NDIS - Labor Lies...

[Rorschach]

To be perfectly fair, Labor’s guilty of NDIS hypocrisy
The Australian
12:00AM May 17, 2017
Paul Kelly
Editor-At-Large
Sydney

Bill Shorten has enshrined fairness as his theme for the current parliament, saying only Labor really understands fairness — yet Labor’s “fairness” claims in its budget reply are a strange mix of deception, contention and confusion.

Take, for example, the conflict over the 0.5 per cent increase in the Medicare levy and Labor’s refusal to endorse the same quantum of increase as implemented by Julia Gillard and defended as fair and inclusive in the 2013 budget that began to finance the National Disability Insurance Scheme.

Under the Coalition’s 2017 policy the better-off pay proportionally more, with the 6.7 per cent of taxpayers on incomes of more than $180,000 meeting 26.9 per cent of the extra dollars for the NDIS. That is, for top earners their share of the cost is four times their share of taxpayer numbers. Is this an assault on fairness?

The bottom 10 per cent of taxpayers by income pays only 1.6 per cent of the extra Medicare levy, and the bottom 25 per cent of taxpayers pays only 8.1 per cent of the extra levy. Indeed, going further up the scale, the bottom 52 per cent of taxpayers by income contribute only 25 per cent of the extra levy. Again, is this an assault on fairness?

On Sky’s Sunday Agenda last week prominent economist Saul Eslake said he believed the government’s proposed increase in the Medicare levy was “justified and reasonable”, and that because the levy related to income, it was also “fair”. Chris Richardson from Deloitte Access Economics, who provided these calculations, also said he believed the Medicare increase to fund the NDIS justified and reasonable.

The truth is this has become pretty conventional policy. It was noteworthy that in 2013 when the Gillard government proposed the initial 0.5 per cent increase for the NDIS, treasurer Wayne Swan said: “This is a recognition we are all in this together.”

Gillard highlighted the responsibility she said would fall on the average worker earning $70,000 a year — such a worker would have to pay an extra $350 a year or, as Gillard said, another dollar a day.

Labor defended and justified the principle — the average worker had to contribute along with the low-paid taxpayer.

Swan said it was not an “easy” decision but the “right” decision because the NDIS was for “a greater public good”.

Labor knew the increase could be justified in terms of inclusion and fairness. Anybody, rich or poor, could become disabled.

Gillard’s increase was actually a broken promise. Initially she had said she would take the proposed increase to the 2013 election and win a mandate, but later changed her mind. It was passed, and the Abbott opposition supported the move. It made the NDIS a bipartisan policy and this was the stance Tony Abbott took to the 2013 ­election.

Now the Turnbull government seeks to implement the same policy to fill the remaining $55 billion shortfall in funding the NDIS over the next decade. The government’s initial approach was to look towards spending saves. But parliament was opposed and the purpose in this budget, in effect, is to resolve the NDIS funding issue once and for all. The increase in the Medicare levy from 2 per cent to 2.5 per cent means the scheme will be largely fully funded. Yet Labor repudiates the entire idea.

Labor will support the Medicare levy increase for those earning $87,001 or more. This gears the funding heavily to the top end. It means, for example, that the top 6.7 per cent of taxpayers (earning over $180,000) pays 78.3 per cent of the extra dollars for the NDIS.

How fair is this? Clearly, it does not constitute a national sharing of funding for the NDIS but is a punitive raid at the top end.

What happened to Labor’s 2013 views on inclusion and fairness? What happened to the idea “we are all in this together”, since this policy is the reverse?

And if you care about the NDIS, how wise is it to have much of the $55bn shortfall funded by a small group of taxpayers at the top end? Is this fairness or cynicism? Might it even be playing politics with the NDIS?

Labor’s answer from the Opposition Leader and from Treasury spokesman Chris Bowen is that the NDIS is fully funded. They say Gillard Labor funded the entire scheme and that the shortfall, therefore, is a fantasy. In this case, of course, there would be no need for the Turnbull government to raise any Medicare levy whatsoever. And if the NDIS is fully funded, there would be no need for Labor to support any increase in the Medicare levy for anyone.

