Prescription Charges

Tracy Watkins at Stuff reports:

will increase from $3 an item to $5 an item in next week’s Budget, as the Government moves to offset the cost of extra spending in the “zero Budget”.

The new charge will cover up to a maximum of 20 items from January 1 next year, raising $20m in the first year and $40m after that.

Health Minister Tony Ryall and Prime Minister John Key said the money raised would be  reinvested in the health sector.

“Despite tight financial times and what will be a zero Budget on May 24, health will receive a big funding boost, which will come from savings within health and across the Government’s accounts,” Ryall said.

It was the first time the prescription charge has been increased in 20 years. There will continue to be no charge for under-sixes.

Despite this Hone Harawira is claiming children will die because of this.  Anything for a cheap headline.

The fee used to be $15, and Labour in 2004 reduced it to $3. This increase is a maximum $40 per year per person, so I don’t think will be a huge impact for most. The Government noted:

New Zealand continues to have low prescription charges compared to almost every other developed country.

In Australia, for example, the standard prescription charge is up to NZ$45 and in England it’s around NZ$16. In Australia people on low incomes pay around NZ$7.45 per item. In Finland, there is an annual limit of around NZ$1,107 per patient, after which there is a flat fee of around NZ$2.50 per medicine item.

I think Australia has the right idea. It is hugely economically inefficient to provide subsidies to wealthy people who don’t need them. We spend just over $1 billion a year on subsidized medicines.

What Id like to see happen is that low income people with a community services card get their medicine highly subsidized (pay only $3 to $5), while others pay somewhere between most and all of the cost themselves.

The real challenge for this Government is to reduce the huge amount of middle class welfare we have.  We can support those less well off better, if we are not subsidizing medicines for millionaires.

UPDATE: The maximum possible extra cost per person family works out at 11c a day. This puts into context the hysterical claims by Harawira which the media are giving such prominence to.

So this week we have the offer of free voluntary contraception to beneficiaries being compared to Nazi war crimes by Josef Mengele, and a maximum 11c a day rise in the cost of prescriptions to killing children. Some on the left are getting rather demented.

 

 

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