The Abbott government's decision to trim
minister's titles has been criticised by commentators concerned that
important issues, like population ageing, are no longer clearly tagged as
portfolio responsibilities.
There is no doubting the policy challenges posed by the
unprecedented ageing of the population in areas such as health and aged care.
However, critics of the decision not to a have a designated 'Minister for
Ageing' ignore the much bigger issue. The ability of governments to address
ageing depends on the fiscal capacity to undertake ageing-related initiatives. Some countries are better equipped financially to do so
than others.
Since 2007, the Singapore Government has introduced a
comprehensive range of measures to help the elderly remain in the workforce,
access affordable healthcare, stay physically and mentally well, and continue
to live in their own homes.
As detailed in William A. Hasetline's new
book, the 'whole of government' approach has been coordinated by a
Ministerial Committee of the heads of government agencies, and has encompassed
major investments in health and aged care services.
What is remarkable about Singapore compared to Australia
and especially Europe is that these ageing-specific policies (which include a
doubling of the health budget over the next five years and increased subsidies
for aged care and rehabilitation services) are affordable and have not resulted
in budget
deficits.
A major reason for this is the limited role government
plays in the Singaporean health system.
Due to the Medisave
health savings account system established in the 1980s, the majority
of health care (around two-thirds) is funded by private expenditure. Personal
self-funding of health services has not only led to Singapore spending the
least on health of all high-income nations in the world (while still achieving
excellent health outcomes), but has also led historically to government funding
accounting for only one-quarter of the 4% of GDP spent on health.
In recent years, additional spending on ageing-related
health spending has pushed total government health spending up to 1.5% of GDP,
which is still far lower than in Australia (6.4% of GDP).
In Australia, it is generally recognised (as detailed in
the Intergenerational
Reports) that health is an area of government that will involve the most
difficult and costly ageing-driven challenges. What isn't sufficiently
recognised is the fact that because 70% of national health expenditure is
funded by taxpayers, primarily via Medicare, it is much more difficult for
Australian governments to deal with the impact of ageing in health and other
ageing-sensitive policy areas in a fiscally responsible way.
As Singapore shows, when individuals take personal
responsibility for their own health care, governments have much greater
financial discretion to systematically tackle the ageing challenge.
This is another reason why health reform - including the
use of health
savings accounts in Australia - needs to be on the national
agenda.
Dr
Jeremy Sammut is a Research Fellow at the Australian Centre for IndependentStudies.
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