world, on the Sunshine Coast, an estimated 4,790 people will be supported by the NDIS upon its being fully rolled out. By supporting this bill and other interlocking measures relating to the Medicare levy and not resorting to puerile political brinksmanship, this parliament can allow our healthcare professionals to get on with the task of making the NDIS the best it can be. On this basis I commend the bill to the House.

Graham Perrett (Moreton, Australian Labor Party) Share this | Link to this | Hansard source

I rise to speak on the Treasury Laws Amendment (Medicare Levy and Medicare Levy Surcharge) Bill 2017. I should state up-front, because people listening to the previous speaker might get a little bit confused, that Labor supports this bill.

Melissa Price (Durack, Liberal Party) Share this | Link to this | Hansard source

Really?

Graham Perrett (Moreton, Australian Labor Party) Share this | Link to this | Hansard source

I take the interjection from the member for Durack, because she seems surprised that Labor supports this legislation. I am not sure what she has been listening to. I note the member for Fenner's amendment suggesting that:

… whilst not declining to give the bill a second reading, the House condemns the Government for giving a tax increase to low and middle income families, and giving a tax cut to millionaires.

However, that is in the context generally of the Medicare levy surcharge and the increase, particularly for those above $87,000 or thereabouts. This bill will increase the Medicare levy low-income thresholds, particularly for individuals and families eligible for the seniors and pensioners tax offset, in line with shifts in the consumer price index. Those opposite need to understand that. Why does a sensible government do this? It is to ensure that these families and individuals do not have a Medicare levy liability where they do not have an income tax liability. The bill will also increase the Medicare levy surcharge low-income threshold in line with movements in the CPI. Labor supports the indexation of the income thresholds so that Australians who are not earning high incomes will not pay the Medicare levy or Medicare surcharge.

It is only fair that our most vulnerable Australians are not disadvantaged in order to maintain our world-class universal healthcare system—a world-class universal healthcare system made by Labor. The foundations were put down by previous Labor governments under Hawke and Keating. Rudd and Gillard, after, made those foundations stronger. Medicare is one of the greatest legacies, I would suggest, of the late and great Gough Whitlam. The scheme was originally proposed by the economists Richard Scotton and John Deeble in 1968 but was introduced by the Whitlam Labor government in 1975. The birth of Medibank, as it was originally called, was not an easy one. Prior to its introduction there was a bitter battle with doctors' groups, private insurers, most state governments and, most defiantly and short-sightedly, the coalition parties: the Liberal Party and the National Party.

The legislation eventually passed in August 1974, but not before it was necessary to hold a double-dissolution election and a joint sitting of federal parliament. That is a fair dinkum reason to go for a double-dissolution election, not the concocted reason given by the Prime Minister prior to the election on 2 July last year. In the nine months after the legislation was implemented on 1 July 1975, Medibank staff increased from 22 to 3,500, and 81 offices were opened. But the optimism for the new universal healthcare system was short lived. Sadly, the Fraser coalition government, after taking office in November 1975, introduced a series of modifications which resulted in Medibank being dismantled by 1981. It was the Hawke Labor government, when it was elected in 1983, that acted promptly to re-establish a universal health insurance scheme that is the envy of the world. The reinstated scheme was renamed and rebadged as Medicare.

Medicare commenced operation on 1 February 1984. Medicare, like Medibank before it, included free public hospital treatment and subsidised or free medical services, depending on whether the provider bulk-billed. Medicare was funded by a one per cent levy on taxable income. There have been a few policy tweaks to Medicare since 1984, but the central tenets of providing universal medical benefits and free public hospital treatment, regardless of income, have been largely preserved. Medicare has so far survived several more coalition governments since the Fraser government, but we know that the coalition fundamentally do not believe in Medicare. They never have and they never will. It is not in their DNA like it is in the Labor Party's. Any chance the coalition get to tinker with or destroy Medicare, they will take. They have form. It is in their DNA.

Labor will always protect our world-class universal healthcare scheme. We are proud of this legacy and will defend it any day, every day. Central to our universal healthcare scheme is the notion of fairness. Whether you live in Point Piper or in Proserpine, it is fair that you are able to access quality health care. It is fair that what you or your parents earn should not determine whether you can access the health care that you need. It is fair that everyone in Australia can access quality health care.

The Medicare levy was originally set at one per cent of taxable income, with exemptions for those on low incomes. It is currently levied at two per cent of taxable income, again with exemptions for those on lower incomes. The Turnbull government announced in the 2017 budget that the Medicare levy will increase to 2.5 per cent. This increase will apply to everyone. And at the same time the coalition government are hiking the Medicare levy for everyone, including low-paid workers, they are discontinuing the deficit levy imposed on those who earn over $180,000 a year. Remember the deficit levy that was brought in by former Treasurer—

Melissa Price (Durack, Liberal Party) Share this | Link to this | Hansard source

And that was always the plan. Remember that?

Graham Perrett (Moreton, Australian Labor Party) Share this | Link to this | Hansard source

I will take that interjection from the member for Durack. I do remember that. Do you know what you do? I am sure the member for Durack would know that you look at the circumstances. They brought in a deficit levy, which Labor supported, because there was a deficit. Is there still a deficit? Yes. As I am sure the member for Durack would well know, there is still a need for budget repair. In 2014, Treasurer Joe Hockey said, 'The deficit levy was brought in to ensure higher-income Australians contribute to the budget repair.' That is a quote from the Treasurer of the day. Well, the budget is not repaired—far from it. The deficit for 2017-18—it is hard to believe this—is 10 times bigger than that predicted by Treasurer Hockey in his first budget, that horror budget. And he was of course punished for that budget by being sent to some place called Washington—I am not sure where that is!

