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Treasury is running health policy « Previous | |Next »
April 19, 2005

I flickered through the Sydney Morning Herald this morning in Canberra, as I don't generally see the print edition in Adelaide. I came across Louise Dodson's article about the fourth term agenda of the Howard Government. Dodson is a senior journalist at Fairfax and so she knows what's what in politics.

She makes two points that I found of interest. She says that the Federal Treasurer, Peter Costello, is:

"...increasingly behind most of the Government's fourth-term policy agenda. He was the first to publicly back increased skilled migration, he has been pushing for greater participation in the workforce by encouraging older people and those on welfare to work, he has raised the issue of infrastructure bottlenecks and he has been advocating productivity increases through industrial relations changes."

I concur. But it is broader than this kind of economic policy, as Treasury has also grabbed hold of health care policy and placed it under the sign of fiscal sustainability.

We can see this from the second point that Dodson makes. She says that this economically-driven policy agenda has its roots in:

the Treasury's inter-generational report three years ago warning of the impact of the ageing population. Since then Treasury's mantra for improving the economy has been population, participation and productivity.

That 2002-3 Report was Budget Paper (No.5).The core argument was that the federal government "will need to make policy adjustments to maintain a sustainable fiscal position over the next four decades."

Dodson sees the population, participation and productivity drivers, which are the levers the Report says will help to reduce future budget pressure. Suprisingly, Dodson misses Treasury's emphasis on Australia's steadily aging population placing significant pressure on Commonwealth finances; and that technological advances in health care, plus community expectations of accessing the latest health treatments, would place increasing demands on taxpayer funds.

Dodson misses health stuff entirely. She is more focused on Costello's leadership challenge.

The detail of this skeletal policy framework of health care as a financial burden weighing down on younger generations is being sketched in by the Productivity Commission Reports. The core of
Treasury's Intergenerational Report is that the budget pressure from health care can be alleviated or eased by the effects of increases in population, participation and productivity. These drivers will help to grow the economy.

Had Dodson actually read the Intergenerational Report closely (Part IV, p.57), then she would have seen that Treasury's projections indicate that it is health and aged care costs that are going to blow the federal budget big time. It will be increasingly larger deficits from 2014 onwards, due to costs outrunning revenue. Disaster beckons.

Now Treasury's goal is to maintain an efficient and effective medical health system, complimented by widespread participation in private health insurance.Treasury is different from the Department of Finance run by bean counters, as it says that its aim is to manage economic policy to improve the wellbeing of Australians in a way that can be sustained over time.

However, wellbeing as the end of economic policy can only be achieved within the limits of ensuring that future generations of taxpayers do not face unmanageable bills for government services to the current generation. And those bills will become unmanageable after 2015. So we have to do something now by way of making cost savings to the health budget. This is being economically responsible. That is the new policy mantra.

I guess that Dodson is good on politics (leadership) and poor on policy.

| Posted by Gary Sauer-Thompson at 10:42 AM | | Comments (0)