What does the new Australian government mean for the health sector ?
08 September 2010
The H&K PA team has been busy answering questions from our health sector clients about what the new Labor lead government will mean. In short, demand for, and costs associated with, delivering better health services will rise as a result of the Labor Government’s agreement with the three Independents and lone Greens MP. This goes against the Government’s oft-stated desire of reigning in the burgeoning health budget.
The agreement with the Independents/Greens will see an extra $1.8 billion ploughed into rural and regional health services. Already some big dollars have been secured for hospitals outside the mainland cities. $100 million has been set aside for the redevelopment of Hobart Hospital (a further $240 million will be considered as part of the Health and Hospitals Fund), smack bang in the middle of new Independent (and former Green) Andrew Wilkie’s once safe Labor seat. There has also been a promise of $20 million for an upgrade to Tamworth Hospital (home of one of the two Independents whose crucial vote gave the PM’s job to Julia Gillard). The Greens’ dental care scheme – traditionally excluded from Medicare funding – has also been costed at about $4 billion.
All of this comes on top of the Gillard Government’s existing pre-election commitments including:
• $7.3 billion health reform plan to cut waiting times in emergency departments to less than four hours, improve hospital waiting lists, build GP superclinics, federal government to fund 60 per cent of hospital bills. Many of these were already earmarked for the regions. • $96 million to train extra 270 specialist doctors and 2000 nurses for hospital emergency departments. Independent Rob Oakeshott’s interest in regional education and training could see further opportunities in this regard in rural and regional Australia. • $276.9 million suicide prevention plan • A commitment to promoting e-health policies and implementation, and the continued building of the National Broadband Network.
It is likely that the Government will need to consider new avenues for widening the Government’s revenue base to pay for the additional health spending – at the very least, it will make the proposition of removing (or reducing the taxation impact of) the mining tax a difficult one. In the lead up to the election, the Labor Party claimed the savings measures outlined by the Opposition would lead to cuts to the Pharmaceuticals Benefits Scheme (PBS) and more expensive medicines for consumers. This claim was rejected by the Opposition. The Labor Government referred to their own savings measures – in the 2010-11 Budget, Federal Labor delivered $2.5 billion over five years in savings on the PBS including $1.5 billion from the PBS and the medicines industry and $1 billion from pharmacies. In August, the Government also announced they would expand the criteria for streamlining ‘Authority required’ medicines, to include medicines used to treat short-term conditions where patient safety will not be put at risk. This means that when prescribing one of these PBS medicines, doctors and other prescribers will no longer have to obtain telephone or written approval from Medicare Australia before prescribing particular PBS medicines.
Crucially for Julia Gillard and her Labor team, the deciding factors in securing the support of the two rural independents was the National Broadband Network (which the Opposition said it would scrap) and what it would do for health and education in isolated communities. E-Health, which the government had begun to prepare the nation for before the election, was at risk of being abandoned under a Tony Abbott lead government.