Governments must rethink the way that essential social services are funded because jacking up taxes on the mining sector to help pay for them is unsustainable, says health insurer Australian Unity.
Australian Unity also provides retirement living and financial services.
“Our view is that the pressures on the state governments and federal government in relation to service delivery are so significant and so pressing that what we need is a business model change in relation to key elements of service delivery in the social policy arena,” managing director Rohan Mead said on Thursday.
Mr Mead referred to the Queensland government’s cuts to public service jobs and increase in royalties that coal miners must pay to the state government.
Mr Mead said the Queensland government had taken very difficult and unpopular action to find funds for basic service delivery.
“That is an example of what we have been talking about at Australian Unity for years,” Mr Mead said.
“State governments particularly exposed to pressures and dynamics and service delivery to ageing populations will need to take some very serious measures in order to try to keep funding their promises to their populations.
“However, what we saw on Tuesday (in Queensland) is also a short-term approach.
“The capacity of our governments – whether they be federal or state or of any political side – to take cyclical revenues, such as those associated with minerals, and apply them to structural outlays such as health and aged care for an ageing demographic is a non-sustainable solution over the long term.”
Mr Mead said it was worth revisiting the Medicare Select initiative, which was one of the reforms proposed in a report by the National Health and Hospitals Reform Commission in 2009.
Mr Mead said also that changes to the federal government’s private health insurance rebate had resulted in an interesting response.
He said a very significant number of consumers decided to pay their health insurance in advance and therefore had delayed incurring higher payments for their insurance.
“The actual effects of that policy change are deferred into the future and won’t be known until the latter part of calendar 2013 as people start to respond to their tax return requirements and start to review their (health insurance) policies,” Mr Mead said.
From July 1, 2012, the 30 per cent private health insurance rebate became income-tested, with individuals earning more than $84,000 or families earning more than $168,000 receiving a reduced rebate.
Australian Unity on Thursday reported a 13 per cent fall in full year profit as volatile investment markets and the cost of acquisitions dragged down earnings.
Net profit for the year to June 30 fell to $22.2 million from $25.6 million in 2011/12.
Mr Mead described the 2011/12 result as a creditable achievement given the difficult economic and regulatory environments.
