Chaos overtakes $7 medical co-payment

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By Leith van Onselen

Will they or won’t they? Confusion is running wild today on whether the Abbott Government will abandon its $7 co-payment on medical visits, with Treasurer Joe Hockey seemingly contradicting Prime Minister Tony Abbott on the issue.

Last night and this morning, it seemed as if the $7 co-payment was on the chopping block, with the Canberra Times (and other outlets) reporting the following:

Prime Minister Tony Abbott has privately conceded defeat on his controversial budget proposal to introduce a new $7 co-payment on bulk-billed GP visits and will formally shelve the policy before the end of the year.

The decision is a recognition of the reality that it had no chance of progressing through a hostile Senate in the face of trenchant opposition from Labor, the Greens, and a majority of the crossbench…

However, according to the Canberra Times this afternoon, Joe Hockey has breathed new life into the policy:

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Treasurer Joe Hockey has added to the confusion surrounding the federal government’s proposed $7 GP fee declaring it remains alive even after the Prime Minister’s office had briefed several journalists at different media organisations that the policy was to be shelved.

Mr Hockey said the government still intended to take its co-payment to the Parliament as Liberal senator Ian Macdonald threatened to cross the floor and vote against the fee if it was introduced.

The Guardian also reported this morning that the policy was going to be shelved, only to update its story this afternoon confirming that it is still in play:

Speaking on ABC radio on Thursday morning, the leader of the government in the Senate, Eric Abetz, insisted the policy was not dead.
“The government’s policy on the GP co-payment remains,” Abetz said. “It is good policy”…

A spokesman for health minister Peter Dutton also dismissed the reports as media speculation…

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The Guardian also noted that the Government could avoid the Senate altogether and introduce the $7 co-payment by regulation:

Labor health spokeswoman Catherine King… warned the government could by-pass the Senate and introduce the charge through regulation, by reducing the rebate paid to doctors.

“I think this isn’t dead yet,” she told ABC radio.

Meanwhile, the doctor’s union, The Australian Medical Association (AMA), on Wednesday applauded the Government for scrapping the “unfair” co-payment, only to then request that the Government make a clear statement on the whether it has shelved it or not.

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It looks as if there is internal division within the Coalition on this issue, as there is with Abbott’s paid parental leave scheme.

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About the author
Leith van Onselen is Chief Economist at the MB Fund and MB Super. He is also a co-founder of MacroBusiness. Leith has previously worked at the Australian Treasury, Victorian Treasury and Goldman Sachs.