This was published 7 years ago
Election 2016: Bill Shorten's $1b promise to keep medicine costs down
Labor is promising to keep the cost of prescription medicines down by officially ditching the Coalition's "medicine tax".
Opposition Leader Bill Shorten will seek to keep the election campaign focus on health policy on Sunday by pledging not to increase Pharmaceutical Benefits Scheme copayments beyond regular indexation.
The promise will cost the federal budget $971 million over the next four years and $3.6 billion over the decade, according to costings Labor has obtained from the independent Parliamentary Budget Office.
Labor will argue it can afford the promise because it will not proceed with the Coalition's $50 billion company tax cut.
Opposition Leader Bill Shorten addresses the Labor Supporters Network rally at the University of Western Sydney School of Medicine in Campbelltown, NSW.Credit: Alex Ellinghausen
In its deeply unpopular 2014 budget, the Abbott government announced plans for a one-off $5 increase in the general patient co-payment and an 80 cent increase in the concessional patient co-payment. It also announced increases to the general and concessional patient safety net thresholds.
The government shelved the plans last year after failing to secure enough Senate support, saying it would look for alternative savings.
However, the measures remained on the books in the Turnbull government's first budget, meaning they are not completely off the table.
"Malcolm Turnbull confirmed his commitment to these cuts by building them into his first budget earlier this month," Mr Shorten will say."Labor will not stand by and let Malcolm Turnbull and the Liberals dismantle universal healthcare.
Illustration: Matt Golding
"Labor believes every Australian deserves access to affordable medicine."
Mr Shorten will also promise no changes to the safety net thresholds beyond regular indexation. Under the government's proposal, the thresholds would increase by 10 per cent every year for four years.
That would mean patients would have to spend more on medicines before they qualified for free or deeply discounted scripts.
Health Minister Sussan Ley is understood to have no affinity for the policies put forward by her predecessor in the portfolio, Peter Dutton, but she has not yet found another $1 billion saving to take it off the table.
The price of almost 400 medicines actually went down last month under a PBS reform package struck by Ms Ley and supported by Labor. The government predicts medicine prices will drop again in October under further changes.
The Coalition has made nearly 1000 medicine listings since coming to office, worth about $4.4 billion.
Mr Shorten's announcement, which is likely to be warmly welcomed by doctors and pharmacists, comes just days after Labor promised to lift the controversial freeze on Medicare rebates.
That measure will cost the budget $2.4 billion over four years and $12 billion over the decade, making it the biggest campaign commitment made by either side since the election was called two weeks ago.
Labor originally froze indexation for eight months in 2013, lifting it briefly for GPs in 2014-15. The Coalition extended it for four years in 2014, and this year extended it a further two years to 2020, to save $925.3 million.