Budget Night was on Tuesday 13th May, 2014 and it is still not finalised.
Both major health and education changes as well as pension changes are still stuck and we have a new Families Package being floated . Also we have only 2 sitting weeks in Parliament before the next Budget - due to be handed down Tuesday 12th , May 2015.
The big news last week has been the so called Intergenerational Report which tries to look out 40 years and work out where we will be. These are the same guys who brought you failed budgets and (for Labor) all those promised surpluses. Let’s face it forecasting 3-4 years out is a strain - so you can assume virtually all the figures are wrong - even the demographics which have the highest chance of being somewhere near the mark!
Here is some sensible analysis:
Intergenerational report: Grey army marches to our rescue
Peter Martin, James Massola
Beneath all the talk about finances, beneath the spin about which side of politics would handle Australia future better, this week's Intergenerational Report contained a disturbing truth: the day is fast approaching when a much smaller proportion of the Australian population will be able to work than we've become accustomed to.
Treasurer Joe Hockey said on Thursday the point of the Intergenerational Report, or IGR, was to "begin a conversation with the Australian people; every town hall, every street corner, over every barbecue, we want Australians to embrace the future. It's a great future. Our nation has a fantastic future, but we've got to own it".
But in his framing of the report Mr Hockey has also made clear the IGR - which set out two "sliding door" scenarios that show a ballooning debt under the former Labor government's policy settings and net debt paid off by 2031-32 if all of the Coalition's first budget had been passed by the Senate - has a political purpose.
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Think about it - even just 10 years ago there were no iPads or iPhones and Facebook was a startup. Now Apple is the largest company in the world - and has finally been admitted to the DOW index replacing AT&T! How can you have even the remotest clue about 40 years out? Short answer it is a huge guess!
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Articles this week include.
General Budget Issues.
Trans Pacific Partnership will push medicine prices up, review finds
Date March 3, 2015 - 8:39AM
Peter Martin
Economics Editor, The Age
The proposed Trans Pacific Partnership is likely to push up the price of medicines, stop some Australians from taking their medicines and make it harder to restrict the sale of tobacco and alcohol, a comprehensive review of the deal between Australia and 11 other nations including the US and Japan has found.
The so-called health impact statement, compiled by the Centre for Health Equity Training Research and Evaluation at the University of NSW relies on leaked texts of draft chapters of the agreement Australia is preparing to seal within weeks.
Although its stated aim is to bring down trade barriers and allow mutual recognition of standards, many of its provisions deal with medicines and make it difficult for member countries to move against foreign-owned corporations.
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Debt bomb in Australia set to explode unless Federal Government takes tough action
- Samantha Maiden National Political Editor
- The Sunday Telegraph
- March 01, 2015
AUSTRALIA faces a debt bomb so huge it will represent half the nation’s entire economy within two decades unless tough action is taken, according to Joe Hockey’s intergenerational report.
The long- awaited report has delivered a stunning warning to Labor, the Senate and voters on the huge challenges the nation faces if political leaders fail to act.
Prime Minister Tony Abbott dropped a hint yesterday the unpopular Medicare co-payment would be dumped, admitting it was “no secret’’ he was rethinking the policy.
However, the intergenerational report warns higher taxes or lower spending on health and education face future generations unless tough action is taken now.
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BCA backs long-term budget fix
- The Australian
- March 03, 2015
David Crowe
THE federal government is being warned against making savage cuts in the May budget as Tony Abbott resets his economic message, with the Business Council of Australia calling for “modest” action this year in favour of deeper savings over the decade ahead.
In a major shift in the budget debate, the nation’s peak business group will today urge a slower strategy to repair the nation’s finances based on a “10-year perspective” to assure Australians there is a path from crippling deficits to lasting surpluses.
The BCA position throws new weight behind an approach being taken by the Prime Minister and his top economic ministers to focus its next reforms on long-term savings rather than repeating the unpopular cuts that ignited political resistance to last year’s budget.
