On the first AM Agenda of the year, I joined Kieran Gilbert to talk about the government's latest backflip on Medicare and the sustainability of health spending in the long term. Here's the transcript:
SKY AM AGENDA
MONDAY, 19 JANUARY 2015
SUBJECT/S: Abbott Government’s cuts to Medicare; Queensland state election; Joint Strike Fighter espionage; Bali Nine executions
KIERAN GILBERT: Welcome to the program Assistant Education Minister Simon Birmingham and Shadow Assistant Treasurer Andrew Leigh. Gentlemen, good morning. Senator Birmingham, first of all I want to get your thoughts on this leak yesterday in the Sunday Telegraph. Samantha Maiden is reporting that Peter Dutton, the former health Minister, and Joe Hockey argued against reducing the rebate for GPs for shorter consultations. That didn't go ahead anyway as we know, that was due to start today. But the fact that we're seeing leaks from the Expenditure Review committee, that very senior portion of the Cabinet, has got to be a big worry to start the new year?
SIMON BIRMINGHAM, ASSISTANT EDUCATION MINISTER: Good morning, Kieran. Look, I'm not terribly worried nor interested in unsourced leaks, whether they're accurate or not, who knows. What I'm more interested in is, and what the Government is more interested in, is getting the policy settings right. Sussan Ley as the new Health Minister is going to go out and consult extensively with the health sector, with the medical profession to try to ensure we can come up with the right policy that delivers sustainability for Medicare in the long term. We want to ensure we can secure Medicare's future in a way that recognises that those who can afford to make a contribution to their healthcare should be making a greater contribution. It is hard; let's understand that this policy, as with so many measures the Government is pursuing at present, is all about getting the budget back under control. It’s about ensuring our economic settings and our fiscal settings and our budgetary settings are sustainable for the long haul.
GILBERT: Do you accept that the approach to this point has been a bit below average, to put it mildly, in terms of the efforts to reform Medicare? There's been two backflips in two months when it comes to your approach to reforming Medicare.
BIRMINGHAM: What I think is below average is that the alternative Government of Australia, the Labor Party, aren't engaged at all in any of these discussions in terms of constructively working towards solutions. We're going to try and work through an option which will have a chance in getting through the Senate, will have a good chance of success and it's so important that we do so. Because if we don't tackle the budgetary problems this country has – which everyone from the Reserve Bank Governor to the independent Parliamentary Budget Office to the former Head of the Treasury all accept we have – then if we don't deal with those problems, we pass on a bigger problem, a bigger debt and deficit disaster to our children and to the next generation. So this Government, unpopular though it may be at times, is confronting the difficult decisions that have to be taken. We want to get on with those difficult decisions. In the health debate where we've had a tricky issue, Sussan Ley will now buckle down and make sure that she consults with the medical profession and come up with a model that is sustainable for the future.
GILBERT: As the Minister points out, Andrew Leigh, under the current framework for Medicare do you concede that there's an unsustainability about elements of it? Do you accept that there's any unsustainability about the framework of Medicare as it stands at the moment?
ANDREW LEIGH, SHADOW ASSISTANT TREASURER: Well Kieran, firstly thanks very much for having me on again and happy new year to you and your viewers. I don't accept that there is an unsustainability to Medicare and in fact that's what the experts tell us. The growth in health spending is the slowest it has been in a generation, Australia spends less on healthcare than the typical developed country, and we spend less on public healthcare than the typical developed country. So this notion of a crisis in Medicare is just a fabrication by the Government. It disappoints me that the Government's claiming this is about the budget because let's face it, their plan is for their GP tax to go into a separate fund rather than consolidated revenue. So there's so many mistruths you've got to cut through here and I think that's why you've had this disunity. You've got the Prime Minister telling you that the problem is the Health Minister so he changes the Health Minister, you've got leaks from the Treasurer suggesting that the problem is the Prime Minister, but really, the only way of solving this problem is to change the Government. To have a Government that wants to put Medicare first and wants to listen to doctors and the Australian people.
GILBERT: I know the Government has repeatedly pointed that you as a student or as an academic at university argued for a co-payment previously. What's your view now for a price signal to ensure that healthcare costs, with an aging demographic, don't blow out?
