Labor warns jobs will be sent to Asia if Medicare payments privatised

Labor says public service jobs in the Department of Human Services could be sent to Asia if a privatisation of key departmental functions goes ahead.

Labor senator Doug Cameron says the government must come clean on how many jobs would go if the payment of Medicare pharmaceutical and veterans' benefits goes to the private sector. 

Human Service Minister Marise Payne has dismissed as "alarmist exaggerations" union predictions that up to 20,000 jobs could go if the $29 billion of payment services were farmed out to private players.

But DHS bosses have admitted that they do not know how many of their public servants are engaged in delivering the payments, further complicating the job of estimating the impact of the move for DHS's 30,000 public servants.

Last week, the Health Department called on private players to express interest in taking over the payment of $29 billion each year in health and pharmaceutical benefits currently managed by the Department of Human Services.

After the news, there was speculation that Australia Post or one of the nation's big four banks might take over the payment systems.


But Senator Cameron, Labor's human services spokesman, warned on Wednesday that outsourcing to one of the big four might lead to DHS jobs being shipped offshore.

"If you look at the history of banks in this country, then it's clear that jobs will very quickly end up in India or the Philippines," he said.

Senator Cameron also took issue with Senator Payne's angry reaction to claims of 20,000 jobs on the chopping block, with the Labor frontbencher challenging the minister to provide details on the impact on public service employment.

"She must now come out and detail why she believes this is exaggerated, what in her estimation is the number of jobs that would be lost as a result of this privatisation," he said.

Senator Payne and Health Minister Peter Dutton have justified going to the market because of DHS's ageing IT infrastructure, which is in need of expensive upgrades, with the ministers arguing the private sector may be able to offer cheaper alternatives.

But Senator Cameron says all the available reports indicate that DHS runs efficiently and effectively and the move towards privatisation is ideological.

"All the reports I've seen from the Australian Public Service Commission show that the department is well run, efficient and effective," Senator Cameron said. "This approach from the Coalition is based on ideology, on the belief there is no role, or very little role for government."

Senator Payne's office did not to requests for comment on Wednesday.

DHS was asked by Senator Cameron this year how many of its public servants were engaged in delivering Medicare and pharmaceutical benefits but the department said it did not know and had no intention of carrying out the research.

"Since integration in July 2011, data in relation to the previous master programs is no longer maintained and to disaggregate and respond specifically in relation to employees involved in the delivery of these payments would be an unreasonable diversion of resources," the department wrote in its official response.


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