E&OE……………………….……………………………………………………………
PRIME MINISTER:
Ever since the election this Government has been dealing with the budget mess that the Labor Party left us – increasingly effectively with the budget mess that the Labor Party left us. We went into the last election with the Labor Party saying that the deficit would be just $18 billion. It turned out to be almost $50 billion. That was a mess that Labor created and then tried to cover up and that’s what this Government’s fundamental task has been all year – to get Labor’s debt and deficit under control.
Part of getting the debt and deficit under control has been making Medicare sustainable. Ten years ago Medicare was costing us $8 billion, it's now costing us $20 billion. In a decade it will be costing us some $34 billion and the Medicare levy at the moment is raising only about 50 per cent of the Medicare spending. So, we've got to make it sustainable.
Our Budget changes were designed to make Medicare sustainable, they were designed to save money in the long term and also to invest in our strengths. Obviously we do have fabulous doctors, fabulous nurses, terrific health institutions and a really, really world-class medical research community. So, that's what our Budget changes were designed to do.
But for some time I've had backbenchers coming to me, I've had members of the community coming to me, saying we support the idea of more price signals in the system, that's an economic reform, but can't it be better for children and for pensioners.
That's exactly what Peter Dutton and I are announcing today – a system which is better for children and for pensioners, a new and improved proposal which indicates that this is a Government which is always capable of listening, learning and improving.
So, what I announce today is a new package of measures. There will be no change to bulkbilling for children under 16, for pensioners, for veterans, for people in nursing homes and other aged care institutions. Only for adults who aren't on concession cards will there be the option – and I stress the option – of doctors charging at their discretion a $5 co-payment.
Now, we do have to pay for changes and so there are a couple of additional measures which I announce today which mean that the overall package will save about the same amount of money as the package that was announced at budget time.
One of the measures is a quality control measure, another measure is a measure which the Labor Party previously had in place.
We will ensure that to obtain the standard rebate the consultation has to be for 10 minutes or more because we all know about the phenomenon of six-minute medicine, sausage machine medicine, some clinics where patients are churned through. This is something that we are determined to tackle as a quality control measure, so the standard rebate will only apply if the consultation goes for a reasonable time.
We will also be freezing rebates over the forward estimates period. This was a measure that Labor has had in place for some time and we'll be continuing it.
So, what we've done with this package is we have very, very significantly improved it, while at the same time maintaining our support for more price signals in the system and maintaining our support for a really strong, world-class medical research future fund.
I do want to stress these fundamental things – bulkbilling stays for young people and for pensioners, and the co-payment is at the option of the doctor – at the option of the doctor. I want to thank Peter Dutton; I want to thank my parliamentary colleagues, all of my parliamentary colleagues. I certainly want to thank my backbench colleagues who have been out there listening to the community and have been reporting back to me but I particularly want to thank Peter Dutton for coming up with what I think is a new and improved way of dealing with this very significant issue.
MINISTER FOR HEALTH:
Prime Minister, thank you very much.
The Government said from day one that we wanted to have a strong and sustainable Medicare and we delivered that through the changes that we announce today. As the Prime Minister has said, about eight million Australians, those who are on concession cards, those that are pensioners, those that are living in aged care residential facilities, those children under age 16 across the board, they will all be able to maintain bulk billing as we know it today.
There will be the bulkbilling incentive that stays in place and there will be the ability for the doctor to bulkbill those patients on an ongoing basis. So, we provide significant support for eight million Australians, including all of those listed as well as DVA patients going through or veterans going through the DVA process. We also exclude pathology and diagnostics from our announcement today and the status quo remains for pathology and diagnostics.
We've listened to the concerns of not just the backbench, as the Prime Minister says, but also Australians with whom we've corresponded and met with since the May Budget and this also addresses many of the concerns that the crossbench senators have raised with us over recent months. I believe very strongly that this has a strong level of balance and of equity and it has a great ability for us, given the ageing of our population, the huge cost with personalised medicines and all of that which we will need to pay for over the course of the coming decades, it gives us a head room and the ability for us to be able to spend more as our population ages but in a sustainable way. I think we've struck a reasonable balance here and on that basis I think it's very worthy of support.
QUESTION:
What precisely is the savings figure and does this not require legislation?
