Introduction by Croakey: Readers have until 6 June to contribute to Productivity Commission consultations of interest for the health, aged care, and disability sectors. Of particular note is a consultation on development of a national framework to support government investment in prevention.
The Productivity Commission notes that “governments are often reluctant to invest in prevention programs”, and suggests a framework “that measures and incorporates the long-term benefits of prevention could encourage greater investment in evidence-based prevention programs”.
This particular consultation focuses on:
- barriers to government investment or scaling up of effective prevention programs
- the extent to which inadequate funding and the short-term or limited assessment of benefits has restricted effective prevention
- the extent to which the benefits of prevention accrue across different sectors and/or tiers of government
- policy actions that could support greater investment in prevention activities.
Some useful context to the productivity agenda is provided below by Dr Lesley Russell, who writes that productivity and inequality challenges should not be looked at in isolation as they are “inextricably linked”.
Meanwhile, Croakey is keen to hear from readers making submissions to these consultations. Please be in touch.
Lesley Russell writes:
The Treasurer, Dr Jim Chalmers, has indicated that in its second term the Albanese Government’s economic focus will be on increasing productivity.
This is essentially about working smarter, not harder, and using technology well. Even a small increase in productivity, which has been lagging this century, could help lift wages and living standards.
Chalmers has clearly been thinking about this approach for some time.
In December last year the Government asked the Productivity Commission to develop actionable reforms for each of the five pillars of its productivity agenda.
At the same time Chalmers also announced a $900 million National Productivity Fund to encourage the States and Territories to implement competition reforms.
The five pillars are:
- Creating a more dynamic and resilient economy
- Building a skilled and adaptable workforce
- Harnessing data and digital technology
- Delivering quality care more efficiently
- Investing in cheaper, cleaner energy and the net zero transformation.
I have not been able to determine how these five pillars were arrived at and whether this was work done by the Productivity Commission or the Albanese Government. They may have come out of agreements on reforms to National Competition Policy arrived at by Federal, State and Territory Treasurers in November 2024.
There are outlines of the inquiries into the five pillars here.
Clearly the healthcare, aged care and disability sectors will be impacted by whatever reforms are put into place, especially those under the ‘Delivering quality care more efficiently’ pillar.
Public engagement
What’s different and exciting about this is that the Productivity Commission is looking to bring the public into this work in several different ways.
From December 2024 through January 2025, the Commission conducted a “Productivity Pitch” that asked for policy ideas on how to improve productivity.
The results of that call for policy ideas are here.
Under Pillar 4 (Delivering quality care more efficiently) the following proposals are listed:
- Develop new models for commissioning services that limit duplication and reduce fragmentation within the care sector and use navigators to support National Disability Insurance Scheme (NDIS) participants and drive more efficient outcomes.
- Introduce a single Care and Support Regulatory Framework that covers aged care, disability, veterans’ services and early childhood education and care. This could limit regulatory duplication and administrative burden and encourage organisations to work across sectors.
- Use pharmacists to deliver more care, including reviewing medications, consulting on minor illnesses, helping manage chronic illnesses, screening for illness, delivering mental health support, and administering vaccinations and prescribed medicines.
- Invest more in preventative health, including through community-led primary healthcare services and vouchers to fund activities that benefit health.
- Reform private health insurance to improve uptake, such as through taking payments out of superannuation, increasing rebates for older people in rural areas and undertaking a further review.
- Reform the Therapeutic Goods Administration to facilitate repairing and accessing medical devices.
Going forward, the Productivity Commission has chosen to work on just three of these suggested reform areas:
- Reform of quality and safety regulation to support a more cohesive care economy (more information here).
- Embed collaborative commissioning to increase the integration of care services (more information here).
- A national framework to support government investment in prevention (more information here).
Looming deadline
Consultation on these reform areas is now open; the closing date for these is 6 June.
More recently the Commission has also called for submissions on a National Competition Policy Analysis paper that looks specifically at a number of identified reforms around occupational licensing and international standards.
You can read the Call for Submissions here. The closing date for these is also 6 June.
An interim report is due in July – August, with a final report to Government by December 2025.
Although the call for public input into the Commission’s work is a very positive move, this has not been done in a way that facilitates a broad range of opinions from all the stakeholders, including the general public.
There has been no publicity about this. I was not aware of the Productivity Pitch and the calls for submissions until the whole Productivity Commission inquiry was brought to my attention by the Treasurer’s media release of 19 May.
Also, the time frames for input (one month) are very short.
What this means is that responses will be biased towards those organisations with the capacity to follow government and agency initiatives and to do the work involved in writing submissions.
I think it’s fairly obvious that the outcomes from the Productivity Pitch reflect proposals from major stakeholders like the Pharmacy Guild, private health insurance funds, medical device manufacturers and the providers of disability and aged care services.
It will be very interesting to see: (1) the extent to which the public input (and public opinion) agrees with the final reform proposals put forward by the Productivity Commission; and (2) the extent to which the Albanese Government implements the recommendations of the final report.
I did note that the 19 May media release from the Treasurer states: “We’ll consider the PC’s recommendations within the context of the fiscal constraints we inherited and balance these against other government priorities.”
Equity matters
In a recent interview with The Guardian, Dr Andrew Leigh, who has been reappointed as the Assistant Minister for Competition, Charities, Treasury and now, Productivity, spoke about how he is concerned that the benefits of productivity growth are distributed equally and do not further worsen current inequalities.
“I’d be concerned about consumption inequality, wealth inequality and income inequality,” he said.
“All of those measures have risen over the last generation. And also social mobility… Think about inequality as being the gaps between the rungs in the ladder, and social mobility as being how easy it is to climb up or down it in a generation. It becomes harder to class-jump in a really unequal place.”
An OECD Working Paper released last year looks at the policy approaches to reducing inequalities while boosting productivity growth. The main conclusion is that productivity and inequality challenges should not be looked at in isolation; they are inextricably linked.
One way to achieve this is to ensure that these issues are an integral part of the Measuring What Matters wellbeing framework established by Chalmers and Treasury in 2023.
• Dr Lesley Russell writes The Health Wrap column at Croakey; is a member of Croakey Health Media; and an Adjunct Associate Professor at the University of Sydney’s Leeder Centre for Health Policy, Economics and Data.
See previous editions of The Health Wrap
