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AUSTRALIA

Health gap widens as wage growth falls

  • 26 June 2017

 

It may be touted as a fundamental human right, and something rather fecklessly taken for granted by the majority, but health is a peculiarly political imperative, particularly come budget time.

Universal health care is an ostensibly bipartisan prerogative, but what universal actually means and how it's achieved is a somewhat moveable feast.

Spending, we are told, is unsustainable as the population ages and we move toward ever-more personalised and technologically-advanced treatment paradigms. The objective of this rhetoric is to rationalise the privatisation of our health system by stealth, incrementally shifting the onus onto patients through out-of-pocket expenses and private health insurance.

The latest wages figures are something of an inconvenient truth in this 'unsustainable spending' fiction. With average pay rising just 0.5 per cent in the first quarter of 2017 and 1.9 per cent across the year (1.8 per cent in the private sector), wages growth is now at its lowest since Australian Bureau of Statistics records began.

There are several reasons for this — inflation, productivity and labour demand are all suppressed as we continue to feel the effects of the mining bust — but it ultimately translates into less money in the bank for workers. (It also makes rather risible the decision by our lawmakers to reward themselves with a two per cent payrise from 1 July.)

For a government crying poor when it comes to health, it has the perverse effect of decreasing spending pressure, with some 70 per cent of the $110 billion annual public spend on health going on wages.

'Lower wages growth ostensibly puts less pressure on public spending,' said the Grattan Institute's Stephen Duckett. 'You can see this in the effect of the Medicare rebate freeze, that many doctors did not give up bulk billing because the costs were growing relatively slowly — CPI, for example was only going up one per cent or so — so they were able to absorb the rebate freeze more readily than anticipated.'

Because inflation — the price of goods — is even more stagnant than wages, the 'affordability' of health care remains largely unaffected, according to Duckett. But what if your starting point is already one of profound disadvantage?

Universal or user-pays?

Universal health care is something of a misnomer in Australia, particularly when it comes to primary care, prevention and managing complex conditions.

While the government funds around two thirds of health care, drawing on income tax receipts and the recently expanded Medicare levy, the remainder is

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