Bernie Ripoll (Oxley, Australian Labor Party) Share this | Hansard source

Always, Madam Deputy Speaker. As I said—(Quorum formed) I have to thank the opposition for bringing in an audience for me. I always appreciate that; it certainly does make speaking in here a lot more fun. It is a bit rich of the Liberal Party to come in here and complain about the amount of time they have to speak on bills, about democracy, about being heard out, about not being gagged and about getting enough speakers, but when somebody from the government stands up to speak on a perfectly legitimate bill, they try to shut us down. Calling quorums on people trying to speak on the Tax Laws Amendment (Medicare Levy and Medicare Levy Surcharge) Bill 2004 is a little bit too rich.

The important thing about the bill is that it brings into line some very important issues: readjusting thresholds and making sure that the right people are paying the right amount when it comes to levies and surcharges, and that people are not being disadvantaged by either the Medicare levy or the Medicare levy surcharge. This bill brings into line the low-income thresholds and the Medicare levy surcharge provisions, and they will be increased in line with the consumer price index. These increases will apply to 2007-08 and later income years as well. It also makes sure those thresholds are aligned for individuals as well as for families.

As people understand, the Medicare levy is imposed at a flat rate of 1.5 per cent on a resident’s entire taxable income. However, low-income earners are not liable for the Medicare levy. In addition, a person does not pay the full 1.5 per cent rate of Medicare levy once their income exceeds that relevant threshold. What we have done in our amendments is to make sure that those thresholds and levies are at the right position. Low-income individuals and families will continue to be exempt from the Medicare levy or surcharge. That means that because the Medicare levy thresholds have not been changed since 1997, this is a huge leap forward to catch up to where those levies ought to be. I will give an example: where those thresholds applied on incomes of $50,000 for individuals and $100,000 for couples without private health insurance, the Medicare levy surcharge threshold will be changed to $100,000 for singles and $150,000 for couples.

I know that these changes have attracted some criticism, although I think they are very good quality moves. The criticism has come from the Australian Health Insurance Association and from the Australian Medical Association. They have expressed concerns that this may lead to a mass exodus of people from private health insurance schemes and that, in turn, it will stretch the public hospital system. I assure them that while some people may exit the private health insurance system because of these changes, it is a proper readjustment in terms of the impost that was placed on those individuals in the first place. To say that it will stretch the public hospital system is without base. The reality is that there are a whole range of people who are in private health insurance, particularly young people, who are only there because of penalties they otherwise might face. They take out the very minimum of cover so they do not have to pay the surcharge based on their income, and then take out a copayment system where they are trying to get upfront benefits for that. So there is no real win in it for them or for the private health insurance companies. This will realign those systems to be a proper reflection of where they should be. It is also an advantage that will increase the Medicare levy low-income threshold for pensioners below age pension to ensure that they will not incur a Medicare levy liability where they do not have an income tax liability. This will happen from this budget forward.

As I said, I did not want to speak long on this bill but just make a number of points. This bill is good policy, it is keeping the commitment that Labor made prior to the election and it is a readjustment—something that is long overdue, something that the previous government should have done a long time ago and did not do. We will be very keen to follow through on these amendments. I would suggest that maybe the opposition look very closely at these amendments and support them. I would also suggest they have a very close look at the way they are using interjections, using points of order that are not points of order, using quorums and whatever other mechanisms they think are available to them to disrupt debate and take away the opportunities of government members in this place to have a fair and open hearing—something that this opposition was very good at when they were on this side.

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