Ann: Australian Government Mid-Year Economic and Fiscal Outlook, page-2

CAJ, PRY and SHL now have all said in unison that they will start charging patients more. Fortunately for SHL, the revenue impact is only 3.5%/2% for pathology/radiology with a 5-6% EIDTA impact in FY17, without remedial measures. So with them, it's likely to be even less of an impact. International operations should be able to counteract this, along with the exchange rate benefit. Again, this is the benefit of a geographically diversified exposure to this sector. The government have not learnt their lesson and this is now the third time they have attempted to introduce co-payments by stealth. Will they learn? Let the politics begin. So far government are down 2-0 in this game.

In the pathology sector, given the relatively weaker positions of PRY and Healthscope in the sector, I don't think we will see them outdo each other buy trying to fight each other further on costs and absorb these costs themselves rather than pass them onto patients.