tag:theconversation.com,2011:/africa/topics/catherine-king-27612/articlesCatherine King – The Conversation2023-11-09T09:37:22Ztag:theconversation.com,2011:article/2172802023-11-09T09:37:22Z2023-11-09T09:37:22ZGrattan on Friday: When Labor states don’t dance to the Albanese government’s tune<p>It’s helpful for the Albanese government to have all mainland states in Labor hands – but only up to a point. </p>
<p>This week we’ve seen the Queensland government bite back at federal plans to curb the national infrastructure program, while Victorian resistance to changes to the Murray-Darling water plan prompted Environment Minister Tanya Plibersek to lash out. </p>
<p>Infrastructure is always a vexed issue. The program is full of pork barrelling, whoever is in power. Even when that’s not involved, what to build and when it should be built is often contested. </p>
<p>In May, the government announced a 90-day review of the $120 billion infrastructure pipeline it inherited from the Coalition.</p>
<p>Infrastructure Minister Catherine King said projects had increased from about 150 to 800. The government’s aim was to reduce the number of projects (many of them small) and rearrange priorities.</p>
<p>High inflation, cost overruns and shortages of labour and materials are plaguing the program.</p>
<p>The political difficulties of abolishing or changing projects, often involving negotiation with states and territories, are obvious enough. Now they have become significantly worse. </p>
<p>The government has received its stocktake, and Treasurer Jim Chalmers says the overall cost of the program has blown out by some $33 billion. </p>
<p>Also, <a href="https://www.imf.org/en/News/Articles/2023/10/31/cs103123-australia-staff-concluding-statement-of-the-2023-article-iv#:%7E:text=Australia's%20economy%20has%20been%20resilient,after%20a%20correction%20in%202022.">an International Monetary Fund report</a> last week said infrastructure projects should be rolled out at a “more measured and co-ordinated pace, given supply constraints, to alleviate inflationary pressures”.</p>
<p>Chalmers is pushing this message, but it’s not being received well in Queensland. </p>
<p>State Treasurer Cameron Dick was blunt. “Queensland is Australia’s growth state and we need more infrastructure, not less,” <a href="https://twitter.com/camerondickqld/status/1720977443337691323">he said in a tweet</a>. “If infrastructure cuts are needed, they should be made to southern states with low growth and high debt.” (Fun fact: the electorate offices of Queenslanders Chalmers and Dick share a common wall.)</p>
<p><div data-react-class="Tweet" data-react-props="{"tweetId":"1720977443337691323"}"></div></p>
<p><a href="https://www.couriermail.com.au/news/queensland/qld-politics/road-rail-projects-need-to-be-cut-to-take-heat-out-of-inflation-treasurer/news-story/a99b728bdff427ae13cb879700b19ed1">Queensland Police Minister Mark Ryan said</a>:</p>
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<p>I’ve got a clear message for Jim. Jim’s a mate of mine. Jim, those projects better not be in Queensland.</p>
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<p>The last thing the Palaszczuk government wants is for projects to be cancelled, slashed or delayed. It is in a particularly precarious position – it faces an election in a year’s time and will be fighting for survival.</p>
<p>Queensland has an obvious political self-interest in resisting infrastructure cuts, but there’s a national point too. With large numbers of migrants coming into Australia, the demand for transport and other infrastructure will be increasing, rather than decreasing. Whatever cuts and slowdowns are made will need to be well judged. </p>
<p>The federal government argues the existing pipeline is unrealistic and without change could not be delivered anyway. But even if the decisions about what to cut, scale back or defer are economically sound, in political terms they could store up electoral time bombs for the government. </p>
<p>Even minor and unworthy projects can be sensitive in marginal seats. Scrapping them could open opportunities for the opposition. Also, available funds for new projects presumably will be limited. </p>
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<a href="https://theconversation.com/grattan-on-friday-transport-minister-catherine-king-struggles-to-find-a-landing-strip-amid-qatar-turbulence-213076">Grattan on Friday: Transport Minister Catherine King struggles to find a landing strip amid Qatar turbulence</a>
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<p>When the government finishes its negotiations with the states and the outcomes are announced, King will be the main minister defending the decisions. </p>
<p>As we saw in the row over the rejection of Qatar Airways’ bid for extra flights, she struggles when under pressure. She could find the task challenging. </p>
<p>The fight over the government’s water changes centre on its planned amendments to the Murray-Darling Basin plan. </p>
<p>The legislation, soon to be considered by the Senate, broadens the activities that can be funded and extends the times for delivery of water-recovery projects. Most importantly, it removes the cap on the federal government’s “buybacks” of extra water for the environment. </p>
<p>The Murray-Darling plan is always fraught, because the interests of upstream and downstream users and their governments differ. Nevertheless, Queensland, South Australia and New South Wales have signed on – although NSW has done so reluctantly. </p>
<p>But Victoria, where the Andrews government has built a close relationship with irrigators, has held out, defending its position on the basis of work done by Frontier Economics. </p>
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<a href="https://theconversation.com/grattan-on-friday-cost-of-living-crisis-is-the-dragon-the-government-cant-slay-216441">Grattan on Friday: Cost-of-living crisis is the dragon the government can't slay</a>
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<p>Its report argues that “previous water recovery has resulted in less irrigation […] putting the viability of major irrigation districts and the industries and communities they support under pressure”.</p>
<p>“Further water recovery from irrigators (buybacks and on-farm projects) will add to the impacts already being felt and undermine the ability of irrigation communities to plan for the future.”</p>
<p>Plibersek declared, <a href="https://www.tanyaplibersek.com/media/transcripts/abc-radio-national-breakfast-with-patricia-karvelas/">in an interview with the ABC</a>, that it was “extraordinary that we’ve got a Labor government using dodgy modelling to join up with Barnaby Joyce and David Littleproud”. </p>
<p>Victoria’s Water Minister Harriet Shing retorts: “This isn’t about party politics, and it’s disappointing to see it framed that way. We don’t apologise for standing up for Victorian communities and environments.”</p>
<p>But Plibersek has backing from Jamie Pittock, from the Australian National University’s Fenner School of Environment and Society. He says: </p>
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<p>The Victorian government can usually be relied on to make decisions based on solid data. In the case of the Murray-Darling Basin, bizarrely, it has relied on low-quality consultants’ reports that exaggerate the socio-economic costs and ignore the benefits from water buybacks.</p>
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<p>The legislation will come to a vote in the Senate this year, and there will be wrangling with the crossbench. </p>
<p>Assuming the legislation passes, the federal government can override Victoria and proceed with the buybacks of water for the environment. But it will still face the opposition of farming and irrigator groups, and some local communities. </p>
<p>It would be hard to find political observers who believe Peter Dutton can win the next election, due by May 2025. But there is increasing talk about the possibility that Labor, given it has a very narrow majority, could find itself in minority government. (Contrast a year ago, when all the talk was about Labor’s prospects for increasing its majority.)</p>
<p>Being pushed into minority is something Albanese – a senior figure in the minority Gillard government – would want to avoid at all costs. It would hamper the government’s flexibility to pursue its program, mean constant negotiation with crossbenchers including bolshie Greens, and encourage the Coalition to run maximum disruption. </p>
