Treasurer plays down prospect of aged care levy

Treasurer Josh Frydenberg has played down the prospect of a Medicare-style levy being imposed on taxpayers to help cover the cost of a better aged care system.

The Royal Commission into Aged Care Quality and Safety suggested increasing the Medicare levy or imposing a separate one could provide some of the funding boost sorely needed in the sector. On Monday, Prime Minister Scott Morrison appeared open to raising funding in this way.

Treasurer Josh Frydenberg has played down the prospect of the government introducing a levy to help fund aged care.Credit:Alex Ellinghausen

But on Wednesday, Mr Frydenberg pointed to the Coalition’s track record on cutting taxes, not raising them.

“I notice that the commissioners had different approaches with respect to the levy or the tax proposals, but it is fair to say our government’s track record has been about delivering lower taxes,” he said. “That’s what you’ll consistently see from a Coalition government.”

He acknowledged investment and spending on the aged care sector would have to increase, particularly with demand growing as the population aged.

“It is patently obvious that there is going to be more spending from our government on aged care,” Mr Frydenberg said.

A one per cent income levy could cost the median person who already pays the Medicare levy as much as $610, while boosting funds for the aged care sector by $7.85 billion annually. A union proposal for a 0.65 per cent levy would raise about $5 billion a year.

Labor has indicated it is open to government proposals for funding changes, but intends to respond after the May budget.

Mr Morrison announced an immediate injection of $452 million into aged care on Monday as he released the royal commission’s final report.

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