Croakey readers will no doubt be aware of the sweeping changes to health, welfare and other services that have been proposed by the Federal Government’s Commission of Audit, including an end to universal health care and a much tougher GP (and Emergency Departments) co-payment scheme than previously touted.

Further on health, it recommends “requiring” high income earners to take out private cover, and dropping the rebate that encourages them now, plus deregulating private health insurance so health funds can charge people for certain “lifestyle factors”, such as smoking, and allowing pharmacists to set up in supermarkets.

Released today, two months after it was handed to Treasurer Joe Hockey, the Commission’s report also recommends huge changes to other benefits and services in Australia, including a slower rollout of the National Disability, scrapping the Family Tax Benefit Part B payment, and forcing young job seekers to move to better employment areas.

In media parlance, Hockey is being “coy” about what recommendations he will rule out until after the May 13 Federal Budget is handed down, so it’s fair to speculate that the scope and of the Commission’s report and the timing of the release are aimed at making tough measures look not so bad by comparison.

But it sets a tone and direction for future reform that will deeply worry many people working in public health, the community sector, and Indigenous affairs – no real surprise given the members of the Commission are mostly drawn from business – headed by former Business Council of Australia president Tony Shepherd and including former Howard Government Minister Amanda Vanstone.

Croakey will be running rolling analysis of the Commission’s recommendations on this post. Here, first, are some of the main recommendations.


The Commission says Australia’s health system is not well equipped to face future challenges such as an ageing population and rising health services costs and should look to a bunch of short and longer term changes.

It says its suggested reforms fall into five categories:

  1. Requiring those on higher incomes to take greater responsibility for their own health care needs.
  2. Requiring everyone to make a small contribution to the costs of their own health care.
  3. Improving the effectiveness of private health insurance arrangements.
  4. Improving the effectiveness of Medicare.
  5. Improving arrangements with the States.

It recommends:


  • A $15 co-payment for all Medicare funded services, dropping to $7.50 per service once a patient exceeds 15 visits or services in a year.
  • Concession card holders would pay $5.00 per service up to the threshold and then $2.50 per service.
  • Ensure that consumers are not able to insure against the co-payment and that medical practitioners who wish to bulk bill are not able to waive the co-payment.
  • Encourage States to set up Emergency Department co-payments for “less urgent conditions” that could be seen by a GP.

Private Health Insurance

  • Reform the private health insurance market, including deregulating price setting arrangements and allowing health funds to move into primary care and vary premiums to account for some “lifestyle factors”, including smoking.

Pharmacies and pharmaceuticals

  • Allow pharmacists and nurses to take on bigger roles, including to monitor blood pressure and diabetes tests, issue medical certificates for certain conditions (colds, hay fever), and “undertake some prescribing for chronic conditions” following an initial diagnosis and prescription by a doctor.
  • Increase co-payments for all Pharmaceutical Benefits Scheme medicines, including for concessional medicines that are currently free.
  • Open up the pharmacy sector to competition, including developing alternative retail models such as pharmacists in supermarkets.
  • Streamline approvals for new drugs through the Therapeutic Goods Administration process by recognising approvals made by certain overseas agencies.


  • Introduce a new Disability Support Pension (DSP) pegged to 28 per cent of average weekly earnings, with tougher means testing.
  • Scrap Family Tax Benefit Part B and apply a new means test for Part A.
  • Set a new benchmark to cut the minimum wage over 10 years so it is equal to 44 per cent of average weekly earnings
  • Force young single jobseekers to to move to areas of higher employment after one year or lose their benefits.
  • Increase the interest payable on the Higher Education Loans Program and cut the repayment threshold to an annual wage of $32,354 per year from $51,309.
  • Dramatically cut the maximum payout of the government’s proposed paid parental leave scheme.

Indigenous affairs

  • Introduce voucher program for education and training of children, young people, to cover education fee, travel and boarding.
  • Pull back the Commonwealth from State responsibility areas, such as Indigenous housing, municipal and essential services and the National Partnership Agreement on Stronger Futures.
  • Cease funding for lower performing, or lower priority activities (such as carbon farming) and from programs related to early childhood, schooling, higher and vocational education.
  • Consolidate the existing 150 or so Commonwealth Indigenous programs and activities into just six or seven.
  • Streamline and possibly rationalise around 30 Indigenous bodies, advisory boards and committees, including by amalgamating Indigenous Business Australia and the Indigenous Land Council and scrapping funding (on “duplication” grounds) for the National Congress of Australia’s First Peoples.
  • Establish an agency within the Department of the Prime Minister and Cabinet with responsibility for Commonwealth Indigenous specific program delivery and co-ordination. It should focus first on skills and training of its staff and invest in a robust data and evaluation strategy on the performance of programs.
  • Engage more with Indigenous people in the design of mainstream programs and improved reporting on outcomes.

