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Thursday, 16 May 2013
Page: 2745


Senator JACINTA COLLINS (VictoriaManager of Government Business in the Senate and Parliamentary Secretary for School Education and Workplace Relations) (12:48): I move:

That these bills be now read a second time.

I seek leave to have the second reading speeches incorporated in Hansard.

Leave granted.

The speeches read as follows—

NATIONAL DISABILITY INSURANCE SCHEME LEGISLATION AMENDMENT BILL 2013

This bill follows up the recent landmark legislation underpinning the first stage of DisabilityCare Australia, the National Disability Insurance Scheme, by making minor clarifying and consequential amendments to complement the main legislation.

The National Disability Insurance Scheme Act 2013, passed earlier this year, establishes DisabilityCare Australia, —the National Disability Insurance Scheme.

This will enable the scheme to be launched, and DisabilityCare Australia to operate the launch, in four sites across Australia from July 2013 - in South Australia, Tasmania, the Hunter region in New South Wales, and the Barwon area of Victoria - and, from July 2014, in the Australian Capital Territory and the Barkly region of the Northern Territory.

This bill makes minor amendments to the legislation to clarify the policy intention in relevant provisions, and to address minor anomalies and technical errors.

These technical changes will make sure that all of the details intended to be specified in the rules - which are necessary for implementation of the first stage of the scheme - will reflect the principal legislation for the scheme.

For example, provisions that allow rules to be made to prescribe relevant 'criteria' will be clarified to make sure rules can also be made to prescribe 'matters for consideration' or 'factors to be taken into account'.

Similarly, in the case of the early intervention supports, where there is no intention to make rules and where key eligibility criteria are already set out clearly in the legislation, the current rule-making power is being removed to avoid any risk that those provisions would not be available to people who may benefit from them.

The bill will strengthen the audit and risk management framework of DisabilityCare Australia. It is critical that the Board adopts a rigorous approach to oversight of DisabilityCare Australia, ensuring that this historic reform is financially sustainable and will support the wellbeing of Australians with disability for decades to come.

The framework for audit and risk management provides an important assurance that DisabilityCare Australia's operations and risks are being prudently and soundly managed.

Other minor amendments include clarifying the matters to which the CEO must have regard when considering whether to take action to claim or obtain compensation, or take over the conduct of an existing claim. These matters are similar to the matters that the act already requires the CEO to have regard to when deciding whether to require a scheme participant to take compensation action.

While it is not expected that the CEO will often need to take on or take over compensation claims, the amendments provide clarity to scheme participants and potential participants about what the CEO would need to consider before taking any such action.

The bill also makes consequential amendments to other Commonwealth Acts to complement the National Disability Insurance Scheme Act 2013.

The bill will establish a new National Disability Insurance Scheme Division of the Administrative Appeals Tribunal and require that members appointed to the division have expertise relating to disability or other relevant experience.

The Minister responsible for the scheme will also have to be consulted before a tribunal member can be assigned to the new division.

These requirements will ensure that applications for review of relevant decisions under the scheme are reviewed by tribunal members with appropriate training, knowledge or experience in this specialised area. A robust external merits review system is integral to supporting fair, efficient and effective decision making under the National Disability Insurance Scheme.

Amendments to the social security law will include changes to ensure that amounts paid under the National Disability Insurance Scheme for supports funded under a participant's plan are not taken into account under the social security or veterans' entitlements income and assets tests.

Lastly, among some consequential amendments to the taxation legislation, there will be changes to ensure that payments and benefits provided under the National Disability Insurance Scheme to participants in the scheme are exempt from income tax.

DISABILITYCARE AUSTRALIA FUND BILL 2013

For too long, people with disability, and their carers and families, have lived with inequity and uncertainty.

That is why this Government is transforming disability services by creating and locking in funding for DisabilityCare Australia.

DisabilityCare Australia will provide people with significant and permanent disability across Australia with the support they need.

The support they have waited too long for.

It will provide them with choice and control.

And it will enhance their opportunities for social and economic participation.

Through the bill the Prime Minster has introduced, the Government will provide a strong and enduring funding stream for DisabilityCare Australia, and provide certainty to people with disability that they will receive support in the long term, the Government will increase the Medicare levy from 1.5 to 2 per cent from 1 July 2014.

Disability can affect any of us and therefore it affects all of us.

That is why we are asking Australians to make a small contribution that will make a big difference to the lives of over 460,000 people with disability when the scheme is fully rolled out.

It was a Labor Government that introduced the Medicare levy in 1984 to fund Medicare.

