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Part four: wrapping reaction to the Federal Budget

This is the fourth in a series of articles wrapping reaction to the Federal Budget from diverse groups and stakeholders (see parts one, two and three).

This wrap includes analysis and commentary from Macquarie University Centre for the Health Economy, the Australian Human Rights Commission, the Royal Australasian College of Physicians, dental health advocate Dr Angelo Papageorgiou, the Foundation for Alcohol Research and Education (FARE), and the Australian Medical Students’ Association and also links to some related articles at The Conversation.


Far more work and investment needed

Professor Henry Cutler, Dr Anam Bilgrami and Mona Aghdaee from the Macquarie University Centre for the Health Economy (MUCHE)

(This analysis is the executive summary of a detailed budget analysis published by MUCHE).

The last time this Government tabled a Budget just before an election was in 2019. That was a ‘cash splash’ Budget with large tax breaks. While Health portfolio funding growth was subdued, its allocation was strategic, aimed at grassroots voters by dispersing funds across many individual programs.

This Budget is straight from the same playbook. There are no big ticket reform announcements, but lots of smaller funding allocations targeted at specific groups and programs. It comes at a time when affordability of care and medicines is a substantial problem for many Australians.

Health portfolio funding will be reduced by $5.7 billion in 2022-23 compared to 2021-22. This equates to a nominal reduction of 5.1 per cent, but a real reduction of 7.5 per cent once health inflation and population growth are considered.

Funding will be tighter in 2023-24, with another $3.2 billion reduction. Most of the funding reduction in the next two years is from the cessation of COVID-19 emergency measures. However, real funding in 2025-26 is also estimated to be 6.0 per cent lower than in 2021-22.

Aged care has received more funding, but mostly to battle COVID-19. The largest item is $215 million over two years to provide bonuses to aged care workers. The sector has argued these one off payments are insufficient to retain and attract workers.

While more funding will come online from last year’s $17.7 billion Budget announcement, aged care needs another $5 billion annually to meet expected quality standards. That doesn’t all have to come from Government, but unsecured future aged care funding remains a perennial problem and many providers are still struggling financially. It will be impossible to increase quality if marginal costs are not covered.

Hospitals are heading further into crisis territory with COVID-19 blowing out public hospital elective surgery waiting lists. Around 5 per cent of public patients in Victoria waited more than 365 days in 2020-21, while it was 11 per cent in NSW. Non-urgent elective surgery was again suspended within the Delta and Omicron waves, most likely blowing out waiting times further.

States will receive another $984 million for the National Partnership on COVID-19 Response, building on $752 million allocated in the MYEFO. However, some states claim that activity based funding prices may also need to be adjusted upward, because public hospital costs have substantially increased from changed delivery models in response to COVID-19.

There is a strong argument for the Government to lead on improving elective surgery waiting times. This should be achieved through greater investment and an amendment to the National Health Reform Agreement. Ensuring timely access to care is not explicit within its long term health reform principles.

This Budget has allocated more funding to a mental health care package with $303.2 million in new funding since the MYEFO. Funding is spread across 27 items related to mental ill health prevention and early detection, suicide prevention activities, treatment services, and workforce and governance. Suicide rates seemed to have turned a corner, coming down slightly in the latest Australian Bureau of Statistics data for 2020, despite the lockdowns and financial upheaval of COVID-19.

The Government is yet to seriously expand the mental health workforce or tackle the structural change recommended by the Productivity Commission. This is despite the National Mental Health Workforce Strategy and the National Mental Health and Suicide Prevention Agreement recently being finalised. They could have informed further reform in this Budget.

The pharmaceutical sector received some good news with several ‘big ticket’ medicines recommended by the Pharmaceutical Benefits Advisory Committee (PBAC) newly listed on the Pharmaceutical Benefits Scheme. The Government and Medicines Australia signed a landmark five year agreement in 2021. It will include reviewing health technology assessment processes and improving consumer engagement processes, along with guaranteed expenditure on medicines.

Big consumers of prescription medicines will also benefit from this Budget. The Government announced a reduction in the Safety Net threshold, costing the Government $525 million over four years. This will reduce the cost of prescriptions for big consumers, aligning with announcements to reduce the cost of living made in other portfolios.

The Government will further embed pharmacies into the health and aged care sectors. Pharmacies were allowed to help vaccinate people for COVID-19, albeit relatively late in the vaccine rollout, and will now help deliver more flu vaccinations. The Australian Medical Association (AMA) had pushed back on allowing pharmacies to dispense vaccines. Regardless, this Budget announced $345 million to get pharmacists more involved in dispensing medicines onsite in residential aged care facilities.

