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Australia’s health minister Greg Hunt
Health minister Greg Hunt says the PBS co‑payment for concession card‑holders will remain capped at $6.60 per script as the maximum co‑payment for general patients rises to $41.30 per script. Photograph: Mike Bowers/The Guardian
Health minister Greg Hunt says the PBS co‑payment for concession card‑holders will remain capped at $6.60 per script as the maximum co‑payment for general patients rises to $41.30 per script. Photograph: Mike Bowers/The Guardian

Uni fee rises and welfare cuts: six Australian government changes coming on 1 January 2021

This article is more than 3 years old

The controversial ‘job-ready graduates’ package and a ban on the export of certain types of unprocessed waste to take effect

Australia is about to mark the end of a year like no other, but some new year rituals endure. One of the enduring traditions is the Australian government setting 1 January as the start date for a range of changes to fees, regulations and benefits. Here are six changes to look out for:

Medicine co-payments rise with new listings of subsidised drugs

Co-payments for drugs listed on the Pharmaceutical Benefits Scheme (PBS) typically increase on 1 January each year based on consumer price index (CPI) movements. The government says the maximum co‑payment for general patients will be $41.30 per PBS script in 2021, an increase of 30c (or 0.7%) from the 2020 level.

But the health minister, Greg Hunt, says the PBS co‑payment for concession card‑holders will remain capped at $6.60 per script in 2021. “The safety net threshold for concession card‑holders will also remain at $316.80 per year,” he says. “When a concession card-holder reaches the Safety Net threshold, they will be eligible for a Safety Net Card and receive PBS medicines free of charge for the rest of 2021.”

The new year will also see several new listings of drugs on the PBS, including Darzalex as a treatment for patients with multiple myeloma – a cancer of the plasma cells. The government says Australians living with severe chronic psoriasis will benefit from the listing of Otezla on the PBS.

University fees to skyrocket in some disciplines

The government’s controversial “job-ready graduates” package takes effect in January, with a range of courses facing fee hikes. For example, students in disciplines such as law and humanities will pay up to 113% more than current students.

Fees for certain other fields of study – such as the sciences – will decrease in a bid to encourage Australians to undertake study in areas of skills needs as the economy recovers from the Covid-19 shock. The changes apply to new students, rather than those midway through their courses.

Critics say the package represents, on average, a reduction in the commonwealth contribution to university degrees, shifting more of the burden on to students. The government says it will fund an additional 12,000 commonwealth-supported places in 2021 in national priority areas.

Foreign investment charges to rise

The Morrison government says it will increase fees for reviewing foreign investment proposals from 1 January to “ensure that foreign investors, not Australian taxpayers, bear the costs of administering the foreign investment system”. The budget papers say the fee overhaul will deliver $55m to the budget over four years.

The fee changes come as the government has also tightened rules – including adding a new national interest test – against the backdrop of concerns about potential Chinese investment in sensitive national security businesses. China has previously accused the Australian government of blocking foreign investment proposals on opaque national security grounds – an objection we are likely to hear more of as tensions between the two countries spill over into 2021.

Insolvency relief for business

The government’s changes to insolvency rules will also take effect on 1 January. The changes could allow small businesses that are in financial distress due to the Covid recession but still considered viable to be left in the hands of their owners rather than placed into administration under a new debt restructuring process.

The treasurer, Josh Frydenberg, says the reforms draw on key features of the chapter 11 bankruptcy model in the United States, giving flexibility for businesses to restructure. “They will apply to incorporated businesses with liabilities of less than $1m – covering around 76% of businesses subject to insolvencies today, 98% of whom who have less than 20 employees,” he says.

Cuts to the coronavirus supplement

While businesses will gain added flexibility from the insolvency changes, more than two million welfare recipients are set to face a significant hit to their incomes from 1 January, as the government cuts the coronavirus supplement by $100 a fortnight.

Recipients of the jobseeker payment and several other welfare payments had their incomes topped up as part of emergency measures introduced at the beginning of the pandemic and then extended. But the government has maintained it will proceed with tapering the measure.

From 1 January, about 1.3 million people on the jobseeker payment will receive a base rate of $715.70 a fortnight, down from about $1,115 at the height of the pandemic. Three days later, the rate of the jobkeeper wage subsidy will also be reduced.

Ban on waste exports

The federal government is banning the export overseas of certain types of unprocessed waste – including plastic, paper, glass and tyres – from 1 January. Official figures indicate Australia exported about 7% of all waste it generated in 2019, as highlighted by The Conversation. There have been concerns about the impact of sending unprocessed waste offshore, and countries including China and Malaysia have instituted bans on imports.

The government says the Department of Agriculture, Water and the Environment will administer a licensing and declaration scheme allowing the export of waste materials “where it can be demonstrated that sufficient processing has occurred prior to export to prevent harm to the environment or human health overseas”.

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