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Privatising Medicare a gift for Labor

For conservative governments at least, Medicare is pretty much a no-go-zone. They're seen as reluctant conscripts to universal health insurance, raising legitimate concerns about their motives.

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Modernising Medicare?

The government confirms it wants to modernise the Medicare payments system amid reports it intends outsourcing the process to private companies.

John Howard used to trot out the rhythmic line that his government, through the office of his then health minister Tony Abbott, was "the best friend Medicare ever had". It was an overstatement calculated to rebut Labor's charge that the Coalition would scotch Medicare in a heartbeat if only it weren't so damned popular - and effective.

So it is a brave government indeed that would broach privatising Medicare holus bolus along with PBS payments and Veterans Affairs benefits.

For a start, such a move would be a gift to a desperate Labor Party, so cruelly denied the GST lifeline by Malcolm Turnbull's strategic weekend retreat on same.

If a great big tax on everything is no longer "on the table", then the neutering of Medicare by stealth offers Labor a close second by way of a consolation prize. Few institutions have a more established reach into Australian households than the Medicare system - and thus, few reform proposals would be as immediately susceptible to engendering concerns within the electorate.


"Engendering concerns" is a nice way of describing the time-worn political practice of mounting scare campaigns. And make no mistake, that is what is already being planned by Labor around the privatisation of Medicare/PBS/Veterans benefits.

The combined value of these payments - projected to amount to some $39 billion next financial year - speaks to their centrality to the economies of almost all Australians.

Importantly, nothing has yet been decided. But neither is the government denying the existence of scoping studies currently under way. How could it? After all, the process began quite publicly in August 2014, when the (Abbott) government actually sought expressions from companies interested in taking over the Commonwealth's massive payment responsibilities.

Malcolm Turnbull makes a persuasive point, noting that Medicare's payment system is slow, clunky, labour-intensive, and nowhere near what we'd call consumer-friendly in the digital age. Massive capital investments are needed for upgrades.

There may be serious obstacles to privatisation such as the inherent and perceived risks of handing ultra-confidential health records to private interests, prohibitive initial costs that could send the budget backwards before savings are booked, and, an increased potential for fraud and malfeasance. But these are not insurmountable.

Perhaps the biggest hurdle is attitudinal - which is to say, political. Turnbull promised change, innovation, and economic leadership. Driving these changes, to allow for the same kind of instant digital transfers as are now common elsewhere, seems to qualify for such leadership.

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