How Australia Won Universal Health Care — And How Workers Saved It With a General Strike (2024)

In 1967, Moss Cass, a medical doctor and left-wing member of the Victorian branch of the Australian Labor Party (ALP), invited the Labor opposition leader Gough Whitlam to a meeting at his house in in Canterbury, in Melbourne’s eastern suburbs. Whitlam met a coterie of health-policy experts, including two health economists, Dick Scotton and John Deeble.

Scotton and Deeble proposed that Australia could replace private health insurance with a universal public health insurance scheme that would be funded by a 1 percent levy on taxable income. Whitlam was interested and asked them for a copy of their paper.

The ALP leader subsequently announced that Labor would introduce a national health insurance scheme known as Medibank. The proposal became a centerpiece of Labor policy in the lead up to the 1969 election.

Labor lost that time, but only just. Crucially, Medibank seemed to win the party votes. Labor formed a government after the 1972 election and Whitlam became prime minister. In August 1974, his government passed Medibank at a joint sitting of both houses of Parliament.

Moss Cass was an unlikely broker for a national health insurance scheme. As a doctor, he had written pamphlets that argued for a fully nationalized medical service staffed by salaried health professionals. This, Cass argued, would make it possible to abolish medical fees entirely.

Making doctors salaried public employees was also attractive from a public-health point of view. A fee-for-service practitioner has a vested interest in your sickness; a salaried practitioner has a vested interest in your health. A fully public health system is thus better suited to providing preventative medicine. By contrast, as an insurance scheme, Medibank preserved the fee-for-service model while shifting the financial burden from individuals to the government.

To understand why a public insurance scheme prevailed over a British-style National Health Service, we need to backtrack a little. World War II was a watershed in the development of Australian social policy. The Curtin and Chifley Labor governments came out of the war committed to building a comprehensive social-welfare system.

The government’s key advisory body on health policy, the National Health and Medical Research Council (NHMRC), proposed replacing private practices with a coordinated system of hospitals and group-practice clinics. These were to be organized in a regional hierarchy, staffed by a salaried medical service, and administered by the Commonwealth Department of Health. A joint parliamentary committee on social security established in 1941 adopted the NHMRC’s recommendations more or less wholesale.

The Curtin and Chifley Labor government opted for a less ambitious plan in the short term that would subsidize hospital treatment and the cost of pharmaceuticals. However, even this proved problematic.

In 1946, Chifley’s government successfully called a referendum on social services that gave the federal government power over a range of health and medical services. However, Labor agreed to a proviso that this power would not “authorize any form of civil conscription.” The concession suggested that the Labor leadership had little interest in creating a nationalized, salaried medical profession.

The Australian branch of the British Medical Association seized on this to launch a High Court challenge. They claimed that it amounted to “civil conscription” if a pharmaceutical benefit scheme required doctors to use an official government prescription pad and formulary to prescribe medicines. The High Court accepted this far-fetched claim, making it clear that the legal system would deem a national health service unconstitutional.

The medical profession presented a united front in its opposition to a pharmaceutical benefits scheme and “socialist” medicine. At the same time, many doctors still thought preventative medicine could only be guaranteed by a salaried medical practice. For many general practitioners servicing low-income communities, becoming a salaried public employee was more attractive than working under a fee-for-service model.

In 1961, Whitlam conceded that Australia’s constitution ruled building a national health service on the British model. Instead, he suggested that the Commonwealth Government could use its right to give state governments conditional financial grants as a work-around. It could still compel the states to build a regional network of hospitals staffed by salaried medical professionals.

While the constitution precluded the “socialization of doctors,” Whitlam argued, it was no impediment to the “socialization of hospitals.” Although Cass would have favored shifting the emphasis from hospitals to general practice and community-based primary health care clinics, this was a step forward.

The 1969 Labor platform called for

the provision of general practitioner medical services staffed by salaried medical practitioners willing to join and available without charge and without means test to persons who choose to use such services.