<p>The challenge of keeping out of minority increases the importance of the “ground game” in Labor’s marginal electorates. And it could make controversies over local issues – scrapped infrastructure projects, or unpopular new ventures including ugly transmission lines for renewable energy – potentially dangerous for the incumbents in those seats.</p><img src="https://counter.theconversation.com/content/217280/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Michelle Grattan does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Infrastructure is always a vexed issue. The program is full of pork barrelling, whoever is in power. Even when that’s not involved, what to build and when it should be built is often contested.Michelle Grattan, Professorial Fellow, University of CanberraLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/2152632023-10-09T07:13:51Z2023-10-09T07:13:51ZSenate committee says government should ‘immediately review’ its rejection of Qatar flights<p>A Senate inquiry into the Albanese government’s refusal to agree to the extra flights sought by Qatar Airways has recommended the decision be immediately reviewed. </p>
<p>The inquiry’s report, tabled Monday, is also sharply critical of Qantas, whose executives came under hostile questioning over its treatment of customers, when they appeared before the committee. </p>
<p>In its majority report the committee, chaired by the Nationals Senate leader Bridget McKenzie, asks the Senate to re-appoint it so it can bring before it former Qantas CEO Alan Joyce, who declined to appear saying he was overseas. This will require a Senate vote.</p>
<p>Qantas opposed the Qatar application, on the ground it would distort the market. </p>
<p>The report criticises Transport Minister Catherine King for not clearly articulating the factors in her decision not to approve the Qatar application. She has maintained she acted in the “national interest”, and given various reasons at different times. </p>
<p>“A wide range of witnesses, including key stakeholders in Australian aviation, submitted that they did not fully understand the basis for the decision,” the report says. </p>
<p>“The weight of evidence before the committee indicates the national interest would have been well served by agreeing to Qatar’s request.” The report also criticises the government’s refusal to provide the committee with information it sought. </p>
<p>Evidence suggested the decision cost the economy a loss of up to $1 billion; it was also a missed opportunity for tourism and trade, particularly agricultural exports that use passenger planes, the report says. </p>
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<a href="https://theconversation.com/qantas-chief-alan-joyce-quits-early-amid-customer-fury-at-the-airline-212845">Qantas chief Alan Joyce quits early, amid customer fury at the airline</a>
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<p>The inquiry recommends that in deciding on bilateral air agreements, the government should look at a cost-benefit analysis, consult widely with stakeholders including the Australian Competition and Consumer Commission, and publish its reasons for decisions. </p>
<p>In the wake of the government’s rejection, Qatar has asked for consultations.</p>
<p>King responded to the report by denouncing the inquiry as a “political stunt” by the Coalition. The committee has repeated its request to King to appear before it, which she has declined to do.</p>
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<a href="https://theconversation.com/grattan-on-friday-transport-minister-catherine-king-struggles-to-find-a-landing-strip-amid-qatar-turbulence-213076">Grattan on Friday: Transport Minister Catherine King struggles to find a landing strip amid Qatar turbulence</a>
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<p>The committee comprised three Coalition senators, one from the United Australia Party, two from Labor and one from the Greens. </p>
<p>In their dissenting report Labor senators Tony Sheldon and Linda White said many of the majority recommendations “appear blissfully ignorant of the current policy framework underpinning Australia’s aviation sector”. Green senator Penny Allman-Payne also dissented on some issues.</p>
<p>The report recommends reinstatement of the monitoring of the airline industry by the ACCC. </p>
<p>It says that in addition to this broad monitoring of competition in aviation, “the committee would support a specific investigation by the ACCC into Qantas’ actions in the aviation market. </p>
<p>"The committee is concerned by evidence suggesting Qantas may be especially aggressive when seeking to maintain its market share. This muscular approach towards competitors and new entrants can compound the problems that are already caused by a lack of competition.”</p>
<p>The Qantas group has “significant steps to take to repair trust” with consumers, the report says. “The committee expects tangible improvements regarding their behaviour toward their customers.”</p>
<p>The committee recommends the government develop consumer protection reforms in the aviation industry as soon as practicable to address delays, cancellations, lost baggage and devaluation of loyalty programs.</p><img src="https://counter.theconversation.com/content/215263/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Michelle Grattan does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>The inquiry’s report is sharply critical of Qantas, and has recommended the decision to block extra flights sought by Qatar Airways be immediately reviewedMichelle Grattan, Professorial Fellow, University of CanberraLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/2140672023-09-21T10:35:53Z2023-09-21T10:35:53ZGrattan on Friday: Albanese government faces an uphill road and angry locals as it drives change to renewables<p>Fire fear is gripping many Australians, with extremely high temperatures for September.</p>
<p>One day this week some 20 schools on the New South Wales south coast were closed, amid rising weather risk. Sydney national parks were shut. Multiple fires broke out in the eastern states.</p>
<p>The nation is bracing. The memory of that horrendous 2019-20 summer is embedded in our psyche. </p>
<p>The Bureau of Meteorology this week formally declared an El Niño event, looking to a hot dry summer. That will put pressure on ageing coal-fired power stations and thus the power system.</p>
<p>Apart from for a small minority, the argument about global warming is over. But the debate still rages about dealing with climate change and, close to home, Australia’s energy transition, which is under way but accompanied by increasing pain and problems. </p>
<p>Labor scored well politically when it issued its pre-election plan for the transition to renewables. It came with an election promise of an average $275 saving on household electricity bills by 2025. The promise will be unattainable, and in the meantime households face sky-high power bills, with only some benefiting from the government’s relief package. </p>
<p>Most people accept our energy system must move from fossil fuels, especially coal, to renewables as soon as practicable. But there are serious obstacles on the ground – literally.</p>
<p>The government uses the “not in my backyard” scare when the opposition proposes nuclear should be added to the energy mix. Now it is confronted by “not in our backyard” resistance from farmers and local communities to the big transmission cables needed to carry the renewable power. As well, there’s a backlash in some areas to wind turbines.</p>
<p>In 2014, then-Treasurer Joe Hockey was ridiculed when he described wind turbines around Lake George (near Canberra) as “a blight on the landscape”. The then opposition environment spokesman, Mark Butler, said Hockey was making “an utterly ridiculous contribution”. Labor can’t afford to laugh anymore. </p>
<p>Climate Change and Energy Minister Chris Bowen was in the NSW Hunter region this week to try to calm anger about the government’s declaration of a zone off the coast for future wind projects. Among their objections, locals have raised the harm to birds, sea life and the view. </p>
<p>The South Australian government has argued the proposed Southern Ocean zone for wind farms, off the coast of Victoria and SA, should stop at the Victorian border. </p>
<p>The rows breaking out over power cables and wind turbines are classic examples of major developments clashing with other priorities, whether commercial (tourism, fishing, agriculture), environmental or aesthetic. We’ve seen these battles for decades with mining projects. They’ve now moved into the age of renewables. </p>
<p>Australia is not alone on this issue, which is rearing its head in Britain and elsewhere. The Albanese government’s difficulty is there will be so many breakouts. It remains to be seen whether citizen discontent will translate into voter backlash in particular seats. </p>
