A new low for the carbon tax scare campaign

In a new low in the Coalition’s campaign against the carbon tax, Victorian Health Minister David Davis MLC has resorted to shameless fear tactics in authorising a widely distributed leaflet claiming “the carbon tax will hurt patients.”

A dramatic picture shows anxious parents gazing at their son in a hospital bed clearly suffering some serious ailment. The boys head is stamped “carbon taxed by Julia Gillard”. Linking presumably life threatening illness to the carbon tax is a ridiculous over-reach and symptomatic of how detached from reality this debate has become.

The leaflet is being letterboxed by local Liberal State MP’s in the eastern suburbs of Melbourne. The leaflet is authorised by “David Davis MLC” using his electorate office address and bears no indication of its connection to the Liberal party or that the Liberal Party paid for the leaflet and its distribution.

The Victorian Auditor General has previously been critical of the use of Parliamentary entitlements for constituent communication for political campaigning and could be expected to take an interest in the source of funding for this leaflet.

The leaflet makes four misleading claims to justify the claimed threat to patients’ health.

Firstly it claims that public hospitals face a $13 million “tax bill” as proof that “Julia Gillard doesn’t care”. However there is no tax on hospitals and they don’t pay any such bill.

The amount that hospital electricity costs may increase over the next year is unclear and the contributing factors overlap. State government required spending on bushfire prevention measures, capital upgrades to distribution assets and a range of other pressures will determine the level of any rise. The annual health expenditure is $15,155 million – so even if costs increased by $13 million, it would be less than 0.1 per cent of the total.

Significantly, the indexation of hospital funding, of which the Commonwealth contributes just under a half, is determined on the basis of the increase in costs, not just the CPI, and hence any increased electricity costs to hospitals will be offset by increased funding.

In addition, the previous Brumby government established a $460 million Greener Government Buildings program to assist hospitals and other public agencies to reduce energy usage and this has now been running for three years. Hospitals have many opportunities to reduce their energy wastage to minimise any impact of higher prices.

Secondly, the leaflet claims that air ambulance fuel will be taxed “inevitably forcing up the cost of Ambulance Victoria membership”. Although domestic aviation fuel is subject to the carbon price, other influences, including the world oil price have a far bigger influence on fuel prices, which are a small part of the total cost of ambulance services.

Staffing costs amount to 67 per cent of the cost of ambulance services and the Air Ambulance component in total represents just 6 per cent of spending. Fuel would be a small part of this.

Moreover, Ambulance Victoria services are free to all health card holders and privately insured patients with the bulk of the cost being met by the state government under a “community service obligation” arrangement.

The state government is responsible for authorising any increases in ambulance fees – and in fact last year halved the cost of membership to reduce the share paid by individuals. It would have to justify any increase the government wanted to make by demonstrating its link to the flow-through effect of helicopter fuel.

Interestingly, Ambulance Victoria’s latest annual report reveals that, in the last year, it has conducted energy audits and cut energy consumption at numerous sites and is now implementing energy efficient lighting programs. It expects to reach its target of using 25 per cent renewable sourced electricity this year.

The third claim made by the health minister’s leaflet is that private health insurance premiums will rise as a result of the carbon tax. There is no evidence that private hospital costs have increased measurably or that they have failed to take any measures to avoid wasting electricity.

The private health funds have annual contracts for how much they reimburse hospitals and set rates for rebates to patients taking into account a number of factors, of which electricity costs are very minor. The funds are required to justify annually any increase in premiums and these are closely scrutinised. If the private health funds have evidence that they have been affected by the carbon price at all – they would have to present it to the federal regulator PHIAC next year.

The fourth claim is that the cost of a visit to the GP can “only get more expensive”. This ignores the fact that more than 80 per cent of GP visits are bulk billed at a rate fixed by Medicare.

Like all other small businesses, GPs are bound by law not to use the introduction of the carbon tax to increase their costs in any way that is not justified by actual flow on costs. The electricity component of the operating costs of a GP clinic is miniscule and the relative movement in overall operating costs will be impacted by many things more substantive than the rise in electricity costs – only part of which is attributable to the carbon price.

Any GP seeking to bump their costs up by 10 per cent on the basis of the urgings from the Victorian health minister would be well advised to take a deep breath and think again.

The ACCC has shown it will take a keen interest in any dramatic increased charges – as the former manager of the Brumby’s bread franchise can now attest.

Andrew Herington is a Melbourne freelance writer.

More from Business Spectator