The government has said the revenue will be dedicated to help fully fund the NDIS which, in its first full year of operation, 2019-20, is expected to cost $22 billion. That annual cost has been estimated to rise to more than $32 billion in a decade.

Labor and the Greens oppose the Medicare levy hike. Labor believes it should be applied only to those earning more than $87,001 and that the so-called temporary deficit levy, a 2 percentage point increase to the top marginal tax rate, be reintroduced and made permanent.

Senator Hanson said she would not be backing any tax increase until satisfied the NDIS had sufficient safeguards to avoid cost blowouts.

Her stance against what is essentially a 0.5 percentage point income tax hike comes days after she confirmed One Nation would not be supporting the remainder of the company tax package either.

Needing support

The dual citizen fiasco and other scandals have dramatically changed the make-up of the Upper House. On Thursday, the NSW state Parliament approved former NSW Labor Premier Kristina Keneally to replace Sam Dastyari in the Senate.

With the Senate finally back to its full contingent of 76, there are 11 crossbenchers. The government needs nine of these every time it wants to pass legislation that is opposed by Labor and the Greens. One Nation is the only party with three Senators, meaning its support is needed every time. This will be the case until at least July 1, 2019, when the new Senators chosen at the next federal election, will sit.

That is the same date the increased Medicare levy is supposed to take effect.

Senator Hanson's position is likely to increase pressure on Labor to pass the tax hike as budgeted to support the NDIS – which Labor created. When last in government, Labor lifted the Medicare levy from 1.5 per cent to 2 per cent to fund the NDIS and the Coalition supported it.

The government is planning to announce income tax cuts in the May budget to take to the next election. It is refusing to rule out a tax cut starting on July 1, 2019, that would more than offset the Medicare levy increase.