Many thanks to Dr Lesley Russell for this insightful analysis of the federal health budget.

Dr Russell writes:

Every year since 2007 I have done a detailed analysis of the health provisions in the federal budget.  I do this in the light of current and past strategies, policies, programs and funding and support my work, where possible, by data drawn from Medicare, the Pharmaceutical Benefits Scheme, reports and published papers.

It’s become an increasingly difficult task and, as was the case last year, this year’s analysis has been delayed as I have spent endless hours trying to sort out what is going on. The budget papers are even more impenetrable than those from 2014-15, provisions in the Budget have already changed as the Abbott Government struggles to sell its policies, and new announcements have been made in the weeks since the Budget was released.

The impacts of the 2015-16 budget must be assessed in light of the previous Budget, which casts a long shadow.  Australians’ health and wellbeing depends not just on their ability to access quality and affordable healthcare services when they need them, but on a range of other services, of which education, employment, social justice and welfare supports are the most important.

ACOSS estimates that, combined, the two budgets strip approximately $15 billion / 4 years from basic services and supports that affect low and middle income households and analysis from NATSEM has confirmed that the Government’s budget changes are being made at the expense of the less well-off.

The over-arching aim appears to be to improve the federal budget deficit by shifting costs off the Commonwealth Government’s balance sheet on to the States and Territories, service providers and consumers.

The Health Budget this year sees the Government using the same methods to take savings with the same objectives as last year. The controversial Medicare co-payment has been abandoned but changes to Medicare reimbursements will see patients’ out of pocket costs grow – effectively implementing co-payments by stealth. And PBS co-payments remain on the table, at least until replacement savings are found.  Eligibility and funding rules for patients’ benefits and providers’ incentives are tightened, funds are cut (again) from health programs and agencies in the name of efficiency and rationalisation, and service agreements with states and territories, non-government providers and the private sector are renegotiated – or dropped.

What leaps out is the continuing failure to develop and implement strategies and policies to underpin these decisions. Budget decisions smack of policy on the run.  In critical areas like mental health, e-health and primary care we see a common modis operandi: commission a report but delay acting on it; implement a few aspects of the report and ignore the remainder – or set up an advisory group to obtain yet more advice and further delay; rebadge anything named by the previous Labor Government; and finally – make sure there are no plans and no funding for anything beyond three years.

The one substantial Government commitment is to the Medical Research Future Fund, which has become the beneficiary, even the justification, for savings from many areas in the Health portfolio. It is ironic that these program cuts will quickly lead to impacts on the health of individuals and the population as a whole – the very things that the MRFF is lauded as addressing through the research it will support.

The biggest concern must be that these efforts of the Abbott Government to ensure that our grandchildren do not bear the burden of Government debt mean future generations will bear the economic and social burdens of increasing rates of illness and disability. There is a failure to realise that health is central to the well-being and wealth of individuals and nations and that wise investment in health systems helps create societal wellbeing and promote equity.

These messages all apply to Australia’s formulation and funding of health policies and services, and never more so than in 2015.

This year’s budget analysis is on the University of Sydney e-scholarship website.  My analysis of the Indigenous  affairs 2015-16 Budget and analyses from previous years are also here.


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