Gross debt is equivalent to $20,000 for every man, woman and child in Australia. Yet the Turnbull government is lifting the deficit levy from higher income earners. You do not need to be Einstein to work out that if you take a half a per cent of someone's wage and then give them back two per cent of their wage, they will end up with more money. So the effect of the Turnbull government budget is very simple: it gives more money in the hand to people earning over $180,000 and less to those earning less than $180,000. Suddenly, according to the Turnbull government, high-income earners do not need to contribute to help repair the budget. This is at a time when the damage done to the budget by the coalition government has left it in a state that obviously is diabolically worse.

This government thinks middle- and low-income families should be doing the hard lifting to repair the budget mess that they have created. They are about to enter their fifth year of government. Remember that. This is not a group that are fresh to government; they are about to enter their fifth year of government. Under the Turnbull government, 10 million working Australians will be paying more tax. Under the Turnbull government, low-income earners will be taking home less pay after they have their penalty rates cut from 1 July. Under the Turnbull government, high-income earners and big business will be paying less tax because of the bizarre commitment to a $65 billion tax giveaway.

Increasing the Medicare levy across the board is a flat tax. It is unfair. It is unfair to make a cleaner pay a higher tax rate, which may mean they cannot afford to see the dentist. It is unfair to make a nurse pay a higher tax rate, which may mean they cannot pay for their children to play sport. It is unfair to make a teacher pay a higher tax rate, which may mean they cannot afford to get their car repaired or buy extra equipment for their classroom. It is unfair to give a tax break to those who have a greater capacity to pay when those who have little capacity to pay, and less disposable income, are asked to pay more. That is fundamentally unfair, fundamentally un-Australian, at a time when we have the greatest level of disparity in terms of income distribution since the Great Depression.

For wealthy Australians, being asked to contribute a fraction more may only be the difference between spending two weeks overseas this year or 2½ weeks. And good luck to them. But the wages of low- to medium-income earners are stagnating. They have the lowest annual wages growth on record—ever since the ABS started publishing data in 1997. But, for high-income earners, the income of the top one per cent of income earners, and that includes politicians, has doubled. The income of the top 0.1 per cent has actually tripled.

What is Labor's approach? What would we do that is fairer? We would confine the Medicare levy increase to only those with incomes over $87,000. I am not suggesting that you are wealthy if you are making over $87,000; I am just saying that you would have more capacity to find a few extra dollars. This would protect 10 million people from paying more income tax. To make up for that lost revenue, because we do believe in responsible budgets, Labor would retain the deficit levy for those earning over $180,000. Over the medium term, our proposal would actually raise more revenue than the coalition's. The budget would be $4.5 billion better off over the next decade. Our position is fairer and better for the budget.

Budgets are all about choices and priorities. It is clear that the Turnbull government's priorities are to make the rich get richer and the poor get poorer, and that is un-Australian. The ANU Centre for Social Research and Methods has done modelling on the Turnbull government's budget decision, and found that twice as many households would be worse off than under the Labor Party's fairer plan—twice as many. The ANU modelling shows that 60 per cent of households would be worse off, 39 per cent would see no change and only one per cent would be better off if the Turnbull policy were in place. Alternatively, the ANU modelling shows that under Labor's policy only 27 per cent of households would be worse off and 73 per cent would see no change at all. The modelling also shows that over four years Labor's policy would raise $300 million more in tax than the Turnbull government's proposal. So, over 10 years Labor would raise an extra $6.8 billion. This is a fairer solution.

It is not fair to make battlers pay more and have millionaires getting a tax cut of $16,400 at a time when wage growth is at record lows, when energy prices are rising and when young Australians are struggling to get together a deposit for a house and are concerned about going to university. Imposing a flat tax would be cutting the income of people who are struggling to make ends meet right now. Even more troubling is the data from the National Foundation for Australian Women, which found that women on around $50,000 could face an effective marginal tax rate of—believe this—100 per cent. This would mean that a woman who has graduated from university and is earning $51,000, who is relying on child care and is receiving family payments, will have less take-home pay than a man earning $32,000. How could those opposite argue that that is fair?

The priorities of this Turnbull government are clear for all to see in their policies. They will always look after the top end of town. They will never protect Medicare. They claimed on budget night that they were lifting the Medicare freeze, but what did we find out later? The freeze will not be lifted until 2020. There are 113 Medicare items that will stay frozen for another three years. These items were accessed 23 million times in the last financial year. Important health services like consultations for mental health plans and chronic disease assessments will stay frozen. These are services that are essential to keep Australians healthy.

If that is not enough, we also see that their plans involve a significant cut to public hospital funding and abolishing the private health insurance rebate. The Liberal government cannot be trusted with our health care. At Senate estimates, it has been revealed that senior health bureaucrats have been actively working on options to attack our universal healthcare system for years. The task force proposal was discussed as recently as a few weeks ago. We should have learned by now that the Liberals will attack Medicare every chance they get. It is unfair to the universal health care that we all cherish and that keeps so many people from going down the road that the United States has. Do you know the No. 1 cause for bankruptcies before the Whitlam Labor government stepped in and brought in Medibank and Medicare? It was health costs. It is unfair that universal health care, which we all cherish, is again under attack by this government. Our universal health system is fair; it is very, very egalitarian and very, very Australian. It is the envy of the world. Medicare, the legacy of the late, great Gough Whitlam, will be under threat as long as we have a coalition government that is blinded to the benefits that it brings. Labor will always fight to protect Medicare. I guarantee that.