LEIGH: The reason I've changed my view over the last twelve years since I was a university student, is that I've listened to health experts on this. Many of them make the point that if you prevent people getting access to doctors, prevent that frontline primary healthcare role, you end up with more people in emergency rooms. If you look across the developed world, it's true that we spend less than a typical developed country but we have a higher-than-average share of people in hospitals. Hospitals are much more expensive than GPs. So we don't want to force people out of GP surgeries if the result is instead to send them into hospital care. I listened to doctors and to patients and changed my view. The sad thing is the Government hasn't been able to do the same thing because the GP tax is still its policy.
GILBERT: Minister Birmingham, I'd like to get you to respond to a couple of those things. Particularly the suggestion of the parallel Dr Leigh is making in terms of other developed countries, that actually this is a fabrication of the Government's making and the system is not unsustainable.
BIRMINGHAM: Well I'm very happy to deal with the budget numbers that demonstrate the problem we've got and which Andrew and the Labor Party are appearing to be ignoring. Around a decade ago, Medicare cost Australian tax payers $8 billion a year. Today, it costs around $20 billion a year. In a decade's time it is forecast to cost around $34 billion a year. But the Medicare levy only contributes around half of today's costs so there's a significant deficit between what the Medicare levy raises and what the taxpayers have to fund in terms of the costs of Medicare. Now that is an absolute problem because that then goes and affects the budget bottom line.
GILBERT: That's a pretty cogent point; let's get Andrew Leigh to respond directly to that specific point put by the Minister there.
LEIGH: Absolutely, Kieran. As we become richer, we want to spend a larger share of our income on health. You see that right across the developed world and it doesn't mean that the system is unsustainable. It certainly doesn't mean that we have to stop people going to the doctor. Who's going to be deterred from going to the doctor by putting on a GP tax? Well it'll be people who are the most vulnerable. A friend of mine who is a psychiatrist in Queensland wrote to me deeply concerned about this proposal. He said that it's his patients that will be deterred and who will fail to get that basic screening which is necessary to prevent them from ending up in hospital.
GILBERT: Your reaction to that? As a growing country, should we be spending more as a percentage on health?
BIRMINGHAM: Right there in what Andrew just said is the heart of the Labor Party's problem. He said as we become richer we expect to spend more on health – sure. But how are we paying for it and who is paying for it? What I identified in the figure I gave before is a deficit between what's being spent and what's being raised to pay for that expenditure. That, of course, is the problem we have right across the federal budget at present that we're trying to grapple with. The Labor Party seem oblivious to the fact that this is a problem. Whether it's Medicare or whether it's the budget overall, right now we're spending significantly more than we're raising hence our debt is going up, it was forecast under Labor to hit $600 billion dollars plus. That's why we have to take these sorts of difficult decisions; they won't be fixed by a Labor Party saying things like ‘we're going to put Medicare first’. What does that mean? You've got to actually tackle the difficult policy decisions which this Government is doing.
GILBERT: We've got to take a quick break, back in just a moment with the Assistant Education Minister, Simon Birmingham and the Shadow Assistant Treasurer, Andrew Leigh.
GILBERT: Senator Birmingham, to you on the Queensland election: the LNP launch was held yesterday with no sign of the Prime Minister. Is that intentional, the Queensland LNP don't want the Prime Minister in their backyard at the moment?
BIRMINGHAM: This is hardly unprecedented; it's happened on all sides of politics at different times. The Queensland LNP are running their race in Queensland. The state election will be focused and determined on state factors. Campbell Newman is outlining an ambitious plan: investment in education, investment in young people. I thought it was an inspiring address he gave yesterday and what we've seen in Queensland, as we have in New South Wales, is that Coalition governments are really trying to turn those states around by reducing business costs, by creating opportunities for new investments, by generating jobs. We're seeing a really different project in New South Wales and Queensland to what we saw previously and that's for the fairness of young people who want jobs in those states in the future.
GILBERT: Andrew Leigh, you'd expect that Labor will fall short even though the polls suggesting a swing to Labor. To win after the loss last time would be something a little beyond reach at this stage?
LEIGH: It's a huge ask Kieran, to come from less than ten seats to win government. Bill Shorten has been up there regularly campaigning with our Queensland candidates which is more that can be said for the Prime Minister.
GILBERT: He was on holidays though, wasn't he?
