Understanding the budget impacts for the healthcare sector
Following the announcement, NAB’s panel of leading economists and industry healthcare experts have analysed the Governments’ much-anticipated 2013 Federal Budget, and here they share with Health View their breakdown of what it means for the healthcare sector.
Healthcare had a mixed budget night, with long term headline projects capturing the attention, along with some stings in the tail. Cancer care is the big winner, but health was also a key area of savings through changes to Medicare.
Disability Care Australia was a focus, with an accompanying increase in the Medicare Levy from July 2014 to fund it, but the scheme won’t be fully implemented until July 2019. Cancer treatment and research was a more immediate beneficiary, receiving $226 million ($190 million new funding).
Healthcare professionals funded under the Medicare Benefits Scheme were losers from the budget, with an eight month delay in indexation resulting in major savings in coming years.
- The budget allocates $14.3 billion in new investment for Disability Care Australia, a national disability insurance scheme that will be paid for with a 0.5 percentage point increase in the Medicare Levy (to 2% of taxable income) from July 2014. The government estimates that $20.4 billion will be raised from the increase between fiscal 2015 and fiscal 2019, which would be placed in a fund for 10 years and could only be drawn upon to fund the Disability Care scheme.
- $226 million to fight cancer, including $55.7 million for breast cancer screening; $18.5 million for prostate cancer research; $23.8 million for bone-marrow transplants.
- But many Australians are expected to be hit by a phase-out of the net medical expenses tax offset over the next two years, which will save the budget nearly $1 billion over four years. However, claims for aged care, disability aids and attendant care will be allowed through until June 30, 2019 when DisabilityCare is rolled out across the country.
- The Government will realign the indexation of Medicare Benefits Schedule (MBS) fees to the financial year in line with many other Government programs. MBS fees, which are currently indexed on 1 November each year, will be indexed on 1 July each year. The next indexation date will be 1 July 2014. This measure will result in savings of $664.4 million over four years.
Our team of leading economists, tax and superannuation experts will continue to unpack the Federal Budget 2013 to help you get your ducks in a row and understand what it means for you. Visit all the latest articles, fact sheets and video commentary – 2013 Federal Budget – Business Research and Insights.
For further analysis download the fact sheet.
- Health Federal Budget Fact Sheet (PDF 714 KB)