Joe Hockey (North Sydney, Liberal Party, Manager of Opposition Business in the House) Share this | Hansard source

The government’s first budget was far from the slash-and-burn job predicted by the Treasurer in the lead-up to 13 May. Despite boosting overall health spending, there is little in this budget that will advance the health of Australians. Contrary to the banter about preventative health and hospital reform being thrown around, there was nothing in this budget that reflected a new, meaningful shift of policy in either direction. Instead, we got a confused jumble of policies that add up to a big disappointment for the Australian people.

The first and most obvious problem with the budget, from our perspective, is the baseball bat that the government has taken to private health insurance. The government’s changes to the Medicare levy surcharge will see healthy young Australians leaving private health insurance in droves and relying on a dysfunctional state-run public health system shackled by constant mismanagement. The government has raised the Medicare levy surcharge threshold from $50,000 to $100,000 for individuals and from $100,000 to $150,000 for families.

According to the budget papers, this measure alone will save the government $959.7 million over four years and $232 million in 2008-09 alone, because the government will not have to pay the private health insurance rebate to those who opt out of private health insurance. Exactly how many people we are talking about remains a mystery, as the Prime Minister has refused to reveal Treasury’s modelling. One would suspect that the number lies somewhere between the 485,000 offered by the Treasurer and the one million asserted by the Access Economics report commissioned by the Australian Medical Association.

It stands to reason that those who benefit least from health insurance and whom the costs of premiums hurt the most will be the first to leave the system. They will be those with good health, the young and the fit. Australian families are hurting. As the government watches fuel prices, grocery prices and mortgage repayments spike, the cost of private health insurance may be too much for individuals and families to bear. This means that those left in the system will be the high-end users: the aged, the sick and those with an urgent need for health insurance and access to the sort of health care that the public system cannot provide. That will translate to higher premiums for anyone left in the system. Medibank Private’s chief executive officer, George Savvides, told a Senate estimates hearing that he expects to lose between seven and 10 per cent of his clients alone. If you apply that across the board, that is somewhere between 700,000 and 950,000 people dropping out of private health insurance. Ultimately, even those who need private health insurance will be forced out of the system and these high-end users will cost the public health system a disproportionately high amount in dollar terms, placing even greater burdens on an already overburdened public hospital system. It is a lose-lose situation for all Australians and a prime example of how poorly developed policy can cost the Australian people a relative fortune.

Another poorly thought out supposed health measure was the Prime Minister’s pet project: the alcopop tax. As a straight revenue raiser it is supposedly going to deliver $3.1 billion to the government over five years. It will do absolutely nothing to curb binge drinking. Even Treasury’s own modelling, or at least the brief that was released on the modelling, says that. It is said that each year revenues from the alcopop tax will increase in line with increasing consumption, from $640 million in 2008-09 to $892 million in 2011-12.

Right from the start the coalition disputed the validity of this supposed health measure. We urge the Prime Minister to be honest with the Australian people that this was a revenue raiser that will do nothing to curb binge drinking. This was confirmed as recently as today, in a Senate estimates committee hearing. It was confirmed by the Treasury that the Australian Taxation Office and Customs were the only agencies consulted prior to the introduction of this tax. The department of health were not even invited to make a submission before a decision was made on the alcopop tax, and yet the Prime Minister claimed that it was a health measure. Looking at it as a revenue measure, the government needs to do some basic maths. Treasury confirmed today that the estimated revenue figures contained in the budget papers rely on the expected growth in the consumption level of alcopops. This projected growth is above and beyond that which the industry itself was predicting even before the tax was introduced by the Prime Minister.

The Australian Institute of Health and Welfare submission to the Senate Standing Committee on Community Affairs inquiry into ready-to-drink alcohol beverages is telling. It found that:

… the increased availability of RTDs does not appear to have directly contributed to an increase in risky alcohol consumption.

The same submission also found that the increase in consumption of ready-to-drink alcohol is apparent in older age groups but that patterns of RTD use amongst teenagers is unclear. The latest statistics from the Nielsen ScanTrak survey of liquor retailers and independent bottle shops nation-wide show that, as planned, alcopops sales have dropped since the introduction of the new tax but, instead, sales of free-pour spirits—that is, spirits in bottles—have skyrocketed to fill the gap. Sales of 700 ml bottles of spirits rose by 21 per cent and hip flasks of spirits rose by 20 per cent in the same period as the introduction of the alcopop tax.

