Archives for July 2014

Coalition for Working Women (CWW)

NFAW is a member of the Coalition for Working Women (CWW) formed in early 2014 to address issues impacting the capacity of women to participate equally in the Australian economy. Its particular focus is ensuring that the Government does not scale back the gender reporting requirements under the Workplace Gender Equality Act 2012.

The WGE Act was introduced to strengthen the capacity of the Government to collect and report meaningful gendered workforce statistics to improve workplace equity and female participation in the workforce, in particular in management and leadership roles. The macro level workforce indicators currently generated by the Australian Bureau of Statistics are not sufficient as they show trends not specifics, have little relevance to individual employers and do not drive change – which is clear from the lack of real progress to date.

The CWW has made a submission to the Department of Employment’s formal consultation on workplace gender equality reporting requirements. As the consultation appears to be seeking responses primarily from employers and employees the CWW believes it is important to have represented the views of women’s and industry organisations on a policy that has long-term implications for the Australian economy.

What can you do?

The CWW comprises the following organisations:

  • Australian Council of Trade Unions
  • Australian Local Government Women’s Association
  • BPW (Business and Professional Women) Australia
  • Financial Services Institute of Australasia
  • Local Government Managers Australia
  • National Council of Women of Australia
  • National Foundation for Australian Women
  • Women on Boards
  • Women’s Electoral Lobby
  • The Work and Family Policy Roundtable (UniSA)
  • YWCA Australia

View CWW Submission to WGEA Consultation July 2014.V3 here.

Clive Palmer, the unlikely friend of low income earners

The low income superannuation contribution is rapidly becoming a case study in the perils of linking unrelated policy initiatives.

The scheme, a federal government contribution of up to $500 to people earning less than $37,000 per year, was a response to the structural inequity of low income earners paying more tax on their superannuation contributions than higher income earners, thanks to the flat rate of tax applied to earnings.

As I have written previously the superannuation system is not a fair system. The LISC grants a tax concession without requiring additional contributions. This boosts retirement savings significantly without reducing take home pay.

But the Rudd/Gillard government’s decision to link it to revenue collected from the mining tax has made it become a political hot potato that has seen an unlikely saviour emerge: mining billionaire Clive Palmer.

When Labor introduced the mining tax, it hitched a package of spending measures to it, including the Low Income Superannuation Contribution (LISC). Both the mining tax and the LISC were based on recommendations of the Ken Henry tax review. While neither emerged from the parliamentary process in the form proposed by Henry, one of the biggest flaws was the act of linking it to revenue collected by the mining tax.

The scheme, introduced from 1 July 2012, effectively refunds the tax paid by the superannuation funds on compulsory contributions. This gives a tax break of 15%, comparable to that available to a person earning up to A$80,000 but still less than a person on the higher income tax brackets.

But its funding mechanism has given the Abbott Coalition a reason to abolish the scheme, even though it addresses the bias to high income earners in the superannuation system.

Enter Clive Palmer, who this week said that while he supported the repeal of the mining tax, he would not support the axing of several other funding initiatives, including the low income superannuation scheme.

The repeal of the initiative was opposed by the Senate Standing Committee on Economics, which stated in a report in December last year that: “Superannuation groups that provided evidence to the committee were broadly united in opposing the repeal of the LISC”.

These groups were particularly concerned that the repeal of the LISC would remove any concession low-income earners received on their superannuation contributions, as the 15% flat rate on superannuation contributions was higher than the rate they paid on their take-home income.

The Government introduced the MRRT Repeal Bill into Parliament last year, but it was rejected by the Senate in March this year.

The recommendations of the Committee were that the Bill be passed but that the issue of superannuation incentives for low income earners be revisited when the budget returns to surplus and as part of the proposed review of taxation. The ALP members tabled a dissenting report which highlighted the repeal of the LISC as a reason for the legislation not to proceed.

The Bill was reintroduced into the House of Representatives last month to be debated by the Senate after the incoming Senators took their seats on 1 July. Although not part of the 2014 budget, the repeal of the LISC is consistent with the current Government’s approach in cutting back expenditure. It was estimated to cost around $950 million per year, considerably less than the 2013 tax expenditure of $16 billion on employer contributions to superannuation.