The introduction of Medicare and the Medicare levy ensured equal access to health care for all Australians and demonstrated a commitment by the Labor government to the benefits of universal health care.

The DisabilityCare Australia Fund Bill is an important part of making DisabilityCare Australia a reality.

Every dollar raised from increasing the Medicare levy will be paid into the DisabilityCare Australia Fund, that we will establish with this bill.

This bill makes it crystal clear that the additional funds raised by the Medicare levy can only be drawn upon to fund DisabilityCare Australia.

The DisabilityCare Australia Fund will be managed by the Future Fund Board of Guardians (the Future Fund Board) who have the experience in successfully managing other Government owned investment funds.

The bill requires that a fixed amount of the money flowing into the Fund each year will be set aside for the States and Territories.

This amount will be $825 million in 2014-15, one quarter of the amount we expect to raise in that year.

The annual amount allocated within the Fund to the States and Territories will be grown in future years by 3.5 per cent per year.

Over ten years, the States and Territories will be allocated a total of $9.7 billion.

Funds will be used to reimburse States and Territories for spending on the scheme once key conditions are met.

We will formalise those conditions in agreements with the States.

Consistent with the principle that these funds are only to be used for additional costs in delivering DisabilityCare, those conditions will ensure that States can only access funds once they are incurring significant new costs in delivering DisabilityCare.

To support early establishment costs, eligible States will also be able to access some of their annual allocation in 2015-16, 2016-17 and 2017-18.

The bill will also provide the opportunity to cover interim matters to enable DisabilityCare Australia to commence operations from 1 July 2013, through creation of a transitional special account to manage State and Territory government funds until the Board overseeing the National Disability Insurance Scheme Launch Transition Agency is established.

The transitional special account will also be credited with the Commonwealth's contribution for 2013-14 which will be appropriated to the Department of Families, Housing, Community Services and Indigenous Affairs. This will provide assurance to State and Territory governments that the Commonwealth's contribution will be spent only on DisabilityCare Australia.

This bill allows the DisabilityCare Australia Fund to receive, hold and invest the additional revenue from the increase in the Medicare levy for the purposes of reimbursing the Commonwealth and States and Territories for their contributions to DisabilityCare Australia. It supports the critical objectives and principles of DisabilityCare Australia.

The Government's plan for DisabilityCare Australia extends well beyond the Medicare levy increase and the DisabilityCare fund.

In the Budget, the Government detailed the long term structural savings that, along with the revenue from the Medicare levy increase, will fully fund DisabilityCare well beyond the forward estimates, even beyond a ten year horizon.

This unprecedented step of providing long-term funding well beyond the normal four year Budget cycle shows the depth of Labor's commitment to DisabilityCare.

It shows our commitment to righting the wrongs of too many years of complacency, too many years where we have not given proper regard to the needs of people with significant and permanent disability.

With the secure funding we lock in for DisabilityCare today and for the future, we ensure that come 1 July 2013, DisabilityCare will be here to stay.

MEDICARE LEVY AMENDMENT (DISABILITYCARE AUSTRALIA) BILL 2013

Australia's strong economy and Australia's social safety nets are the envy of the world.

In this Bill, we see Australia at its very best.

In this Bill, we see that we still can be the strong, smart, fair Australia that created the Age Pension and the Pharmaceutical Benefits Scheme, Medibank, Medicare and universal superannuation.

In this Bill, we see that there is still a place for collective action to solve those great pressures of life that are too big and complex for individuals and families to solve alone.

In this Bill, we see a nation united in a spirit of concern to strengthen and extend the fair go, to ensure no one is left behind ...

… we also see a Parliament ready to put the national interest ahead of ideology.

To those who say Australian politics no longer works, I say simply: read the Medicare Levy Amendment (DisabilityCare Australia) Bill.

This is a united embrace of national responsibility and a great act of mutual care and solidarity.

Every week or fortnight, a sliver of the paypacket will go to DisabilityCare Australia: around a dollar a day for the average earner.

But all that money added together from every corner of the nation will be a mighty force for good.

Today we give an assurance to all Australians who live with disability and to those who care for them: DisabilityCare Australia will be here when you need it … election after election, decade after decade, generation after generation.

A new assurance for 410 000 Australians living with significant, permanent disability now and for their families and carers.

Today we also give a new assurance to all those Australians who do not have a disability today but who, through the vagaries of fortune, will come to have a significant, permanent disability in times to come.

For everyone who thinks, "it couldn't happen to me - could it?" this Bill brings peace of mind, it brings the knowledge that a scheme as well-designed and stably-funded as Medicare will be here when you need it.

Let me turn to the detail of the Bill.