This fits in well with the studies selectively quoted by the Prime Minister in this House. These studies show that teenagers have simply switched to alcopops from other alcoholic drinks but, overall, teens are drinking less or the same amount as they were in the 1990s. Allow me to also refer to the Treasury minute dated 14 May, the day after the federal budget—the only Treasury modelling of any kind released by this government to date. The Treasury note said: ‘The second possibility is a redirection of alcohol consumption to other products as a result of the change in the price of RTDs.’

We know from experience that the government do not take advice from Treasury seriously. Perhaps they should have in this case, as once again their advice has become prophetic. Instead of delivering a health measure the government have simply shifted teenagers away from alcopops, containing one standard drink in a 375-millilitre can, to pour-your-own spirits, where they may be doling themselves three or four standard drinks in the same volume of soft drink. The Prime Minister may well have delivered a shot in the arm to Treasury by applying a new tax to alcopops, but the health of Australian children will suffer.

As flagged in the Labor election campaign, one of the coalition’s best policies—bringing dental care into Medicare—was dismantled. From November last year people with complex health problems were eligible to receive $4,250 worth of dental treatment over two years at a private dentist. We all know that new programs are usually slow to get off the ground, but this program doubled the number of services delivered each month, peaking at 94,617 services delivered in March, just before it was scrapped altogether. In total 172,000 dental services were provided over the five months that the scheme existed. Instead, the government has rolled out two new, and, I think, unsubstantial, dental programs that are not going to deliver the outcomes that the government is predicting.

The flagship program is the $490 million teen dental scheme in which needy teenagers will each get $150 vouchers to go to the dentist for a check-up. If the dentist finds anything that needs fixing they will be on their own, because no funding has been put aside for treatment services. Instead they will be directed, together with all other Australians, to the public state-run dental clinics. These clinics, which employ less than 10 per cent of the nation’s dentists, have the sorts of waiting lists that stamp the hospital system as a failure and they are to be compensated with the grand total of $290 million over four years. This figure would not be enough to manage the numbers they are seeing now, let alone the increased pressure from those that have been kicked out of Medicare dental. I have had countless constituents call and write to complain about this. It is an absolute tragedy for Australians who have dental problems—the sorts of problems that leave them in constant pain, unable to eat, in many cases, and affect their general health.

The Prime Minister and the member for Gellibrand, the Minister for Health and Ageing, have talked a lot about preventative health care. This budget did not have anything that walks the walk of preventative health. Specifically it gave nothing to GPs, who are expected to roll out most of the health measures that will deliver the biggest benefits in health terms. There has been no funding at all to increase the number of GP trainees, which means that, as the general practice workforce continues to age and continues to shrink, the burden on the public hospital system will not be ameliorated any time soon. In fact there have been a number of slashes to the funding of GPs that will probably mean that more disillusioned doctors leave the system. By taking over $500 million off the budget in a measure widely known as the ‘mystery cuts measure’ or what the government calls ‘underspends’, many important health programs are being slashed.

In a new hallmark of haziness there is almost nothing anywhere in the budget about the details of these cuts. The minister for health has admitted that $32.6 million of the Medicare around the clock grants have hit the deck. These payments are what keep GPs providing after-hours services, especially in outer metropolitan rural areas. Slashed as well, by $180 million, are incentive payments to keep mental health nurses co-located with GPs to help guarantee access to mental health expertise.

There are other coalition general practice and service incentive payments that have been slashed by the government, including payments to sign patients up for e-health and incentives on completion of an immunisation schedule for children in a GP’s practice, primary care panels that help GPs care for people in aged-care facilities and primary care collaboratives that help GPs achieve best practice in managing people with complex care needs.

In addition, $26.2 million worth of grants that previously encouraged GPs already in practice to start doing after-hours services were also scrapped, and $29.7 million has been hacked off the ATAPS program that helps patients access mental health help through their GPs. The list goes on. It seems that the government have put all of their eggs in the superclinic basket. Of the 31 superclinics on the table, only 12 are in areas of doctor shortages and most are in marginal Labor Party seats. The $275 million in funding over four years is going to capital funding to build the centres. In concept, there will be multidisciplinary primary care centres delivering after-hours GP services as well as a whole raft of allied health and nursing services. The problem is, of course, that the Labor Party have not said how they are going to get doctors into the clinics. Unlike the coalition’s promised emergency family medical centres, there are no incentive payments to draw doctors there and no incentives for these doctors to offer after-hours services. So far, the furthest we have got in moving towards bringing superclinics to life is purchasing the land they are going to be built on. The first cabs off the rank will most likely be in South Australia, where the state government has already started building them through a state funded GP Plus program that the Minister for Health and Ageing plans to piggyback her superclinics onto. But if the South Australian experience is anything to go by, the superclinics are not going to solve anything.

