What Rupert Murdoch told the US Ambassador about the pending Whitlam dismissal – 12 months beforehand in November 1974? Yes 1974. John Menadue

Posted on May 21, 2013 by John Menadue

More pieces are falling into place. Last year we learned from Jenny Hockey’s second biographic volume of Gough Whitlam that a serving High Court Judge Anthony Mason from August 1975 improperly briefed Sir John Kerr about the dismissal of the Whitlam Government.  He even drafted a dismissal letter, although it was never used. The legal, political and business establishment was closing ranks to get rid of the elected Whitlam Government.

Now Philip Dorling has written what Rupert Murdoch told the US Ambassador Marshal Green and other Embassy officers over lunch at the US Embassy in Canberra on 27 November 1974. According to the cable from the US embassy, Murdoch told the Ambassador

‘Australian elections are likely to take place in about one year, sparked by refusal of appropriations in the Senate’. (Published in the National Times, May 20, 2013)  http://www.theage.com.au/opinion/political-news/whitlam-radical-fraser-arrogant-hawke-moderate-secret-cables-reveal-murdoch-insights-20130520-2jvtl.html

Note that Murdoch’s prediction was made 12 months before the dismissal, not one month or even one week before hand.

This is the first time I have seen anything about the Embassy lunch. The record of these discussions was released by the US State Department on 20 June 2005. But the search engines had not found this record because Murdoch was misspelt with a ‘k’ rather than an ‘h’.

Murdoch got it right about the dismissal, although he expected that Bill Snedden would be the likely Liberal leader in twelve months. If not he suggested to the Ambassador it could possibly be Phillip Lynch. Murdoch discounted the possibility of Malcolm Fraser becoming leader.

But he got one thing absolutely correct. The Whitlam Government would be dismissed in twelve months’ time through refusal of Supply in the Senate. And so it happened.

How could Murdoch be so well informed a year in advance? I cannot prove it but I think I know the answer.  Sir John Kerr had made it clear that dismissal was one of the options at his disposal.

In my autobiography ‘Things you learn along the way’ (Go to: www.johnmenadue.com, then click on book.) I recounted a meeting between Rupert Murdoch and Sir John Kerr and others at Cavan, Murdoch’s country residence outside Yass in late 1974. On page 155 I wrote

‘George Munster in his book about Rupert Murdoch, ‘Paper Prince’ recalls a visit which Kerr made to Murdoch’s home at Cavan as far back as late 1974. … The account which George Munster gives of that meeting in Cavan in late 1974 is very similar to an account which Ian Fitchett, who was also present, gave to me. Fitchett was political correspondent of the Sydney Morning Herald and doyen of the Canberra Press Gallery. … [Kerr] had been invited by Murdoch to drop in at Cavan for a drink and perhaps a meal. Murdoch was holding one of his soirees with his editors from around the world. Kerr, over drinks, embarked on a very detailed and elaborate outline of the various possibilities that the Whitlam Government might face in the future if the Senate blocked or deferred supply. According to Fitchett and Munster, all the options were laid out in front of Murdoch. There was probably no-one in Australia better briefed than Murdoch as to how the Governor General might act.  He was very privileged; the Governor General never gave his Prime Minister such a briefing. Kerr was very indiscreet. That was a briefing that Murdoch tucked away for future reference, a year later. Just as importantly, Murdoch, who was always a great judge of people’s strengths and weaknesses knew how and when to apply pressure to Kerr.’

Note the critical dates. The briefing of Murdoch by the Governor General was “late 1974”.The briefing of the US Ambassador was on November 27 1974.

Further Murdoch told me over lunch in Canberra on 7 November 1975 what I now surmise he had learnt from the Governor General twelve months before and told within a few days to the US Ambassador about the imminent election. He told me on November 7 1975 that

‘He was quite certain there would be an election before Christmas and an election specifically for the House of Representatives.  I suggested to him that a half Senate election was the only possibility. He rejected this view and said that he believed that there would certainly be a House of Representatives election before Christmas and that he would be staying in Australia until this occurred. He was very confident of the outcome of any election and even mentioned to me the position to which I might be appointed in the event of the Liberal victory – Ambassador to Japan.’ See my autobiography p157

Murdoch denies my account of the lunch and our discussion. I stand by it. He was accurate about both the election and my appointment to Japan in 1977.