PRIME MINISTER:
The Budget announcements, as I understand it, saved some $3.6 billion over the forward estimates. This package will save, as I am advised, some $3.5 billion over the forward estimates but obviously those figures will be released in MYEFO. The changes to the rebates will require regulation. The change to the Medicare claiming will require legislation. So, we will be before the Parliament but obviously legislation will be less central to this than it was to the proposal that we took to the Budget.
QUESTION:
[inaudible].
PRIME MINISTER:
The legislation are disallowable – no doubt about that. I would certainly expect given that we have addressed what were the principal concerns expressed to us by the crossbenchers, I think it would be most surprising if the Parliament were to take the rather extreme step of disallowing a Medicare regulation.
QUESTION:
I appreciate that you had to compromise on this, you couldn't get your original proposal through, but given concessional pensions and so forth will be exempt, do you not think you will be confronted with the same problem in a few years' time that the people go to the doctor the most have no price signal?
PRIME MINISTER:
Well that's a fair point, Phil. It's a very fair point. In the end whether the patient faces a price signal is the choice of the doctor. Now, doctors to their great credit have largely chosen to bulkbill vulnerable people and we want that to continue, we really do want that to continue, and that's why there's no change to the bulkbilling arrangements for children, for pensioners, for veterans, for people in nursing homes and no change to the bulkbilling arrangements for diagnostics. So, we want that to continue. In the end, though, this is a question for the doctors and what we're saying to the doctors is for adults who aren't on concession cards we don't think it's unreasonable for you to charge a co-payment and what we want to do by legislation is enable them to directly claim the rebate, provided the co-payment they charge for that particular class of patients is $5 or less.
QUESTION:
Prime Minister, there seems to have been some mixed signals sent in recent weeks over this policy and does that reflect basically an indecision in the Government over what to do on this issue?
PRIME MINISTER:
Look, it's been pretty obvious for some time that we were going to have to improve the position that we took to the Budget. I thought the position that we took to the Budget was a very good position, but I think this is a better one and obviously there are a range of conversations that we have with a range of different people in terms of coming up with this improved position. As I said to you a week or so back in this very spot, it was a bit ragged but we've got to a better position and that, in the end, is what people want. They want us to have the best possible policy in the circumstances in which we find ourselves.
QUESTION:
Sorry, Mr Dutton, you say that the co-payment is going to be optional but you're still cutting the Medicare rebate by $5, won't that effectively force a lot of doctors to charge the co-payment in those circumstances?
MINISTER FOR HEALTH:
Just by way of clarification, so for concessional patients there is no reduction in the rebate, but for general patients there is a $5 reduction for essentially time-based services. So, levels A through D, and then it will be at the doctor's discretion as to whether or not they charge that $5, that will be a decision for the doctor, essentially as it is now, and what we're saying is that there is a change that we can make so that the benefit can be assigned to the doctor as opposed to the patient paying up-front the full level B, for argument's sake, and then claiming part of that back through Medicare. So, that's the change that we make and in the end it will be a decision for doctors.
The only other point that I'd make is about seven out of 10 non-concessional patients at the moment, so seven out of 10 people without a pension or a concession card, are bulkbilled and this is the element around the six-minute medicine. We think the change in the way in which the A and B can be charged, so having a minimum of 10 minutes before they can charge for a level B consultation, that that will concentrate a lot of the doctor's effort on those who are most in need of help, those with chronic diseases. It will skew the finances, if you like, when the doctors are considering this, towards spending more quality time with patients as opposed to just churning people through, so there are a number of benefits out of what we propose.
QUESTION:
You don’t agree that financial considerations will force the doctors a lot of the time to charge the co-payment regardless of if they want to or not?
MINISTER FOR HEALTH:
I think the doctors will make a decision as they do now and as the Prime Minister pointed out, doctors make decisions about patients and whether or not they charge and we've maintained the very important principle of universality in the measures that we announce today. But we've listened to the concerns that people had, particularly about concessional patients, people within aged care facilities for example. There was a lot of feedback in relation to that and we've listened to all of that advice and we've acted accordingly.
PRIME MINISTER:
And I stress – and I really would want to stress that nothing changes; nothing changes in terms of the bulkbilling arrangements for children, for pensioners, for veterans, for people in nursing homes and for diagnostic services.
