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Australia will run out of money to pay for Medicare and its welfare and education systems unless the Abbott government takes a harder look at costs, says Treasurer Joe Hockey.
Mr Hockey said he was ''ringing an early warning bell'' about the sustainability of federal funding for vital programs, saying hard work will be needed in the future just to maintain the quality of life expected by most Australians.
Treasurer Joe Hockey has issued a warning on Australia's finances and ability to afford Medicare. Photo: Stefan Postles
''The starting point is if our health and welfare and education systems stay exactly the same, Australia is going to run out of money to pay for them,'' Mr Hockey told the Seven Network on Friday.
''If nothing happens, we will never get back into surplus, we'll never pay off debt.
''We'll either have to have a massive increase in taxes, and that means fewer jobs at the end of the day, or we're going to have to look at ways we can restructure the system to make it sustainable.''
Illustration: Ron Tandberg
Mr Hockey said that Medicare was forecast to increase from $65 billion in this year's budget to $75 billion within just three years.
There's speculation the government could be paving the way for the introduction of a GP fee, although Prime Minister Tony Abbott has said he wants to be the ''best friend'' Medicare's ever had.
Policy consultant Terry Barnes, a former adviser to Prime Minister Tony Abbott, suggested a $6 fee to see a GP or for GP-type treatment at a hospital emergency department, in a submission to the government's Commission of Audit.
Health Minister Peter Dutton has also signalled that Medicare could be means-tested with access to bulk-billing and medical tests such as X-rays, blood tests limited to those on lower incomes, in a News Corp report.
Mr Dutton questioned why those on higher incomes should be able to go to the doctor ''for free'' and said it was ''one of the discussions . . . we have to have''.
But doctors have warned that the fee would lead more patients to seek treatment in overcrowded emergency departments including those with conditions that had deteriorated because of deferred care.
Opposition Leader Bill Shorten slammed the proposals on Friday, saying that people should be able to get ''the health care they need, not the health care they can afford'' and said Australians did not want to go down the path of the American model.
Australasian College of Emergency Medicine president Anthony Cross said any disincentive to see a GP would send patients elsewhere.
''EDs [emergency departments] do have a reputation of being able to see and treat anything - there is a sense of a one-stop shop - so if they have to pay $6 that might sway people to come to an ED,'' he said.
''People for whom the $6 is most likely to be a disincentive are people from poor backgrounds with chronic and psychiatric disease, the people who need care the most.''
Australian Healthcare and Hospitals Association chief executive Alison Verhoeven said the chronically ill were likely to defer seeing a GP, leading them to become sicker and need more treatment.
''That will obviously cost more and that's not a good trade-off, it's not going to put more dollars into the system,'' she said.
He said funding agreements between the Commonwealth and states prevented hospitals charging patients for public hospital treatment, and would need to be changed if the government adopted his plan for a $6 co-payment.
Mr Dutton said on Wednesday one of his government's most important tasks was ''to grow the opportunity for those Australians who can afford [it] to contribute to their own healthcare costs''.
He questioned whether people on ''reasonable incomes'' should expect to pay nothing to see a doctor leaving other taxpayers to pick up the bill.
In the second half of last year, 81.7 per cent of GP visits were bulk-billed, meaning patients incurred no out-of-pocket costs.
But, Consumers Health Forum spokesman Mark Metherell said, many bulk-billed patients received concessions, for example pensioners with chronic conditions, and other patients already paid a fee to see a doctor.
Patients who are not bulk-billed pay an average of $28.60 to visit their GP, according to Medicare data.
Victorian Council of Social Service chief executive Emma King said the poor already faced significant costs for quality healthcare including for medications and tests.
The Treasurer flagged that other programs, including the aged pension for people over 65, were also overdue for review and would have to be examined.
Mr Hockey said the pension was introduced in the 1950s when life expectancy was 55, but he said costs had ballooned with the average lifespan stretching today to 85.
AAP with Kate Hagan and Dan Harrison