In claiming victory at the 2019 election, Prime Minister Scott Morrison hailed the role of the "quiet Australians" in the Coalition's win. This group was defined in various ways, with one central factor a perceived disinterest in, or disengagement with, politics. Such a position is probably unsurprising, given the grandstanding, dissembling, lack of accountability, blame shifting and general circus-like nature of modern politics and associated policymaking.
But, this lack of attention does come with some risk. When we aren't watching, policies and programs you thought you knew well can and do change, often in plain sight.
Let's take Medicare as an example.
Introducing the legislation to establish Medicare in September 1983, then Health Minister Neal Blewett clearly delineated the scope of the scheme as both universal and equitable: "Medicare will provide the same entitlement to basic medical benefits, and treatment in a public hospital by the hospital's doctors, to every Australian resident regardless of income." Yet in 2021, on an episode of the ABC's Q&A program, the President of the Australian Medical Association defined Medicare somewhat differently: "Medicare is an insurance system for our private sector, so public hospitals are completely separate from Medicare." To add further confusion, the 2021 Intergenerational Report had another view: "It [Medicare] funds medical services, public hospitals and medicines." So, what happened?
From 2017, the original intent of Medicare is no longer its actuality.
While you weren't watching, in 2017, the Turnbull government quietly changed the boundaries of Medicare. The change was made by Health Minister Greg Hunt in the full light of day but buried away in that year's budget papers, so received little attention. The Medicare Benefits Schedule, which pays benefits to consumers enabling them to access medical services, and the Pharmaceutical Benefits Scheme, which provides subsidised access to medicines, were joined together as a single "pillar" (there are four) of the health system. The MBS and PBS are now funded from a Medicare Guarantee Fund, which comprises proceeds from the Medicare Levy (less the funds earmarked for the NDIS) and general taxation.
The previously central inclusion of access to public hospitals as part of Medicare's equity proposition was removed, with the Commonwealth government's role now relegated to "supporting hospitals" under a separate pillar - note that the support now is for "hospitals", not "public hospitals". So, is this mere semantics? Administrative deckchairs being reshuffled? I think there is more at play here.
It matters not whether the Commonwealth continues to provide "record" funding to the states and territories for public hospitals under ongoing agreements, it is now doing so almost as an act of generosity, to "support" the states in an area of their responsibility. There is no mention of public hospitals under the budget's "Guaranteeing Medicare" pillar, so while funding to the states may be agreed, it is not guaranteed in the same way as, say, funding for services provided by doctors and pharmacists. In much the same way as it provides funding for private schools, the Commonwealth can (and did in the 2020-21 budget) provide funding directly to private hospitals under the "Supporting our hospitals" pillar of the health system. They are hospitals, after all.
The original version of Medicare wasn't an abstract idea or some administrative artifice. Rather, it was a central policy proposal at the 1983 federal election, extensively debated and strongly supported by the electorate. It was accepted by the trade union movement as an important part of the social wage, as a trade-off for wage restraint. No-one had the chance to vote this time around but from 2017 the original intent of Medicare is no longer its actuality.
There is an additional issue, possibly even more important over the long term, which goes to the flip side of Medicare's equity proposition, funding. Medicare was designed originally to make health insurance fairer and more affordable because, as then Health Minister Blewett put it, "everyone will contribute towards the nation's health costs according to his or her ability to pay" through the Medicare levy and general taxation. Not any longer. While you weren't watching, in 2007, then-federal treasurer Peter Costello engineered a fundamental attack on the equity of the taxation system by enabling income drawn from superannuation to be tax free for most people after the age of 60 (an indexed balance cap has applied since 2017). This also means that the Medicare levy is not paid on such income from superannuation after the age of 60, further breaking the original social pact of Medicare - universal coverage supported by all, according to their ability to pay. Under the arrangements for defined benefit pensions, tax may apply but even here many older people can receive preferential treatment via the Seniors and Pensioners Tax Offset and a higher threshold for the Medicare Levy.
There is more than a little irony that Medicare, the universal scheme designed with equity at its heart, should now have become the poster child for generational inequity.
At the very time when their use of the health system increases, most older people are paying little towards its upkeep. Actually, the situation is worse than that - some older people are paying even less. Remember franking credits? Another of former treasurer Costello's measures, while you weren't watching in 2001, the law was changed to enable people who held more dividend imputation (franking) credits from their share portfolio than they paid in income tax, to receive a cash rebate from the tax office. When combined with the 2007 move to tax-free superannuation, some people aged over 60 are paying no tax, no Medicare Levy and getting a cash rebate from the Tax Office.
Given the apparently successful self-serving campaign in the 2019 election against the proposed removal of cash rebates for franking credits, it's unlikely to be revisited. It may be impossible to completely redress the current tax inequity so that all individuals pay the same tax on the same income, regardless of its source. But, at the very least, people aged over 60 years of age should be paying the Medicare Levy on the same basis as younger people. A bit like the original intent of Medicare, this would be simple, universal, affordable and fair. It won't fix generational inequity but would at least be a start.
No need to make it an election issue. Just do it quietly, when no-one is watching.
- Paul Mackey worked for 25 years in senior health policy positions across the public, private and not-for-profit sectors.