Shayne Neumann (Blair, Australian Labor Party) Share this | Hansard source

I am standing here a little earlier than I thought I would be, but I am pleased to be able to speak on this piece of legislation, the Tax Laws Amendment (Medicare Levy Surcharge Thresholds) Bill (No. 2) 2008. I rise to speak in support of the bill. The Medicare levy surcharge is a one per cent increase on top of the Medicare levy for individuals and families who do not have private hospital cover. The threshold is currently set at $50,000 for individuals and $100,000 for couples and families. This piece of legislation will increase the threshold to $75,000 for individuals and $150,000 for couples and families, and it will index these thresholds against wages growth in the future. I fully support this piece of legislation.

Originally, the previous, coalition government brought in the Medicare levy surcharge situation and it was supposed to be geared towards high-income earners, but in fact, as wages grew, more and more people became trapped and had to pay this particular tax in circumstances where they never actually anticipated they would have to. The member for Dickson, now a shadow minister, was then the Assistant Treasurer. In August 2006, he was asked a question on notice. He revealed that, in 1997, 167,000 people paid the surcharge; by 2001, 198,000 people paid it; by 2002, 235,000 people paid the tax; by 2003, 282,000 people paid the tax; by 2004, 362,000 paid the tax; and by 2005-06 it had risen to 465,000 people paying the tax. This is quite outrageous.

Effectively what had happened was that a tax trap had been set by the previous, coalition, government which caught more and more working families, as the minister for health described it. The figures I have just outlined she described in her second reading speech on 25 September 2008, and I think it is worth the Australian public actually knowing these facts when we consider this bill. So the previous, coalition, government set this tax trap which caught more and more Australians to the point where people earning below what a lot of people would describe as an average full-time wage were faced with a stark choice that affected their hip pocket: the choice between taking out private health insurance, which they really could not afford in the circumstances, or paying a tax which was only supposed to apply to high-income earners. That is the legacy of the coalition when it comes to the Medicare levy surcharge: a tax was set that trapped more and more Australians to the point where nearly half a million Australians were trapped by this tax.

So what did we do? We said in the budget that we would raise the threshold to $100,000 for individuals and $150,000 for couples and families. We set about effectively giving the Australian public some tax relief. What did the coalition do? They opposed it on spurious grounds. I think that what has happened is they have listened, but they have listened to the wrong people. They have not listened to the working families in this country; they have listened to the big private health insurers. We want to give tax relief to Australian families and individuals—we want to do that—but we cannot get it through the Senate on the basis of what we previously announced. We have talked to the private sector, we have talked to those sitting on the crossbench just across the corridor, we have talked to other stakeholders and we have come up with an alternative. Instead of lifting the threshold for individuals to $100,000, we are now proposing to increase it to $75,000 while retaining the couples threshold of $150,000 which we proposed in the budget. We have listened carefully and we want to help.

The measure that we are trying to bring through this House today will give immediate tax relief to about 330,000 Australians, and that is a lot of people. Put it in the context of those people—465,000 Australians—paying this tax in 2005-06. For an average income earner, earning about $60,000 a year, this will deliver about $1,200 in their pocket in the first year. For those people who live in my constituency of Blair in Queensland, that is a lot of money. I think the average taxpayer and the average person living in my electorate would think that $1,200 is a lot of cash. If they had that money in their pocket, it would be a bit easier when they went to the supermarket, it would be a bit easier when they had to buy schoolbooks for their kids, when they had the choice of being able to afford to buy either shoes for soccer or uniforms for kids at school, or to take the kids to the movies, or just to buy some luxuries that high-income earners can afford. One thousand two hundred dollars is a lot of money, and if they had that in their pocket they could do a lot with it. It really is incumbent upon those sitting opposite to pass this legislation, not to oppose it here and not to oppose it where the red carpet exists. We want to give real choice to families and we want to put money back in their pockets. We do not want to force them into an alternative which they cannot afford to pay.

If the coalition had indexed this, like they should have, you would be looking at something like $76,000 for individuals and $152,000 for families. That is what the Australian Private Hospitals Association says. Access Economics, in a report for the AMA, and the minister in her second reading speech said a similar thing: a $70,000 threshold for an individual and a $140,000 threshold for a couple. Access Economics said, and the minister reported, that this would restore the system to its previous real levels if this were the goal.

