The Budget includes a number of significant health measures.
They include expansion of the My Health Record, public hospital funding,
immunisation initiatives and an expanded tobacco excise.
My Health Record expansion
The Budget provides $374.2 million over two years from
2017–18 to continue the operation of the My Health Record system and
expand its use through a national roll-out of opt-out arrangements.
The My Health Record is a ‘secure online summary of a person’s medications,
diagnosed illnesses, treatments, allergies and tests’.
Currently, participation in the My Health Record is on an
‘opt-in’ basis, where an individual actively chooses to register. An ‘opt-out’
approach automatically registers an individual unless they expressly request
Trials of an opt-out My Health Record were undertaken last
year, following the passage of the Health Legislation Amendment
(eHealth) Act 2015 (the Act). The Act introduced a new regulatory and
governance framework for eHealth, replaced the personally controlled electronic
health record (PCEHR) with the new My Health Record, and allowed for trials of
opt-out arrangements. The 2015–16 Budget allocated funding of $485.1 million
for the development of the new My Health Record and for the opt-out trials.
The recently released evaluation of the trials found that, ‘[o]n
most measures, the opt-out participation arrangement yielded more significant
increases (compared to opt-in trial sites and the rest of Australia) in My
Health Record system uptake and participation.’ Importantly, the evaluation
also found that stakeholders preferred opt-out as the participation model.
The evaluation identified a number of issues and made a list of
recommendations. The Council of Australian
Governments (COAG) agreed in March 2017 to adopt an opt-out approach
The Australian Government has made significant investments
in developing eHealth capabilities. Between 2009–10 and 30 June 2016, some $1.2
billion was spent on infrastructure development, implementation and the ongoing
operation of the former PCEHR and new My Health Record.
The Government expects to offset some of the costs of this measure through
efficiencies expected to be achieved, for example through greater use of the My
Health Record by medical professionals and hospitals, and by utilising
uncommitted health program funds. Some $305.5 million in offsets is forecast.
Some stakeholder responses have been positive. For example,
the Australian Healthcare and Hospitals Association (AHHA) described the move
to an opt-out approach as ‘commendable’. However, other
stakeholders have previously criticised the prospect of an opt-out system.
One commentator warns it will lead to health records being ‘breached and leaked
and sold’. Legislation will not be
required as the Act allows for the Minister to make rules to apply the opt-out
Public hospital funding
The Australian Governments makes annual payments to the
states and territories for public hospitals under the terms of the National
Health Reform Agreement 2011. Under a 2016 COAG agreement, the Commonwealth
committed to meet 45 per cent of the efficient growth in the cost of public hospital
services for the period 2017–2020 (capped at 6.5 per cent growth in
Commonwealth funding per annum) and retain activity based funding (ABF) and the
National Efficient Price (NEP) as the basis for hospital funding for this
The 2017–18 Budget provides additional funding for the
period 2016–17 to 2020–21, based on an estimate of 5.6 per cent average
annual growth. This is a higher growth rate than forecast at the Mid-Year
Economic and Fiscal Outlook (MYEFO). Some $19.6 billion is
allocated in National Health Reform (NHR) funding for 2017–18, which comprises
funding for both public hospitals and public health programs.
Although NHR funding is forecast to increase over the
forward estimates, National Partnership (NP) payments, which fund state-based
health services, health infrastructure and Indigenous health services, will
decline. In part, this is due to
the $730.4 million one-off payment in 2016–17 to maintain the operation of the
Mersey Community Hospital for a ten-year period. Under an agreement with the
Tasmanian Government, ownership of the hospital will revert to Tasmania from
July 2017. Other NP payments that
will decline include payments for health infrastructure and payments linked to
expiring agreements. NHR and NP payments do
not require legislation.
The 2017–18 Budget contains two health measures in support
of the Government’s ‘No Jab No Pay’ (NJNP) policy to further increase childhood
vaccination rates, specifically:
- $5.5 million over three years (including $1.5 million
from the existing resources of the Department of Health) for an awareness
campaign to encourage childhood vaccination and
- $14.1 million over four years to fund free catch-up
vaccinations for adolescents and newly arrived refugees who may not have
received their childhood vaccinations.
The Government is also extending its NJNP welfare measure
from the 2015–16 Budget by reducing the fortnightly payment rates of Family Tax
Benefit Part A (FTB-A) recipients whose children do not meet immunisation
The Budget contains a confidential amount of funding for Q fever
vaccine and local production of pandemic influenza vaccines, and $85.4 million
in capital funding over three years to replenish the National Medical
Stockpile’s reserve of medicines, vaccines and antidotes (for use in the event
of a public health emergency).
Apart from the measure relating to FTB-A payments, none of
these immunisation measures should require legislation.
The Public Health Association of Australia has described the
measures to increase childhood vaccination rates and invest in the National
Medical Stockpile as ‘a strong commitment to protecting the health of all
Aligning the tax treatment of roll
your own tobacco and cigarettes
Dr Matthew Thomas
This brief considers the health-related aspects of the
measure. For a summary of how the measure is to be applied and its revenue
implications, see the Budget Review article ‘Tax—tobacco excise’.
International and domestic evidence suggests that where the
price of manufactured cigarettes is high relative to the price of roll your own
(RYO) cigarettes, this is associated with the increased use of RYO cigarettes
over other cigarettes.
There is evidence to suggest that in recent years the use of
RYO cigarettes has increased in Australia following a number of substantial tobacco
excise increases. While the excise
increases apply to all tobacco products, because RYO cigarettes are cheaper
relative to manufactured cigarettes, smokers may be substituting RYO cigarettes
for manufactured cigarettes as they have become a more appealing economic
Similarly, there is a risk that young people, who are
typically on limited budgets, may be smoking RYO cigarettes as a means of
limiting their costs.
