How Unions helped build Medicare

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Medicare wouldn’t exist without the union movement.

On 1 February 1984, Medicare came into operation.  Medicare is such a well-known and well-loved institution today it is easy to forget that a national public healthcare system hasn’t always existed. In fact, it was something unions had to campaign for.

The union movement has always advocated for laws and policies that will protect the health of working people.

Unions were strong advocates for the Whitlam Labor Government’s introduction of universal healthcare during its time in office from 1972 to 1975. This scheme was called Medibank (not to be confused with today’s Medibank Private).

But many conservatives hated the idea of public healthcare and had tried to stop Whitlam’s new scheme. When Whitlam was dismissed from government in 1975, the Liberal Party Prime Minister Malcolm Fraser didn’t wait long before undermining the system.

In July of 1976, the union movement realised we had to take a stand to protect public healthcare.

Unfortunately, universal healthcare didn’t have many defenders. This might be hard to imagine today, but at the time there were lots of people who wanted us to go down the private healthcare path, like the United States.

The ACTU, led by our President, Bob Hawke, organised a national strike to defend public healthcare.

More than two million workers took action on the day – an event reported around the world!

But while we were able to delay Fraser’s attacks, we weren’t able to stop them entirely. By 1981 Fraser had abolished the national public healthcare system.

The union movement, however, didn’t give up.

In 1983, former ACTU President Bob Hawke was elected Prime Minister, leading the new Labor Government.

This government had an agreement with the union movement, known as the Accord. To tackle the spiralling inflation crisis of the time, the union movement agreed to wage restraint in return for what was known as a ‘social wage’.

This meant the introduction of major reforms and programmes that would benefit working people.

As part of this agreement, we insisted on the restoration of universal healthcare. Health cover for workers was such a major priority that the ACTU even drew up its own Health Charter in 1983.

In a 2012 speech to the ACTU Congress, former ACTU Secretary Bill Kelty recalled:

‘The very first conversation I had with Bob Hawke as prime minister, he said clearly, he said, “Bill, I’ve got a few hard issues for you to sort out. Wage rates are too high. We have to make all these changes to get employment up. And by the way we’ll have the Medicare but you [union members] have to pay for it”.

I said no problems.’

A new system of national healthcare was introduced by the Hawke government under a new name: Medicare!

It is important to remember that it was not inevitable that Medicare would be created. As the historians of Medicare, Anne-Marie Boxall and James Gillespie, have written:

‘When Labor finally came to power in 1983 under Bob Hawke, much of its program was delayed or abandoned in the face of a ‘budget black hole’, a record deficit inherited from the early 1980s recession and Fraser’s pre-election budget of 1982. The main reason Labor in government implemented Medicare – the rebadged Medibank – was pragmatic. Labor needed union support for wage restraint, and that support was contingent on the restoration of universal health insurance in Australia.’ (Anne-Marie Boxall and James Gillespie, Making Medicare: The Politics of Universal Health Care in Australia, NewSouth, 2013, p. 115)

Once again, public healthcare met with widespread opposition from within the Liberal Party. The Liberal Party’s 1987 electoral policy document made clear its disdain for Medicare, stating:

‘Australia’s health care system is in a shambles. The real villain is Labor’s doctrinaire commitment to a universal government health insurance system, Medicare. By discouraging self-provision, by increasing health funding from the taxpayer and removing disincentives to overuse of medical services, Medicare has created a system obsessed with cost at the expense of quality, security and comfort.’ [Quoted from Anne-Marie Boxall and James Gillespie, Making Medicare: The Politics of Universal Health Care in Australia, NewSouth, 2013, p. 151]

That is the history of how unions helped create Medicare – a system we have campaigned to protect, and better, ever since.

This history has some very consistent themes: unions campaigning to advance public healthcare for the benefit of all Australians, while the Liberals insist that we should just trust our health to the market.

It is not too surprising then that today, in the middle of the greatest health challenge of our time, we see the union movement campaigning for vital public health measures like the need to make Rapid Antigen tests free and widely available.

And Scott Morrison’s response? You might recall the PM recently saying in reply to calls for widespread RAT availability: ‘you can’t just make everything free’.

If you agree that the Morrison Government must step up to make Rapid Antigen Tests free and accessible to all, support our campaign. You can find all the details here.

By Dr. Liam Byrne. Liam is the ACTU Historian and author of Becoming John Curtin and James Scullin (Melbourne University Press, 2020).

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