Carrot or stick? What separating Australia’s health insurance penalty from its subsidy reveals about smarter tax design

The Australian government uses both a carrot and a stick to encourage people to buy private health insurance (PHI). The carrot is a premium subsidy for people who buy PHI (the PHI Rebate), costing $7.6 billion a year. The stick is a tax penalty (the Medicare Levy Surcharge, or MLS) applied to higher earners who don’t purchase it.

Published 03 Sep 2026

Monthly inflation rose in August

The Melbourne Institute Monthly Inflation Gauge increased for a second consecutive month in August, after falling in May and June.

Published 31 Aug 2026

Per-capita recession likely — too early to call

GDP per capita fell by 0.1 per cent in the March quarter. Nevertheless, the per capita expansion is dated as having continued in the March quarter.

Published 27 Aug 2026

Third and Final Nowcast in the June Quarter 2026 is 0.2 per cent

The Melbourne Institute anticipates that Australian economic growth in the June quarter is likely to be weak (0.2 per cent).

Published 27 Aug 2026

Indexes again suggest modest growth prospects across the states

The latest Melbourne Institute State Leading Indexes of Economic Activity show improvements in growth prospects in NSW, VIC, SA, WA and TAS, but a material weakening in QLD.

Published 27 Aug 2026

Consumer inflation expectations increased in August

The expected inflation rate (30-per-cent trimmed mean measure) rose by 0.2 percentage points in August to 4.9 per cent.

Published 20 Aug 2026

SERD is a welcome overhaul of the innovation ecosystem

The Melbourne Institute welcomes the Department of Industry, Science and Resources SERD report, which has undertaken a strategic examination of our research and development system.

Published 19 Aug 2026

Call to modernise Australia’s private health insurance

In response to the Government’s Private Health Insurance Amendment (Modernising the Private Health Insurance Rebate) Bill 2026, the Melbourne Institute of Applied Economic and Social Research has prepared a submission supporting the removal of the higher private health insurance rebate for people aged 65 and older.

Published 13 Aug 2026

Vale Bill Evans (1950 - 2026)

Over the decades of his involvement with the Melbourne Institute of Applied Economic and Social Research, Bill, as chief Economist of Westpac, was a valuable and respected collaborator. He was a terrific member of the Melbourne Institute Advisory Board and was responsible for a wonderful and enduring partnership with Westpac.

Published 12 Aug 2026

RBA pause likely to continue, inflation battle far from over

Published 11 Aug 2026

Health insurance rebates may change for the over‑65s. Our new study shows what to expect

Since the federal government announced earlier this year it would scrap the higher private health insurance rebate for people aged 65 and over, opponents have come out in force.

Published 07 Aug 2026

For the first time, the census will ask your sexual orientation. My new study shows why it matters

The change to this year’s census means for the first time, researchers will be able to examine how people’s health differs by sexual orientation across the whole population, not just in those living with a same-sex partner.

Published 03 Aug 2026

AI giants could get a free pass – and gut creators’ rights

Last week senator David Pocock alleged that the Albanese government was considering two competing proposals to change copyright policy for AI training.

Published 13 Jul 2026

Want to use health insurance in an emergency? Here’s what it does (and doesn’t) cover

In a medical emergency, Medicare is your primary safety net. You will get free care in every public hospital emergency department (and at urgent care clinics).

Published 09 Jul 2026

Australia’s cost-of-living super squeeze

Australians are being squeezed on all sides. Paul Bloxham has referred to this as a “super-squeeze” and Sam Tsiaplis has noted that people have higher inflation expectations now than they did during the peak of the COVID-19 pandemic.

Published 19 Jun 2026

RBA in ‘pause mode’, expected to keep rates unchanged

The Reserve Bank of Australia’s Monetary Policy Board is expected to hold the policy interest rate unchanged today, as they wait to see the full impact of previous decisions.

Published 16 Jun 2026

The price of power: Electricity pricing for a cleaner and fairer energy future

Presented on Tuesday 2 June 2026 at the University of Melbourne, the 2026 Downing Public Lecture features Professor Meredith Fowlie (UC Berkeley) examining the critical role of electricity pricing in shaping a cleaner and more equitable energy future.

Published 16 Jun 2026

Research

Homeownership is twice as hard for casual workers, research finds

There's multiple reasons outside of smaller wages that make it hard for casual workers to buy a house, says Dr Inga Lass.

Published 01 Jun 2026

LEAP towards closing the gap for LGBTQ equality

Delegates from across Australia and overseas gathered in Melbourne on the eve of IDAHOBIT week, for the very first LGBTQ+ Economists and Allies in the Asia Pacific (LEAP) Summit.

Published 22 May 2026

The tax changes in the budget only scratch the surface. Here are 4 reforms Australia needs next

Is Australia finally getting serious about tax reform, or just testing the waters? The 2026 federal budget makes some long-debated changes to capital gains tax, family trusts and negative gearing. This has sparked fresh debate about whether the tax system is pulling its weight, especially when it comes to housing.

Published 19 May 2026