Ms Husar interjecting—

Steve Irons (Swan, Liberal Party) Share this | Link to this | Hansard source

I remind the member for Lindsay that the warning from question time still carries over.

Melissa Price (Durack, Liberal Party) Share this | Link to this | Hansard source

I rise today to speak on the Treasury Laws Amendment (Medicare Levy and Medicare Levy Surcharge) Bill 2017. This bill will increase the Medicare levy by half a per cent to a total of 2.5 per cent to fully fund the NDIS. This bill will also increase the Medicare levy low-income threshold for singles, families, seniors and pensioners for the 2016-17 financial year, in line with movements in the consumer price index.

Australians place great faith in their government to provide them with the services that are essential for them and their families to go about their day and their business. The average Australian does not want government interfering in their life. What they want is for us to do our job in this place and to give them the services that best allow them to go about their day. This is precisely what our recent budget has set out to do. We have guaranteed the funding for the services that have been promised to the Australian people for the last few years—especially the most vulnerable of Australians. That is important because trust in politicians and trust in this House is at an all-time low. We must all work harder to regain that trust.

I hope that, in the debate around this bill and the criticisms that have been levelled at this government, we do not lose sight of the fact that our most recent budget fundamentally guarantees funding for some of the most essential services that Australians take for granted, and so they should. Re-indexing Medicare, fully funding the NDIS, addressing the inequity in federal funding for schools in Western Australia—our recent budget achieves all of this.

With respect to this bill that we are debating, this measure is ensuring that those low-income households without the financial capacity to pay the Medicare levy will continue to not pay that levy. That is a simple, fair and reasonable measure by this government. That means that no Medicare levy will be paid by an individual taxpayer with income up to an amount of $21,655. Single taxpayers with no dependents will only pay after their income hits an amount of $27,068. Couples and families not eligible for the seniors and pensioners offset will not pay the levy until their income hits $36,541, whereas couples eligible for the seniors and pensioners tax offset will not pay the levy until their income hits some $47,670.

As you can see, this is all very reasonable. So why is it that Labor, up until recently, have been denying us the chance to fully fund the NDIS? I heard from the member for Moreton, who was the previous speaker, that now they are all on board, they are happy with this particular bill and they are going to sign up to it. That is good, but there is no denying that there was one great big whopping hole left that had to be filled. The arrogant claim that our funds were wrong and that they had fully funded it was incorrect. Although I am told by those opposite that they support it, let's see how we go at the end when we actually vote on this.

What we do know at this point in time is that Labor did not fully fund the NDIS. The budget papers very clearly demonstrate that there was a $55 billion hole between now and 2027-28. There is a funding shortfall; there is no denying that. This government has taken the hard steps towards fully funding the NDIS, because Labor were clearly incapable of doing so. Only this government will support the most vulnerable Australians, and I am immensely proud of that.

Our government is asking those who earn more to pay more of the Medicare levy to help support those vulnerable, most disadvantaged Australians, and I believe that that is appropriate. A taxpayer on $80,000 a year will pay $1,600 in a Medicare levy. A taxpayer earning $240,000 a year will pay $4,800 in a Medicare levy. Very clearly, those who are earning more are paying more and those who are earning less are paying less or, where appropriate, nothing at all.

This class warfare rhetoric that we are hearing time and time again from Labor—we heard it from the previous speaker and we will no doubt hear it from the next speaker well—is clearly their fallback. The reason why it is their fallback is that, when they have nothing constructive to say, we hear this time and time again. Labor always revert back to what boils down to the politics of envy, always banging on about how the top income earners are not paying their fair share and that somehow they are ripping off the system. But the reality is that the top 10 per cent of income earners pay 60 per cent of the income tax in this country. That is undeniable. I think what incenses Labor so much—and we have seen this in this debate tonight—is that, after all is said and done, what we have proposed in our budget is actually indeed very good for Australians.

This bill is getting on with the job of looking after Australians' needs. It is guaranteeing essential government services over the forward estimates. These are the big programs that people rely upon day in and day out. This is ensuring that Medicare is protected. This is the Commonwealth funding for schools, especially in Western Australia, which is the biggest winner here. This is also fully funding the NDIS. It is on that basis that I commend this bill to the House.

Emma Husar (Lindsay, Australian Labor Party) Share this | Link to this | Hansard source

I rise to speak on the Treasury Laws Amendment (Medicare Levy and Medicare Levy Surcharge) Bill 2017. I thank the previous speaker for pre-empting what I might actually speak on! I remind the member for Durack that on 1 July, high-income earners, those people earning over $1 million a year, will actually be in receipt of a $16,400 pay rise in the form of a tax cut. So while the member for Durack might lecture us on class warfare, I think it is poignant to make that very salient point.

Labor welcomes the indexation of the income threshold below which Australians do not pay the Medicare levy or the Medicare levy surcharge. This is a regular process that ensures that the most vulnerable Australians are not disadvantaged while maintaining their access to the Medicare system, which is fundamental to the health of most Australians.

