Shake-Up for Pharmacies, Schools and Universities as Productivity Commission Unveils Multibillion-Dollar Growth Plan

Automatic dispensaries would replace community pharmacies, low-value health care procedures would be defunded, hospitals would be rated on the basis of outcomes, people with real-world skills would be made teachers, and drivers would be charged for the use of roads under a series of bold proposals the Productivity Commission believes could add hundred of billions of dollars to Australian GDP over the next few decades.

In the first of a series of five-yearly reports commissioned by Treasurer Scott Morrison, Shifting the Dial, the Commission says productivity growth has fallen to a fraction of what it was in the 1990s and that without an improvement, future income growth is likely to be half of historical levels.

It identifies governments as the biggest impediments to lifting productivity, singling out their management of health education and infrastructure as brakes on economic growth.

On health, it suggests that 2 to 3 per cent of the hospitals budget be set aside for locally based programs that would keep people out of hospital.

Low value procedures such as knee arthroscopies should be defunded and patients told why. Hospitals should be rated and the results made available in a form patients can understand.

Medicines would be dispensed automatically by staff with qualifications “involving substantially less training than currently required for pharmacists”.

Universities would be told about the reduced need for a future supply of pharmacists and trained pharmacists would be given other primary health roles where they could do some of the work presently done by general practitioners.

Automatic dispensaries would be trialled in remote and regional areas where there is currently a shortage of pharmacists and would be free of the “unnecessary boundaries on locations now endemic in pharmacy planning rules”.

Alcohol would be taxed on the basis of volume, eliminating what at the moment is a subsidy for cheap cask wine, taxed only the basis of price.

On education, the Commission says 30 per cent of high school information technology teachers never studied IT. It would boost in-service training for out-of-field teachers, and bringing in new teachers with knowledge of fields such as IT after short periods of teacher training.

Universities would be made subject to consumer law, to give students the same rights to compensation comprising the “right to a repeat performance” as consumers of other products.

On transport, user charging for roads should be trialled as soon as possible to test behaviour under different pricing regimes and assess the actual need for new infrastructure.

Planning regulations would become less of a road block to development applications and stamp duties would be phased out and replaced with land tax to ensure the better use of land.

On energy, the Commission says a “single effective price on carbon” should be introduced as a matter of urgency, backed up by a clear strategic direction to expert regulators.

While the Commission says many of its ideas have been proposed before, governments and commentators “should be very wary of the seductive claim that something is well under way already”.

“The headline is often not supported by reality, or has not yet achieved the co-operation of all the necessary participants”.

While responsibility for implementing the recommendations would rest with the Commonwealth and states governments, it would not be implemented though the Council of Australian Governments.

“COAG is the place where good policy goes to die”, said the Commission’s chairman Peter Harris in a University of Melbourne podcast released with the report.

“Doing nothing is going to condemn us to a slowly declining economic paradigm,” he said. Multifactor productivity had been either zero or negative in Australian and most developed economies since the mid-2000s.

Treasurer Scott Morrison welcomed the report on Tuesday and said the challenge was not just to create more jobs, but better paid jobs as well.

“The Commission has sought to bring the productivity agenda up to date and ensure it is aligned with where our economy is today and where it is headed,” he said.

“[It points] to the need for patient centred healthcare to create more healthy workers; a more proactive education system that supports better teaching to create more proficient, more resilient and more adaptive workers; and more functional cities that will not choke our economy.”