SPEERS: Minister, can you just clarify for me how much this new levy will raise as a proportion of the full cost of the National Disability Insurance Scheme, and how much will still have to be found elsewhere?
WONG: Well, David, in developing this plan to fund the DisabilityCare scheme we were very conscious of the importance of having security of funding and thats why we have put a levy on the table in relation to which the States can access some revenue.
In terms of the Commonwealths costs, over the first five years the levy covers the full Commonwealth net new spend on DisabilityCare, and over the ten years it covers about 60 per cent of the Commonwealths net new spend.
So, obviously, thats a very significant ongoing contribution and a secure funding source for a reform that is long overdue and that the Labor Government and this Prime Minister has been working on for some time.
SPEERS: So, in about six years, when the scheme is fully operational, there will still have to be a lot of money found on top of this levy
WONG: Look, we will continue to have to take structural saves to ensure the budget can sustain this expenditure over time. And of course this is a Government that has taken a lot of structural saves and will continue to build on them. And we have been thinking about how you improve the long-term position of the budget for some time and weve taken decisions that improve the long-term position of the budget in previous Budgets.
SPEERS: But this is an important point: will the Budget being handed down the week after next include details on how this full scheme will be fully funded once its fully operational?
WONG: Look, well be very clear about the approach of the Government to funding DisabilityCare in the Budget. Weve made decisions to take structural savings previously, and we will build on those savings in this Budget to ensure that we can sustainably fund programs like DisabiltyCare.
Can I say this is the difference between the Prime Minister who has had the courage and determination to put this on the table and to get this done, and an Opposition which belatedly, but were very pleased, have changed their mind to come on board with a sustainable funding source to ensure DisabilityCare can become a reality.
SPEERS: But, Minister, the levy is only part of the equation here. Will this Parliament deal with the question of how to fully fund the scheme, or will that be left to the next Parliament?
WONG: Ive just answered that question. Ive said the Budget will make very clear this Governments approach to funding DisabilityCare, not just tomorrow but for the longer term. And Ive also said that you should anticipate more structural savings in the Budget to build on the structural savings weve already taken to date.
And I would make this point, David: Tony Abbott is demanding the Government give him more detail. This is the man who says he supports DisabilityCare and has opposed a great many of the structural savings measures to date which improve the capacity of the budget to support programs including DisabiltyCare into the long term; private health insurance, the Baby Bonus all structural saves for the long-term that Tony Abbott has opposed uphill and down dale.
SPEERS: One of the other details that Tony Abbott is seeking is on the actual fund itself that the money raised through the levy goes into. How will that be managed? Will it be controlled by the guardians of the current Future Fund?
WONG: I saw that Mr Abbott put that as one of the things he wants to ensure passage of the Bill. I would say I hope we can get to a point where we dont get anymore politics around this and we get this legislation through.
On the Fund, the Government has made very clear our intention. We want a separate fund that will ensure every dollar of the levy goes to DisabilityCare funding we made that upfront, clear when the Prime Minister made the announcement. Were happy to work through some of the governance details in light of Mr Abbotts request. We dont want this to get in the way of ensuring a funding source for a DisabilityCare scheme which is so important to hundreds of thousands of Australians with a disability, and their families and carers.
SPEERS: But this fund will raise a lot of money. The Treasurer has used the figure of around $20 billion. Who will control it? Who will make the decisions on where that money is invested?
WONG: Well, Ive just said we are happy to work through governance details in light of Tony Abbotts request. The Governments already been working on how we bring forward legislation to establish the fund. And, in terms of governance arrangements, well consider what Mr Abbott has put forward. I think we all want the same thing, which is to ensure that people can be assured that the proceeds in the fund will only be spent on DisabilityCare and we are at one on that point.
SPEERS: Okay, so you will consider having the guardians of the Future Fund also overseeing this fund?
WONG: Yeah, look, Im not ruling out any particular model. We will look at what Mr Abbott has proposed. The more important issue is to make sure the legislation passes. We want to get this done. Weve done a lot of work on DisabilityCare. I think its important to remember this has moved a long way in 48 hours but lets remember why weve got to this point.
Weve got to this point because Labor sent it to the Productivity Commission, because we funded the launch sites, because we worked with the States to get the launch sites up and because the Prime Minister is negotiating the full scheme with the States and Territories. And weve got to this point because the Prime Minister has been prepared to put her plan on the table as to how we ensure DisabilityCare is funded in the years to come.
SPEERS: And just on the levy itself clearly widespread support for it but one of the side effects may be that it raises the effective marginal tax rate for low-income earners, essentially a disincentive for them to earn more money...
WONG: Well, Id remind you that that disincentive is less for many people because of the Governments tripling of the tax free threshold, a reform that Tony Abbott has pledged to abolish. You know, one of the benefits of that Government tax measure, that Government reform, has been to improve the reward for work for a great many Australians a great many low-income Australians across the country.
SPEERS: And just a final question, Minister, separately on the Budget. The Financial Review today reports that the prediction for where the carbon price is going to be in 2015 will be cut from $29 a tonne to $15 a tonne cut in half. Is that about right?
WONG: All of these estimates will be available on Budget night. Unlike Tony Abbott, well make sure our figures are there for the world to see and that will include consideration of what the floating price estimate should be when we transition to a full scheme. Well make sure thats all transparent.
And I hope in an election year we see from the Opposition Leader, who has now changed his mind when it comes to funding DisabilityCare, that we see a change of heart as well when it comes to actually being upfront with Australians about his plans. He should apply the same approach hes trying to now take on DisabilityCare across the board and be upfront with Australians about what his plans really are.
SPEERS: Finance Minister Penny Wong, thank you.
WONG: Good to speak with you.
ENDS