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Turnbull’s Medicare backflip – or is it?

By Ken Wolff

Turnbull recently announced that his government, if re-elected, will not change any element of Medicare. It came in response to Labor’s campaigning that Medicare was under threat, that it would be privatised under a Liberal government. The general media response was to take Turnbull at his word and that Labor’s continuing use of the campaign was no more than a ‘scare campaign’ now based on a ‘lie’. But let’s take a closer look, including a careful examination of the words he first used.

First we need to understand Medicare. Although we associate Medicare with medical services, it actually does not deliver a single such service. In essence, it is no different to private health funds insofar as it provides cover for the costs when people purchase medical services – or as it is sometimes described, a ‘universal health insurance scheme’ and we pay the Medicare levy as our insurance policy payment. Of course, it has ‘bulk billing’ which allows that medical services, if provided at a cost stipulated by Medicare, can be provided at no cost to the ‘consumer’. It is basically a payment system. The government controls policy and sets the ‘prices’ it will pay for services and also determines what services are included in the Medicare benefits schedule (which is the other work of Medicare staff, advising on those prices and services). There have been policy decisions over the years that provided additional funding (‘incentives’) to service providers, such as pathology and diagnostic imaging, if they bulk billed.

So it is similar to government provision of pensions. Government sets the policies but provides only a payment and no direct service. By way of comparison, think about the Bureau of Meteorology or the Australian Bureau of Statistics: government again controls policy but its funding of those bodies is for the direct provision of a service.

Back in February it was revealed that a task force had been established within the public service to examine the Medicare payment system, including the ‘commercial possibilities’. The government described this, however, as only the ‘back office operations’ of Medicare. From the description of Medicare, you will see that the payment system is not a ‘back office operation’ but is the core business of Medicare.

The proposed change was described as:

… part of our commitment to ensuring the government embraces innovation and is agile and responsive to changes in the digital economy.

No doubt you will recognise the words ‘innovation’ and ‘agile’ and their obviously intended link to Turnbull’s previously announced national innovation agenda. The implication being that we should support the proposed changes to Medicare as part of a much broader agenda in the national interest.


Any outsourcing would only apply to back office operations and the administrative actions of making payments to individuals and providers. It doesn’t include setting fees or rebates and it doesn’t have any impact on the cost of health care, other than it may result in services being delivered more efficiently.

The latter are Turnbull’s words in parliament and remember this was only four months ago. He wasn’t denying it then.

Labor attacked then and continued the attack that the Liberal government did not support Medicare. It had plenty of ammunition including the continued freeze of Medicare rebates (now continuing until 30 June 2020) and the cessation of incentive payments for bulk billing to pathology and diagnostic imaging services. For the election, Turnbull announced that stopping the incentive payments had been put off for six months, will be reviewed, and that rents for pathologists will be reduced. How he can achieve the rent reduction is a vexed question – surely a Liberal government would not wish to interfere in the market in that way! All Turnbull has done is remove it temporarily while the election takes place. He has not said it is off the table permanently.

Labor’s attack was obviously gaining traction in the electorate forcing Turnbull to come out and say:

It will never, ever be sold. Every element of Medicare services that is being delivered by government today, will be delivered by government in the future. Full stop.

Apparently this was a ‘captain’s call’ by Turnbull but still Labor wasn’t convinced.

And I had to ask myself why did he spell out ‘every element of Medicare services that is being delivered by government’. As far as I can glean the only services not delivered by Medicare, but associated with it, are some registries of diseases kept by non-profit organisations in the medical sector. Or did he mean that payments are not a ‘service’? Or when he referred to ‘government’ was he limiting it to the ministers in his cabinet who govern the country? – in that case, what the government ‘delivers’ is the policy of Medicare. He was so specific in his statement that it hints at obfuscation.

Also, he claims that these services ‘will be delivered by the government in the future’. What does that clause actually mean? It doesn’t preclude the possibility that payments could be contracted out: that is still a ‘government service’ but it has simply asked someone else to do it. Consistent with Turnbull’s statement it is not ‘selling’ the provision of Medicare payments, merely hiring someone else to undertake the task. Remember he is a trained lawyer and understands the use of words.

Subsequently Turnbull had to clarify his meaning and spelled out that payments would not be outsourced and upgrading of the payment system would take place ‘within government’. The fact he was forced to do so emphasises that his opening explanations were less than clear but more importantly not convincing the electorate.

As Labor initially continued the attack, despite the denial, Turnbull said that Labor was ‘peddling an extraordinary lie, so audacious it defies belief’. Surely it shouldn’t defy belief within the Liberal party: after all they used a similar tactic regarding Gillard’s words about a carbon tax.

Turnbull also made a point of saying that the issue had not gone before cabinet and, therefore, there was no government decision. However, when Labor made an FOI request on the issue it was denied a number of documents because they involved ‘briefing the minister on a submission which is proposed to be submitted to cabinet’. Clearly the public servants had been preparing briefs and submissions on the issue: that doesn’t happen without someone in cabinet knowing about it and such submissions to cabinet are coordinated by Turnbull’s own Department of Prime Minister and Cabinet. So Turnbull’s nit-picking that the issue did not go to cabinet was a little disingenuous.

