Sid Sidebottom (Braddon, Australian Labor Party) Share this | Hansard source

I do not like using the word ‘hypocrite’ or hearing the word ‘hypocritical’, but I will not hear that term levelled at us from members of the former government that ripped the heart out of the public health system and in particular our hospital system. The member for Moncrieff, who just spoke, ranted and canted about the public health system, but he was part of the government which tried to decimate that. Before he leaves the chamber he might like to hear the remainder as well. We do have a universal healthcare system called Medicare. Mr Keating and others in Australia can be proud of that. That universal healthcare system is paid through income tax and the Medicare levy. The rant and cant was loudly served up by the other side in very large quantities. Added to that was a drop of scaremongering for the pensioners and independent retirees on the Gold Coast. What we got was no argument at all and a failure to deal with the detail of the legislation, which I would like to have a look at.

I rise in support of the Tax Laws Amendment (Medicare Levy Surcharge Thresholds) Bill (No. 2) 2008. I reinforce that the bill is about helping the budgets of working families around Australia and providing choice. The Medicare levy surcharge is a one per cent increase on top of the Medicare levy for individuals, couples and families who do not choose to take out private health insurance. The second proposal that we have put up is to lift the threshold from the current $50,000 for an individual and $100,000 for couples and families to a more realistic $75,000 and $150,000 respectively. This bill also indexes these thresholds against wages growth in the future.

The bill is another move by the Rudd government to pick up the slack from the former government. Although they were quite happy to introduce the surcharge as far back as 1997, they did nothing to stop it impacting over the years on more and more individuals, couples and families and their household budgets and savings. When the coalition introduced the surcharge it was meant to apply to high-income earners. I remind members that the then Minister for Health and Family Services, Michael Wooldridge, said at the time:

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 would hardly consider an individual earning $50,000 or a family or a couple earning $100,000 today, and trying to meet the costs of living in today’s climate, to be high-income families or individuals.

I would also like to take a moment to try to cut through some of the hysteria that we just heard from the member for Moncrieff and some of the hysteria being peddled by those opposite. I particularly heard that in the template answer by the opposition spokesperson for health and, not unexpectedly, from members of the health insurance industry. Their claims about a mass exodus from health insurance because of the change are alarmist at the least, and I believe they are an insult to the intelligence of everyday Australians, many of whom have made the decision to take out private health insurance because they can see real benefits from the security it offers. To suggest they will jettison this security because of a change like this is extreme. But don’t take my word for it; instead, I will turn to the opinion of Monash University senior lecturer Charles Livingstone, from the university’s Department of Health Science. In the Age last month he looked at what he calls ‘the great lie about private health cover’ and he questioned the concerns of Family First Senator Steve Fielding and his concern for the poor:

Clearly, he’s been strongly persuaded by the private health insurance lobby’s dire predictions of the consequences of increasing their threshold for the 1% surcharge, a fairly modest change to the panoply of Howard-era incentives and penalties intended to prop up their business.

Dr Livingstone contended that the introduction of the levy surcharge in 1997 did not stop the membership decline in private health insurance. Two years after the introduction of the surcharge, membership had in fact fallen from 32 per cent to 30.6 per cent of the population. The 30 per cent rebate, introduced on 1 January 1999, saw only a 0.8 per cent additional uptake in its first year. It was not until the introduction of the Lifetime Health Cover in July 2000 that numbers actually turned around. It led to an increase in health insurance coverage from 32.2 per cent of the population in March 2000 to 45.8 per cent by September 2000, and that was particularly because of its penalty and the non-taxpayer contribution. So Dr Livingstone asked:

If the surcharge didn’t encourage anyone to take up health insurance, why would its adjustment induce an exodus?

It is a fair question. Dr Livingstone goes on to argue about the merits of private insurance overall, contending it would be better to invest more in public hospitals. That is a debate that is not relevant here at the moment; we will leave that for another day. Suffice it to say that Labor is already putting a real increase in funding into public hospitals and public health after 12 years of neglect and promotion of the blame game. No other place is more demonstrative of that than the government intervention in the Mersey hospital in my electorate of Braddon. Why did it take 12 years for it to take an interest in public health and public hospitals? The member for Moncrieff never commented on that, and he could not counter that.

The point made by Dr Livingstone is that this change should not be viewed as a major disaster for health insurers but taken as a benefit for families. It is a tax break, a tax relief from a tax trap set in 1997. Contrary to the scaremongering by those opposite and by members of the health insurance industry, the AMA and others, there are people reporting that those most likely to drop cover are those in the younger age bracket, who are generally more healthy and are not major consumers of hospital services anyway. So they are unlikely to cause a major increase in public hospital activity. Again, in the rant and the cant of the member for Moncrieff, there was no comment on that.

