THE Medicare co-payment is an ideological attack on universal healthcare, not a rational, efficient revenue-raiser. In 2013 the then Labor Government raised the Medicare levy from 1.5 per cent to 2.0 per cent, raising an annual $3.2 billion extra (Financial Review, 30 April, 2013)
In the Sunday Telegraph 18 May Samantha Maiden writes “The Medicare co-payment will raise an estimated $1.1 billion in 2015-’16. Over the next four years the budget estimates that will raise $3.4 billion.” It is important to note that $2 of the $7 payment is being kept by those collecting the co-payment to compensate them for administrative costs That’s nearly 30 per cent of the payment being spent on administration.
Raising the Medicare levy 0.2 per cent to 2.2 per cent would raise annually $1.28 billion and would cost virtually nothing extra in administration as the collection system is already there. One needs to ask yourself why if raising the Medicare levy carries little to no cost in administration and would raise more money, has the Abbott Government chosen to move in the less efficient direction of the co-payment.
The first part of the answer lies in the tax system. Under changes made by Labor raising the tax-free threshold to $18,000 one has to earn more than that amount to pay tax and therefore pay the Medicare levy. Around 48 per cent of Australians earn less than 18 thousand a year and therefore do not pay tax and thus do not pay the Medicare levy. That 48 per cent includes pensioners, children under 18, the unemployed and others receiving government benefits.
The reason for imposing an inefficient co-payment instead of simply raising the Medicare levy is to force those who have the least capacity to pay and the greater need for medical care to make a contribution or to move them to the emergency department in hospitals where the State Government bears the cost.
On 23 April the Abbott Government announced the purchase of 58 new joint strike fighters at a cost of $12.4 billion, delivery of which will not occur until 2020. If we reduced that purchase to 50 fighters it would save $1.4 billion, $0.3 billion more than the revenue raised ($1.1 billion) by the co-payment.
In summary, $2 of the $7 co-payment is being lost in the administrative cost of collecting the money. That’s almost 30 per cent. In contrast, raising the Medicare levy from 2.0 per cent to 2.2 per cent would raise $1.28 billion, $0.18 billion more than the co-payment and would have very little to no costs involved in collecting. Limiting our current purchase of the joint strike fighter to 50 instead of 58 would also save $1.4 billion. The fighter does not come into service until 2020 and the purchase of a further eight could come out of a future surplus.
Looking at the figures I have saved $1.58 billion from the budget bottom line in increased revenue and savings and saved $2 per doctor visit in administration charges, clearly showing that the co-payment is an ideological attempt to sabotage universal healthcare, is inefficient and too costly to administer.
Peter Summers,
Pakenham.
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