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Ministers ditch the doom and gloom to talk up the economy
Date March 2, 2015 - 4:08PM
Fergus Hunter
While the numbers and projections seem to paint an ever worsening picture of Australia's budgetary position, the government's rhetoric appears to be growing more positive.
According to Department of Finance figures released at the end of February, Australia's net government debt was at $252 billion in January – more than 40 per cent higher than at the end of 2013.
Leaked figures from the upcoming Intergenerational Report reportedly show that, without significant change, net debt would reach 50 per cent of Australia's economy within 20 years, compared to the roughly 15 per cent it is now.
Wind back the clock and the government's tone reflected this. A "budget emergency" with "debt and deficit stretching out as far as the eye can see" was used to justify many tough and unpopular budget measures such as university fee deregulation, the Medicare co-payment and changes to welfare and pensions.
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Coalition needs to junk its feigned 'budget black holes' and business-stacked commissions of audit
Date March 2, 2015 - 8:45PM
Richard Mulgan
Business leaders who demand radical, unpopular policies do conservative politicians no favours.
The defeat of Queensland's LNP government and the near-fatal wounding of Coalition Prime Minister Tony Abbott have together dealt a major blow to business confidence in Australia. Both events were quite unforeseen as the country's movers and shakers took their usual long summer break, enjoying the cricket and tennis and spending time with families and friends. In the space of just over a week, political expectations were shattered and assumptions about government intentions thrown into confusion.
The crisis in confidence is not just about government policy directions. Such lack of clarity is not uncommon in the rough and tumble of democratic politics and is a regular factor in corporate decision-making, along with the many other variables affecting commercial markets. This time the doubts strike much more deeply, into long-held views about the relationship between the business community, represented by major companies, such as members of the Business Council of Australia, and the political system.
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‘Secret’ trade deal will drive up medicine costs: report
3rd Mar 2015
PUBLIC health and consumer groups have stepped up demands for details about a secretive trade deal with the US, Japan and other Pacific nations, saying it could raise the costs of medicines in Australia and weaken the nation’s ability to regulate alcohol, food and tobacco.
The Public Health Association of Australia (PHAA), consumer advocate CHOICE and about 20 other groups have seized on a health impact assessment, released today, to pressure the government for transparency about the Trans-Pacific Partnership Agreement (TPP).
They suspect an accord could favour giant multinational corporations over consumers and pave the way for private interests to undermine Australian policies such as plain-packaging rules for cigarettes and subsidised medicine.
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Intergenerational Report.
Intergenerational report: Abbott says Coalition has made progress in reforms
PM says Australians should take an optimistic view of long-term finances and that while there is a ‘very big budgetary challenge, a very substantial start has been made’
Lenore Taylor, political editor
Sunday 1 March 2015 19.23 AEDT
The prime minister has painted a much more positive picture of this week’s intergenerational report than his own treasurer, saying that it would show Australia faced a “big challenge” but also that a “substantial start” had been made by the coalition’s first budget.
Joe Hockey said recently the same document would cause Australians to “fall off their chairs” because despite the government’s efforts “we still don’t get anywhere near being able to reduce spending over the medium-term to the same level that exists today”.
Abbott also said the document would include a comparison of what the budget would have looked like under the former Labor government’s policies and how it stands under the current government’s policies – something previous intergenerational reports have not done.
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Abbott government spends $380k on focus groups to fine-tune Intergenerational Report
Date March 2, 2015 - 6:34PM
Peter Martin, Gareth Hutchens
The federal government is so concerned about the presentation of this week's Intergenerational Report that it has spent $380,000 on focus groups to test reactions.
The contract was awarded to consultants Hall & Partners Open Mind, whose website says it specialises in brand and communications research with "fresh new approaches to measuring consumer engagement and participation with brands".
A Senate hearing was told last week that Hall & Partners had conducted 30 focus groups on the report since November.
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Intergenerational report: Health spending to soar but causes lie in wages and disease rates
Date March 6, 2015 - 8:21AM
Dan Harrison
Health and Indigenous Affairs Correspondent
Federal government health spending will more than double in real terms over the next four decades but the Treasury expects ageing to contribute only 10 per cent of this projected increase.