<p>Infrastructure Minister Catherine King has felt the heat in her electorate of Ballarat. In a submission earlier this year, made as the local MP, to an Australian Energy Market Operator’s report on the proposed Victoria-New South Wales Interconnector (VNI) West transmission link, she repeated her long-held concerns about the consultative process. </p>
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<p>As Australia continues its transition to net zero, there will be increasing need for new projects,“ she wrote. "In rolling out these projects, it will be important to engage thoroughly and honestly with impacted communities all throughout the process – from project conception, to construction and beyond.” </p>
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<p>In July, Bowen announced a “community engagement review” to improve engagement on renewable energy infrastructure upgrades and new developments, to report
by year’s end. </p>
<p>The process is tortuous and often fractious. And, as the Grattan Institute’s energy expert, Tony Wood, <a href="https://theconversation.com/unsexy-but-vital-why-warnings-over-grid-reliability-are-really-about-building-more-transmission-lines-212603">has pointed out</a>, investment in renewables is stalled because of the slowness in getting the transmission grid in place. </p>
<p>The implications are substantial. The government is committed to having renewables generating 82% of our electricity by 2030. The present level is 35%. Wood says: “We are nowhere near where we need to be. We are way behind in time and way over in cost.” </p>
<p>The transition problems are making the opposition bolder in pushing its case to have nuclear power on the agenda. It argues if nuclear could replace some of the retiring coal-fired power stations, the existing grid could be used, reducing the disruption by new cables. But it has produced nothing specific on how nuclear will feature in its policy. Nor is it clear how politically risky raising the nuclear option is for the Coalition. </p>
<p>In an attempted political hit, Bowen this week issued an estimate that replacing coal-fired stations with nuclear would cost $387 billion. Given all the uncertainties, numbers mean little, although most experts maintain the nuclear path would not be economically viable any time soon. Even so, the government suddenly sounds defensive when rejecting even lifting the present ban on nuclear. </p>
<p>Pushed on Monday on the ABC’s Q+A about the ban, Bowen said that would be “a massive distraction. It would take a lot of our public debate”. This seems an odd argument. Whether nuclear power should be considered surely rests on two basic questions: whether the market believes it viable and whether the public considers it acceptable. </p>
<p>At least the government this week had some good news on the gas front: the latest estimates by the Australian Competition and Consumer Commission indicate the country will go into early next year with an adequate supply for the domestic market. Treasurer Jim Chalmers was quick to declare the opposition’s “fearmongering” about the government’s imposition of pricing caps had been unjustified. </p>
<p>On the other hand, gas is coming under mounting attack from climate activists, as the government defends it as a transition fuel.</p>
<p>In political terms, the energy transition will put pressure on Labor on several fronts between now and the next election. </p>
<p>The first, and most obvious, is high power bills, feeding into the cost-of-living crisis. </p>
<p>Second, the localised arguments about the infrastructure will continue. </p>
<p>Third, investors will need more reassurance. </p>
<p>Fourth, the efficiency of the energy system must be maintained through difficult times. </p>
<p>And fifth, the government will need to hold the line against the Greens and the more militant parts of the climate movement that will attack it for not going fast enough to meet the climate challenge. </p>
<p>Those are the knowns. One unknown is whether we’ll get a really bad fire season and the implications that would have.</p><img src="https://counter.theconversation.com/content/214067/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Michelle Grattan does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Most people accept our energy system must move from fossil fuels, especially coal, to renewables as soon as practicable. But there are serious obstacles on the ground – literally.Michelle Grattan, Professorial Fellow, University of CanberraLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/2130762023-09-07T11:14:11Z2023-09-07T11:14:11ZGrattan on Friday: Transport Minister Catherine King struggles to find a landing strip amid Qatar turbulence<p>A few days ago, the furore over the government’s rejection of Qatar Airways’ bid for more flights into major cities was all about cheaper tickets and additional seats.</p>
<p>Now the issue has doubled back to become, apparently, at least in part about the mistreatment of the Australian women who were hauled off a flight in 2020 and subjected to invasive body searches, after a newborn was found abandoned in Doha Airport. </p>
<p>Five of the women have a legal case on foot. It is back in the Federal Court on Friday for the 21st time.</p>
<p>Transport Minister Catherine King, in yet another attempt to explain, or dodge explaining, her rejection of the Qatar application, said on radio on Thursday morning that the 2020 incident “wasn’t a factor in the decision, but it was certainly context for the decision”. </p>
<p>This is as baffling as most of the other explanations King and other government members have given. Isn’t “context” a “factor”?</p>
<p>Well yes, it seems. Only an hour or so earlier, at a crack-of-dawn news conference at Canberra airport, where she released a green paper on aviation policy, King suggested the 2020 incident was a factor, although “there was no one factor that influenced my decision in relation to the national interest”. She argued: “I don’t think it’s helpful for me to point to any one factor.” </p>
<p>On Thursday night on the ABC, she did spell out some factors – what was happening in the aviation market, capacity coming back into the market, jobs.</p>
<p>While initially it was thought the 2020 incident might have been a reason behind the decision, King had subsequently indicated that it was not, finally settling on this nebulous concept of the “national interest” to justify the government’s stance. </p>
<p>But the 2020 incident has hung there in the background of the controversy. On July 10, the day she made the decision, King wrote to the five women, who had contacted her strongly opposing the additional access, to assure them Qatar was not being considered for more flights. </p>
<p>In their letter the women had said the airline was “not fit to carry passengers around the globe let alone to major Australian airports”. </p>
<p>“When you are considering Qatar Airways’ bid for extra landing rights, we beg you to consider its insensitive and irresponsible treatment of us,” they wrote. “We implore you to instead consider an airline that will uphold human rights.” </p>
<p>On Monday this week, Foreign Minister Penny Wong had a phone conversation with the prime minister of Qatar. </p>
<p>Wong has said that in the call, which she initiated, they discussed bilateral matters, as well as multilateral issues ahead of the United Nations UN General Assembly meeting later in the month. They did discuss the 2020 incident; they did not canvass the flights matter. That seems extraordinary. After all, the Qatar government owns Qatar Airways and flights involve country-to-country agreements.</p>
<p>Could this resurrection of the 2020 incident be one way of seeking to neutralise an issue that has been debated – to the Albanese government’s detriment – in terms of limiting competition? </p>
<p>King insists she made the decision herself. She says she consulted colleagues, whom she doesn’t name. She has fudged when probed about what her department recommended. She said she told Anthony Albanese of the decision before it became public later in July, but stonewalled when pressed in parliament for the date on which she informed the prime minister. </p>
<p>Before the attention focused on King, Albanese was copping the heat, because the decision was seen to be in line with his perceived closeness to former Qantas CEO Alan Joyce (who quit prematurely this week, as part of that airline’s attempt to quell public anger at it). </p>
<p>King, from the left, is one of the longest-serving House of Representative members, having won the Victorian seat of Ballarat in 2001 from the Coalition. She was briefly in the ministry in 2013, at the tail end of the former Labor government. </p>
<p>Transport wouldn’t have been King’s first choice of portfolio. She was shadow health minister (she had a background in health policy) for two terms under Bill Shorten, and looked forward to being health minister after the election Labor thought it would win in 2019. The unexpected loss meant major changes in the frontbench under Albanese, which saw King moved to infrastructure, transport and regional development.</p>
