Thursday, June 04, 2015

2016 Budget - I Really Suspect Will Be A Powerful Slow Burn Of Horror, As The Senate Seems Set To Be Difficult Again.

June 4 Edition
Budget Night was May 12, 2015.
Since then the selling has been at full throttle and we have all gradually come to grips with what it means for all sorts of groups. The selling now seems over and we are into the hard graft of getting what is proposed through the parliament.
The most important news this week came from this release.

Introduction of the Medical Research Future Fund Bill 2015

The Australian Government is focused on ensuring Australia’s best and brightest medical researchers remain at the forefront of developing treatments and cures.
Page last updated: 27 May 2015

Joint Media Release

Hon J B Hockey

Senator the Hon Mathias Cormann
Minister for Finance

Hon Sussan Ley
Minster for Health

27 May 2015
The Abbott Government is focused on ensuring Australia’s best and brightest medical researchers remain at the forefront of developing treatments and cures that will improve the lives of Australians and millions of people around the world.
Today, we introduce legislation to create the $20 billion Medical Research Future Fund – the biggest endowment fund of its kind in the world.
The Medical Research Future Fund is a landmark Coalition Government initiative. This is a game-changer for Australia and for Australians.
Subject to the passage of the legislation, the Medical Research Future Fund will be established from 1 August 2015.
The Fund will receive an initial contribution of $1 billion from the uncommitted balance of the Health and Hospitals Fund. In addition, the estimated value of savings from the Health portfolio will be contributed until the Fund reaches a target capital level of $20 billion, projected, to be in 2019-20.
The first $10 million in additional medical research funding is to be distributed in 2015-16 and over $400 million is estimated for distribution over the next four years.
The Fund will be invested and managed by the Future Fund Board of Guardians, which has a proven track record in managing investment portfolios on behalf of the Government and maximising returns over the long term.
The Government will separately establish an expert advisory board to provide advice on the medical research strategy and priorities to inform how annual distributions from the Medical Research Future Fund are to be spent.
----- End Release.
So there you have it - the Research Future Fund is being funded from savings made in the rest of the system - i.e. patient care, doctors pay, efficiencies etc.
The other worrying development is the increasing discussion that a recession is on the cards in the next year or two. That would make a serious mess of any budget projections!
Here are the other articles I found helpful this week.

General Budget Issues.

Abbott hits the campaign trail, bearing gifts for all

Phillip Hudson

Whether he calls an early election or not, Tony Abbott is in campaign mode. Since the budget the Prime Minister has visited nine marginal seats in six states, including electorates where he would not have been very welcome just a few months ago.
Four of the visits have been to Queensland where he was asked to stay away during January’s state election because he was considered “ballot box poison”, but with the demise of Campbell Newman the federal Coalition is getting a more positive response.
It helps that this year’s post-budget roadshow is all about giving away money with $5.5 billion for small business tax breaks unashamedly aimed at a voting bloc now known as “Tony’s tradies”, $4.4bn for families and childcare and a $5bn infrastructure loan scheme for northern Australia.

‘Hidden hit’ in Abbott Government’s ‘fair’ budget: poorer to be worse off

  • May 25, 2015 7:02AM
IT has been labelled the Budget’s “hidden hit”.
As the Abbott Government enjoys a bump in the polls for its self-styled “fairness” approach, new economic modelling suggests Australia’s poorest families and those with children will actually be hit hardest if Budget measures pass parliament unamended.
The Labor opposition commissioned the National Centre for Social and Economic Modelling (NATSEM) analysis which reveals the poorest families would lose about seven per cent of their disposable income.

NATSEM analysis shows federal budget to hit the poor hardest, while rich benefit

Date May 25, 2015 - 7:24AM

Gareth Hutchens

Families on lower incomes will be hit hardest by the budget, new modelling shows.
Families with children on the lowest incomes will bear the brunt of the federal government's budget cuts, while high income families will actually see their disposable incomes increase slightly over the next four years. 
New analysis from the National Centre for Social and Economic Modelling has shown how the government's budget consolidation - for the second year in a row - is being made at the expense of the less well-off.

Scott Morrison opens door to welfare deal with Senate

David Crowe

The federal government has opened the door to a compromise on a $3.6 billion cut to family tax benefits, amid an escalating ­political fight over budget savings, with Tony Abbott hitting back at new claims his reforms will punish households on average incomes.
A deal on petrol excise is also in prospect as the Greens make it clear they would consider a mod­ified version of the government’s tax increase, after formally deciding to block the $2.4bn measure in its current form.
The Australian has been told that changes to Family Tax Benefit Part B have been canvassed in meetings with crossbench senators to secure the legislation, scaling back a change that would halt payments to households when their youngest child turns six.

