Prime Minister Julia Gillard has put an ultimatum to Tony Abbott that will decide the immediate future of the National Disability Insurance Scheme.
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“If the leader of the opposition is prepared to support this half a per cent increase in the Medicare levy to fund DisabilityCare then I will bring the legislation into the parliament immediately,” Ms Gillard said in a press conference in Tasmania.
But if the Opposition Leader does not support raising the Medicare levy, which would raise about $3.3 billion a year to help pay for the NDIS, Ms Gillard said she would delay introducing the legislation until after the September election.
Given the Coalition is expected to win the election and has already rubbished the idea of a new tax to pay for the NDIS, it is unlikely the levy will ever exist if it is delayed until the election.
Fairfax Media has sought a response from Mr Abbott’s office on whether he will take Ms Gillard up on her ultimatum. Mr Abbott baited the Prime Minister earlier on Wednesday, suggesting if she was truly committed to the NDIS she would introduce the legislation before the election.
Independent MP Rob Oakeshott called on Ms Gillard and Mr Abbott to ‘‘get rid of the politics’’ surrounding the NDIS - a policy that both parties support.
‘‘Of course it should be legislated prior to the election,’’ Mr Oakeshott told Fairfax Media. ‘‘We’re in a period of governing aren’t we? This is governing not electioneering and we’ve got five more sitting weeks’’.
‘‘I think this is the first shot across the bow that we are now in election season,’’ Mr Oakeshott said.
To end the political game Mr Abbott could ‘‘very quickly making a statement that he supports this and he would support it in this parliament... That would get rid of any of the politics around September.’’
In her morning announcement of the increased Medicare levy, Ms Gillard shied away from legislating before the election, saying it could be dealt with by the next parliament, potentially making the long-awaited disability insurance scheme a major election issue.
Ms Gillard, Treasurer Wayne Swan and Disability Minister Jenny Macklin confirmed on Wednesday morning that Labor would raise the Medicare levy by 0.5 percentage points to help pay for the National Disability Insurance Scheme.
''I am prepared to be judged by these choices,'' Ms Gillard said.
''I will be asking the nation in September to make a choice too. To endorse this plan, to make sure that we support disability care around Australia,'' Mr Gillard said.
However, Ms Gillard said there was time for the matter to be dealt with in this parliament.
''Obviously we will see what the responses are in the parliament as to what people's dispositions are on the legislation, but I anticipate that this legislation will need to be dealt with in the next parliament,'' she said.
The fund, which would be used solely for disability care, contains a major sweetener for those states yet to sign up for the program, with up to 25 per cent of the money to be available to states in the form of grants to help the states' contribution to the scheme.
The levy is expected to raise $20 billion between 2014-15 and 2018-19.
Ms Gillard laid down the challenge to Opposition Leader Tony Abbott to come clean on how he would fund the scheme.
Mr Abbott has recently re-committed to the disability scheme but questioned the wisdom of a levy and hinted that the start date should be subject to the state of the economy.
''This is really serious. It's not for political platitudes and a slogan. It is not for the talking of nonsense. I said before there are probably 410,000 people and their families and carers who are concentrating on every word of this press conference because it means so much to their lives,'' Ms Gillard said.
''I feel that burden really acutely. Mr Abbott needs to shoulder that burden too, and if he has got a different way of doing this, spell out every dollar and every cent. Otherwise he is letting those Australians down, and every Australian who wants to see this rolled out for the long-term of our country.''
Mr Abbott, who is on his annual Pollie Pedal to raise funds for charity, refused to say whether he supported the levy, despite persistent questioning.
He said the levy would only half fund the insurance scheme and he would wait on the Prime Minister to show how she would fund the whole scheme. Ms Gillard should put the legislation to parliament before the election, he said.
''Show us the work, give us the legislation and let's get on with it,'' Mr Abbott said.
Shadow treasurer Joe Hockey rubbished the idea of a levy during interviews on Wednesday morning, though he said the Coalition remained committed to the scheme.
Treasurer Wayne Swan said the levy would provide a ''stable, secure funding stream'' that would help both the Commonwealth and states pay for the scheme.
''When it comes to [20]18/19 which is the first full year of the scheme right around the country, you have got the critical mass to support this vital reform,'' Mr Swan said.
''I don't think there is going to be too many premiers with any excuses left after this announcement today when it comes to signing up to disability care.
''This is a recognition that we are all in this together. We want the states to join us.''
Mr Swan said this was an issue of participation, both in the workplace and in society.
Under the funding for the scheme, NSW will contribute $3.2 billion, Victoria $2.3 billion, Queensland $1.9 billion, Western Australia $976 million, South Australia $727 million, Tasmania $216 million, the ACT $192 million and the Northern Territory $92 million.
Queensland Premier Campbell Newman has already signalled his support for a levy for the scheme, saying on Wednesday that it was the ''right thing to do''.
But West Australian Premier Colin Barnett has again baulked at signing up, saying the increased Medicare levy is the ''easy'' part of funding the plan.
Mr Barnett thinks WA will eventually be part of a national scheme but he wants greater flexibility and a more decentralised model before he commits to it.
''We're not going to sign up to a take-it or leave-it proposal,'' Mr Barnett told ABC radio on Wednesday.
Victorian Premier Denis Napthine spoke to Ms Gillard on Wednesday morning.
