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LINDSAY MITCHELL: Scrapping $5 fee makes no sense

Yesterday, as part of the Wellbeing Budget 2023, the government announced the scrapping of the $5 prescription charge. This will cost $170 million annually covering around 29 million scripts.


They have done this because an estimated 3 percent of adults apparently do not collect their medicine because they can't afford the $5 fee (which is capped at $100 over a year).


But the vast majority of patients DO collect and pay for their medicines.


Yet again Labour has introduced a universal policy to solve a non-universal problem. Prior examples of this folly include the Winter Energy Payment for all superannuitants and the Best Start payment for all parents of babies aged under 12 months. Throwing money at people who do not need it is hardly testament to good governance.


But it gets worse. In this instance the government has also thrown money at businesses that don't need it.


Around 10-15 percent of the prescription market belongs to relatively new entrants into retail pharmacy. The best known is probably the Chemist Warehouse.


To gain a commercial advantage and market share the Chemist Warehouse did not charge the $5 prescription fee. They paid it themselves. By scrapping the fee Grant Robertson has effectively handed the non-chargers a $17 million subsidy (at minimum). Far from leveling the playing field for all pharmacies, the 'big boys' now have even more disposable dollars to promote their chain and on-line services which have, by the way, been very successful due to superior product pricing and choice.


But back to the problem of people not accessing medicine due to prescription costs, the problem the Finance Minister is claiming to solve.


According to Work and Income, "If you or a family member can't cover your prescription costs, we may be able to help with a Special Needs Grant." A Special Needs Grant is not repayable.


Another option was for the patient to use one of the non-charging pharmacies if an outlet was convenient.


This move also comes against a backdrop of minimum and living wage hikes, and benefit increases. Yes, there is a cost-of-living crisis but set at $5 the fee was also inflation-proofed.


All things considered it is difficult to understand why the Labour government has chosen now to scrap the fee for low-income individuals - let alone the wealthy.


Then again, it is election year. And simplicity makes for easy soundbites and headlines. Stupidity takes a little longer to uncover and understand.



Lindsay Mitchell blogs here

2,856 views105 comments

105 comentarios


The cost to Chemist Warehouse and others like our local chap was not $5. It was $5 plus the administration costs which were also met by the Chemist. Nothing the Government imposes on business is free. There is the flick in the tail of the bookkkeeping and audit costs as well.

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mhut1313
mhut1313
20 may 2023

It dawned on me today just how serious this is. It’s got nothing to do with $5 prescription fees or new taxes - they’re just diversions. There’s only one thing in Robertson’s mind and that is to survive the election to nail home the Te Tiriti led approach to anything associated with or funded by government. Of course they have to fund basic stuff and respond to the cyclone otherwise they’d get slaughtered. But that’s not Labour’s priority. If you think TPM is dangerous, take a look at what’s already happened with Labour. Universities which so many of us attended are now “Te Tiriti led”. I just went to my daughter’s graduation in Welly - that opened my ey…

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Contestando a

You are absolutely right. Our attention is constantly directed toward different "trees" so that we cannot see the "forest". I don't understand why theese socialists who call themselves our government want to take our communal property from the people and give it to some Maori corporations but it will certainlt be in their own self interests. My guess is that this is a global/UN agenda by which publically owned resources can become available for commercial exploitation. The economy depends on increasing access to more natural resources and many of the desired ones are publically owned and not available for exploitation. The majority of people would object to the commercialization of these communal resources that we jointly own. The way to avoid this objection is convince…

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tjalling.jonker
tjalling.jonker
19 may 2023

is there ANYTHING this bunch of muppets have done that makes sense?

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mhut1313
mhut1313
20 may 2023
Contestando a

Everything they do makes sense. Don’t make the mistake of thinking that they’re stupid, the cunning little bastards.

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No such thing as a free lunch! There is always a sting in the tail!

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mhut1313
mhut1313
20 may 2023
Contestando a

Te Tiriti.

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Sigh. The $5 fee per medicine is every 3 months, and does not apply once a household's total prescription fee spend reaches $100 per year (year from 1st February to 31st January). So not really the "$50 per month" claimed by our newest Labour MP. Perhaps she is confusing the prescription fee with the cost of blister packaging, which is monthly and additional to the script fees. Disappointing that neither MPs nor journalists seem able to actually look on the internet to find out what the charges are.

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winder44
winder44
19 may 2023
Contestando a

Of course not. They're MP's and journalists. Say no more!

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