Rupert Murdoch has a pattern of memory loss in relation to the Whitlam Government. He denied that he asked me to negotiate with Whitlam after the 1972 election for his appointment as Australian High Commissioner to London. (See also my autobiography p113) I stand by my account of Murdoch’s request for the London appointment.

Murdoch was clearly a major player in the dismissal of the Whitlam Government. His newspapers could not have been more partisan in the lead-up to the dismissal and the subsequent election. Journalists at The Australian went on strike over the bias of the Murdoch campaign. Nothing much has changed.

Murdoch was determined to get rid of the Whitlam Government. The briefing he got from John Kerr in late 1974 was an enormous benefit. Confident from the Kerr briefing he boldly predicted to the US Ambassador the dismissal of the Whitlam Government in twelve months’ time. He told me very much the same story again in Canberra a few days before the dismissal.

How else could he have known so accurately what was in prospect from the Governor General?

Murdoch loves the exercise of power. He is addicted to it whether in business or politics.

 

 

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We are a more generous people than the politicians think we are. John Menadue

Posted on May 20, 2013 by John Menadue

It is easy to be disappointed and depressed with the whole toxic debate about asylum seekers. The government is doing some things well, such as releasing more people from detention, but it is failing to provide political and moral leadership in this sensitive area. Tony Abbott and Scott Morrison do their best to demonise asylum seekers and create fear.

But many people don’t want to be part of this.

Last Friday night, with 500 other people, I attended a fund-raising and fancy-dress dinner for the Asylum Seekers Centre in Sydney. My wife and I dressed as best we could – French clowns. Perhaps that would not be hard you might say.

What struck me most of all were the hundreds of young people who attended, many volunteers at the centre and all supporters of the cause to help asylum seekers and refugees. Seeing all the young people gives us ‘oldies’ encouragement.

We had a moving and inspiring story from ‘Antoinette’, an asylum seeker who came from Uganda several years ago, having lost many of her family.  In Sydney she was homeless and friendless. The ASC ‘took me in’ she said. With that support she was slowly and steadily able to find her own feet. So many Australians helped her, some in small ways and others in big ways. She is now in employment, has a boyfriend and has become an Australian citizen. The speech was not a ‘tear jerker’ but a moving story of vulnerability and resilience. We should never underestimate a survivor.

HG Nelson was the MC giving his time and talents freely for the 11th function in a row.

I was at a table arranged by St Mary Magdalene Parish in Rose Bay. This parish has raised almost $100,000 for the Centre over the last few months.

There is good news around despite the public debate.

One issue stands out in my mind in the asylum seeker debate. The government is wisely releasing more asylum seekers from Immigration Detention Centres into the community. But very few of them are allowed to work. How can a Labor Government justify this denial of the dignity of people by insisting that they cannot work! The argument which the Minister for Immigration gives is that if they were allowed to work it would encourage more asylum seekers to come. There is no evidence in research anywhere in the world to support such a claim.

Denying anyone a right to work, particularly for able bodied people in a desperate situation will inevitably result in some breaking the law and finding work. Can you then imagine what Scott Morrison and Eric Abetz will say?

Confronted by a problem the Australian community is more generous and understanding than our politicians give us credit for. If only we had principled leadership we could do even better.

John Menadue

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Truth, Trust and the Media. John Menadue

Posted on May 17, 2013 by John Menadue

Our mainstream media is in a downward spiral. Its decline is driven by new technology and a growing sense by readers that we can no longer trust the media.  We have a lot of spin, but very little well-informed debate. Ken Henry has commented that he can’t recall a time when public debate was so bad.