QUESTION:
Prime Minister, I wanted to ask you a question about the profile of the savings and perhaps Mr Dutton you can explain. You say the savings are around about the same but I imagine that the control measures and plus the freezing of the rebates means that the savings are waylaid. I imagine this has an impact on pathway to surplus. But can you give us a rough idea of the savings profile between those two measures that you've mentioned?
PRIME MINISTER:
Well, they're about a billion dollars for each of the three major measures and all of that will be crystallised in MYEFO but each one of the measures, the change to the rebates, the reduction by $5 for certain categories of patients and the freeze raise in the order of $1 billion over the period.
QUESTION:
Prime Minister, I remember when you were health minister you had to put extra incentives in to make doctors bulkbill. So, taking money away from doctors, won't that cause a drop off in bulkbilling rates?
PRIME MINISTER:
Well, plainly what we're saying to doctors is that with adults who don't have concession cards, we don't mind you charging a co-payment of up to $5. That's what we're saying, obviously we're saying that. Frankly, we think that's an entirely reasonable position, an absolutely reasonable position and that was the point that many of the crossbenchers made to us in discussions, that they were happy to see a co-payment on some people but they didn't want to see a co-payment on all people.
The other point I make, Sid, is that there is a world of difference between what's right and good with a $20 billion surplus and what's right and good with a $50 billion deficit and again, I stress we went into the last election with Labor claiming that we were on track for surplus and that the deficit in that financial year was only going to be $18 billion. Well, it turned out to be almost $50 billion, there was a $30 billion budget black hole in just one year and we were never going to get back into surplus under the policies of the former government. That's why what was right and good in the Howard years is not necessarily right and good now.
QUESTION:
A couple of things. When was the decision actually taken finally to do this? Second, you've talked about consultations with the backbench and the crossbench but have you talked to the doctors about this given that they're pretty central to the whole process? And third, both in your opening remarks and your statement you've linked the level of the Medicare levy and the shortfall in funding, is there a prospect implicit in your comments that the Medicare levy is something you will have to look at again?
PRIME MINISTER:
No, look, both sides of Parliament agreed to see a modest adjustment to the Medicare levy prior to the election to help fund the NDIS but we have no plans whatsoever for any change there. Peter Dutton is in constant contact with the medical profession. I am in more intermittent contact but I'm still in some contact with the medical profession, as you'd expect, from a former health minister. Without putting words into the mouths of doctors, I think they will acknowledge that this is a significantly better package than the one that was brought forward at budget time. This is something that the ERC has been chewing over for some weeks and the decision crystallised late last week and it was supported by the Cabinet this morning.
QUESTION:
Prime Minister, you say the savings, the measures you've announced today are roughly the same savings as the co-payment, but are far less politically contentious. If so, why didn't you opt for these in the first place and did you stay with the $7 co-payment for too long? It’s since May now.
PRIME MINISTER:
All of you will make your own judgments and the general public will make their own judgment about process, but I am absolutely convinced that the package that we have brought forward today is a better package than the one we brought forward at budget time. That was a good package. It was a very important way of dealing with the problem, but I think this is a better package – an even better way of dealing with the problem – and that's why I'm confident that we’ll be able to move forward with this.
QUESTION:
Prime Minister, the Medical Research Future Fund, is that now dead? And secondly, can I ask, doctors at the moment can charge whatever they want above what they receive in the Medicare rebate, so they could already charge more. Aren't you just cutting that rebate, effectively?
PRIME MINISTER:
The Medical Research Future Fund is a very important way for Australia to build on its strengths. So, all of the savings that the Government makes in this area, at least for the next few years, will go into the Medical Research Future Fund until it gets to a balance of $20 billion and that will roughly double our annual spend on health and medical research. This is going to be good for Australia and it's going to be good for the wider world because our medical researchers are absolutely world class and one of the reasons why an Australian born today can expect to live a quarter of a century longer than an Australian born 100 years ago, is because of the extraordinary work of our medical researchers.
So, an investment in medical research is an investment in a better life for every Australian. So, the saves continue to go into the Medical Research Future Fund and I don't believe the Medical Research Future Fund should be contentious. It's only once that fund is fully paid up that the saves will return to the Budget. That's why we are not only addressing the long-term budget weakness, but we are fundamentally playing to our strengths as a nation. Now there was another question to that?
