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05 May 2016

Main points


  • Medicare rebate freeze extended to 2020
  • Indexation delays cost households $370m
  • Bulk billing set to fall
  • $2.9 billion for public hospitals
  • $60 million for new drugs

The Federal Government is increasingly pushing the cost of care onto patients and households as it screws down on health spending, undermining Medicare and putting the poorest and sickest at risk, AMA President Professor Brian Owler has warned.

As the Federal Government prepares for a 2 July election, it has raided Medicare for almost $1 billion in savings by extending the rebate freeze, pushing the system to the point where GPs will be forced to cut back on bulk billing and begin charging patients, Professor Owler said.

At the same time, it has taken an axe to aged care, public dentistry and community health program funding, is targeting the Medicare Benefits Schedule for multi-million dollar savings, and has further delayed indexation of the Medicare Levy Surcharge and the Private Health Insurance Rebate thresholds, costing families an extra $370.9 million between 2018-19 and 2019-20.

Professor Owler said the Budget continued the Government’s “stranglehold” on the Medicare system, constituted “another hit to household budgets, and represent extra disincentives to people accessing health care when they need it”.

The Government’s decision to extend the freeze on Medicare rebates to 202 would be the “tipping point” for many medical practices, the AMA President warned, forcing many to wind back bulk billing and begin charging patients.

The Budget confirmed Prime Minister Malcolm Turnbull’s pledge to provide an extra $2.9 billion for public hospitals, and included more than $57 million for new drugs, almost $10 million to help protect the nation against the overuse of antibiotics, more than $33 million for Indigenous eye tests and $21 million for a trial of Health Care homes.

Health Minister Sussan Ley said the Budget showed the Government would lift its spending on health, aged care and sport to $89.5 billion next financial year – a 4.1 per cent increase from 2015-16.

“Our reforms are targeted to meet the growing needs and expectations of the modern consumer and are bold and broad, but also affordable, achievable and, most importantly, fair,” Ms Ley said. 

The Minister said the Government had a “clear focus” on integration and innovation, and she pledged that it would “eliminate waste, inefficiency and duplication wherever we find it”.

“The Turnbull Government will make sure every health dollar lands as close to the patient as possible,” Ms Ley said.

But Professor Owler said the positive initiatives in the Budget had been overshadowed by the cuts, and the document was a missed opportunity for the Government to “steer a new course and a new strategy of health policy and health sector engagement”.

The AMA President said that instead, the Government’s strategy had been to attack health professionals.

“Doctors, pharmacists, nurses, Aboriginal health services, and even medical receptionists, have in the past week been blamed for rorts and waste in the system, with incorrect and inaccurate statistics being used to push these mischievous claims,” he said.

Professor Owler said the attacks were a subterfuge being used by the Government to distract public attention from “the main game – the fact that the Government’s health policies, in the main, are all about making savings to the Budget, not improving access to quality affordable health care for all Australians”.

The AMA President said it was a myth that health spending was out of control, as the Government has claimed – this financial year it comprised less than 16 per cent of the Commonwealth Budget, down from 18 per cent a decade ago.

He also took issue with health insurer complaints that doctors were driving up their costs, pointing out that in many cases specialist fees had not been indexed in a decade.

“Contrary to the line being pushed by the Government and the private health insurers, medical services are not an issue for the insurers or for patients,” Professor Owler said. “Some insurers have been only too eager to vilify doctors even though the publicly listed PHIs have posted record profits, their executives are paid multimillion dollar salaries, and when doctors charge above the PHI schedule, ithe PHI contribution falls to 25 per cent of the scheduled fee.”

The Government already faces a campaign from pathologists and diagnostic imaging providers over its decision to axe and reduce bulk billing incentives, and Professor Owler warned it ran the risk of more health groups joining them if it did not change policy direction and improve it public relationship with the health sector.

What they said

“Tonight we've seen an extension of the Medicare rebate freeze, and that means that the Government has extended its stranglehold on patients' rebates. That means 925 more million dollars out of the pockets of everyday Australians; it means that people are going to have to pay more out of their own pockets when they receive medical treatment” – AMA President Professor Brian Owler

“This is a plan that will ensure our children and our grandchildren enjoy the great opportunities these times offer them. This is a responsible economic plan for growth and for jobs” – Prime Minster Malcolm Turnbull

“If you earn less than $80,000, which is 75 per cent of all Australian workers, you will not get a cent out of this budget, but your schools will be cut, the hospitals will be cut and we will see precious little action on climate change” – Opposition leader Bill Shorten

“Our reforms are targeted to meet the growing needs and expectations of the modern consumer and are bold and broad, but also affordable, achievable and, most importantly, fair” – Health Minister Sussan Ley 

“Mr Turnbull has again smashed Australia’s health system, ripping another $2.1 billion out of health spending and keeping the GP tax in place for another two years – a measure that will cost Australian families $925 million” – Shadow Health Minister Catherine King

“It [the Medicare rebate freeze] will very likely see consumers paying greater gap payments as the price the Government pays for Medicare services won’t even keep up with inflation” – CHOICE CEO Alan Kirkland

“The 2016 Federal Budget has done absolutely nothing to reverse the increasing pressure on Australia’s world-class health care system” Royal Australian College of General Practitioners President Dr Frank Jones


Adrian Rollins



Published: 05 May 2016