Transcript by The Hon Jenny Macklin MP

ABC Lateline with Tony Jones: DisabilityCare Australia

Program: ABC Lateline

E & OE – Proof only

Subject: DisabilityCare Australia

TONY JONES: Jenny Macklin, thanks for joining us.

JENNY MACKLIN: Thank you Tony.

TONY JONES: Now is the legislation for DisabilityCare and the Medicare levy to fund it written and ready to go?

JENNY MACKLIN: The DisabilityCare legislation to establish the scheme is already through the Parliament. It was put through at the end of March, so the scheme is ready to start on 1st July, which is of course very exciting, especially for people with disability in the launch sites around Australia. As for the legislation for the Medicare levy increase, of course that’s a very simple piece of legislation, and as the Prime Minister has indicated, if the Opposition are willing to support an increase in the Medicare levy for DisabilityCare, then we’ll put the legislation into the Parliament straightaway.

TONY JONES: Do you favour putting the DisabilityCare, or this legislation to fund it anyway, to Parliament regardless of whether Tony Abbott agrees or not because you don’t need his vote?

JENNY MACKLIN: Well I think the important thing is that people with disability want certainty and they’ve certainly got that from us today. We’ve made it clear to people with disability that we intend to increase the Medicare levy to help pay for DisabilityCare, and of course that’s what people in the disability sector have been calling for.

TONY JONES: Ok, but can I just interrupt you there because we can go over that a little bit after we’ve established this. But after all these years of putting the reforms together, you’re prepared to sit on it until the election, is that right?

JENNY MACKLIN: We’re prepared to put it into the Parliament. We’re saying to Mr Abbott, people with disability want this. Why don’t you support it, do what people with disability want, give them certainty and support it.

TONY JONES: Ok, I’m going to interrupt you again because you keep coming back to Tony Abbott and yet you don’t need the Coalition’s vote to get this through Parliament. So, I’m just asking, after all these years, if you don’t get Tony Abbott’s vote, will you sit on it until the election, this legislation?

JENNY MACKLIN: Well, we’re saying, Tony, I’ll just repeat again, we’re saying to Mr Abbott: support this legislation. It’s a very important way of supporting the funding that’s needed for DisabilityCare. We’re giving people certainty, saying this is what we will do. He now needs to indicate what he will do. Will he in fact support this increase to the Medicare levy or not?

TONY JONES: Ok, alright. If he does not, what happens then?

JENNY MACKLIN: Well, let’s wait and see. Apparently Mr Abbott is going to have more to say tomorrow. I would say to him tonight, do the right thing by people with disability, support the increase in the Medicare levy. We’ll put the legislation in straightaway. He should support it.

TONY JONES: Can I put it to you that people with disability who’ve been waiting for many years for this legislation might well say to you right now, why don’t you put it to Parliament, regardless or not of whether Tony Abbott and the Coalition agree to this legislation?

JENNY MACKLIN: Well I think people with disability want to know that this is going to be supported right across the Parliament. That’s what happened when we put the DisabilityCare legislation into the Parliament in March. It was supported right across the Parliament and people with disability were very pleased about that. Now they want a bipartisan approach to the money raising, they want to know that Tony Abbott will support this increase in the Medicare levy.

TONY JONES: If it goes through Parliament, he’d have to rescind it in Parliament if he came to government. So the point is you’ve got one way of guaranteeing this legislation going through and that’s to put it through yourself. Won’t a lot of people with disabilities be expecting you to do exactly that, what you’ve been promising to do all this time?

JENNY MACKLIN: Well we’ve made clear what our position is. We will have an increase to the Medicare levy. What Tony Abbott hasn’t done is made clear what his position is. He won’t say …

TONY JONES: …no, but with all due respect, you’ve made this point, but with all due respect, you haven’t made your position clear.

JENNY MACKLIN: Yes we have.

