Scott Morrison (Cook, Liberal Party, Treasurer) Share this | Link to this | Hansard source

I move:

That this bill be now read a second time.

The only thing that guarantees the essential services that all Australians rely on is a stronger economy. That's what guarantees them. That's what Australians can have confidence in when they are looking for the support of the services that make all the difference in their lives, particularly the most vulnerable Australians. Whether it's Medicare, whether it's the Pharmaceutical Benefits Scheme, whether it's aged care or disability support, whether it's the pension, whether its Newstart—all of these things are only guaranteed at the end of the day by a stronger economy. We only need to look at the fiscal wreckage of other countries that have ignored that principle and seen that social safety net ripped away from them for no other reason than that those who were running those countries lost sight of the fact that, unless you plan for a stronger economy and act on those plans, all the other noble social causes and social issues that you may believe in become of nought. So the greatest test I think of any government's commitment to these social services, and I say that as a former Minister for Social Services, the greatest test of your real commitment to them is not the noble way you speak about them; it is about the practical plans you put in place to pay for them. Because if you can't pay for them and you can't support them they are completely meaningless—they are not worth the paper they are written on. There are too many people sitting in developed economies today who understand that better than they ever hoped they would, as they've seen their pension payments and other things evaporate because of the mismanagement of governments that failed to understand that without a stronger economy you can do very little.

Through our plan for a stronger economy, which is what this budget is all about, the Turnbull government is guaranteeing the essential services that Australians rely on. Funding for Medicare has been guaranteed in legislation, but, more importantly, it is underpinned by our plans for a stronger economy. And the delivery of those plans, as I have reminded the House now on many occasions, has resulted in more than a million jobs being created since the election of the coalition government in 2013. In our most recent calendar year, the record jobs growth, the strongest jobs growth on record, in which, according to the Australian Bureau of Statistics, some 75 per cent of those jobs were full-time—the official record shows.

That stronger economy means the government are no longer—because of the performance and the improvements in our economy, not just now but into the future—in the position, thankfully, that we need to make any adjustments to the Medicare levy. As I announced in the budget, we are not proceeding with that previous measure. Where you don't have to increase taxes you shouldn't. Taxes as a share of the economy should be kept under control. They should be constrained. If you fail to constrain your taxes then you punish the economy, you cost jobs, cost investment and you undermine the very basis for supporting the essential services and social services that people rely on. So you must be careful about tax policy. You must not allow your taxes to rise to unsustainable levels and stay there. If you can't control your taxes it means you can't control your spending. If you're not prepared to control your taxes it means you're not prepared to control your spending. These are emerging as very significant issues in the Australian political and policy debate today.

This bill will assist Australians on low incomes by continuing to exempt them from paying the Medicare levy. This bill increases the Medicare levy low-income thresholds for singles, families and seniors and pensioners in line with increases in the consumer price index. These changes will ensure that low-income households who did not pay the Medicare levy in the 2016-17 income year will generally continue to be exempt in the 2017-18 income year if their incomes have risen in line with, or by less than, the consumer price index.

The Medicare levy low-income thresholds 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—generally do not incur the Medicare levy.

The changes to the thresholds mean that no Medicare levy will be payable for individual taxpayers with taxable income that does not exceed $21,980 in 2017-18 (increased from $21,655). Single seniors and pensioners with no dependants who are eligible for the seniors and pensioners tax offset will not incur a Medicare levy liability if their taxable income does not exceed $34,758 (increased from $34,244).

Further, in combination with the individual thresholds, couples and families who are not eligible for the seniors and pensioners tax offset will not be liable to pay the Medicare levy if their combined taxable income does not exceed $37,089 (increased from $36,541). Couples and families who are eligible for the seniors and pensioners tax offset will not be liable to pay the Medicare levy if their combined taxable income does not exceed $48,385 (increased from $47,670). The thresholds for couples and families go up by $3,406 for each dependent child or student (increased from $3,356).

These new thresholds will apply to the 2017-18 income year and future income years.

The government's plan for a stronger economy is delivering more jobs, as I've said, but it also means that we're guaranteeing the essential services that Australians rely on. We're doing this by ensuring at the same time that the government continues to live within its means. These are the things that I think provide the certainty and surety to Australians as we look out over this next decade with the economic plan that the government has again confirmed in this budget and continues to roll out and deliver so that, as we look into the economy Australians will live in under this plan, they'll be better off; they'll be more confident; they'll be more assured about the essential services like Medicare because of the government's economic management and financial management. That facilitates and unleashes the sound and wise decisions of businesses all around the country which are employing Australians and fuelling our economy and expanding it to ensure that we can deliver the broader and just social safety net of which this country can be rightly proud.

This bill deals with one of the most important elements of that social safety net, which is the Medicare system, to ensure that it's supported and funded in a way that is fair. Now, we all know that the Medicare levy does not fully fund—not even remotely fully fund—the cost of Medicare and the Pharmaceutical Benefits Scheme. It doesn't come anywhere near it, but it is an important part of how we support that program. The government is absolutely committed to these key pillars of our social safety net. It is part of the society that we are in. We understand that the only way you can guarantee them is by ensuring that you focus your policies on a stronger economy that can pay for them.

Full details of the measure are contained in the explanatory memorandum.

Debate adjourned.