23 January 2015

Yet more budget bungles from Bowen…

Fresh from admitting earlier this week that Labor has secret plans for big spending cuts and big tax rises, Chris Bowen has added to Labor’s chaos and confusion by telling lies about Labor’s Budget legacy.

In an interview on Sky News yesterday morning, Chris Bowen said that the Medicare system that Labor left was sustainable.

“Medicare is a sustainable system. We spent half what the United States spends on their health system for much better results.” (Source: Chris Bowen, Sky, 22 January 2015)

This is not reflected in the facts – Labor left a legacy of unsustainable spending across Government – including in the health sphere. The Medicare system we inherited from Labor was growing at an average annual growth rate over the next decade of over 6% a year – and these numbers are not just confirmed by the Treasury, but also by the independent Parliamentary Budget Office. (Source: Parliamentary Budget Office, Projections of Government Spending over the medium term, August 2014, p38)

The cost to the taxpayer of the Medicare system has doubled in the past decade, and now costs the Government around $20 billion a year. Without action it will almost double again over the next decade.

Chris Bowen should know this – after all it was his own Labor Government that warned about the increased pressures on government finances from rising health expenditure. The former Treasurer’s foreword to the 2010 Intergenerational Report – released when Bowen was a Treasury portfolio minister – noted that “Pressures for government spending will increase, particularly in the health sector.” (2010 IGR p2)

Page 49 of the same Intergenerational Report further stated “based on past spending patterns, growth is projected to stem from increasing demand for health services and the funding of new technologies. Over the medium term, the combined effect is manifested in growth in all major categories of health spending: hospitals, medical benefits, pharmaceuticals and private health insurance.”  (2010 IGR p49)

Chris Bowen should do the right and proper thing. First he should admit that Labor left a Budget mess, second he should join with us in cleaning up that mess.