The National Disability Insurance Scheme, or NDIS, has itself been labouring under something of a disability of its own: lack of money.
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The scheme was a promise of the Gillard government in 2012. But that promise was unfunded, which made it more like a good idea than well-thought-out public policy.
That is now about to be rectified. How well it is rectified will be up to the Senate where Treasurer Scott Morrison appears to be confident a deal can be struck with enough crossbenchers to put the scheme on a sound financial footing at last. The government wants to raise the Medicare levy from its present 2 per cent of income to 2.5 per cent in order to fund the NDIS.
Opposition Leader Bill Shorten has decided this is unacceptable, and wants to impose the higher levy only on taxpayers in the top two tax brackets – that is, those earning more than $87,000. He justifies this by contrasting the extra burden on the low paid with the government's "tax cuts for the wealthy". It is a surprising and disappointing attempt at populism on his part. The NDIS began trial operations in 2013, and last year was expanded nationally; by 2019, when it will be operating at full swing, it expects to be supporting 460,000 people.
Like Medicare, the NDIS is fundamentally an insurance scheme. It funds services to the disabled by spreading their cost across the whole population. The levy is not a tax; rather, it is in effect the premium that all subscribers – all Australian taxpayers, that means – pay to gain this comprehensive insurance cover. Taxes can be progressive, redistributing money from the wealthy to the poor, but an insurance premium should not have that function.
Everyone may at some time in their life, early or late, acquire a disability and need continuing support from the NDIS. That universal human possibility justifies a universal obligation on all citizens to pay to insure against it.
Since the levy is a fixed proportion of incomes, it at least represents the same burden for the wealthy as for the poor – though of course, like the flat tax which it resembles, its actual effect may weigh heavier on the less well off. Even so, at 2.5 per cent of income, the burden is not great. The Treasurer, and the government, ought to win this argument.
