QUEENSLAND has joined Victoria in looking at an increase in the Medicare levy as the fairest way of raising government revenues on the eve of a meeting of national leaders.
VICTORIAN Premier Daniel Andrews has suggested a rise in the Medicare levy of about $1000 a year for the average family could be an equitable way to pay for a funding black hole in the health system.
He wants Prime Minister Tony Abbott and state and territory leaders to consider a rise in the base rate of the Medicare levy as a fairer alternative to raising GST when they meet on Wednesday. A one percentage point increase in the Medicare levy, from two to three per cent, would cost $1000 for families earning $100,000 a year, he said. Queensland Premier Annastacia Palaszczuk is considering a similar proposal, saying an increase in the Medicare levy could be a viable tax reform. Queensland government departments are working on modelling a rise in the rate or base of the levy after Ms Palaszczuk again ruled out a change to the GST. “That could be a way forward,” Ms Palaszczuk said. “But once again the Commonwealth needs to explain why it cut funding across the nation in health and education, and why do the states now have to make that shortfall and why do the states have to come up with the solution.” Mr Andrews accepted the average family might be angry about paying more in tax, but said they should direct that anger at Mr Abbott. “Let’s not for a moment lose sight why there is a $70 billion hole in our hospital budget,” he said in Melbourne on Tuesday. “It’s because Tony Abbott can’t keep his promises and has hacked into hospitals like no other prime minister.” Mr Andrews will not support an increase in the GST because he believes it is inequitable. He says increasing the Medicare levy is fairer because it is calculated as a percentage of income.