<p>King will survive this imbroglio, but the affair is salutary for the Albanese government. </p>
<p>Much of the trouble over the Qatar decision comes from public anger about Qantas and its poor service and arrogant attitude. The rejection of the Qatar flights, which benefited Qantas, became a lightning rod. The government failed to pick up on the strength of feeling about Qantas – if it had, Albanese might not have appeared with Joyce at the airline’s recent event to back the Voice, including with travel assistance for “yes” campaigners.</p>
<p>The Qatar matter shows the government can’t just expect to fob off questions by invoking generalities such as the “national interest”. It also reaffirms the point that while parliament’s question time is mostly useless, it can on occasion expose the weaknesses of a minister under pressure.</p>
<p>Finally, there is a lesson here about the role of cabinet. King might argue such decisions are “routine” and say she consulted (unspecified) colleagues, but the matter would have been better taken to cabinet. A cabinet discussion can tease out competing arguments for and against a decision, and reinforce a government’s case. In her defence in parliament, King tried to make a virtue of ministerial autonomy, but it doesn’t always serve a government. </p>
<p>Thanks to its own bungling, the government on Tuesday facilitated the Senate setting up an inquiry this week that will do a deep dive into its mishandling of the Qatar affair. </p>
<p>Nationals senate leader Bridget McKenzie proposed the inquiry. The government got the Greens onside to vote against it, by accommodating their push for another inquiry – into the Middle Arm export facility in the Northern Territory. </p>
<p>But it neglected to attempt to peel off other crossbenchers until the very last moment. McKenzie had already done the rounds. On Thursday, the government did manage to tweak the terms of reference to look back into some of the Coalition’s years.</p>
<p>Courtesy of the inquiry, a good deal more is expected to emerge about this imbroglio.</p><img src="https://counter.theconversation.com/content/213076/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Michelle Grattan does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>At a crack-of-dawn news conference at Canberra airport, King suggested the 2020 incident was a factor, although “there was no one factor that influenced my decision in relation to the national interest”.Michelle Grattan, Professorial Fellow, University of CanberraLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1931092022-10-24T11:31:22Z2022-10-24T11:31:22ZBudget deficit this financial year to be $36.9 billion<figure><img src="https://images.theconversation.com/files/491509/original/file-20221024-5833-2ag00g.png?ixlib=rb-1.1.0&rect=107%2C395%2C3790%2C2221&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">
</span> <span class="attribution"><span class="source">Mick Tsikas/AAP</span></span></figcaption></figure><p>Treasurer Jim Chalmers has said the budget bottom line will be more than $40 billion better over the four-year forward estimates in total than previously forecast. </p>
<p>The forecast for gross debt will also be lower than earlier estimates. </p>
<p>The 2022-23 deficit is forecast to be $36.9 billion, compared to a forecast of $78 billion in the March budget delivered by then-treasurer Josh Frydenberg. </p>
<p>The government says this bottom line improvement is primarily the result of its work to return back to the budget a big majority of the revenue upgrade rather than use it for new spending. </p>
<p>The upgrade has mainly come from higher commodity prices and strong employment numbers and amounts to more than $100 billion over the forward estimates. </p>
<p>Over the four year period, the budget bottom line is estimated to be more than $42 billion better than what was expected in March. </p>
<p>But after an early improvement, the deficits are forecast to worsen towards the end of the forward estimates, compared to earlier forecasts. </p>
<p>This is because the drivers of the revenue upgrades fade and there are surging spending pressures – especially from the National Disability Insurance Scheme and interest payments on debt– substantially higher than forecast in March. </p>
<p>The trend underlines the need for the government to rein in spending in later budgets if it wants to continue budget repair. It has already announced a review of the NDIS, which is headed for a cost of about $50 billion by mid-decade.</p>
<p>On the tax side, the government is hamstrung by election commitments not to change the Stage 3 tax cuts or introduce new taxes. But the budget will see action to prevent multi-nationals’ tax avoidance. This was the one new tax measure Labor promised at the election. </p>
<p>The budget will also show gross debt is lower every year over the forward estimates compared to the March budget numbers. </p>
<p>It will contain a long list of election promises that are being fulfilled, including on child care (a budget centrepiece), cheaper medicine, and additional university and TAFE places. The government says measures such as better child care support and cheaper medicines will help the cost of living pressures people face. </p>
<p>Prime Minister Anthony Albanese said on Monday the budget “deals with cost of living pressures while not putting pressure on inflation”. </p>
<p>Chalmers said: “The primary influence on this budget is inflation. We are putting a premium on restraint and resilience because that’s what the times call for”. </p>
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<p>Two Coalition regional programs are set for the scrap heap, while Labor is setting up two of its own. </p>
<p>Infrastructure Minister Catherine King announced the government would not go ahead with the Building Better Regions Fund Round 6. The saving from abolishing this round is about $250 million. </p>
<p>King said the Audit Office had found the grants favoured Nationals’ seats and had been awarded on the basis of rules not made clear to all applicants. </p>
<p>Also to go will be the Community Development Grants program, although there will be a pathway for those CDG projects properly accounted for up to the Pre-election Economic and Fiscal outlook statement to be alternatively funded. </p>
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<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/floods-drive-up-fruit-and-veg-prices-while-energy-costs-will-prolong-high-inflation-193014">Floods drive up fruit and veg prices, while energy costs will prolong high inflation</a>
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<p>“All contracted projects will be honoured, and a further 82 projects that date back to 2016 and that are yet to be contracted will have six months to finalise negotiations before the program ends,” King’s statement said</p>
<p>Some $1 billion over three years will be devoted to the new regional programs. </p>
<p>A Growing Regions Program will see regional local councils and not-for-profit organisations compete for grants. </p>
<p>A regional Precincts and Partnership Program will provide “a strategic, nationally consistent mechanism for funding and co-ordinating larger-scale projects that transform a place” for regional cities and wider rural and regional areas. </p>
<p>Meanwhile Sky reported on Monday the budget would predict a rise in power prices of 30-40%. </p>
<p>The NSW treasurer Matt Kean said: “I’d like to see the federal government take the national energy issues very seriously and support households with funding and support in this budget”.</p><img src="https://counter.theconversation.com/content/193109/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Michelle Grattan does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Over the forward estimates, the budget bottom line is estimated to be $42 billion better than what was expected in March.Michelle Grattan, Professorial Fellow, University of CanberraLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1164272019-05-06T20:11:05Z2019-05-06T20:11:05ZWhat are the major parties promising on health this election?<figure><img src="https://images.theconversation.com/files/272755/original/file-20190506-103049-1wnsmkk.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Labor has promised A$8 billion in new health expenditure, while the Coalition has focused on the difference new pharmaceuticals can make to individual Australians. </span> <span class="attribution"><a class="source" href="https://www.shutterstock.com/download/confirm/290070776?src=ZnbalC0cWE1h8qGR38rWvw-1-0&size=huge_jpg">Shutterstock</a></span></figcaption></figure><p>The major parties’ manifestos for the 2019 federal election present voters with starkly contrasting health policies. These policies are shaped and constrained by the overall themes presented by the party leaders, but have some unique elements.</p>