The Bill will increase the Medicare levy by half a percentage point, from 1.5 per cent to 2 per cent, from 1 July 2014.

The Bill also makes consequential changes to the upper phase-in amount for low-income taxpayers with income between certain thresholds - as well as to the formula for calculating the amount of a person's Medicare levy liability where a person has a spouse or dependants.

These changes reflect the increase in the Medicare levy.

Low-income earners will continue to receive relief from the Medicare levy through the low-income thresholds for singles, families, seniors and pensioners.

The current exemptions from the Medicare levy will also remain in place, including for blind pensioners and sickness allowance recipients.

A number of other tax rates that include a component for the Medicare levy will also increase in line with this change - these include increases in the rate of fringe benefits tax and excess contributions tax.

These bills will be introduced by my Ministers today and further details of these consequential increases are set out in the Explanatory Memorandum.

Every cent raised by the increase in the Medicare levy will be allocated to a special fund over the next decade - the DisabilityCare Australia Fund.

By law, the fund will only be spent on supporting people with disability through DisabilityCare Australia.

The DisabilityCare Australia Fund will be established by the DisabilityCare Australia Fund Bill 2013, which will be put before the House as part of this package.

Full details of this fund will be outlined in the explanatory memorandum to that Bill which is to be tabled by the Deputy Prime Minister shortly.

Increasing the Medicare levy will raise approximately $20.4 billion between 2014-15 and 2018-19 - amounting to approximately 55 per cent of the total cost of funding DisabilityCare Australia over that period.

The Commonwealth's share of the fund will go toward our additional contribution to DisabilityCare Australia.

This will cover around 60 per cent of the Australian Government's net new spending on the scheme over the ten years from 2014-15.

In last night's Budget, the Deputy Prime Minister outlined that through this increased Levy and other wise savings, DisabilityCare Australia is fully funded.

DisabilityCare Australia is designed to ensure every Australian with significant and permanent disability, regardless of where he or she lives, gets the care and support they need.

DisabilityCare Australia will end the notorious "postcode lottery" for people with disabilities in this country.

I want no more of the unfairness and irrationality by which a person gets vastly different support merely because of where he or she lives or how a disability was acquired.

This requires the commitment and support of State and Territory governments.

The Government will assist the States and Territories with funding their share of DisabilityCare Australia, by setting aside some of the money going into the DisabilityCare Australia Fund.

Over the life of the fund, the States and Territories will be allocated a total of $9.7 billion.

The States and Territories will be able to draw down from the Fund when they meet key conditions for implementation.

DisabilityCare Australia will have full coverage across the Australian Capital Territory by July 2016, in New South Wales and South Australia by July 2018, and Tasmania, Victoria, Queensland and the Northern Territory by July 2019.

These agreements will see the scheme cover around

90 per cent of the total Australian population.

The Western Australian allocation from the Fund will be quarantined until we reach agreement with the State.

We encourage the Western Australian Government to join the cause.

All our people deserve the best.

To ensure that DisabilityCare Australia is fully funded, the Government has implemented a number of other savings measures.

Part of the savings from reforms to the Government's assistance for private health insurance announced in the 2012-13 MYEFO which have not been allocated to the Government's dental package will support DisabilityCare.

Funding will also come from reforms to retirement incomes policy, the phase out of the net medical expenses tax offset and other long-term savings decisions now announced as part of the 2013-14 Budget.

Making a new call upon the finances of Australians is not something that is done without care in this country - the fact is when a levy does happen, there is rightly a very good reason.

Bob Hawke with the Medicare levy.

John Howard with the levy for gun buy-backs.

This Government's flood levy which rebuilt Queensland.

Now, this increase in the Medicare levy to support DisabiltyCare.

Ours has been a fiscally-responsible government.

Offsetting all new spending since 2009, holding expenditure at a level lower than the average seen over the past 25 years.

A levy was not our first choice of funding vehicle for DisabilityCare.

But with the high dollar and the historic anomaly of nominal GDP growth falling below real GDP growth for a sustained period, the revenue write-downs have been unprecedented ... $17 billion for this financial year since the last budget update alone.

In short, the facts have changed.

I am also deeply conscious that the States and Territories face their own fiscal pressures arising from these same complex economic circumstances.

So we want to be able to offer them more support to pay for the scheme - which is why a substantial share of funds raised by this levy will go to the States and Territories.

Most importantly, we've listened to the sound case made by disability support groups for secure, ongoing funding for the national disability insurance scheme.

In a time of burden sharing and wise savings, they are right to want to ensure that DisabilityCare has a sustainable and stable funding stream ... in order to guarantee the security DisabilityCare is designed to bring.