The greatest recent upheaval in primary care business models has been the spread of telehealth, with over 100 million services since it was introduced temporarily at the start of COVID-19. Telehealth services have now become permanent, although with some tweaks to limit telephone consults to minor consultations.

This Budget sees a continued focus on responding to the COVID-19 pandemic. The Government allocated $892.1 million over two years to improve access to COVID-related services. This primarily consists of $546 million to extend temporary MBS pathology items for COVID-19 detection and diagnosis in 2022-23, and $248.1 million for the continuation of General Practitioner Led Respiratory Clinics Program. The Government also announced a Women’s health package, allocating $112 million in new funding across 20 different items.

Private health insurance prices continue to increase beyond health inflation, but at an historically low rate rise of 2.7 per cent in 2022. Prosthesis list reforms are expected to save the private health insurance sector around $900 million over four years, translating into a $50 per year saving for families (less than 2 per cent). That relies on private health insurers passing on the savings, but even that won’t subdue the increased pressure on prices. That requires more investment from insurers to keep people out of the hospital.

The private health insurance rebate continues to drain the Health portfolio budget. It cost nearly $7 billion this year and is estimated to cost another $29 billion in the following four years. The Department of Health is looking at changing the rebate and Medicare Levy Surcharge, but removing the rebate seems off the table. This is despite no evidence that the rebate provides a sufficient return on investment.

COVID-19 hasn’t gone away, which is reflected in this Budget. The Government will allocate another $2.1 billion mostly to administer vaccines, supply more personal protective equipment in aged care, and to continue the COVID-19 Rapid Antigen Test (RAT) Concessional Access Program. This builds on the $1.1 billion allocated in the MYEFO for vaccine distribution and administration.

The Hon Greg Hunt’s legacy will primarily be the Government’s healthcare response to the COVID-19 pandemic. Under his watch, reform started in aged care and mental health, and several ‘10 year plans’ were developed, mostly in the last year, but substantial implementation is still lacking.

Our health system is still in urgent need of reform, and it will be difficult, lengthy and expensive. This must occur even as future Budgets groan under the weight of increased debt. It will require increased health system productivity and less waste.

Any new health minister (regardless of political persuasion) must be strategic and considered. Health system sustainability can only be achieved by understanding where investment will generate the most value, relying on evidence and not being persuaded by special interest groups, and continuously aiming to improve care quality.


Human rights funding cuts are a health concern

Budget cuts to the Australian Human Rights Commission are a significant concern for health, given the Commission’s work for Aboriginal and Torres Strait Islander people’s health and across other areas.

Statement by the Australian Human Rights Commission

The Australian Human Rights Commission’s annual core budget funding is approximately $16.5 million, supplemented in some years with additional short term project funding.

This is forecast to remain steady in the forward estimates through to 2025-2026. This year’s budget and the forward estimates includes an additional $9 million over four years for the proposed Religious Discrimination Commissioner.

In addition to our core budget, the Commission sometimes receives additional vexternal project funding. These short-term projects (such as the recently announced National Survey on consent education for secondary school students), increase our employee expenses as we employ contracted staff. In the next budget period, the Commission will receive $9.09 million in external project funding (listed in our Portfolio Budget Statement as ‘own-source revenue’).

Because we cannot predict future short-term projects, we cannot accurately forecast future own-source revenue. Therefore, our employee and overall expenses appear higher this financial year compared to future years.

The Commission’s annual core budget of approximately $16.5 million allows us to fund 76 core staff. This does not provide us with sufficient resources to perform our statutory functions adequately, including complaint handling, and support our eight statutory office holders (seven Commissioners and the Commission President).

In recent years, the Commission has been operating at a staffing level beyond what we can afford within our core appropriation. Last financial year, we ran an operating loss of $4.726 million. This year our estimated operating loss is $3.131million. The Commission has been working closely with the Attorney-General’s Department and the Department of Finance regarding our financial situation and an additional $16 million has been committed in the 2021-2022 MYEFO process.

This support will allow us to meet our obligations in the short term.

To reduce our staff expenses, we have already reduced our core staff positions by approximately 16% since July 2021. In March, we commenced the process of reducing our staffing levels further. This further reduction will mean we are operating with 94 core staff.

This reduced staffing level is not functionally or financially sustainable without an increased core budget. In order to properly resource Commissioners and appropriately handle the increasing number of discrimination and human rights complaints we receive under the five pieces of legislation that we administer, we estimate that we would need a staffing profile of approximately 144.

This would be comparable to the resourcing of similar sized and structured organisations such as the Productivity Commission, which has a similar level of statutory office holders (a Chair and 10 Commissioners, four of whom are part time), operates with 169 staff and has a budget of $33.3 million.

