Opposition leader Tony Abbott.
Opposition leader Tony Abbott. Chris Ison

Levy legislation likely to pass in Parliament

UPDATE 4pm: LABOR'S plan to increase the Medicare levy to help pay for the national disability insurance scheme appears likely to be enshrined in law within weeks after Opposition Leader Tony Abbott caved to public pressure and offered conditional support for the plan.

Less than 24 hours after refusing to say whether he supported the idea, Mr Abbott told reporters in Victoria on Thursday the Coalition would "consider supporting a modest increase" to the Medicare levy.

"The Coalition is prepared to consider supporting this because we want it to go ahead. We are not in the business of putting obstacles in the way of a very important reform which belongs to all Australians and which should be the property of both sides of Parliament," said Mr Abbott.

In reply Prime Minister Julia Gillard, who would have taken the plan to the election in the absence of bipartisan support, said the legislation would be introduced to the Parliament during Budget week, which begins on May 14.

"I am very pleased that today the Leader of the Opposition has said that he is prepared to support this plan; that the Leader of the Opposition today has said he is prepared to support an increase in the Medicare levy," said Ms Gillard, who was in Launceston to announce Tasmania had become the fourth state to sign up to DisabilityCare.

But Mr Abbott's support was contingent on the Prime Minister providing more details about the plan, including how the government intended to fully fund the scheme.

He also suggested a Coalition government would aim to remove the levy increase once the scheme could be paid for out of general budget revenue. Ms Gillard said, not for the first time this week, the government was continuing to find savings in the budget.

"(But) What I've announced with the increase in the Medicare levy would fully fund what we need to do in DisabilityCare over the next five years," she said.

If as expected the levy legislation passes the Parliament within the five remaining sitting weeks before the election, it will come into effect from July 1 next year.

The Medicare levy will increase by 0.5% to 2%, costing the average wage earner between $250 and $300 per year. All money raised by the levy will go into a DisabilityCare Australian Fund. 

It will raise $3.3 billion in its first year and $20.4 billion between 2014-15 and 2018-19.

Nor surprisingly the disability community, which had long called for a levy to fund the scheme, was ecstatic.

Every Australian Counts campaign director John Della Bosca said it was a "day to celebrate".

"Today we have seen the best of Australian politics," Mr Della Bosca said.

"Both Prime Minister Gillard and Opposition Leader Tony Abbott have acted to deliver certainty to people with a disability, their families and the organisations who support them."

The former Labor MP said Ms Gillard had displayed political courage by pursuing what amounts to a new tax in an election year, describing her as a "true friend of the disabled community".

Mr Della Bosca said despite the win the Every Australian Counts campaign would continue between now and the election.

"We want to ensure every candidate in the federal election has signed up to support the NDIS," he said.


EARLIER: Opposition Leader Tony Abbott has offered conditional support to Labor's plan to increase the Medicare levy by 0.5% to pay for the national disability insurance scheme.

Speaking in Victoria during a break in his Pollie Pedals ride Mr Abbott said the Coalition would "consider supporting a modest increase" to the levy.

He said the legislation to create the levy should be dealt with in the remaining five sitting weeks before the election.

But he again pressed Prime Minister Julia Gillard for more detail about the plan.

"The Coalition has supported this scheme every step of the way," Mr Abbott said.

"We want this scheme to come into being as soon as possible because we want millions of vulnerable Australians to have the security and the reassurance that they deserve.

"For that reason we are prepared to consider supporting a modest increase in the Medicare levy to make sure that this happens as soon as possible. We do want to see this come into this Parliament in this term.

"It is important that the Prime Minister come clean about all the details. How is this scheme going to be fully funded? Who exactly will be covered?"

The Coalition issued a lengthy statement a short time ago setting out the conditions it would require to support the levy, including that it be a temporary measure.

Ms Gillard is adamant she will only legislate in the current term if the plan attracts bipartisan support.

Without it she will take the plan to the September 14 election.

The levy would come into effect from July 1 next year and would raise $3.3 billion in its first year.

Ms Gillard was in Tasmania this morning to announce that state had become the fourth to sign up to the NDIS.

Are you prepared to pay more to help fund the national disability insurance scheme?

This poll ended on 01 June 2013.

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