Presentation given in Workshop 4: Medicare and Welfare Reform - the US model for Australian society? at the Now We The People conference, 23.8.03, University of Technology, Sydney

Garry Moore

I want to talk about the way US ideas are encroaching on Australia's welfare system, about some of the actions and coalitions currently active in these areas and some of you may well be part of those coalitions, and also about what is happening to public housing.

When your reflect on what has happened to public housing since 1945, and particularly in the last 15 years, it is instructive about what is happening in Medicare and the income security field.

Australia, compared with the US, has some sort of 20th century welfare state provision, much closer to that which is practised in western and northern Europe. Australia's income security system was developed partially as a rights-based model, recognising the impacts of unemployment and aging, and the inequities inherent in a market-based economy.

Medicare, and its predecessor Medibank, were established at least on the following premises - access to health care is a right for all citizens, affordability and availability of health care services are best managed on the basis of participation and payment by all, and therefore using the tax system as the financing mechanism, and that there was a place for an ancillary private insurance health system.

Some of the key issues in the income security system at the Commonwealth level are:
* there is a growing number of people reliant on the system,
* there is a complex payment system with a range of poverty traps, so that if people are earning money in an attempt to get back into the paid workforce, they are paying tax rates of 100% or more, if you are part worker, part recipient.
* The level of payments are inadequate in the Medicare area. The levy doesn't cover the cost and it hasn't for some time.
* Bulk-billing rates have been dropping for some time, particularly in some locations in urban areas and rural areas. In some areas of NSW it is now below 50% bulk billing.
* Medicare has always had a problem in that the Constitution means it cannot regulate the salaries of medical practitioners.
* Client numbers are increasing in a number of areas.
* Poor interface between the primary health care system and the acute health care system, hospital funding and systems.

If these are some of the problems that the income security and Medicare systems have, and then you start thinking about some of the American influences that seem to have found their way into the way our federal government is pushing in these areas, then you start thinking, well what does that mean?

Some of these influences - no surprises - appear to be an approach to narrow the consumer base - only the deserving poor or those most deserving should ever be recipients of publicly funded services and / or payments.

We are all aware of the creation of a two-tier system approach. Others will talk about the US health system where private insurance is the primary form of providing access to health care. The public system is by and large the minor player. The growth of private insurance - and we are aware of the Commonwealth rebate for private health insurance payments - the introduction of private providers, and where we have examples on the income support side. The Commonwealth Employment Service was abolished in the mid-1990s, the creation of a market to provide employment services in Australia - the Job Network program. That market is now dominated by a few large private providers and a few large not-for-profit providers.

People suspect that in the next few years that Centrelink may well be contracted out. Centrelink is the one-stop-shop approach created a few years ago for delivery of income support payments. In the US there are a range of large private corporations which are contracted at the federal and state level to manage income support payments.

Some of the key Australian impacts of those US influences are:
* Reduced access to income security payments for a range of population groups
* Reduced access to primary health care for a range of population groups through the drop in bulk billing
* Rather than getting amore coherent set of human services in Australia, the US influence is to have a market-based approach which fragments the service delivery systems. Many who work in these services want a more integrated way of delivering support but find they are moving in the other direction.

One of the key things we are likely to see if some of the Commonwealth reforms continue is all the related impacts, whether in housing, community services, transport, education and other fundamental aspects of community well-being. These impacts will fall more on the States. As the Commonwealth has already said, because you have the golden goose of GST, you can pay for it.

We will see more of that in 2004 when the first five-year Commonwealth / State Finance Agreement after the 2000 GST reform comes in.
The evidence in data and qualitative ways is that in a fair amount of Australia there is locational disadvantage and social exclusion based on place. Certain population groups are more marginalised and experience less access to the economy and society. If you look at Tony Vinson's work, who in November will release new data on disadvantage by postcode in NSW and Victoria, you will see impacts in locations where disadvantage is entrenched.

So rather than reducing inequalities across communities, these reforms in both income security and health services will entrench locational disadvantage and social exclusion in those communities.

The impetus for providing public housing after World War II was based on the idea of a broad social mix of people in public housing. Compared to parts of the US, western and northern Europe, Australia has large private home ownership and a very small public housing sector. That original proposal that public housing should be available to all people on a capacity-to-contribute basis has now moved to the reality that only those people in extreme need get public housing. So in fact we've had welfare housing in Australia for the last 20 years. At the same time we end up with concentrations of disadvantage in locations of public housing estates and neighborhoods. The Commonwealth and some of the States, including the NSW Treasury, have talked about he delights of cashing-out the Commonwealth State Housing Agreement and giving the money to individuals to use in the private rental market. In other words, they want to stop the grant funding of public housing. In almost happened in 1996, and I'm sure it's back on the cards at the moment.

We also have at the moment the cynical exercise of the Housing Affordability Inquiry announced a few weeks ago by the Productivity commission.

Of course it has nothing to do with the housing affordability of the 30% who will never be able to own their own home. In this bizarre way of moving from a broader approach to a social mix of income and household types in a public housing program to a welfare housing provision, all of the other things that have happened in our society have happened in public housing. So now public housing has only the most marginal - and there are 92,000 applicants on the NSW public housing waiting list - you can't even get a sense of public housing into any major policy debates any more. You get all the social exclusions I have mentioned.

Part of the fear of the not-for-profit human services sector where I come from is that if we don't do something about winning some of these arguments and stopping some of these developments, all of the obvious things will happen - a two tier system and reduced access for lower income and disadvantaged groups.

But the real essence of locational disadvantage and social exclusion will be further entrenched and we will never be able to get on top of it.
At the NSW and national levels there is a Save Medicare Alliance that has been active. There has been a set of discussions, such as the recent national summit on new approaches to Commonwealth / State financing for health, and there will be efforts to raise the issues of private tenants and public housing tenants in the Housing Affordability Inquiry, and other issues about the tax system.

People should be aware that the Federal Treasurer has recently released a Bill about defining Charities in Australia, and it contains a conspicuous attempt to prevent charitable organisations from advocating for a cause, or against a government policy or a law.

Questions

There is a new poor - the self-funded retirees.
Answer - there is no arrangements yet to deal with people who have little income but have an asset.

The Howard government would be happy to create more working poor to make us more competitive in the flat-earth economy. The Australian Youth Network and the Girl Guides were defunded for criticising the government's policy. Now they want to explore how philanthropy can provide more welfare services.

What is happening about the Charities Bill in terms of political action?
The human services at the national and NSW levels have organised to take action, and talked to the NSW Treasury about it because if federal funds are cut, then organisations will turn to the states for more grants.

What is the best way to defend Medicare?
We take the view that dental services should come under Medicare. We want the levy to be increased. The needs to be a new Commonwealth State Health Care Agreement. At the interface between health and community care, there is a systemic nightmare. All the focus is at the hospital and the emergency unit. Part of this is about nursing homes.

There was a brief exchange about whether or not to advocate the prohibition of private health insurance or at leas the abolition of the private health insurance rebate.

A speaker blamed Labor governments for the marginalisation of public housing finance, and asked how this could be reversed.

No easy answer is available. All major residential developments should have 10% - 15% of affordable housing, paid partly by developers and partly by Commonwealth / State Housing funds, and there should by revenues taken from stamp duties and other taxes for public housing.
The US does recognise that it must give generous tax breaks to direct funds into housing and other services, but in Australia we are taking away tax exemptions. That's one way we are not taking all of the US model that the Howard government seems to admire so much. Why?

Ends

Gary Moore is the Executive Officer of the NSW Council of Social Services