Prime Minister Julia Gillard's government is bracing for a fresh round of tax levy debates if the Productivity Commission, as expected, recommends later this month that the government examine a $5 billion levy to fund a universal disability insurance scheme, according to a report by The Australian Financial Review.
The national disability scheme being examined by the commission will likely come with a price tag of nearly $11 billion per year and puts the government on course to clash with Opposition Leader Tony Abbott, who has said he will refuse to support any new tax, as well as a potentially rocky road with taxpayers after a cool public reception to the flood levy.
The disability proposal does, however, have backing. Premiers from NSW, Victoria, South Australia and Tasmania, along with many union leaders, have all come out in favour of the idea so long as it comes with a viable business plan for sustainable funding, according to the AFR.
To achieve the $5 billion funding gap through a levy, taxpayers would see 0.8 of a percentage point added to the existing 1.5 per cent Medicare levy, the AFR reported.
