The Australian Government announced in the 2008-09 Budget that it would increase income tax thresholds for the Medicare Levy Surcharge (MLS). The changes were subsequently introduced in the Tax Laws Amendment (Medicare Levy Surcharge Thresholds) Act (No. 2) 2008. A Regulation Impact Statement (RIS) was required for the decision to introduce the increased MLS income thresholds, but was not prepared. The proposal was assessed as non-compliant with the Government’s best practice regulation requirements. As a result, a Post-implementation Review (PIR) was required. The PIR document prepared by the Department of Health and Ageing concluded that the increase in the MLS threshold to $70,000 and the introduction of indexation effectively addressed the problem that the fixed $50,000 threshold would at some stage have resulted in the MLS applying to taxpayers who would not be considered to be on a higher income. In terms of the effects on the uptake of private health insurance and possibility of detrimental flow on effects for the health system in general, the PIR concluded that the full implications of the changes to the MLS on the health system may not be known for some years, but the analysis done to date shows there has been no significant impact. The Office of Best Practice Regulation has assessed the PIR document as adequate.