The President of People with Disability Australia, Craig Wallace, has summarised the argument well - the levy will be

An insurance premium for good times and bad ... people ' s disabilities will not go away the next time we have a surplus.

That's the backdrop against which I introduce this Bill.

That's why the Government not only has bipartisan support for this Bill, we have near-nationwide agreement on this scheme.

Following the ground breaking agreement with New South Wales last December, the other jurisdictions have joined the cause, one by one:

South Australia, the ACT, Tasmania, Victoria, Queensland and most recently the Northern Territory.

That means 90 per cent of Australians are now part of the plan ... leaving only the people of Western Australia still waiting for a decision by their Premier.

People with disabilities and their families have campaigned so long to design and fund a national disability insurance scheme.

Many of those advocates are here with us today - I want to take the time to welcome and acknowledge you all now - and to acknowledge the passion and dedication of so many people with disability, so many families and carers, who have brought the campaign to this point.

In recent weeks, as the momentum you have built has broken through, as we have struck agreements with States and Territories and announced details of the funding, I have seen the hope and anticipation which Australians with disability, particularly young Australians, now share.

The Saturday before last, I travelled to Melbourne to meet Premier Napthine and sign up Victoria to DisabilityCare.

In Melbourne, I saw Sophie, a twelve-year-old girl who lives with Down Syndrome.

As her parents describe her, Sophie "reads and writes, mucks around on the monkey bars, can be well behaved and badly behaved, runs like a billy goat, and is a budding photographer".

She took my photo while we were there.

Last week I travelled to Brisbane to meet Premier Newman and sign up Queensland to DisabilityCare.

While I was there, I met Sandy, who is 17 and lives with a physical disability similar to cerebral palsy.

Sandy has big dreams for his future, like any teenager, but his future also has some big needs: mobility aids that cost tens of thousands of dollars, personal care to maintain his hygiene, physical therapy to maintain his muscles and his health.

When I met this young man he handed me a card signed by him and his mates to say thanks for what we are doing for people with disability - a card illustrated by the photo Sophie had taken a week before.

In years to come, DisabilityCare Australia will ensure Sophie and Sandy and so many other young people with disability will have the security and dignity every Australian deserves.

This, above all, is why Australians so overwhelmingly support DisabilityCare.

Over the past six years, the idea of a national disability insurance scheme has found a place in our nation's heart.

In March, we gave it a place in our nation's laws.

Today we inscribe it in our nation's finances.

The people who've gathered here today from around the country to witness this debate, know what this means.

There'll be no more "in principle" and no more "when circumstances permit".

There'll be launches, not trials ... permanent care, not temporary help.

DisabilityCare Australia starts in seven weeks - and there will be no turning back.

FRINGE BENEFITS TAX AMENDMENT (DISABILITYCARE AUSTRALIA) BILL 2013

The Fringe Benefits Tax Amendment (DisabilityCare Australia) Bill 2013 is part of a package of measures increasing the Medicare levy by half a percentage point.

The Gillard Government is proud to be delivering DisabilityCare Australia, the most important social reform since Medicare.

We know this is a reform that's time has come.

A reform that will deliver significant benefits to people with disability, their carers and families and to the wider Australian community.

DisabilityCare Australia will transform the lives of people with disability, their families and carers. In 2019-20, the first year of full scheme, it will provide around 460,000 Australians with a significant and permanent disability the care support they deserve, regardless of how they acquired their disability.

People with a disability, their families and carers deserve certainty. They deserve the certainty of knowing that they will be supported over their lifetimes, and the certainty that DisabilityCare Australia will be funded over the long term.

That's why the Government is increasing the Medicare levy from 1.5 to 2 per cent. And that is why every dollar raised from increasing the levy will go directly to fund DisabilityCare Australia. The DisabilityCare Australia Fund will be used solely to for spending on DisabilityCare Australia.

This will ensure DisabilityCare Australia has a strong and stable funding stream, replacing the current funding model based on arbitrary budget allocations.

People with a disability, their families and carers also deserve certainty that they will receive support no matter where they live in Australia. DisabilityCare Australia is a national reform that requires the commitment and support of all State and Territory governments.

To assist the States and Territories, the Government will make a share of the DisabilityCare Australia fund available to the States and Territories. We will make available to the States and Territories $9.7 billion over the next decade to assist in the delivery of DisabilityCare Australia.

People with a disability, their families and carers also deserve certainty that the Commonwealth will fully fund its share of DisabilityCare Australia. That is why we have taken a number of tough savings decisions and will direct those savings to fully fund DisabilityCare Australia.