The intergenerational report projects under the current policy settings, real health spending per person will grow from $2800 in 2014-15 to $6600 in 2054-55. Over this period, federal government health spending will grow as a proportion of economic activity from 4.2 per cent to 5.7 per cent. This reflects a shift in the mix of health services, away from hospital care, which get most of their funding from states and territories, and towards primary care and pharmaceuticals, which are federally funded.
The report says under the policy settings in place before the Abbott government's first budget, federal government health spending would have risen to 7.1 per cent of economic activity by 2054-55.
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A chance to open up the debate we really have to have
- The Australian
- March 06, 2015
Paul Kelly
THERE is only one way to interpret the Intergenerational Report — it is a relentless argument for new spending saves to achieve the overall impact of the 2014 budget measures. Treasurer Joe Hockey was emphatic on this point yesterday.
This is the report that Tony Abbott and Hockey needed a year ago. It explains the problem their deeply unpopular budget tried to solve.
It shows the May 2014 budget savings are essential for long-run fiscal integrity, yet it is the harshness of these savings that has triggered Abbott’s famous policy retreat and recasting.
In this sense the IGR reveals the contradiction at the heart of the Abbott government.
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Political Instability.
Julie Bishop is the 'safe' choice if Tony Abbott loses leadership, backers say
The foreign minister is being presented to conservative Liberals as the candidate who would cause the least disruption, as party enters deal-making phase
Lenore Taylor, political editor
Sunday 1 March 2015 14.24 AEDT
Julie Bishop is being touted as the “safe” Liberal leadership candidate who would deliver minimal frontbench upheaval and greater party unity, as more conservative Liberals conclude Tony Abbott cannot save his prime ministership.
Malcolm Turnbull remains the clearly favoured alternative, but the Liberal party has entered a phase of complicated backroom deal-making as frontbenchers calculate what a leadership change would mean for their own positions and the conservative wing considers what a Turnbull prime ministership would mean for the government’s policy direction.
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Tony Abbott’s poisoned policies on notice
- The Australian
- March 02, 2015
David Crowe
POLICIES will be put up for review as Tony Abbott acts this week to revive his political fortunes by dropping his most unpopular budget change and scaling back others blocked in the Senate.
A move to scrap the GP co-payment will be the first step in a wider recovery plan that will include an overhaul of other budget measures that are dragging down the government as Mr Abbott tries to fend off talk of another leadership spill.
The government is considering how to modify its controversial proposal to force young jobseekers to wait six months before receiving unemployment benefits, while also negotiating changes to university reforms that reduce public funding and increase fees.
Some policies will be allowed to “fall by the wayside” as cabinet ministers meet tonight to discuss the government’s political challenges, in a session where Mr Abbott is expected to clear the room of officials to allow a candid discussion.
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Health Budget Issues.
Health Policy Stagnation
Brian Owler
As Health Minister Sussan Ley engages in consultation with health and consumer groups about the Government’s GP co-payment and other Medicare changes, work on other areas of the health system is in stagnation. There is a vacuum as far as health policy is concerned.
The co-payment has sucked the life out of health policy development, discussion, and debate. This has not only been detrimental to the Government, it is also harmful for the practice of medicine and for our patients.
Minister Ley was thrown somewhat of a hospital pass when she took on the portfolio. Her attempts to consult and develop something more akin to health policy are laudable. However, it means she has little time to devote to the many potential crises brewing in her broad portfolio – and many crises there are.
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Time to revisit the Medicare reform conversation
Date March 3, 2015 - 4:31PM
Terry Barnes
Since the Abbott government's election, only one issue in relation to the future of Australia's health system has been on the public radar.
That's charging a minimum co-payment for general practitioner services, including those that are currently bulk-billed and free to patients when they go to the doctor.
