Medicare chiselling reveals 40 years of political cycles

by on January 4, 2014

WHEN, oh when, will this 40-year wheel-turning-and-yet-being-forever-still end. The latest Medicare co-payment issue indicates that it will not be anytime soon.

A few months into a Coalition Government and we have more of the same-old, same-old.

Labor comes to power. Has worthwhile big-picture changes for the great public good. Most of the great reforms come from Labor. But Labor is hopeless at organising finances. Runs up big debt. Cannot control the public credit card. Combines this with more favours for union mates who fund Labor than is good for the country or the Labor Party. Gets turfed out.

Tories come in. Go for the jugular at Labor big-ticket reforms that help the masses using the guise of sorting public finances for the national good. Move even more of the public wealth to the privately wealthy who fund the Coalition. Start annoying even the middle classes with their meanness, insularity and small mindedness. Get turfed out of office.

And off we go again.

When will we ever get a government with a social conscience AND a solid sense of public finance?

Never, I suspect, if the past three months is any guide.

Oozing charm from every pore, Abbott oiled his way into government. He never sincerely meant to match Labor’s big-ticket education and disability reforms. He merely want to neutralize them, and then after the election get out the little chisel, like Malcolm Fraser and John Howard before him, and tap away at Medicare, the Pharmaceutical Benefits Scheme, childcare and the general raft of Labor’s social changes hoping they would be undermined to extinction.

The cycle is getting worse.

The mass of research in economic psychology and health financing would tell any diligent Member of Parliament that a Medicare co-payment in the long term will do more harm than good and will cost the public purse more than it saves.

But the Calvanist mentality runs strong even in the now heavily Catholic Coalition ministry. Malcolm Fraser’s no free lunch is alive and well.

So everyone must pay $6 to go to the doctor.

Forget the administrative nightmare. Forget the exodus to free hospital emergency departments. Forget the further administrative nightmare in an emergency department if the $6 is applied there as well (in an attempt by the States to staunch the flow of people for whom $6 matters). Forget the likelihood that many people will delay or avoid going to a doctor if they have to pay $6 with a resulting higher future public health bill.

Sure, the Coalition has not adopted the plan which came from Terry Barnes, a former health adviser to Tony Abbott. But it has not yet said no to it.

This is another detestable aspect of modern politics – kite-flying. A policy is floated by a related third-party or by leaking to test popular reaction. If the reaction is too visceral, the kite can be brought to ground with no damage done.

The method shows that political parties are not interested in objective, evidence-based policy-making, but just seeing what they can get away with to further either their ideological aims or to help their constituency or donors.

There is no evidence of significant over-servicing in Medicare. To the contrary, cost is keeping people away, especially from dental care, for example.

There are, of course, circumstances when people will flock to a freebie with poor overall outcomes. All the first-home buyers schemes are good examples. People flocked to them and drove the price of housing up far more than the grant was worth.

In the old days, lazy people flocked to Tesltra’s free directory service making it untenable. The only way to stop them was to charge them and give some cash back for reasonable use by the disabled.

But this is not the case for doctors. By and large, people do not like going to the doctor. Moreover, doctors and their support staff are not fools. They can pick an over-servicer kilometres away and quickly devise methods of discouragement.

The whole thing smacks of a lack of empathy and understanding for the way the other half lives.

It is just like Malcolm Fraser’s attempt in the 1980s to thwart tax avoidance by imposing a penalty tax on children’s income. He saw the world through the eyes of a pastoralist splitting income among the off-spring, not the world of the boy with (in those days) a paper round to help with the family house-keeping.

On the Labor side, the lack of empathy with small business is equally lacking.

It is not the occasional going back on an election promise when circumstances change that irritates people. Rather it is the wholesale pre-election presentation of a political party’s aims to govern in the best interests of all and then afterwards divide the spoils among mates and supporters or pursue some blind ideological agenda irrespective of the general good or the evidence.

And please spare us hand-picked “independent” inquiries to come up with positions pre-determined by the government. We have a perfectly good Public Service and a raft of expert bodies like the Productivity Commission to provide evidence and advice on how to deal with problems of the day.

And over-servicing in Medicare is not one of them.


