Disability Levy Serves The Common Good


It's probably too early to declare victory in the long fight to ensure disabled Australians have a measure of dignity in their lives. But the events of this week have certainly swung the balance in their favour.

To recap, Julia Gillard's Government has announced that it will seek to implement the national disability insurance scheme, now called, rather blandly, Disability Care. To help pay for it, the government will raise the Medicare levy — currently a 1.5 per cent levy on everyone's income tax — to 2 per cent.

The extra money raised won't completely pay for the estimated $6-7 billion annual cost of Disability Care, but according to the government, it will raise an extra $3.3 billion a year in extra federal revenue — “$20.4 billion between 2014-15 and 2018-19, when the full scheme comes into place.”

Transparently, this is a win for Australians with a disability, and for their families and carers. The disastrous state of Australia's shirked responsibility for those most in need has been well chronicled, most extensively by a Productivity Commission report into the matter.

According to the Government, there are approximately 410,000 Australians with a permanent disability. Where they live and how they acquired their disability has a huge effect on whether they can access any insurance or government care. Most of them are cared for by their families, who in turn are often unable to work. The economic and social impact is vast. In 2011, the Australian Bureau of Statistics estimated that there were “almost 42,000 primary carers who had indicated a need for more assistance with respite alone”.

Disability Care won't solve all these problems, but it will help many Australians who need help most. It's well past time one of the richest nations in the world moved to protect and enable some of our society's most vulnerable.

But Disability Care won't just protect the vulnerable. It will actually grow our economy. That's because it will bring people into the workforce who are currently unable to work – not just the disabled themselves, but also their carers and family members. Back in 2011, the Productivity Commission estimated that the cumulative impact would increase GDP by something like $32 billion in the year 2050. And because all those extra workers will be paying income tax, the net effect on the budget bottom will be positive.

“Taking account of the benefits over the longer run, the reforms would be equivalent to reducing budget pressures by around $2.7 billion (in constant prices) per year over the next 90 years,” the Commission reported.

So Disability Care is a win for society, the economy and the budget, as Peter Martin today points out. It's a win-win-win. There can't be too many reforms which are so obviously good for the country.

No doubt that is why Tony Abbott and the Coalition support this scheme. The Coalition, to its credit, has consistently given its bipartisan support to a national disability insurance scheme.

All of which makes the somewhat mixed reaction to Labor's announcement yesterday particularly perplexing. Much of the media coverage focussed on the slightly higher taxes Australians will have to pay to fund the increase. Such increases are modest: the extra half a percent will equate to around a dollar a day for a worker on $70,000.

That hasn't stopped many of the Murdoch tabloid newspapers running slanted stories attacking the scheme as a “backflip” by Julia Gillard (which is true: she previously didn't support the idea of a levy), and as evidence that the government has a spending problem (which is not true: government spending remains at modest levels by international standards). Gemma Jones in the Daily Telegraph, for instance, furnished her readers with this lamentably unbalanced piece, which presents the Government's decision to introduce Disability Care as a “broken promise", largely ignoring the fact that the scheme itself is longstanding Labor policy.

Fairfax was at it too, with Mark Kenny penning a strange opinion piece in which he claimed that the disabled “are now caught in a political game of chicken with neither side of politics prepared to unconditionally back legislation before the election”.

Not to put too fine a point on it, that's rubbish. Labor has said it will introduce the legislation to Parliament if it can win support from the Opposition; sure enough, Tony Abbott today signalled his support. So if there is a game of chicken, it's one where both parties seem pretty committed to getting to the other side. If Jones or Kenny had simply reported on the policy, rather than inventing convoluted political metaphors to describe normal legislative horse trading, their readers would have a better understanding of what's being proposed.

Even more offensive were Myer CEO Bernie Brookes' remarks yesterday about the impact of the levy on discretionary income. Brookes told a bunch of suits at Macquarie Investment that “another 0.5 per cent on the Medicare levy is not good for our customers and not good for the discretionary income world”, complaining that the “$300 they might have spent with us.” Brookes has been forced to apologise for the comments, but it was a bizarre remark anyway. The retail sector is now growing again, thanks to a string of interest rate cuts. Australia can afford Disability Care in the short term and in the long term it will make us all richer.

You don't get too many issues where the common good is so obvious for all to see. Disability reforms are one of them. This measure is good for nearly everyone. Anyone who is against it is essentially selfish, which is about the most charitable thing you could call Bernie Brookes. The reason that Bernie Brookes and the News Limited tabloids are seeking to muddy the waters is precisely because the issue is so clear cut. You could accuse the Coalition of political expediency in supporting these reforms, but I'd prefer to believe they support it because it is right.

When the Productivity Commission unveiled its report in 2011, I argued that “in time, these reforms will come to be seen as the single most important social policy reforms of the Gillard Government.” If the Prime Minister can usher these reforms through parliament before the election, and there is every indication she will, that judgment will stand.

Disability Care is a reform we should all welcome, even while keeping a close watch on the implementation. It should change Australia for the better.

Ben Eltham is New Matilda's National Affairs Correspondent.