Cube attended a post-budget discussion yesterday led by Chris Caton, Chief Economist at BT Financial Group, dissecting the 2010 Federal budget announcement. Contrary to 2009 forecasts – made during the height of the global economic crisis – the Government is aiming to drive the budget back into surplus within just three years.
As predicted, health is high on the priority list in this year’s budget. A total new investment of $7.3 billion in the National Health and Hospitals Network over five years hit the headlines yesterday, funded by major reforms and tax increases across three economic sectors.
Where have the savings been made?
Increases in tax revenue across three core sectors will be used to fund the pledged health reform. As pre-announced in the media two weeks ago, taxes on tobacco have increased by 25%; a $9 billion Resource Super Profit Tax on the mineral industry was announced last week; and significant reforms within healthcare through the Pharmaceutical Benefits Scheme (PBS) and a new Community Pharmacy Agreement are predicted to deliver a total $2.5 billion in net savings over five years from 2010-11.
PBS reform plans began back in 2007 and are expected to generate about $6 billion in savings. Designed to take advantage of patent expiry, cuts to the price of prescription medicines are expected to generate $2 billion savings to the Government and about $300 million to patients over four years. Economic experts at the post-budget discussion suggested that leaning against the steady growth in PBS spending seen in recent years was an appropriate measure.
Where is the money going to be spent?
Whilst tax increases are not always popular and reforms can take time, the cuts will help fund the Government’s new health commitment. These savings will provide an additional $2.2 billion to meet the needs of Australia’s healthcare system, including:
- $355 million for almost 450 GP ‘Super Clinics’
- $417 million to enhance after-hours services, making them more streamlined
- $523 million to provide practice nurses in all GP surgeries
- $467 million to rollout the national e-Health strategy, introducing individual electronic health records
Distilling the debate down to a grassroots level, patients may receive cheaper scripts, better access to GPs and practice nurses, shorter waiting lists for elective surgery and emergency department care, and better chronic disease management.
The current Government has placed a major focus in the national health system in an election year and time will quickly show the outcome of its decisions.