Other health measures

Budget Review 2017–18 Index

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

Amanda Biggs

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.[1] The My Health Record is a ‘secure online summary of a person’s medications, diagnosed illnesses, treatments, allergies and tests’.[2]

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 otherwise.

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).[3] 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.[4]

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.’[5] Importantly, the evaluation also found that stakeholders preferred opt-out as the participation model.[6] The evaluation identified a number of issues and made a list of recommendations.[7] The Council of Australian Governments (COAG) agreed in March 2017 to adopt an opt-out approach nationally.[8]

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.[9] 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’.[10] However, other stakeholders have previously criticised the prospect of an opt-out system.[11] One commentator warns it will lead to health records being ‘breached and leaked and sold’.[12] Legislation will not be required as the Act allows for the Minister to make rules to apply the opt-out model nationally.

Public hospital funding

Amanda Biggs

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 period.[13]

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).[14] 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.[15]

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.[16] 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.[17] Other NP payments that will decline include payments for health infrastructure and payments linked to expiring agreements.[18] NHR and NP payments do not require legislation.


Alex Grove

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 requirements.[19]

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).[20]

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 Australians’.[21]

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.[22]

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.[23] 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 alternative.[24]

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.[25]

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.[26] 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.

[1].          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.

[2].          Department of Health (DoH), ‘Evaluation of the My Health Record Participation Trials’, DoH website.

[3].          Health Legislation Amendment (eHealth) Act 2015.

[4].          Australian Government, Budget measures: budget paper no. 2 2015–16, p. 104.

[5].          Siggins Miller, Evaluation of the participation trials for the My Health Record, Siggins Miller, 2016, p. 5 (viii).

[6].          Ibid., p. 5 (xi).

[7].          Ibid., pp. xiv–xx.

[8].          Council of Australian Governments (COAG) Health Council, Communique, COAG Health Council Meeting, Melbourne, 24 March 2017.

[9].          Senate Community Affairs Legislation Committee, Answers to Questions on Notice, Health Portfolio, Supplementary Budget Estimates 2016–2017, Question SQ16-000590.

[10].       Australian Healthcare and Hospitals Association (AHHA), Doctors, industry groups entrusted with the keys for a healthy Australia, media release, 9 May 2017.

[11].       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.

[12].       A Wolf, ‘Govt's electronic health record plan is a data breach waiting to happen’, Crikey, 11 May 2017.

[13].       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.

[14].       Australian Government, Mid-Year Economic and Fiscal Outlook 2016–17, p. 77.

[15].       Australian Government, Federal financial relations: budget paper no. 3: 2017–18, p. 15.

[16].       Ibid.

[17].       DoH, ‘Support 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.

[18].       Federal financial relations: budget paper no. 3: 2017–18, op. cit., pp. 22, 26.

[19].       For further information on this measure see M Klapdor, ‘Family payments’, Budget review 2017–18, Research paper series, 2016–17, Parliamentary Library, Canberra, 2017.

[20].       DoH, ‘National 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.

[21].       Public Health Association of Australia, 'Medicine' budget - not a health budget, media release, 9 May 2017.

[22].       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 Fong, ‘The 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.

[23].       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.

[24].       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.

[25].       See Quit Victoria, Roll-your-own tax a welcome step to curb appeal to young people, media release, 10 May 2017.

[26].       Australian Government, Budget measures: budget paper no. 2: 2017–18, op. cit., p. 12.


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