Health System Is Precious, Let's Keep It That Way
The Sun Herald
Sunday March 7, 1993
IT is, generally, too early to make other than tentative judgments about the Clinton Administration in the US and its relevance for Australia. However, some important signals have already been given and, in particular in the area of health care, President Bill Clinton has set up in neon lights an unequivocal message for Australian voters - and 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 US 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 the US 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 the prospect of income tax cuts for the "middle class".
The President cleared the decks for action by invoking the "cupboard was barer than I thought" syndrome. Now that he knows the real magnitude of the problem, he has told Americans that some of those promises must go.
Rather than tax reductions, a single person on an income of $US115,000 a year and a couple on $US140,000 will face an increase in tax from 31 per cent to 36pc, calculated to bring in an additional $US35 billion a year revenue.
Taking into account all other measures on the expenditure and revenue side- including the long overdue new energy tax - it is calculated that the effect will be to reduce the current deficit of $US300 billion by $US140 billion by 1997.
This is good news for the US and the rest of the world. To the extent 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.
Very 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, threatened action which could increase tariffs on the import of Japanese mini-vans by 1,000pc and, in an argument with the Europeans over bidding for Federal Government contracts, has 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 GATT-consistent, Mr Kantor's reported reply was: "I'm not interested in theology."
We should not much care about the theological belief of this administration but we should be extremely apprehensive if it has a cavalier agnosticism about the importance of freeing up international trade and if it is not absolutely serious, in particular, 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 APEC (Asia Pacific Economic Co-operation) for this can only strengthen the capacity of that body to play a significant role in helping to resolve these critical questions.
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.
Nor could there be any other message for the facts are clear, compelling and frightening.
As The Economist recently pointed out, although the US nominally has a private sector system, health takes up $US250 billion, or 16pc, of the Federal Budget, not counting interest costs, and $US115 billion was spent on health last year by State and local governments.
In total, around 14pc of the country's Gross Domestic Product (GDP) is expended on health, but as The Economist says: "Despite all this money, 35.4 million worried Americans go uninsured."
In Australia, by comparison, we spend around 8pc of our GDP on health and to the everlasting credit of successive Labor governments we have a universal coverage.
In introducing that partisan note I make the point that I am not one who happens to believe that the Coalition parties are always entirely wrong in all 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 argument can be advanced in its favour.
But on health the Coalition cannot be trusted and they always get it wrong. Malcolm Fraser promised not to abolish Medibank - and then proceeded to do 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 and that their record in this area was appalling.
And 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 the 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.
There may be some room for argument on what the Canadian experience tells us exactly about the Opposition's GST and the other tax proposals. There can be no doubt whatsoever on what the US experience tells us about their health proposals.
They would mean a return to the obscenity of an increasingly expensive health system where the doctor and the private insurance fund come first and the patient a poor second.
Health is one area where, on its record and philosophy, the Opposition is simply not entitled to be believed.
Australians should say by their vote next Saturday: "Thank you, Mr President, message received loud and clear. We will not get it wrong on health care."
© 1993 The Sun Herald