Take the example of the superclinic slated for Modbury, which is now to be tacked onto to the planned state government-run GP Plus clinic, with fifty-fifty funding from the federal and state governments. Despite what the minister has promised, this superclinic, the GP Plus clinic, will have no GPs in it. The local division of GPs has unanimously elected not to move into the centre and take a hit by dissolving their own practices, no matter how shiny the new building will be. Instead they will continue to offer after-hours services, as they always have, but this superclinic will be ‘GP Minus’. The mere promise of the superclinic has meant that the South Australian government took this as an excuse to rip beds out of Modbury Hospital. How is this delivering on better health care for the people of Adelaide?

If this experience is our first taste of the superclinic, it is unlikely that this pricey scheme is going to be the panacea for the health system anywhere—especially not in rural and regional areas, where access to a GP remains an enormous problem. In fact, there is really nothing in this budget to address the problems in rural health. It is all obviously too hard for the minister to come up with any ideas to relieve the doctor shortage in rural and regional Australia. It is easier to slug rural Australians with more cuts from the mystery cuts category. Allow me to list them: $15.5 million off the Mental Health Services in Rural and Remote Areas initiative, which gives access to psychologists and mental health workers; $2.5 million off telephone and web counselling services, which are used by people in remote areas who do not have access to therapists around the corner; $33.5 million off the Training for Rural and Remote Procedural GPs program, which helped GPs get the skills they need to work with limited specialist support; and $30 million cut from the PGPPP, a coalition initiative that helps fund junior doctors to spend time in rural general practice. This means a loss of 90 places per year. Then there is $16 million off the HECS Reimbursement Scheme, which boosted the number of doctors in rural and regional Australia.

The government have set up their $10 billion Health and Hospitals Fund, with funds coming online from 2009-10. This fund is for capital works only. So you will have all these shiny new facilities and the burden of running those facilities will fall to the state governments. We know that staffing is a problem, and it is not a state-caused disaster, because they are going into hospitals where they have no staff. It is like a scene out of Yes Minister. We saw almost no investment in this budget to address this country’s chronic medical workforce shortage in any meaningful way. There are none of the coalition’s promised placements to train GPs, and 25 clinical schools for enrolled nurses were scrapped. Instead we see 1,170 new university places for nurses over four years and a harebrained scheme which aims to provide incentives to get nurses back into the workforce. Returning nurses now get an up-front cash pay-off of $6,000, with a further $3,000 if they stay in the system for six months, and again at 18 months. The problem is that it gives nothing to those hardworking nurses who stayed in the system, carrying the heavy workload. The government plan to find 7,000 nurses with the incentive program. I think they are dreaming.

One last measure that deserves our attention is buried in Budget Paper No. 2’s ‘responsible economic management’ section, where a few cuts to pathology services were announced. Pathology is generally done by big corporate players—the sort the Prime Minster definitely had in his sights when he viewed himself as Australia’s new version of Robin Hood. The problem with the pathology cuts, which wiped $180 million over four years or 2.2 per cent of the sector’s bottom line, is that the government had agreed to honour a memorandum of understanding with the peak bodies representing all pathology sectors, but these cuts—made unilaterally and with no consultation—effectively ripped up the current bipartisan MOU with pathologists and also 13 years of MOUs arrived at between Liberal and Labor national governments in the past. The implications of this are potentially dire. Perhaps I need to point out to the minister that MOUs between government and industry groups are an important way to contain costs and guarantee supply. Unilaterally breaking one throws into doubt the credibility of this government and any MOUs it has negotiated. We are not sure whether this was a flagrant thumbing of the nose at those who the member for Gellibrand no longer values as collaborative partners or whether it was simply gross incompetence from an inexperienced minister with a junior team and now an unceremoniously dumped chief of staff.

In all, the budget is a disappointment. It is a disappointment when it comes to health services. It is a disappointment when it comes to the health workforce. It has no exciting innovations. Even though it increases money, there is no indication that the money being allocated is being better allocated. From the coalition’s point of view, it seems as though the minister for health has delivered a very clumsy outcome in the budget, one with quite a ramble when it comes to health outcomes. The bottom line is that Australians will not have better health care as a result of this budget. I think all Australians expected more from the first budget of the Rudd government.

See this speech in context