 An Australian election study 1997/2010 rated trust in the following institutions as follows:

  • Armed forces – 91%
  • Universities – 80%
  • Police – 79%
  • Banks and financial institutions – 56%
  • Major Australian companies – 54%
  • Political system – 53%
  • Public service – 41%
  • Trade unions – 29%
  • Television and newspapers – 17%.

The survey found that the least trusted in the media was talk-back radio.

In June last year, Essential Research reported as follows.

“The ABC retains its undisputed title as Australia’s most trusted media. Trust in ABC television news and current affairs grew two points to 74%, its fourth straight rise, and ABC radio lifted two points to 69%. … The Age (76%) and the SMH (69%) are the most trusted of the major newspapers. … The Australian suffered a 9% fall in trust, down to 60%. The Herald Sun in Melbourne fell to 51% as did the Courier Mail in Brisbane which fell 14 points to 51%. The Daily Telegraph is the least trusted at 59%.”

Nothing surprising there.

In March this year, Essential Research found that only 30% of Australians trust TV news and newspapers. The High Court, Reserve Bank and the ABC were trusted by over 60% of respondents.

Reading our media this week about the budget, one could not possibly avoid the conclusion that we are on the verge of economic and financial collapse. Yet we have one of the best performing economies in the world – solid growth, low inflation, low unemployment, low debt and a AAA credit rating by the three world rating agencies. John Howard commented only a few days later that “our resilient economy is in better shape than most… We are still fortunate with our unemployment rate…and that the Australian economy was better than Japan, US and Europe”.

The Australian Financial Review has become a barracker for business rather than a reporter about business.  The headlines on two successive days this week were ‘End Budget chaos – business’ and then ‘Labor, business at war’.

Supported by business commentators, the BCA has been conducting an incoherent and partisan campaign against the government. If it tried it could not do more to damage business and consumer confidence. But perhaps as a proxy for Tony Abbott, damaged confidence is just inevitable collateral damage.

Crikey reported Paddy Manning a business reporter on the AFR as saying that there was a “contract” between the AFR and business for “high level access in return for soft coverage” He was sacked for saying what many people  would regard as  obvious.

The Minerals Council with the aid of business journalists helped corrupt the debate about a profit tax on large mining companies. How ironic it is that the Minerals Council with its obsession with the Labor Government didn’t keep its eye on the inefficient state mining royalties that have increased five-fold since the early 2000s. A real own-goal kicked by the Mining Council.

The media and particularly News Corporation which lost its moral bearings long ago have been campaigning to get rid of the ‘hung parliament’. But the parliament will see out its three years and with a considerable legislative program to its credit.

The media and again, particularly News Corporation, has been part of a misinformation campaign about asylum seekers. Obsessed with boats and pictures of boats, the media has continually misinformed us about the small number of asylum seekers coming to Australia compared with other countries and that more asylum seekers come to Australia by air than by boat. The Australian Press Council drew attention to the misinformation by News Corporation publications, over use of the term ‘illegals’ and its inflammatory language.

The media, including notably the ABC facilitated the dog whistling over the miniscule problem of boat arrivals. The dog whistling in the run up to the next election will be about deficits and debt despite Australia having one of the lowest net debt ratios in the world. Where will the media be in ensuring an informed debate? I will not be holding my breath.

With its whimpish attempts to curtail abuse of power by the media, the government was subject to an extraordinary tirade of abuse dressed up by the media as the public interest. Minister Conroy was depicted in News publications as a new Stalin or Pol Pot.

Filled with revenge that he was not made Prime Minister after the 2010 election, Tony Abbott decided that if he couldn’t get his own way he would do his best to wreck everything. The media let him do it and in the case of News Corporation, encouraged him to do so.

There is public concern about truth in public life as surveys show. The delicate fabric of our society depends on trust and telling the truth. Our society will break down without a general acceptance of what is honest, fair and reasonable.

Truth is a bedrock issue and the media is not helping us to know the truth or is particularly trustworthy itself. No-one should be surprised that so many readers, viewers and listeners are losing trust in the “old media’ and going online.

Truth is being eclipsed in public life. The media is a major contributor to that eclipse. It is getting quite dark.

