2026710291_changed_mind_xlargeSo we have all woken up to the earth shattering news… that Julia Gillard’s word is not worth a pinch of salt.

Ben Packham in The Australian reports that Julia Gillard will go to the next election promising a 0.5 per cent income tax hike to help fund her national disability insurance scheme. 

The Prime Minister said her plan to lift the Medicare levy from 1.5 to 2 per cent would cost average Australians $1 more a day from July 1, 2014.

Last year when the NDIS juggernaut rolled over Australia’s collective horizon most were unaware there was a problem with disability in Australia but what we did know was that Labor had previously rejected the concept of a levy to fund the NDIS, which the Productivity Commission said should be a last resort.

But Ms Gillard said today:

I have thought about this deeply and I have changed my mind.

Well, I’ll be…

How convenient for you, Ms Gillard.

Many people have changed their minds since foolishly voting for the most wastrel government this country has had the misfortune to experience, but unfortunately for us (but fortunately for her) we have to wait until September 14th to do it officially.

Not only has Gillard once again changed her mind in changed circumstances, much like her now infamous 180 degree turnaround on implementing a Carbon Tax,  she isn’t really being all that up front about the impact of this proposal.

Well, maybe she is… but in a weaselly, laywerish manner, where the detail is hidden just under the surface.

What detail you ask?

The detail that this tax increase is just the tip of the iceberg.  This is NOT a once off increase in taxes because moving forward the NDIS will require many more increases of the Medicare levy to cover its cost.  The detail is there, just obscured from view.

The 0.5% increase in the Medicare levy will raise an estimated $3.3 billion which would be placed into a special account that would be used only to fund the NDIS.

However the NDIS is budgeted to cost more than TWICE that much to run when it is in full swing, in fact the NDIS tips the scales at a whopping $8 billion a year when fully operational.

OK two things.

The 0.5% increase will only raise $3.3 billion and it is only for trials.

The budgeted cost of the full monty version is $8 billion.

See that? That’s another $4 billion that we need to find PER YEAR, EVERY YEAR to fund this policy.

So where exactly will this additional money come from do you think?

Well, the ever truthful Ms Gillard told us yesterday that..

..further budget savings would be needed in the future to meet the full cost of the scheme..

So Labor, the party that firmly believes in Tax and Spend, is in fact highlighting that this is not the only time we will be hit with another tax to pay for their fancy policy ideas.

My tax rate already went up to pay for the additional 3% Super Guarantee, having gone from 30% to 32.5% and now I will have to pay an additional 0.5% on top of that to fund LESS THAN HALF of the yearly bill for the NDIS.

To be able to pay for  the NDIS fully, we could expect another 0.5% increase in the Medicare Levy next year and as we know with taxes, they only go one way and as that great 1990’s band Yazz once told us, that is up.

Here’s an idea.

If the NDIS is so important, then let us as a nation prioritise it against the other spending that is going on, because there is a lot of spending going on, however much of this spending is being wasted on programs that are not working, or not on initiatives that are not needed.