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Federal Budget 2014: health experts react

By Stephen Duckett, Anne-marie Boxall, Mike Daube & Philip Clarke

The Abbott government has announced a A$20 billion medical research “future fund”, to help discover what Treasurer Joe Hockey calls the “cures of the future”, paid for with money generated as a result of major changes to health policy.

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The fund, expected to be “biggest medical research endowment fund in the world” within six years, will be capital protected, with net interest earnings used to fund medical research. Distributions to medical research are expected to be around $1 billion by 2022-23, effectively doubling the government’s direct medical research funding. Distributions of $20 million are expected in 2015-16.

It comes as the government warns of unsustainable health-care spending, which currently costs 4.1% of GDP, expected to rise to 7% if no changes are made.

From July 2015, the government will introduce a $7 co-contribution payment for GP consultations and out-of-hospital pathology. Concession card holders and children will also pay the fee, capped to the first ten services. Of this, $5 of every $7 will go to the medical research fund.

Australians will also pay an extra $5 towards the cost of each Pharmaceutical Benefits Scheme (PBS) prescription from July next year. Concession card holders will pay an extra 80 cents.

In a major blow to the states, the government will pull back from its commitment to increase public hospital funding, indexing funding to a combination of growth in the consumer price index and population, from 2017-18.

From 2016, a new Medicare Safety Net will be introduced with lower thresholds for most people. Indexing on all Medicare rebates...

The full text of this article can be purchased from Informit.