Opposition parties are warning the rise in prescription charges will hit low-income families and the elderly hard, and could have deadly consequences.
The Government yesterday announced that prescription charges would be increasing for the first time in 20 years.
The rise in prescription costs – up from $3 an item to $5 on subsidised drugs – is capped at $40 a year for families.
But with savings expected to reach $40 million a year, the Government suggests it is the sort of sacrifice people may be asked to make as it prepares to deliver its second zero Budget in a row.
The money trimmed from the $1 billion-a-year drug bill will be used to help pay for a boost in the number of specialist cancer nurses, and an extra 4000 operations a year.
"It allows us to spend more on frontline services than we would otherwise have been able to do," Prime Minister John Key said.
"It is a conscious decision from the Government to increase that part charge so that money can be applied to more medical services, more medicines and a greater level of healthcare for New Zealanders."
NZ First leader Winston Peters said today the Government was trying to "fob off" the increase as modest.
"But it's a lot for people on fixed incomes. It's a lot for people who have heavy medication requirements, and a lot of people do.
"For them it's going to be seriously tough because incomes are not going up and costs are right across the board and this is just one more of them."
Mana Party leader Hone Harawira said poor families with many children were already forced to get the cheapest medicine available.
''It's not necessarily the right medicine but it's the cheapest. When their child looks like they're better, they stop giving them the medicine, they keep it in the cupboard and they build up a bank of medicine because they just can't afford to keep going to the doctor.''
Health problems were exacerbated for families in substandard housing who could not afford decent food, he said.
''Anything which is going to make that worse is going to put lives in serious jeopardy in poor communities and particularly poor Maori communities.''
The last time prescription charges changed was between 2004 and 2008, when they dropped from $15 to $3 an item. The new charges kick in on January 1 next year and prescriptions for under-sixes will remain free. The $5 per item cost is charged up to a maximum of 20 items for a family in one year.
Medical Association chairman Dr Paul Ockelford said the increase was "relatively small" and he did not think it would be a barrier to people getting the drugs they needed.
Asked if there would be more such tradeoffs or user charges in next week's Budget, Mr Key said there would not be "a huge number" but confirmed there would be some "minor changes".
The Government has already signalled a likely increase in the amount some families will have to pay for early childhood education. It has not spelt out those changes but says they are aimed at lifting participation of Maori and Pacific children.
It has also announced changes to student allowances and student loans and there is also expected to be a big hike in excise on cigarettes.
In last year's Budget, the Government made cuts to KiwiSaver. It also trimmed about $200 million a year from the $2.6 billion Working for Families.
Mr Key said yesterday that the Government was spending "billions and billions" over the next four years in critical areas such as health, education and science and innovation.
Because the Government was committed to a zero Budget, that had to be matched by "either an increase in charging or a reduction in expenditure".
Labour health spokeswoman Maryan Street said increasing prescription prices to subsidise other health services punished the wrong people.
"What [Health Minister] Tony Ryall is doing is asking low and middle-income New Zealanders, who already struggle to meet their basic needs, to cough up more cash at the counter to subsidise treatment for others."
Pharmacy Guild president Karen Crisp said the increase was expected, as current funding was unsustainable.
"For those patients who genuinely cannot afford the co-payment, there is help available from Work and Income NZ, or the primary health organisations. This means that no patient ... needs to go without their medicines because they cannot afford them."
Raewyn Fox, of Family Budgeting Services, said the higher charge might only be an extra $2 an item, but the rise came on top of other increases.
"All added together they are significant."
- © Fairfax NZ News
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