Posted in Economy, Media, Refugees and asylum seekers | Tagged , | 2 Comments

Malaysian Elections Hangover.-How 51% of votes secured only 40 % of the seats. Guest blogger El Tee Kay

Posted on May 15, 2013 by John Menadue

As a guest blogger on May 2 I described the intense interest in the General Election to be held on May 5. This was shown on election day with a voter turnout of more than 84%, the highest in Malaysian history.

The Opposition Pakatan Rakyat (PR) won the popular vote but lost the elections. It garnered 5,623,984 or 50.88% of the popular votes but won only 89 Parliamentary seats (40%) compared with the ruling Barisan Nasional’s (BN) 5,237,699 votes or 47.38% with 133 seats. The BN lost 7 seats.

The component parties of BN, the Malaysian Chinese Association (MCA), and the Gerakan were almost annihilated and the Malaysian Indian Congress (MIC) with only 4 seats barely survived the mauling. The United Malay National Organisation (UMNO) the strongest coalition partner however did well in the rural areas.

The hard fought elections had some undesirable aspects. Rumors were rife that “ballot box stuffing” by foreigners legitimized as “Malaysian citizens “was used in marginal constituencies to influence the result. Opposition supporters were encouraged by bloggers to alert the authorities, but some of them behaved like vigilantes.

Despite BN’s fear mongering tactics of talking up potential racial violence and religious tensions, the bribing of voters with cash handouts and promises of more to come after the elections, urban voters voted for the PR in large numbers. The Prime Minister’s election pledge of “you help me and I will help you” only amused urban voters.

The BN, particularly the PM and former PM Tun Mahathir Mohammed, bitterly criticized the Chinese voters for being racial in abandoning the party in urban constituencies. It became clear how out of touch BN was with the demographic changes and the powerful socio-economic and political forces at work in urban areas. Their political analysts must know that the Chinese electorate could not have pulled off the coup in urban areas without the strong support of the Malays. But stoking racial and religious sensitivities have always been exploited successfully by BN.  They must also know that Chinese candidates in BN lost to opposition Chinese PR candidates. Clearly this was a party preference and not an ethnic one. It is to the credit of the Opposition that they did not use the race card to criticize the BN for pushing for Malay dominance in rural areas.

What saved the BN were the rural Malays voters in the 317 Felda settlement land schemes spread throughout the country. 90% of these 600,000 settler voters, beneficiaries of huge payouts during the run up to the elections, are diehard UMNO supporters. The Pan Islamic Party (PAS) a component party of PR was hoping to improve on its 2008 performance in these areas but was not able to make inroads into the 54 parliamentary and 92 state seats in the Felda dominated areas. Also, BN maintained its stranglehold in the mainly rural areas of East Malaysia. The opposition DAP made impressive gains in all urban areas in the country.

The PR claims fraud in at least 30 seats. This is significant as it needs only 23 seats to unseat BN. Allegations have been made of vote buying, misuse of postal ballots, of legitimizing foreigners to vote and other irregularities. The Election Commission (EC) has said that appeals to the courts can be made within 21 days of the election results being gazetted. No one is holding their breath in expecting a fair outcome to any of the appeals. The credibility and track record of the investigating agencies have never inspired confidence in Malaysians.

Bersih, the NGO for clean and fair elections is setting up a Peoples Tribunal to probe election fraud and irregularities. Its findings may have little impact on the outcome of the election but it will certainly have long term national and international implications.

El Tee Kay from Kuala Lumpur

 

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Does Catholic Health really want to destroy Medicare? John Menadue

Posted on May 14, 2013 by John Menadue

In his submission to the Senate Standing Committee on Finance and Public Administration on February 15, 2013 Martin Laverty, the CEO of Catholic Health wrote.” Another option (to achieve a single funder in health) would be to embrace the Medicare Select proposal put forward by the National Health and Hospital Reform Commission. Medicare Select would enable Australians to choose a health and hospital plan best suited to their needs. They would be able to be insured by Medicare or instead opt out to be insured by a private health insurer or one operated by a non-profit organization…”

Medicare Select envisages all Australians being enrolled in a Government funded plan, but with the opportunity of opting out and moving to a selected plan to which Government funding would be directed on a capitation basis, and which could involve extra services funded by private insurers.  The ‘plans’ would be managed by private corporations or not-for-profits.