The Fringe Benefits Tax Amendment (Disabilitycare Australia) Bill contains consequential amendments as a result of the increase in the Medicare levy, contained in the Medicare Levy Amendment (DisabilityCare Australia) Bill 2013.

Fringe Benefits Tax plays an important role in maintaining the fairness and integrity of Australia's taxation system.

It places employees who receive fringe benefits on a more even footing with employees whose remuneration consists entirely of salary or wages. It ensures that all forms of remuneration paid to employees bear a fair measure of tax.

The fringe benefits tax system also ensures that such benefits are counted as income when a person accesses means tested Government financial assistance, such as family tax benefits, ensuring that families are treated equally.

Fringe benefits are taxed at a rate of 46.5 per cent. This is the sum of the top marginal tax rate of 45 per cent plus the current Medicare levy rate of 1.5 per cent.

The Fringe Benefits Tax Amendment (DisabilityCare Australia) Bill 2013 will increase the fringe benefits tax rate to 47 per cent to reflect the increase in the Medicare levy. This will apply from 1 April 2014 - the start of the FBT year.

These consequential amendments will help to ensure the integrity of the tax system.

Further details of the bill are set out in the explanatory memorandum for the package of bills.

In supporting these changes in the Parliament, we show our support for certainty for people with disability, their families and their carers.

We all commit ourselves to this long overdue and much needed reform.

INCOME TAX RATES AMENDMENT (DISABILITYCARE AUSTRALIA) BILL 2013

The Income Tax Rates Amendment (DisabilityCare Australia) Bill 2013 is part of a package of measures increasing the Medicare levy by half a percentage point.

This bill contains consequential amendments to the Income Tax Rates Act 1986. These are necessary as a result of the increase in the Medicare levy, contained in the Medicare Levy Amendment (DisabilityCare Australia) Bill 2013.

When a superannuation fund or retirement savings account member does not provide their tax file number, the contributions made on behalf of the member are counted as income of the superannuation fund or the retirement savings account provider. The superannuation fund or retirement savings account provider is then required to pay tax on the contributions where no tax file number has been provided. This helps to ensure the integrity of the tax system.

The rate of the tax imposed on contributions where no tax file number has been provided includes a component which is the current Medicare levy rate of 1.5 per cent.

The Income Tax Rates Amendment (DisabilityCare Australia) Bill 2013 will increase this component from 1 July 2014 to reflect the increase in the Medicare levy from 1.5 per cent to 2 per cent.

These consequential amendments will help maintain the integrity of the tax system.

The revenue from this package of bills will be used to provide a strong and stable funding stream for DisabilityCare Australia.

Further details of the bill are set out in the explanatory memorandum for the package of bills.

SUPERANNUATION (EXCESS CONCESSIONAL CONTRIBUTIONS TAX) AMENDMENT (DISABILITYCARE AUSTRALIA) BILL 2013

The Superannuation (Excess Concessional Contributions Tax) Amendment (DisabilityCare Australia) Bill 2013 is part of a package of measures increasing the Medicare levy by half a percentage point.

The increase in the Medicare levy will help fund DisabilityCare Australia, the most profound piece of social justice policy since Medicare.

This is a watershed moment in our federation of states, our national story. An opportunity to alter the course of the future for millions of Australians that find difficulty in maintaining a basic level of existence which we all take for granted.

The importance, the urgency of this, is not to be underestimated.

Once DisabilityCare becomes a reality, we will never look back.

We will never look back to a time, a truly primitive time, when the disabled and their carers had to shoulder the burden and fill the gap while legislators sat back and looked at their knuckles, and hoped the problem would fix itself.

I believe this is the greatest cause to come before this chamber for a very long time, and the most important that I have had the privilege to work for.

This is our chance to turn to the almost more than four hundred thousand Australians, their families and their carers that face these daily struggles and say to them `your country will not leave you to fight each day alone`.

We see you. You have worth. And with a bit of help from your people, your society, your tribe, there is a chance things can change.

A better prosthetic may give new chances of work. The help of a specialist, one that was previously unaffordable under the private system, could make a breakthrough that can turn a life around.

This will change lives.

Change families.

Change the dimension of hope in every community.

No longer do we fill this place with empty rhetoric on this issue. We now put our money on the table. And we ask:

What is the price of an ordinary life?

Under DisabilityCare, it doesn't matter if you were born with it, or the circumstance in which you came to be the way you are.

What seems like such a basic concept, as old as the Good Samaritan, has taken a lot of work by a lot of people to come to action, fruition, to legislation in this place, on this historic day.

This really is a moment in our history to relish and remember.

