News State Western Australia Howard backs co-payments, GST

Howard backs co-payments, GST

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Former prime minister John Howard has backed the proposed Medicare co-payments plan, saying it is not an “extreme right-wing attack” on public healthcare.

With Labor and the Greens poised to block the budget measure, the federal government may have to horse-trade with new Senate crossbenchers after July 1.

Mr Howard said he strongly supported the co-payment, and said Labor had previously tried to go down the same path.

“In case anybody believes that this is some kind of neo-conservative, extreme right-wing attack on Medicare, there was another prime minister who introduced a Medicare co-payment and his name is Bob Hawke, and he introduced it via the 1991 budget,” he told a post-budget business briefing in Perth on Thursday.

“It didn’t get very far because his former treasurer and later prime minister Paul Keating opposed it and used it as one of the arguments in the Labor Party caucus to bring about Hawke’s removal.”

His comments came after opposition leader Bill Shorten said Treasurer Joe Hockey was “out of touch with ordinary Australians” for saying the $7 co-payment was only the cost of a couple of beers and much less than a $22 pack of cigarettes.

Former Labor finance minister Lindsay Tanner told the briefing he understood why premiers were swiftly responding to the plan to axe $80 billion from public hospitals and schools by 2024/25.

“This is likely to be the driver on pressure for tax reform,” Mr Tanner said.

He said more cuts might follow as the “giant tide” of revenue from the mining boom dissipated.

Mr Howard said making the GST broader based was “overwhelmingly sensible”.

“If the GST had applied to food, as it should have – and it would have but for the actions of the Senate – we would have now seen about $10-$11 billion a year at least flowing to the states,” he said.

Mr Tanner also touched on the 2 per cent deficit tax for high-income earners, saying it was “all about creating an impression of sharing the pain”. But he was prepared to pay the levy “and I won’t complain”.