In effect this would be a 100% PHI rebate – not 30%, not 40% that we have at present, but 100%.

Forty seven percent of Australians have private hospital insurance coverage and 55% have private general treatment coverage.If those who presently hold private health insurance(about 50%) opted for Medicare Select, over $30b presently spent by governments would be channelled through the high cost financial intermediaries, the Private Health Insurance funds. It would be goodnight Medicare.  Make no mistake about it, Medicare Select is designed to cripple and displace Medicare and give a widened role for PHI.

A colleague of mine Ian McAuley has highlighted major problems with Medicare Select.  He notes that it appears first to have been designed to secure a privileged place for private insurers who would impose a bureaucratic overhead on healthcare without adding value.’ Second, it is based on a misunderstanding of “choice” for we cannot know what our future healthcare needs will be. Third it is likely to result in cost escalation to the benefit of providers; this is an inevitable outcome of the intrinsic “moral hazard” associated with all insurance. And fourth, it makes it easy for a Government to redefine Medicare, the Government program, as a bare bones program for the poor or indigent, thus establishing a two-tier health system”

Medicare Select is not an “option” being floated only by Martin Laverty .It is being insinuated as a firm proposal of the NHHRC which was chaired by a senior executive of BUPA. The PHI lobby is continually extolling the virtues of Medicare Select which would greatly expand their business and cripple Medicare. It would take us further down the path of private health insurance which is destroying equitable and efficient health care in the US. Warren Buffett has described private health insurance as the “tape worm “in the US health system.

But that seems to be the path that Martin Laverty wants to take Catholic Health and destroy Medicare in the process

Is that what the Stewardship Board of Catholic Health want in “advancing the healing ministry of Christ” as set out in its Charter? , This not an academic issue particularly as Catholic Health is the largest provider of non-government health care in the country with 19 000 aged care beds, 9,500 beds in 75 health care facilities, 8 dedicated hospitals and palliatives care facilities and 35,000 employees

The Medicare Select option is a long way from the “option for the poor” which the Catholic Church espouses. It is an option to advantage the rich.

(See a speech I gave on this and particularly the damage PHI is doing and will continue to do. ..:” Now is the time for all good people to come to the aid of Medicare”… October 2009 on my web) Johnmenadue.com/health/html_files/VHA.html

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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Euthanasia – A denial of human dignity. Guest blogger Dr Joanne Wright

Posted on May 11, 2013 by John Menadue

It is concerning that The Greens and organisations such as GetUp have seen fit to re-ignite the debate about the legalisation of euthanasia.  I am a doctor.  I worked in palliative care and now work with the elderly.  I have seen first hand the complexity of the issues at the end of life. In reality, most people who say they agree with euthanasia have little understanding of the issue at all.  The term as it is intended by pro-euthanasia activists refers to the intentional termination of life by another at the request of the person who wishes to die, not the withdrawal of futile care or “life support”.

It is ironic that those with a pro-euthanasia stance refer to euthanasia as “dying with dignity”. I don’t know what is dignified about one person intentionally killing another or providing the means for their suicide.  It must change the person who does the deed irrevocably.  On the other hand, I have seen many dignified deaths.  Dignity has nothing to do with whether a person is faecally incontinent, disfigured, emotionally disturbed or unattractive.  Dignity has to do with the respect we accord every individual, regardless of personal characteristics or their current state of health.  Accepting death when it naturally occurs is quite different to condoning or encouraging the intentional killing of or suicide by another.