OUR household plan to do our bit for planet without inflicting any long-term personal pain has borne fruit. We have replaced 35 halogen 50 watt downlight globes with LED 5 watt globes. Our (hitherto embarrassingly astronomic) quarterly electricity bill has come down by more than $200. We also put in a more efficient swimming-pool pump.

Yes, I know, it all sounds a bit hypocritical. If I were serious I should wear a hair-shirt and live in a cave.

But the important point is that it is precisely the people with 35 halogen downlights and swimming pools that need to change their ways if climate change is not to ravage us all.

Unfortunately, the well-off can afford not to do it, and the less-well-off, on the other hand, cannot afford to do it.

Nonetheless, the prices of solar gear have come down so much in the past few years that even retrofitted LED lights and solar panels are a no-brainer. They pay for themselves very quickly and thereafter all is money saved – quite useful when the prospect of highly paid work is not indefinite.

And reducing the demand for coal-driven energy is a valuable side-effect.

The trick now is to work out how to apply this to rental properties where the tenant pays for the electricity but the landlord pays for the infrastructure.

And a word to Maurice Newman, the chair of the PM’s business advisory committee: this is not delusional, nor a religious climate crusade. It is just good sense.
This article first appeared in The Canberra Times on 4 January 2014.

{ 3 comments… read them below or add one }

Brian O'Donnell 01.05.14 at 9:24 am

Hi Crispin,
I think the answer to your question—When will we ever get a government with a social conscience AND a solid sense of public finance?—is when we stop accepting the Tory propaganda that the are the ‘repository’ of all fiscal wisdom.
The public has long accepted the simplistic idea that a surplus equates to good financial management and a deficit equates to bad financial management.
When the Howard government was removed from office they left a budget surplus – but it could be reasonably argued that the surplus was actually the result of bad financial management. It was largely produced by three things: being the highest taxing government in Australian history (bar none), drastically underspending on infrastructure maintenance and selling billions (that’s billions) of dollars worth of Commonwealth assets.
Then to poison the well for the next government, they cut taxes in an unsustainable way. So the next government faced a perfect financial storm, an infrastructure under-maintained, less tax revenue, fewer assets and just to top things off the greatest world-wide financial crisis since the great depression.
Now in that scenario what would we expect the outcome to be if the Labour government was as bad at financial management as the Tories say they always are?
What was the result? One of the best examples of economic management in the developed world and arguably the best economic crisis management in Australia’s history.
If the Tories had achieved that, we would never hear the end of it. But as it happens they would be most unlikely to have achieved such a good result if they had been in government. Why? Because they urged the government to do exactly the opposite of what they did do! So much for their supposed financial genius.
One could go on citing examples that demonstrate the Tories are not nearly as clever as they keep saying they are (on and on ad nauseam). Buying back the boats – surely one of the dumbest ideas of all time. Denying the obvious truth of Climate Change in the face of overwhelming evidence. Their cripple-ware version of the NBN etc.
If we point out the falsehoods in the propaganda and make their true ideologically driven agenda clear, then public opinion will eventually force them to change.

Inthe Know 01.05.14 at 11:08 am

I liked your article and agree with the see-saw of politics. Regarding Medicare, I agree that a surcharge will force people into Emergency depts. and to avoid treatment due to cost, and you are right, those who work already pay for the system through tax.

As to your comments about over servicing, yes it does happen, by the doctors not the patients. And gross overcharging is a big problem. Many doctors abuse the safety net which is designed to help families not struggling blue blooded doctors.

The Medicare safety net requires a huge overhaul. Obstetricians, eye surgeons, cosmetic and laser surgeons and psychiatrists are the worst. Some services in these categories already have caps applied by Medicare but the doctors manipulate the system for another loophole to exploit. Using day surgery as an outpatient service is a biggy also.

To allow themselves to charge exorbitant fees, they rely on the safety net to make it ok with the patient because the patient’s out of pocket cost is reduced by the safety net. The safety net only comes into play for outpatient services. More capping of services in these categories will save the Government millions.

Madonna 03.02.14 at 7:29 pm

Well out here in the bush, I already pay a co payment. No luxurious bulk billing here.
I think the gap is about $40.00. Safe national seat. No government love out here in the seat of wide bay.

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