Unless the Commission’s budget is re-baselined to be functionally sustainable, we will have to continue to reduce core staff numbers further to 76 positions to remain within an appropriation of $16.5 million. This would have a direct impact on the ability of the Commission and Commissioners to meet our legislative mandates and deliver our complaint-handling, education and training services. The Commission is committed to continue working with the Attorney-General’s Department and Department of Finance to ensure that we are adequately and reliably resourced to deliver against our statutory obligations into the future.

***

Meanwhile at The Conversation, Associate Professor Amy Maguire writes that Budget cuts to the Australian Human Rights Commission couldn’t have come at a worse time.

Also at The Conversation, Professor Bronwyn Carlson from Macquarie University investigates ‘Does the pre-election budget address ways to realistically ‘close the gap’ for Indigenous people?’ 

“Unfortunately, Indigenous people are used to disappointing budgets that lack the strategic planning needed to address real issues that Indigenous communities themselves constantly raise,” she says.

Also read this Twitter thread by the Centre for Public Integrity on funding cuts to other integrity bodies, including the Ombudsman’s office.


Doesn’t deliver key reforms needed

Statement by Royal Australasian College of Physicians

The RACP says the Federal Budget is disappointing and doesn’t provide the funding needed to support vital parts of the healthcare system and Australia’s future.

The RACP also says it’s been a missed opportunity to help children in particular recover from the setbacks from the pandemic.

While the Government has done good work developing national strategies and responses on children’s mental health, aged care, primary care and preventive health – all areas which have suffered major COVID-19 setbacks – the Budget fails to provide the funding needed to put them into action.

In response to these focus areas, RACP President-elect Dr Jacqueline Small says:

Indigenous health

“We echo the comments made by NACCHO that ‘business as usual’ is not going to close the health gap and call on the Federal Government to increase funding to Aboriginal Community Controlled Health Organisations for the delivery of primary healthcare services for Indigenous people. Issues that matter to Indigenous leaders must be to prioritise and expand the provision of sustainable long-term funding to Aboriginal Community Controlled Health Services (ACCHS) for the delivery of primary healthcare services for Aboriginal and Torres Strait Islander people.”

Climate change

“The Budget falls far short of providing a comprehensive response to the health impacts of climate change, even as communities deal with devastating floods and others are still recovering from horrific bushfires. Following the recent devastating floods, the RACP led 10 medical colleges representing over 100,000 medical specialists calling for a climate ready and climate friendly healthcare system by developing climate change adaptation and resilience plans.”

Child health

“COVID-19 has overturned many parts of children’s lives that are crucial for their healthy development such as social connections, education, and extracurriculars. While we welcome funding for specific youth mental health programs, overall, we needed to see more for investment in our children and young people to help them to catch up from the setbacks of the COVID-19 pandemic. Leaders from across the political spectrum must commit to a package of policy and funding measures to help our kids catch up.”

Funding for health workforce

“The pandemic has shown what that we need a strong, well-resourced healthcare system. Last night’s budget is a missed opportunity to urgently invest in responses to long-standing structural challenges. The public health workforce in particular has been provided with minimal funding that is insufficient to deliver the healthcare that Australians want and need.”

Telehealth and regional care

“We welcome important investment in regional healthcare, with $296 million as part of the Government’s commitment to permanent and universal telehealth. However, it still remains unclear whether or not this includes funding for phone telehealth items for specialist care. This will be vital in ensuring equity and access to specialist care for people in regional and remote areas – as well as those living with a disability, the elderly, those with less advanced technical knowledge, and some Aboriginal and Torres Strait Islander people.”

Medication expansion

“We welcome the expansion of the national Take Home Naloxone (THN) program through a $19.6 million investment which is making the opioid overdose-reversing medication available at no cost and without a prescription, in all Australian states and territories.”

Silicosis

“We are pleased to see $11m funding for prioritising improved care for people with dust-related diseases which the RACP has strongly advocated for.”

The RACP’s pre-budget submission can be found here.

***

On related themes, Associate Professor Elizabeth Hill from the University of Sydney, says the paid parental leave change takes us backwards and childcare costs were ignored.

“This has been billed as a “cost-of-living” budget, but early childhood education and care have been overlooked. Even with a record spend of $10.3 billion this financial year, Australia has one of the most expensive early learning systems (for consumers) in the world. Childcare payments are one of the biggest costs to households, alongside housing costs and food.…Our system is not working for families and children, and this budget just tinkers at the sidelines,” she writes at The Conversation.