Harvey Chochinov, a Canadian psychiatrist, has written extensively about dignity at the end of life and his views are valid in this context.  He describes the all-important interpersonal dimension to dignity.  Dr Chochinov’s model affirms the basic truth that human beings are relational and that what accords us dignity is how we are treated in a relationship.  The legalisation of euthanasia alters the interpersonal relationship between the vulnerable patient and their carers.  If the patient does not volunteer to be euthanased perhaps the patient is being selfish by remaining burdensome to others.  The idea that we can prevent subtle “coercion” through legislation shows a lack of understanding of the realities and subtleties of human relationships. History has shown that the people most commonly euthanased “voluntarily” are women, the mentally ill, socially isolated and socioeconomically disadvantaged.  These are the usual victims when society fundamentally loses its respect for human life.

Having worked in palliative care, I have had requests from relatives and carers to euthanase dying people. What was evident was that these “observers” were suffering and wanted their own suffering to end. Vulnerable and sick patients often believe that they are a burden to those around them.  So do elderly people. I hear it from them all the time. We know that suffering is a reality in life.  Palliative care and modern medicine relieve most suffering but cannot relieve all.  When carers are able to rise to the occasion with conscientious caring for a vulnerable person, the dignity of that person is affirmed.  Much anxiety in the patient is also relieved.  For those few who really do suffer extreme and unrelieved existential anxiety at the end of life, good palliative care offers the option of sedation.

It is widely recognised that Western Society has become detached from death.  We tuck away dying people in hospices or hospitals and often don’t have effective rituals surrounding death.  We shield our children from death.  As a society, we are in “death denial”.    We have a belief that modern medicine can, or at least should, cure every ill – this is false.  If we acknowledged the certainty of death perhaps we wouldn’t be panicked into the issue of euthanasia, or into continuing with futile and uncomfortable medical treatments.  We might have conversations with our relatives about our values and the situations in which we would want treatment to be withdrawn and even draw up legally binding Advance Care Directives.

There are times in life when we must give care – and times when we must graciously accept it.  We must not as a society define the worth of individuals by their functional abilities or level of independence.  We must not decide that the means justifies the end or that our right to make autonomous decisions trumps our instinctive understanding that it is wrong to sanction the deliberate killing of another.  If we as a society and as individuals cannot accept that at times we have to face difficulty, then we cannot face the realities of life.  We also will not foster the qualities in society that make us civilised: empathy, compassion and the protection of the most vulnerable.

Dr Joanne Wright

 

 

 

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Our better angels. Guest bloggers Brenda, Edith and Elizabeth

Posted on May 10, 2013 by John Menadue

Dear Elizabeth,

At our church, Liverpool South Anglican Church, we have befriended some men from Sri Lanka who have been released from the Curtin Detention centre. They are setting up house in Sydney. We held a BBQ and cricket match on Anzac Day and about 30 men came along.

Our Minister explained to them about Anzac Day and why it is important to Australians.

Another minister preached the gospel message to them in Tamil.

We heard from about 5 of the men about the story of their trip to Australia.
They were very grateful. It was the first celebration they had been to in Australia.

Then today 15 came to church and we provided lunch. But we have not got enough blankets to give them.

Do you think that Wraps With Love might be happy to provide about 20 wraps?

Regards
Brenda and Edith

 

 

Posted in Guest bloggers, Refugees and asylum seekers, Religion and Faith | Tagged , | 1 Comment

Curbing health costs starting with pathologists and radiologists. John Menadue

Posted on May 9, 2013 by John Menadue

In discussing the looming budget deficits there has been focus on the rising costs of healthcare. And so there should be.

But before addressing some of the factors leading to increased costs, we should keep in mind that Australia spends about 9% of GDP in health. That compares with France 12%, Germany 12%, Canada 11%, New Zealand 10% and UK 10%. The OECD median is 9%. The US at 18% of GDP is ‘off the charts largely due to private health insurance.

Thus 9% of GDP spent on healthcare in Australia is not excessive in world terms. Medicare for all its difficulties has laid a solid basis for efficiency and equity in healthcare. We would change it at a great cost to the nation.

I will be writing about some areas in future where cost reduction is necessary and possible e.g. the costs that are incurred because of different commonwealth and state responsibilities (e.g. patients going to an expensive Emergency Department when it would be cheaper and better to go to a GP), antiquated work practices and clinical errors.