The Government is adjusting the taxation of RYO tobacco
(along with other tobacco products, such as cigars) to ensure that manufactured
cigarettes and RYO tobacco excise rates are comparable.
The adjustment is to be phased in over four years from 2017 to 2020 to match
the legislated 12.5 per cent annual tobacco excise increases.
This measure should help to counter the above trend and
ensure that the protective effects of tobacco excise are maintained. It will
also result in a substantial increase to Government revenue.
This measure will require amending legislation.
The budget figures in this brief have been taken from the following
document unless otherwise sourced: Australian Government, Budget
measures: budget paper no. 2: 2017–18, 2017.
Department of Health (DoH), ‘Evaluation
of the My Health Record Participation Trials’, DoH website.
Amendment (eHealth) Act 2015.
Australian Government, Budget
measures: budget paper no. 2 2015–16, p. 104.
Siggins Miller, Evaluation
of the participation trials for the My Health Record, Siggins
Miller, 2016, p. 5 (viii).
Ibid., p. 5 (xi).
Ibid., pp. xiv–xx.
Council of Australian Governments (COAG) Health Council, Communique,
COAG Health Council Meeting, Melbourne, 24 March 2017.
Senate Community Affairs Legislation Committee, Answers to Questions
on Notice, Health Portfolio, Supplementary Budget Estimates 2016–2017, Question
Australian Healthcare and Hospitals Association (AHHA), Doctors,
industry groups entrusted with the keys for a healthy Australia, media
release, 9 May 2017.
R Pearce, ‘eHealth
record changes raise ire of privacy advocates’, Computerworld, 7 March 2016.
See also stakeholder comments in A Biggs, L Ferris, J Tomaras, Health
Legislation Amendment (eHealth) Bill 2015, Bills digest, 41, 2015–16,
Parliamentary Library, Canberra, 2015, pp. 9–12.
A Wolf, ‘Govt's
electronic health record plan is a data breach waiting to happen’, Crikey,
11 May 2017.
A Biggs, ‘Hospital
funding’, Budget review 2016–17, Research paper series, 2015–16, Parliamentary
Library, Canberra, 2016. Efficient growth is explained in the National
Health Reform Agreement at clause A3. The NEP is independently
determined by the Independent Hospital Pricing Authority (IHPA). See IHPA, ‘Pricing framework’,
IHPA website. The 2014–15 Budget announced that ABF and the NEP would be
dropped as the basis for hospital funding from 2017 onwards, but this decision
was later reversed under a Heads of Agreement signed in April 2016: A Biggs ‘Health
funding agreements’, Budget review 2014–15, Research paper series,
2013–14, Parliamentary Library, Canberra, 2014; COAG, Heads
of agreement between the Commonwealth and the states and territories on public
hospital funding, COAG, 2016.
Australian Government, Mid-Year
Economic and Fiscal Outlook 2016–17, p. 77.
Australian Government, Federal
financial relations: budget paper no. 3: 2017–18, p. 15.
for health services in Tasmania’, fact sheet, DoH, 2017. The Commonwealth
purchased the hospital in 2007: M Turnbull (Prime Minister), W Hodgman
(Premier of Tasmania), $730
million to secure Mersey Hospital, media release, 5 April 2017.
Federal financial relations: budget paper no. 3: 2017–18,
op. cit., pp. 22, 26.
For further information on this measure see M Klapdor, ‘Family
payments’, Budget review 2017–18, Research paper series, 2016–17,
Parliamentary Library, Canberra, 2017.
Medical Stockpile’, DoH website. Q fever is a livestock
infection contracted by meat workers, farmers and veterinarians. See Government
of South Australia, ‘Q fever - including symptoms, treatment and prevention’, SA Health website.
Public Health Association of Australia, 'Medicine'
budget - not a health budget, media release, 9 May 2017.
See ‘13.1 Price elasticity of demand for tobacco products’ in M Scollo
and M Winstanley (eds.), Tobacco in Australia: facts and issues, Cancer
Council Victoria, 2016 and D Curti, C Shang, W Ridgeway, F Chaloupka and G
use of legal, illegal and roll-your-own cigarettes to increasing tobacco excise
taxes and comprehensive tobacco control policies: findings from the ITC Uruguay
Survey’, Tobacco Control, 24 (S3), 2015, pp. 17–24.
See ‘2.5 Industry sales figures as estimates for consumption’ in Scollo
and Winstanley, op. cit. For a brief description and analysis of the tobacco
excise increases, see M Thomas, ‘Tobacco
excise increase’, Budget review 2016–17, Research
paper series, 2015–16, Parliamentary Library, Canberra, 2016.
According to 2013 National Drug Strategy Household Survey (NDSHS) data,
in the previous 12 months, 66.8 per cent of Australian smokers
aged 14 and over smoked manufactured cigarettes daily, 21.1 per cent
smoked roll-your-own cigarettes, 7.3 per cent smoked cigarillos and
1.3 per cent smoked cigars: Australian Institute of Health and
Welfare (AIHW), Table 3.9: Tobacco use in the previous 12 months, smokers aged
14 or older by frequency of use, 2013, ‘Online
tables’, AIHW website.
See Quit Victoria, Roll-your-own
tax a welcome step to curb appeal to young people, media release, 10 May 2017.
Australian Government, Budget
measures: budget paper no. 2: 2017–18, op. cit., p. 12.
All online articles accessed May 2017.
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