<h2>Liberal – money in your own hands</h2>
<p>The Liberal campaign has two main messages: standing on the government’s claimed record as good economic managers, and offering significant tax cuts in the long-term. The tax cuts are marketed as giving people the power to make their own choices about how the money should be spent.</p>
<p>In health care, this spending-light approach has led to a focus on re-announcing existing policy, and spending down the <a href="https://beta.health.gov.au/initiatives-and-programs/medical-research-future-fund">Medical Research Future Fund</a> with research announcements popping up every other day. </p>
<p>The Future Fund announcements have attracted good publicity for the government, even though they do not represent any increase in research funding, just a change in how the available funding is to be used.</p>
<p>The re-announcement approach can probably best be seen in the Liberal’s policy on <a href="https://www.liberal.org.au/our-plan-youth-mental-health-and-suicide-prevention">youth mental health and suicide prevention</a>, where the five-page policy concludes: </p>
<blockquote>
<p>The Coalition’s plans for youth mental health and suicide prevention will not place additional costs on the Budget.</p>
</blockquote>
<p>Throughout his term as health minister, Greg Hunt has highlighted new drugs being added to the Pharmaceutical Benefits Scheme in formulaic ministerial media releases such as <a href="https://www.greghunt.com.au/breast-cancer-and-rare-skin-cancer-medicines-on-the-pbs/">new listings of drugs for cancer</a>, <a href="https://www.greghunt.com.au/10-million-for-adhd-medicine-on-the-pb/">attention deficit hyperactivity disorder</a>, and <a href="https://www.greghunt.com.au/thousands-to-benefit-from-spinal-arthritis-medication-listing-on-pbs/">spinal arthritis</a>.</p>
<p>He has sought to contrast the Coalition’s approach – where the advice of the Pharmaceutical Benefits Advisory Committee about listing a new drug has always been followed – to that of the previous Labor government, which <a href="https://www.abc.net.au/news/2011-04-12/pharmamilne/55694">deferred some listings after the global financial crisis</a>.</p>
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<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/the-coalitions-report-card-on-health-includes-some-passes-and-quite-a-few-fails-113734">The Coalition's report card on health includes some passes and quite a few fails</a>
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<p>Minister Hunt has continued this focus during the campaign. In a unique approach, he used much of his time in the <a href="https://www.npc.org.au/speakers/the-hon-greg-hunt-mp-the-hon-catherine-king-mp/">National Press Club health debate</a> last Thursday to tell stories about new Pharmaceutical Benefits Scheme listings. It is an old political aphorism that “<a href="https://en.wikipedia.org/wiki/All_politics_is_local">all politics is local</a>”. Minister Hunt was presenting the message that all politics is personal.</p>
<p>The personal stories and the real impact a new listing can have were quite touching, helping to humanise the minister and presenting the government as really caring for individuals in need. </p>
<p>Of course, drugs being listed on the PBS is part of the routine business of government, and Labor has committed to listing the same drugs. The difference is in the way the government chose to inject these stories into the political debate. The message was: vote for us and we will look after your individual needs and care for you as an individual, because we are the party that supports innovation in pharmaceuticals.</p>
<p>This focus on individuals is very much in the Liberal tradition, harking back to <a href="http://www.liberals.net/theforgottenpeople.htm">the “forgotten people” meme of the Menzies era</a>.</p>
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<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/budget-2019-boosts-aged-care-and-mental-health-and-modernises-medicare-health-experts-respond-114194">Budget 2019 boosts aged care and mental health, and modernises Medicare: health experts respond</a>
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<p>The only significant spending announcement by the Liberals in this campaign was to <a href="https://www.liberal.org.au/latest-news/2019/05/02/strong-economy-provides-millions-australians-cheaper-and-free-medicine">reduce the co-payment thresholds for the Pharmaceutical Benefits Scheme</a> from 60 to 48 scripts for pensioners and health care card holders, and from an annual cap of A$1,550.70 to A$1,470.10 for other patients.</p>
<p>This is a good policy which Labor has now matched.</p>
<h2>Labor – cost of living needs to be addressed</h2>
<p>Labor’s campaign on health is quite different from the Liberals. A key overarching theme is the cost of living. The Labor message is: wages have flat-lined, but prices keep going up, and Labor will fix that.</p>
<p>Labor’s policies on childcare and minimum wages fit within this general theme. So does shadow minister Catherine King’s approach to health policy.</p>
<p>Labor has made health a centrepiece of its campaign, with five big announcements.</p>
<p>The first big announcement was to promise billions of dollars to <a href="https://theconversation.com/labors-cancer-package-would-cut-the-cost-of-care-but-beware-of-unintended-side-effects-114979">reduce out-of-pocket costs for people with cancer</a> and to <a href="https://www.smh.com.au/federal-election-2019/labor-promises-to-end-hospital-funding-wars-with-2-8-billion-package-20190413-p51dvj.html">expand funding for public hospitals</a>.</p>
<figure class="align-center ">
<img alt="" src="https://images.theconversation.com/files/272758/original/file-20190506-103053-1rla5r.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/272758/original/file-20190506-103053-1rla5r.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=335&fit=crop&dpr=1 600w, https://images.theconversation.com/files/272758/original/file-20190506-103053-1rla5r.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=335&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/272758/original/file-20190506-103053-1rla5r.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=335&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/272758/original/file-20190506-103053-1rla5r.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=421&fit=crop&dpr=1 754w, https://images.theconversation.com/files/272758/original/file-20190506-103053-1rla5r.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=421&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/272758/original/file-20190506-103053-1rla5r.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=421&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
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<span class="caption">Labor has committed to funding 50% of the hospital funding growth.</span>
<span class="attribution"><a class="source" href="https://www.shutterstock.com/download/confirm/687517969?src=jhlWisgjKa449M1gf5-h5A-1-98&size=huge_jpg">Jacob Lund/Shutterstock</a></span>
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<p>The cancer announcement played extremely well, tapping into concerns that opposition leader Bill Shorten had picked up in his “listening tour” of dozens of <a href="https://theconversation.com/view-from-the-hill-bill-shorten-at-ease-in-town-hall-type-forum-116555">town hall meetings</a> throughout Australia since the last election.</p>
<p>The cancer policy includes: </p>
<ul>
<li>new items on the Medicare Benefits Schedule to encourage bulk billing by cancer specialists</li>
<li>a guarantee that new drugs will be listed on the Pharmaceutical Benefits Scheme</li>
<li>expansion of cancer outpatient services in public hospitals.</li>
</ul>
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<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/labors-cancer-package-would-cut-the-cost-of-care-but-beware-of-unintended-side-effects-114979">Labor's cancer package would cut the cost of care, but beware of unintended side effects</a>
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<p>The second big-ticket health promise was to restore the share of the cost of public hospital funding growth met by the Commonwealth to 50%, up from 45% now. </p>
<p>The cut from 50% to 45% was announced in Prime Minister Tony Abbott’s 2014 budget. Labor has identified the impact of that cut on every public hospital in the country.</p>
