Clear Signal In Failed Us Health Care
THE SUNDAY AGE
Sunday March 7, 1993
IT IS too early to make more than tentative judgments about the Clinton administration and its relevance for Australia. But some important signals have already been sent and, particularly in the area of health care, the President has set up in neon lights an unequivocal message for Australian voters _ one which they will ignore at their peril.
But first, the other signals. For the first time it seems we have an administration which is serious about addressing the fundamental issue of the United States budget deficit. For years I added Australia's voice to those of other countries calling in vain for action to tackle what has been not only a problem for America but a danger to the rest of the world.
President Clinton's predecessors lacked the political will to take the fight up to a reluctant Congress, for the White House shared with Capitol Hill a fear of undertaking the necessary combination of expenditure cuts and extra revenue measures.
Clinton promised action on the deficit during the campaign but most commentators were cynical given the context of his other promises, including income tax cuts for the ``middle class".
The President cleared the decks for action with the old ``the cupboard was barer than I thought" syndrome. Now that he knows the real magnitude of the problem, he has told the American people that some of those promises must go. Rather than tax reductions, a single person on an income of $US115,000 and a couple on $US140,000 will face an increase in tax from 31 to 36 per cent, calculated to bring in an additional $US35billion revenue a year.
Allowing for all other measures on the expenditure and revenue side _ including the long-overdue new energy tax _ it is calculated the effect will be to reduce the current deficit of $US300billion by $US140billion by 1997.
This is good news for the US and the rest of the world. To the extent that the US finances its own activities and standards by not drawing on the savings of the rest of the world, there will be less distortion of interest and exchange rates. Importantly, and perhaps less well understood, will be the beneficial impact on the external deficit and to that extent a reduction in the capacity of protectionist lobbies to bolster their case.
Other signals coming from the new administration on the international trade front are less propitious. It has invoked anti-dumping duties on steel, and threatened action that could increase tariffs on imported Japanese mini-vans by 1000 per cent.
In an argument with the Europeans over bidding for federal government contracts, the US threatened to withdraw from GATT rules covering procurement. When it was suggested to the President's new special trade representative that some of his proposals would not be consistent with GATT, Mr Kantor's reported reply was: ``I'm not interested in theology." We should not much care about this administration's theological belief, but we should be extremely apprehensive if it has a cavalier agnosticism about the importance of freeing up international trade, particularly if it is not absolutely serious about establishing a sane co-operative trading relationship with Japan.
On an optimistic note, I was pleased to read the President's recent positive observation about the importance of Asia Pacific Economic Co- operation (APEC), for this can only strengthen that body.
There may be some question marks in this area, but there are none in the message going out loud and clear from the administration about health care in the US. The message simply is: ``The United States has got it wrong." Neither could there be any other message, for the facts are clear, compelling and frightening. As `The Economist' recently pointed out, though the US nominally has a private sector system, health takes up $US250billion or 16 per cent of the federal budget, not counting interest costs, and $US115billion was spent on health last year by state and local governments. About 14 per cent of GDP goes on health, but as `The Economist' says: ``Despite all this money, 35.4million worried Americans go uninsured." In Australia we spend about eight per cent of our GDP on health, and to the everlasting credit of successive Labor governments we have universal coverage.
In introducing that partisan note, I am not one who believes that the Coalition parties are always entirely wrong in their policies. Even in regard to the GST, which I profoundly believe would be a disaster for this country, particularly at this stage of the economic cycle, one has to acknowledge at least that some arguments can be advanced in its favor.
But on health the Coalition cannot be trusted, and they always get it wrong. Malcolm Fraser promised not to abolish Medibank, then did so.
And who will ever forget the shambles of the period 1987 to the election in 1990 when their shadow spokesman, Peter Shack, had to concede they had no policy?
The reason the Coalition ``gets it wrong", as they have in the US, is that they consistently look at health care, not from the perspective of the patients' interest, but through the prism of the interests of doctors and the private health insurance industry. While Opposition parties continue to do this they will never get it right, and on this score alone do not deserve to win government.
If it were not so tragic it would be laughable that at the very time the US, under its new president, is telling the world that it has got health care policy wrong, the parties offering themselves as the alternative government are preparing to take Australia down the path the Americans are rightly abandoning.
Health is one area in which, on its record and philosophy, the Opposition is simply not entitled to be believed. Australians should say by their vote on 13 March: ``Thank you Mr President, message received loud and clear, we will not get it wrong on health care." Bob Hawke was Prime Minister from 1983 to 1991.
© 1993 THE SUNDAY AGE
