A glimmer of rationality has appeared on the question of funding public hospitals. ACT Chief Minster Kate Carnell has suggested that the one-off 0.2 per cent extra Medicare levy raised to buy back weapons continue in force to fund public hospitals.
It may result in cynicism about broken promises, but the fact is public hospitals need extra money. There is a limit to the effectiveness of efficiency dividends, privatisations, corporatisations and the like. After a time it is necessary to put real dollars into public health if we are to maintain high standards of health (world’s best practice, as the management gurus say) in Australia in the face of an aging population and better and more expensive medical technology.
One of the reasons we seek a better economic performance must surely be so that we can have better health care.
Mrs Carnell’s acknowledgement that extra funding is needed for public hospitals and that it must come from taxation is a welcome one. It is contrary to the view of her federal counterpart, Dr Michael Wooldridge, who has said that the increase in the Medicare levy for high-income earners would go to general revenue, not health.
In fact the Medicare levy raises about $4 billion a year; whereas the total medical and hospital costs of the federal government (which includes funding state public hospitals) is about $15 billion. Clearly more revenue is needed if health is to pay for itself and standards be maintained. And that must come from a higher levy because the Government’s plan to encourage more people to private health cover, on its own admission, can at best only stop the drain.
Perhaps the Government should consider levying gross, rather than net income, to catch tax avoiders and income minimisers, as suggested by a letter writer to this paper. That is already done with respect to pre-dividend-imputation share income.