However, Whitlam ended up ignoring the party platform and proposing a tax-funded national insurance scheme instead.

Despite its limitations, Medibank was definitely an improvement on what had existed before. Postwar conservative governments had only provided free health services subject to a means test.

Anyone who didn’t qualify had to take out private health insurance, with the government limiting its role to subsidizing insurance providers. Families were allowed to claim the cost of their premiums as a tax deduction. By the mid-1960s, around 15 percent of households lacked private insurance, yet were barred from accessing free services by the means test.

Many who did have cover still found themselves under-insured. Private insurers offered refunds as a proportion of doctors’ fees based on patients’ premiums, the seriousness of their illness, and the cost of the service. By the mid-1960s, average insurance payouts only covered around two-thirds of fees. Those who could only afford lower premiums — or who presented with more serious illnesses — received even less.

Australia’s private health insurance system gave better refunds to those who could pay higher premiums. Tax deductions also favored those with higher incomes. On top of this, when medical fees rose, insured patients had to cover the additional costs. When the government tried to narrow the gap between fees and refunds by increasing subsidies to insurers, doctors simply raised their fees again.

This was the system that Labor’s Medibank aimed to fix — and to a large extent it did. It was a remarkably equitable approach to health insurance. Medibank put Australia far ahead of countries like the United States that still rely on private insurance that is overwhelmingly linked to an ongoing employment contract.

Along with guaranteeing free treatment in public hospitals, Medibank set a standard rate for general practitioner visits while still allowing doctors to run private practices. Doctors could “bulk-bill” by accepting the scheduled fee set by Medibank, effectively making consultations free for patients. Alternately, if doctors wanted to charge more than the scheduled fee, their patients had the option of paying the full fee upfront and claiming reimbursem*nt to the value of the scheduled fee.

While not a fully public health system, Medibank was still a historic step forward. It was typical of Whitlam’s technocratic, research-based, and redistributive approach to welfare policy.

Whitlam did not give the health minister Doug Everingham responsibility for Medibank. Instead, he gave it to Bill Hayden, the social security minister. This decision was symptomatic of Whitlam’s general approach to health care and social welfare. Political scientist Peter Sloman has defined this approach as typical of the “transfer state.” Instead of providing high-quality public services funded by taxation, it favors direct cash transfers that top up household incomes to reduce inequality.

Whitlam wasn’t always averse to publicly owned services, from education and social housing to sewerage and swimming pools. When it came to health, however, he opted to meet the Liberals on their own terrain, accepting the insurance model of health care provision and introducing Medibank to make it more equitable. Instead of transforming the way health care was provided, Whitlam’s reforms redistributed the cost of health insurance.

In November 1975, Australia’s governor general John Kerr sacked the Whitlam government with the backing of the Queen, the CIA, and the conservative opposition parties. The Liberal-National Coalition led by Malcolm Fraser won the following election. Immediately, Fraser moved to water down Medibank, initially by making it easy for people to opt out and purchase private health insurance instead.

Fraser’s goal was to reduce Australia’s universal health insurance scheme to a residual system for low-income earners. This effectively abolished the guarantee of universal health insurance coverage.

Although organized labor played little role in the development of Medibank, the Coalition’s attack was the perfect opportunity for rank-and-file unionists to mobilize against the wider Fraser agenda. In July 1976, Australian unions called a national strike that saw up to two million workers walk off the job in defense of Medibank. It was one of the few general strikes in Australia’s history.

In the mid ’70s, the idea of striking to advance a nonindustrial political agenda was still relatively novel. However, it was in line with an emerging trend toward politically oriented industrial action. Sydney building workers had pioneered “green bans” on ecologically, historically, or socially destructive projects.

In the wake of Indonesia’s 1975 invasion of East Timor, maritime unions placed bans on Indonesian shipping. Railway and maritime unions blockaded uranium shipments in support of the antinuclear movement. Unions in Queensland also launched political strikes defending civil liberties against Joh Bjelke-Petersen’s hard-right state government.

