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The deterioration of the living standards in Australia

By Arthur Plottier (aka Freethinker)

It is the opinion of the the Grattan Institute that Australia’s political system is failing to deal with – among other things – the country’s deteriorating living standards and falling education standards. More about that can be read in their ‘Orange Book 2016: priorities for the next Commonwealth Government’ by John Daley. Daley writes that:

The Commonwealth also needs to improve the quality and reduce the cost of public services. Pricing reforms to pathology and pharmacy, and reducing the number of inappropriate procedures, would save money. Funding should be redirected to promote more integrated care, and support more people to live at home near the end of life.

Budget repair is a major priority. Commonwealth budgets have not come close to balancing for eight years, and younger generations will be taxed significantly more to pay for today’s spending. Both spending reductions and targeted tax increases are needed.

The economists in the Grattan Institute – and our politicians for that matter – are continuing to look for solutions based on the ‘neoliberal economy theory base’ in indicators like the GDP and others that do not do anything to address the concerns in the report, or for that matter polices from our major political parties.

On the neoliberal economy theory people have to adjust their living to suit the economy target requirements instead that adjusting the economy to meet the needs of the people.

The only one way to change this universal trend is in the way of thinking; a new approach perhaps starting at the secondary and tertiary education levels.

The use of indicators like the GPI (Genuine Progress Indicator) and the Sustainable Development Indicator are some of the tools that can help reversing the present trend.

The apparent obsession to having a permanent growth and having a target to eliminate the deficit – even at the cost of development, infrastructure, and social progress – is one of the factors that has caused the decline of the living standards as well as environmental sustainability.

A permanent economic growth, large or rapid, is not possible. Growth eventually will slow down to a ‘sustainable’ rate and development will eventually take over and maintain that slow growth.

The economic growth that we had in Australia during the natural resources boom was not environmental nor economically sustainable. It worked against environmental and social issues, and as such it could be argued that it had an affect on what it was the foundation of a healthy economy.

I hope that we will mature politically to become more progressive and innovative in the way that we look at the macro and micro economy.

Until then our living standards will continue their decline.


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  1. Jennifer Meyer-Smith

    Hear, hear Arthur

  2. Athena

    From the orange book….

    “Pathology services are paid for as if testing were still done by
    thousands of small providers manually processing tests, and not
    by two industry giants with automated services.”

    There’s no reference for this statement. There’s also no indication that the authors have taken into account several other important factors, such as:

    The costs associated with transport of specimens from and delivery of blood and blood products to rural (including remote) areas cannot be recouped from Medicare and the patient is not billed for it. That part of the business is running at a significant loss and Australia has a large area of remoteness for pathology labs to service.

    Not all tests can be automated and some of them are being performed at a loss.

    There are significant other costs incurred in meeting the requirements of accreditation which cannot be billed.

    Cost savings due to automation help to pay for all of the other costs that cannot be billed.

    Automation is profitable when it is running well. When it isn’t working properly there are significant extra costs in repairs, running extra quality control and repeating tests to ensure that the correct result is released. When the problem cannot be resolved quickly, the lab may have to resort to manual tests or transporting large volumes of specimens elsewhere if there is another analyser at a different site that is set up to perform the same test. Labs that operate over multiple sites tend to consolidate testing on one site for low volume tests and tests that are never required urgently, so a back up instrument at another site may not be an option.

    Private labs don’t perform many of the tests that are not profitable, leaving the public labs to carry the cost of performing that service. Unlike the private labs, the public labs don’t get to choose what work comes through the door and in most cases don’t get to decide the price.

    Finally, if you think that medical pathology is expensive, check out veterinary pathology. There’s an industry that is not regulated like medical pathology and charges several times more for performing the same test.

  3. Jack Russell

    Good explanation Athena, thanks.

    Perhaps nationalising all the private labs thus removing the profit motive that has the known effect of incentivising second-rate services?

    Just a thought…

  4. Kaye Lee

    If we want to save a squillion on the PBS we should have the government as the wholesaler. Buying in bulk makes an enormous difference to the price of drugs. New Zealand pays far less than us for a range of drugs, as do Western Australian Hospitals who brokered their own deal.

    “The Commonwealth could save A$1.3 billion each year by reforming the Pharmaceutical Benefits Scheme (PBS), according to a report released today by the Grattan Institute. The report, Australia’s bad drug deal, shows that if the PBS simply paid prices for drugs that many Australian public hospitals or New Zealand’s national pharmaceuticals purchaser pay, the government could be on its way to a budget surplus.

    If Australia also encouraged doctors and patients to replace some drugs with others that achieve a similar result, at least another A$550 million could be saved every year.”

    The problem comes from deals with the big pharma companies – don’t blame your local chemist.

    Expect far worse from the free trade agreements as companies evergreen patents and sue us if we do anything to control their greed.

  5. paul walter

    There it is, the unadorned truth. FTA’s and other neolib policies do not eventuate to increase genuine economic efficiency, but carve out captive markets for vested interests.. regardless of any real world harm done.

  6. Jack Russell

    It is no coincidence that the FTA’s have been veiled in an enforced shroud of secrecy … with the global MSM willingly assisting.

    Google the ALEC, a neo-con corporate group headquartered in the USA and read about their tentacled reach there, and globally.

  7. michael lacey

    Cheap labour neocons don’t give a toss about working people. The ugly truth is that cheap-labour conservatives just don’t like working people. They don’t like “bottom up” prosperity, and the reason for it is very simple. “Corporate lords” have a harder time kicking them around. Once you understand this about the cheap-labour conservatives, the real motivation for their policies makes perfect sense. Remember, cheap-labour conservatives believe in social hierarchy and privilege, so the only prosperity they want is limited to them. They want to see absolutely nothing that benefits those who work for an hourly wage. The strategy is clear. The more ignorant and destitute people there are – desperate for any job they can get – the cheaper the cheap-labour conservatives can get them to work.

  8. Freethinker

    From the report, quote:
    Budgetary reform
    Tough choices required
    • Both reduce spending and increase taxes to balance the
    • Target superannuation taxes, reduce capital gains tax and
    negative gearing tax concessions, and increase the GST.
    • Reduce costs with the recommendations outlined above to
    reduce costs in transport, education, and health
    • Further target the Age Pension, and curtail unsustainable
    growth in Carer’s Payment and aged care
    End of Quote
    1) Reducing spending and increasing taxes put a brake on development, therefore growth
    2) Increase GST will bring inflation and increase the gap between the wealthy and the poor.
    3) Reduce cost in health and education if that means investment on them will stop development and reduce growth
    4) targeting age pension and age care is an attack on social justice.

    Like I said in the article, the economists insist in that people have to serve the economy and not the economy the people.
    We need a change.

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