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Latest figures show health prices are key cost of living pressure – and Federal Budget will make things worse

SACOSS has today released its June Quarter Cost of Living Update, highlighting rising health prices as a key cost of living pressure.

Health expenditure is a significant and increasingly important part of average household expenditure, and health price increases were a major contributor to CPI rises in the last quarter. The SACOSS report shows that health costs also disproportionately impact on older and low income households, and many of the proposed changes in the Federal Budget will increase health costs for struggling households and undermine the principles of universal health care.

Key Findings

  • Adelaide households spend on average $84.53 pw on health (5.7% of household consumption), with aged pensioners and those with disability or long term health conditions spending much more
  • Health prices have increased at double the general inflation rate over the last decade - with South Australians now spending $27 a week more for health services than they would have had prices simply increased at the general inflation rate and expenditure patterns remained the same
  • The Federal Budget will increase key health prices with the proposed $7 co-payment for GP visits and other services adding nearly 5% to a pensioner’s health costs and changes to the Pharmaceutical Benefits Scheme representing a 17% hike for medicines.

Health Prices and CPISACOSS Executive Director, Ross Womersley said,

“Rising prices for a basic necessity like health are a real concern and we are worried that people struggling to balance the weekly budget will simply skip going to the doctor, or not purchase medicines necessary for their health.”

“It is also a concern that many of the initiatives in the Federal Budget will make this worse.”

“The co-payment for GP visits and the increase in the PBS threshold will impact directly on health costs for older South Australians and low income households – and this will be on top of changes to income support payments which mean that they will be struggling even more.”

“Added to these budget impacts are the massive Federal Budget cuts to state-run health services which threaten the availability of services, so the health outlook for vulnerable and disadvantaged households in our state is pretty bleak”, Mr Womersley said.

SACOSS is calling on the Federal government to abandon the co-payment plan and reverse the changes to the PBS (or that the Senate reject those plans), address the shortfall in agreed state health funding, and for all levels of government to (re)commit to universal access to basic medical care, preventative health care and health promotion.

Beyond health costs, the SACOSS Cost of Living Update shows that in the June 2014 quarter the cost of living went up by 0.4% for aged pensioners and other welfare recipients. 

This was below the general inflation rate nationally (and equal to the Adelaide CPI) and included a welcome drop in electricity prices. However, for those on base level income support payments, living costs still outstripped benefits , meaning these people were $5 a week worse off than at the same time last year.

Download SACOSS Cost of Living Update No.19

Published Date: 
Thursday, 31 July 2014