Health has taken another hit in the 2015-16 Federal Budget, with nearly $2 billion cut from the health system over the next five years. There’s particular concern around $1 billion in “savings” from a range of flexible funds and grants for preventative health research, chronic disease prevention and rural outreach (click twice to enlarge pic below), and “lingering profound negative effects” of the savage cuts to public hospital funding in the 2014 Budget.
Dental care is also a big concern. 
See the Health Portfolio Budget Statements.
Below are some of the early reactions to the Budget from the health and social sector, although there are lots of details still to be analysed – in part because health leaders didn’t get the Budget papers till they got out of the lockup. The AMA said the health sector was “not impressed”.
See this wrap from health experts at The Conversation, which says the biggest surprise about this year’s health budget was what wasn’t there – billions of expected savings from the Pharmaceutical Benefits Scheme (PBS). It said:
In the past week, pharmacists and drug companies have widely reported as being “on the brink of war” with the federal government, over well-sourced predictions that the budget would try to save as much as $5 billion from the PBS over the next five years.
Australian Medical Association:
The AMA said the modest positive measures in the 2015 Health Budget failed to overcome the lingering profound negative effects of the 2014 Budget and it would be seeking “urgent clarification” about the objectives of the Medicare Benefits Schedule (MBS) review “with the clear inference that this would be a Budget savings exercise” after all.
“There is nothing in tonight’s Health Budget to indicate that the Government will restore public hospital funding, which was savagely cut in last year’s Budget, and the AMA was also concerned about the apparent lack of preventive health measures and funding.
It said it welcomes a range of other measures, including: e-health changes, including the myHealth Record, particularly the opt-out component; the mental health plan; support for the National Critical Care and Trauma Response Centre; funding for Aboriginal Community Controlled health organisations; organ donation programs; and the Ice Action strategy.
Here’s its full statement.
Public Health Association of Australia
The Public Health Association of Australia (PHAA) has described the 2015 Health Budget as “a bloodbath for health organisations” delivering vital services to the Australian community, saying it was “death by a thousand cuts’ with $1.7 billion worth of funding cuts flagged across funded programs over the next 4 years.
“Last year’s Budget foreshadowed $197.1 million in cuts to the ‘Health Flexible Funds’ over 3 years. This year, that figure has turned into $500 million worth of cuts. There is still no clarity in relation to how these savings are to be achieved. Among the 16 Flexible Funds apparently to be affected are those supporting the provision of essential services in rural, regional and remote Australia; working to Close the Gap in health outcomes for Indigenous Australians; managing vital responses to communicable diseases; and delivering substance use treatment services around the country. Obviously it’s of great concern to all the services and organisations potentially affected.
“Other programs to be subjected to cuts include: health assessments for children; the Child Dental Benefits Schedule (with cuts of $125 million to be achieved by freezing indexation); cuts to scholarship programs; and a range of others. On top of the $1.7 billion in cuts to funded programs, a further $96 million in internal Departmental cuts will be applied over the forward estimates. So the cuts to service delivery and community capacity will be mirrored by reduced capacity within the Department itself.
“These drastic cuts to funding for NGOs in the Health portfolio will only lead to worse public health outcomes and increasing expenditure on the acute care sector over time. Support for preventive health care and timely interventions reduces the likelihood of expensive hospitalisation and makes good economic sense. Services provided by the community sector are integral to the achievement of key health and economic goals.
“Maintaining funding to the NGO sector within the Health portfolio is vital to achieving key targets for Closing the Gap in health outcomes for Indigenous Australians. Likewise, alcohol and other drug services would be severely impacted by any funding cuts. On the one hand, the Government has announced that $20 million will be spent over two years on a community awareness campaign as part of the National Ice Action Strategy. On the other hand, funding to the services helping individuals, families and communities to address addiction are now up for the chop. To think that funding for these vital services is currently under threat beggars belief.
“If these drastic cuts go ahead it could decimate NGO sector responses to many of the key challenges in public health and leave Australian families and communities without the support they need.
“What adds insult to injury is the lack of transparency around these measures. Organisations attending this year’s Health Budget Lock-Up received only a press release on arrival that made no mention of any cuts to funding. The Government can’t hide the impact of this slash-and-burn approach. Unfortunately Australians will find out soon enough the impact of these measures,” said Mr Moore.
The Australian Health and Hospitals Association (AHHA)
The AHHA said it is pleased with a stronger focus on strategic, long-term health policy in the Budget but it warned “the devil is in the detail, and there is a distinct lack of information or long-term planning evident for many important program areas in health.”
“While Minister Ley has taken some important steps in building the credibility of the Commonwealth Government in the health sector, such as instigating a long-overdue review of the MBS, the continued failure to honour hospital funding arrangements, which were built on bipartisan agreement, is very disappointing. The move away from activity-based funding and an efficient pricing formula – and the $57 billion that was slashed from hospital funding in last year’s budget – will have a significant impact on the sector between 2017-18 and 2024-25.”
