15 May 2009
Federal Budget - insightful debate can strengthen proposals
The Federal Budget always takes a few days to digest. Of course, much of the budget was strategically leaked prior to Tuesday night but there was still plenty to trawl through. One of the contentious elements of the Budget is the proposed reduction in government support for the private health insurance rebate. In its Budget response, the Opposition vowed to block the proposed means testing and protect the 30 per cent rebate for middle to high income earners. What should be remembered is that government subsidised private health insurance is a relatively recent trend in Australia. It was introduced in 1997 when the Howard Government launched the Private Health Insurance Incentive Scheme (PHIIS) - a means-tested rebate for hospital and ancillary health insurance - along with a Medicare surcharge for those with a household income over $100,000pa (and a single income over $50,000pa) who did not have private health insurance. PHIIS was replaced in 1999 by an uncapped 30 per cent private health insurance rebate to further encourage uptake of private health insurance. It is a questionable scheme that disproportionately favours middle to high income earners and costs the Government billions. The Opposition recommends leaving the rebate and increasing tax on cigarettes to cover the cost. Why not do both and invest the $1.9 billion in more jobs or the public health system? Why are smokers paying for people like myself and Mr Turnbull to have more affordable private health care? Private health insurance aside, the Treasurer delivered a balanced and fair Budget in context of the current global economic downturn. A payment increase for all pensioners is very welcome. However, more could have been achieved for the unemployed if a more hardline approach was taken in the review of tax cuts to those able to ride out the downturn. With unemployment set to rise to around 1 million by the Government's own estimates, it is disappointing that the Newstart allowance was not increased to more than $225 per week. The Budget is centred around a bold plan to spend our way through the recession and protect jobs. The legacy of this will be huge government debt which is a legitimate concern for the Australian community. Especially if recovery does not come as quickly as the Treasurer has forecast. What we need now from the Opposition is insightful and well informed debate to strengthen the Budget rather than scaremongering and political point scoring which threatens to undermine important cost saving initiatives.
RSS | Previous Post | Next Post |
Comments: 2
| Comment on this 
|
