Prime Minister Malcolm Turnbull says the Medicare levy increase was necessary to fund the National Disability Insurance Scheme.
Prime Minister Malcolm Turnbull has defended the government's move to increase the Medicare levy for most taxpayers, saying it will benefit future generations.
Mr Turnbull told ABC24 the hike, which will apply to those earning more than $75,000, was essential to ensure the scheme continued into the future.
"We haven't been able to secure the savings through the Senate to fund it through savings so we are increasing the Medicare levy from 2019 to ensure the National Disability Insurance Scheme is fully funded," he said.
"We are guaranteeing Medicare, restoring indexation, creating a Medicare guarantee fund and we are ensuring that schools funding confirms with David Gonski's recommendations. Labor never did that.
"Schools funding will be national, consistent, needs-based, transparent and fair.
"It is a very fair budget, it is a responsible budget and it is of course driving a massive investment infrastructure."
Opposition Leader Bill Shorten hit back at the suggestion the scheme, put in place by former Labor prime minister Julia Gillard was unfunded, saying the government was trying to find money for "other purposes".
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"The fact of the matter is if you want to fully fund schools or going to university or Medicare or the National Disability Insurance Scheme, don't give a $50 billion plus company tax cut," he said.
Treasurer Scott Morrison told Sunrise the government had previously supported increases in the Medicare levy to fund the NDIS and would use this one to fully fund the scheme.
"All of us have an obligation to our fellow Australians with a disability to ensure they can enjoy a better standard of life," he said.
"I wasn't going to say to Australians with a disability, their carers, and others, that we were going to leave this $55 billion funding gap over the next 10 years. This ensures the NDIS is fully paid for."
Mr Turnbull also defended the government proposed 0.06 per cent bank levy was "only fair".
"Levies like this are common right around the world," he said.
"This is a very conventional approach and it is one that will secure that additional money - $6 billion over the next four years - that will assist us in bringing the budget back into balance and ensuring that our children and grandchildren are not burdened with a mountain of debt."
Mr Turnbull rejected suggestions bank customers and shareholders would be the ones to feel the impact of the new levy.
"The ACCC will keep an eye on it," he said.
"We are enhancing competitiveness. There are other banks and financial institutions competing with them.
"You have to remember that the banks are hugely profitable. They do not need to pass this on. They will still be very profitable and the most profitable banks in the world.
"We need to bring the budget back into balance.
"This budget is fair at every level. We are bringing it back into balance so we don't burden our children and grandchildren with a mountain of debt."
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Mr Turnbull also moved to defend the government's move to drug test some welfare recipients, saying he was "so disappointed people are critical of that".
"If people are on welfare and they have an addiction problem it needs to be identified and helped," he said.
"It needs to be helped and get off the addiction so they can get back into the workforce. This is helping people.
"There is a big correlation between substance abuse and unemployment. Because, of course, people who are on drugs or got a serious alcohol and drugs problem of course they are not able to work therefore they become welfare dependent.
"We want to get people off welfare into employment. This is one of the many ways we seek to do that."
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