QUESTION:
Doctors can already charge above the Medicare rebate if they choose, so isn't this really just a cut in that rebate?
PRIME MINISTER:
Well, it's a very selective change, it's not an across the board change, and we're not saying that you must charge anyone a co-payment, we're just saying that if you're a GP who is delivering a time-based service to someone who is 16 or over and who doesn't have a concession card, the rebate will go down by $5 and you have the option, should you choose to take it, of charging a $5 co-payment and still claiming directly the rebate from the Government. So, sure, this is a change, but it's a very carefully targeted change which in the end is all about giving the families of Australia the best possible deal.
QUESTION:
Prime Minister, some parts of this including the changes to the consultation times, I think it says come into effect in January and the rest in June, but you're announcing it after Parliament has risen for the year when you don't know and you won't know what verdict the Senate will pass on the regulations and the legislation to implement it. So, doesn't that run the risk of introducing significant uncertainty for doctors and for patients?
PRIME MINISTER:
Well, I'm very confident that these regulatory changes will stand because I believe that the change to the times of consultations is a quality control measure. It really is a quality control measure and I think that the vast majority of the medical representatives will accept that this is an important quality control measure.
In terms of the freeze to the rebates, well, this has been Labor policy for quite some time and while I know that Labor has walked away in Opposition from many things that it supported in government, given the fiscal situation, I would be amazed if they would want to further sabotage the task of fiscal repair.
QUESTION:
[inaudible] of the opposition parties about whether they will support this that you're announcing after Parliament has risen?
PRIME MINISTER:
It's very important that Labor declare itself on this, obviously. I invite Labor to declare itself on this and I trust that just for once the Labor Party will opt for economic security rather than against economic security. One of the points that I've made in the Parliament and elsewhere recently is that we've managed to secure a degree of bipartisanship on national security. This is long-term economic security and I'd certainly invite the Labor Party to look at this on its merits.
QUESTION:
Prime Minister, what would you say to the critics who would say that you are squibbing the big decisions on getting the Budget back into surplus now that you're not prepared to take policies from the Budget to the Parliament, succeed with that and get the Budget back?
PRIME MINISTER:
This package of measures today, Paul, will save almost the same as the package that we announced on Budget night. So, this is every bit as much about budget repair as the measure announced on Budget night and we are absolutely committed to budget repair. But this, I think, is a better package of proposals and I also think that it's more achievable in terms of securing the actual implementation of the proposals. So, again, I want to thank my colleagues for insisting that we come up with something which enshrined the principle of price signals, which enshrined the principle of budget repair, but was better for children and for pensioners.
QUESTION:
Prime Minister, on the Medical Research Fund, some of your colleagues, at least privately, have pointed at that part being the reason this was difficult to sell. Therefore, why have you kept it and can we expect any other back downs on policies?
PRIME MINISTER:
Have you honestly found anyone who doesn't support the principle of medical research? I mean I ask you – I ask you a question, if I may – is there anyone in this country who doesn't support the principle of a greater spend on medical research? The research investment we make today turns into the better health outcomes that we get tomorrow. It is absolutely vital if we are going to build on our long-term strengths, if we're going to play to our strengths as well as live within our means, that we are prepared to take bold and innovative measures like this. One of the things that I was proudest of, as Health Minister, was the very large increases in health and medical research funding back in those days. These days are different, but the objective of getting a greater medical research effort is as important as ever and this is our way, in our time, of ensuring that we can continue that increase.
QUESTION:
Prime Minister, are you surprised or disappointed about how much your Budget is struggling to get support? And just on another issue, I believe Cabinet also discussed cracking down on internet piracy. What was decided on that today?
PRIME MINISTER:
Well, Matt, I will allow any subsequent announcements to be made in due season, as Kevin Rudd used to say. All in good time, you will get further announcements. But, on the overall task of budget repair, this is absolutely critical to the future of our country, because without getting the Budget under control we can't build a stronger economy with more jobs and greater prosperity for all. The point I keep making is that this Government inherited a mess, we've made a great start, there's much more to do, we've got to get the Budget under control because that is essential to building a stronger economy with more jobs and more prosperity for everyone. So, if at first we find one set of proposals blocked or obstructed, we will come up with a different set of proposals which essentially do the same thing, but in this case, do it in a better way and that's what our political process is all about: it's about trying to ensure that we come up with the best possible solutions to the problems that we are wrestling with.
