Government takes first steps to sell Medicare

Friday, August 15, 2014
A Save Medicare action in Wollongong in May. Photo: Savoy Truffle.

The federal government took the first steps towards privatising the Medicare payment system on August 8, asking businesses for expressions of interest in taking over the handling of claims and Medicare and Pharmaceutical Benefits Scheme payments.

This $29 billion annual operation is currently carried out by the federal Department of Human Services (DHS), the government's largest department.

Medicare is second only to Centrelink as the biggest section of DHS. Selling off Medicare payments would begin the break-up of the department, and represents an attack on the Australian public service as a whole.

Up to 20,000 public service jobs could be lost or outsourced to the private sector if the Medicare sell-off goes ahead.

This head-on attack against the public service by the Coalition government is part of its neoliberal war against the public sector. The Australian ruling class is intent on slashing the public service and privatising the overwhelming bulk of public enterprise, in order to seize direct ownership of state assets in the interests of the big multinational corporations.

"The sell-off  [of Medicare was] a recommendation of the federal government's National Commission of Audit, one of many that did not make it into May's federal budget. Departments and agencies are now braced for announcements of more of the commission's ideas," the Sydney Morning Herald reported on August 8.

"These include the sell-off of Centrelink [social security] payments, big cuts to Defence Department staffing in Canberra, the abolition of the Australian Public Service Commission and the establishment of a shared services department.

"Commission head Tony Shepherd also wanted parts of the Commonwealth workplace insurer Comcare sold off ... Jobs in the Department of Veterans Affairs will also be in the gun as the Health Department looks to outsource nearly $2.5 billion in veterans' benefits, currently administered by DVA," the SMH said.

The Australian Financial Review said on August 8: "The decision [to sell off Medicare] ... could allow Australia Post or any of the big four banks to step in to calculate and process health payments and absorb Medicare retail outlets.

"Early discussions have indicated a very strong level of commercial interest in fulfilling the contract. It could boost the valuation of Australia Post if the government decided to privatise the government business enterprise later.

"The struggling mail carrier has already made a pitch through the Commission of Audit process to take over the entirety of the Department of Human Services' payment delivery responsibilities, including welfare payments."

"The development of a new payment system could facilitate the collection of the $7 payments for doctor visits, pathology and imaging the government wants to implement.”

This last point underlines the link between the plan to sell off Medicare payments and the attack on Medicare as a universal public health system contained in the $7 co-payment plan. It shows the urgent need to combine a campaign against both the privatisation push and the Medicare co-payment.

The Community and Public sector Union (CPSU), which covers DHS employees, has slammed the government's move to privatise Medicare payments.

CPSU national secretary Nadine Flood said on August 8: "Medicare staff are stunned and appalled at news the government is planning to sell off their jobs and outsource Medicare payments to big business. This outrageous move could cut up tens of thousands of public service jobs, most in regional and suburban Australia where jobs have already been hit hard.

"This is another part of [Prime Minister Tony] Abbott's plan to murder Medicare. Medicare is a highly effective key part of Australia's great public health system, yet this government is determined to dismantle it and sell the profitable bits to its big business mates. It is absolutely shocking.

"It's even worse they're doing it without a word to the community or thousands of Medicare workers whose jobs are in the firing line. The first we hear of this is a tender to sell off Medicare. This is a nasty, sneaky move by the Abbott government.

"Australians are wary about privatisation because so often they pay more and get less. The last place we want that to happen is with something as important as Medicare.”

The recommendations of the National Commission of Audit, headed by former Business Council of Australia chair Tony Shepherd, are essentially a wishlist for big business in Australia from the federal government.

The Abbott government — the most pro-corporate regime in recent Australian history, which is taking up issues even the Howard government backed away from — is seeking to implement this business agenda as fast as it can.

In light of the public opposition to the government budget in general, and the Medicare co-payment proposal in particular, the time is now right to launch a broad community and union campaign to fight both the co-payment and the Medicare sell-off plans.

This means working to unite the existing Save Medicare campaign aimed against the co-payment with a drive by the CPSU and other unions, under the umbrella of the Australian Council of Trade Unions, to stop the privatisation of the Medicare payment system.

The Australian public has a strong interest in the defence and extension of Medicare as a universal, freely available public health system. Medical care should be free and equally shared as a community right.

The campaign to save Medicare — both to stop any form of co-payment for doctors' visits and to prevent the sell-off of its administration and payment system — is now an urgent priority for the union movement and the community generally.

From GLW issue 1021