Australia is establishing the world’s biggest medical research fund using some of the money raised from a new co-contribution of $7 for a visit to the doctor.
For each $7 patient contribution, $5 will be reinvested in the new Medical Research Future Fund. This will come from reducing Medicare Benefits Schedule rebates for these services by $5, with $2 going to the provider.
The Medical Research Future Fund will start in January next year and grow over five years to $20 billion, the largest of its kind in the world.
It will facilitate Australia maintaining a world-class medical research sector, with access to innovation and clinical breakthroughs in hospitals.
Treasurer Joe Hockey says: “Every dollar of estimated savings from health reforms in this Budget will be reinvested in the Fund until it reaches $20 billion.”
To establish the Fund, about $1 billion in uncommitted funds from the existing Health and Hospitals Fund will be transferred.
The fund is estimated to reach the $20 billion target capital level by 2020, and the capital base is set to be preserved in perpetuity.
From 2015-16, the net earnings from the Fund will serve as a permanent revenue stream, primarily to the National Health and Medical Research Council (NHMRC). The Fund will distribute around $1 billion a year into medical research from 2022-23.
The additional $1 billion a year in funding will roughly double the government’s direct funding to medical research.
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