Aged Care Royal Commission Calls for Revenue Increase to Fund Recommendations

Australia Institute

Among the recommendations in the Aged Care Royal Commission report is the call for an effective 1% increase in the Medicare levy, or a new Medicare-style Aged Care levy which could be applied progressively based on income.

“Increasing the Medicare levy by at least 1 per cent, or a new progressive Aged Care levy, is a rare opportunity to shore up Australia’s dwindling revenue base,” said Ben Oquist, executive director of the Australia Institute.

“The shocking findings of the Royal Commission have highlighted the urgent need for additional funding for Australia’s aged care sector.

“As the Prime Minister has said, this is a once in a generation opportunity to address the aged care crisis.

“It is never politically easy to increase taxes, that is why it is crucial our Parliament does not to miss this opportunity to permanently increase Australia’s revenue base.

“Australia is a low tax country — in fact, the ninth lowest taxing country in the OECD. If the OECD average tax to GDP ratio applied in Australia, revenue would be a staggering $107 billion higher per annum.

“A Medicare levy rise of 1% is small compared the size and scale of the recent income tax cuts.

“Collecting more revenue via a very modest permanent increase in the Medicare levy or a new progressive Aged Care levy will help ensure this opportunity is not lost, helping protect aged care funding into the future.”

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