The Crest of the Commonwealth of Australia Treasury Portfolio Ministers
Picture of Peter Costello

Peter Costello

Treasurer

11 March 1996 - 3 December 2007

No. 091

MEDICARE "GOLD" UNFUNDED AND UNSUSTAINABLE

The Finance Department costings of Labor’s "flagship" policy "Medicare Gold" show the policy is unfunded and would be unsustainable if Mr Latham ever tried to implement it.

The Finance Department concludes that in the first two years of introduction from July 2006 the Labor Party costings are wrong by $700 million, and further, will rise at approximately 10 per cent per annum beyond 2007-08.

But this cost blowout is just the tip of Labor’s problem. Finance qualifications warn that the costing assumes the Commonwealth will clawback money from the States under Australian Health Care Agreements. Finance estimates that the clawback would be approximately half of the cost of treating people aged 75 years and over in public hospitals which amounts to $3.3 billion in 2006-07 and approximately $3.5 billion in 2007-08, requiring a clawback of $1.6 billion in 2006-07 and $1.7 billion in 2007-08.

The clawback required would be 20 per cent of current Commonwealth funding under the Health Care Agreements.

In other words after docking the States the sum of $3.3 billion in the first two years (and continuing) the policy is still underfunded by $700 million.

No doubt the States would refuse to accept renegotiation of Health Care Agreements, refuse to accept reduction in funding of $3.3 billion over two years, refuse to accept reductions continuing indefinitely, and point out that the consequence of such a decision would be to reduce access to public hospitals for those under 75 in order to fund increased standards of health for those over 75.

Which State Labor Premier has agreed to Mr Latham’s clawback?

Medicare Gold is not costed, will not work and could never be introduced on a sustainable basis.

Labor’s health policy is a sham.

8 October 2004

Contact: Amanda Kennedy
(02) 6277 7340