Michael Keenan (Stirling, Liberal Party, Shadow Assistant Treasurer) Share this | Hansard source

We know that you are there, Bill. This is a government that is already, by the actions that it has taken in this House tonight, arrogant and drunk on power. The opposition opposes this bill. We oppose it because it is likely to result in a drop-off in the numbers likely to take out private health insurance. In fact, what we know is that the effect of these bills will be to put almost half-a-million more Australians into already long public hospital queues.

Compare that with the record of the coalition government. Through a series of measures—such as a 30 per cent rebate on premiums and Lifetime Health Cover, which allows health funds to charge different rates for people who join at different ages, thereby rewarding loyalty and encouraging people to join early and maintain cover—we rescued private health insurance, bringing membership levels up to a sustainable 44 per cent of the population, compared to 34 per cent under Labor before we came to office in 1996. These measures have led to long-term stabilisation of the private health insurance industry, thus taking the pressure of Medicare. More than 55 per cent of all hospital procedures are now done in private hospitals.

Contrast that with this disastrous Labor budget. The financially and physically fit will no longer be taking up private health insurance. Young people, who are less likely to make claims on their private health insurance policy, are most likely to drop their cover. They are the best customers for private health insurers, so this decision of the government will impose great financial strain on the private health sector. This leaves pensioners, the elderly and the sick, and those who know that they are going to need their private health insurance, to face higher health insurance premiums. Private health insurance adds money to the health system overall. Reducing the premium inflow and reducing the government assistance through the rebate will reduce the assistance available to Australians through the public system.

Health insurance is now one of the key parts of the CPI. A decision that will lead to higher prices for private health cover will feed into the CPI. How can the Treasurer or the Prime Minister sensibly claim that this budget will keep downward pressure on inflation? We are here today debating a decision that will have exactly the opposite effect. There are estimates that these bills will have an inflationary effect of around 0.17 per cent, reflecting an approximate 10 per cent increase in prices for premiums. Clearly, the cost of private health insurance is going to go up. As people stop renewing their private health insurance, health insurance costs for everybody else will go up. What did this tricky Prime Minister do in the lead up to last year’s election?

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