The Turnbull government is optimistic it can strike a shock deal with the Senate crossbench and pass the $7.8 billion Medicare levy, one of the centrepiece measures of the 2017 budget.
Subscribe now for unlimited access.
or signup to continue reading
In a move that defies predictions the 0.5 per cent levy rise would stall in the Senate - and possibly be put on ice until after the next federal election - Treasurer Scott Morrison will on Thursday bring the bill to the Parliament.
The 0.5 per cent levy rise is supposed to start from July 1, 2019 and is designed to help fill the 10-year, $55.7 billion funding shortfall for the National Disability Insurance Scheme.
Mr Morrison has led behind the scenes negotiations with the Greens and members of the Senate crossbench in recent weeks and senior government sources said those meetings had been very "constructive" and the prospect of a deal was a "live option".
The introduction of the legislation is a clear sign of the federal government's confidence it can secure the votes it needs in the Senate.
Despite the five current absences from the Senate because of the citizenship crisis, illness and retirement, the government must secure the four votes from Pauline Hanson's One Nation, three votes from the Xenophon Team and three of the five other crossbenchers.
Alternatively, a deal with the Greens and one more senator would suffice, because of pairing arrangements.
Government sources said they were confident "we have a couple of different paths to victory here".
Mr Morrison told Fairfax Media on Wednesday evening the NDIS had enjoyed bipartisan support from its inception because all parties recognised "the need for this vital service and the importance of caring for those who need it the most".
"The only thing we have not agreed on is funding the program," he said.
"Now is the time to finish what has been started, and fully fund the NDIS once and for all. The Turnbull government chose the Medicare levy, asking most Australians to contribute according to their means - because this is the responsibility of all of us."
"A few years ago, Bill Shorten asked Australians to do the very same thing, and contribute to the NDIS by a 0.5 per cent increase in the Medicare levy. He voted 'yes' then, and now he wants to vote 'no' to suit his political agenda, pitting Australians against Australians."
Mr Morrison said Labor should "do the right thing" and back the legislation, but this is unlikely to happen as Labor has said it will only support the rise for taxpayers in the top two tax brackets - that is, people earning more than $87,000 a year - and argued it is unfair to raise taxes on singles earning as little as $21,655 and families earning $36,541.
Labor adopted this position despite a split in the shadow cabinet, revealed by Fairfax Media in May.
The Greens raised similar concerns to Labor back in May, as did senator Nick Xenophon, while Senator Hanson said she was not convinced the extra money raised would fund the NDIS.
The government believes, however, it will be able to put these concerns to bed.
According to figures from the Treasurer's office, based on data from the Australian Tax Office, it is not necessarily the case that any single person earning more than $22,000 will be hit by the Medicare levy rise.
According to the data, about 9 million adult Australians don't pay the Medicare levy.
A single parent earning less than $49,871, a pensioner on less than $42,806 or families with three kids on less than $57,399 pay a reduced rate of Medicare levy, or even no levy at all, because of various exemptions and protections.