I have come in here today because during the speech the Treasurer, the member for Cook, made to this House on 24 May on this piece of legislation he said that it was 'to give families dealing with disabilities and their carers' some certainty. To the Treasurer I say this as the mother and carer of a child with a disability, we do not 'deal with' specific disabilities—

Ms Price interjecting—

Member for Durack, I do have a copy of the Treasurer's speech here that I am happy to table. But, as it is on the Hansard and publicly available, I do not feel that I need to do that. But it is here. We do not 'deal with' people who have a disability. To the Treasurer I say this: some of the things that he might deal with on a daily basis could be bad coffee, traffic jams or running late. Those are reasonable things that we might deal with. Some of the things that we on this side have to deal with are the raucous crew who run this country, for example. The member for Durack is providing a fine example of what that looks like. We deal with double standards and we deal with hypocritical answers from ministers about foreign donations during question time. They are what you deal with, Treasurer. We do not deal with people who have a disability. Parents and carers of those people with a disability simply do not deal with our loved ones who are affected by disability. We love them, and we love them hard. We love them on the tough days, the long days and the days we think will have no end.

I will also point out that during that same speech made by the Treasurer he also said that I showed a continuous lack of support for the NDIS. I might just take this opportunity to say exactly how I do not show a lack of support for the NDIS. I can put on record that that is one of the fundamental reasons why I actually sought election through a very hard-fought campaign to get here.

I have a son, my second child, who has a disability. When he was 18 months old, I realised that things were not right and that we might need to take a look at some of those things, and we might need to find some ways of helping him. He is now 10 years old. What I found with the system during that time, prior to the NDIS, was this: it was a system that was broken, it was unfair, it was difficult to navigate; and parents who were not educated or did not have access to a high amount of money for services for their child or other loved one were extremely disadvantaged. The system was mismatched to people who had a disability. It was incredibly inconsistent and completely broken.

I felt that we were one of the lucky families. There was me, driving my son's therapy. I knew who to ask for help. I knew where to go. So, when the idea of the NDIS came along, of course I jumped at it. My son was lucky, but not everyone else was as lucky. Some families could not access the services for their children or other loved ones who are affected by disability—not 'dealing with' disability but affected by it—by themselves. We needed a system that would actually provide for these families, a system that would care for these families and a system that was fair and equitable for these families.

So for the Treasurer to come in here and say that I show a continued lack of support for the NDIS is completely not true. For other people's children who are affected by disability; children who are in care or are taken into care because their families cannot care for them; for people who are in care institutions, where someone is charged with their care but abused that system, I welcomed the opportunity of the NDIS and everything that that represented, because as the parent of a child with a disability I know what a difference that will make.

I was involved in the Every Australian Counts campaign. To the Treasurer, who says I continue to show a lack of support for the NDIS: I was involved in those very early meetings many, many years ago, when the member for Lindsay was not me, and not a Liberal, but David Bradbury. We got involved and I started fighting. I started fighting for the NDIS, to ensure that not just my child but every child could be looked after—that every person who had a disability could be looked after. So, when I hear the Treasurer telling me that I have a continued lack of support for a scheme that I have fought so hard for, I am completely aggrieved.

As I said, I was involved in the Every Australian Counts campaign, and, when people from my electorate—whom I now have the absolute privilege of representing in this House—tell me about how their lives have changed through the advent of the NDIS, I am completely humbled, and the hairs on the back of my neck stand up. And it sometimes brings tears to my eyes, because I know the difference that early intervention and support for these families makes. It is life changing. It is a game-changer for this country. No big reforms that have ever been undertaken in this country were easy. We never got to the end of a big reform and said, 'Hey, that was easy,' high-fived each other and said, 'Let's do it again.' They are hard work, and we on this side of the House would know that because we are the only party that have been involved in major changes that this country has undergone and in major social reform that has been undertaken. The member for Moreton spoke very positively about the changes we made to Medicare many years ago.

What the NDIS means to me and my community is certainty for people in a space where we had no certainty before. We have some consistency. We have services available to these families who are sometimes at breaking point, who relinquish their children. And, when we as parents or carers or as the older people who are responsible for our loved ones shuffle off, we have people and systems in place and we have supports for our loved ones—not people who we are 'dealing with'.

My commitment to my community on the NDIS is that I will continue to be an advocate for it, using my experience to change their lives. The reason that I stood for parliament and worked my arse off to get into this place, in an eight-week winter campaign in a marginal seat that was tough every single day, was the NDIS. It was to ensure that this system was something that could go forward, be implemented and not be ruined. My efforts were hinged on my experiences of my son, amongst many other things, and the experience of those people I represent—the other mums I have met and the tired therapists who have always wanted to do more for their clients but were constrained by families' ability to pay or the ability to get those families through the door. So to the Treasurer who comes in here and accuses me of not caring or being someone who had to 'deal' with my son I say this: we do not deal with them; we support them and we fight for them.

Of course I support the NDIS being funded, of course I want the program to succeed. But I also offer this: I come in here today as well because during question time members of this government are frequently ending their questions not with quotes but with 'Are you aware of any alternative approaches?' I am progressive and I am pragmatic, but you need to be neither of those things to display absolute common sense—some people might even call it applying the pub test. So my answer to the Prime Minister and to his Treasurer, and to all of the backbench who constantly search for alternatives, is this: do not fund a big business tax cut in the order of $65 billion and slug average income earners with higher taxes to pay for it. The member for Hughes and the member for Pearce have had some interesting things to say about the NDIS and the cost of the NDIS. The member for Hughes was asked about the scheme on 29 May in a TV interview on Sky News. He said that the costs of the NDIS are 'almost double what Julia Gillard, when she first proposed it, actually are.' However, the minister in charge, Minister Porter, the member for Pearce, said it was 'wildly premature to make that conclusion.'

