UBS analyst Andrew Goodsall says despite his view that healthcare cuts are less likely in an election budget, the growing budget deficit remains a constraint on largesse.
The Turnbull government’s May budget could “showcase” new policies it plans to take to the election on innovation and research, according to healthcare analysts.
UBS analyst Andrew Goodsall also outlined that despite his view that healthcare cuts were less likely in an election budget, equally the growing budget deficit remained a constraint on largesse.
“Given major reform processes (in healthcare) underway, we generally expect a more subdued approach to further healthcare reform in budget 2016,” he said.
The respected healthcare analyst pointed out that federal funding represented more than 70 per cent of income for some of the major Australian-listed healthcare stocks.
The budget, he said, was likely to provide updated projections on recent policies, such as bulk-billing incentive cuts, updated forecast for pharmaceutical benefits scheme spending after existing pricing savings, along with the Medicare Benefits Schedule freeze.
“It may be too early to book material savings from the key reviews of MBS and private health insurance, although some early savings targets may be included in forward estimates. The budget is also expected to fund the initial rollout of new GP chronic care initiative covering 65,000 patients and 200 GP clinics,” Mr Goodsall said in a client note on the budget.
“Although we expect few major surprises for health … with the expectation of a federal election in 2016, the budget does offer an opportunity to showcase new policy that the government can take to an election, such as investment in innovation and research.”
He added that the government had also been clear that its Aged Care policy direction favoured consumer directed care and bed license deregulation. Mr Goodsall said that agenda could move forward in the budget.
Read more at: http://www.theaustralian.com.au/business/budget-2016-ubs-analysts-dont-expect-health-cuts-in-election-year/news-story/da25f947455486f429d7c66dae29cbd0