14 thoughts on “Weekend reflections”

1. Medicare is the name given to the host of medical services either provided for by our governments (eg state hospitals) or provided by the private sector and paid for by the government (eg General Practioners).

   Medicare is nominally funded by the medicare levy. This is an income tax surcharge which is currently set at 1.5%. There is an additional levy of 1%, known as the Medicare Levy Surcharge, for high income earners that don’t have government approved private hospital insurance.

   Setting aside the question of whether we should have Medicare at all I am interested to know why we should continue to have the medicare levy at the current level. The medicare levy at 1.5% gives the impression that medicare is cheap, where in fact a levy that actually raised the funds required to pay for the services known as medicare would need to be set at about 8% or more.

   It seems to me that the medicare levy is highly misleading and we could reform the system in one of the following ways:-
   
   a) Abolish the levy and then increase the general income tax rates to make up the difference.
   b) Increase the levy to the level required to pay for the associated services (eg 8%) and reduce general income tax accordingly.
   c) Live with the discrepency and let the masses think medicare is cheap.
   
   I would be interested to know which of these three options participants here are most inclinded toward.

2. Since my first preference would be the abolition of income tax, option a) would be the preference here. Realistically if you’re not going to break all tax up into respective expenditure categories, why bother with this tiny anachronism?

3. REGULATION TASKFORCE JUST RECOMMENDED OPTION A

   Recommendation 5.41 of the Rethinking Regulation report released yesterday is to abolish the Medicare Levy and recoup the moneys foregone through a compensating increase in personal tax rates. This is of course quite sensible, but there may be a political concern that personal tax rates would be seen to have risen, silly though that might be.

4. Its official – the greenies really do want us to revert to living in caves:

   Cave dwellers in China serve as a model for designing an eco-friendly life

5. Thanks Tom. Thats quite uncanny.

   Given the surplus the Treasurer could just abolish the medicare levy completely at the next budget and give everybody a little tax cut. However I am sure he would then get accused of moving to abolish Medicare.

   Personally I would not mind option (b). However I suspect that option (a) is more likely to get support. I certainly don’t like option (c ).

6. Support some of the cost at least by abolishing the stupid 30% private health insurance handout.

7. Terje: Either option a) or b) is fine by me.

   Crocodile: Hear, hear. Abolish the damn thing now.

   Dogz: That is pure spin. Just can’t resist any chance to kick ‘greenies’, can you? Try again. But first go and do some reading on the very real benefits of living underground, like plenty of people do in the opal fields of Australia.

8. Prof Q whats your call on the Lions this year? Looks like it’s gunna be a tough one.

9. Seeker, lighten up. Everyone knows living underground is for the worms.

10. I think after tonight’s performance at the Gabba, football has once again become a topic for polite discussion. I like the look of that young lad wearing Darryl White’s old number – good signs for the future. And it was Simon Black’s best game for a year or more. Good signs.

11. I would have to agree that option (a) seems like the way to go. Presumably there is some cost in administering the levy so, at least, we’d save that when looking to increase the general tax rate. Also agree that the private health insurance rebate should go. Why is the government supporting the private health insurance industry? The money would be better spent in fixing the public health system.

12. I worked out a grandfathering way of getting rid of direct personal tax, with an age range wedge that pushed back the oldest age at which taxes were payable at the same time as pushing the youngest age at which people became entitled to various benefits. The group in between would gradually grow, and all the while people in it would be enabled to make their own arrangements without being dropped in it. It’s described somewhere on my publications page, in an article I wrote for News Weekly.

13. Best site I see. Thanks.

14. Terje,
    I would have thought that option
    (d) Abolish Medicare
    would have made the most sense. Government funds, out of general revenue, health insurance for those who cannot afford it. That would probably cut it down to 1.5% and get rid of the lie that the system is.
    I would agree on the 30% rebate. Abolish it, along with every other tax break, rebate, refund, incentive etc. etc. etc.