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Publication: |
The Australian |
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Date: |
8 May 2009 |
Matthew Franklin, Chief political correspondent | May 08, 2009
Article excerpt:
KEVIN Rudd will strip $1.9 billion from the pockets of middle- and high-income earners by slashing their taxpayer-funded 30 per cent private health insurance rebates in Tuesday's budget. And while the Prime Minister will honour promises of tax relief of almost $60 a week for high-income earners over the next two years, he will use his insurance reforms to claw back part of their gains.
... In a dramatic strike against John Howard's so-called middle-class welfare, the Government will also lift penalties for well-off taxpayers who refuse to buy private insurance - boosting their Medicare levy surcharges by up to 50 per cent. The Australian understands single people earning more than $74,000 a year and couples on more than $150,000 a year will watch their insurance rebates melt away on a sliding scale.
The payments will cut out completely at incomes of $120,000 for singles and $240,000 for couples - leaving the wealthy to pay for their own insurance in its entirety.
Article summary:
An average family health insurance policy costs about $2600 a year. The Howard government gave all insured taxpayers an annual rebate worth 30 per cent of their premiums, with those aged 65 and older eligible for a refund of up to 40per cent.
Tuesday's budget will repudiate Mr Howard's non-means-tested approach. The new arrangements will affect singles earning over $74,000 a year and couples earning over $150,000 a year, with a tiered approach offering 30%, 20% and 10% rebate depending on your income. Singles earning more than $120,000 a year and couples on more than $240,000 will no longer receive subsidies.
However, if they refuse to take out insurance, their Medicare levy surcharge will rise from 1% to 1.25-1.5%
The Government claims to have based its decisions on detailed assessment of existing trends indicating that middle- and high-income earners receive a disproportionate benefit compared to those on modest incomes, and says the changes will prevent the rebate system spiralling out of control, saving $1.9billion in its first three years and $8.7billion in the period leading up to 2019-20.
