Government’s backflip on Medicare Levy

CHRIS BOWEN, SHADOW TREASURER: Thank you for coming everybody. If ever we needed confirmation that the Turnbull Government gets the big calls wrong, then we have it today. For some time now, Malcolm Turnbull and Scott Morrison have lectured the Labor Party and told the Australian people that it was absolutely vital for every Australian earning more than $21,000 to pay more tax to fund the NDIS.

 

Labor took a clear position that this was wrong. The Government said that NDIS would be unfunded without this tax rise. Now, what would have happened if Labor had accepted the Government's arguments? If Labor had voted for this tax rise? It would now be the law of the land. Instead we see Scott Morrison dropping this policy today. And there's only one reason he's dropping the policy - because he couldn't get the votes in the Parliament because of the Labor Party's opposition.

 

Scott Morrison likes to talk about being a party of low tax when he was proposing to increase the tax on every single working Australian.

 

Just as they got the big call wrong on the Banking Royal Commission and refused to hold it, just as they've got the call wrong on refusing to reform negative gearing, they've got this one wrong as well and Labor has got it right.

 

Now, I welcome the fact that finally Malcolm Turnbull and Scott Morrison are dropping this tax increase on Australians. They should never have proposed it in the first place. This just shows that this is a Government completely out of its depth when it comes to the Budget and to tax. They move from one idea to another - from increasing the GST to fund personal income tax cuts to not having company tax cuts to now having big company tax cuts. This is a Government which simply doesn't know what it's doing and I'm very glad that they have dropped this ridiculous proposal.

 

This is a Government which simply is not up to the job. And while they're at the business of backflips, they should keep going. They should drop their proposal to increase the pension age to 70. They should drop the proposal to take the energy supplement off pensioners. They should drop their big-business tax cuts as well. If they're in the business of backflips today, then don't do half a job, keep the job going.

 

Now, of course, the Government asked to meet us in the middle. You know, Malcolm Turnbull even asked how we could look the parents of disability children in the eye when we proposed the Medicare levy increase. But we indicated to them that we would be prepared to support a Medicare levy increase for those earning more than $87,000 in an effort to compromise, in a spirit of compromise to try and give them something that could pass the parliament. The Government now having dropped the Medicare levy increase, of course we no longer need to proceed with that effort of compromise for those above $87,000.

 

The Government won't be proceeding with the Medicare levy increase, therefore the Labor Party will not be proceeding with that increase above $87,000, which was always the Government's idea. It was simply the Labor Party proposing to meet the Government in the middle.

 

One other issue before I take questions. The Government is also announcing a top-up - a small top-up - to WA to help with the GST shortfall for hospital funding. Now, we announced a Fair Share for WA Fund last year. Bill Shorten and I in Perth. $1.6 billion fund. We said that Western Australia has legitimate grievances when it comes to the GST. But the answer was not to change the formula to disadvantage other jurisdictions but to improve the funding for Western Australia through the Commonwealth balance sheet.

 

Scott Morrison engaged in his typical blathering hyperventilation, said you couldn't fix it this way today. Today, he has in a small way done the same thing himself, just another example of this Treasurer being completely not up to the job. Happy to take any questions.

 

JOURNALIST: Isn't you dropping the $87,000 levy you back flipping as well?

 

BOWEN: No, as I said, we offered to compromise with the Government. They Government said they wanted a Medicare levy increase and we said we will give you one above $87,000. That’s all they’re prepared to vote for. They’ve now dropped the entire policy, so obviously the effort to compromise is now null and void as well.

 

JOURNALIST: (inaudible) if the Government is going to fully fund it, it doesn't really matter?

 

BOWEN: This is an important point. Let me make it crystal clear. Labor invented the NDIS. It's one of our proud achievements. We will always ensure it is funded, just as we ensured it was funded in Government by taking a whole range of measures.

 

Now, Malcolm Turnbull and Scott Morrison have engaged in quite a regrettable and quite unfortunate scare campaign about the NDIS, which has scared the recipients of NDIS and the families of recipients of NDIS. They never should have done that. They never should have brought it into question. Were they proposing to cut NDIS funding? I give them credit. I don't believe they were. By linking it to the Medicare Levy Increase, just as they've linked it previously to other cuts, they've made a political hypothecation. Not a real hypothecation.

 

Now, the fact of the matter is the NDIS is funded. Labor in Government will always ensure it is funded. The Productivity Commission has confirmed that there is no blowout in the cost and it's projected to cost just what it was projected to cost when it was introduced. The Government finally should stop playing political football with the NDIS. It is funded and let me make it crystal clear - it will always be funded under Labor.

 

JOURNALIST: You were unhappy the Government was going to impose a levy on low income-earners. Are you happy they won't?

 

BOWEN: The Government gets no credit for finally admitting they were wrong. I mean they never should have come up with this idea in the first place. Scott Morrison is out there saying this is good news. I think he even said it's ‘very good news, very, very good news’. Well, the fact of the matter is he never should have proportioned it. You don't get credit for not proceeding with something you never should have proposed in the first place. Of course, we welcome the fact that this is not proceeding and more importantly, Australians paying tax earning between $21,000 and $87,000 welcome the fact this is not proceeding but there's one reason it's not proceeding - they couldn't get the votes in the Senate because of the position of the Labor Party which has stopped this tax rise on ordinary Australians.

 

JOURNALIST: Are you just upset because the Government are now saying they're not increasing taxes and politically that's hard for you to counter?

 

BOWEN: We have pointed out consistently that they talk about lowering taxes but their policy is to increase tax. They were talking about tax cuts in this Budget when they were imposing a tax rise on every Australian earning more than $21,000. The fact they're not proceeding with that is good. But they don't get a tick for it. They shouldn't have come up with the silly idea in the first place.

 

Okay. All good? Thanks very much, everyone.