Equality, a truly Labor principle, is the simple goal of this nation changing reform.

I turn now to the details of the bill.

This bill contains consequential amendments as a result of the increase in the Medicare levy, contained in the Medicare Levy Amendment (DisabilityCare Australia) Bill 2013.

Contributions to superannuation are subject to a number of different caps, which vary depending on the age and retirement status of the person making the contribution, and on whether the contribution is made out of before or after tax income. These caps exist to ensure that the amount of concessionally taxed superannuation benefits that a person may receive is sustainable and appropriately targeted.

The amount of a person's pre-tax superannuation contribution that exceeds the concessional cap is currently taxed at a rate of 31.5 per cent. This is the sum of the top marginal personal tax rate of 45 per cent and the current Medicare levy of 1.5 per cent, less the general rate of 15 per cent tax paid by most superannuation funds.

The Superannuation (Excess Concessional Contributions Tax) Amendment (DisabilityCare Australia) Bill 2013 will increase the rate at which tax on excess concessional contributions is payable.

From 1 July 2014, this rate will increase by half a percentage point to 32 per cent, reflecting the increase in the Medicare levy.

These consequential amendments will help to ensure the integrity of the tax system.

Further details of the bill are set out in the explanatory memorandum for the package of bills.

SUPERANNUATION (EXCESS NON-CONCESSIONAL CONTRIBUTIONS TAX) AMENDMENT (DISABILITYCARE AUSTRALIA) BILL 2013

The Superannuation (Excess Non-Concessional Contributions Tax) Amendment (DisabilityCare Australia) Bill 2013 is part of a package of measures increasing the Medicare levy by half a percentage point.

This bill contains consequential amendments as a result of the increase in the Medicare levy, contained in the Medicare Levy Amendment (DisabilityCare Australia) Bill 2013.

Contributions to superannuation are subject to a number of different caps, which vary depending on the age and retirement status of the person making the contribution, and on whether the contribution is made out of before or after tax income. These caps exist to ensure that the amount of concessionally taxed superannuation benefits that a person may receive is sustainable and appropriately targeted.

The amount by which a person's after-tax contribution to their superannuation exceeds the non-concessional cap is currently taxed at a rate of 46.5 per cent. This is the sum of the top marginal personal tax rate of 45 per cent and the current Medicare levy of 1.5 per cent.

The Superannuation (Excess Non-concessional Contributions Tax) Amendment (DisabilityCare Australia) Bill 2013 will increase the rate at which tax on excess non-concessional contributions is payable.

From 1 July 2014, this rate will increase by half a percentage point to 47 per cent, and will apply to an individual's excess contributions for a financial year. This reflects the half a percentage point increase in the Medicare levy.

These consequential amendments will help to ensure the integrity of the tax system.

The revenue from this package of bills will be used to provide a strong and stable funding stream for DisabilityCare Australia.

Further details of the bill are set out in the explanatory memorandum for the package of bills.

SUPERANNUATION (EXCESS UNTAXED ROLL-OVER AMOUNTS TAX) AMENDMENT (DISABILITYCARE AUSTRALIA) BILL 2013

The Superannuation (Excess Untaxed Roll-Over Amounts Tax) Amendment (DisabilityCare Australia) Bill 2013 is part of a package of measures increasing the Medicare levy by half a percentage point.

This bill contains consequential amendments as a result of the increase in the Medicare levy, contained in the Medicare Levy Amendment (DisabilityCare Australia) Bill 2013.

Contributions to superannuation are subject to a number of different caps, which vary depending on the age and retirement status of the person making the contribution, and on whether the contribution is made out of before or after tax income. These caps exist to ensure that the amount of concessionally taxed superannuation benefits that a person may receive is sustainable and appropriately targeted.

Excess, untaxed, roll-over amounts are currently taxed at a rate of 46.5 per cent, which is the sum of the top marginal personal tax rate of 45 per cent and the current Medicare levy of 1.5 per cent.

The Superannuation (Excess Untaxed Roll-Over Amounts Tax) Amendment (DisabilityCare Australia) Bill 2013 will increase the rate at which tax on excess untaxed roll-over amounts is payable.

From 1 July 2014, this rate will increase by half a percentage point to 47 per cent, and will apply to excess untaxed roll-over amounts paid on or after 1 July 2014. This reflects the half a percentage point increase in the Medicare levy.

These consequential amendments will help to ensure the integrity of the tax system.

The revenue from this package of bills will be used to provide a strong and stable funding stream for DisabilityCare Australia.

Further details of the bill are set out in the explanatory memorandum for the package of bills.