Until the idea was dropped on Tuesday, the GP co-payment has dominated political discussion for over a year. It became a key factor in the collapse of the political standing of Prime Minister Tony Abbott and his government. Few expected it to be a centrepiece measure in last year's budget, and fewer still expected the Frankenstein's monster of a measure that the government put together.
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Private health patients face doubling of excess cost for a hospital surgery
- March 08, 2015
- John Rolfe Cost of Living Editor
- News Corp Australia Network
EXCLUSIVE: The cost of going to hospital for an operation as a private patient could double to as much as $2000.
The private health insurance regulator has set out the case for deregulating the “excess” payable on admission in a document that has only come to light due to freedom of information laws.
The current excess cap on a family policy is $1000 and $500 for singles cover. These haven’t increased since 2000.
“Over time, the real value of the maximum excess has been eroded by inflation”, the Private Health Insurance Administration Council says in the discussion paper. As a share of earnings it has halved, PHIAC notes.
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Medicare Co-payment Issues.
New funding model for GPs to replace co-pay
Joanna Heath
Health Minister Sussan Ley could end Medicare's universal "fee for service" approach and pay GPs a lump sum per patient, rather than for each visit under a replacement plan being considered for the government's unpopular $5 co-payment proposal.
In an attempt to reduce the churn of so-called "six-minute medicine", the new model would pay GPs an amount in advance annually to look after some patients, most likely the chronically ill.
This would replace the per-service Medicare rebate charge, and has been introduced in other countries to incentivise GPs to improve patients' health faster rather than see them as many times as possible to maximise income. The patients themselves would most likely fit into categories that are routinely bulk-billed.
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GP co-payment set to be dropped as the Coalition mulls blended system
The government is considering moves towards a system that would incorporate user-pays, rebates and upfront government payments
Tuesday 3 March 2015 09.52 AEDT Last modified on Tuesday 3 March 2015 10.44 AEDT
The federal government is set to confirm that its controversial GP co-payment has been dropped, and is looking at longer-term savings measures, including a “blended payment” model.
Ending the current fee-for-service model and instead paying doctors in advance for patients who are chronically ill or have special requirements is one option on the table, as the government considers moves towards a blended system that would incorporate user-pays, rebates and upfront government payments.
The health minister, Sussan Ley, has been discussing ways to find savings, including giving rebates to doctors rather than patients, with the Australian Medical Association (AMA).
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Tony Abbott delivers rebuke to cabinet minister Peter Dutton over GP co-payment saga
Date March 3, 2015 - 2:46PM
James Massola and Dan Harrison
EXCLUSIVE
Prime Minister Tony Abbott has used a cabinet meeting to deliver a thinly veiled rebuke of Peter Dutton over the former health minister's handling of the GP co-payment.
This issue has been mishandled, it has been mishandled until now
The Abbott government finally killed off the unpopular GP co-payment proposal after several attempts to reach agreement on different versions of the controversial charge failed.
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Coalition working on fifth incarnation of Medicare policy after co-payment killed
Prime minister tells question time the latest attempt to introduce a co-payment is ‘dead buried and cremated’ and a new ‘value signal’ would be developed
Lenore Taylor, political editor
Tuesday 3 March 2015 15.43 AEDT Last modified on Tuesday 3 March 2015 15.46 AEDT
The Abbott government is now working on a fifth version of its Medicare policy after the prime minister declared its latest attempt to introduce a co-payment “dead buried and cremated” but the health minister said she had not finalised an alternative to achieve the same policy aims.
The government is retaining a freeze on the Medicare rebate that would force doctors to abandon bulk billing over time unless they finally agree to alternative budget savings – and it says its policy goal to restrict bulk billing to the “vulnerable” remains.
The health minister, Sussan Ley, said she was still negotiating with doctors about alternative Medicare savings as she abandoned the fallback policy of a $5 rebate cut announced by the prime minister last December and “put on hold” in January.
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3 March 2015, 11.01pm AEDT
Medicare co-payment: a case study in policy implosion
Michelle Grattan
Tony Abbott was in full confessional mode after Tuesday’s formal interment of the Medicare co-payment.
