Ursula Stephens (NSW, Australian Labor Party, Shadow Parliamentary Secretary for Science and Water) Share this | Link to this | Hansard source

The Tax Laws Amendment (Medicare Levy and Medicare Levy Surcharge) Bill 2006 amends the Medicare Levy Act 1986 to increase the Medicare levy low-income thresholds for individuals and their families. The dependent child-student component of the family threshold will also be increased. The increases are in line with movements in the consumer price index. This bill also increases the Medicare levy low-income threshold for pensioners below age pension age so that they do not have a Medicare levy liability where they do not have an income tax liability. The A New Tax System (Medicare Levy Surcharge—Fringe Benefits) Act 1999 will also increase the Medicare levy surcharge low-income threshold in line with movements in the CPI. The individual threshold will be increased from $15,902 to $16,284, while the level of the family income threshold will also rise from $26,834 to $27,478. That threshold will also be increased by a further $2,523 for each dependent child or student. This bill also proposes to increase the threshold amount for pensioners below age pension age, so that pensioners who face no income tax liability will not have a Medicare levy liability. The threshold amount for pensioners who are under age pension age will also go up from $19,252 to $19,583.

The Medicare levy also applies at a reduced rate to taxpayers with taxable incomes above the threshold amount but not more than the phase-in limit. For 2005-06 the rate of the Medicare levy payable in these circumstances is limited to 20 per cent of the excess over the threshold amount that is relevant to the particular person. The phase-in limit for individuals is increased from $17,191 to $17,604. Pensioners who are under age pension age will have an increase in the phase-in limit from $20,812 to $21,170. There is no phase-in limit for families as the figure changes with the number of dependants. Instead, there is a formula that limits the levy payable by persons with families to 20 per cent for 2005-06 of the amount of family income that exceeds their family income threshold, and this range is increased for dependants.

A Medicare levy surcharge of one per cent applies on taxable income in certain cases where taxpayers do not have private patient hospital cover. The surcharge of one per cent also applies to the reportable fringe benefits in certain cases where taxpayers do not have private patient hospital cover. However, a family member who would otherwise be liable for the surcharge is not required to pay the surcharge where the total of that person’s taxable income and reportable fringe benefits do not exceed the individual low-income thresholds. Unlike the Medicare levy, there is no shading-in of the surcharge above the threshold amount. References to the individual low-income threshold amounts of $15,902 in the Medicare levy surcharge provisions in respect of surcharge on a taxable income are also being increased to $16,284. References to the individual low-income threshold amount of $15,902 in the Medicare levy surcharge provisions of the bill in respect of surcharge on reportable fringe benefits are also being increased to $16,284. On that basis, Labor is supporting the bill.

Andrew Murray (WA, Australian Democrats) Share this | Link to this | Hansard source

The Tax Laws Amendment (Medicare Levy and Medicare Levy Surcharge) Bill 2006 amends the Medicare Levy Act 1986 and the A new Tax System (Medicare Levy Surcharge—Fringe Benefits) Act 1999. Section 7 of the Medicare Levy Act says no Medicare levy is payable where a taxpayer has a taxable income at or below the taxable threshold amount. The bill increases the low-income thresholds for individuals and families in line with the movements of CPI from $15,902 to $16,284 and increases the threshold under which the Medicare levy for pensioners below pension age is not payable. There is no medical care liability where such persons do not have an income tax liability.

Senator Stephens has covered the bill adequately. I indicate that the Democrats do support the bill, but I want to take the opportunity during the debate on the second reading of this bill to draw the attention of the chamber to a problem. I have known about this problem, but I was reminded of it by a summary in the Age on Saturday, 10 June 2006 entitled ‘The state of gay rights in Australia’. Under the heading ‘Medicare levy and safety nets’ it said:

The Medicare Levy surcharge affects same-sex couples differently due to the Medicare Levy Act’s definition of couples. This means that the surcharge is calculated at a higher rate for gay couples.

My party and many parliamentarians from all parties were very pleased to hear the Prime Minister the other week comment that he was not in favour of discrimination that acted to the detriment of Australians. He was specifically being asked about the situation for same-sex couples. I thought that this should be an occasion for the Senate to ask the government if they would advise the Senate of this particular issue.

I move the second reading amendment standing in my name on sheet 4963:

At the end of the motion, add:

        “but the Senate requests that the Government;

             (a)    report to the Senate not later than the first sitting day of 2007, on the costs and ramifications of adjusting the Medicare Levy surcharge to ensure that it affects or is calculated for same-sex couples on the same basis as mixed-sex couples; and

             (b)    provide a statement of the Government’s policy position in relation to that issue”.

It is a simple request. It requires a simple response. This would be the cost, and this is the government’s policy. As a courtesy and due to the fact that it is non-controversial legislation, I will take the votes on the voices.

Ursula Stephens (NSW, Australian Labor Party, Shadow Parliamentary Secretary for Science and Water) Share this | Link to this | Hansard source

I indicate to the chamber that Labor will be supporting the amendment standing in the name of Senator Murray. Recognising the Prime Minister’s commitment to eliminating discriminatory impacts of legislation, this is an important step forward.

Question negatived.

Original question agreed to.

Bill read a second time.