Will the plight of Australian battlers get worse?

Further difficulties for battlers are evident in regards to health, despite bulk-billing rates to general practitioners remaining high at 73.9 per cent in 2008-09. In July and August 2008, Primary Health Care, which owns 87 medical centres across Australia and earned a profit of $108.5 million in 2008-09, added a $30 upfront fee for non-concession holders and those over 16 in selected medical centres. The company argued that the basic Medical Benefits Schedule fee of $33.55 has not kept pace with either average weekly earnings or the cost of medical services.

And with the public cost of Medicare increasing by 9.7 per cent in the year to June 2009, Labor has proposed to cut the Medicare rebate for cataract surgery by 50 per cent from November 2009, a policy that will leave some of those with impaired vision the prospect of waiting years for surgery.

At the same time, it is the wealthy that benefit most from the Medicare safety net, which presently covers 80 per cent of costs of out-of-pocket medical bills once they exceed $555-1111 a year depending on income, as poorer people often cannot afford the high initial cost of private specialist and diagnostic services. In 2007, about 30 and 22 per cent of Medicare safety net benefits in 2007 funded obstetric and assisted reproductive services with only 8 per cent going towards general practice consultations.

To be fair to Labor, it has adopted some measures to better target welfare assistance. Labor negotiated with the Senate to increase the Medicare income threshold from $100,000 to $125,000 before a family is penalised with a higher Levy penalty for not having private insurance, while the penalty increased from 1 to 1.5 per cent for higher-income earners without private insurance.

Labor also has sought to introduce greater means-testing to save public costs and better target assistance, although the child-care rebate (increased from 30 to 50 per cent) up to a maximum $7,778 (indexed) per child per year remains non means-tested. With about 15 per cent of households earning $150,000 or more, there is now an income limit of $75,000 of combined income during the first six months after the baby is born to qualify for the baby bonus, and a $150,000 per year income limit regarding eligibility for Family Tax Benefit B.

Labor has also proposed a means test on the 30 per cent private health insurance rebate which will gradually reduce for families earning more than $150,000.

Yet, such measures will hardly prevent Australia’s battlers from facing harder times, despite most benefiting from cheaper consumer goods in recent decades, such as cars, televisions, computers, and other machinery and equipment.

One has only to note the Australian Medical Association’s call in November 2008 for the immediate injection of $3 billion to avoid the collapse of public hospitals throughout Australia with an extra 700 hospital beds needed in Victoria alone (ABC News, “Vic hospitals struggling: AMA”, November 13, 2008).

Are there signs to be optimistic for battlers based on recent trends?

Not really. The Rudd Labor Government has adopted important reform, but the demands of meeting the needs of ordinary people and business appears to be getting harder and more political. Remember Labor did not pass the recent pension increase on to sole parents and the unemployed, and upheld income tax cuts in 2009 that delivered most benefit to high-income earners. It remains to be seen what tax reform the Ken Henry review will suggest with Australian companies wanting a lower rate in order to compete.

With a projected $200 billion fall in tax collections over the next four years, it is also possible that one-off bonuses may end. Since 2001, the Howard government gave many one-off payments to pensioners, families, carers, while the Rudd Government sought to provide economic stimulus by payments of $900 or more to most taxpayers, pensioners, carers, parents, some students and some farmers.

And with the proportion of the working age population relying mostly on welfare increasing from 3 to 16 per cent since 1965 (Peter Saunders, Sydney Morning Herald, February 21, 2009), Australia’s pension age is to be increased to 67 to help pay for an ageing population, as is the case in US, Germany, Iceland, Norway, Denmark and Britain.