Today’s budget winners may lose tomorrow

A crisis is building up in Australian government finances. It’s not an immediate crisis, as Joe Hockey claimed in his budget speech a year ago, lamenting the legacy Labor governments have left him. But if strong action isn’t taken, we’re on track for a doozy of a budget problem in a decade or so — and it’s already complicating long-term investment planning, especially preparation for retirement.
Currently, government debt is comfortably low. But it’s rising quickly. The combination of weak political leadership, a populist Senate and the public calling for more government spending but without higher taxes, leave us with the prospect of unsustainably high budget deficits over the medium term and longer.
Check the gaps between what politicians have promised and what they’ve delivered — and then consider the perceptive warning in the final quote:

Joe Hockey's populist push on GST exposes the problem with politics

Date May 27, 2015 - 12:16PM

Mark Kenny

Chief political correspondent

In the perennial tussle between policy and pragmatism, the latter is usually preferred by politicians whose personal polling points to peril.
Abbott, who praised Hockey in the Liberal party room over the budget, must surely be frustrated. 
This pathetic principle explains the perverse policy improvisation by Treasurer Joe Hockey on Q&A on Monday night when he preferred narrowing rather than broadening the goods and services tax through the exemption of tampons and related intimate products. 

I wasn’t panicking about the economy … until now

10:00pm, May 29, 2015
Jason Murphy
New figures from the ABS paint a grim picture of the Australian economy.
This graph makes my tummy turn into a knot.
It shows how much money business in Australia expects to invest. Businesses invest in new trucks, new computers and new buildings. Investment is what makes businesses grow, what makes the economy grow.
The white columns are spending plans, the grey columns are cold reality. Looking at those last two small white columns, we see business is terrified.

Joe Hockey waiting on a tradie miracle

Date May 29, 2015 - 6:00PM

Michael Pascoe

The Business Week that was

The end of Capex shock week saw a new world of nightmares open up for Treasurer Joe Hockey. Michael Pascoe comments.
It's not even three weeks old, but after a happy birth, Joe Hockey's second budget has been sent to the sick bay by the latest private fixed capital expenditure data.
Various budget clinicians are shaking their heads, some even daring to offer a gratuitous R-word diagnosis, albeit couched more softly and somewhat oddly as "recessionary".

Deficit decade: Tony Abbott's $100 billion black hole

Date May 29, 2015 - 6:21PM

Mark Kenny

Australia faces more than decade of uninterrupted deficits according to an updated assessment by the independent Parliamentary Budget Office that shows Senate intransigence will carve a $100 billion black hole out of revenue between now and 2025-26.
Savings not realised as a result of parliamentary gridlock suggest the budget prediction of a near fiscal balance by 2018-19 is overly optimistic because it is based on budget repair initiatives that have not been legislated and, in many cases, are unlikely to ever pass the Parliament.
The PBO's assessment lists out the proposals such as welfare cuts and major higher education reforms already factored into the current budget projections as savings but which are not yet approved, in a table entitled "unlegislated measures carried forward from the 2014-15 budget".

Federal changes to hospital funding will 'cost 8000 doctors and nurses'

Date May 30, 2015 - 4:16PM
Queensland Health Minister Cameron Dick has slammed federal government changes to public hospital funding, saying they will take more than 8000 doctors and nurses out of the state's health system.
Mr Dick says changes to the way the federal government will fund hospitals from 2017/18 will remove the equivalent of 8337 jobs for doctors, nurses and health practitioners from the Queensland health system by 2024/25.
He told the Australian Medical Association's national conference in Brisbane on Saturday the change would shift the burden of Australia's ageing population on to states and territories.

Tony Abbott still struggling to get Senate support for budget measures

Date May 31, 2015 - 12:15AM

Adam Gartrell

Almost three weeks into its budget sales job the Abbott government is still struggling to secure Senate support for some of its key proposals, leaving billions of dollars of savings in doubt.
The government's age pension changes, childcare package, cuts to paid parental leave and plan to impose a one-month wait for the dole all still face an uncertain fate in the upper house.
While crossbench negotiations are set to ramp up even further in the coming weeks, it looks increasingly likely the government will be forced to abandon or heavily amend some of its plans. The latest crossbench talks come after the Parliamentary Budget Office warned Senate intransigence could carve a $100 billion black hole in revenue in the next decade.

Health Budget Issues.

Medibank scraps GP Access program

22 May, 2015 Flynn Murphy
Medibank will scrap its controversial GP Access program on 31 July.
The trial, which at its peak operated in 26 IPN GP clinics, guaranteed Medibank-insured patients GP appointments within 24 hours, no out-of-pocket expenses and free after-hours GP access.
It was attacked for setting a precedent that critics argued would erode clinical autonomy and undermine universal access to healthcare.

