Editorial: Free doctors visits unfair on taxpaying generation

Labour is offering free doctors and medicines to a generation that grew up in a welfare state. Photo / Brett Phibbs

When policymakers in the modern world worry about the cost to future taxpayers of ageing populations, pensions are only part of it. Healthcare also contributes to the bill. As is always evident in doctors' waiting rooms, older people are heavy users of health services. But it is not just their number that is increasing as the postwar baby boom moves into retirement; advances in the care and treatment of organ deterioration are rapidly extending the human lifespan. Welcome and wondrous as they are, the treatments come at ever increasing cost to a decreasing ratio of working taxpayers.

For that reason, younger voters ought to ask hard questions of the Labour Party's election promise to provide free primary healthcare for everyone over 65. The first question to ask is, how many of them need it? Some with chronic conditions may struggle to afford a fee for the frequent visits they need, but these days general practices are funded for the needs of a range of enrolled patients and doctors can vary their charges. Labour proposes to replace doctors' discretion with free consultations and medicines to the over-65s regardless of their ability to pay.

It would give the elderly the same benefits provided to children up to age 13 in this year's Budget, which Labour endorses. It would add pregnant women to the free list too, for any medical attention they might need in addition to the prenatal care that is already free. Not all parents of children under 13, or expectant mothers, need these benefits either. Many can well afford to pay a fee. But at least a case can be made in generational equity for children and young parents. Not so, the older generation.

Labour is offering free doctors and medicines to a generation that grew up in a welfare state, attended university at a fraction of the cost faced by their children, bought houses at lower relative prices, had their top income tax rates reduced by half early in their working years and enjoyed galloping house price inflation in their peak earning period.

Some have been able to invest in multiple houses to generate additional retirement income, which would not be taken into account when Labour provides them with free medical services at a cost to the taxpaying generation, which has already had to pay a higher share of its tertiary education costs and taken out much higher house mortgages to afford a home of their own in a market inflated by the lucky generation's appetite for investment property.

Labour proposes to balance the generational ledger a little with capital gains tax on sales of rental property and a higher top income tax rate, as well as raising the age of national superannuation to 67. But why waste some of those gains on providing healthcare at a level of subsidy many senior citizens do not need?

If Labour's Budget calculations give it a spare $280 million a year, its supporters could probably suggest several more urgent uses of that money than a universal health benefit for the over-65s, many of whom are still earning high incomes as well as receiving national superannuation and a return on savings or rental properties. The groups that constantly measure child poverty could nominate more worthy purposes for the money.

It is too easy for political parties to promise handouts in election year. No rival is going to say senior citizens do not need it. The election becomes an auction in which all parties put up their bids at public expense. If the party wins power it is obliged to carry out the promise no matter how cheaply it was made. And once enacted, the benefit becomes almost impossible to remove. Taxpayers bear the waste and the economy loses the investment. It is one way that nations get poor.

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