It was the shortest auction for votes in living memory. The government dropped — to select media outlets — that it would announce, on Sunday morning, $8.5 billion to expand bulk-billing incentives to everyone, along with some GP workforce measures. It will “support thousands of general practices to bulk bill every patient”.
“No more wondering if you need to reach for your Medicare card or your credit card,” Labor said. Coincidentally (ha!), the funding would restore “the $8.3 billion the Australian Medical Association says was cut from Medicare through the funding freeze initiated by Peter Dutton a decade ago”.
The goal, inevitably, was to paint Dutton as a threat to Medicare, not just in the past but now. But Dutton was having none of it. Just after noon on Sunday, Dutton issued a media release saying the Coalition backed the spending, as well as claiming it had already committed $500 million to mental health care, thus investing a “historic” $9 billion “to fix Labor’s mess”. The email actually beat Labor’s formal media release by five minutes.
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Treasurer Jim Chalmers admitted that only $5.4 billion of the spending had already been built into the forward estimates, so it was, in effect, $4 billion being added to the national credit card by the major parties.
And all for zero political effect. Labor owns health as an issue. But as long as the Coalition copies Labor, it can nullify most of that advantage. “Mediscare” in 2016 was an exception, being built on an outrageous lie — one of many told in Western politics that year — about a much-needed overhaul of Medicare back-end systems, backed by fake texts and robocalls from Labor. But when it comes to straight funding, it’s much easier for the Coalition simply to say “me too”.
The big loser is the taxpayer. The increase in health and caring spending over the past decade under both sides has been necessary, reflecting our ageing population and our commitment, as a civilized society, that the elderly and people with disabilities should enjoy a reasonable quality of life. But Australia does not need to be spending $8.5 billion encouraging GPs to bulk-bill everyone — and especially not the half the population with above-average incomes. The actual impact on health outcomes will be minimal, with taxpayers subsidising the GP visits of the worried well when the funding could be directed at far more efficacious health policies.
But it’s not really a health measure at all, it’s an un-means-tested cost of living measure masquerading as health policy, intended for political effect given voters are bitterly resentful of inflation despite it falling back to more traditional levels.
It’s all of a piece with the current mood of the major parties; to spend without any serious regard for ensuring we’re taxing ourselves enough to pay for it. The Coalition peddles its standard line about cutting spending and fixing Labor’s mess, but it’s full of shit — it left spending at 26.4% of GDP when it left government in 2022, with receipts stuck at 25%. Labor has racked up two surpluses off surging tax revenues but is pushing spending over 27% next year, with revenue maxing out at 25.5%.
Both sides are signed up to the multi-hundred billion dollar folly of AUKUS, which will hammer the budget for generations to come. Both sides are signed up to a rotten GST deal with the corrupt petro-state over in the west that is costing us tens of billions. The Coalition wants to throw $330 billion — likely half a trillion by the time cost blowouts and delays have been properly accounted for — at nuclear power in a country that is perfect for renewable energy, all to keep the Coalition’s fossil fuel donors happy.
And not a word from either side about delivering a tax system that will pay for this permanently higher level of spending, rather than leaving an ever-growing interest bill and dumping the burden on younger voters who, as Ken Henry rightly observes, are the victims of a massive intergenerational swindle. The only players in the tax reform debate are greedy peddlers of self-interest like the Business Council, their shills in the media and the beneficiaries of the existing tax system — AKA wealthy baby boomers and gen Xers — who want to keep the rip-off of young people going.
And every budget initiative, every election promise, every handout, makes things worse.
When Kevin Rudd bravely stood up during the 2007 election campaign and said “this reckless spending must stop”, throwing the Howard government’s reelection strategy into disarray, revenue was at 25% of GDP — not much below where it is today — but spending was just over 23% of GDP. With spending now headed for 27%, does anyone have the guts to take the same stand — or explain how we’re going to fix the tax system to pay for the bigger government voters and politicians clearly want?
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