A central problem is that we all see our doctor too much and we have too many tests. The following table shows how all medical services per 10,000 of population have increased dramatically in the ten years to 2011/12

These figures are derived from Medicare Australia-Statistics-Medicare Benefit (MBS) Group Statistics.

All Medicare services by category per 10,000 of population 2001/02 to 2011/12

Medicare service

2001/02

2011/12

Increase

% Increase
Professional attendance

606,240

677,504

71,264

11
Therapeutic procedures

66,308

88,102

21,794

33
Diagnostic imaging

63,032

89,247

26,215

42
Pathology

336,214

503,613

167,399

50
Total

1,090,878

1,460,460

369,582

34

 

These figures show the dramatic increase in medical services per 10,000 of population over ten years by 34%. The increase in diagnostic imaging services has been 42% and for pathology services, 50% Together with many specialists, including in church hospitals they have been making a motza..

The government has attempted to restrain these increases particularly in imaging and pathology, but there is a long way to go. There are several reasons for the escalating number of services.

  • Advancing technology will result in more and better pathology and imaging services, for example. GP’s will naturally want to use them
  • General practitioners run more possible professional risk in ordering too few tests than too many.
  • With increasing corporate takeovers of general practice, there is more vertical integration between the general practitioner and specialist services such as pathology and imaging. There is a clear conflict of interest when a general practitioner employed by a corporate orders a battery of pathology tests from the same employer.
  • Fee-for-service is particularly inappropriate for services with high fixed costs and low variable costs, such as imaging. If fees are set on an average basis, including fixed costs, then the contribution to overheads and profits is high giving an incentive for high use. This has clearly been happening.

There are actions that the government could take.

It could set budgets for general practitioners when they prescribe drugs, order pathology tests or imaging services. Germany is doing some of this already to curb escalating costs.

Improved means tested co-payments would be another way to place more financial responsibility on the patient to restrain spending

The Government could also offer contracts to General Practises as an alternative to fee for service. It could be surprised at the take up of contracts. Many GP’s are tired of turnstile medicine. They want to work as part of a professional team with opportunities for upgrading of skills and sabbaticals. Fee for service is a driver of over servicing. It is a perverse incentive where quantity rather than quality of service is rewarded. It must change if quality of service is to be improved and costs contained.

As in so much of health services in Australia, vested interests in such areas as imaging and pathology together with their lobbyists are very effective in protecting their interests at the expense of the patient and the taxpayer. So much of the time of the Minister and the Department of Health is taken up in managing the demands of the vested interests rather than addressing structural problems and costs in the health service. The Minister and the Department are no match for the powerful vested interests –the AMA, the Pharmacy Guild and PHI sector. It is because of the failure of existing governance of the health service – the ministerial/departmental model – that I have recommended for many years  a statutory commonwealth health commission composed of independent and professional people (like the Reserve Bank in the financial field) to administer health services in Australia, subject to guidelines determined by the government.

An important role for such a commission would be leading an informed public debate about the changes that are necessary in health care. Without an informed community, governments are not going to have the polical courage to confront the powerful vested interests that in many respects have a veto on reform. We can’t leave it to the “market” to sort it out because there is no open or free market in health services. Outcomes are rigged by very powerful providers. They hold all the cards. It is really about power in the health sector and how that power is exercised

There will not be effective cost containment unless this is addressed

John Menadue

Posted in Health, Uncategorized | Tagged , , | 4 Comments

Are wage rates to blame? John Menadue

Posted on May 8, 2013 by John Menadue

We have read a lot recently from retailers and restauranteurs about high wage rates particularly at weekends that are said to be a major burden for business. But is this the full story? There are several factors that we need to consider.