Medibank dumps GP access trial

Date May 25, 2015 - 11:56AM

Dan Harrison

Health and Indigenous Affairs Correspondent

Medibank has abandoned a controversial trial which gave its members preferential access to GPs.
The nation's largest private health insurer has announced the GP Access pilot, which guaranteed Medibank members same day GP appointments and after hours home visits with no out of pocket costs, would cease on July 31.
The trial had been the subject of fierce controversy since its launch in October 2013, with consumer advocates arguing the move eroded universal healthcare because people with private cover would get a better standard of care than those without insurance.

Medibank Private seeks answers for cost blowouts

Sean Parnell

Australia’s largest health insurer, Medibank Private, wants to know how surgery can cost more than 70 per cent more in one hospital than in others.
The health fund is calling for an industry-wide program to improve quality and efficiency after its analysis of 2014 admissions shows significant variations in hospital provider charges, prostheses charges and medical provider charges, even taking into account complications and averaging the top 5 per cent and bottom 5 per cent of bills.
The analysis found an appendectomy, for example, cost between $7500 and $12,500 in a metropolitan hospital (67 per cent difference), and between $7500 and $11,000 in a regional or remote hospital (47 per cent difference). A hip replacement cost between $29,000 and $49,500 in a metropolitan hospital (71 per cent), and between $29,000 and $44,000 (52 per cent) in a regional or remote hospital.

Brian Owler: Budget of discontent

Brian Owler
Monday, 25 May, 2015
THE 2015 federal Budget is getting a much better reception than last year’s model, with opinion polls showing it has given the government a popularity boost.
But the health announcements in the Budget have received a much cooler response, due mainly to the lingering effects of the freeze on Medicare patient rebates, which will stay in place until 2018.
Winter is coming. For doctors and patients, it could be a very long one.
The big problem with this year’s health budget is that the small target approach has been completely overshadowed by last year’s devastating blows to the heart of the health system — the copayment, now gone, the massive cuts to public hospital funding and, of course, the rebate freeze.

After-hours PIP cash amounts revealed

25 May, 2015 Paul Smith
The Federal Government has revealed what it will pay practices for offering after-hours care under the revamped  Practice Incentives Program.
Under the reformed scheme, there will now be five tiers, rather than the three tiers used under the previous after-hours PIP that was scrapped in 2013.
The payments will be linked to the number of patients on the practice's books, which will be calculated using Standardised Whole Patient Equivalents (SWPEs).

Government defends health funding changes

Health Minister Sussan Ley insists changes need to be made to Medicare and public hospital funding before the system reaches a crisis point.
Ms Ley denied on Friday the government was "pulling the rug" out from public hospitals but says efficiencies need to be found with unnecessary presentations costing $3 billion a year.
She told the Australian Medical Association's national conference in Brisbane the government wanted to work with doctors but needed to look at the health system maturely and clean it up.

Pharmacy Issues.

PM told to act on deregulation

25 May, 2015 Chris Brooker
One week on from the in-principle signing of the Sixth Community Pharmacy Agreement and media reports are already calling for the government to implement a pharmacy reform agenda.
A report in the Australian Financial Review is questioning why the 6CPA contains a planned two year review of pharmacy location rules and remuneration structures.
Author Alan Mitchell contends that “both the problem and the answer are pretty obvious”. In other words, deregulation.
He says the Pharmacy Guild of Australia should have used Prime Minister Tony Abbott’s (pictured) current political weakness to “secure a more generous exit subsidy for the less economically efficient pharmacists.” 

PBS changes: drug prices to drop, push for generics

Date May 27, 2015 - 1:05AM

Dan Harrison

Health and Indigenous Affairs Correspondent

Consumers will pay up to 50 per cent less for many common medicines under changes to the Pharmaceutical Benefits Scheme to be announced by Health Minister Sussan Ley on Wednesday.
The changes are also expected to save the budget about $3 billion over five years by encouraging consumers to choose cheaper, identical generic versions of off-patent drugs and less expensive similar drugs.
Ms Ley will introduce legislation to enact the changes on Wednesday after inking five-year deals with the Pharmacy Guild and the Generic Medicines Industry Association. Negotiations with the patented medicines industry, represented by Medicines Australia, were still underway on Tuesday night, but it is understood Ms Ley is determined to also implement changes to how patented drugs are priced, with or without the industry's agreement, given these are the most expensive drugs on the PBS.

