May 2, 2013

The strange politics, and sensible economics, of the NDIS levy

Labor is using revenue writedowns as justification for an unrelated tax increase -- but it's not actually a bad idea. From Canberra, Crikey's man on the strange politics of the NDIS.

Bernard Keane — Politics editor

Bernard Keane

Politics editor

At first glance the government’s sudden conversion to an income tax levy to fund the NDIS is a shemozzle, a specialty of Labor’s.

This government has had two opportunities to embrace an NDIS levy. The first was after the Productivity Commission released its final report on disability services in 2011. The PC examined a levy closely and preferred NDIS funding to be sourced from elsewhere in the budget, but a levy was its fallback option, and it ended up focusing on the need to establish a specific fund for the NDIS, which under legislation the government would be required to maintain, either from savings elsewhere in the budget or from new taxes.

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36 thoughts on “The strange politics, and sensible economics, of the NDIS levy

  1. T DG

    The decision to fund the NDIS through an increased Medicare levy means the government will have to reconsider its decision to exclude NZ citizens legally residing in Australia from coverage by the NDIS.

    It was always dodgy excluding a group of people with residence rights in this country from coverage given that their taxes will be paying for it and many have been living here legally for many years, yet are also denied a pathway to citizenship that could allow them to access the service someday in the future.

    It is almost unbelievable that the government could seek to hit hundreds of thousands of people to fund a specific service to which they are denied access. Restrictions placed on NZ citizens accessing government services and citizenship in Australia are already straining trans-Tasman relations and were recently criticised by a joint report of the Productivity Commissions of both countries. Blatantly ripping off hundreds of thousands of NZ citizens in the manner proposed would cause very significant harm to the relationship and destroy any prospect of furthering trans-Tasman integration for years to come.

  2. mikehilliard

    Other than the comment @1 (seems very unfair) I don’t understand why increasing the medicare levy to partially fund the NDIS is a problem. I would have thought it would be politically much harder to create a new tax rather than extending an existing one, subtle difference I know. Maybe someone can explain this?

  3. Savonrepus

    Always when it comes to funding something it is hit payroll – hit payroll – we need a decent discussion on better ways to tax because getting a job should be a fundamental right for everyone and taxing it should be the last priority. I noticed a list on The Conversation as to revenue raising – cost reduction alternatives that shows that you do not have to look to far to think about alternatives to taxation on incomes via payrolls –

    I have listed some of the better ideas

    Extending the carbon tax to imported goods – a container tax would be simple to implement

    Cancelling the mining industry diesel fuel subsidy – claimed to be $2.5 billion

    Resource Tax that actually collects a tax

    Legalise certain drugs and tax them – seems to be working well in the fight against tobacco

    Stop funding a NBN that is being superceded by wireless as it is being built

    Start taxing property which at $1500 in $500,000 is ridiculously under taxed

    This list is not exhaustive and some points may be debatable but illustrates there are so many better opportunities than increasing unemployment by increasing a tax on wages. If you think there are upward pressures on unemployment now just wait till the super increase hits in July.

  4. Julia Birchwood

    “Stop funding a NBN that is being superceded by wireless as it is being built”

    did some go ahead and invent optical wifi when i wasn’t looking?

  5. Mark from Melbourne

    Why does everything be seen through such a complex prism/

    Gillard changed her mind – presumably the risks of pursuing a levy became lesser than the risks of pursuing it given the stress on the budget. FFS – contexts change, people change their minds. It’s called reality.

    The next time Abbott or someone carries on about the PM changing her mind we should ask them if they still hold 100% to their previous positions in all regards. I’d expect apopletic silence…followed by a swift exit.

  6. Mark from Melbourne

    “of not pursuing”…

  7. dazza

    “Optical wifi’? wow.. Someone’s going to be very rich.

  8. Savonrepus

    Julia what is happening around the traps is that people are no longer putting fixed installations into homes – and running off mobiles – a trend that is gathering pace they are getting their internet off their mobile as well as well as increasing use of free call software – NBN to sockets into homes – going to be a big waste of money – NBN to node and wireless termination well perhaps not so much of a waste. The roll out of the NBN is blowing out and being delayed by a total under estimation of the expense of node to the socket cost and now it seems totally unnecessary.

  9. Simon Mansfield

    >>Stop funding a NBN that is being superseded by wireless as it is being built<<

    Those WiFi towers will just be linked with fishing line instead – unlike it can be stretched without breaking.

    Better yet – this new replacement technology which goes beyond any known physics should much make climate change a solved issue. Beam me up … Savonrepus.

  10. Savonrepus

    Simon – read my comment – obviously the major links of the NBN need to go ahead – just not the expensive bits –

    It is a great shame that people like Simon like to ignore the reality of what people are actually doing just so you can take the opportunity to be facetious.

    Well I have the comfort in my arguement to know that I am right. Very few of my twenty something kids and their mates are installing fixed connections into premises that they are moving into. The cost of the NBN from the node to the socket is a total waste of money. Thank goodness we do have a political party available in the next election that understands economics.

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