Australia: Howard government gunning for Medicare

Determined mass opposition needed to save health service

Working people are about to face more blows to the already bleeding Australian Medicare system. Why is this occurring? What can we do to stop it?

The recent re-election of the right wing, Liberals-led, Coalition government of Prime Minister John Howard was, in part, due to their platform pledge that they were better economic managers than the Australian Labor Party, even claiming they could miraculously control interest rates. As we have seen, within months of their re-election interest rates are rising, and it’s likely we will see another increase in the near future, unless further expected economic bad news puts it off. Belts are being tightened, as dark clouds loom over the economy and the bosses and their media demand the Coalition government make new cuts to social services.

While the Liberals vowed to "strengthen Medicare" to secure votes, they have already shattered any such illusions with yet another series of dramatic back flips: the first of which is to lift the Medicare threshold for out-of-pocket medical expenses. Families, pensioners, and health card holders will have to spend $500 (up from $300), before the government picks up 80% of the tab. For others, the threshold will be lifted to at least $1,000 (up from $700).

Now that the cat is out of the bag, government said it would make no more "iron clad promises’ and has basically admitted that there will be further vicious attacks to the Medicare system, which are likely to include capping payments and to reduce the 80% rebate to a lower rate. These attacks are not that surprising, considering the Liberals determined neo-liberal agenda.

Workers to pay for boom ending

There is increasing evidence that the debt-fuelled economic boom is ending. Therefore the Howard government is determined to make workers pay. Howard is ditching his pre-election promises made under electoral pressure, while the economy was stronger. He plans to drastically slash disability and single parent’s benefits, and to attack low income earners with a great reduction of the award system safety net, which a great majority of workers and families rely on. Obviously, these back flips on election promises are a huge blow to working families.

All the economic illusions of promised economic security are now being shattered one by one. The Liberals almost unashamedly revealed an economic blow out of the health budget: budgeted at about $1.3 billion, compared with the $440 million originally costed. This is mainly due to specialists bumping up their fees to take advantage of the $700 threshold – once over that families pay nothing. However the Liberals will not act against their own constituency – far better to raise the threshold making life harder for working class families, especially those with chronically ill children.

Government Minister, Abbot, claimed this was in line with the government maintaining its economic responsibilities: "I think the citizenry of Australia know that governments sometimes have to choose between a range of difficult alternatives and in this case we had to choose between strictly keeping that commitment that I gave and the long-term health of the economy and the long-term health of the Medicare system and we chose the long-term health of the economy."

Abbot went on further and threatened higher income taxes as the only alternative to raising the safety net.

The Liberals have already directly taxed the working class and the health system, with dodgy rebate systems, subsidies to big business insurers, and a flawed and inequitable Medicare levy (a flat tax).

Those with private cover, who earn over $100,000 annually, are eligible to receive a 1.5% discount on the Medicare levy. The Doctors Reform Society estimates that if high income earners were taxed 2.5%, as those who do not have private insurance have to pay, this alone would make available an extra $2.5 billion.

Bulk-billing under the Liberals is providing less adequate health care, with fewer doctors offering this service, usually only to health care holders. In many regions of Australia, especially in rural and outer-suburban areas, it has become almost impossible for people to find a GP who still "bulk-bills," that is, bills the government for consultations instead of charging patients a fee. Those seeking free treatment in public hospitals face long waiting lists, while conditions inside the cash-starved hospitals have deteriorated, producing a wave of avoidable patient deaths. Yet, the reduction of the safety net is the next step toward decimation of our health care system – another step in the direction of US-style health care system.

Nevertheless, the government’s solution to this so-called budget blow-out, is to hand over more of the public expenditure, in the form of subsidies to multi-national giants such as the health insurers.

Private health cracks

There are already cracks appearing in the private health insurance system. There is a steady decline in the rate of those taking up private cover (down to 44%) due to the fact that its still unaffordable for a great majority of working class people, despite the last scare policy which sought to force people into private cover by making them pay higher premiers if they didn’t take out private health insurance. This is clearly a move, with very real threats, to scare those middle and lower income earners, who weren’t persuaded last time, to ensure that they now take out private insurance.

Already we see this system is failing, as the private subsidies system clearly doesn’t work. Economically it’s costly, and it’s obviously not working as evidenced by shortages; over-worked staff; long queues (especially in working class suburbs and rural centres); life-threatening operations with long queues. And, yet, ironically these latest and hard hitting attempts to force the people to take up private cover will inevitably see premiums rise.

We have seen dramatic rises in the cost of premiums, and industry analysts predict they are set to increase dramatically in the near future. On top of this, is the issue of the quality of the private health insurance cover on offer. Issues such as adequate coverage – with many insurers offering as little as 40%, which leaves a huge gap to be out of pocket for individuals and families. Many insurers have complicated limits on coverage. For example, they don’t cover services offered at only selective hospitals. The latest back flips are only the beginning, as the government seeks to adopt the US models of privatisation, where we will soon see a greater division in the health provision; a system which operates as a two tier system of health, such as private emergency services. Under the recent US-Australia Free Trade Agreements the subsidies provided to proscribed drugs chosen by the Federal Government are under threat from US pharmaceutical companies who want a ‘free market’. This would mean more expensive drugs for ordinary people.

These attacks on Medicare will see a callous reduction in the level of health provisions to the working people and greater economic burden on them.

A free market in health will mean a US-style crisis. In the US the vast amount of money spent of health care goes into the profits of the private hospitals and pharmaceutical companies. The US has one of the worst population health levels in the richer capitalist states world, with Cuba having better life expectancy than citizens of Washington DC. There are 82 million Americans under-insured or uninsured. The most common reason for bankruptcy in the US is health expenses.

Labor Party compliant

The Australian Labor Party (ALP) has been compliant in systematically cutting funding to the health system, in real terms, even since the day former ALP Prime Minister Bob Hawke introduced Medicare in 1984. In State governments, the ALP have slashed away at health spending and fought nurses and health workers demands for decent pay and conditions, leading to many health workers leaving Australia for ‘greener pastures’. The very moderate reform of Medicare Gold promised by the previous Latham-led ALP Opposition has since been ditched by the new Beazley-led ALP.

Although Medicare is not perfect it represents, in a limited way, a victory or reform won by workers from this rotten capitalist system. That is why the ruling class and their politicians want to scrap it. We must fight for the defence and extension of Medicare. We stand for a real universal health care system.

A government which blatantly denies decent basic health care to the majority of working people, due to economic constraints, is clearly operating under a system of failure. These agents of neo-liberalism parade their so-called economic prowess, while claiming workers cannot afford a decent health care system. It is working class people who cannot afford such a system, and whom have the power to change it! Together with a coalition of unions, community groups, disability and single parent pension recipients, unemployed and all workers, in unity we can fight these attacks, and work towards the building of a real universal health care system.

We need a health care system which works – that provides free health care to all those who need it. That’s why we say:

  • Scrap the subsidy to the private health system – pump this money back into the public health system
  • Democratic control of hospitals and health care centres, run by elected representatives of staff, patients, carers and relevant government departments Free prescribed drugs as a basic right
  • No to the commercialisation of health care – yes to a massive increase in government funding
  • Nationalisation of the pharmaceutical companies under worker’s control and management
  • Free health care for all as a basic right

This article also appears in the new edition of The Socialist, paper of the Socialist Party (cwi) in Australia

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May 2005