Federal Government will disappoint – initial Budget commitment forecast to less than $4B a year: Sky News

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The news channel’s Political Editor, Andrew Clennell says senior Government sources have informed him that the aged care levy recommended by the Commissioners is not expected to be a feature in next month’s Federal Budget.

You can watch the report here.

“While no final decision has been made, senior Government sources have told me the imposition of the levy is not expected to occur,” he told Sky News.

“There will be a funding commitment for aged care in the budget worth extra billions but presumably it will be funded through debt or other savings.”

Both Commissioners supported the idea of a levy but differed on its design – Commissioner Lynelle Briggs AO pushed for a 1% levy on personal taxable income while Commissioner Tony Pagone QC suggested this figure could be higher but need to be examined by the Productivity Commission first.

In his interim response to the Final Report, Prime Minister Scott Morrison said the Government would consider the idea – but also repeated that the Coalition remained committed to lower taxes.

Mr Clennell said: “I’m told Budget discussions have found the party of lower taxes wants to stay that way. The commitment per year will be less than the $4 billion a year the sector wants initially in the Budget, but it will build up over time.”

He added that some in the sector have advised him that a minimum of $6 to $7 billion is required.

“You can expect new funding for residential aged care and home care with restructuring around what sort of services people can access in home care,” Mr Clennell went on.

“With a deficit around the $200 billion mark likely to be improved by a few billion because of iron ore prices, now is the time to spend a few billion without being so controversial.”

All discussion has been around $7 billion a year being the minimum required – who or what will miss out?

Will the $4 billion predictions prove true?

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