The 24-hour Medibank general strike shut down public transport, closed schools and most industrial enterprises, and grounded aviation. Even pubs shut their doors. However, the Australian Council of Trade Unions (ACTU) only grudgingly backed the strike.

ACTU president Bob Hawke — who hailed from Labor’s right faction — believed that union militancy would stymie negotiations over Medibank between the trade union movement and the Fraser government. The ACTU did not organize union-sanctioned rallies or marches to back the rank-and-file driven 24-hour shutdown.

The strike did not halt Fraser’s attacks on Medibank, although it did delay them. Strike action also built broad public support for what was already one of Whitlam’s most popular reforms.

In 1981, driven by an austerity agenda, the Fraser government moved to abolish Medibank altogether. In addition to its popularity, Medibank was one of Whitlam’s most expensive social policy reforms.

From the opposition benches, the ALP leadership showed little enthusiasm for defending Medibank. By now, Cass was the Labor spokesperson on health, and found himself having to defend a scheme he had little taste for. However, the experience of Medibank in operation had largely allayed any public misgivings about universal health insurance while reassuring the medical profession that its interests were not under threat.

Following the 1976 Medibank strike, the unions also threw their considerable social power behind universal health insurance and free, non-means-tested hospital care. This was a crucial factor, since Australian unions could have gone the way of their US counterparts, brokering deals for health insurance with individual employers as part of workplace agreements.

By the early 1980s, Labor’s program for government insisted on imposing wage restraint and buying industrial peace from unions by way of an “Accord” between the unions and government. As a payoff for limiting union rights, Hawke offered workers a “social wage.” Universal health insurance was the most important component of this. In 1982, Labor committed to restoring Medibank in order to win union support for the Accord.

With the Accord sealed in February 1983, the ALP returned to power the following month. Bob Hawke now became prime minister. Having locked unions into a system of centralized wage indexation, the following year Labor delivered on its part of the deal and introduced Medicare, which essentially restored Whitlam’s Medibank.

The legacy of the Accord is still debated, and the ACTU played a contradictory role. Although the union federation bought into an agenda of wage restraint and industrial quiescence, it also extracted concessions that extended the reach of Australia’s hitherto modest welfare state.

Today, Medicare remains a popular but imperfect scheme. Its claim to universality is undermined by the growing “gap” fee that many doctors charge above the scheduled rebate. In addition, it excludes dental care, psychological treatments, and many allied health services, leaving many patients out of pocket. Defending Medicare is a vital task for working-class politics today, but we also need to expand its scope.

How Australia Won Universal Health Care — And How Workers Saved It With a General Strike (2024)


How is universal healthcare achieved in Australia? ›

Australians admitted to public hospitals are guaranteed access to fee-free treatment as public patients. Funding of public hospital services is managed through intergovernmental agreements between the Australian Government and state and territory governments (Boxall 2014).

How does Australia have free healthcare? ›

The costs of healthcare in Australia are covered through taxes. Residents pay 2% of their income to the Medicare Levy, which funds the public system. As a result, most patients never pay medical fees at their appointments and they can claim reimbursem*nts if they do.

What is Australia's universal health scheme? ›

Medicare is Australia's universal health insurance scheme. It guarantees all Australians (and some overseas visitors) access to a wide range of health and hospital services at low or no cost. Find out what we're doing to improve Medicare for all Australians.

How is Australia's healthcare system funded? ›

A u s tra lia 's h e a lth 201 6 Public hospitals are funded by the state, territory and Australian governments, and managed by state and territory governments. Private hospitals are owned and operated by the private sector but licensed and regulated by governments.

Why is Australia's healthcare system so good? ›

A big factor of the Australian health care system is that it doesn't just cater to only those who are sick. Australia puts a big emphasis on disease prevention and health management so that emergency departments and public hospitals don't get overrun, believing that prevention is more cost-effective in the long term.

