Australian Prime Minister Julia Gillard vindicated her stand on health insurance in the House of Representatives on Wednesday, when lawmakers struck down the tax rebate on health insurance premiums for individuals earning more than 129,000 Australian dollars ($137,800) a year.
The legislation won by a narrow margin -- 71 votes to 70, will come into effect from July 1 to help the government deliver a budget surplus next year. Wealthy earners will, therefore, pay up a total of AU$2.4 billion over the next three years.
Lower and middle-income earners are also expected to be hit, as the new rule will limit the 30 percent tax rebate on health insurance premiums. Couples with joint incomes exceeding AU$258,000 will no longer be eligible for the rebate.
Currently all taxpayers can claim the rebate.
The bill is assured passage through the Senate as the center-left Labor Party and the minority Greens Party will vote for it.