I wonder what the goal of the previous coalition government was and what their goal is now. We have suggested $100,000 for individuals and $150,000 for couples, and they will not cop it. They will not allow tax relief to the Australian public. So we put up $75,000, and we are hoping that they will do the right thing. I am not confident, because it is not always in their DNA to do the right thing when it comes to helping working families in this country. You only need to look at the Work Choices legislation of the last parliament to see what they really think about working families.

Fifty thousand dollars is not a high salary. That is the current level for an individual. As Australian Liberal Senator Simon Birmingham conceded, it is not a high salary. He said it is a working salary. And it really is. If you earn $50,000, you are not rich—you struggle to pay your mortgage and you struggle to pay your education expenses for your kids. It is hard to put food on the table for your family and for yourself. For anyone, it is hard to meet the costs of living. Those opposite should do the right thing by those on low incomes. It is important to provide relief for the Australian public in this regard.

We support the idea of the public and private sectors being involved in the health needs of our community. In my electorate we have some good public hospitals. We also have a great private hospital in Ipswich, St Andrew’s Hospital, not far from where I live. We have got a terrific public hospital, Ipswich general hospital. I had the great privilege for many years to serve on the local community health council. It was a great privilege to go to the rural hospitals in my electorate, places like Boonah and Laidley and others, to see the care that nurses and doctors and those allied health professionals provide.

The public use both public and private sectors when it comes to their health needs. What we are doing here is about getting rid of an unfair tax on average, battling Australian households. The income threshold for the Medicare levy surcharge has not changed since 1997. That is 11 years ago, and it is high time it was changed. When it was first brought in, the then Minister for Health and Family Services, Michael Wooldridge, said:

High income earners will be asked to pay a Medicare levy surcharge if they do not have private health insurance. These are the people who can afford to purchase health insurance …

I really wonder about those opposite. In the last 11 years, have they gone to the supermarket, have they bought a car, or have they bought a house or paid rent for premises? The cost of living has increased enormously during that time. We have seen, correspondingly, salaries go up during that time as well.

They come up with a number of arguments which I think are quite fallacious when it comes to this particular legislation. They claim it is going to put too much of a burden on our public hospital system. Let me tell you: we have put in $1 billion extra to help states and territories with respect to the public health and hospital system in this country and $600 million for elective surgery. That is in great contrast to those opposite. Those opposite failed when it came to this area.

On 5 October last year the Australian Institute of Health and Welfare released a report which exposed that from 1995-96 to 2005-06 the former coalition government share of public hospital funding decreased from 45.2 per cent to 41.4 per cent. Those state and territory governments that they much maligned took up the slack. They increased their funding over the same period from 45.8 per cent to 50.6 per cent. Even the former Minister for Health and Ageing, the member for Warringah, had to concede that. It took a bit of oral surgery to get it out of him, but he had to concede that that was what had happened. Those opposite failed. It is a bit rich for them to give us lectures when it comes to the public health system in this country. It is quite extraordinary they go to that extent.

You have to ask why they are complaining about this legislation. If they had such a great commitment to the public health system of this country, why didn’t they put more money into it? Why didn’t they put in the extra billion dollars that we put in? Why didn’t they put in the $600 million that we put in for elective surgery? I can tell you why: because when it comes to so many things of a public nature—whether it is public education, public health and the like, or even Medicare—they do not really believe in it. They say they do, but they do not. They defund it if they get a chance. If they ever come back to sit on these benches, we will see the same. It is the same thing with education.

It is about time they did the right thing. It is about time they listened to the Australian taxpayer who wants a break. It is about time they put up or shut up and it is about time they showed some degree of commitment to helping those they claim they are helping, those they should have helped for so long. It is time they actually delivered and stopped thinking that we are living in a mid-1970s time warp where they can obstruct our legislative agenda and try to cut back the surplus. I really wonder if they think it is 1974-75. We have moved beyond that. It is more than 30 years since that time. It is about time they stopped obstructing our legislative agenda, which the people of this country voted for last year. Let it go through. Let the government govern. Give the Australian taxpayers a break when it comes to this particular piece of legislation. It is time they did the right thing by the Australian taxpayer. I commend the bill to the House.

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