LEIGH: Well he seems to be doing quite a lot during his holiday – just not in Queensland, Kieran. Perhaps they built an Abbott proof fence, or maybe people are trying to avoid a near-Abbott experience by standing next to a man whose strategy for the nation seems to be to cut, increase deficits and drive up unemployment. Particularly when it reminds them of Campbell Newman's strategy for Queensland, which has been pretty similar. Now, Simon talks about generating jobs but there's a whole lot more people unemployed in Queensland now than when Campbell Newman came to power. And the idea that you're going to sell off the family silver as your strategy for the future just doesn't make sense to so many Queenslanders. They're looking for a team with hope, a sense of energy and optimism for the future. That’s what Queensland Labor is offering.
GILBERT: Senator Birmingham, your reaction to that, given the polling suggest Campbell Newman will struggle to hold on to his own seat? They'll probably win the election but possibly with a different leader.
BIRMINGHAM: Queensland voters will determine what happens in Queensland but I'm confident that we'll see a good result in Queensland because the Newman Government and Campbell Newman will be rewarded for what has been a period of making difficult decisions to address budget deficits, investing in significant infrastructure and they have even bigger and bolder plans to invest in infrastructure in the next term coupled with significant additional investment in education that was announced yesterday. They’ve got a focus on how to help young people and ensure that job creation is at the heart of what this government does. I am sure we'll see an LNP government that's returned and returned because it's got those fundamentals of budget management and economic growth right, whilst delivering the services of the state that are affordable and sustainable for the future.
GILBERT: Now, I want to look at this story in the Fairfax papers that the Joint Strike Fighter (JSF) has been compromised by Chinese espionage. There was a sense that these JSF was a target, Andrew Leigh, now the latest Snowden leaks reported in the German publication Der Spiegel are suggesting that there’s been quite extensive encroachment there by the Chinese spies in terms of the JSF program.
LEIGH: Kieran, I appreciate the public interest in this but I'm not sure it's helpful if people like Simon and myself comment on national security matters of this kind. The JSF is an important program. It’s important for Australia, we're in it with the British, the Canadians and the Americans. And it's a very ambitious project aiming to produce a fighter which can not only engage in aerial combat but also carry out some of those long-range missions as well. It has had challenges with costs, it's a new generation fighter and so that presents challenges. I would say this story aside, that air superiority is dependent not only on your intellectual property but also on your ability deliver that platform.
GILBERT: Senator Birmingham, would this would be a worry if the extent of these breaches as reported are accurate, given that we've just ordered just shy of sixty JSF, this is the backbone of our Air Force into the future?
BIRMINGHAM: As far as I understand it, there's nothing in these allegations that is new. These allegations, which relate to the operation of Lockheed Martin in the United States in 2007, have been made before. The US defence department has given evidence to a US Senate inquiry in 2013 that has been very clear in their view that all their security protocols around the JSF are quite secure. So in general, the government won't comment on intelligent matters and for good reason; Andrew has rightly urged exercising caution around some of these reports. But it is important to emphasise that these allegations don't appear to be new, they have been aired before and the US defence department has responded before to give certainty to the intelligence that surrounds this project.
GILBERT: Now my interview with the Foreign Minister, Julie Bishop coming up after the top of the hour but i want to get both of your thoughts on the situation that stands with the two Bali Nine members on death row. Senator Birmingham, there's not a lot of cause for optimism in the possibility for clemency here it seems, given the events of the last 24 hours.
BIRMINGHAM: Well the Government is doing all that is possible. The Prime Minister and Julie Bishop, the Foreign Minister, have been working very hard to represent the interests of these Australians. We hope that there might be some late clemency that comes through but ultimately, of course, this is a warning and a reminder to all Australians about the consequences about this type of behaviour overseas. We cannot always successfully come to the rescue of people when they are in such deep, deep trouble. Now hopefully, a good outcome can still be secured here in terms of the lives of these young people but it's a reminder that everybody needs to abide and adhere to the laws of the country that they are visiting and take responsibility for themselves in those circumstances as well.
GILBERT: Andrew Leigh, just quickly to you because we're almost out of time, your thoughts on that?
LEIGH: I lived in Indonesia for three years as a child which might be more than any other member of the Parliament. So as somebody who has that background in Indonesia, I would say to President Widodo that we will maintain a strong relationship with your country regardless of what happens. But, that relationship can be further strengthened by clemency in this case. Australia abandoned the death penalty in 1984 because it is ethically wrong and because as a practical matter, it doesn't help to deter. What these people did was stupid and wrong but we don't believe that the death penalty is appropriate and that's a bipartisan position.
GILBERT: Shadow Assistant Treasurer Andrew Leigh and Assistant Education Minister Senator Birmingham, it's good to see you both. Thanks for your time this morning.
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