Monday, February 28, 2011

Another levy. A good one. Today.

Already under pressure over the carbon tax and floods levy Prime Minister Gillard will today face calls for a third new tax, a Medicare-style national disability insurance levy costed at $5 billion.

To be unveiled in the interim report of a year-long Productivity Commission's investigation the levy would be set at 0.8 per cent of income on top of the 1.5 per cent Medicare Levy bringing the total impost to 2.3 per cent. An alternative option to be spelled out would collect money in the same way as the superannuation levy, at an average cost of around $400 per year per worker.

"Right now if you lose the use of your limbs falling off a ladder you are without support," says former NSW government minister John Della Bosca. "But if you lost use of limbs in a car you would be fully covered. It'd make sense to get up, get into a car and crash it."

John Della Bosca introduced Victorian-style compulsory no-fault car accident cover to NSW and believes both states have left the job half finished.

As campaign director for the lobby group Every Australian Counts he is confident the Commission will today recommend compulsory life-time cover for all disabilities however inflicted, including those acquired at birth.

He is less certain about how the Commission will suggest it be funded.

"I think it will set out options, the primary one being a Medicare-style levy. I would like to say to my political colleagues this isn't the sort of levy you should build a scare campaign around"...

"Doing nothing to provide disability cover is not an option. It can happen to anyone at any time, and it can happen to anyone's kid any time. Right now on a completely arbitrary basis some are denied support. The sector doesn't like me saying this, but it is true. Without support carers get burnt out. If carers can't get support they eventually break down and can't continue caring for their children.

A passionate critic of the government's flood levy, ANU professor Warwick McKibbin supports the idea of a disability levy, telling The Age that while one is bad in principle the other makes economic sense.

"One of the key things a government can do well is bundle the risk of a whole bunch of people and make it cheaper for everybody," he says.

Victorian leader Ted Baillieu is backing a national insurance scheme as are NSW leaders Kristina Keneally and Barry O'Farrell.

The total cost of caring for the $850,000 severely disabled Australians is estimated at around $10 billion per year, with only around half this presently funded through motor vehicle third party insurance.

Mr Della Bosca says the cost of the other half should come down over time as people are case managed and returned to work to boost Australia's productivity and pay taxes.

Published in today's SMH and Age

Related Posts

. We've disabled ourselves. Henry to tackle Australia's shame

. NewStart is $231 and shrinking relative to other benefits. Can anyone else see a problem?