3 tests for the CDC

The change is one of many recommended by an independent review into the Bank’s operations. What the review didn’t do, and what nobody sensible has called for, is to reduce the Bank’s independence.

There are two reasons that monetary policy is best kept at arm’s-length from governments. Keeping inflation under control has long-term benefits but can have steep short-term costs. Governments may prefer to bask in the glow of a raging economy today than raise interest rates, crimp the economy, and avoid economic problems down the track.

And commercial interests aren’t shy about telling the Reserve Bank to keep the money spigot open. If that pressure was applied to governments, that always have an eye on the next election, they might cave in.

Preventing chronic disease is the same. Like monetary policy, the stakes are high. Half of Australians have a chronic disease, such as diabetes, cardiovascular disease, or mental health problems. Chronic diseases cause the vast majority of illness and death. Treating them costs more than $70 billion a year. At the same time, they reduce productivity, erode tax revenue, and expand welfare spending.

A lot of chronic disease can be prevented, but the results of prevention policies often take time and are usually taken for granted. And companies that sell products that make us sick – from sugary drinks to gambling – work hard to lobby governments to protect their profits.

Sound familiar? It’s the monetary policy problem again, but this time it’s about our health instead of our wealth, and it explains Australia’s otherwise puzzling prevention deficit.

Australia has fallen behind the rest of the world on chronic disease prevention, with much lower spending, and fewer policies to help keep people healthy.

More than 100 countries have a sugar tax, but Australia doesn’t. Other countries have tougher rules on food labelling, the amount of salt and toxic transfats in manufactured food, and junk food advertising to children.

The imminent establishment of an Australian Centre for Disease Control (CDC) is the chance to turn this around.

Before the last federal election, the then-opposition promised to set up a CDC. It’s not yet clear what shape it will take, but those decisions will be taken soon. Getting it right is crucial. It’s a once-in-a-generation chance to overcome the biggest barriers to prevention.

Independence is essential. Unlike the Reserve Bank, the CDC shouldn’t have the final say on policy. But it must be a strong, fully independent voice that can push governments to act, even when it isn’t in their political interests, when it contradicts current policy, or when it will upset harmful industries.

Prevention bodies that weren’t independent have been starved of funds, silenced, and in Australia and the UK they have been summarily shut down. Australia’s new CDC should be an independent statutory body so that it doesn’t face those threats.

Independence does have some risks, but they can be managed. Independent bodies can become unrealistic, straying too far beyond what the community will accept and what governments can deliver. But a CDC board with a range of expertise and perspectives, and external reviews each five years, should avoid that, learning from the approach to the Reserve Bank.

Independence alone won’t be enough. Advising governments what to do should be a core CDC role. Otherwise, the CDC’s independence won’t be used to push governments in the right direction. The CDC should table reports in federal and state parliaments outlining what the CDC recommends, what the costs are, and how much healthier it will make us.

Finally, the CDC needs the budget to do its job properly, both for prevention of infectious diseases, such as pandemics, and preventing chronic disease. The budgets of prevention agencies around the world vary, but adjusted for Australia’s population they typically amount to hundreds of millions of dollars a year. Given how far behind we are, that’s an investment well worth making.

These are the three key tests for the federal government when it announces the model for the CDC: is it independent, will it publicly recommend actions based on transparent analysis, and does it have the budget to do it well?

If the government fails any of these tests, short-termism and vested interests will win out most of the time. If the government meets all these tests, Australia will be set up for ongoing reforms over years, and across governments, adding up to thousands of extra years of healthy life and billions of dollars of taxpayers’ money saved.