Nothing to smile about

Statement by Dr Angelo Papageorgiou, Immediate Past President Australian Dental Association SA Branch 

Yet again the Federal Budget failed to deliver on Australia’s Silent Shame – the much overdue oral health care needs of our ageing/older Australians.

Whilst there was a welcomed win in the short-term financial relief for Australian’s cost of living, the real losers are the most vulnerable who yet again have been neglected – elderly Australians living in residential care who are too frail to attend a dental provider and unable to look after themselves to maintain optimum oral health and oral hygiene.

Yet again the announcement of another extension of the Federation Funding Agreement (FFA) with State and Territories, fails to address the inadequacy of this short shelf life funding model which does not allow for forward planning and therefore does not provide sustainable long term oral health solutions.

The annual nature of the agreement provides no long-term certainty to public oral health care, meaning the care provided is sporadic and episodic, and doesn’t meet the oral health needs of Australians – something which was recognised by the Grattan Institute in 2019.

Funding provided by the Commonwealth has remained the same over the last 4 years, meanwhile, oral health care costs are increasing and there are more people eligible for publicly funded care.

“Commonwealth funding is woefully inadequate to extend providing in facility care for the elderly.

Both major parties have a major gap when it comes to oral health policy, and it disappointingly looks like that gap isn’t going to be filled,” says Dr Angelo Papageorgiou.

It is a sad indictment that the government and relevant policy makers are not be able to champion this ongoing and long overdue issue, particularly as it is the focus of the National (and South Australian) Oral Health Plan as well as the Royal Commission into Aged Care Quality and Safety.

The Royal Commission into Aged Care Quality and Safety recommended a Seniors Dental Benefits Scheme be implemented no later than 1 January 2023 to address the oral health needs of Older Australians. This Federal Government budget gives no commitment to that recommendation.

Once again, the mouth is separated from the rest of the body, and the oral health needs of our most vulnerable don’t count.

“What’s very clear is that our major parties need to step up when it comes to oral health care.”

Everyone from provider and advocacy groups such as the ADA, other groups like COTA and some of the best public health policy minds in the country are calling for action on dental care. “Time and time again, I have patients crying out for better oral health support for their elderly loved ones, and there just aren’t the resources to provide it” says Dr Papageorgiou.

We need a substantial increase in funding support for the dental sector to provide certainty in oral health care delivery, and a commitment to implementing the Royal Commission recommendations including a Seniors Dental Benefits Scheme.

“A Seniors Dental Benefits Scheme would drastically reduce the financial burden of oral health care for our most vulnerable and would mean more people can access the care they need.”

Dr Papageorgiou stresses that “it is time to act and address the significant shortfalls in the current system of oral health care for older Australians.”

Unmet oral health needs are a barrier to ageing well for many older Australians.

Dr Angelo Papageorgiou, Chair South Australian Oral Health Plan – Older Person’s Working Group, is calling on the Commonwealth Government to show compassion and commitment to support and implement fully the oral health recommendations of the Royal Commission into Aged Care Quality and Safety and lead system wide reform in community and residential aged care to improve the oral health of older Australians.


Some good news

Statement by the Foundation for Alcohol Research and Education (FARE)

FARE has welcomed news that this year’s Federal Budget does not include a 50 per cent cut to the draught beer tax.

Strong community advocacy has resulted in common sense prevailing, with the health of our families and community prioritised over tax cuts for alcohol companies.

The rumoured tax cuts were labelled as a gimmick by Australia’s top economists, found expensive and ineffective by Australia Institute modelling, strongly opposed by more than 80 health and community leaders and organisations, and viewed by many Australians as a waste of taxpayer money.

Alcohol companies have been pushing for tax breaks for years and are attempting to use the cover of the pandemic to get a handout on top of their billion-dollar profits.

FARE strongly opposes any moves to reduce taxes for alcohol companies and will continue to advocate for decision-makers to put the health and wellbeing of Australians first.

FARE looks forward to working with the Government to reduce alcohol harms that have negatively impacted far too many Australians.


Band-Aid approaches won’t solve medical workforce maldistribution

Statement by Australian Medical Students’ Association (AMSA)

The Australian Medical Students’ Association (AMSA) is extremely disappointed to see the Australian Government fail to fund the much-needed National Medical Workforce Data Strategy.

“Australia’s medical workforce has extreme country-wide maldistribution, both geographically and with respect to the distribution of specialist doctors. Rural and remote Australians are desperate for a sustainable solution to this problem, yet the Government continues to make short-sighted funding decisions which only place band-aids on a complex issue,” said AMSA President Jasmine Davis.