Although the task force seems no longer to be operating, Labor also points to a Productivity Commission report requested by Treasurer Scott Morrison:

… to review all aspects of human services delivered by government, including community services, social housing, prisons, disability services and Medicare.

The terms of reference include examining ‘private sector providers and overseas examples like the United States’ for alternative service delivery models.

One could ask why the United States is specifically picked out as an overseas example. If the government wished only to improve efficiency but retain services within government, it could have listed a few European countries as examples for study. No, looking to America, with its heavy emphasis on the private sector, is clearly indicating the model the government wants.

I still question Turnbull’s stronger dismissal of Labor’s argument. If payments by the Department of Human Services are outsourced on an American model, it would become logical in the future to also outsource Medicare payments – we already see Centrelink and Medicare in the same shopfronts and it would make sense for staff to have access to the same payment system on their computer screens. Would such an approach still be ‘within government’? – it could, simply by fully moving the Medicare payments system to the Department of Human Services.

Whatever else may be said, Labor achieved its purpose and forced Medicare to front and centre of the election debate. For a while it moved discussion onto its favoured ground forcing the Liberals to respond with border security and turning back boats and revealing information they normally claim is a secret operational matter. Yes, when it comes to an election operational secrecy no longer matters!

Turnbull, as are many politicians, is a trained lawyer and knows how to choose his words carefully. He knows how to avoid outright lies but also how to avoid the truth. He knows how to say only what he wants to say and avoid adding any flourish that may reveal more than he wishes. The fact he was forced to change his words does imply that he was less than truthful in his initial statements or, at the least, was attempting to keep his options open. And perhaps even his stronger denial still has an element of keeping his options open but I leave that for you to think about.

This article was originally published on The Political Sword

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  1. win jeavons

    It’s time ; time to limit the number and duties of lawyers in government . Let’s have more scientists , teachers, ethicists and dirt farmers to broaden the debate , and have rules that punish propaganda and planned lying.This might not be easy, but bullshit generally stinks.

  2. Matters Not

    that rents for pathologists will be reduced. How he can achieve the rent reduction is a vexed question

    Can’t work that one out either. In my ‘neck of the woods’, pathology agencies occupy ‘shopfronts’ in building complexes that also house a wide range of businesses including Chemists, Bakers, Gift stores and the like. The owners of those complexes will have no cause to lower rents for particular tenants. But maybe he is working from a tenet that I know nothing about. It seems like nonsense to me.

    One of the big problems we have is that the MSM does not question politicians (from all sides) when these counter-intuitive statements are made. Certainly there mightn’t be an opportunity at the ‘press conference’ but where is the ‘follow-up’. Very much a ‘delaying’ tactic.

    Andrew Elder has a good piece outlining the problem.

  3. totaram

    “… keeping his options open but I leave that for you to think about.”

    Ken, it doesn’t matter what he says, ALL options are open, because he can go back on his promise exactly as this govt. did about “No cuts..” Those who have not forgotten “No cuts…” don’t need to analyse carefully anything Turnbull says. Couple that with his behaviour on the NBN and you have a clear case of someone whose words mean nothing and whose actions have demonstrated clearly that outcomes will not be in the peoples’ favour. As usual, you are being far too charitable by assuming that Turnbull will stick to any promise that he makes. These are not people one feels charitable towards.

  4. Matters Not

    by assuming that Turnbull will stick to any promise that he makes.

    It seems to me that is now a high risk strategy for a politician to break what can be construed as a ‘key’ promise. Gillard was hammered for the ‘no carbon tax’ (yes I know she did give herself an ‘out’ but most people only remembered the ‘no carbon tax’ bit). Abbott promised ‘no cuts to … ‘ and for that he too was hammered. Painted as a liar, lost credibility and was replaced.

    I think that Turnbull will now be ‘gun shy’ when it comes to Medicare. All thanks to Shorten et al. Turnbull, if returned. will have to walk on eggshells, because the seats he loses will in all probability be from his ‘faction’. Abbott is in waiting.

  5. kerri

    Why is no one pointing out Turnbull’s history with audacious lies??
    Remember “Utegate” ?? Godwin Grech???
    When it comes to lies Turnbull not only has form but would describe himself as gullible as an excuse for not knowing what Grech was up to!

  6. Keitha Granville

    Let’s face it, they all tell lies. How about we have some kind of parliamentary honesty policy that means they can’t go back on ANYTHING they said before an election UNLESS there is a dire defence need (ie a war) to do so. At the end of the term anything that has not been delivered as promised could be marked off the list and if they have failed they are out. Wouldn’t that make it interesting !

