The Federal Government will guarantee its share of future NDIS funding by increasing the Medicare Levy. The Federal Budget announces an increase of 0.5 per cent to the Medicare Levy for the sole purpose of funding the NDIS. This effectively removes NDIS funding from battles in Cabinet and Parliament about spending and savings priorities. Relying on savings to fund the NDIS inevitably pits it against other worthwhile programs and initiatives and subjects NDIS funding to the vagaries of politics.
The Federal Budget reveals a gap in 2019-20 of $3.8 billion in the Commonwealth funding required for the NDIS. The gap expands to almost $5 billion in the following year. The increase in the Medicare Levy will bridge this gap. It will add to existing savings, the Commonwealth's share of the Disability Care Australia Fund (also funded through the Medicare Levy) and existing Commonwealth expenditure on disability services.If Parliament agrees, the Medicare Levy will be increased from 2.0% to 2.5% (from July 2019). All revenue raised will be directed to the NDIS ($9.1 billion will be credited to the NDIS Savings Fund Special Account over the next four years). Low income earners will be protected from the rise in the Levy.