In his pre budget statement, Prime Minister Anthony Albanese has effectively put an end to all conjectures regarding imposing means testing on the National Disability Insurance Scheme.
While keeping the option open for scaling back certain tax breaks currently enjoyed by the property sector.
As the cost of NDIS now stands well above $55 billion, Prime Minister Albanese refused to consider any proposals to make eligibility dependant on financial situation of individuals and stressed the need to keep the scheme universal and confined only to disability.
In such manner, Albanese has found himself in opposition to his own Health Minister, Mark Butler who had suggested before that such an option is very much on the table.
However, Albanese quickly realized that the scheme cannot go on like that.
Since the start of the year, costs of the NDIS have more than doubled in relation to 2021, with children especially with developmental problems or autism forming almost half of its recipients.
As it has been decided to slow the growth from around 10% per year to less than 6% one solution proposed is to involve the new initiative “Thriving Kids” in directing children with low moderate needs outside NDIS.
A group of crossbench MPs, led by Monique Ryan from Kooyong, has written to ministers to say that they are worried that the basic supports aren’t ready to handle kids being taken off the NDIS yet.
The Thriving Kids rollout won’t be fully up and running until 2028.
Housing tax shake up
Albanese was unwilling to commit himself to restrictions on negative gearing or the CGT discount, pointing out that Treasury was looking at measures that could include a limit on allowable deductions to new constructions.
This comes after the Senate committee investigation determined that, when added together the CGT discount and negative gearing were causing the ownership of homes to favor investors at the expense of owner occupiers.
According to sources, the Treasury would rather go for a cut in the 50% discount rate to 33%, but the government can use the discount change exclusively for housing investments.
The political ramifications are quite clear. In the latest survey conducted 61% of property investors would reduce their investments or even sell their properties should the changes in the discount rate and negative gearing rules take place.
The Liberal Party has already threatened harsh repercussions.
National News: Sydney Airport Just Shut Down Dozens of Flights
Albanese is trying to find a way to cut two of the country’s fastest growing spending and revenue commitments without upsetting either disability communities or the millions of Australians who own investment property.
The real test for a government that is entering its second term under increasing financial pressure will be whether the final budget papers match the level of rhetoric.
