States vow to resist federal health and education cost shifting

New South Wales Premier Mike Baird and Treasurer Andrew Constance are concerned about federal funding for hospitals and schools. AAP/Alan Porritt

The Liberal states of New South Wales and Victoria have sharply criticised the federal budget’s cost shifting on health and education, while the medical lobby has slated its $7 co-payment for visits to the doctor.

NSW Treasurer Andrew Constance said the state treasury estimated NSW was being asked to find an extra $1.2 billion over four years for its health budget.

“We are deeply concerned about what this budget means for health and education services,” Constance said.

NSW also had concerns about the implementation of the GP co-payment and its potential impact on “overwhelming our emergency departments” and needed to have discussions on the detail of the measure.

Victorian Treasurer Michael O'Brien said Victoria was concerned “by what appears to be a reduction over time in federal funding for areas including schools and hospitals”. This would reduce the benefit of the state government’s additional investment announced in last week’s budget.

“Victoria will continue to meet its obligations … however no state or territory is in a position to fill all funding gaps left by the Commonwealth,” O'Brien said.

The Victorian minority government, which is on a knife edge, faces an election later this year while the NSW government, with a large majority, goes to the polls early next year.

The Australian Medical Association declared the health budget “full of pain for patients”. AMA vice-president Professor Geoffrey Dobb said while there was a place for co-payments with the right model, this was not it.

“Patients will now face higher out-of-pocket costs at their GP, the emergency department, radiology, and at the pharmacy, through new or higher co-payments. Access to quality primary care will be more difficult for many Australians,” he said.

Dobb also said changes to the National Health Reform Funding Agreement would create uncertainty in the states about public hospital funding.

“State budgets will be in danger of being overrun by public hospital cuts. Patients will have longer waits for public hospital services. Put together the cuts and co-payments threaten fairness and equity in the health sentence,” Dobb said.

The Consumers Health Forum of Australia said the budget slashed $8.5 billion from the health budget over five years while slugging consumers with extra charges. “The government has traded the Medicare card for the credit card in requiring millions of Australians to pay out of pocket towards their primary medical care.”

Shadow Treasurer Chris Bowen reaffirmed that Labor will try to block the co-payment in the Senate. Bowen said the Australian people had been hit with a budget of “broken promises, cruel cuts and unfair increases in the cost of living.

"It is built on more than $80 billion in savage cuts to schools and hospitals. It is built on the destruction of Medicare, and the end of fair and affordable higher education. It is a budget built on Tony Abbott’s act of mass deceit at the last election,” Bowen said.

Bowen also said Labor would vote against the rise in the pension age to 70 and the restoration of the petrol excise indexation. But the latter will get through because the Greens have said they will support it.

Clive Palmer, whose PUP will be in a pivotal position in the new Senate after July 1, declared that Joe Hockey had delivered “a heartless and cruel budget that will cause many Australians undue pain, all based on a fairy tale they have concocted that Australia is in some kind of debt crisis.

"We have no debt crisis. There is no justification for a debt levy or the $7 Medicare co-contribution. It’s just more bullshit being fed to the Australian public,” Palmer said.

“We have been told by the Liberals that the age of entitlement is over, yet their entitlement to deceive the Australian people goes unhindered,” he said.

The support of PUP will be needed for the government to get any budget measures through the Senate after July 1.

Greens leader Christine Milne said this was a “divisive and brutal budget, written in the boardrooms of big business.

"The vicious attack on payments to vulnerable young people confirms this is a government of old men, out of touch with the reality facing young Australians,”

She said that Tony Abbott’s medical research fund “will be funded by the already sick”.

Business groups welcomed many aspects of the budget, though they had some criticisms.

The Australian Industry Group said the government was backing its big fiscal ambitions with decisive steps to put the budget on a firm long term footing. But it also carried some risks to Australia’s short term economic health.

Chief Executive Innes Willox said the so called “budget repair levy”, which would take the top marginal income tax rate to 49%, “is an inefficient way to raise additional revenue. It will detract not only from discretionary consumer spending and therefore business income, but it will also dampen incentives to save and invest at a time when we need to lift investment by Australian businesses”.

The Business Council of Australia said the budget was “a solid start to putting the fiscal strategy back on track”, but it was disappointing to see ad hoc measures such as the tax levy. CEO Jennifer Westacott said changes to health and social security arrangements “need to be implemented carefully and sensibly” to avoid unintended consequences that could place an unfair burden on particular groups.

ABC Managing Director Mark Scott said the funding cuts for the public broadcaster “would be disappointing for audiences. The government gave repeated commitments before and after the election that funding for the corporation would be maintained”.

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