<p>The third big promise was to reduce the out-of-pocket costs of dental care. As the 2019 <a href="https://grattan.edu.au/report/filling-the-gap/">Filling the Gap Grattan Institute report</a> showed, more than 2 million Australians miss out on dental care each year because of cost. </p>
<p>The promised Labor scheme is for seniors only. Importantly, though, the policy commits Labor to introducing a universal dental care scheme in the long-term.</p>
<hr>
<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/too-many-australians-miss-out-on-timely-dental-care-labors-pledge-is-just-a-start-116169">Too many Australians miss out on timely dental care – Labor's pledge is just a start</a>
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<p>The fourth big health promise, announced during the official campaign launch on Sunday, was extra funding for <a href="https://theconversation.com/money-for-hospital-emergency-departments-in-shortens-campaign-launch-116577">public hospitals to improve emergency services</a>.</p>
<p>A fifth health initiative does not involve specific spending but also addresses cost of living — a <a href="https://theconversation.com/labors-2-cap-on-private-health-insurance-premium-rises-wont-fix-affordability-91232">cap of 2% on private health insurance premium increases</a> for the next two years while the Productivity Commission reviews the private health sector.</p>
<p>Together, these policies will not only help address cost of living pressures; they will reshape the health sector significantly. </p>
<p>The dental announcement especially is transformative, addressing a major gap in Australia’s public funding of health care. </p>
<p>The new bulk-billing item for cancer care could also have a major effect. </p>
<p>And the Productivity Review of private health could lead to a major shake-up of that sector.</p>
<hr>
<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/labors-2-cap-on-private-health-insurance-premium-rises-wont-fix-affordability-91232">Labor's 2% cap on private health insurance premium rises won't fix affordability</a>
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<p>The bill for Labor’s health policies is big: <a href="https://www.canberratimes.com.au/story/6106154/health-focus-for-shortens-campaign-launch/?cs=14264">more than A$8 billion</a> over the next four years. </p>
<p>Where’s the money coming from? </p>
<p>Labor’s answer is to close what it calls <a href="https://www.theguardian.com/australia-news/2018/mar/05/labor-to-crack-down-further-on-tax-loopholes-and-concessions-bowen">tax loopholes for multinationals and wealthy people</a>; taking from the very rich to give to ordinary Australians.</p>
<h2>Different prescriptions</h2>
<p>Health policy was a significant feature of the 2016 election, when Labor’s so-called <a href="https://theconversation.com/labors-mediscare-campaign-capitalised-on-coalition-history-of-hostility-towards-medicare-61976">Mediscare campaign tapped into voter concerns</a>. </p>
<p>This time Labor is front-footing health policy, fitting neatly into its overall campaign meme of addressing cost of living pressures. </p>
<p>The Liberal campaign is not a big spending one, and so re-announcements of previous commitments and an innovative personalisation of the benefit of new drugs are being used to present the Liberals’ health credentials.</p><img src="https://counter.theconversation.com/content/116427/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>The Grattan Institute began with contributions to its endowment of $15 million from each of the Federal and Victorian Governments, $4 million from BHP Billiton, and $1 million from NAB. In order to safeguard its independence, Grattan Institute’s board controls this endowment. The funds are invested and contribute to funding Grattan Institute's activities. Grattan Institute also receives funding from corporates, foundations, and individuals to support its general activities as disclosed on its website.</span></em></p>Labor and the Coalition’s health policies and campaign strategy couldn’t be more different this election.Stephen Duckett, Director, Health Program, Grattan InstituteLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/662782016-10-19T04:35:27Z2016-10-19T04:35:27ZFactCheck: Have average out-of-pocket costs for GP visits risen almost 20% under the Coalition?<blockquote>
<p>These statistics ignore the fact that under this government, average out-of-pocket costs for GP visits are up by almost 20%. <strong>– Shadow minister for health and Medicare Catherine King, <a href="http://www.theaustralian.com.au/national-affairs/health/bulkbilling-rates-stay-high-for-poor-increasing-for-wealthy/news-story/b29d5bc3c91b3bc2aa5a68e527e9cff4">quoted in The Australian</a>, September 27, 2016.</strong></p>
</blockquote>
<p>In 2013, Labor introduced a <a href="https://theconversation.com/confused-about-the-medicare-rebate-freeze-heres-what-you-need-to-know-59661">fee freeze on Medicare rebates</a> in an effort to rein in the cost of government health spending. After winning the 2013 election, the Coalition government extended that fee freeze twice. Labor has now said it would lift the Medicare rebate freeze if elected.</p>
<p>In that context, the Australian Medical Association is <a href="https://ama.com.au/ausmed/health-costs-rise-rebate-freeze-bites">recommending</a> GPs raise their fees for a standard appointment of less than 20 minutes to A$78 from November 2016.</p>
<p>A news <a href="http://www.theaustralian.com.au/national-affairs/health/bulkbilling-rates-stay-high-for-poor-increasing-for-wealthy/news-story/b29d5bc3c91b3bc2aa5a68e527e9cff4">report</a> in The Australian quoted shadow minister for health and Medicare, Labor MP Catherine King, saying that average out-of-pocket costs for GP visits are up by almost 20% under the current government.</p>
<p>Is that right?</p>
<h2>Checking the source</h2>
<p>There are two components to pricing for medical services in Australia: bulk-billing rates, and rates for services that aren’t bulk-billed. </p>
<p>For services that aren’t bulk-billed, patients pay an “out-of-pocket cost”, which is the difference between the Medicare rebate and the fee the doctor charges. </p>
<p>When asked for sources to support the statement, a spokesperson for Catherine King said:</p>
<blockquote>
<p>The figure was taken from the <a href="http://www.health.gov.au/internet/main/publishing.nsf/Content/Quarterly-Medicare-Statistics">Medicare quarterly statistics to June 2016 (Tab 1.5b)</a>.</p>
<p>The average patient contribution for a patient billed GP service was $29.11 in September 2013, and is now $34.61 – a 18.9% increase. Accordingly, when we say “this Government” we are referring to the Abbott/Turnbull Liberal Government.</p>
<p>An additional source which might also be of use – the <a href="http://www.racgp.org.au/home">Royal Australian College of General Practitioners</a> (RACGP) <a href="http://www.racgp.org.au/yourracgp/news/media-releases/medicare-rebate-freeze-new-evidence-showing-patient-out-of-pocket-costs-increasing/">note</a> that in the last 12 months, out of pocket costs have risen by 6%.</p>
</blockquote>
<p>So King’s figure of “almost 20%” comes from a reliable source. </p>
<h2>Have average out-of-pocket costs for GP visits gone up by almost 20% since 2013?</h2>
<p>Yes. According to Medicare <a href="http://www.health.gov.au/internet/main/publishing.nsf/Content/Quarterly-Medicare-Statistics">data</a>, out-of-pocket costs for GP visits have increased by nearly 20% since the Coalition won government in 2013, as the chart shows.</p>
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<p>It’s not entirely clear why the cost consistently dips slightly in the December quarter, creating the step-shaped formation in the chart above. It may be because of the way the Department of Health processes Medicare claims around this time of year. Nevertheless, the trend is clearly upward over time.</p>
<p>And it’s not just out-of-pocket costs for GP visits that have been rising. The <a href="http://www.health.gov.au/internet/main/publishing.nsf/Content/Quarterly-Medicare-Statistics">Medicare quarterly statistics to June 2016</a> show out-of-pocket costs for all Medicare services have increased by 25.1% since September 2013. Over the same period, out-of-pocket costs for specialist appointments are up by 29.7%.</p>
<h2>Costs were also climbing under Labor</h2>
<p>However, that rise in out-of-pocket costs started well before the Coalition took power in 2013.</p>
<p>In fact, as the chart above also shows, under the previous Labor government out-of-pocket costs for GP services grew from around $18.31 in December 2007 (when Labor’s Kevin Rudd was sworn in as prime minister) to $29.11 when Rudd lost power in September 2013.</p>