TONY JONES: No you haven’t explained whether or not if Tony Abbott says no you’ll put it through the Parliament.

JENNY MACKLIN: Well that’s a hypothetical. Hopefully by tomorrow we will know what his position is. If he says yes, that’s good, we’ll put it in straightaway and we’ll get it through the Parliament very quickly. If he says no, that Tony Abbott will not support an increase to the Medicare levy, then he needs to say how he will support DisabilityCare Australia. How will he fund it? What cuts will he put in place to fund this very, very important reform for people with disability?

TONY JONES: And I’ll put it to you again, would you agree that the only sure way to guarantee it goes through Parliament before the election and even after the election, that it goes through Parliament and is legislated is to do it yourself with the numbers that you’ve currently got?

JENNY MACKLIN: Well of course you know it’s a minority Parliament. Whether or not we would have the numbers on the floor of Parliament is another matter. But …

TONY JONES: …ok, I’m gonna say there’s a very easy way to find that out. You ask them, you negotiate with them and then you put it into the Parliament. Are you doing that? Are you talking to the Greens and the independents now?

JENNY MACKLIN: Well, of course we will. We always do that with every single piece of legislation. We’ve had to do that to get our very big legislative program through and of course I’ve done that with some very difficult pieces of legislation. But in this case, this is a very, very significant reform that requires bipartisan support. That’s what people with disability want. They want to know what Mr Abbott is going to do and it’s only fair that he tells them.

TONY JONES: After all the years you personally have worked on this, are you really prepared to sit on this legislation until the election as a form of political strategy, which is what you seem to be saying?

JENNY MACKLIN: Of course that’s not what we’re saying, Tony, at all, and I don’t think that’s fair. I think we’ve made very clear today what our position is. Our position is that we will put an increase to the Medicare levy into the Parliament if we have bipartisan support, and if we don’t, we will take it to the people. The election is very close. We will say to the Australian people, this is our position. Tony Abbott should do the same.

TONY JONES: But it stands to reason if you’re taking to the people something that you could otherwise legislate with the numbers that you have, you’re using this legislation as a political strategy.

JENNY MACKLIN: Not at all. I don’t see it that way at all. We are making clear…

TONY JONES: …a lot of people might see it that way.

JENNY MACKLIN: Well we are making clear that we’re prepared to put the legislation into the Parliament as soon as possible. We could do that very quickly. It’s a very simple piece of legislation. It’s now really in Tony Abbott’s court to say whether or not he will support it.

TONY JONES: Well let’s go to some of the detail of who would benefit. There are 830,000 people on the disability support pension, but only 410,000 people are eligible for DisabilityCare. So what’s the cut off for eligibility?

JENNY MACKLIN: Well the criteria’s very clear in the legislation that’s been through the Parliament just a couple of months ago now. So what that makes clear is that people have to have a permanent disability and need to have care and support provided for them to enable them to participate in the community. So, just to give you an example of a family that lives near me with a very, very disabled son, the sort of support that they need. They’ve had to fundraise themselves to get a new wheelchair for their son. Of course that would change under DisabilityCare. They would get the wheelchair that they need. The same with respite care. Parents, carers need to wait inordinate periods of time for respite. That too, of course, would change. So, it’s really about saying to people with permanent disabilities, the care and support that you need will be provided. The assessment will be done about what’s reasonable and necessary to meet the needs of those individuals.

TONY JONES: Could it include people with mental illness, because reports in the past week tell us that mental illnesses are the fastest growing category for people being granted the disability support pension. Now if that is growing, is it possible that the numbers could actually grow from 410,000 up in the future?

JENNY MACKLIN: It is the case that DisabilityCare will cover people with serious mental illness, mental illnesses that are permanent and of course where people need care and support. And of course that’s the important part of this decision making. So, it’s a different test, of course, from those who are seeking support under the disability support pension. That of course is for people who are not able to work and are not able to support themselves in the workforce.