Aged care

  • Make it harder to get a Commonwealth Seniors Health Card by including superannuation payments in the eligibility test.
  • Gradually increase the age eligibility for an aged pension to 70 years by about 2053.
  • Include the value of the family home in the age pension means test from 2027-28.


  • Establish a single National Health and Medical Research Institute, combining the National Health and Medical Research Council, Cancer Australia and the research budget of the Australian National Preventative Health Agency.
  • Establish a new Health Productivity and Performance Commission, through a merger of the Australian Commission on Safety and Quality in Health Care, the Australian Institute of Health and Welfare, the Australian National Health Performance Authority, components of the Australian National Preventative Health Agency, the National Mental Health Commission and other bodies.
  • Privatise Australia Post, NBN Co, Defence Housing, Snowy Hydro among other government-owned enterprises


Below are some early reactions to the Commission’s report, but first some Twitter commentary:

Twitter reax


See a number of reactions on the health recommendations compiled by The Conversation.


National Aboriginal Community Controlled Health Organisation (NACCHO): Media release

Aboriginal and Torres Strait Islander people should be exempt from any health co-payments to prevent any backward steps in Aboriginal health.

NACCHO Chair Justin Mohamed said the introduction of co-payments for basic health care such as GP visits and medicines, as recommended by the Commission of Audit, would increase barriers for many Aboriginal people to look after their own health.

“Improving Aboriginal and Torres Strait Islander health remains one of Australia’s biggest challenges,” Mr Mohamed said. “Increasing barriers to Aboriginal and Torres Strait Islander people seeking appropriate health care will only increase this challenge.

“We need initiatives that will encourage Aboriginal people to seek medical attention and seek it early, not make it even harder for them to get the care they need.”

Mr Mohamed said Aboriginal and Torres Strait Islanders often had a range of complex health issues so even a low co-payment charge could make health care unaffordable for many.

“For people who only visit their GP once a year a small co-payment is likely to be manageable,” Mr Mohamed said.

“However for Aboriginal and Torres Strait Islander people with more complex health needs even a $5 charge for each visit would add up very quickly.

“A large Aboriginal family could be out of pocket hundreds of dollars after just a few GP visits.

“This would put basic health care out of reach and be detrimental to the health of many Aboriginal people.

“I urge the government to carefully consider the implications before implementing this recommendation and to ensure any decision is not going to mean a backward step for the health of Aboriginal people.”

Consumers Health Forum of Australia: media release

The Audit Commission’s suggested remedy for the health system is an ideological prescription for the end of Medicare.

The commission’s manifesto reveals an unhealthy obsession with costs at the expense of access to quality health care for many patients.

A steep increase in out-of-pocket costs for seeing the doctor and getting prescribed medicines would entrench a two class health system in which the well-off access preferential care from their doctors while uninsured patients face higher hurdles and financial barriers to care.

See the full media release:

Professor Sabina Knight, Director of the Mt Isa Centre for Rural and Remote Health, James Cook University

Some sensible recommendations albeit tentative; for example, nurse practitioners could indeed add value, they don’t need expansion of scope of practice – that is established – the financing arrangements need to be liberated!

The recommendation relating to the Minister developing a options for reform confirms the notion that instigating the finance levers in isolation of the system design is a challenging task.

Capping Commonwealth’s proportion of efficient price of hospital  care defeats the purpose of exposing the Commonwealth to the growth in costs related to inefficacies or failure in primary care. This is unlikely to save money in the medium or longer term.

Michael Moore, CEO, Public Health Association of Australia

Merging is bureaucratic double-speak for getting rid of ANPHA and other bodies. Simply no mention of the long term economic and health benefits of prevention. It is not mentioned, nor is there any understanding of the social determinants of health reflected in the report.

Australian Health Care and Hospitals Association (AHHA): Media release

The AHHA supports the proposed rationalisation of 22 existing health portfolio bodies and agencies and welcomed a recommendation that the Health Minister develop options to reform Australia’s health care system, with a report to the Prime Minister in 12 months’ time on progress and a preferred way forward.

However it was critical about the lack of focus on health promotion and disease prevention, and says “we are moving towards a two-tiered system of ‘haves and have-nots’ in health”.

See the full media release:

Professor Amanda Lee, School of Public Health and Social Work, Queensland University of Technology

A major concern is that there is NO recognition or even mention of the need for preventive health whatsoever. This omission is bizarre in a document that purports to be driven by economic considerations.

