Extract from The Guardian website:
Warnings from ministers about making cuts disguise the political choices on where the cuts will fall
- Lenore Taylor Political editor
- theguardian.com,
Quite obviously, we’re getting softened up here. Softened up big time. Which means it’s time to pay very, very close attention.
Treasurer Joe Hockey warns we’re “running out of money’ to pay for health, welfare and education”. Health minister Peter Dutton says he wants a “frank, fearless and far reaching discussion on our health system.”
They’re right about the long term budgetary problem. The tricky bit comes when we consider two things - the inconsistencies between this message and what they said, and promised, before the election, and the choices they are making now - the ones we are being softened up for.
Let’s start with the inconsistencies. Try this for starters.
About 48 hours before the polls opened, Tony Abbott was on the ABC’s AM program ridiculing Labor’s suggestion that he would end up having to make big spending cuts in order to pay for his promises and get the budget back to surplus.
“I can assure your listeners that there will be no cuts to health, no cuts to education, no cuts to pensions, no change to the GST and Mr Rudd’s hysterical talk of a $70 billion black hole will turn out to be just hyperventilation from a Prime Minister with no record to defend and no vision for the future,” he said.
Now cuts are clearly on the agenda, possibly with the attempted justification that money saved will be redirected to other priorities in the same portfolio, or by deferring major changes until after the next election.
And then there are the choices.
There are choices this government has already made - spending $5.5bn a year on paid parental leave that goes disproportionately to middle and upper income families, for example, at the same time it is warning everyone will have to do some “heavy lifting”.
And there are the choices about to be made, as the government considers the commission of audit report and the final shape of its May budget.
The immediate debate about health cuts careened down the path of co-payments for visits to the doctor.
A former coalition adviser, in a report for the Australian Centre for Health Research, said a $6 co-payment for each of the first 12 bulk billed visits to a GP each year would, if GP rebates were frozen as an incentive to take the co-payment, save the Government $750 million over four years.
But according to the Australian Medical Association and health academics it could also deter people from going to the doctor and end up having a limited impact on the overall budget because many put off from going to the doctor would simply present to hospital accident and emergency services instead.
But there are other, more equitable ideas for savings from health.
The Australian Council of Social Services, for example, has proposed removing the 30% private health insurance rebate for ancillary cover - that is the “extras” covered by top level private health insurance like gym memberships, or visits to the naturopath, acupuncturist or chiropractor. According to ACOSS’ budget submission, that would save $1bn a year
So there’s a choice. Save $750m over four years by charging everyone $6 to visit the GP, or $1bn a year by forcing the well off to pay the full cost of joining a gym or going to the naturopath.
And then there’s the cost of the aged pension, with Hockey saying we need to “get real” because “when it was introduced, in the early 1900s, life expectancy was 55. Today life expectancy is 85 and yet the pension starts at 65.” (Actually, for many of today’s workers the pension, if they qualify for it, won’t start until 67, under changes the previous government made, and a 15 year old boy in 1908 had a life expectancy of 64 and a 15 year old girl 67, but let’s not quibble, we get his point.)
Increasing to 70 the age at which people can access the aged pension, could, according to the Grattan Institute, ultimately save the budget bottom line $12bn in today’s terms. That’s a lot.
But, as the institute notes, it would also have the “adverse social consequence that some who would prefer to stop working earlier will not be able to afford to do so”. Which is a nice way of saying lower income pension-dependent workers won’t take kindly to slaving until they’re 70.
There would, however, be some quite substantial immediate savings if the coalition kept Labor’s promised 15% tax on superannuation pension earnings of more $100,000 a year.
There’s another choice. Make people work another three to five years to get about $21,000 a year in aged pension, or impose a small tax on those earning $100,000 a year from their superannuation.
And so it goes on. The government could save many more billions if it reduced the threshold level of contributions at which superannuants are only charged 15%, not to mention the savings that could be had from reforming the tax treatment of family trusts, or negative gearing, or removing fuel tax concessions.