What are the advantages of Australia's healthcare system? ›

It provides quality, safe and affordable health care for you and your family. It's a key reason why we enjoy one of the longest life expectancies in the world. There are many providers of health care in Australia, including: primary care services delivered by general practitioners (GPs)

Is Australia healthcare better than us? ›

The outcomes for both systems have been quite good. Australians live longer than Americans, they're healthier and they see their doctors more. They don't die of preventable diseases nearly as often as we do. And they get these results for less money, spending about half what we do per person.

Are Australians happy with their healthcare system? ›

More than two-thirds (73.4%) of Australians reported being satisfied with their healthcare, while only a slight majority (54.2%) of Americans said the same.

How much does healthcare cost in Australia compared to the US? ›

Specifically, the average health spending per person per year in the USA in 2016 was $9,892. You can compare this to only $4,708 in Australia [4]. This equates to an average cost in the USA of approximately 17.2% of GDP. Meanwhile, in Australia our system costs us about 9.6% of GDP [4].

Which country has the best healthcare system? ›

South Korea tops the list of best healthcare systems in the world. It's been praised for being modern and efficient, with quality, well-equipped medical facilities and highly trained medical professionals. Generally, treatment in South Korea is affordable and readily available.

Is Medicare free in Australia? ›

Medicare is a national scheme providing Australians (and some overseas visitors) with free or subsidised health services.

What are 5 funding sources for health care services in Australia? ›

Health Care Funding In Australia
  • Medicare. ...
  • Private Health Insurance. ...
  • Private Health Funds. ...
  • Government Regulation of Private Health Insurance. ...
  • Government Incentives.

Has healthcare always been free in Australia? ›

The new Parliament passed the health care legislation in 1974, establishing free public hospital care and subsidized private care. However, following a change in government in 1975, access to free health care services was limited to retired persons who met stringent means tests.

What are the major challenges facing Australia's health care system? ›

The following are the major core health issues and challenges that I believe Australia will need to address.
  • Demographic changes. ...
  • Technology costs. ...
  • Private and public funding of health care. ...
  • Issues in the medical research sector. ...
  • Equity issues and health inequality. ...
  • Rapid urbanisation health issues.

Is Australia's healthcare system one of the best in the world? ›

Australia ranks first among OECD countries for equity and healthcare outcomes, and holds third place for overall healthcare performance, behind Norway and the Netherlands.

What are two weaknesses about the Australian healthcare system? ›


It suffers from system inadequacies, including workforce shortages and poor communication systems.

What has the greatest burden on the health of Australia? ›

The impact of dementia has increased considerably this century, a trend that is likely to continue. Dementia now causes the greatest burden of disease of any chronic illness among Australia's older residents, according to the Australian Institute of Health and Welfare (AIHW).

What is Australia's biggest health issue? ›

Coronary heart disease is the single leading cause of death in Australia, despite the coronary heart disease death rate falling by > 80% since 1980. Between 386,200 and 472,000 Australians were living with dementia in 2021. In 2017–18, 67% of Australian adults were overweight or obese, up from 57% in 1995.

What are 3 key aspects of Australia's healthcare health system? ›

The health care system has multiple components—health promotion, primary health care, specialist services and hospitals.

Is hospital free in Australia? ›

Summary. Public hospital healthcare is free to all Australian citizens and most permanent residents of Australia. A combination of Medicare, private health insurance and personal payments covers the cost of treatment as a private patient in a public or private hospital.

How to fix the Australian health system? ›

How to fix Australia's broken health system: six experts have...
  1. Rethink the role of nurses. ...
  2. Put more emphasis on preventive care. ...
  3. Understand that poverty is a health issue. ...
  4. Address disability competency. ...
  5. Take mental health seriously. ...
  6. Improve access for Indigenous children.
Aug 31, 2022

Why living in Australia is better than America? ›

High Standard of Living

Australia is one of the countries with the highest standards of living and wages. They are know for one of the highest qualities of life and pay is significantly higher in the same industry. This translates to why there are many Americans, as they are here to accept new jobs.

