Bill Shorten dismissed the advice of a majority of his shadow cabinet when he announced Labor would only support an increase to the Medicare levy for people earning more than $87,000 a year.
Fairfax Media has confirmed with three shadow cabinet ministers that during a shadow cabinet meeting a day before the opposition leader's budget reply speech, a majority of Labor MPs argued for the party to back the Turnbull government's across-the-board 0.5 per cent rise in the Medicare levy.
More National News Videos
- Video duration
- 02:08
Shorten sets Labor's agenda
Shorten sets Labor's agenda
The battle lines are drawn with Labor leader Bill Shorten revealing what he will and won't support in the budget, setting up a fight with the government.
Up Next
Nine charged over $165m ATO fraud
- Video duration
- 02:53
- Video duration
- 02:53
Nine charged over $165m ATO fraud
Nine charged over $165m ATO fraud
One of those to be charged is the son of the Australian Taxation Office Deputy Commissioner Michael Cranston, who will appear in court.
Up Next
Major delays at Sydney Airport
- Video duration
- 00:56
- Video duration
- 00:56
Major delays at Sydney Airport
Major delays at Sydney Airport
Passengers express their frustrations in the check-in queue after an airport passport control system outage caused delays at Sydney Airport on Monday.
Up Next
Woman killed changing tyre in Crows Nest
- Video duration
- 00:25
- Video duration
- 00:25
Woman killed changing tyre in Crows Nest
Woman killed changing tyre in Crows Nest
A woman believed to be in her mid-20s has died after being struck by a minibus in Crows Nest on Sydney's lower north shore. Vision: Channel 7
Up Next
North Korea's missile threat
- Video duration
- 02:32
- Video duration
- 02:32
North Korea's missile threat
North Korea's missile threat
North Korea's program to develop a nuclear-armed Inter-Continental Ballistic Missile is accelerating.
Up Next
Passport control system failure causes chaos
- Video duration
- 00:52
- Video duration
- 00:52
Passport control system failure causes ...
Passport control system failure causes chaos
A glitch with the Advanced Passenger Processing system causes mayhem and delays at Sydney and Melbourne airports on Monday morning.
Up Next
Fake refugees claim sparks anger
- Video duration
- 01:47
- Video duration
- 01:47
Fake refugees claim sparks anger
Fake refugees claim sparks anger
After Immigration minister Peter Dutton described some refugees as "fake", lawyers have criticised him, but the PM backing his minister in.
Up Next
'Twiggy' Forrest donates $400m to charity
- Video duration
- 02:43
- Video duration
- 02:43
'Twiggy' Forrest donates $400m to charity
'Twiggy' Forrest donates $400m to charity
Unveiling a $400 million donation to charities and cancer research, mining magnate Andrew 'Twiggy' Forrest stood with politicians in Canberra to celebrate the biggest private donation made in Australian history.
Shorten sets Labor's agenda
The battle lines are drawn with Labor leader Bill Shorten revealing what he will and won't support in the budget, setting up a fight with the government.
The leaking of details from Mr Shorten's shadow cabinet is rare, underscores the disquiet within opposition ranks, and will likely be seized on by the Turnbull government.
Nine MPs addressed the Wednesday meeting of the shadow cabinet about the Turnbull government's policy, which is designed to raise $7.8 billion over two years from July 2019 to help fund the National Disability Insurance Scheme.
Related Content
Those MPs were Mr Shorten, Tanya Plibersek, Chris Bowen, Mark Butler, Brendan O'Connor, Jenny Macklin, Anthony Albanese, Shayne Neumann and Joel Fitzgibbon.
A majority of those MPs, from the Right and Left factions, told the shadow cabinet that given the federal budget was forecast to remain in deficit for years to come, the opposition should be fiscally responsible, bank all of the additional Medicare levy revenue and move on.
In addition, the MPs argued the NDIS was created by Labor and that to oppose a measure that helped fund it would be a politically risky move.
At the end of the meeting, Mr Shorten told the meeting: "It's fair to say no one is violently opposed, whichever way the leadership group decides".
No one in the room disagreed with that statement and the MPs understood they were not the final decision making body on the contentious issue.
The next day, the decision to only support the Medicare levy rise for higher income earners was taken by the smaller Labor leadership group.
Mr Shorten's position was strongly backed by deputy Labor leader Tanya Plibersek in that meeting, and the opposition leader prevailed.
In his budget reply that night, Mr Shorten announced Labor would reinstate the deficit levy and raise the Medicare levy to 2.5 per cent for people earning over $87,000 a year.
This would, the opposition leader said, raise $4.45 billion more revenue than the Coalition over 10 years and was portrayed as fairer.
One shadow cabinet member said the decision was "the toughest call the ALP had to make in responding to the budget" but the "the view in shadow cabinet was overwhelmingly to back all of the Medicare levy [rise]" given the amount of revenue it would raise.
"Bill sounded us out. It wasn't totally one way traffic but a strong majority said we should adopt it."
Another MP said that "it was a really tough decision and there was a lot of discussion. It was very tempting to take that revenue".
A third member of the shadow cabinet said the decision had made life harder for shadow treasurer Chris Bowen, given Mr Shorten also committed to spending an extra $22 billion on school funding in the speech.
"It's true that some people in shadow cabinet wanted to keep it all. Shadow cabinet was divided, so the leadership group made the call" on the day of the speech, the person said.
It's understood some Labor MPs were concerned about a fiscal gap opening up by opposing the rise in full.
When costings came back from the parliamentary budget office, those concerns were assuaged as Labor's proposal would raise more money in the medium term.
The leak comes just days after Mr Shorten's rival for the Labor leadership back in 2013, Anthony Albanese, offered an alternative budget reply speech in which he argued the federal opposition should have claimed victory after the Coalition's "ideological surrender" in the 2017 budget.
In contrast, Mr Shorten argued the document was not a Labor budget. Mr Albanese subsequently argued the substance of his speech was identical to that of his leader.
While the major measures announced by the Turnbull government in its second budget, including the rise in the Medicare levy, have been well received, last week's Fairfax-Ipsos poll showed Labor in the lead 53-47 in two-party-preferred terms.
Parliament returns for two weeks from Monday and will start debating the government's school funding plan, its plan to cut company taxes for businesses with a turnover of more than $50 million and other key budget measures.
42 comments
Comment are now closed