Julia Gillard deals with a taxing political issue

In the end, the disabled outsmarted the politicians. Julia Gillard will bring legislation to the current parliament for her tax increase to contribute to the cost of the national disability insurance scheme. Tony Abbott’s Coalition will vote for it.

Political reality overtook some cynical power play from both sides, but especially by the PM, because they couldn’t afford to be seen point scoring at the expense of people with disabilities.

Gillard had wanted to delay introducing the legislation for a 0.5 percentage point increase in the Medicare levy, so she could get maximum leverage from the NDIS issue in the run up to the election. Abbott called her bluff, demanding the bill come in at once. But he wouldn’t undertake to support it unless the PM revealed the rest of the funding for the scheme.

Neither could hold out. Abbott yesterday announced the Coalition would “consider” providing support. He outlined various other things the government had to do, including the release of “operational details” for the scheme.

Gillard read “consider” supporting as “will support” and waved aside assorted demands as things on which the government was already working.

Whew. Both leaders are out of awkward holes, and quickly.

Gillard has lost an opportunity to wedge Abbott; the Opposition leader has agreed to a tax rise and even described it as “modest”.

Who would have thought he would be using the word “modest” in relation to an increase that will raise more than $3 billion annually? Shadow treasurer Joe Hockey must be choking – but then this “modest” tax rise is now incorporated into the Opposition’s own funding for the NDIS, which is a boon for Hockey’s difficult numbers exercise.

There was consultation among the senior opposition leadership before Abbott’s announcement. The Coalition is holding out the prospect of removing the levy “when the budget returns to strong surplus and the NDIS can be funded without it”. That sounds like a very long time.

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