Back to $3.50 by July?, page-16

Sorry to paste so much but as the unexpected transfer of funding from pathology to the PBS for new drugs in MYEFO has cost me so my understanding is:

1) Will this change require Senate Approval: Yes  (Probably)
2) Why: Regulation Process
3) How much is the incentive:

There are some other services impacted and although there is an argument by Government that the incentive did not improve bulk billing rates this incentive is right at the margin and could make many many services unprofitable. Hence the correction in the share price. Current earnings aren't the issue as it is sitting on a PE of 8-9 when the sector average is around 20. As the next election is not due until Jan 2017 the current Senate may hold it up but if the Senate changes after the election it may well pass.

The good news is of course a small co-payment will recover the minimal profit on the service and that's why it is a business and not a public service (essential as it may be ..). Demand for these services are on a growth trajectory but its simply a question of who pays.