Levy could be approved within weeks

Prime Minister Julia Gillard says she will legislate to increase the Medicare levy. Picture: Hamish Blair Source: Herald Sun

THE federal government's tax hike to help pay for a new national disability care scheme could pass parliament in two weeks, after the coalition offered to support the measure.

Opposition Leader Tony Abbott has agreed to consider a 0.5 percentage point rise in the Medicare levy to two per cent, neutralising a key election issue for Labor Prime Minister Julia Gillard.

Following talks with shadow ministers overnight and Thursday, Mr Abbott said the coalition recognised the need to secure funding for DisabilityCare, despite Labor's "mismanagement" of the federal budget.

This morning Mr Abbott said the Coalition was prepared to consider supporting a "modest increase" to the Medicare levy to help fund the scheme.

The Opposition Leader said he wanted the issue to be dealt with in this parliament, but called on Julia Gillard to release more details on how the scheme would be fully funded.

Federal opposition leader Tony Abbott says the coalition will consider supporting an increase to the Medicare levy to fund the NDIS. Picture: Mark Brake

"We want this scheme to come into being as soon as possible because we want millions of vulnerable Australians to have the security and assurance they deserve," Mr Abbott said.

"But at the same time … it is important the Prime Minister come clean with all of the details on this scheme. How will it be fully funded?"

"We do want to see this come into the parliament in this term."

Ms Gillard now plans to introduce a bill during the budget session of parliament beginning May 14.

All eyes will be on Tony Abbott today as he responds to the PM's challenge to back an NDIS funding proposal.

"I am very pleased that today the leader of the opposition has said ... he is prepared to support an increase," she told reporters in Launceston.

"The leader of the opposition has changed his mind on this matter.

"On the basis of that change of mind by the leader of the opposition, I will bring to the parliament the legislation to increase the Medicare levy by half a per cent."

This means the bill to enact the increase will be introduced to parliament before the September federal election.

Mr Abbott's consideration rests on a number of conditions and he's promised to scrap the impost if the coalition wins the September election and the budget returns to strong surplus.

Ms Gillard said most of the detail had already been legislated, while work on the remainder was under way. Other funding details will be available in the budget due on May 14.

Labor could have had the support of the Greens and enough cross-benchers to pass the bill, although it risked a battle with the Greens in the Senate if the minor party tried to link the bill with a widening of the mining tax.

Prime Minister Julia Gillard has announced a 0.5 percent increase to the Medicare Levy to support the National Disability Insurance Scheme. Courtesy ABC News

The prime minister said to get lasting reform she needed the coalition's support.

Ms Gillard yesterday announced Labor would seek to increase the Medicare levy from 1.5 per cent to 2 per cent to pay for disability support.

The Medicare levy increase will raise about $3.3 billion a year - less than half the $8 billion or more annual cost to run the disability care scheme when it begins full operation from 2018/19.

To fill the funding gap, Labor needs to make further budget savings and the states and territories will also need to contribute.

There are just five sitting weeks left of parliament in the Lower House before the September election. The Senate will sit for just three weeks before September 14.

Mr Abbott said he had always been supportive of a National Disability Insurance Scheme and a bipartisan approach to seeing it made reality.

"I would not be riding more than 1000 kilometres to support Carers Australia if I wasn't fair dinkum about a NDIS," Mr Abbott said.

"I am profoundly committed to a National Disability Insurance Scheme. I have been calling from the beginning for a bipartisan approach to this."

Mr Abbott said it was important that the issue be dealt with in this parliament so that it had a "substantial monument".

Disability campaigner and former NSW Labor minister John Della Bosca said Thursday's outcome was "fantastic".

"We've seen the best of Australian politics in Julia Gillard and Tony Abbott showing great leadership," he said.

Meanwhile, department store Myer has apolgosied after its chief executive Bernie Brookes sparked outrage and boycott threats by saying the levy rise wasn't "good for our customers", who would have less money to spend at his department stores.

Disability discrimination commissioner Graeme Innes was furious about Mr Brookes' comments and demanded Myer employ 10 per cent more disabled people by 2015.

Earlier this morning Mr Abbott called on Ms Gillard to release the full eligibility criteria for the scheme.

He said when that came out a lot of Australians would be "disappointed" when they realised they would not be included.

But Disability Reform Minister Jenny Macklin brushed off his concerns.

"The Leader of The Opposition should read the legislation that he voted for at the end of March," Ms Macklin said.

"The eligibility of criteria is very clear in the legislation. It is not responsible to raise these issues when you have voted for this legislation just over a month ago."

The indication of support from Mr Abbott came as Tasmania became the fourth state to sign up to the multi-billion-dollar NDIS.

Ms Gillard and Tasmanian Premier Lara Giddings signed a deal this morning to secure funding for the scheme.

In a statement following his press conference Mr Abbott said the NDIS was "too important to become a partisan football".

"Australians with a disability and their carers want the confidence that the NDIS means a permanent change in the way that our country supports people with a disability," he said.

"People with a disability should not have to wait any longer than is necessary for the support they need."

Mr Abbott said if elected the Coalition would ensure the Medicare levy increase was only temporary.

"If elected to government the Coalition would resolve to ensure that the increase to the Medicare levy is a temporary increase and will be removed when the budget returns to strong surplus and the NDIS can be funded without it," he said.

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