“Tonight, the Government has indicated that around $1 billion will be removed over 5 years from a range of program areas, including those managed as flexible funding, yet the Department of Health was unable to clarify which programs would be affected. As these funds support programs across important areas such as alcohol and drug services, mental health, Indigenous health and palliative care, and many are delivered by not-for-profit agencies, the level of funding uncertainty will have profound impacts on the sector.
“The lack of commitment to preventive health, including a specific cut to research, is also deeply concerning in a health system which is grappling with an increasing burden of chronic disease. Likewise, one year funding arrangements to support dental health, despite media fanfare from the Government on this important issue, are very disappointing.
The AHHA has released a number of other statements on other aspects of the budget, including a warning that “blunt” PBS cost savings may do more harm than good. Croakey will link to them when they are available online.
Consumers Health Forum of Australia
The budget contains a measure to tighten the safety net for medicine subsidies which revives fears the Government is still hoping to introduce an increase of up to $5 in the PBS co-payment.
This rise in the safety net threshold which means concessional patients will have ultimately to pay for eight extra prescriptions per year before qualifying for free or cheaper medicines, will have to pass the Senate.
“It is a concern for consumers, particularly the chronically ill, that this may be a sign the Government has not taken off the table its hope of increasing the co-payment , a plan which was linked to the safety net change in last year’s budget.
Read the full statement.
Australian Council of Social Service (ACOSS)
ACOSS said the Budget demonstrated a fairer approach to pension reform and increased investment in child care but it retained many harsh cuts from last year’s Budget and will leave many people on the lowest incomes worse off.
“The Families Package is at the heart of this Budget, and increased investment in child care is overdue and welcomed. Yet key features leave it unbalanced and unfair, relying on cuts to family payments for low income families, and providing overly generous subsidies to families on high incomes. Many children in low income families will lose 12 hours a week of early childhood education that helps improve their life chances. Meanwhile the Paid Parental Leave scheme change comes out of the blue and takes us backwards in the search for short-term savings.
“On the part Pension, we strongly support the reforms to the assets and income tests and applaud this change in direction. We now need a similar approach to superannuation reform, which is equally important in building a strong and durable retirement income system. We must get value out of super tax concessions, then benefits of which remain unfairly skewed towards high income earners. Super remains serious unfinished business.
“The Government’s Youth Employment Strategy is also a move in the right direction. Investment in school-to-work transition programs to help vulnerable unemployed young people shows the Government has listened to community concerns about the ending of the Youth Connections scheme. Regrettably, instead of reversing last year’s proposal to make young unemployed people wait six months for income support, it is reduced to one month and applied to a younger cohort (under 25). There is no justification for this measure.
Read the full statement
Council of the Ageing (COTA)
COTA said older Australians will welcome confirmation that the Federal government has dropped unfair changes to pension indexation and given them more choice and control in how they receive aged care at home. It said other budget measures will be received with less enthusiasm including changes to employment incentives and cuts to dementia care. See the full statement.
Rural Doctors Association of Australia (RDAA)
The RDAA said it has “commenced a search for fine details on rural health budget items” as it had only been able to access the Health Budget papers online late on Budget night.
Pending the fine details, it said it welcomed:
- Re-development of the General Practice Rural Incentives Programme in 2015-16 to better support delivery of medical services in rural and remote communities.
- The return of the management of after-hours incentive payments to the Practice Incentive Payments program in 2015-16.
- The previously announced trial of an opt-out eHealth system, to be renamed the My Health system.
- Additional funding for the Royal Flying Doctor Service.
It noted there will be $1.7 billion in efficiencies over 4 years for the Federal Health Department, including in the Flexible Funds program. “We await the details on which programs may be affected, and we are concerned to see how this will impact on various regional and rural health programs….We are disappointed that there has been no announcement regarding the introduction of a program to replace the Prevocational General Practice Placements Program (PGP).”
See the full statement.
St Vincent’s Health Australia (SVHA)
St Vincent’s Health Australia (SVHA) said that despite welcome commitments related to e-health and the Medicare Benefits Schedule review, Australia’s health system “faces an uncertain future after this year’s federal budget locked in the Commonwealth Government’s changes to public hospitals from last year and left other significant areas – such as public dental care – reliant on short-term funding”.
Read its full statement, with concerns also around preventive health, the Pharmaceutical Benefits System safety net increase, and the funding of the Medical Research Future Fund.
Mental Health Australia
Mental Health Australia notes that big decisions are yet to come with the development of a new national mental health plan to come, and expects that membership of the Expert Reference Group to advise on implementation of the recent National Mental Health Commission Review will be announced in the next fortnight.