Do Australians pay more tax than Americans? ›

Australia's maximum 47 per cent rate is 8 percentage points higher than New Zealand (39 per cent), about 5 percentage points above the US (a figure which includes an estimated average state income tax) and 2 percentage points higher than the UK.

How is Australia better than the USA? ›

Australia has some of the highest living standards globally, and the living expenses and tuition fees in Australia are lower than in the United States. Moreover, when it comes to safety, the crime rate is much lower in Australia than in the USA.

What country is happiest with their healthcare? ›

RankCountryHealthcare access and quality index
6 more rows

Why is healthcare so expensive in Australia? ›

Australia is host to an ageing population – we're living longer due to better drugs, devices and technologies. The demand on health services is higher than before due to more people experiencing chronic and complex disease. Claims are also higher as a result.

Is Australia a health conscious country? ›

Top 10 Healthiest Countries in the World (2021 Global Health Security Index): United States — 75.9. Australia — 71.1.

Is US healthcare the most expensive in the world? ›

The United States has one of the highest costs of healthcare in the world. In 2021, U.S. healthcare spending reached $4.3 trillion, which averages to about $12,900 per person. By comparison, the average cost of healthcare per person in other wealthy countries is only about half as much.

Does the US have the highest healthcare costs in the world? ›

Health Care Use

While U.S. health care spending is the highest in the world, Americans overall visit physicians less frequently than residents of most other high-income countries. At four visits per person per year, Americans see the doctor less often than the OECD average.

Why is US healthcare so much more expensive than other countries? ›

The United States healthcare system is complex and most costs are market driven. High, unregulated prescription drug costs and healthcare providers' salaries rank higher than in other western nations, and hospital care accounts for 31% of the nation's healthcare costs.

What country is #1 in healthcare? ›

1- Denmark

Source: Based on information from Best Countries project by U.S. News, The Guardian, International Health Care System Profiles by The Commonwealth Fund and Canadian Health Care.

Where does US rank in healthcare? ›

Despite having the most expensive health care system, the United States ranks last overall compared with six other industrialized countries—Australia, Canada, Germany, the Netherlands, New Zealand, and the United Kingdom—on measures of quality, efficiency, access to care, equity, and the ability to lead long, healthy, ...

What countries have better healthcare than America? ›

Key Findings: The top-performing countries overall are Norway, the Netherlands, and Australia. The United States ranks last overall, despite spending far more of its gross domestic product on health care.

Can Americans get Medicare in Australia? ›

To enrol in Medicare you need to prove you live in Australia.

Can I use US Medicare in Australia? ›

In most situations, Medicare won't pay for health care or supplies you get outside the U.S. The term “outside the U.S.” means anywhere other than the 50 states of the U.S., the District of Columbia, Puerto Rico, the U.S. Virgin Islands, Guam, American Samoa, and the Northern Mariana Islands.

What are the disadvantages of Medicare in Australia? ›

Disadvantages of Medicare
  • The treatment you require may not be covered, such as dental treatment or physiotherapy.
  • You could be subject to longer wait times.
  • No choice of when and where you're operated on and who performs the surgery.
  • Depending on your income and circ*mstances, you may need to pay the MLS.

Who pays for hospitals in Australia? ›

Public and private hospitals are funded from a range of sources, including the Australian Government, state and territory governments, private health insurance funds and out-of-pocket payments by individuals.

What happens if an Australian taxpayer does not have private health insurance? ›

The Medicare Levy Surcharge (MLS) is a levy paid by Australian tax payers who do not have private hospital cover and who earn above a certain income.

What is the largest component of health spending in Australia? ›

The components of the Australian Government spending in 2020–21 were:
  • hospital services payments ($1.3 billion, or 33.0%)
  • state public health payments ($2.3 billion, or 58.1%)
  • private hospital financial viability payment ($0.4 billion, or 8.9%).
Jul 7, 2022

Who has better healthcare Canada or Australia? ›

The Australian hospital sector is more efficient than Canada's and further efficiency is being driven by national adoption of activity-based or case-mix funding. Under this arrangement, hospitals are paid for the work they do — up to a cap.