INCOME TAX (TFN WITHHOLDING TAX (ESS)) AMENDMENT (DISABILITYCARE AUSTRALIA) BILL 2013

The Income Tax (TFN Withholding Tax (ESS)) Amendment (DisabilityCare Australia) Bill 2013 is part of a package of measures increasing the Medicare levy by half a percentage point.

This bill contains consequential amendments to the Income Tax (TFN Withholding Tax (ESS)) Act 2009. These are necessary as a result of the increase in the Medicare levy, contained in the Medicare Levy Amendment (DisabilityCare Australia) Bill 2013.

Employers are required to pay the withholding tax if they provide their employees with discounted shares or rights and employees have not provided their tax file number or Australian Business Number to their employer by the end of the income year. This helps to ensure the integrity of the taxation of employee share schemes.

The rate of the withholding tax is currently 46.5 per cent, the top marginal rate of 45 per cent plus the current Medicare levy rate of 1.5 per cent.

The Income Tax (TFN Withholding Tax (ESS)) Amendment (DisabilityCare Australia) Bill 2013 will increase this rate to 47 per cent, from 1 July 2014, to reflect the increase in the Medicare levy from 1.5 per cent to 2 per cent.

These consequential amendments will help to ensure the integrity of the tax system.

The revenue from this package of bills will be used to provide a strong and stable funding stream for DisabilityCare Australia.

Further details of the bill are set out in the explanatory memorandum for the package of bills.

INCOME TAX (FIRST HOME SAVER ACCOUNTS MISUSE TAX) AMENDMENT (DISABILITYCARE AUSTRALIA) BILL 2013

The Income Tax (First Home Saver Accounts Misuse Tax) Amendment (DisabilityCare Australia) Bill 2013 is part of a package of measures increasing the Medicare levy by half a percentage point.

This bill contains consequential amendments to the Income Tax (First Home Saver Accounts Misuse Tax) Act 2008. These are necessary as a result of the increase in the Medicare levy, contained in the Medicare Levy Amendment (DisabilityCare Australia) Bill 2013.

Where a first home saver account holder improperly uses the account, the First Home Saver Accounts Misuse Tax applies to claw back the benefit they have obtained.

The rate of the misuse tax is currently 46.5 per cent, the top marginal rate of 45 per cent plus the current Medicare levy rate of 1.5 per cent.

The Income Tax (First Home Saver Accounts Misuse Tax) Amendment (DisabilityCare Australia) Bill will increase this rate from 1 July 2014 to 47 per cent, to reflect the increase in the Medicare levy from 1.5 per cent to 2 per cent.

These consequential amendments will help to ensure the integrity of the tax system.

The revenue from this package of bills will be used to provide a strong and stable funding stream for DisabilityCare Australia.

Further details of the bill are set out in the explanatory memorandum for the package of Bills.

FAMILY TRUST DISTRIBUTION TAX (PRIMARY LIABILITY) AMENDMENT (DISABILITYCARE AUSTRALIA) BILL 2013

This bill is part of a package of measures to transform disability services by creating and locking in funding for DisabilityCare Australia, the national disability insurance scheme.

DisabilityCare Australia will change the lives of people with disability, their families and their carers. It will provide the 410,000 Australians with a significant and permanent disability the care and support they deserve, support they have waited far too long to receive.

The Government is also providing certainty. Certainty for people with disability. Certainty for their families and carers. And certainty to all Australians. Certainty that DisabilityCare Australia will be funded in the long term.

The Gillard Government will increase the Medicare levy by half a percentage point, from 1.5 per cent to 2 per cent, from 1 July 2014. This will provide DisabilityCare Australia with a strong and enduring funding stream.

The Government will also ensure that every dollar raised from increasing the levy will go directly to fund DisabilityCare Australia. As part of this package of bills, the Deputy Prime Minister and Treasurer introduced the bill that will establish the DisabilityCare Australia Fund. The Fund will hold and invest the proceeds from the increase in the Medicare levy and can only be used to meet expenditure directly related to DisabilityCare Australia.

To ensure that all Australians benefit from this fundamental reform, the Government will make a share of the Fund available to the States and Territories to assist them in establishing DisabilityCare Australia.

Over a ten-year period, the Government will allocate around $9.7 billion of the revenue from the increase in the Medicare levy to the States and Territories to help fund their contribution to DisabilityCare Australia.

The risk of disability is something that all of us face and the rewards of supporting people with disability will be shared by all. That is why we are asking Australians to make a small contribution to fund DisabilityCare Australia.

For someone earning average wages of around $70,000 this will mean a modest contribution of around 96 cents a day—a small amount that will make a big difference to those with disability, their carers and their families.

