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Monday, 30 August 2004
Page: 26766


Senator Nettle asked the Minister representing the Treasurer, upon notice, on 7 July 2004:

(1) How did the Government determine the personal income threshold at which the Medicare levy surcharge becomes payable.

(2) For each of the financial years 2000-01, 2001-02, 2002-03 and 2003-04: (a) how many people paid the Medicare levy surcharge; (b) how many of the people who paid the surcharge were single and how many were couples; (c) how much was collected; and (d) how does this amount compare with the receipts for the Medicare levy.

(3) How much does the Government expect to receive in the 2004-05 financial year from: (a) this surcharge; and (b) the Medicare levy.

(4) Has the Government reviewed the personal income threshold at which this surcharge is to apply; if so, when, and what was the outcome; if not, does the Government intend to review the threshold; if so, when; if not, why not.

(5) How does the Government justify setting the personal income tax threshold for the Medicare levy surcharge at $50,000 per annum of gross taxable income when it has increased to $58,000 the top of the band for the 30 cents in the dollar income tax rate.


Senator Minchin (Minister for Finance and Administration) —The Treasurer has provided the following answer to the honourable senator's question:

(1) The Medicare levy surcharge imposes an additional one per cent Medicare levy on single people with incomes (taxable incomes and reportable fringe benefits) greater than $50,000 and families with combined incomes greater than $100,000 who do not have private patient hospital cover. A taxpayer whose individual income is below the Medicare levy low income threshold does not have to pay Medicare levy surcharge even if their family income exceeds the family surcharge threshold. The thresholds were determined to provide an incentive for the purchase of private patient health insurance.

(2) Data on the numbers of taxpayers paying Medicare levy surcharge and Medicare levy, and total amounts of Medicare levy surcharge and Medicare levy, for 2000-01 and 2001-02 income years, are available from ATO Taxation Statistics, at the following internet address:

http://www.ato.gov.au/content/downloads/2002PER7.xls

(3) Medicare levy revenue for 2004-05 is forecast at $5.79 billion. Forward estimates of Medicare levy surcharge revenue are not available.

(4) No.

(5) The Medicare levy surcharge is unrelated to marginal income tax brackets.