As a former health minister, “I should have known better than to attempt health reform without the strong co-operation and support of the medical profession”, Abbott told parliament.
“I accept chastisement,” Abbott said. “But it is much better to learn than to be obstinate.”
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Dumped Medicare co-payment policy to cost $1bn
- The Australian
- March 04, 2015
Sid Maher
TONY Abbott has accepted “chastisement’’ and dumped the GP co-payment but maintained a freeze on Medicare payments to general practitioners, a move doctors have warned will cut the rate of bulk-billing and hurt practices in vulnerable suburbs.
The Prime Minister said the copayment would not return but the government would continue consulting with the medical profession about how to make the Medicare system sustainable in the future.
Mr Abbott accepted responsibility for the backflip, declaring: “I should have known better than to accept health reform without the strong co-operation and support of the medical profession’’.
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Lazarus or zombie? The GP fee is rising from the dead
- March 04, 2015
- Sue Dunlevy National Health Reporter
- News Corp Australia Network
THE government has dumped its unpopular $5 GP fee, but is now considering a new way to introduce an upfront charge to see a doctor via a direct billing system.
Prime Minister Tony Abbott said on Tuesday the $5 GP co-payment was “dead, buried and cremated” but his health minister Sussan Ley still wants general patients to pay “a modest contribution” to see a doctor.
News Corp Australia understands the government is now considering a direct billing system that would change Medicare’s rules to allow doctors to introduce their own GP copayment.
It would be voluntary and doctors could decide how much they would charge. Such a charge would boost doctors incomes and while it wouldn’t save the government money it would have the support of the Australian Medical Association.
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Co-payment may be ‘dead and buried’ but GP cuts still on cards
- The Australian
- March 05, 2015
Sid Maher
THE Abbott government wants to cut the number of well-off patients who are bulk-billed by doctors, limiting free visits to concession-card holders and children.
Health Minister Sussan Ley yesterday backed Tony Abbott’s declaration that the GP co-payment was “dead’’ but indicated that the government wanted to reduce the 75 per cent of doctor visits by non-concession patients that are bulk-billed.
Reducing the bulk-billing rate for non-concession-card holders would force more people to pay upfront to see a GP and then claim a rebate back from Medicare, a move which would impose a de facto price signal on those forced off bulk-billing.
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Co-pay policy: the known knowns, the known unknowns
If you are suffering from co-pay backdown concussion, here is a brief guide of what's in, what's out and what's still speculation.
Known knowns
Rebate cut:
The $5 cut to rebates for GP attendance items is gone, or in Prime Minister Tony Abbott’s words, it is "dead, buried and cremated".
The $5 cut to rebates for GP attendance items is gone, or in Prime Minister Tony Abbott’s words, it is "dead, buried and cremated".
So there will be no cut this year to GP attendance item rebates for non-concessional patients as the Federal Government originally threatened last year.
The move, had it gone ahead, was apparently going to remove $1 billion of expected Medicare funding for GP care over the next four years.
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How we can save billions of dollars from health spending without a GP fee
- March 07, 2015
- Sue Dunlevy National Health Correspondent
- News Corp Australia Network
PRIME Minister Tony Abbott said this week he “should have known better” than to try and introduce a $7 fee to see the doctor, and he was right.
A quick tour of Australia’s political history shows politicians who try to make people pay to see a doctor put their survival at risk.
In 1991 Bob Hawke’s attempt to introduce a $3.50 Medicare copayment became the focus of Paul Keating’s successful campaign to depose him.
In 2004 John Howard came under pressure when the GP bulk billing rate plunged to 67.6 per cent (it’s 82 per cent today).
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Pharmacy Issues.
Audit office criticises health department's handling of $15 billion pharmacy deal
Date March 6, 2015 - 8:29AM
Dan Harrison
Health and Indigenous Affairs Correspondent
The federal health department has been criticised by the Australian National Audit Office for its administration of a $15 billion agreement with pharmacists.
