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James Thomson is the editor of BRW. Previously he was editor and publisher of SmartCompany and a senior editor at Business Spectator. He writes regularly on Australia's wealthiest entrepreneurs and has deep expertise in small business and the mid market.

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Gillard to raise Medicare levy to pay for disability scheme

Published 01 May 2013 11:59, Updated 02 May 2013 07:16

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Gillard to raise Medicare levy to pay for disability scheme

Prime Minister Julia Gillard describes the new NDIS levy as “the most fundamental social policy reform since the introduction of Medicare”. Photo: Glenn Hunt

Prime Minister Julia Gillard says Labor will pay for the national disability insurance scheme by increasing the Medicare levy from 0.5 percentage points to 2 per cent from July 2014 if it wins re-election.

The increase would see an average wage earner on $70,000 a year pay an extra $350 every year. A person earning $110,000 would pay an extra $551 per year.

The government say the change would raise $3.3 billion in the first year, and $20.4 billion between 2014-15 and 2018-19, when the full scheme comes into place.

Gillard described the change as “the most fundamental social policy reform since the introduction of Medicare”.

“This reform will provide peace of mind to all Australians that if they or a loved one acquire a disability, they will be supported.”

Gillard told reporters that while it was risky to hit “millions of Australians” with a tax hike before an election, “I am prepared to be judged by these choices”.

“I will be asking the nation in September to make a choice too. To endorse this plan, to make sure that we support disability care around Australia.”

The opposition supports the NDIS but this morning shadow treasurer Joe Hockey said he did not support a tax increase to pay for it. The Coalition is yet to say how it will fund the policy.

“I am not making any commitment and the Coalition is not making any commitment until we see the full budget,” Hockey told ABC Radio.

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