The Turnbull government must stop misleading the people about the funding of the NDIS. The NDIS is far too important for political games. People with a disability, their carers and their mothers have waited an exceptionally long time for this. In fact, there are people in my electorate who are 70 years old who I have known my entire life—which is not 70 years!—who have waited for this and who actually will be ineligible, but they know how important this is and they campaigned alongside me. To this government I say: stop playing with people with a disability, their families and their carers, who have waited their entire lives. Get on with the job of ensuring that we get the best possible NDIS.

Steve Georganas (Hindmarsh, Australian Labor Party) Share this | Link to this | Hansard source

Before I call the next speaker, I remind the member for Lindsay that there are certain words that we do not use in the parliament and I would not want her use of such words to be set as a precedent available to others in this parliament to follow. I let it go because I know the member was very passionate in her speech, but I just want to make that point.

Bert Van Manen (Forde, Liberal Party) Share this | Link to this | Hansard source

To the member for Lindsay, I can assure her that that is exactly what this government is trying to do—ensure that the NDIS is fully funded and provided for, unlike the system provided by her colleagues when they were on this side of the House. I am pleased to speak on the Treasury Laws Amendment (Medicare Levy and Medicare Levy Surcharge) Bill, which is designed to provide relief and certainty for some of the most vulnerable in our community. The bill is a response by this government to the faith that individuals across Australia place in us every day. Health care, and in particular affordable health care, is one of the things that sets this nation apart from the rest of the world. It is one of the things that makes us the greatest country in the world, and this government should be very proud of so effectively continuing that tradition.

This year's budget is all about protecting those essential services that so many Australians rely on, and it is only this government that has a plan to make sure these services are fully funded into the future. I have heard those opposite talk about people earning $60,000 and those earning $180,000 and all the rest of it. As a bit of an education for them on who currently pays what in our system, somebody earning $60,000 a year is paying approximately $11,000 in tax, plus about $1,200 in Medicare levy, and the subsequent increase will add another $300 to that, taking it to about $12,500 in tax. That is not allowing for any welfare they receive back in family tax benefits and all those sorts of things.

Somebody on $180,000 a year is paying $54,000 in tax and paying $3,600 in Medicare levy. And they are about to add another $900 to that, which takes that to $4,500. So, they pay about $3,000 a year more on their Medicare levy, and they pay some $40,000-odd more in tax. In total, they are paying about $45,000 a year more than those on low to middle incomes. I think it shows the progressive nature of our tax system and why the arguments of those opposite are full of hypocrisy and fallacy.

The important part of this bill is that we are ensuring the long-term integrity of the system. I know this is an issue that is of vital importance to many Australians. Indeed, in my electorate of Forde I regularly speak with people who are ardent about maintaining their access to quality health care and passionate about making sure that the government defends their ability to receive it. Many of these people are still living with the effects and concerns created by the grubby 'Mediscare' campaign perpetrated on the Australian people by those opposite at the last election.

Those opposite are part of a dishonest party that is in the business of scaring voters and the vulnerable, including our elderly and our young families. It was interesting to reflect on the contribution of the member for Lindsay about hypocrisy. Well, I have been in this place for about seven years, and I have seen plenty of hypocrisy on that side. It is the party opposite that has to resort to blatant lies to get ahead, trampling over our most needy along the way. But health care is not about scaremongering and point scoring. It is a vital service for Australian communities, and this government knows that. This government will continue to focus on providing those services and ensuring that we provide support to the people who need it most. And we will make sure that these people have the confidence and the security that those services will be provided and will be funded, and that is exactly what we are seeking to do in this budget.

This bill increases the Medicare levy low-income thresholds for singles, families, pensioners and seniors in line with increases to the CPI. In addition, and importantly, it provides a concession to low-income households—the Medicare levy low-income thresholds that make sure that people who pay no personal tax because of their eligibility for offsets do not incur the Medicare levy. It is estimated that some one million individuals will benefit from this increase to the low-income thresholds, as it means that some low-income individuals will no longer have to pay the Medicare levy. For others on low incomes, it will also mean that they now have to pay less Medicare levy than they would if the thresholds were not increased.

It is estimated that in 2016-17 around 10 million individuals will pay some Medicare levy after accounting for the increase in the thresholds. This means that just over one in every two adults are contributing to Medicare, and, importantly, the National Disability Insurance Scheme, through the Medicare levy. And I think all of us in this House could say that is fair. It recognises that these levies act as a proxy insurance scheme for both Medicare and the National Disability Insurance Scheme, under which all Australians are covered. We know that Australians are watching and hoping this parliament will live up to this test of fairness that the government has set to ensure that the National Disability Insurance Scheme is fully funded once and for all.

I hope that when the opportunity for those opposite comes up in the weeks to come that this parliament will respond positively to the increase in the Medicare levy, to ensure that the National Disability Insurance Scheme is fully funded. I note the comments from the member for Moreton earlier that those opposite do support the measure in this particular bill to increase the thresholds. I welcome that support. It is important. But the important bit will be when we get to the increase to the Medicare levy, to ensure that that funding is there, to create the certainty and peace of mind that is necessary for the NDIS to be fully funded.

