'We no longer need this': Turnbull government to scrap $8b increase in Medicare levy

Treasurer Scott Morrison has said a strengthening economy means he can fund the National Disability Insurance Scheme (NDIS) without a Medicare levy hike. 

Ahead of an announcement today where the Turnbull government will scrap an $8 billion increase to the Medicare levy, Mr Morrison confirmed the extra 0.5 percent hike, which was a signature measure of the 2017 budget, is no longer needed thanks to increased revenue.

“It’s good news because we are fully funding everything for the NDIS and we are doing that because we have a stronger economy,” the treasurer told The TODAY Show this morning.

“It’s good news for taxpayers because we can do it without increasing the Medicare levy. And it’s good news for all Australians because we are able to do this and keep track to bring the budget back to balance.”

Better-than-expected tax receipts up until February are expected to have run $4.8b higher than estimated in December thanks to company profits, temporary commodities and a jobs boom.

“Over the last 15 months or so, we’ve seen the economy improving … we started to see the tax collections from companies doing better and we can have greater confidence about revenues into the future,” Mr Morrison said.

“As we prepared the budget it was clear that we no longer had to do this and I’m so pleased that we don’t.”

The treasurer will today again accuse Labor of leaving a $57 billion shortfall in NDIS funding when it left office.

"The reason we proposed to increase the Medicare levy was only to fully fund the gap left behind by Labor on the NDIS," he will say.

"We no longer believe we need to do this."

Negotiations over the government's bill have stalled in the Senate.

Labor had proposed to restrict the 0.5 percent Medicare levy increase to those earning more than $87,000.