Hockey and Dutton are right. These are all important choices with long-term effects on the lives of Australians. That’s why the government should get the “frank and far reaching” debate it says it is seeking
Treasurer Joe Hockey warns we’re “running out of money’ to pay for health, welfare and education”. Health minister Peter Dutton says he wants a “frank, fearless and far reaching discussion on our health system.”
They’re right about the long term budgetary problem. The tricky bit comes when we consider two things - the inconsistencies between this message and what they said, and promised, before the election, and the choices they are making now - the ones we are being softened up for.
Let’s start with the inconsistencies. Try this for starters.
About 48 hours before the polls opened, Tony Abbott was on the ABC’s AM program ridiculing Labor’s suggestion that he would end up having to make big spending cuts in order to pay for his promises and get the budget back to surplus.
“I can assure your listeners that there will be no cuts to health, no cuts to education, no cuts to pensions, no change to the GST and Mr Rudd’s hysterical talk of a $70 billion black hole will turn out to be just hyperventilation from a Prime Minister with no record to defend and no vision for the future,” he said.
Now cuts are clearly on the agenda, possibly with the attempted justification that money saved will be redirected to other priorities in the same portfolio, or by deferring major changes until after the next election.
And then there are the choices.
There are choices this government has already made - spending $5.5bn a year on paid parental leave that goes disproportionately to middle and upper income families, for example, at the same time it is warning everyone will have to do some “heavy lifting”.
And there are the choices about to be made, as the government considers the commission of audit report and the final shape of its May budget.
The immediate debate about health cuts careened down the path of co-payments for visits to the doctor.
A former coalition adviser, in a report for the Australian Centre for Health Research, said a $6 co-payment for each of the first 12 bulk billed visits to a GP each year would, if GP rebates were frozen as an incentive to take the co-payment, save the Government $750 million over four years.
But according to the Australian Medical Association and health academics it could also deter people from going to the doctor and end up having a limited impact on the overall budget because many put off from going to the doctor would simply present to hospital accident and emergency services instead.
But there are other, more equitable ideas for savings from health.
The Australian Council of Social Services, for example, has proposed removing the 30% private health insurance rebate for ancillary cover - that is the “extras” covered by top level private health insurance like gym memberships, or visits to the naturopath, acupuncturist or chiropractor. According to ACOSS’ budget submission, that would save $1bn a year
So there’s a choice. Save $750m over four years by charging everyone $6 to visit the GP, or $1bn a year by forcing the well off to pay the full cost of joining a gym or going to the naturopath.
And then there’s the cost of the aged pension, with Hockey saying we need to “get real” because “when it was introduced, in the early 1900s, life expectancy was 55. Today life expectancy is 85 and yet the pension starts at 65.” (Actually, for many of today’s workers the pension, if they qualify for it, won’t start until 67, under changes the previous government made, and a 15 year old boy in 1908 had a life expectancy of 64 and a 15 year old girl 67, but let’s not quibble, we get his point.)
Increasing to 70 the age at which people can access the aged pension, could, according to the Grattan Institute, ultimately save the budget bottom line $12bn in today’s terms. That’s a lot.
But, as the institute notes, it would also have the “adverse social consequence that some who would prefer to stop working earlier will not be able to afford to do so”. Which is a nice way of saying lower income pension-dependent workers won’t take kindly to slaving until they’re 70.
There would, however, be some quite substantial immediate savings if the coalition kept Labor’s promised 15% tax on superannuation pension earnings of more $100,000 a year.
There’s another choice. Make people work another three to five years to get about $21,000 a year in aged pension, or impose a small tax on those earning $100,000 a year from their superannuation.
And so it goes on. The government could save many more billions if it reduced the threshold level of contributions at which superannuants are only charged 15%, not to mention the savings that could be had from reforming the tax treatment of family trusts, or negative gearing, or removing fuel tax concessions.
Hockey and Dutton are right. These are all important choices with long-term effects on the lives of Australians. That’s why the government should get the “frank and far reaching” debate it says it is seeking
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