TONY JONES: Ok but what I’m saying is could the numbers grow significantly beyond 410,000 if the broader category of people with mental illness are included in the disability support pension, DisabilityCare system?

JENNY MACKLIN: I understand. We’ve had a lot of work done on this issue. Of course in the first case by the Productivity Commission and it was really as a result of their work that they told the Government that they determined that 410,000 Australians would be eligible for DisabilityCare, the new disability insurance scheme. So, it’s the Productivity Commission that’s made the estimates and it’s really from their work that we’ve built the scheme.

TONY JONES: Ok, so it’s an estimate. It could in fact grow way beyond 410,000?

JENNY MACKLIN: Well, we’ve done further work on both the estimates of the numbers and also the costings. There’s been a lot of work done to check the costings that were originally done by the Productivity Commission, by the Commonwealth actuary and also then independently to check the figures because obviously we are talking about a lot of money.

TONY JONES: So could it grow beyond the 410,000?

JENNY MACKLIN: Well I think it’s been very carefully worked on. We do think that the numbers are accurate.

TONY JONES: Let’s go to the funding issue. How much of the $3.3 billion a year raised by the levy will be spent in the next four years before the scheme becomes fully operational?

JENNY MACKLIN: Well, you’ll see the rollout of the forward estimates in the budget figures that we’ll release in a few days time, just after next week of course and so all of the annual figures will be clear. But what the Prime Minister and the Treasurer made very plain today is that all the money that’s raised as part of the increase in the Medicare levy will go into a DisabilityCare fund. That fund will hold the money until it’s needed to spend on DisabilityCare. It will…

TONY JONES: …that’s what I was going to get at actually, because over the four years you’ll raise, well, roughly $13.2 billion from the levy. What proportion of that do you think will be spent before the scheme becomes fully operational?

JENNY MACKLIN: Well the big increase in the spending for the scheme will start in 2016-17. As you may be aware, we have an agreement with New South Wales, the biggest state, to rollout the scheme right across New South Wales. That will mean around 170,000 people across New South Wales will come into the scheme from 2016-17, so that’s when we will really start spending the money in the DisabilityCare fund.

TONY JONES: And if the final amount, that is, the anticipated final amount for the cost of the fund is about $8 billion a year and 50 per cent of it…


TONY JONES: ..yes, exactly, 50 per cent, that much extra. If 50 per cent is being put up by the states roughly, that means the Commonwealth’s liability will be at the time it’s fully operational around $4 billion a year, is that right?

JENNY MACKLIN: The Commonwealth is paying slightly more than 50 per cent, so our share of the $8 billion is $5.4 billion in today’s dollars.

TONY JONES: Ok, so in fact you’re going be raising $3.5 billion a year from the levy so really the Commonwealth doesn’t have to find much more money per year, does it, by comparison to what the states will have to find?

JENNY MACKLIN: Well of course at the moment disability support is largely a state responsibility, so they have more in their budgets already for disability care and support. We are expecting each of the states to come up to a benchmark. We don’t think it’s fair that the states that have been doing a better job should subsidise those states that haven’t been doing such a good job. So all states will need to come up to the benchmark and then pay that bit extra, but the Commonwealth of course will also put in a very substantial increase to disability care.

TONY JONES: Ok. Very briefly, we’re nearly out of time, but it does sound like the Medicare levy will actually take up most, create most of the funds that the Commonwealth actually needs. You’ll probably have to find…

JENNY MACKLIN: …around 60 per cent. Around 60 per cent of the cost.

TONY JONES: Alright. So how much extra will the Commonwealth have to find by the time the scheme is fully operational?

JENNY MACKLIN: Well the Medicare levy increase will pay for around 60 per cent, so around 40 per cent of the $5.4 billion will need to be found and we’ll need to find that in our Budget.

TONY JONES: Jenny Macklin, we’ll have to leave you there. We thank you very much for joining us.