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AUSTRALIA

There's nothing fair about Australia's tax on sickness

  • 24 June 2016

 

Do our leaders believe in a fair go? Prime Minister Malcolm Turnbull has stated that he and his wife Lucy have been lucky and observed that 'there are taxi drivers that work harder than I ever have and they don't have much money'.

One might expect that such recognition of the place of luck (genes, family support, education, freedom from illness or exposure to trauma) in achieving wealth and the security that goes with it would lead to the development of policies which minimise the place of luck in our lives.

But timely access to affordable health care, first class education and justice before the law remain a struggle for many. It appears that both major political parties are quite happy to pursue policies which entrench the importance of that luck. An examination of our health system highlights this.

My patients who earn $36,000 a year pay $36 for most prescriptions. My patients who earn $360,000 pay the same, and those on $3 billion pay the same. Usually, these prescriptions are for conditions which can't be avoided — it's just bad luck.

This government imposed co-payment is a tax on illness. It is not noticed by those on $360,000 but for those struggling on $36,000, or pensioners who pay a reduced tax on illness of $6 per prescription, this does affect their small disposable incomes. It is a regressive tax.

The effect of this on patient behaviour is well documented. The Australian commissioned a Newspoll Survey in 2011 and reported that 18 per cent of those earning $40-79,000 delayed or did not fill a prescription due to cost.

Slightly lower figures for the whole population from the Australian Bureau of Statistics Patient Experience survey (10 per cent) and the Commonwealth Fund survey (14 per cent) indicate that underuse is a major consequence of such co-payments.

The Commonwealth Fund survey has also looked at sicker Australians and found, not surprisingly, that the figure rises to 20 per cent for them.

 

"Our leaders claim that such taxes are necessary to ensure that people value the service and don't overuse it. The hypocrisy of this claim is demonstrated by the facts."

 

So much for the government imposed tax on illness, the prescription co-payment. There was also the general practice (GP) co-payment in its many forms. The ALP's Senator Wong correctly labelled it a tax on illness. That label has fallen from the ALP lexicon, presumably because they realise that the prescription co-payment