Monique Ryan (Kooyong, Independent) Share this | Hansard source

Ahead of the forthcoming budget, I'd like to speak to how we can improve productivity through investment in health care. Health care is not merely a cost on the national balance sheet. It is an investment in the wellbeing of our people, which underpins workforce participation and drives economic growth. Investment in health is a productivity goldmine for Australia's economy. Every dollar invested in health and medical research yields close to $4 returned to the Australian economy. There are few sectors in which the economic dividends are so clear and so direct. Our healthcare system is not operating at its productivity potential. That's not because of the people who deliver care. Instead, the problem lies in the structures around them: outdated regulation, fragmented data systems, poor workforce planning, underinvestment in research and missed opportunities for disease prevention.

Firstly, Australia's health and medical research sector is world class, but it is underfunded and underleveraged. Medical research is a critical enabler of productivity. It drives new treatments, new industries and new jobs while reducing pressure on hospitals and primary care services. But our expenditure on R&D has fallen to only 1.7 per cent of GDP. That's the lowest in 20 years. The Medical Research Future Fund sits now at almost $25 billion. It remains underdistributed, and that money is just sitting fallow in the government's bank account. The MRFF represents billions of dollars in lost opportunity for discovery, for translation and for commercialisation. We could address this immediately by increasing MRFF disbursements to $1 billion annually, which was the original intention of the fund when it was created. The government could also engage with Horizon Europe, and it could also engage with fully funding the National Health and Medical Research Strategy.

Secondly, we have to address workforce planning and regulation. It's extraordinary that there's currently no single body responsible for workforce planning for the national medical workforce. Workforce shortages are amongst the most significant constraints on productivity across the care sectors. If we want a productive system, we need modern workforce regulation. We need clearer scope-of-practice frameworks and a national planning agency with real authority to enable better workforce distribution.

Another major productivity bottleneck lies in training. Students in many health disciplines have to complete hundreds of hours of unpaid placements. All should be included in the Commonwealth Prac Payment scheme. When students defer or abandon their degrees because they can't afford placements, we are losing a workforce that we've already invested in training. That is a false economy.

Finally, we can't talk about healthcare productivity without talking about prevention. Australia spends less than two per cent of its total health budget on preventive care, despite evidence that every dollar spent on prevention returns $14 in downstream savings from fewer chronic conditions, fewer hospitalisations and fewer years lost to disease. Chronic diseases are one of the country's largest drivers of lost productivity. In 2023-24 alone, Australia's health expenditure reached $270 billion. That was driven, in part, by avoidable chronic conditions that could be reduced through better prevention. People with chronic conditions are 60 per cent less likely to participate in the labour force and less likely to work full time.

Early detection, healthier environments and community-wide preventive programs all reduce rates of chronic illness and resulting absenteeism. Nowhere is that clearer than in dental and oral health. Nearly one in five Australian children defers dental care due to cost. In 2023-24 we saw 88,600 preventable hospitalisations for dental conditions in Australia. That is a stark illustration of how failing to invest in prevention costs us far more in the long term. Expanding preventive dental care, starting with children and older Australians would reduce chronic health risks later in life. It would reduce the incidence of chronic disease, diabetes and stroke in older Australians.

Improving productivity in our economy doesn't have to be about asking people to work harder. It should be about building a system that works smarter, that invests in healthcare research, supports its workforce, reduces chronic illness and sees health not as a cost but as the foundation of prosperity.

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