It welcomes continuation of the Mental Health Nurse Incentive Program, improved mental health support in rural and regional areas, and the new Youth Employment Strategy but is concerned at the ongoing impact of the “indexation pause”.
See the full statement which also looks at PBS changes, carer support services, NDIS funding, and changes to welfare for young job seekers. It notes that participants in Disability Employment Services and job active participants who are assessed as requiring greater assistance to obtain employment, job seekers who are principal carer parents, and young people leaving state care will be exempt from the 4 week waiting period for unemployment benefits (reduced from the six months prescribed in the previous budget).
Australian Academy of Scientists (edited statement)
Today’s Federal Budget shows that while there is a welcome reprieve for science funding in 2015-16, further deep cuts of around $290 million to key Australian science and research programs lie on the horizon.
Despite immediate relief for the National Collaborative Research Infrastructure scheme (NCRIS) and an ongoing commitment to establish a Medical Research Future Fund, overall funding for science in Australia will continue to decline. It’s great that NCRIS facilities will continue to be supported for the next two years but significant reductions to block grants to researchers in universities is like taking engines off the jumbo jet.
Ticks and crosses for the 2015 science budget:
✘ $262.5 million cuts to university block grants
✘ $26.8 million cut to Cooperative Research Centres (CRCs)
✓ Two-year continued funding for NCRIS
✓Establishment of the Medical Research Future Fund
✓$13 million for the Australian Synchrotron
✓$22.3 million increase for ANSTO
✓$9.4 million for Antarctic research and $15.3 million for tropical medical research.
See also this wrap from The Conversation on science in the Budget.
Mental Health
Sebastian Rosenberg, Senior Lecturer, Brain and Mind Research Institute, University of Sydney writes that while the Department of Health has suffered some cuts in Budget 2015, it appears as if there have been few if any changes to funding for mental health programs. Funding to existing programs will be delivered, at least until those programs are due to lapse. For example while there is no cut to the Mental Health Nurse Incentive Program, neither has there been any extension or growth.
The Budget also tasks the Mental Health Commission with setting up a new reporting framework to permit monitoring of progress against the Mental Health Review. But this will supersede the two report cards already built by the Commission rather calling into question what happens to this work and the Commission’s commitment to report against identified priorities.
Which does cast a pall over the Budget’s other mental health commitment which is for the Federal Government to consult with States and Territories about a new national mental health plan by August 2015. The prospect of new funding into old and failed systems is a demonstrated risk here.
It also sets up a rather confused governance arrangement. Who exactly is leading mental health reform? Is it the National Mental Health Commission, which survived the Budget and indeed received an increase in staffing from 13 to 14 people? Or is it the new Expert Advisory Groups? Or is it the usual mix of government bureaucrats?
Opposition health spokeswoman Catherine King (edited)
In last night’s Budget a further $2 billion was ripped from health in yet another unfair cut. The Abbott Government appears determined to inflict even more pain and chaos on a health sector already reeling from last year’s cuts.
Close to $1 billion will be cut from programs that fund measures such as preventative health care, drug and alcohol rehabilitation, mental health and other crucial health programs.
Literally thousands of organisations around the country that do vital work caring for Australia’s most at risk and vulnerable people will be left reeling from this assault on their core funding.
The scale of these cuts means many organisations will be forced to close their doors, while others will have to cut back on staff and services.
The Budget has also cut:
- $125 million from the Child Dental Benefits Schedule
- $144.6m cut from the MBS including halving the amount paid for child health assessments
- $69.6m cut to DVA dental and allied health payments
- $214.1 million from eHealth with not a single dollar allocated beyond 2018
- $252.2 million from PBS listed drugs
- $72.5m cut to health workforce scholarships
In addition to these new cuts the Budget does nothing to reverse the $1.3 billion increase to the price of medicines; the millions of dollars being added to out of pocket costs through unfair changes to the Medicare Safety Nets; or the indexation freeze on GP fees that will attack Medicare and will have an even greater impact than the initial proposal for a GP Tax.
At the same time, the Government continues to bank the $57 billion in cuts it made to public hospitals in last year’s funding. This year’s Budget confirms that growth in hospital services expenditure is expected to fall by 10.2 per cent between 2015/16 to 2018/19. This will be inadequate to meet the demand for hospital services and inevitably lead to a blow out in emergency department waiting times and elective surgery waiting times, putting lives at risk.
The Abbott Government has gutted Medicare since coming to office and this Budget only inflicts further damage. If the Abbott Government gets its way Medicare will be nothing more than a residual safety net, not the universal health insurance scheme as it was established by Labor.
Tony Abbott and Joe Hockey have broken their promise to families that they would not be hurt – this Budget is paid for by cuts to the health services of all Australians.
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And some of the Twitter reaction so far:
