Bye Bye Medicare Levy Increase

    The federal government has abandoned plans to increase the Medicare levy.

    The federal government will not increase the Medicare levy by 0.5 per cent as planned, treasurer Scott Morrison confirmed on Thursday.

    Announced in last year's Budget, the government said it would increase the levy charged to taxpayers for Medicare by 0.5 per cent, in a move that was designed to raise $8.2 billion over the forward estimates in order to cover the estimated gap in funding for the National Disability Insurance Scheme (NDIS).

    It was looking like the government would struggle to get the levy increase passed through the Senate, and Labor was only supporting the levy increase for people earning $87,000 per year and over.

    On ABC's AM program on Thursday, Morrison announced that the levy wouldn't go ahead because the amount of tax revenue the government was taking in had increased more than originally forecast.

    "Tax receipts up to February alone this year are $4.8 billion higher than we estimated back in MYEFO [Mid-Year Economic and Fiscal Outlook 2017-2018]," Morrison said.

    "And so the stronger economy we have been building through our stronger economic policies is actually providing that dividend that enables us to do the job of fully funding the National Disability Insurance Scheme, without the need to increase the levy."

    Labor looks set to abandon keeping the levy increase for people on higher incomes, should it win government at the next election. Guardian Australia reported that Labor will abandon the policy, but shadow treasurer Chris Bowen would not confirm it when asked on ABC's RN Breakfast.

    The announcement is one of the first pre-Budget drops ahead of Morrison delivering his third Budget on May 9. He has already moved to quash speculation that it will be a big spending pre-election Budget, saying he is not Santa Claus.