The notion of a fully funded NDIS has become Labor dogma. The 2013 budget created a DisabilityCare Australia Fund for proceeds from the Medicare levy to be preserved for NDIS implementation. Labor also identified a series of other saves to support further NDIS funding (along with a lovely graph to show it worked). But the extra “saves” were not allocated to the DisabilityCare Fund. Some were legislated, some weren’t. They were “saves” in a budget where annual spending growth was supposed to be kept to 2 per cent a year in real terms until the surplus was soon attained — and these were fantasy figures and notions.

Shorten’s comments betray Labor’s abject confusion. He says the NDIS is fully funded. Then he says the money is “there to fund the NDIS”. Then he says Malcolm Turnbull could fund the NDIS from a negative gearing crackdown, or hitting tax havens in the Cayman Islands, or getting rid of the $65bn company tax cut — all of which means Labor didn’t leave the NDIS fully funded.

Labor has a problem. The NDIS shortfall is now $4bn a year, rising to $6.9bn a year in a decade. It is not funded and Labor rejects the Prime Minister’s Medicare levy financing method. So Labor had better tell us how it plans to finance the NDIS off the current 2017 budget numbers and find the stack of money to do the job.

What happened here is that Labor needed an argument against this budget — it got the argument by seeking to reinstate the temporary deficit levy on high income earners and giving low and middle earners the Medicare levy tax break. This gave Shorten his mantra that Turnbull was giving millionaires a tax cut and 10 million others a tax hike — hence the budget is unfair.

Labor, as the party of fairness, wants a top marginal rate of 49.5 per cent that cuts in at a relatively low $180,000 income. Paul Keating revealed what he thought of Shorten (and Turnbull) by saying the top rate shouldn’t be above 39c. But Keating’s voice for aspirational Australia is all but dead in the ALP today.

With both Coalition and Labor agreed the budget must be repaired by tax rises, not spending cuts — a historic win for the progressives — Labor is gearing for the next battle: who pays the higher taxes? Its answer: the top end and companies. Australia has a progressive tax system and Labor wants to make it more progressive.

For example, the top 5 per cent of taxpayers pays 33.1 per cent of income tax. The top 10 per cent pays 45 per cent of income tax. And the top 25 per cent pays two-thirds of income tax.

At the same time the Productivity Commission found in 2014-15 that 40 per cent of families pay no net tax or are transfer winners, with the other 60 per cent being the contributors. Other estimates show an even greater bias in favour of people paying no net tax.

Is this fair or unfair?

Labor’s message is that, in the name of fairness, it wants more redistribution, more progressivity and less incentive for aspiration. This is the pivotal issue in the 2017 budget and now the central debate in our politics.

Personally I don't think the NDIS in its current form is affordable. It was certainly never fully funded.

[J o h n S m i t h]

I think labor will ultimately pass the legislation when it comes to the vote.. All the talk is just that, talk. They can't make it to easy for the libs.

[Neferti]

Can't people already claim for special needs stuff? Such as wheelchairs, special beds and so forth? I have heard of people who have claimed that The Government paid for whatever.

[cods]

Can't people already claim for special needs stuff? Such as wheelchairs, special beds and so forth? I have heard of people who have claimed that The Government paid for whatever.

.. its a just like any disability welfare nef... its not easy to be accessed and it all takes time and more time...it is a huge costly process..to get on to it.....

when you think refugees who are not refugees can come here and get welfare no trouble at all then go home for holidays at our expense...

and then those who are in need of so much help have to get in a queue... and be assessed

very disappointing...

[J o h n S m i t h]

when you think refugees who are not refugees can come here and get welfare no trouble at all then go home for holidays at our expense.

don't believe all the bullsh1t you read cods. Turns out they were refugees afterall. The newspapers lied