  7. wam

    A long term friend and rabbottian couldn’t wait to tell me that her old man bought her foxtel so she can watch the news rather than the ABC bias.
    I stuck my tongue firmly in my cheek and said. Wow, now you go to bed after the foxtel news, wake up to ch9 today and then read the murdoch paper. That will keep your mind busy.
    But there is hope for 2019 she is a new type 2.
    The libs have closed the offices so no source of expertise is available beyond the chemist over the counter. When bulk billing is dead, she will be paying through the nose for doctor, podiatrist and prescriptions.
    Love it Kerri but labor is not as churlish as they should be in putting the boot in. They have hardly put a scratch empty’s copper surface? There has been a diagnosis service for bush patients and bush doctors can get support from specialist via the NBN for labor not to shame the copperman on this alone is sad so I doubt if any laborite remembers 2013 much less gillard/swan or the AAA economy they left for the rabbott and hockey to mess with.or naplan, or ndis or turnball/wong/howard climate change???

  8. Carol Taylor

    When Turnbull responded to a question with the statement that the Australian public could have any impression that they chose, I could see the lawyer in Turnbull. He gives impressions but rarely replies with factual information, hence the reason that he can later claim that others clearly gained the ‘wrong impression’ and should have known what he meant all along.

    Therefore although not precisely a lie, Turnbull knows precisely how to play a lawyer’s game.

  9. Michael

    Privatisation = trading public (that which is owned by all citizens, managed on our behalf by the government in their capacity as trustees) assets to human construct entities in return for money.

    In Manly, NSW (Abbott and Baird country) we had (before an enfranchising dilution amalgamation) a well schooled Liberal majority council voted for a $29M car park under Manly oval (with scant financial justification) supported by among other reasons, the following:

    10. The long term leasing for 99 years of the Whistler Street site for development is
    intergenerationally equitable because, while its value can be released by the upfront payment of
    rent, the site will remain in public ownership.

    11. The asset recycling by long term leasing of the Whistler Street site is consistent with current best
    practice for governments to deliver new and enduring infrastructure.

    Suck the living daylights out of an asset by way of an upfront payment, lose control of it, yet still call it ours because it sits in our asset register valued at $1.00, then spend the proceeds on an asset which does not give a positive return – this is called “asset recycling” – the Liberal way.

    But don’t tell Mal.

  10. Pauline Westwood

    This is really worrying, in view of the fact that US corporations, through various trade pacts such as the Trans Pacific Partnership and Trade in Services Agreement are targeting the service industries in partner countries, particularly what they call the state owned enterprises. They can force governments to open up public services to be run for profit by US corporations through the mechanism of interstate dispute settlement (ISDS) provisions. A few years ago, a Canadian government was being sued for operating a government-run postal service under the ISDS provisions of NAFTA. The case was dropped, fortunately.
    Australian governments have in the past always refused to agree to an ISDS clause in any trade agreement with the US –even John Howard refused to agree to ISDS in the Australia-US Free Trade Agreement. The ALP still has this policy. However, the current government has approved an ISDS clause in the already-signed but pending TPP. If this is ratified, it opens the way for all our government services to be privatised and potentially run by foreign, probably US corporations. Once this happens, we open the door to these corporations suing Australian governments for policies, laws or guidelines (such as a caps on prices charged) which might interfere with their future profits. This government knows that if it can’t get the public to agree to the Americanisation of our services, it may yet be able to do so via the back-door, through these secretive FTAs. AFTINET has the best website about FTAs.

  11. jim

    . It’s time ; time to limit the number and duties of lawyers in government . Let’s have more 1 scientists ,2 teachers,3 ethicists and 4 dirt farmers to broaden the debate , and have rules that punish propaganda and planned lying.This might not be easy, it will be impossible as so many would have to pull their heads in.LOL.Good point win, , we should have a Referendem on each of these quoters in government. …..

  12. Ken Wolff

    Thank you for your comments which have covered a range of issues. Forgive me if I respond to only a few.

    Matters Not: I also could not understand Turnbull’s promise to reduce rent for pathologists. It is a nonsense. The only possibility is in Commonwealth owned buildings and there aren’t many of those left!.

    totaram: Sorry if you think I am being too charitable towards Turnbull but, unlike Turnbull, as an author I do try to stick to the facts and not to go overboard where I am expressing my own opinion. My ‘Barbie bigot’ pieces give me freer reign to express my own opinions uninhibited.

    Carol: yes, Turnbull’s answers are often equivocal and can be understood in different ways, leaving him room to act as he wishes and still be ‘consistent’ with his answer. And I certainly see his Medicare responses in that way.

    win jeavons and jim: I agree that fewer lawyers in parliament would be beneficial if only we could achieve it. We need the major parties (both sides) to nominate appropriate non-lawyers, including the categories you mention – people who may speak honestly including admitting when they have made a mistake. Apart from getting rid of lawyers, it may return some trust in the poltical process.

    Pauline: Yes, the TPP is a worry for many government services we take for granted here in Australia.

  13. diannaart

    Yes, Malcolm, as innovative as a fox and agile as a rat… of course, when you said “never, ever” which we have learned to our detriment, is Lib-speak for “as soon as I am reinstated as PM, I will recant on this and every other promise made on the “never, ever”.

    Saying “never, ever’ is far more time efficient.

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