<p>(As a side note, the rate of growth in out-of-pocket costs for specialist services has continued to rise faster than that for GPs.)</p>
<h2>While out-of-pocket costs rose, bulk-billing rates have too</h2>
<p>Interestingly, Medicare data also show bulk-billing rates continue to climb, even after the fee-freeze was introduced by Labor in 2013 and after the Coalition government decided to extend the freeze:</p>
<iframe src="https://datawrapper.dwcdn.net/3MtmG/1/" frameborder="0" allowtransparency="true" allowfullscreen="allowfullscreen" webkitallowfullscreen="webkitallowfullscreen" mozallowfullscreen="mozallowfullscreen" oallowfullscreen="oallowfullscreen" msallowfullscreen="msallowfullscreen" width="100%" height="400"></iframe>
<p>This may be because the best way to get many patients to return (and so maintain doctor earnings) is not to charge them at all – <a href="http://onlinelibrary.wiley.com/doi/10.1111/joie.12098/full">competition</a> is at play and is keeping bulk-billing rates high. </p>
<p><a href="http://onlinelibrary.wiley.com/doi/10.1111/joie.12098/full">Research</a> has shown that GPs in affluent areas are less likely to offer bulk-billing, and more likely to charge higher prices.</p>
<h2>Verdict</h2>
<p>Catherine King was correct to say that “under this government, average out-of-pocket costs for GP visits are up by almost 20%.” However, that’s not the whole story.</p>
<p>Average out-of-pocket costs for visiting a GP have been rising for some time and rose under Labor too. <strong>– Anthony Scott</strong></p>
<hr>
<h2>Review</h2>
<p>I agree that the statement by Catherine King is factually accurate, out-of-pocket costs for GP visits have increased by almost 20% since September 2013, but there is more to the story than that.</p>
<p>Out-of-pocket costs for going to see a GP also rose during the Rudd/Gillard period. In fact, using the same data that Catherine King refers to and shown in the article above, I have calculated that out-of-pocket costs rose <em>faster</em> under the last Labor government (in terms of percentage change) than the current Coalition government.</p>
<p>To compare how fast GP out-of-pocket fees grew under Labor (between 2007 and 2013) and the Coalition (between 2013 and 2016), I looked at the percentage change over four quarters. This is a way of using the quarterly data to see how things are changing every 12 months. </p>
<p>Using this method, the average yearly percentage change in out-of-pocket costs under Labor was around 8%. The average yearly percentage change under the Coalition to date (between 2013 and 2016) was 5.4%. (These figures only cover patients who were not bulk billed.)</p>
<p>An important point noted in the article is that bulk-billed patients, who are not represented in this figure, do not pay any out-of-pocket costs. Bulk-billing rates have increased over the same period, to record levels around 80%. </p>
<p>So the proportion of patients paying any out-of-pocket costs has actually been falling. Competition fostered by an increase in supply of GPs in recent years is likely keeping bulk-billing rates high and slowing the growth in out-of-pocket costs. <strong>– Peter Sivey</strong></p>
<hr>
<p><div class="callout"> Have you ever seen a “fact” worth checking? The Conversation’s FactCheck asks academic experts to test claims and see how true they are. We then ask a second academic to review an anonymous copy of the article. You can request a check at checkit@theconversation.edu.au. Please include the statement you would like us to check, the date it was made, and a link if possible.</div></p><img src="https://counter.theconversation.com/content/66278/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Anthony Scott's current research is funded from the National Health and Medical Research Council, Australian Research Council, Medibank Private Ltd, and the World Bank. He is a member of the Patient Identification Working Group of the Health Care Homes Implementation Advisory Group of the Australian Government Department of Health.
</span></em></p><p class="fine-print"><em><span>Peter Sivey receives funding from the Australian Research Council and has previously has previously been funded by Health Workforce Australia and the National Health and Medical Research Council.</span></em></p>Shadow minister for health and medicare Catherine King said under this government, average out-of-pocket costs for GP visits are up by almost 20%. Is that true?Anthony Scott, Professor, The University of MelbourneLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/613602016-06-27T23:53:29Z2016-06-27T23:53:29ZElection FactCheck: has the Coalition cut bulk-billing for pathology and scans ‘to make patients pay more’?<blockquote>
<p>In their first term in office the Liberals … cut bulk-billing payments for pathology and diagnostic imaging to make patients pay more. – <strong>Shadow health minister Catherine King, <a href="http://www.catherineking.com.au/media/malcolm-cannot-be-trusted-on-medicare/">media release</a>, June 20, 2016.</strong></p>
</blockquote>
<p>The opposition has released political ads accusing the government of planning to privatise Medicare and warning of higher health costs in future – a campaign Prime Minister Malcolm Turnbull has <a href="http://www.news.com.au/national/federal-election/scare-campaign-could-hamper-attempts-to-boost-medicares-efficiency/news-story/fe9e1ae2b30ee2e2f8ec9aa817448579">called</a> “extraordinarily dishonest.” </p>
<p>As part of Labor’s Medicare campaign, shadow health minister Catherine King said that the government has “cut bulk-billing payments for pathology and diagnostic imaging to make patients pay more”. Incentives worth between $1.40 to $3.40 are paid direct to pathology service providers to encourage them to bulk-bill. </p>
<p>Is King right?</p>
<h2>Checking the source</h2>
<p>The Conversation asked Labor campaign media for sources to support Catherine King’s statement but did not hear back before deadline. </p>
<p>Health Minister Sussan Ley has <a href="http://www.health.gov.au/internet/ministers/publishing.nsf/Content/health-mediarel-yr2016-ley001.htm">argued</a> that bulk-billing incentives are not meant to be used to cross-subsidise other costs of doing business for <a href="https://theconversation.com/true-blood-cutting-through-confusion-about-pathology-cuts-55140">large companies</a> – some of which are owned by private equity firms – at a time when health care costs are growing.</p>
<h2>From ‘Don’t Kill Bulk Bill’ to a deal on rent</h2>
<p>In its December 2015 <a href="http://www.budget.gov.au/2015-16/content/myefo/download/MYEFO_2015-16_Final.pdf">Mid-Year Economic Fiscal Outlook</a>, the Coalition government announced a suite of bulk-billing changes aimed at saving $650 million over four years. It proposed removing bulk-billing incentives for pathology and diagnostic imaging services.</p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/127652/original/image-20160622-19786-1usxxbd.png?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/127652/original/image-20160622-19786-1usxxbd.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/127652/original/image-20160622-19786-1usxxbd.png?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=440&fit=crop&dpr=1 600w, https://images.theconversation.com/files/127652/original/image-20160622-19786-1usxxbd.png?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=440&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/127652/original/image-20160622-19786-1usxxbd.png?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=440&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/127652/original/image-20160622-19786-1usxxbd.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=553&fit=crop&dpr=1 754w, https://images.theconversation.com/files/127652/original/image-20160622-19786-1usxxbd.png?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=553&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/127652/original/image-20160622-19786-1usxxbd.png?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=553&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
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<span class="attribution"><a class="source" href="http://www.budget.gov.au/2015-16/content/myefo/download/MYEFO_2015-16_Final.pdf">MYEFO 2015-16</a></span>
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<p>Pathology Australia, which includes big players such as Genea and Sonic Healthcare Group among its members, has been central to how this issue has unfolded. Pathology Australia says its member organisations perform a majority of pathology testing within the private sector.</p>
<p>Pathology Australia collected nearly 600,000 signatures for its “<a href="http://www.dontkillbulkbill.com/">Don’t Kill Bulk Bill</a>” campaign, which warned that patients would face expensive pap smears and other costly tests due to government’s removal of the bulk-billing incentive for pathology services.</p>