Despite this small increase, virtually every taxpayer is still paying less tax now than they were in 2007.

I will now turn to the details of the bill.

This bill contains consequential amendments as a result of the increase in the Medicare levy contained in the Medicare Levy Amendment (DisabilityCare Australia) Bill 2013.

The family trust distribution tax is payable where a trustee of a family trust has made a family trust election and a distribution is made to, or a present entitlement conferred on, a person other than the primary individual or a member of their family.

The rate of the family trust distribution tax is currently 46.5 per cent, the top marginal tax rate of 45 per cent plus the current Medicare levy of 1.5 per cent. The alignment with the top marginal rate and Medicare levy minimises the incentive to reduce a person's tax through the use of a family trust.

To maintain this alignment, the Family Trust Distribution Tax (Primary Liability) Amendment (DisabilityCare Australia) Bill 2013 will increase this rate of tax to 47 per cent.

These consequential amendments will help to ensure the integrity of the tax system.

Further details of the bill are set out in the explanatory memorandum for the package of bills.

TAXATION (TRUSTEE BENEFICIARY NON-DISCLOSURE TAX) (NO. 1) AMENDMENT (DISABILITYCARE AUSTRALIA) BILL 2013

The Taxation (Trustee Beneficiary Non-Disclosure Tax) (No. 1) Amendment (DisabilityCare Australia) Bill 2013 is part of a package of measures increasing the Medicare levy by half a percentage point.

This bill contains consequential amendments to the Taxation (Trustee Beneficiary Non-Disclosure Tax) Act (No. 1) 2007 as a result of the increase in the Medicare levy, contained in the Medicare Levy Amendment (DisabilityCare Australia) Bill 2013.

Where a share of the net income of a closely held trust is distributed to another trust, the trustee must advise the Commissioner of Taxation of each share of trust income or tax-preferred amounts that is distributed from the trust. If a trustee does not provide this information, they will be liable to pay trustee beneficiary non-disclosure tax.

The rate of the trustee beneficiary non-disclosure tax is currently 46.5 per cent, the top marginal rate of 45 per cent plus the current Medicare levy rate of 1.5 per cent.

The Taxation (Trustee Beneficiary Non-Disclosure Tax) (No. 1) Amendment (DisabilityCare Australia) Bill 2013 will increase this rate to 47 per cent, from 1 July 2014, to reflect the increase in the Medicare levy from 1.5 per cent to 2 per cent.

These consequential amendments will help to ensure the integrity of the tax system.

The revenue from this package of bills will be used to provide a strong and stable funding stream for DisabilityCare Australia.

Further details of the bill are set out in the explanatory memorandum for the package of bills.

TAXATION (TRUSTEE BENEFICIARY NON-DISCLOSURE TAX) (NO. 2) AMENDMENT (DISABILITYCARE AUSTRALIA) BILL 2013

The Taxation (Trustee Beneficiary Non-Disclosure Tax) (No. 2) Amendment (DisabilityCare Australia) Bill 2013 is part of a package of measures increasing the Medicare levy by half a percentage point.

This bill contains consequential amendments to the Taxation (Trustee Beneficiary Non-Disclosure Tax) Act (No. 2) 2007 as a result of the increase in the Medicare levy, contained in the Medicare Levy Amendment (DisabilityCare Australia) Bill 2013.

The Taxation (Trustee Beneficiary Non-Disclosure Tax) Act (No. 2) 2007 also imposes a secondary trustee beneficiary non-disclosure tax, which supports the core trustee beneficiary non-disclosure tax, which is contained in Taxation (Trustee Beneficiary Non-Disclosure Tax) Act (No. 1).

In order to discourage the use of circular chains of trusts to disguise the identity of the final beneficiary of trust income, trustee beneficiary non-disclosure tax is also imposed on the first trustee beneficiary where trust income is further distributed to another trust.

The rate of the trustee beneficiary non-disclosure tax is currently 46.5 per cent, the top marginal rate of 45 per cent plus the current Medicare levy rate of 1.5 per cent.

The Taxation (Trustee Beneficiary Non-Disclosure Tax) (No. 2) Amendment (DisabilityCare Australia) Bill 2013 will increase this rate from 1 July 2014 to 47 per cent, to reflect the increase in the Medicare levy from 1.5 per cent to 2 per cent.

These consequential amendments will help to ensure the integrity of the tax system.

The revenue from this package of bills will be used to provide a strong and stable funding stream for DisabilityCare Australia.

Further details of the bill are set out in the explanatory memorandum for the package of bills.