Cuts to Health: The saga continues

Balancing a budget may be important, but maintaining Medicare funding for diagnostic services and healthcare is critical.

Scott Morrison has made his debut as treasurer, releasing his first Mid Year Economic and Fiscal Outlook (MYEFO) since assuming the role a few months ago. The Australian government’s budgetary position is not looking good, with the deficit projected to reach $37.4 billion in 2015-16 and unlikely to reach surplus until after 2021. Within this context, there is an imperative upon government to save money where it can.

It’s unfortunate that the new treasurer and new prime minister have chosen to make cuts to bulk billing as a means of clawing back money. Incentive payments for diagnostic imaging will be removed, which is expected to save the Commonwealth approximately $639 million over four years. This comes as part of a $1.3 billion cut to health funding generally.

As described in the MYEFO, changes include:

Removing bulk billing incentives for pathology services, aligning bulk billing incentives for diagnostic imaging services with those that apply to general practitioner services and reducing the bulk-billing incentive for magnetic resonance imaging (MRI) services. This measure is expected to reduce cash payments by $197 million in 2016-17 ($639 million over four years to 2018-19).

MYEFO 2015, Part 3

The medical profession are unimpressed and have warned that this will lead to undiagnosed cancers and other health complaints. The Australian Medical Association has stated that the measures represent a “co-payment by stealth“. It was less than two years ago that a “debt and deficit crisis” was used as a justification for slashing health funding before public outcry and a hostile Senate rejected the moves in 2014.

When he assumed office, Malcolm Turnbull told Australians that fairness would be at the centre of his government’s policies because his overall goal was for a “high wage, generous social welfare net, first world economy“. That’s harder to achieve when $1.3 billion is ripped from the health budget.

I concede that savings need to be made, but there are other places that government should target first, such as the absurd negative gearing scheme that effectively subsidises wealthier Australians when they buy a second home.  Negative gearing costs the Commonwealth government $4 billion a year and is expensive, inefficient, inequitable and reduces home ownership. There are numerous other examples of middle-class welfare that can be clawed back before taking away incentives for doctors to provide affordable healthcare to patients.

Whether this measure passes through the Senate remains to be seen. These shall be a test of the new treasurer’s and prime minister’s powers of persuasion in an election year.

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