<p>In May, Pathology Australia <a href="http://www.pathologyaustralia.com.au/2016/05/13/patients-win-in-pathology-announcements/">closed</a> its Don’t Kill Bulk Bill campaign after striking a <a href="https://www.liberal.org.au/latest-news/2016/05/13/coalitions-plan-access-affordable-pathology-all-australians">deal</a> with the government, aimed at ensuring pathology service providers who co-located their collection rooms inside a GP’s building were charged “fair market value” rents.</p>
<p>The bulk-bill incentive removal is still going ahead, but the idea is that many pathology service providers may now be better able to absorb the cost if they’re getting a cheaper deal on rent – instead of passing the extra cost onto patients. </p>
<p>Nick Musgrave, president of Pathology Australia, told The Conversation that:</p>
<blockquote>
<p>Decisions regarding billing practices are made by individual pathology providers … The regulatory changes announced by the Coalition to control excessive rents for pathology collection rooms will enable providers to more readily maintain current billing practices as would the maintenance of current funding. In the absence of either of these measures, providers had indicated they would not have been able to maintain current high levels of bulk-billing.</p>
</blockquote>
<p>Musgrave said the deal to regulate rents for collection rooms will “more readily enable pathologists to maintain current billing practices” whether or not they are members of Pathology Australia. (You can read his full response <a href="http://theconversation.com/full-response-from-pathology-australia-61438">here</a>.)</p>
<p>But some other pathology service providers have said the deal with the government doesn’t take them into account.</p>
<h2>Not all pathologists</h2>
<p>Pathology is no longer a small industry, with the Sonic group reporting annual revenue of about <a href="http://www.sonichealthcare.com/about-us/corporate-overview/">$4 billion</a> – but not all businesses are on this scale.</p>
<p>Catholic Health Australia is one of the service providers that says the deal doesn’t take them into account. This group also represents pathology service providers, including many in regional and rural areas.</p>
<p>According to its spokesman:</p>
<blockquote>
<p>Independent and not-for-profit pathology providers may have to adopt co-payments simply in order for their services to remain viable … Turnbull’s deal with ‘the pathology sector’ was made without taking not-for-profit providers into account.</p>
</blockquote>
<p>The group said that the rents deal will:</p>
<blockquote>
<p>disproportionately assist the larger corporate providers and will not be sufficient to adequately offset the cuts imposed on smaller providers by removing the bulk-billing incentives.</p>
</blockquote>
<p>You can read Catholic Health Australia’s full comment <a href="http://theconversation.com/full-response-from-catholic-health-australia-61439">here</a>.</p>
<p>So, whether or not you’ll pay more for pathology tests after July 1 depends mostly on who owns that practice or pathology service provider, and whether they can afford to absorb the cost of the changes themselves or choose to pass on these costs to patients.</p>
<p>Labor has <a href="http://www.smh.com.au/federal-politics/federal-election-2016/federal-election-labor-promises-to-continue-funding-bulkbilling-incentives-for-pathology-radiology-20160618-gpmd3m.html">pledged</a> to reverse cuts to the Medicare Benefits Schedule pathology bulk-billing incentives – which it believes will improve access to bulk-billed pathology services, but would also drive up the cost to taxpayers. </p>
<p>Others, such as the Grattan Institute, <a href="http://grattan.edu.au/wp-content/uploads/2016/02/935-blood-money.pdf">argue that</a> there are ways save money in pathology, saying that:</p>
<blockquote>
<p>patient co-payments for tests should be abolished. Patients aren’t the real consumers of pathology tests – the doctors who order and use them are. </p>
</blockquote>
<h2>What about scans?</h2>
<p>The rents deal struck between the government and Pathology Australia doesn’t cover scans.</p>
<p>Australian Diagnostic Imaging Association (ADIA), which represents private providers of radiology services, <a href="http://www.adia.asn.au/public/3/system/newsAttachments/ADIA%20Pathology%20Deal%20Response%20May16.pdf">said</a> the rents deal was “cold comfort for the millions of patients needing vital radiology services”. </p>
<p>The government plans to remove bulk-billing incentive payments for radiology services in January 2017. However, ADIA has <a href="http://www.adia.asn.au/public/3/system/newsAttachments/050616_FINAL_ADIA%20welcomes%20Coalition%20commitment%20on%20access%20to%20diagnostic%20i%20....pdf">secured</a> a commitment from the government to “work with the diagnostic imaging sector on structural reforms to provide patients with certainty on affordable access to services”.</p>
<p>The review will happen before January 2017.</p>
<p>ADIA has also said that patient rebates for diagnostic imaging have been frozen since 1998, with patient gaps now averaging <a href="http://www.adia.asn.au/public/3/files/ADIA%20Rebate%20Response%2031May16.pdf">$100</a>, and has voiced concern that Labor’s pledge to reverse the decision to remove the bulk-billing incentive does not go far enough. Labor has said it will restore indexation in January 2017 to all services provided by GPs, allied health and other health practitioners and medical specialists – but that scans are not included.</p>
<p>ADIA has <a href="http://www.adia.asn.au/public/3/system/newsAttachments/100616%20ADIA%20calls%20Labor%20failure%20to%20index%20DI%20a%20broken%20promise%20on%20Medicare....pdf">called</a> on Labor to expand its indexation election promise to include diagnostic imaging service providers too.</p>
<h2>Verdict</h2>
<p>Catherine King was right to say that in its first term of office, the Coalition government cut bulk-billing payments for pathology and diagnostic imaging. That is scheduled to come into effect on July 1, 2016, for pathology services and in January 2017 for radiology services.</p>
<p>But the second part of her statement – “to make patients pay more” – didn’t tell the whole story. Pathology Australia’s deal with the government on rent regulation means some pathologists may be able to keep bulk-billing. Others, however, may not. </p>
<p>Whether or not patients will pay more as a result of the bulk-billing incentive removal depends on whether your pathology or radiology service provider passes on the cost to customers. <strong>– Helen Dickinson</strong></p>
<hr>
<h2>Review</h2>
<p>This is a sound FactCheck. I would further note that the Grattan Institute <a href="http://grattan.edu.au/wp-content/uploads/2016/02/935-blood-money.pdf">reports</a> that almost 99% of pathology tests for out-of-hospital patients are bulk-billed, an increase from 93% a decade ago.</p>
<p>St John of God, a large not-for-profit health group, is <a href="http://www.clinicallabs.com.au/media/1037/australian-clinical-labs-media-statement-22nd-june-2016.pdf">selling</a> its pathology operations to Clinical Labs. The removal of the bulk-billing incentive payment may have put them in a position where they would have passed increased costs onto patients. </p>
<p>The unmentioned driver behind the rising cost to the health budget of pathology bulk-billing is clinicians practising <a href="http://www.racgp.org.au/afp/2014/may/we-live-in-testing-times/">defensive medicine</a> – GPs and specialists reasonably ordering tests “to be sure” or “safe”, even where it may not be needed.<strong>– Bruce Baer Arnold</strong></p>
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<p><div class="callout"> Have you ever seen a “fact” worth checking? The Conversation’s FactCheck asks academic experts to test claims and see how true they are. We then ask a second academic to review an anonymous copy of the article. You can request a check at checkit@theconversation.edu.au. Please include the statement you would like us to check, the date it was made, and a link if possible.</div></p><img src="https://counter.theconversation.com/content/61360/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Helen Dickinson receives funding from the federal Department of Health.
</span></em></p><p class="fine-print"><em><span>Bruce Baer Arnold does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Labor’s shadow health minister Catherine King, said that the government has “cut bulk-billing payments for pathology and diagnostic imaging to make patients pay more”. Is that right?Helen Dickinson, Associate Professor, Public Governance, The University of MelbourneLicensed as Creative Commons – attribution, no derivatives.