  • Do we have too many retailers and restaurants? Restaurants seem to be opening every second day, driving out mixed-businesses, green grocers and butchers from our shopping streets. Has the proliferation of retail outlets and restaurants reduced profit margins and put pressure on business rather than wages?
  • Our lives are being driven by the 24/7 craze. Do we really need to keep shops and restaurants open like this? What has happened to the desire of many who still value the weekends for family and recreation? Sunday is no longer ‘a day of rest’. But I am probably old-fashioned! I recall that the union campaign for an 8-hour working day featured ‘recreation’ as a key objective. It is now largely forgotten.
  • Retailers have failed to respond adequately to online shopping and the concerns many of us have for the lack of service in retail outlets. The retailers’ case was not helped recently by the managing director of Myers telling us that the levy to pay for the disability scheme would mean less money to spend at Myers.
  • The household savings rate in Australia declined steadily from about 10% in the mid-1970s and falling to below zero by the mid-2000s. This private spending and debt binge couldn’t last and Australians are wisely saving more.  Retailers and restaurants should not have expected that the spending and debt binge would continue.
  • Some retailers and restaurants pine for the US model of flexible and low wage-rates. In the US this has resulted in great inequity and very low wage rates for the working poor. Fortunately we have not gone down that path.

With the softening of the mining boom and restructuring of the economy, there will need to be restructuring including in retail and restaurants. But we should not point the finger at wage rates alone.

John Menadue

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We all see our doctor too much; and it’s not just the aged. John Menadue

Posted on May 6, 2013 by John Menadue

Following the Grattan Institute’s recent work on budget deficits there was a focus by the media on rising health costs. The media commentators didn’t seriously examine the Grattan work about ageing but hopped onto an old and overworked hobbyhorse – that rising health costs are largely due to the ageing on the Australian population. The Business Council is also a repeat offender on this fiction about ageing.

Increases in health services have been across all age groups, particularly in the band 25 to 54 year olds. The following figures compare Medicare services per head and by age 1984/85-2011/12. They are extracted from the Department of Health and Ageing website, although the figures are not easy to find.  Below I have combined male and female figures, assumed a 50/50 gender split. It should also be noted that some Medicare services and items were not around in 1984/85 when Medicare was established by the Hawke Government. This would not detract from the thrust of the figures.

Medicare services per head and by age 1984/85 to 2011/12

Age group

1984-85

2011-12

% Change

0-4

6.97

8.87

27

5-9

4.25

5.04

18

10-14

3.49

5.06

45

15-19

4.68

7.59

62

20-24

6.43

8.58

34

25-34

7.05

10.78

53

35-44

6.54

12.15

86

45-54

7.99

14.75

85

55-64

9.47

20.32

115%

65-74

11.80

28.61

142%

75-84

15.22

39.08

157%

 

It is noteworthy that the rate of increase in Medicare services levelled off in the over 65s but grew very strongly in the 35-54 band. Age is only a part of the problem.

The Productivity Commission confirmed this in its report in 2005 on Medical Technology “to date population ageing does not appear to have been a major driver of increased demand for health services’.

Professor Jeff Richardson of Monash University’s Centre for Health Economics, in his paper on the ‘Lamentable state of Australian health reform’ in March 2009 put it ‘Ageing per se in the absence of technological change would have minimal effects on expenditure… the link between ageing and health expenditure as a percentage of GDP is simply disinformation’.

The Grattan report referred to  said ‘Contrary to widespread belief, it is not just the ageing of the population that is driving health spending but the fact that people of all ages are seeing doctors more often, having more tests and operations and taking more prescribed drugs”

The Health Council of Canada in a survey a couple of years ago of more elderly users of health services concluded ‘the largest controlling factor in this rise [in health costs] is neither ageing nor population growth … it is increased use’.

In future blogs I will look at some of the major drivers of increased demand and increased costs in health care that should be addressed. It is not just the ageing of our population.

But we should keep a sense of perspective. At 9% of GDP committed to healthcare in Australia, we are in the middle range of comparable countries and slightly below the OECD median. Medicare has served us well. We spend about a half of what the US spends on health as a proportion of GDP.

The US is a standout example that we should not entertain any idea of increased government support for private health insurance companies that are no match for powerful providers…doctors and private hospitals including “charitable” hospitals.

John Menadue

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