Apply Adam Smith to dentistry to keep cavities away

Adam Smith wrote in The Wealth of Nations, ‘people of the same trade seldom meet together, even for merriment and diversion, but the conversation ends in a conspiracy against the public, or in some contrivance to raise prices.’

If alive today, Smith would not be surprised at attempts by the Australian Dentists Association (ADA) to protect the incomes of Australian dentists.

Following the advice of the Australian Workplace Productivity Agency, the Abbott government recently opted not to tighten skilled migration rules on dentists. Dentists remain on the Skilled Occupation List, meaning foreign workers can come to Australia and apply for a permanent visa without requiring a sponsor.

The decision means more trained dentists can work in Australia, which means more competition between dental practices for patients. This can only be a positive outcome for consumers, as increasing the supply of immigrant dentists will put downwards pressure on prices.

Dentist fees can be a determining factor for whether families on middle and lower incomes receive basic dental treatment. Increasing the supply and lowering the cost of dental care can therefore increase access to necessary dental services.

This is not the view of ADA, which described the government’s decision on the skilled migration ‘criminal,’ claiming local dentist graduates would ‘cop it.’

There is nothing new about the ADA putting its member’s interests ahead of the public interest. Last year, it called on the government to cap the number of university places for dentistry at 460 to address a purported ‘oversupply’ of dental graduates.

Restrictions on the movement of dentists into the Australian market, either through constraining skilled migration or restricting student entry, are designed with the same intention – to keep prices high and prop up dentist incomes.

According to Graduate Careers, dentistry remains the highest-paid field of education, with 2012 graduates starting on a median salary of $80,000, compared to the average on $52,000. In addition, 83.6% of dentistry students found full-time employment within four months of graduation.

Dentists are hardly doing it tough. This group of well-off professionals do not need their incomes protected by the government at the expenses of the best interests of middle and low income families.

Alexander Philipatos is a Policy Analyst at The Centre for Independent Studies.