As I have explained, under this government, and with our tax system, if you are on a lower income you will pay less and if you are on a higher income you will pay more. I have gone through some of those figures already. That is the way our tax system has been for many years. It is appropriate that those earning higher incomes, who have the capacity to pay higher taxes and a higher proportion of the Medicare levy, do pay that and support the system. Most Australians are happy with that. They recognise that in having the capacity to pay they are willing to pay to support those in our community who need it most. That is the way our system is set up. It is fair, rational and sensible. We will not ask people to pay more than they can give, but we will make sure that all are provided for.

The government is ensuring that this fairness remains central to the Medicare levy and that all us together will also share in the responsibility of helping those fellow Australians, and their families, as the member for Lindsay has quite rightly pointed out, who either are living with a disability personally or are family members of someone who has a disability. We need to give them the assurance that this vital service provided through the National Disability Insurance Scheme will be there for them not only now but, importantly, into the future—and not just for them but for those who may need it through whatever circumstances in the future—for any and all Australians who could be forced to live with a disability.

This government is providing peace of mind in guaranteeing Medicare. We are making sure that all Australians can be assured that Medicare is not only here to stay but will be strengthened in the future so that our children will continue to benefit from it. This government is looking forward to establishing the Medicare Guarantee Fund, from 1 July, to pay for all the expenses in the Medicare Benefits Schedule and the Pharmaceutical Benefits Scheme. An additional contribution from income tax will also be paid into the fund to make up the difference. This will provide transparency in the cost of Medicare and a clear guarantee as to how we are going to pay for it. This bill is designed to give people financial confidence, confidence go to the doctor without fear, confidence to have children and grow our population, and confidence to speak openly and honestly with their GP about their vital health care needs. This is what we need. We want an Australia that is healthy, vibrant and ready to meet the challenges of our modern world. Medical care and assistance are not something only the wealthy deserve. An affordable health care system is the way you move a country forward, both for those who require it currently and for those in the generations to come. It is this government that is seeking to provide that reliability, that certainty and that transparency. I commend the bill to the House.

Brian Mitchell (Lyons, Australian Labor Party) Share this | Link to this | Hansard source

I rise today to support the Treasury Laws Amendment (Medicare Levy and Medicare Levy Surcharge) Bill 2017. It makes a refreshing change to be able to debate a bill by this government that involves Medicare without the bill including a cut of some sort—and no, that is not an invitation for an amendment. This bill modifies the income threshold by which the Medicare levy and the Medicare levy surcharge kick in to keep pace with the cost of living. With the vast majority of workers in my electorate earning wages well below the national average, any measure that keeps money in my constituents' pockets is fine with me.

I am pleased to say that Labor has a strong record when it comes to improving the health of Australians. Labor's Gough Whitlam introduced Medibank, but the Liberals' Malcolm Fraser killed it. Labor's Bob Hawke introduced Medicare; the Liberals' Andrew Peacock and John Howard tried to kill that but failed. But Mr Howard did wound Medicare, with one of his first acts upon his election of '96 being to axe dental care from Medicare—a great shame for the dental health of this country. But, on ending Medicare itself, the Liberals did seem to give up. One day they just stopped going to elections pledging to kill it.

But what they really did was play doggo. They waited until Medicare stopped being an election issue, until all Australians believed Medicare was safe, irrespective of who was in government, and then they struck. In 2014, having gone to the previous year's election promising no cuts to health, those opposite went to town on Medicare. They sought to introduce a $7 GP fee on top of already-widening gaps between the Medicare schedule and doctor's bills, and they hacked away at hospitals. When doctors, nurses, Labor and patients yelled, 'Stop! Your cuts are killing Medicare,' those opposite yelled, 'No, we're making it stronger.' 'There's never been a better friend of Medicare,' they cried maniacally as they drilled holes into its roots and poured in the poison. Well, with friends like those opposite, Medicare does not need enemies.

In Tasmania between July 2016 and March 2017, bulk-billing fell by 2.2 per cent—more than three times the national average. Tasmanians' out-of-pocket costs to visit a GP have risen by $5.90 per appointment since December 2014, up from $30.79 out of pocket to $36.74 out of pocket for each visit. So it will come as no surprise that I do not really believe this government when it says it has no plans to get rid of Medicare. I keep looking for that crossed pinky finger, because history tells us that by whatever means possible this government will do what it can to dismantle Medicare and all it stands for. And if it cannot dismantle Medicare in one go, it will chop and hack and saw away, bit by bit, until it achieves the same aim.

And we will be there to defend it. We will not let our guard down again, because Labor understands that Medicare is more than a logo; it is an ideal, a statement of Australian values. Medicare has come to be shorthand for Australia's universal health system, the ideal of which is simple: to provide quality health care to any Australian who needs it irrespective of their wealth or where they live in Australia. But we are failing the ideal. A properly functioning universal health system requires the proper resourcing of preventive health programs, primary health care, hospitals and more. But health care is getting more expensive, and increasingly the quality and timeliness of treatment depends on the capacity to pay for it.

When we have people on waiting lists that are so long that they died before getting the treatment they needed, we must admit that we are not just failing but have failed. Stories of men dying of bowel cancer that was caught too late because they could not see a public specialist in time are becoming too common. Stories of women who require surgery to save their sight being told that Medicare will pay $700 of their fee but that the gap payment is $2,000, none of it claimable on private health insurance, are unacceptable. It is my great hope that when Labor is next afforded the privilege of governing this nation the full repair and restoration of the principles and practices of our universal health system will form a major element of our policy suite.