This government, however, is focused on cutting expenditure to bring the budget into surplus and has deferred decisions about tax expenditures to the tax review.

Although the LISC is not a budget initiative, the abolition is yet another regressive impact on low income earners who will also be impacted by the proposals for the medical co-payment, the removal of the schoolkids bonus (which Palmer also says he won’t support), deregulation of university fees and restructuring of income support payments.

Ironically the Government is highlighting the inclusion of the Superannuation Guarantee in its Paid Parental Leave Scheme – yet the LISC benefits 2.1 million low paid women.

Clive Palmer has appeared to commit the Palmer United Party to oppose the repeal of the LISC. Under the current composition of the Senate a combination of the ALP, Greens and PUP senators have the numbers to block legislation. If PUP senators have the interests of low income Australians at heart, they must hold firm on this commitment.

AUTHOR – Helen Hodgson, Associate Professor, Curtin Law School. Curtin Business School at Curtin University, member NFAW Social Policy Committee.

 

Co-payment will hit harder than expected, Sydney University study finds

Treasurer Joe Hockey has faced criticism for the Medicare co-payment. AAP/Joe Castro

The government’s proposed Medicare co-payment and its increase in the pharmaceutical benefits scheme threshold will send a bigger-than-anticipated price signal, according to a study by Sydney University general practice researchers.

If both policies were introduced, the average annual extra cost to a patient, which increases with age, would be A$36 for children up to $122 for people 65 and older.

A young family of four would expect to pay $170 in co-payments for GP visits and tests, plus $14 for medications – $184 more annually.

A self-funded retired couple without Commonwealth concession cards could expect to be up for an average of $189 in co-payments for GP visits and tests, plus $55 for medications – totalling $244 more.

An age pensioner couple with concession cards would pay an average $140 in co-payments for GP visits and tests plus $59 for medications – $199 extra.

The research comes as the Medicare co-payment faces defeat in the Senate with Clive Palmer reaffirming his opposition.

The researchers – Clare Bayram, Christopher Harrison, Graeme Miller and Helena Britt – are from the Family Medicine Research Centre at the Sydney School of Public Health. They used data from the Bettering the Evaluation and Care of Health (BEACH) program which is a continuous national study of general practice activity. The researchers say they have been conservative in their assumptions.

They found that more than one-quarter of adult GP consultations involved at least one test, which would make for a minimum out-of-pocket cost for the consultation of $14 in co-payments. About 3% of adult GP consultations involved imaging and pathology – making for a minimum $21 in co-payments.

Different people use health services at different rates, with the average number of GP visits made by the Australian population who visited a GP in 2012-13 being 6.6. The rate increases substantially with age, from an average of 4.5 for children to 10.5 for people 65 and over. A similar age-related pattern applies for pathology services.

“Therefore, the introduction of co-payments will not have an equal impact across the population. It is the high users, usually the older, sicker people in our community who will be the most affected,” the report said.

The co-payment would change patterns of health service use, with different impacts for different patient groups .

“Compared with other OECD countries, Australia already has one of the highest levels of out-of-pocket health costs. Through introduction of the co-payments the government aims to ‘ensure health services are sustainable and used efficiently’. However there is no evidence that any modelling was performed to assess the effect of co-payments on deterring people from seeing a GP, or the flow on effect on hospital emergency department attendances.”

In 2012-13, 5.8% of people delayed or did not see a GP because of cost, and this was a greater barrier for those from disadvantaged areas.

“Discouraging people from using primary care health services flies in the face of all international evidence.

“It is likely that the increased costs due to these policies would deter more people from seeking early treatment or from taking necessary medications. This is a concern when areas in Australia already have 13% of their population delaying or not seeing a GP due to cost, and 15% doing the same for prescriptions.

“Overseas studies have shown that there is little evidence of health care care cost reduction from introducing co-payments. The evidence suggests that long term health costs will be higher due to patients deferring necessary care, resulting in increased hospitalisation and progression of disease,” the study said.

“International evidence overwhelmingly suggests that the most efficient, effective and equitable health systems have a strong primary care focus.

“We believe that if Australia is to maintain an efficient and equitable health care system, general practice requires investment, not reductions.”

Click here for the online version