Andrew Podger writes:

The health budget contains a lot of positives. Bearing in mind the major spending initiatives of the last 18 months, including  the new Australian Health Care Agreements (reversing the serious neglect of public hospitals by the Howard Government) and Indigenous health services, the Government deserves congratulations for including additional spending measures that will address capital shortages and workforce problems and improve cancer services particularly in regional and rural areas.

Many of the savings measures are also eminently sensible, requiring greater cost effectiveness through the MBS and PBS.

Yet there are missed opportunities. Maybe we are setting the bar too high, expectations raised by Mr Rudd’s rhetoric. And to be fair the NHHRC has yet to present its final report. Nonetheless, I had hoped for a package that bore more resemblance to the directions the NHHRC set in its interim report, and involved steps that might move towards its longer-term governance options.

There is nothing much for primary care, so no move even towards the NHHRC’s Option A (full Commonwealth takeover of primary care), nor anything for better regional planning that might set a platform for either Option A or B (full Commonwealth takeover with regional management).

And the means testing of the PHI rebate might make opponents of PHI happy, but it does nothing for coherence of what is already a hopelessly complex and confusing public/private insurance system, and certainly does not help those who would like to see Australia move towards the NHHRC’s Option C of managed competition. If high income people are to pay more whether they have PHI or not (those without PHI face a higher Medicare levy surcharge), why on earth not just stop their tax cuts – the budget bottom line would have gained more, and the Government could have done more sensible things to reduce rebate costs such as limit it to Medicare eligible services.

A financial crisis is also an opportunity to address more difficult issues, like rationalising co-payments or sorting out residential aged care financing.

Nonetheless, under the circumstances, it would be churlish not to give the Government a muted tick overall.

Andrew Podger is a consultant as well as National President of the Institute of Public Administration Australia and Adjunct Professor at the Australian National University. He is a former Health Department secretary and public service commissioner who served both Labor and Liberal governments.

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