So yes, this indexation relief, however minor in the grand scheme of things, is welcomed. But let's not forget that this bill is part of a regular process. It is not a generous gesture on the part of the government. It is something that happens whoever occupies the benches opposite. The process of regularly reviewing income levels and indexing them to protect the most vulnerable Australians is a lasting testament to the framework that Labor put in place when Bob Hawke created Medicare in 1984. It is a framework that is being undermined by this government, and nowhere is that more obvious than in Tasmania.

My state has been left off the map by this government when it comes to securing long-term health outcomes. Last year, for example, we suffered a diabolical failure of government with the botched switch of federal funding from preventive health programs to chronic care across Tasmania's regions, particularly in my electorate. The rollout was so bad that even Tasmanian Liberal senators, who are usually notorious for their silence, were lining up to complain. Well supported community based programs were axed, replaced with programs to address chronic care needs, such as diabetes. While I have little doubt that chronic care needs deserve attention, it beggars belief that well supported community programs were axed to make way for them. Less than two per cent of the federal health budget goes towards preventive health—and when we know that every dollar spent on preventing ill health pays massive dividends down the line. Keep one person out of hospital, keep one older Australian out of care for another year of their life, and the minuscule investment required now more than pays for itself. So when I see that this government is prepared to flush away $65 billion in its big corporate tax cashback but is not prepared to invest in community preventive health, I shake my head.

It has been six months since the changeover in my regions, and it has hardly been a painless process. Good people have lost their jobs, and people in the community are reporting gaps in services. We are hearing reports of people who used to enjoy social engagement being increasingly isolated. They do not suffer chronic illness, so they now stay home alone instead of being picked up for an activity. Perhaps they will get some attention when they end up getting sick. Others are reporting long travel times to see a health worker or long waiting times, and people are falling through the cracks. It is fair to say that any changeover will be accompanied by some painful adjustment, but let's remember that it is people who are already vulnerable who are experiencing the pain. And let's not forget that these new regional health contracts are, in the main, for a short period of time. Some expire in as little as 18 months. Are these communities expected to suffer this upheaval all over again? It is just not good enough.

I have not even started on Tasmania's public hospital crisis. Yes, the state Liberal government must carry the can for the crisis engulfing Tasmania's hospital system, but the Turnbull government's lack of coherent leadership has been disappointing to say the least. Waiting lists are out of control, ambulances are ramped for hours, and sick patients are being sent home because the hospitals are over capacity, and we are not even in peak flu season. The long lines in emergency departments have undoubtedly lengthened as the Medicare rebate freeze continues into its fifth year, when it was only ever meant to have lasted less than one. Extending it for so many years has ensured that bulk-billing is almost impossible to find across my electorate, despite the lower than average incomes. Doctors have their books shut, and people are avoiding seeing doctors because they just cannot afford it. Even doctors who try to hold out on charging anything above the bulk-billing rate have had to introduce fees this year as their own cost of living increases under state and federal Liberal governments. Every day the freeze remains is a day that the cost of a visit to the GP increases. The government has announced that the freeze will be lifted in three years time, but that is too long to wait. Every day it remains is a day when a visit to the doctor costs more.

I am pleased to report that my Labor colleagues in the Tasmanian parliament are fighting the good fight for Tasmanians by putting strong plans on the table to address these concerns. The state Labor leader, Rebecca White, has rightly identified health as the No. 1 issue of concern to most Tasmanians. Tasmanians are tired of the underinvestment, the efficiency and the ideology. They just want a health system that works, and that really should not be too much to ask for.

It is fair to say that this government's treatment of Medicare reflects its treatment of the Australian value of fairness more generally. Under this government, when you earn $55,000 a year you pay $275 more tax by way of an increase in the Medicare levy, but when you earn $1 million a year you pay $16,000 less tax. That is not fair. Under Labor's fairer tax policy alternative 80 per cent of Australians are protected from a tax increase and the budget is still $4.5 billion better off over the next decade. It says everything about the priorities of Prime Minister Turnbull, a former merchant banker, that he is so determined to give a tax cut to his millionaire friends while increasing taxes for the vast majority of Australian workers. It says everything about the priorities of Prime Minister Turnbull, a former merchant banker, that he is so determined to give a $65 billion handout to banks and corporations while doing nothing to stop wages being cut for millions of Australian workers, many of them already on low incomes and most of them women.

Alternatively, a Labor government will protect 10 million working Australians from paying more tax. Labor's plan is fairer. The Medicare levy will go up for those earning above $87,000 and the deficit levy will be kept for those earning more than $180,000 a year, including everyone in this chamber. It makes no sense that the Liberals introduced a deficit levy when the deficit was lower, and they are removing it now that the deficit under them has tripled. Labor's proposal will raise $4.5 billion more than the government's tax changes will raise, and it will be fairer.