AMSA has been involved with a number of medical workforce stakeholders in the establishment of the National Medical Workforce Strategy (2021-2031), and was excited to see it approved by Health Ministers late 2021. Despite this approval, Tuesday’s Budget suggests the Government has no intention of implementing the findings of such an important piece of work.

“A strategy means nothing if the Government does not take steps to fund its implementation. The key request from our organisation was funding of the National Medical Workforce Data Strategy. This seems to not be funded in the budget which is a huge shock,” Ms Davis claimed.

“A crucial reason our workforce is so disjointed and maldistributed is the lack of data collection and utilisation of data in decision making. This has detrimentally led to an estimated oversupply of doctors by 2030, and yet an undersupply of important specialists such as general practitioners and psychiatrists,” said Ms Davis.

“To see the Government fail to fund such a crucial and time-sensitive strategy, and instead fund new medical school places without the data to suggest that these new places are needed, is completely at odds with what medical workforce organisations are suggesting,” continued Ms Davis.

The funding of a National Medical Workforce Data Strategy will facilitate data-driven decision making and modelling of workforce planning, enabling a more efficient designing processes, as well as the capacity to longitudinally monitor and evaluate ongoing training models.

***

AMSA also said it is extremely disappointed by the lack of measures in the Federal Budget to improve the access to healthcare for LGBTQIA+ Australians.

AMSA’s Pre-Budget Submission called on the Government to fund the inclusion of gender-affirming healthcare, including surgical procedures, post-surgical care and other gender-affirming services under Medicare and the Pharmaceutical Benefits Scheme.

“Transgender and gender diverse Australians are in urgent need of support. The failure of the Government to direct funding to increase access to gender-affirming services will cause significant harm to patients who are unable to afford access,” Jasmine Davis, AMSA President said.

AMSA is also disappointed to see a lack of specific funding for LGBTQIA+ mental health.

“Queer Australians already experience higher rates of mental-ill health and suicide. Nearly a third of LGBTI Australians aged 18 and over have attempted suicide, a number which is eight times higher than the general population,” Flynn Halliwell, Chair of AMSA Queer, said.

“The federal government has itself continued to perpetuate direct harm to the mental health of these communities through attempts to introduce harmful legislation, as well as political weaponizing of trans and gender diverse people in public discourse.

“If the Government is serious about improving mental health, and reducing suicide rates in Australia, there should be specific funding for LGBTQIA+ mental health services,” Mr Halliwell said.

“It is time for the federal government to be accountable and prioritise LGBTQIA+ health and wellbeing. Medical students call for funding of gender-affirming services on Medicare, investment in LGBTQIA+ led health organisations and suicide prevention programs, as well as funding of research on the health and wellbeing of transgender and gender diverse communities.” Ms Davis said.

AMSA is the peak representative body for Australia’s 17,000 medical students. AMSA Queer is the representative body for Queer identifying medical students and works to improve health outcomes for all LGBTQIA+ individuals through education and advocacy.


Part one in this series included reaction from: People with Disability Australia; the Australian Aged Care Collaboration; the Change the Record coalition; community health services provider cohealth; the Australian Medical Association; the Australian Nursing and Midwifery Federation; the Rural Doctors Association of Australia; Australian Primary Health Care Nurses Association; the Australian Academy of Science; the Refugee Council of Australia.

Part two included reaction from: National Aboriginal Community Controlled Health Organisation; SNAICC, the national voice for Aboriginal and Torres Strait Islander children; Australian Education Union; Australian Healthcare and Hospitals Association; Australian Dental Association; Oxfam; End COVID For All; Consumers Health Forum; Youth Health Forum; Royal Australian College of General Practitioners; Royal Australian and New Zealand College of Obstetricians and Gynaecologists;  Foundation for Alcohol Research and Education; Australian College of Mental Health Nurses; Society of Hospital Pharmacists of Australia; Country Women’s Association (CWA) of NSW; Dementia Australia; Hepatitis Australia; Australian Federation of AIDS Organisations; Professionals Australia; Australian Psychological Society; Medicines Australia; Australian Medical Students’ Association; Community Foundations Australia and Philanthropy Australia.

Part three included reaction from: Public Health Association of Australia; National Shelter; Jesuit Social Services; LGBTIQ+ Health Australia; Australasian College for Emergency Medicine; Catholic Health Australia; Palliative Care Australia; Royal Australian and New Zealand College of Psychiatrists; Australian College of Nursing; Dr Louise Ellis, Australian Institute of Health Innovation; Allied Health Professions Australia; Australian Physiotherapy Association; The Australian College of Rural and Remote Medicine; Australian Lawyers for Human Rights.


 

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