Mr Taxman
Change the way you feel about taxes.
Get informed and discover what the taxman doesn't want you to know.
Sharing it with Australia, Mr Taxman is a regular Woman’s Day columist and TV finance commentator
  • click to visit Mr Taxman on Twitter
  • click to visit Mr Taxman on FaceBook
  • rss

Medicare levy could push RBA rates cut

May 02, 2013

ECONOMISTS and tax specialists have warned the RBA may have to cut rates to offset the impact of a Medicare levy hike and that governments may adopt levies to fund future promises.

University of NSW taxation professor Neil Warren said Australia had a history of levies and the latest proposed hike could set a precedent.

''We have a long history of this from a milk levy, a sugar levy, levies on guns, a flood levy,'' he said.

''What is different is this goes on forever, we get a little concerned about this because the history tells us from an economics point of view they have such good political consumption, people go 'oh well, it is going to a good cause', governments tend to over use them.''

He said the Medicare levy already only funded a fraction of the nation's medical costs.

AMP chief economist Shane Oliver said the levy proposal was a lesson that proposals such as the NDIS needed to be funded somehow and it was a ''community judgment'' that DisabilityCare was needed.

''If you want something you have got to pay for it. It is a community judgment if we want the NDIS, we have got to pay for it,'' he said.

He said the levy rise was an effective income tax hike at a time when the economy was sluggish.

For a person earning $100,000 with a $250,000 he said the hit was the equivalent of a 0.25 per cent rate hike and the impact on household spending could prompt the RBA to drop rates.

Mr Oliver said hopes household spending would rise to stem the affects of the slowing mining boom could be ''jeopardised to some degree''.

University of Technology tax lecturer Adrian Raftery said raising the Medicare levy from 1.5 to 2 per cent to cover the National Disability Insurance Scheme could set a precedent.

''What is going to happen in five years time or ten years time when you have five new policies are you going to continue to put half a per cent on the Medicare levy?'' he said.


Original article published in Daily Telegraph on 2 May 2013 and can be found here: http://www.news.com.au/national-news/federal-election/medicare-levy-hike-could-push-rba-rates-cut/story-fnho52ip-1226633417670#ixzz2SnpjzI5z

Tags: FamilyPersonal tax

Author: Gemma Jones

Comments

Post a New Comment

Media Availability

Are you interested in booking Mr Taxman for a speaking engagement or requesting his viewpoints for an article?

comments-rhsLatest Comments

  • "After many years of living with my husband i have always be the happiest woman but today i am here to tell you how grateful i am to witness his mighty spell that brought my husband back to me after..."

    By: Willma Lee at May 23, 2017 4:04PM

    Post: Marriage

  • "After many years of living with my husband i have always be the happiest woman but today i am here to tell you how grateful i am to witness his mighty spell that brought my husband back to me after..."

    By: Willma Lee at May 23, 2017 10:46AM

    Post: Marriage

  • "I can not believe this, my husband is back, i am grateful to see my husband returned with full force, Dr.Mack made this miracle to happen, Happiness has come to me at last, I am very pleased to say..."

    By: Katrina at May 23, 2017 8:57AM

    Post: Marriage

  • "Hi, Looking for a debt consolidation loan, unsecured loan,business loan, mortgage loan, car loan, and so on! I am a private lender, I grant loans to companies and individuals,, our minimum loan offer..."

    By: Alexander Grayson at May 22, 2017 10:32AM

    Post: Australian taxpayers still have some easy ways to make last-minute tax breaks

  • "Am here to testify how Mr Martins helped me with the blank ATM CARD to become a millionaire . He is a wonderful hacker which i mailed about the BLANK ATM CARD . I was in financially difficulties till..."

    By: TONY WHITE at May 22, 2017 9:39AM

    Post: Trading US futures in Australia