Sixth Community Pharmacy Agreement is solid outcome: Quilty

Once implemented, the 6CPA will provide a more certainty for community pharmacies to continue investing, employing and high quality health care for the next five years, says David Quilty.

The Guild national executive director wrote in this week’s edition of Forefront that the Guild believes the 6CPA represents a solid outcome for the profession.
“Like previous community pharmacy agreements, the 6CPA covers the issues of pharmacy remuneration for dispensing Pharmaceutical Benefits Scheme and Repatriation Pharmaceutical Benefits Scheme prescriptions, pharmacy wholesaler remuneration including the Community Service Obligation, Pharmacy Location Rules and professional programs and services,” Quilty writes.

Agreement pros and cons

27 May, 2015 Chris Brooker
Pharmacists will be incentivised to offer patients cheaper generic medicines, the Health Minister has revealed.
However, the newly signed 6CPA will see pharmacists offered the controversial $1 ‘optional’ patient co-payment discount.
Health Minister Sussan Ley announced today the signing of landmark agreements with both the community pharmacy sector (the 6CPA) and the Generics Medicines Industry Association (GMIA).

Guild wins $1bn for pharmacist patient care

Pharmacists have won more than a billion dollars from the Federal Government for a major expansion of their role in patient care.
Despite her warning of a fiscal meltdown if spending is not controlled, Health Minister Sussan Ley (pictured) will sign the 6th Community Pharmacy Agreement on Wednesday, which will see pharmacies get $1.26 billion for “professional services”.
Double the funding under the previous agreement, the new deal will see pharmacies receiving payments for providing dose-administration aids, advice to prevent medication adverse events and payments for home medication reviews.
  • May 27 2015 at 3:28 PM
  • Updated May 27 2015 at 8:16 PM

Pharmacy Guild wins $2.8b at the cost of drug makers

Drug makers will bear the brunt of around $6.6 billion in savings to be channelled into new drugs and higher returns for pharmacists – who will not face any full-scale assault on their competitive position – under a pharmaceuticals deal finally struck by the Abbott government.
Health Minister Sussan Ley said the deal would deliver "cheaper medicines, a more competitive pharmacy sector and greater investment in new medicines and patient support services" as part of the package.
But consumer groups immediately warned it meant patients would pay billions of dollars more for prescriptions. The pharmaceutical industry greeted the deal with a sullen, if resigned, assertion that it had gained assurances about certainty in price changes for agreeing to the cuts.

The price of hundreds cheap medicines will rise by 40 per cent under new pharmacy deal

  • May 28, 2015 12:30AM
  • Sue Dunlevy
THE price of antibiotics, blood pressure pills and hundreds of other medications will rise by over 40 per cent from July 1 as a result of an Abbott Government agreement with chemists.
The price rise for consumers and taxpayers results from a government decision to replaced the 15 per cent mark up component of a chemist’s fee with a flat $3.49 “administration and handling fee”.
This new fee will drive up the price of low cost drugs such as antibiotic amoxycillin from $8.29 per script to $11.75 per script. Hundreds of other low cost drugs that cost the government less than $23 a script will also be affected.
General consumers will pay the extra out of their own pocket but when a pensioner buys the medicine the taxpayer will pick up the extra tab.

New drug deal will sweeten PBS fix

Stefanie Balogh

The government will bank $3.7 billion in savings from its reforms to the Pharmaceutical Benefits Scheme, arguing that the drive to encourage Australians to switch to generic drugs is part of the push to make medicines more affordable.
Health Minister Sussan Ley, who has now finalised the $18.9bn sixth community pharmacy agreement, said the package would deliver $6.6bn in savings over five years but $2.8bn would be reinvested in the pharmacy sector, including pharmacy-run primary care programs.
The agreement, which was revealed by The Australian, averts a war with powerful drug companies, which have agreed to a one-off 5 per cent discount on the price paid by the government after a medicine has been on the PBS for five years.

AMA wants GPs paid to hire pharmacists

28th May 2015
THE AMA wants the government to pay general practices up to $187,500 a year to employ pharmacists as part of a new funding model that would save the health system $1.56 for every dollar invested.
A Pharmacist in General Practice Incentive Payment (PGPIP) plan unveiled by the AMA today would pay clinics $25,000 a year per 1000 Standardised Whole Patient Equivalent (SWPE) for hiring pharmacists for a minimum of 12 hours and 40 minutes per week.
Rural loadings up to 50 per cent would apply in the same way as for the Practice Nurse Incentive Programme (PNIP).
It is going to be very interesting to see what happens to the polls and consumer confidence over the next 2-3 months - especially if we see the Senate knocking more savings back as is seeming likely! Already there was a small drop in confidence this week.

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