Nola Marino (Forrest, Liberal Party) Share this | Hansard source

I want to speak against the Tax Laws Amendment (Medicare Levy Surcharge Thresholds) Bill (No. 2) 2008. I and many others spoke against the government’s initial Tax Laws Amendment (Medicare Levy and Medicare Levy Surcharge) Bill 2008, which attempted to increase the Medicare levy surcharge thresholds for individuals from $50,000 to $100,000 and for families from $100,000 to $150,000. This No. 2 tax law amendment bill proposes to lower the income threshold level to $75,000 for singles.

How can these amendments reduce financial pressures on working families? The government must realise that its proposed legislation is not wholly directed at working families. People who are currently in private health insurance also comprise single people both young and old. Low-income families and singles on incomes below the threshold levels would be adversely affected because they would not benefit from the tax cut but would face higher health insurance premiums as a result of fewer people taking out health insurance. Lower income families would simply fall out of the private health insurance market and have no alternative but to rely on the public health system.

A number of senior constituents in my electorate of Forrest have called me to discuss what the government’s proposed legislation would mean to their private health insurance premiums. They are most concerned when they understand the detail of the proposed legislation. It stands to reason that those who benefit least from health insurance will be the first to leave the system. They would be those with good health, the young and fit. Senior people can see the logic of why younger healthier people and also low-income families would withdraw from private health insurance, which would leave a smaller pool of older Australians reliant on their private health insurance. They can also see that ultimately premiums will drastically increase and they may no longer be able to afford the private health insurance that they have maintained to give them some level of surety so that, should they need medical treatment or hospitalisation in the ensuing years, they will be able to receive it and not have to wait in the never-ending queues for elective surgery as a public patient.

Pensioners cannot cope now with the higher cost of groceries, fuel and day-to-day living expenses. Most fear that they will not be able to afford to pay higher premiums for their private health insurance. If the government believes that this will help working families, how will it explain to working families in the future, once the family has pulled out of private medical insurance, why it is they cannot get the necessary medical treatment and why there are queues of public patients before them? This will ultimately put an unsustainable burden on our public hospital system—a system which is struggling to cope now.

What we do need to concentrate on is assisting in the improvement of medical services to all Australians, particularly in regional areas and areas where our communities are telling us that there is a problem. Mostly this relates to problems of shortages as in my electorate of Forrest, where we are certainly suffering from a shortage of doctors. We need to attract more doctors to regional areas and ensure that they remain in regional areas. To this end, a lot more work needs to be done to reform the formula used by both the federal and state governments in calculating the doctor-patient ratio and in determining state areas of unmet need and districts of workforce shortages.

As I am focused on representing the residents in my electorate of Forrest, I will not support the proposed bill because it is not in the interests of my constituents. The proposed amendments will not only affect those people who currently have health cover and wish to retain it but also affect those people who calculate that they do not need private health cover because they will not have to pay the Medicare levy surcharge. Ultimately, it will affect communities because of the shift to reliance on public hospital facilities. The Labor government suggests it will deliver tax relief to working families struggling with household budgets, meaning they will have more money left because they no longer need to pay for their private health insurance premiums. In reality, they will need more funds to pay for their health when in the future they need medical treatment either elective or emergency. The exodus of people from private health will create an enormous strain on our health system.

Western Australia, and in particular the south-west, is already facing shortages—not enough beds, delays, cancelled surgery and emergency departments of major hospitals not coping with demand. According to the Private Health Insurance Administration Council, the private health insurance hospital coverage rate in 2007 for Western Australia was 47.9 per cent. This was the highest in Australia in 2007, with the closest being New South Wales at 45 per cent. There has been a steady increase in the number of south-west residents taking up private health insurance, not only because of the incentive of the 30 per cent rebate but also due to the fact that people know the public health and hospital system is not working for them.

In January 2008 the Australian Health Insurance Association’s national survey of private health insurance funds in Australia reported that people in my electorate with private health insurance represented 56 per cent of voters. This again is higher than the national average of 44.7 per cent. There are many senior residents in my electorate who have raised their concerns with me that, if premiums increase by as much as 10 per cent, they will no longer be able to retain their private health insurance policies—and these are policies they have budgeted for and gone without luxuries for because they want to maintain private health insurance in their later years.

Some 44.7 per cent of the Australian population is now covered by private health insurance. In the 12 months to June 2008 the biggest growth of any age group to take out private health insurance was in the 25- to 29-year-olds—an increase of 53,000 people. If this policy is passed, up to one million people will drop their private health insurance and end up in our state health systems. Even with the expected younger age group exiting the private health system, the government has ignored advice from Treasury which predicts that about 57,000 Australians aged 65 and over will drop their private health insurance. The AMA has estimated that something like 700,000 to 800,000 Australians who are insured will drop out. The government itself admitted it did not take into account that many of these would be families and that children in those families would not be covered and would fall into the public paediatric hospitals.

What the government intends to save by not paying private health insurance rebates for all the people they predicted would drop out based on their change in the Medicare levy surcharge is minimal compared to what it will cost across Australia to support the states and territories in bailing out the public health system with the increases in demand the hospitals will face. State public hospitals cannot cope with the level of demand now. One of my constituents, Mr Murray Upson of Dalyellup, recently underwent a knee operation in Bunbury. It was not a good experience for him in hospital. He observed a chronic understaffing of nurses on the ward, leading to a very stressful time for staff and patients. During the night he had to wait three hours for painkillers, and when the overworked and stressed nurse finally came to him he felt even worse for taking her away from her other duties and actually apologised for being in pain.

This bill will cost government, it will cost households and it will cost our health system. When close to one million people both young and old drop out of private health insurance, they will fall into the public hospital system. The demand will increase, but it will also mean that the pool for private health insurance will become small and private health insurance premiums will go up. The AMA has predicted that premiums will need to increase by 10 per cent per annum, which will make it unaffordable for many Australians, and so the demand will increase. I do not support this bill.

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