Australia is facing a crisis in our health, social and economic systems if we do not tackle prevention of chronic disease in a strategic, co-ordinated, evidence-based manner NOW. This need is recognized by all other OECD countries globally.

In the report , it is stated that the mooted new National Health and Medical Research Institute will “improve patient outcomes and deliver efficiencies by improving the evidence base available to clinicians and patients.”

This implies a focus on the ill-health system only. The consequences will not only be unsustainable  increasing health care costs, but increasing health inequities, particularly those impacting Aboriginal and Torres Strait islander Australians, and increasing community suffering due to the impact of chronic diseases- most of which are preventable by improving physical and social environments to make it easier for Australians to improve diet, increase physical activity, moderate alcohol intake and stop smoking.

This omission seems to indicate a basic lack of understanding of health economics.

Why is the need for preventive economic action identified, but not the need for preventive health, which will not only deliver economic benefits, but also improve future community health and wellbeing?

Gobsmakingly inconsistent, logically and scientifically flawed!

Australian Council of Social Service (ACOSS): Media release

ACOSS said most of the Commission’s recommendations “fail the fairness test” and will create “a two tiered system in health and education”. These include the GP co-payment, cuts to welfare payments and minimum wage earners, reduced funding for employment services, and forcing unemployed young people to move home to search for work.
It welcomes some proposals: “restrictions on health cards for retirees with financial assets over a million dollars, a fairer system of child care benefits and paid parental leave, opening up pharmacies for competition, potentially fairer means tests for the pension and family payments, and an increase in the preservation age for superannuation.

But it says the biggest failure that the Commission was not tasked to look at public revenue.

“The Commission came up with a radical proposal to give the States a share of federal income tax revenues, yet tax breaks for high income earners such as superannuation and negative gearing were out of scope,” said ACOSS CEO Cassandra Goldie.

See the full media release:

Miriam Herzfeld, convenor of the Social Determinants of Health Advocacy Network of Tasmania

A few very quick thoughts:

  • Many of the recommendations hit people who are already struggling – carers, unemployed, students….
  • Numerous recommendations pose a risk to social inclusion – young people (22-30) must relocate to seek work – what about recommendations to build jobs locally so people can stay close to their families and social networks.
  • The recommendations are loaded with victim blaming initiatives – so we want to make it even harder for people to get unemployment benefits.
  • Re the NDIS – these people have waited long enough – this is blatantly unfair.
  • Parents must be working, training or studying to receive childcare benefits – does this take into account parents who are also carers? Is caring recognised as work?
  • Indigenous programs – can 7 really replace 150? What happens to the voices of diversity?
  • Universal health care is paramount – it’s a human right – once we’ve lost it we’ll never go back.
  • We can still find money to increase defence – as always!

Overall many of the recommendations attack the social determinants of health and therefore you can take a fair stab and say that health and wellbeing will suffer in the longer term.

Vern Hughes, the National Campaign for Consumer-Centred Health Care

I don’t think there are “huge changes in health and social policy”

There are relatively minor changes in these changes, confined almost entirely to the introduction of co-payments. You can support or oppose these co-payments, but either way they will have relatively little impact on the big health and social policy spending items. That is, there is:

1. no major push away from hospital-centred health care towards community-based illness prevention
2. there is no major emphasis on employment of people with disabilities and mental illnesses to get them off benefits
3. there is no major push for community-based supports for ageing to keep older people out of institutions for longer.

It’s tinkering at the edge of these problems, rather than seriously tackling them. Same old tinkering.

Catholic Health Australia

The decision of the Commission of Audit to make the case for advanced care directives has been questioned by the nation’s largest network of non-government health and aged care services.

Catholic Health Australia, which today in partnership with the Australian Catholic Bishops Conference (ACBC) released an Advance Care Plan framework, said the Commission’s terms of reference on “scope, efficiency and functions of government” made discussion on end-of-life care appear out of place.

CHA chief executive officer Martin Laverty, speaking on behalf of Catholic not-for-profit health and aged care services who care for one in 10 Australians in a hospital and aged care service, said though thorough care planning at end of life was crucial, governments should not impose its views for economic reasons.

“In anticipating the Commission’s report, we expected to see proposals to reduce government costs and reorganise government services. Including discussion about how people die in the context of recommendations on the ‘scope, efficiency and functions of government’ was not expected,” Mr Laverty said.

“End-of-life decisions are deeply personal. They require sensitive and considered thought. The health and pastoral professionals who work in Catholic hospitals and aged care services support people on a daily basis in making advance care plans.

“We hope the Commission of Audit was not trying to cast end-of-life decisions as a requirement of economic efficiency.

You’ll need Skype CreditFree via Skype
(Visited 83 times, 1 visits today)