Thousands of Australians took to the streets last weekend to demonstrate against health spending cuts announced in the recent federal budget. The introduction of a co-payment for out-of-hospital medical services has raised fears that the age of universal health care is over.

From July 1, 2015 a $7 fee will be charged for all GP consultations, including childhood immunisation appointments and nursing home visits, as well as blood tests and x-rays. This will be capped at 10 payments per year for concession card holders and children. There are no family-caps, so a single parent with three children would still have to pay up to $70 per child, per year.

The Government has defended the cuts, arguing we are in the midst of a budget emergency and our ageing population means current funding arrangements are unsustainable. But economist and UNSW academic, Tim Harcourt, says Australia’s fiscal position is much better than the Government is letting on.

“There’s no debt emergency, there’s no deficit emergency, there’s no economic emergency,” he says. “The only emergency that exists is the one the Government has probably created now, caused by deep cuts to health and the implications that could have.”

The budget emergency argument was questioned further when it was announced that the majority of the GP co-payment would go towards a Medical Research Future Fund. The Fund itself will never be spent, but the interest on the capital will be used for medical research grants.

The Fund was modelled loosely on the UK’s Wellcome Trust, but rather than an endowment from a private company, the Australian version will be generated by an indiscriminate charge on all those seeking health care, including children, the unemployed, the elderly, Indigenous people and those with a disability or chronic disease.

There is no doubt medical research is a vital industry and many believe the Fund is a good investment in Australia’s future. Professor Tony Cunningham, director of the Westmead Millennium Institute for Medical Research, supports the Future Fund.

“There’s a lot of instability in medical research careers, particularly for young scientists,” he says.

According to Professor Cunningham, research institutes currently compete aggressively for short-term funding, with extensions granted unpredictably, based on “government whims”.

But others are concerned that the boost for medical research comes at a cost for other areas of scientific research. The CSIRO, who gave the world Wi-Fi, plastic banknotes and extended wear contact lenses, has had its funding cut by $111 million, and the Australian Research Council, which funds projects in areas such as engineering and environmental sustainability, has been dealt a $75 million blow.

Dr Frank Jones, Vice President of the Royal Australian College of General Practitioners (RACGP), is skeptical that while the money to generate the Fund will be taken out of general practice, the research will remain largely hospital-based and not transferrable to primary health care.

Then there is the ethical question of whether it is right to expect people who need to see a GP more often — for example, the elderly or chronically ill — to foot the bill for research, while the healthy working professional, who may see a GP once a year, will hardly contribute.

The new president of the Australian Medical Association (AMA), Dr Brian Owler, told the ABC last week that while the AMA is obviously supportive of research, “it shouldn’t be done on the back of people that are going to see a GP.”

The Government has responded to this saying that GPs can waive the co-payment at their own discretion. But GPs will have to absorb this cost themselves.

While $2 from every co-payment will go directly to the GP, the Government rebate the GP receives for a consultation will be reduced by $5. Dr Jones, of the RACGP, says if GPs choose to continue to bulk bill, they will suffer a 20 to 25 per cent cut in income.

The co-payment has been marketed as a means to reduce unnecessary GP visits, but GPs themselves are saying this argument is baseless and irrelevant.

“There’s no evidence in Australia or overseas that people present excessively to their GPs,” Dr Frank Jones says. “It’s completely incorrect, and if it’s important to the patient, then it has to be important to us as GPs,” he says.

Dr Jones says the RACGP understands the Government’s fiscal responsibility, but is deeply concerned about the implications of a co-payment.

“It will encourage doctors to see a large through-put of patients, there will be increased pressure to avoid sending patients for investigations, the cost of immunisation will certainly put off some parents, and for the elderly, who have complex health needs and need to see their doctor regularly, this is going to be a big disincentive to coming,” he says.

Dr Jones says there will be a significant reduction in preventative health care, with dire consequences.

“People will present later, they will present more ill, there will be a big flow-on effect on emergency departments,” he says.

There are also concerns the measures will have a major impact on Indigenous health. Justin Mohamed, chairperson of the National Aboriginal Community Controlled Health Organisation (NACCHO) says, “Aboriginal people have the highest chronic disease rates and the lowest incomes in this country, and any barriers set up through charging fees will take Aboriginal health backwards.”

He says the idea of paying for medical research through a GP co-payment will likely be met with cynicism, as Aboriginal people have witnessed the hype of many previous policy failures.

“You’re asking people who have suffered for decades and seen their family members die at a young age to contribute to a special fund that will hopefully look after their health in the future — it’s going to be a pretty tall ask,” Mr Mohamed says.

The announced changes must pass through the Senate before they can come into effect, and at this stage, it appears there will be fierce opposition, with Labor, The Greens and Palmer United saying they will oppose the co-payment.

Alongside other health professional organisations, the RACGP will be lobbying Government to reconsider changes to Medicare, and Dr Frank Jones remains confident that the Australian public will stand alongside GPs in the fight to maintain universal health care.

“Our best allies are our patients, and when the time comes, they will vote with their feet,” he says.