Margaret May (McPherson, Liberal Party, Shadow Minister for Ageing) Share this | Hansard source

The Tax Laws Amendment (Medicare Levy Surcharge Thresholds) Bill (No. 2) 2008 is the second bill the government has introduced to seek to increase the Medicare levy surcharge thresholds for individuals and for families. The coalition opposed the initial proposed changes to the Medicare levy surcharge threshold and we will be opposing this second attempt at the bill to increase the Medicare levy surcharge thresholds on taxable annual income. Let us be clear about this: the Senate voted down the government’s first bill of proposed Medicare levy surcharge changes on 24 September because it would have hurt the most vulnerable in the community, forcing up private health insurance premiums and blowing out public hospital waiting lists.

The legislation is fundamentally flawed. This second bill, amended slightly with higher income thresholds, will still adversely affect older Australians—those people on fixed incomes, those who are in most need of a robust health system. This bill proposes that singles earning up to $75,000 per annum and couples earning up to $150,000 per annum will be able to opt out of private health cover without incurring the Medicare levy surcharge. These changes will see people drop out of private health insurance in vast numbers, leading to higher premiums and increased usage of our public health system—a public health system that is already straining and already not delivering. The bill we are debating affects an already stretched public health system, as I have said. It fails the Australian public now. It is going to continue to fail all Australians if this bill is passed through this House because the public health system will not be able to cope with the increased numbers of Australians on those public waiting lists.

We already have ineffective state Labor governments demanding a federal bailout of their failing health systems. Yet the Prime Minister, the man who promised to end the blame game, is pursuing legislation that will hit the public health system hard, increasing waiting lists. People will have to wait for surgery. In time I have no doubt that, stretched to the limit, we are going to see a compromise in the type of health care and the levels of health care that are delivered to all Australians. The budget papers reveal an expected saving in 2008-09 in reduced expenditure on the private health insurance rebate. Make no mistake about it, this bill is not about a tax cut for battling Australians; it is about saving dollars for the Rudd government.

Private health insurance participation levels under the Howard government rose to 44.7 per cent as a result of three initiatives designed to work together: the 30 per cent rebate, Lifetime Health Cover and the Medicare levy surcharge. In August this year the Private Health Insurance Administration Council released figures showing a record 10.9 million Australians held private health insurance. These figures demonstrate that people want choice when it comes to health care. In contrast, this bill translates to a reduction in private health insurance participation of close to 600,000 people, on government estimates. Access Economics estimates that by 2012, even with revised thresholds, up to one million people will leave private health insurance or not take it out. Further, Treasury has revealed that it expects around 57,000 Australians aged 65 or over will drop their private health insurance. What these figures translate to in real terms is more hardship for our older Australians. Those people on fixed incomes, our pensioners and self-funded retirees, will be the hardest hit, and these are the people who need to keep their private health insurance. Is this the legislation legacy the Rudd government is aiming for—to leave pensioners in the lurch when they need it the most?

Cost of living pressures are biting hard for pensioners, and with so many expected to drop private health insurance it is only a matter of time before premiums rise for the older Australians who do retain their cover. Older Australians are the biggest claimants on private health insurance and often they keep private health cover while forgoing other spending to ensure they will not be on public hospital waiting lists for long periods of time. If premiums increase—and they are predicted to rise by up to 10 per cent—due to a decrease in private health insurance membership then those on fixed incomes may be forced to give up their private health cover, causing a real crisis in public health in Australia. The comfort and security that elderly and chronically ill Australians had through affordable health insurance is at serious risk with the introduction of this bill.

The Rudd government has made it abundantly clear that it does not care for the welfare of older Australians. It has sidelined and ignored them since winning office last year, and this latest abandonment cannot be allowed to go unchallenged. This bill in no way assists older Australians, self-funded retirees, carers and families on low incomes. In reality it is a hazardous measure, as it undermines the health and security of people on fixed incomes, particularly older Australians—those Australians who need health care the most. These people will have to make a choice between the increased cost of private health insurance or sitting on a long public hospital waiting list. Unfortunately, the stretched budgets of Australian families will win out in many homes, as Australians on fixed incomes need to maintain a measure of modest living standards and the cost of increased premiums will in many cases price them out of the market.

I strongly oppose this bill. It is backwards policy and an added burden on a public health system that is already on its knees. The Prime Minister promised to end the blame game, so I cannot understand his logic in putting further pressure on the struggling public health system, on our public hospitals. I would be very surprised if there were one state health minister in this country who supported the initiatives in this bill. Australia is facing considerable challenges with its ageing population. Rather than implementing policy that will help meet those challenges, this measure jeopardises the health and wellbeing of older Australians, Australians on low incomes, those on fixed incomes, self-funded retirees and pensioners. The changes will see a reduction in revenue of around $660 million but a government expenditure saving of $960 million, as it will not have to pay the 30 per cent rebate. Overall this will result in a saving of $300 million.

Does the Rudd government really want to penny pinch on legislation that affects those with the least amount of disposable income? In the current financial climate older Australians need the government’s support more than ever. No matter how the Rudd government tries to spin this one, it is older Australians who will ultimately suffer. If they stay in private health insurance then they will face increased premiums and if they drop out then they will face long public hospital waiting lists. Older Australians deserve better. I challenge this government to think hard about what they will do to support those on fixed incomes, who are struggling to meet rising costs of living and the rising cost of groceries and who now will also be worried about their health and wellbeing. There was no mandate for this legislation at the last election. In fact, the Prime Minister did not share his legislation with the Australian public before going to the election last year. He does not have a mandate to introduce this legislation, and those of us on this side of the House will be opposing the legislation for the same reasons we did the first time.

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