The report on the Fifth Community Pharmacy Agreement, tabled in parliament on Thursday, comes as the department negotiates a new five-year deal with the powerful Pharmacy Guild of Australia.
The current agreement provides $15.4 billion over five years to pay pharmacies to dispense medicines, pay pharmaceutical wholesalers to deliver medicines to pharmacies, and to fund professional programs. It expires on June 30.
The audit office identified several shortcomings in the department's administration of the agreement, including miscalculating the amount of savings to be delivered by the agreement, failing to fully realise a number of government negotiating objectives, and poor record keeping.
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Guild disputes audit report savings conclusions
The Pharmacy Guild of Australia has broadly welcomed the findings of the delayed Australian National Audit Office (ANAO) report into the Fifth Community Pharmacy Agreement.
However the report, tabled in parliament today, is critical of a number of aspects of the 5CPA process and oversight mechanisms.
The Department of Health was slated for its poor record keeping of the negotiation process, deficient risk management and its failure to seek ministerial approval for changes to 5CPA fund allocations.
While indicating general agreement with many of the report’s conclusions, the Guild disputes its estimates of 5CPA budget savings.
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http://www.afr.com/p/national/politics/scathing_audit_threatens_multi_billion_S8el54vzAQe2DYBJmMqDhO
Scathing audit threatens multi-billion dollar pharmacy deal
Joanna Heath
Health Minister Sussan Ley has threatened to blow open negotiations for a fresh five-year multi-billion dollar deal with pharmacy owners for distributing subsidised drugs, which could substantially weaken the influence of one of the most powerful lobby groups in Canberra.
On Thursday the Auditor-General published a scathing report into the administration of the Fifth Community Pharmacy Agreement struck in 2010, finding it failed to deliver forecast $1 billion savings to the government and was beset with administrative errors.
The Pharmacy Guild, which represents pharmacy owners, is well-known in Canberra for its hardball lobbying tactics and grassroots electoral campaigns against parliamentary critics. Negotiations for the sixth agreement to come into force in July this year have only just begun.
Ms Ley said she was deeply concerned by the findings of the report and threatened an inquiry if a full explanation of the shortcomings was not given.
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5CPA funds not 'funnelled' inappropriately: Guild
The Pharmacy Guild of Australia has dismissed calls for Sixth Community Pharmacy Agreement negotiations to be delayed in the wake of the Audit Commission report.
The Australian National Audit Office report, released yesterday, raised concerns over aspects of the administration and negotiation of the Fifth Community Pharmacy Agreement.
Its claims of 5CPA money being moved between programs without ministerial approval and lack of documentation of key areas of negotiation have led to calls for 6CPA negotiations to be halted while an inquiry is held into the report findings. The Consumers Health Forum and Professional Pharmacists Australia are among those advocating such a step.
However the Guild says the report included “no adverse findings” against its implementation and use of 5CPA programs and funds.
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Sussan Ley says Labor has questions to answer over $15b pharmacy deal
Date March 6, 2015 - 6:08PM
Dan Harrison
Health and Indigenous Affairs Correspondent
Health Minister Sussan Ley says Labor has "serious questions" to answer about a $15 billion deal struck with pharmacists under the Rudd Government, following an audit which identified several shortcomings in the administration of the agreement.
The Australian National Audit Office report, tabled in parliament late on Thursday, criticised the federal health department for miscalculating the amount of savings to be delivered by the agreement, failing to fully realise a number of government negotiating objectives, and poor record keeping.
The report comes as the department negotiates a new five-year deal with the powerful Pharmacy Guild of Australia.
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Comment:
I also have to say reading all the articles I still have no idea what is actually going to happen with the 2015 (or the 2016) Budget (or the Government) at the end of the day. With the Co-Payment gone but the need for Budget savings continuing we have to ask what next?
One wonders for how much longer all this will go on and just what impact a apparently almost inevitable change of leader might have? I think that change is still coming.
It is interesting to see the Pharmacy Guild under pressure from a recent audit of the Community Pharmacy Agreement and where money was spent.
Enjoy.
David.
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