QUESTION:
Prime Minister, if this is a better solution, then isn't that a concession that without the pushback of your own backbench and without the obstruction of the Senate, we would have had a less good policy in place? Are you conceding that the Senate has therefore done you and everyone a favour and why didn't we have the best possible policy in the first place?
PRIME MINISTER:
Well, Karen, we had good policy in the first place, now we have better policy. We had good policy in the first place, we've got better policy now and what we've seen here is, I think, an intelligent and sophisticated response from the Minister, from the ERC, from the Cabinet, from the Government more generally, to the quite reasonable observations of the backbench and the community and that's the glory of our system. The glory of our system is you get proposals, you get reactions, you get improvements and you get solutions and this is the system at work. It's a system that I'm very proud to be part of. It's a system that I am very proud to have served for the best part of a quarter of a century.
QUESTION:
When you talked about barnacles the other week, what policies did you actually have in mind and are there any barnacles left to clear after this and your changes to paid parental leave?
PRIME MINISTER:
Well, Steven, as you know, since I made that observation there have been three significant changes: we've moderated our position on Defence personnel allowances and pay, we have announced a significant change of direction in terms of our paid parental leave policy so that it will now be a much more holistic families package than something that is focused very much on paid parental leave and today we've come up with a significantly improved position on Medicare.
Now, we are always looking to do the right thing in better ways. We are always looking to do the right thing in better ways and watch this space. This is a Government which is determined to be better and better in the weeks and months ahead.
QUESTION:
Prime Minister, you say that policy has improved since the Budget and since you've been listening to people. Would this policy have been even better still if you took it to the election and you had voter feedback and put it to the ultimate test – that is, would you have been elected if this policy was in place?
PRIME MINISTER:
I want to make two points. First point is that the commitment we made going into the election is that there be no cuts to health and when you look at the overall spend within the forward estimates there aren't, because all the savings are being reinvested in health through the Medical Research Future Fund. The second point I make is that we are in quite different circumstances 15 months on than we were back in the election campaign. Labor went into the election campaign claiming the deficit would be just $18 billion and that we were on a credible path to a sustainable surplus. What we subsequently discovered was that the deficit would be $48 billion – a $30 billion budget black hole – and that under Labor's policies we would never ever – never ever – get back to surplus and the debt would just keep growing year after year after year after year in a form of intergenerational theft; a crime against our children and our grandchildren. So, that was the situation that we found ourselves in and what we have done is intelligently responded to that in ways which keep faith as best we humanly can with the commitments that we made pre-election.
QUESTION:
Is the Government planning any kind of public information or advertising campaign about these changes, like the ad campaign on higher education?
PRIME MINISTER:
I certainly don't rule it out, but there is not one that has currently been formulated.
QUESTION:
Prime Minister, you frequently remind us that you were a journalist in a former career, and we're very grateful for that, but could you use both your journalistic and political skills to explain to us what a sovereign submarine industry is when you don't actually build the submarines in Australia?
PRIME MINISTER:
The point I've made constantly about submarines is that we want the best submarines – the best possible submarines – at a competitive price and that's what the Government is doing. What we also are absolutely committed to is ensuring that our future submarine fleet is as operationally effective as possible and that obviously means sustainment here in Australia and we will certainly honour the pre-election commitment that we gave that the Australian work on the future submarine fleet would focus on the Adelaide shipyards and what that means is that there will be more work, more jobs in submarines in the future than there are now.
QUESTION:
Prime Minister you’ve talked about $48 billion in deficits. Why should taxpayers be happy about funding advertising campaigns for policies that haven't yet become law?
PRIME MINISTER:
Well, these are information campaigns – I want to stress that. They're information campaigns which are entirely in keeping with the guidelines around government information campaigns. The guidelines always involve independent people assessing the material and I point out that we have spent less in nine months of the just gone financial year than Labor spent in the first three months, including in the caretaker period. So, this is a Government which is fair and which is frugal – a Government which is fair and frugal with taxpayers' money.
Thank you.