The government claims that the Medicare levy needs to go up across the board to pay for the National Disability Insurance Scheme. It goes without saying that Labor is fully committed to the rollout and delivery of the National Disability Insurance Scheme. Labor created the NDIS, and we bitterly regret the way this important national initiative has been politicised by this government. The Prime Minister's misuse of people with disability and their loved ones, including in this House today, as political human shields has frankly been in nauseating. Let's be clear: the government is not raising the Medicare levy on working Australians to pay for the NDIS, as it so often claims. The government is raising the Medicare levy on working Australians to pay for its $65 billion tax cut to corporations and banks. If the government abandoned its $65 billion handout it would have more than enough to fill what it claims is a gap in NDIS funding. There is no need for a tax rise on most working Australians when you have a $65 billion bucket of money sitting there that you are going to hand out to corporations and banks. It really says something about this government that it would rather tax working Australians more than abandon a corporate giveaway to pay for what it claims is a funding hole to address the needs of Australians with disabilities.

Tim Wilson (Goldstein, Liberal Party) Share this | Link to this | Hansard source

I rise to support the Treasury Laws Amendment (Medicare Levy and Medicare Levy Surcharge) Bill 2017. To be frank, I do so from a position of always being reluctant to see any change or increase in levies as any part of the budget process. My objective as a Liberal is always to see lower taxation and lower costs charged to the good people of Goldstein. But part of the challenge also is that if we are to live in a free and just society—and I believe that we should live in a free and just society, which is central to the whole idea of Liberalism itself—you have to make sure that you support and assist people who are in the position of least advantage, particularly those people who are in situations that are outside of their control, particularly people with a disability.

I say that because justice is a very important principle that sits at the heart of Liberal philosophy. We believe in freedom; we believe in responsibility; and we believe in justice. We believe in justice because the world is not fair. We know that—many people have said that before. Some people are born into circumstances, or circumstances are visited upon them, where they need assistance and support. Therefore, having support and assistance for people who have a disability and often cannot change their circumstances to make sure that they can live a life of freedom and dignity is very important. That is why the efforts by the Turnbull government to deliver on the NDIS—but, more importantly, to fully fund the NDIS and acknowledge that there was an unfunded component to it—are so important. That is what is being underwritten by this piece of legislation: a commitment by the Turnbull government to make sure that people with a disability have the support and care and assistance they need and to recognise that the gap that existed when we came to government is now being filled. There are thousands of families all across this great continent of ours who appreciate the support and assistance that the Turnbull government is providing, because this piece of legislation is underwriting and providing certainty and predictability so that the gap that existed under the previous government, the unfunded component, will finally be filled.

It seeks to also do so by increasing the Medicare levy for people who are in a position to afford it and carry some of the cost. Let's be frank: they already carry a very significant cost of social welfare programs in our country and many of them are my electors, but they are also in a position to be able to contribute and continue to assist people today. It is that measure and that approach that we have brought to the change in the Medicare levy. It provides certainty that low-income earners will continue to receive relief from the Medicare levy through the low-income thresholds for singles, families, seniors and pensioners. The changes will ensure that low-income households that did not pay the Medicare levy in the last financial year will generally continue to be exempt in the next financial year if their incomes have risen in line with or by less than the consumer price index.

As I said already, the key objective of this piece of legislation is to fill the gap around the NDIS and recognise that the Medicare Levy plays an important role as the proxy for Medicare as well as the National Disability Insurance Scheme, and underwriting them, so that we can have a just society for all Australians and people get the support and assistance that they need. Particularly the $55.7 billion gap in the NDIS, the National Disability Insurance Scheme, over the medium term had to be addressed in this budget because we know that so many providers involved with care, assistance and reform as part of the NDIS, particularly support services, need that sense of certainty that did not exist with the $55.7 billion gap that we were left with. We have to be mindful of making sure that is filled so they can go on to plan with certainty. I have heard that directly from people within my community.

I was fortunate recently to have the Treasurer visit the wonderful Goldstein community and particularly Bayley House. Bayley House is an institution in the suburb of Brighton. We were taken on a tour by Peter, Bree and Mary, who are clients of Bayley House and simply want to be able to live a dignified life. I go to Bayley House regularly. They invite me for important occasions like Multicultural Week, where they bring together people from across the community to celebrate the diversity that sits within our community. The feedback we got from the Bayley House community was how much the effort of the federal government to fill the $55.7 billion gap that we were left with is appreciated by our community. It gives the institution and the families the opportunity to plan with certainty. But we know this is not just helped by Bayley House. In my electorate is another important community support service called Marriott House, which I am fortunate to visit from time to time as well. In fact, I was at their AGM only last year. At their AGM, I participated in working with and singing with clients at Marriott House who were also going to be clients of the NDIS into the future. We need to make sure that we provide all residents, regardless of who they are in this great country, the opportunity to enjoy the benefits and security that comes with the National Disability Insurance Scheme.

The amendments to the Medicare levy are an important part of the contribution to fill that gap, as I have already outlined. It is part of a broad package brought forward by the Turnbull government to underwrite and make clear the commitment that this government has to a just society where people, regardless of their circumstances or their health conditions, can get the important assistance that they need, and it will fulfil the sense of social obligation that we all have. It is part of a suite or a package as well as the Medicare guarantee.

By doing so, the government is making it very clear what its priorities are. Its priority is to make sure, in line with other measures like reform of the tax system and making sure businesses are more capable of employing people, that, as a country, we seek to advance economic and social progress through the preservation of our culture and our institutions, underwritten by social safety net, so that no matter who you are or where you are in the country—including if you are in the wonderful electorate of Goldstein—you will get the support and assistance that you need. We all have to share the responsibility of carrying that burden. That is the reason I support this legislation.

Debate adjourned.