Dutton under pressure to match PM’s pledge to drop medicine prices by $6.60

Millions of Australians would pay $6.60 less each time they pick up a medicine script under Labor’s latest pledge to woo voters and wedge Coalition leader Peter Dutton with cheaper healthcare policies ahead of the federal election.

The Albanese government plans to bring the patient co-payment for subsidised medicines down to $25 from $31.60, cutting up to a fifth of out-of-pocket costs for the 20 million Australians who can’t access concession prices when they buy scripts under the Pharmaceutical Benefits Scheme.

Labor says it would bring the patient co-payment for subsidised medicines down to $25 from $31.60.Credit: Luis Enrique Ascui, Michele Mossop

As 8 per cent of people report delaying or going without prescription medicines because of expense, the policy gives Labor another cost-of-living measure to push ahead of the May election, which the government wants to be fought over healthcare.

Its $690 million spending pledge will force Dutton to follow Labor’s plan to offer subsidised medicines at their cheapest price level since 2004 or lose ground among voters looking for hip-pocket relief.

The Coalition will be under pressure to adopt the policy to neutralise a political attack – as it did when matching Labor’s $8.5 billion bulk-billing announcement – but this also risks inviting more scrutiny over how it will be paid for, given the opposition has vowed to bring down government spending.

Labor hopes the formal announcement of the policy brings the political agenda back onto its preferred turf as Dutton shifts to campaigning on law and order by pledging to crack down on criminal dual nationals with a potential referendum on stripping their citizenship.

Prime Minister Anthony Albanese and Health Minister Mark Butler will also use the commitment to remind voters of Labor’s health agenda – more than $11 billion in new spending on GP bulk-billing, urgent care clinics, hospitals and women’s health – while continuing their “Mediscare” campaign against Dutton’s record as health minister under the Abbott government.

“Peter Dutton tried to jack up the cost of medicines by up to $5 a script and put free medicines for sick pensioners even further out of reach,” Butler said. “In opposition, Peter Dutton and the Liberals voted to block cheaper medicines six times.

“The contrast this election is clear: cheaper medicines with a re-elected Albanese government, or the frankly terrifying legacy of Peter Dutton, who wants medicines to cost more, not less.”

The target of Labor’s cheaper-medicine policy is the same as its $8.5 billion bulk-billing boost for adults: middle Australian households who have faced financial pressures over the past few years but missed out on cheaper healthcare policies aimed at the most vulnerable people.

The announcement builds on Labor’s policy from 2023 to bring the maximum co-payment for PBS medicines down to $30 from $42.50.

The change will make 80 per cent of PBS medicines cheaper – because they currently cost more than $25 – and come into effect on January 2026 if Labor is re-elected. Prices then rise each year with indexation.

Pensioners will keep receiving medicines at $7.70 per script until 2030, after the government froze the price for five years in last year’s budget.

Other pharmacy changes introduced by Labor include 60-day scripts for more than 320 common medicines – which caused uproar among pharmacists, who Albanese then appeased with a $3 billion deal – and reducing the PBS safety net.

It will keep the powerful Pharmacy Guild onside by going partway to meeting the guild’s plea to shrink the patient co-payment to $19.

Labor said those policies have saved Australians a cumulative $1.3 billion in hip-pocket costs since July 2022. It anticipates Australians will save a further $786 million over the next four years under the $25 co-payment.

The federal government will also spruik the policy for achieving cost-of-living relief while bringing down inflation because it reduces consumer prices.

However, it will lift government spending by $689 million in next week’s budget, adding to a $19.8 billion PBS bill forecast for 2025-26 in the December mid-year budget update.

Labor’s spending spree ahead of this year’s election comes as the federal budget is due to head into deficit, leading economists to urge spending restraint. This year’s deficit is forecast to be $26.9 billion, growing to $46.9 billion in 2025-26.

Labor has defended its budget management by saying it improved the bottom line by $200 billion and recorded two surpluses, saving billions in interest payments. It says its reprioritisations and savings have given it room to spend more in other areas.

The Coalition is leaning on its pledge to cull 36,000 workers Labor added to the public service to find $6 billion in annual savings that can pay for extra spending. However, it has also promised to boost defence funding while arguing Australians are paying too much in personal income tax.

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