Dr Napthine said his government would now consider the new funding model announced by the Prime Minister, but said the government had always been a supporter of the scheme as long as it was properly funded and would help Victorians.
''We are strong supporters, what we want is a fair and reasonable funding model. We now have a new funding proposal put on the table this morning. Quite properly we will evaulate and consider it,'' Dr Napthine said.
He said it was quite a considerable change to what was discussed recently at Commonwealth Heads of Government Meeting.
Also speaking on Wednesday morning, NSW Premier Barry O'Farrell was critical of an increase in the Medicare levy to pay for the NDIS.
“All governments are responsible for determining their own priorities when it comes to funding programs, and I’ll point to the fact that over the past two years our reaction to the need for additional funding is usually to look at how we rein in expenditures rather than putting up taxes,” he said.
South Australia and the ACT have already committed to the full implementation of the scheme, but are yet to comment on the levy increase.
The Prime Minister stressed in her speech that ''every cent raised will be used for disability care''.
The government said Australians earning incomes of $70,000 a year would be asked to pay about $1 a day in an extra Medicare levy to fund the insurance scheme.
The new levy, which would come into effect on July 1, 2014, would raise about $3.2 billion a year - less than half the estimated $8 billion a year the federal government needs to fund the NDIS.
Ms Gillard, who as recently as last December ruled out a new levy to pay for the NDIS, said she had changed her mind for three reasons.
The first was that the government is raising less revenue than previously expected.
The second was that the states and territories would need more support to pay for the scheme – and she promised the states would get a quarter of the money raised by the new fund.
Third, she said she had heard ''loud and clear'' the pleas from disability support groups.
But the Prime Minister has shied away from attempting to legislate the new levy before the election, saying it could be dealt with by the next parliament.
The National Disability Insurance Scheme is not a welfare program but an insurance scheme that would cover the massive medical costs often incurred by disabled people.
Currently, Australians who can prove they are too disabled to work can apply for the Disability Support Pension, but these pension payments do not cover the multitude of costs that come with being disabled.
The NDIS has been designed to plug that gap, and help pay for medical equipment such as wheelchairs or for doctors' appointments linked to their disability. The scheme will cost an estimated $15 billion a year by the time it is fully operational.
There has been media speculation recently that the cash-strapped Labor government would make it harder for people to get the Disability Support Pension, but Minister for Disability Reform Jenny Macklin dismissed that speculation on Wednesday.
''There will not be any further changes to the Disability Support Pension in the upcoming budget,'' Ms Macklin said.
Low income earners will continue to receive relief from the Medicare levy through the low income thresholds for singles, families, seniors and pensioners, Ms Gillard said.
The current exemptions from the Medicare levy will also remain in place, including for blind pensioners and sickness allowance recipients.
Under the new Medicare levy:
• Someone earning $30,000 a year would pay an extra 41 cents a day
• Someone earning $70,000 a year will pay an extra 96 cents a day
• Someone earning $110,000 a year will pay an extra $1.51 a day
Responding to Ms Gillard's announcement, the president of People with Disability Australia, Craig Wallace, said he had long supported the idea of a levy to raise money for the NDIS, and he applauded the Prime Minister for putting a specific proposal ''on the table''.
Mr Wallace called on Mr Abbott to do the same and said he was ''concerned'' that the Coalition had not given any details of how they would pay for the NDIS.
Vague promises would not ''cut the mustard any more'', Mr Wallace said.
''What worries us is we are not getting the detail of what the scheme is actually going to look like under them [the Coalition].
''Now is the time where the rubber meets the road, we actually need some guarantees on funding for this,'' Mr Wallace said.
‘‘If the government would and could do it, and would commit to do it, we would rather have the legislation passed tomorrow,’’ he said.
‘‘The reality is that there is a hung parliament, the reality is that there we’re in an election campaign that seems to be lasting the whole year, and we need bipartisan support to actually land this.’’
Another peak body, the Australian Medical Association, supported Labor's Medicare levy increase and called on the Coalition to do the same.
''We would urge the Coalition to look at this very, very seriously because this is something that’s very popular with the Australian people and we know that individuals have already said that they're prepared to contribute,'' said Steve Hambleton, the federal president of the AMA.
Ken Baker, the chief executive of National Disability Services said he would prefer parliament pass legislation for the levy before the election to give certainty to people with disability.
‘‘I think there’s no good reason to wait,’’ he said. The call was echoed by Leah Hobson, the NDIS Engagement Project Officer for the Australian Federation of Disability Organisations.
‘‘We would prefer that it be set up before the election,’’ Ms Hobson said.
‘‘From our perspecitve, the more certainty, the sooner the better.’’Disability Discrimination Commissioner Graeme Innes said it would be an ‘‘excellent result’’ if parliament could pass legislation for the levy before the September 14 poll.
‘‘It’s always good to have certainty and so it would be terribly unfair for people with disability to raise expectations and then not provide that certainty so in that sense it would be great to have the levy passed prior to the election,’’ he said.
Craig Wallace, the president of People with Disability Australia, said he would also prefer the levy be established before the election.
‘‘If the government would and could do it, and would commit to do it, we would rather have the legislation passed tomorrow,’’ he said. ‘‘The reality is that there is a hung parliament, the reality is that there we’re in an election campaign that seems to be lasting the whole year, and we need bipartisan support to actually land this.’’
