Graham Perrett (Moreton, Australian Labor Party) Share this | Hansard source

because they were prudent enough to look after their private health insurance. That is a disgusting attack on the people of my electorate and all over Australia who have been prudent enough to have private health insurance.

The demutualisation of private health insurance funds has been a surprising bonus for policyholders. The accumulated surplus from the fund is distributed to existing members of that fund, and people like my mum and my sister will receive a bit of a windfall profit because they have been prudent enough to take out health insurance and have been financially able to do so. The downside is that the recipients of this profit are subject to capital gains tax. As the opposition has indicated, that is something they will have to put up with. The Rudd government was fair minded in trying to look after these people by bringing to the parliament this amendment that says that health insurance policyholders will not be subject to capital gains tax when their health fund demutualises. Obviously the opposition has indicated that this is not a smart way to do things. Instead, it is going to slap a capital gains tax on people who are already doing it a bit tough.

In the government’s eyes, this is great news for MBF and NIB policyholders. These funds were demutualised in the last financial year, so the policyholders who have received shares or a cash payment under these demutualisations would have had to include a capital gains tax in their 2007-08 tax return. However, as the government’s amendments are retrospective, people who have already lodged their return before this legislation is enacted will be entitled to have their assessments amended. As a lawyer, and with the Attorney-General in the House, we sometimes have concerns about retrospectivity, but this is a great piece of legislation in bringing in some retrospectivity—although, as the member for Stirling has indicated, there will be some problems in the Senate with trying to protect those people who had taken out private health insurance.

This gives certainty to policyholders of health insurance funds that have demutualised—all of those policyholders of NIB, MBF and others who might be going down that road. Under the Rudd government’s plan, they can have confidence that they will not incur any capital gains tax for the shares or payments they received. However, the member for Stirling and the coalition have obviously got some explaining to do in arguing that policyholders should pay capital gains tax.

The government is not taking this measure because Treasury decided to be extra generous. Rather, it is a vote of confidence in private health insurers and recognition of the sacrifices that people make to maintain their private health cover. As I indicated at the start—and to declare a possible conflict of interest—my mum and my sister are in MBF, so they would have received these benefits. I, too, have maintained private health cover for my family, both in good times and when people are ill. I am with Teachers Union Health, a closed fund. I know many Australians make sacrifices to have private health insurance for lots of reasons.

The Rudd government recognises that a viable private hospital system is essential to the delivery of quality health care in Australia. The private hospital system makes a significant contribution to the health system. In 2005-06, close to 40 per cent, or more than seven million, hospital separations took place in private facilities in Australia. This lines up with the number of Australians who have private hospital cover, which in March 2008 reached 9.5 million people, or 44.6 per cent of the population. Many of those would be in NIB and MBF. In the year ending March 2008 private hospital admissions reached 2.4 million. This removes a significant burden from public hospitals.

The Rudd government is also working with states and territories to strengthen our public health system. One of the most appalling legacies of the Howard-Costello government is its gross underfunding of the public healthcare system. Over the life of the Howard-Costello government, it left state governments billions of dollars out of pocket on public health through the funding administered by the Australian healthcare agreements. In June 2007 state and territory health ministers released Caring for our health? A report card on the Australian government’s performance on health care. This report found that, around the nation, the Howard-Costello government was ripping off the public health system by around $1.1 billion every year. That equates to about 350,000 additional admissions each year.

Under the terms of the current agreement, my home state of Queensland was short-changed around $2.6 billion. I do not have to tell you, Mr Deputy Speaker Scott, with your country constituents, that $2.6 billion buys a lot of surgeries, a lot of cataract operations, a lot of hip replacements, a lot of knee reconstructions and a lot of angioplasties—procedures that can change and save lives. It funds thousands of desperately needed doctors, nurses and allied health professionals, and it helps build and maintain modern health infrastructure that patients and staff deserve.

The Caring for our health? report also found a massive increase in patient numbers in Australian public hospitals. Between 1999-2000 and 2004-05, inpatient admissions increased by around 10 per cent, from 3.88 million to 4.28 million. The report found the coalition government was paying a smaller and smaller share of public hospital costs each year. In 2000 it contributed 50 per cent of the cost of running and maintaining public hospitals but, by 2005, that share had dropped to 45 per cent. Real people suffer because of the Howard-Costello ideological agenda, and the members opposite should be ashamed of themselves. The fact is that over 11 years the Howard government refused to face up to its responsibilities and effectively ripped the heart out of the nation’s public healthcare system.

This Rudd government is turning the tide. We are meeting our COAG commitment of $1 billion to be paid to the states to relieve pressure on public hospitals—hospitals like the PA hospital, which is across the road from my electorate; the QE II hospital, right in the middle of my electorate; and the Logan Hospital, which also services a lot of people in my electorate. We are negotiating a new, fairer healthcare agreement with the states and territories. All states and territories, along with the federal government, have committed to work together to ensure health funding delivers the best possible outcome for public health services throughout Australia. It is a new era of partnership when it comes to health. Isn’t it great to see state and territory governments working in true partnership with the Commonwealth—and I say that having worked for a state health minister in a former calling? The reality is Australians do not care where the money comes from. They do not care who is to blame. All they want is for the job to be fixed.

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