Is insulin free in Australia? ›

People who are registered with the NDSS can access a range of subsidised Government approved products including: subsidised blood gluclose monitoring strips. free insulin syringes and pen-needles (if you require insulin)

How much is Medicare in Australia? ›

Medicare levy

The levy is about 2% of your taxable income. You pay the levy on top of the tax you pay on your taxable income. Your Medicare levy may reduce if your taxable income is below a certain amount. In some cases, you may not have to pay this levy at all.

Why is there a shortage of healthcare workers in Australia? ›

Megan Lilly, executive director for education and training for the Australian Industry Group, explained that the skills shortage problem is largely caused by the lack of skilled migration, international students, backpackers, and other workers from reduced international travel.

What are the top three leading health concerns for Australians? ›

The most prevalent chronic conditions experienced in Australia in 2020-21 were:
  • Mental and behavioural conditions – 20.1%
  • Back problems – 15.7%
  • Arthritis – 12.5%
  • Asthma – 10.7%
  • Diabetes – 5.3%, comprised of Type 1 diabetes (0.6%) and Type 2 diabetes (4.5%)
  • Heart, stroke and vascular disease – 4.0%
  • Osteoporosis – 3.6%
Mar 21, 2022

Is US healthcare better than Australia? ›

Some hospitals and health services in the US provide the best care in the world, albeit at very high cost. Overall, the US health system is very expensive and costs roughly twice as much as the Australian health system per person. Despite this, Americans have lower life expectancy than Australians.

What country has the most successful healthcare system? ›

South Korea tops the list of best healthcare systems in the world. It's been praised for being modern and efficient, with quality, well-equipped medical facilities and highly trained medical professionals. Generally, treatment in South Korea is affordable and readily available.

How do we achieve universal healthcare? ›

Here are four priority actions to ensure health care for all:
  1. Strengthening health systems. ...
  2. Improving pandemic preparedness. ...
  3. Stepping up quality health care for all. ...
  4. More and better financing.
Dec 9, 2022

How can Australia's healthcare system be improved? ›

Increase health workforce flexibility

The Australian Government Minister for Health could identify where there would be benefits in expanding the types of health professionals that can access reimbursem*nt for MBS or PBS items, and can also champion workforce reforms at the national level.

What are the pros and cons of universal healthcare? ›

Here are a few pros and cons of universal healthcare.
  • PRO: Make It Easier for Patients to Seek Treatment. ...
  • CON: Doctors Have Less Flexibility in Negotiating Rates. ...
  • Must Read: What Does Universal Healthcare Means for Medical Practices. ...
  • PRO: It Could Increase Demand for Medical Services.

Why doesn t america have universal health coverage? ›

In the United States, everyone selfidentifies as middle class. This leads to a very simple syllogism about why the United States has no universal health insurance: there is no self-identified working class—no labor party, no national health insurance.

What are the arguments against universal healthcare? ›

5 Arguments Against Single-Payer Healthcare
  • Keeping costs down may reduce the standard of care. ...
  • Lack of competition within the health care industry. ...
  • Government-run health care means waiting lists. ...
  • Citizens may need to buy private insurance anyway. ...
  • The Department of Veterans Affairs is an example of a failed system.

What are weaknesses in the Australian health care system? ›

It suffers from system inadequacies, including workforce shortages and poor communication systems.

What is the biggest health issue in Australia? ›

Cardiovascular diseases (coronary heart disease and stroke), dementia and Alzheimer disease, lung cancer and chronic lower respiratory disease including COPD are the most common underlying causes, together being responsible for 40% of all deaths.

What is the main health problem in Australia? ›

Hypertension (high blood pressure), osteoarthritis, hyperlipidaemia (high cholesterol), depression, anxiety, and asthma are the six most common chronic health conditions affecting Australians, new research reveals.

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