Tony Smith (Casey, Liberal Party, Deputy Chairman , Coalition Policy Development Committee) Share this | Link to this | Hansard source

The Tax Laws Amendment (Medicare Levy and Medicare Levy Surcharge) Bill 2011 is a housekeeping bill which comes before the House each year. As the Assistant Treasurer outlined when he introduced this bill just last week, this increases the thresholds in line with the increase in the consumer price index. So in that sense, it is a housekeeping bill. The Assistant Treasurer pointed out in his second reading speech that historically this bill has received bipartisan support. It is my happy duty to report to my honourable friends opposite that that remains the case. Throughout our period in government we put this bill with the budget bills, as the Parliamentary Secretary, my friend the member for Blair will know. It is a housekeeping bill to ensure that those thresholds are adjusted for the annual increase in the cost of living. If my memory for these things serves me correctly I know that not everyone will be interested in this but the member for Blair is interested in the detail of these things.

I think the House and the Senate have passed this legislation every year since the introduction of the relevant levies, with the exception of one year, in the early 1990s, when it was not required because inflation was negative. That stuck in my mind because I have been talking on this bill each year. On behalf of the opposition I commend the bill to the House. I thank the parliamentary secretary for thanking me in advance for my contribution and the member for Blair, who I know will speak next and who, no doubt, will be here at the same time next year speaking on the same bill.

John Murphy (Reid, Australian Labor Party) Share this | Link to this | Hansard source

I thank the member for Casey for apprising me of the history of this legislation.

Kirsten Livermore (Capricornia, Australian Labor Party) Share this | Link to this | Hansard source

Thank you, Mr Deputy Speaker, I feel as if I am crashing your party. I hope that the member Casey and the member for Blair do not mind my making a contribution. Since I was in the Main Committee I thought I would stick around. As the shadow minister has said this is a very straightforward and technical bill but, like all Labor members, I never knock back the chance to speak on a bill relating to Medicare. It is one of our great Labor initiatives—something that we are very proud of as a party and as a government. Medicare is an enduring feature of our social contract in Australia, so any legislation that acts to preserve its integrity in what it is setting out to achieve is important even though it is a fairly simple measure.

Medicare is built on fairness and it is designed to be progressive. It aims to provide universal access to health care funded by a community-wide contribution to meeting the cost of that health care. This bill amends a number of pieces of legislation to increase the thresholds below which low-income earners and pensioners do not have to pay either the Medicare levy or, in some cases, the Medicare surcharge levy. So the bills increase those thresholds to take account of inflation and to make sure that those people who are pensioners or low-income earners who have not paid the Medicare levy in the past will not, by reason of inflation, be liable for it in the coming year.

I commend the bill to the House—the member for Blair is quick off the mark!—and I acknowledge that it has bipartisan support. I think it is worth just reminding the House that this is a measure that is consistent with the government's efforts to assist pensioners and low-income earners with the costs of living. In doing that, and two years on from the landmark budget of 2009, it is worth reminding the House that it was this government—in just our second budget; a budget that was delivered under the shadow of the global financial crisis—that undertook the ambitious $14 billion reform of the pension system. As a result, age pensions have now increased by $128 per fortnight and $116 per fortnight for couples. Those pensions are now indexed every March and September in a more generous and relevant way than they had been in the past.

I just thought it was worth mentioning, as we all join to support this bill, that this is just one more example of this government being in touch with the needs of pensioners and low-income people, taking these sorts of measures that address those cost of living expenses. We will continue to do that in our policies in the years to come.

Shayne Neumann (Blair, Australian Labor Party) Share this | Link to this | Hansard source

I speak in support of the Tax Laws Amendment (Medicare Levy and Medicare Levy Surcharge) Bill 2011. As the member for Capricornia and the member for Casey have said, this is quite a technical bill that has the support of both sides of the chamber. Certainly, when the Howard government was in power they did allow adjustments in relation to the Medicare levy and the Medicare levy surcharge every year, taking into consideration the CPI, except in 1998 and 1999, where there was a negative movement in the CPI. But I do not think there was a reduction in the surcharge or threshold levels.

As the member for Capricornia said, this legislation certainly allows people of middle- and low-income status not to fall into the trap of paying higher Medicare levies. That is of course important. A Medicare levy is imposed at a flat rate of 1.5 per cent on a person's entire taxable income. However, low-income earners are not liable for the levy and that is consistent with the progressive nature of the income tax assessment legislation.

It has not always been the case that those opposite have supported us in terms of health reform and Medicare. The member for Capricornia talked about the financial aspects for pensioners and low-income earners. I want to talk just for a couple of minutes on the health aspects of Medicare, because Medicare is integral to the health system in this country. Those opposite, as I said, have not always supported Medicare.

Former coalition Prime Minister, John Howard, infamously described Medicare as a rort. Certainly, when the forerunner of Medicare, Medibank, was introduced by the former member for Oxley, the Hon. Bill Hayden, the peak doctors' bodies opposed it tooth and nail and so did the coalition. We are pleased to say that they have now been converted to the cause of Medicare. This is a great Labor initiative of the Hawke and Keating governments. One of the proudest moments in that government's long and illustrious history of economic reform was when Medicare was brought in to help those who were struggling to meet healthcare costs.

But this legislation is part of a whole package, as the member for Capricornia said, in relation to what we are doing to assist low-income earners. Also, let us face it, we are investing massively in terms of health and hospitals in this country, with a 50 per cent increase in health and hospital expenditure, $16.4 billion by 2020; 6,000 more training places for doctors; 425 existing GP practices, including the Flinders Peak Medical Practice in my electorate which will get additional assistance; primary care infrastructure funding; 64 GP superclinics, including the Ipswich GP superclinic in my electorate; 22 regional cancer centres; 44 more specialised breast cancer nursing centres; and 24-hour online assistance to patients who are in need. That online assistance will be rolled out by July 2011.

Only Labor is committed to a public health and hospital system that is viable, world class and that actually cares for the needs of Australians. We have a long history of being committed to Medicare, a long history of being committed to public hospitals and a long history of being committed to helping those in need, the poor, the challenged, the weak, the pensioners and the low-income earners, and Medicare is part of that long history of Labor's commitment to those in need.

David Bradbury (Lindsay, Australian Labor Party, Parliamentary Secretary to the Treasurer) Share this | Link to this | Hansard source

I would like to thank all of the members who have taken part in this debate—the members for Casey, Blair, and Capricornia—and note that the members for Casey and Blair are becoming the heavy lifters when it comes to these tax law amendment bills. The Tax Laws Amendment (Medicare Levy and Medicare Levy Surcharge) Bill 2011 increases the Medicare levy low-income thresholds for individuals and families in line with increases in the consumer price index. The individual threshold amount is to be increased from $18,488 to $18,839. The level of the family income threshold is to be increased from $31,196 to $31,789. The Medicare levy low-income threshold for pensioners below age pension age is also increased so that individuals in this cohort do not pay the Medicare levy when they do not have a tax liability.

The low-income threshold in the Medicare levy surcharge provisions is similarly increased. This change ensures that a low-income member of a family will continue to be exempt from the Medicare levy and Medicare levy surcharge. The amendments to the Medicare levy low-income thresholds apply to the 2010-11 year of income and later income years. The annual adjustments to the Medicare levy and the Medicare levy surcharge low-income thresholds have enjoyed bipartisan support for over a decade, as the member for Casey indicated. Full details of these measures are in the bill and are also contained in the explanatory memorandum. I would again like to thank all of those who have participated in this debate and commend the bill to the House.

Bill read a second time.

Ordered that the bill be reported to the House without amendment.