Media Releases > Press Articles 2002

Hit And Miss - COTA's View Of The Budget

Fifty- Plus News, June 2002 p7, and Sunshine Coast Seniors Newspaper June 2002 p1-2

by Denys Correll, national executive director, Council on the Ageing Australia

The 2002-03 Federal Budget is a typical post election budget. It has scored a hit by delivering on many of its election promises for older Australians, especially in aged care.But at this early stage of the next election cycle - well away from the next election - it has missed by coming down hard in other areas. It contains some very costly measures for older Australians, especially pharmaceutical charges, and with the disability support pension changes hits at a very vulnerable group who suffer the twin disadvantages of being older and disabled. They will suffer more if they live in an area of high unemployment.

The Treasurer devoted much time in his speech - immediately after defence and border protection - to the impending, rapid rise in the number of older Australians.He even presented a new Budget paper devoted to the issue - the Treasury Intergenerational Report. Its billions and quadruplings of health, pensions and ageing costs in 40 years time are part of the justification for the sweeping and harsh pharmaceutical changes.

COTA doubts the Treasury Inter-Generational Report is a definitive guide to long term planning and funding of the needs of an ageing Australia. It has been produced in isolation from ongoing whole-of-government policy work on policies for an ageing Australia. These have been developed and debated publicly in consultation with COTA and other groups and individuals expert in ageing policies in health, incomes and benefits.

There is every need to understand and plan for the costs of an ageing Australia, but there is no ageing crisis occurring.

Pharmaceuticals

The single most important effect of the Budget on most older Australians is in the area of pharmaceuticals. The Pharmaceutical Benefits Scheme was subject to an extensive range of new policy measures to reduce the growth in its costs including an increase in the price of medicines for consumers.

Pensioners and holders of a Commonwealth Seniors Health Card will now be paying $4.60 for a prescription from 1^st August 2002, a 28% cost increase over the current $3.60 charge.

For those who are not pensioners or holders of a Commonwealth Seniors Health Card, the price of subsidised medicines will rise from $22.40 per prescription to $28.60. The safety net limits also rise for everyone.

The rises in PBS consumer contributions are not justified by patient overuse or abuse. The extra expense will cause personal hardship without necessarily reducing the nation's overall health costs. Overseas experience shows that people will visit and require hospitalisation more, and there will be more deaths as a result of increased drug costs.

Other policy measures in pharmaceuticals are welcome. They aim for better prescribing practices by doctors, community awareness campaigns about the costs of the Pharmaceutical Benefits Scheme, controls on consumer doctor-shopping for medicines, and increasing the use of generic medicines.

Nevertheless, we believe that the rising costs of the Pharmaceutical Benefits Scheme could have been tackled in other ways as outlined in our Budget Submission.

Aged care

The government has delivered on its election promises for aged care and provided some welcome additional funding for Home and Community Care. An extra $211 million over four years has been given for residential aged care subsidies.

Older people will benefit from the increased Home and Community Care funding, Community Aged Care Packages and benefits to Carers.These were key COTA budget recommendation due to the importance that older people place on staying in their own home as long as possible.

Disability pensioners

There is a very large and growing number of Australians aged 50-64 who rely on a Disability Support Pension (DSP). This Budget will significantly toughen up DSP eligibility to the disadvantage of many.

Most importantly is that if an individual is capable of 15 hours work per week from July 2003 ( compared with 30 hours now), they will not be eligible for DSP at all and will have to go on to Newstart Allowance. This is a lower rate of benefit with a much harsher means test and activity testing.

People aged 55 and over will be further hit. At the moment, local labour market conditions are taken into account in terms of their eligibility but this goes. People in rural and regional areas with high unemployment rates, will be particularly affected. They too will have to go on to or remain on Newstart Allowance.

COTA does not support these DSP changes. While there is increased labour market assistance, people 50 and over with some impairment will find it extremely to tough to find a job given the level of age and disability discrimination in the Australian job market. Many people will be reliant over a long term on Newstart Allowance which will mean greater risk of poverty and hardship.