Dunne’s Pointers To Next Steps On Path To Recovery
June 4th, 2009
National Ministers have given few clues on the next phase in re-shaping the direction they want to take the economy. Their broad objectives are plain enough: they aim to lift productivity and sharpen international competitiveness. Over the Govt’s term of office (and there’re only 29 months left) GDP per capita is expected to fall 4%, or in another analysis by $10,500 per person over the period till 2014. This could leave its aspiration of closing the income gap with Aust by 2025 gathering dust. There has been speculation the Govt would follow up with the announcement of the 2025 Commission to be headed by Dr Don Brash.
Coalition partner United Future’s Peter Dunne has given some pointers to lines the Govt could follow in delivering better services at lower cost. Speaking of the rise in public health spending Dunne says “the day is not far off where the level of increase cannot be sustained and we will need to look to much greater private-public partnerships, particularly elective surgery services. One of the things we will need to start thinking about is moving to a tax rebate for those over 65 who contribute to health insurance programmes. That will encourage them to retain health insurance, and also to come outside the ambit of the public health system, thus reducing a critical amount of pressure on it.” Dunne sees this as a first step, before taking the example of ACC and the KiwiSaver scheme much further, and developing a comprehensive national health insurance scheme. In such a scheme premiums paid by taxpayers would be offset against their marginal tax rate so the net effect would be self-balancing. The competitive power of the insurance fund could be used to drive down prices.
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Duncan Cotterill