This bill is a revision of our original policy and should come close to the mark suggested by many as a reasonable amount for the threshold, including by the Greens and Senator Xenophon from South Australia and in the review by the Senate. It is also about giving average working families a choice to take out private health care if they feel it is the right thing in their circumstances but not to be slugged with a tax that they may not be able to afford.

I would like to refer to the work of Helen Keleher, Professor of Health Science at Monash University, who has some interesting comments to make, particularly in relation to some of the arguments thrown up by the member for Moncrieff and the opposition health spokesperson. One of the prime arguments against the government’s plan is that hospital emergency departments will be inundated by people who no longer have private health insurance. Every single template answer that popped up on the other side put that argument forward. It is a nonsense. Only a tiny number of private hospitals have an emergency department, and they are very expensive to use anyway. We do not rely on them for emergency services; the public hospitals provide the vast majority of emergency departments across Australia. That is a fact. Nor would all the people who decide not to renew their membership of a private health insurance scheme get sick all at once. You would get the idea from the other mob that anyone who drops out of a scheme is going to rush off to the doctor and to hospital and go and see all the allied health people who provide services all at once. It is an absolute nonsense.

Our taxpayers’ dollars have been subsidising the health insurance industry to the tune of more than $3 billion a year since 1999 through the 30 per cent subsidy of private health insurance premiums. But, as I mentioned before, the research of Dr Livingstone shows this has had very little effect on the numbers of new customers taking out private health insurance. Those opposite who argue for public dollars to prop up private schemes should explain—indeed, I would ask the next speaker from the opposition to explain—why various insurance products are not competitive and why they require a massive subsidy from the public purse.

What about the argument that millions of Australians face an increase in their health insurance premiums? Over the past few years the federal government has allowed the private health insurance industry to raise premiums by more than the consumer price index. They rose by 7.4 per cent in 2003, 7.6 per cent in 2004, eight per cent in 2005, 5.7 per cent in 2006 and 4.5 per cent in 2007. Indeed, between 2002 and 2007 premiums increased by 37.9 per cent while the CPI increased by only 13.9 per cent. So, if such price rises are really necessary, people with private health insurance, like me, have a right to ask themselves if they are getting good value for money. Are the funds efficient? Have all the you-beaut extras they offer really increased the package quality to match the price increase? Surely private health insurance can do better than help people ‘jump the queue’, as Charles Livingstone puts it bluntly.

We are about encouraging people to do what is best for their health and for the health of their families. This bill is coupled with a major increase in the support for health services around the nation, as I mentioned earlier. And nowhere is that more evident than in my own electorate of Braddon. No doubt everyone in this place has heard of the Mersey Community Hospital at Latrobe, which some chose earlier to use as a political football. I would like to bring the House up to date with what has happened at the Mersey, a major Commonwealth hospital. You are probably aware that the Commonwealth reached an agreement with the Tasmanian government to manage the Mersey Community Hospital on our behalf from 1 September 2008. In recent months the Commonwealth has provided $1.1 million worth of necessary equipment and refurbishments that have assisted staff to continue to provide effective and safe management of patients at the hospital. Fortunately, we have been able to equip a high-dependency unit, which is now fully functional, meeting the healthcare needs of patients including those suffering from heart attack, stroke, severe asthma and other conditions requiring specialist care and monitoring.

As part of the Commonwealth’s ongoing commitment to the local community, up to $180 million will be provided over three years to Tasmania, exclusively for the management of the Mersey Community Hospital. This funding will ensure the current range of services is maintained. I would remind you that, apart from the intervention and the rhetoric that went with it, it is the Rudd government that has finally had to deal with the arrangements to give this effect, and that is $180 million over three years. That is a lot more than the $45 million that was thrown around by the former health minister and the former Prime Minister, the former member for Bennelong, when they were talking in this House and in Tasmania.

A dedicated general manager will be employed at the hospital to ensure continued local management. Services that will continue at the Mersey Community Hospital include the high-dependency unit I mentioned, a 24-hour emergency service, medical and surgical services for both day surgery and inpatients, low-risk obstetric services, low-risk inpatient paediatrics and low-complexity inpatient acute medical services. The Commonwealth funding will also allow for the expansion of a range of services, potentially including renal dialysis, more elective surgery, a regional rehabilitation unit for the north-west and transition care for older patients. To ensure the continuity of care all current staff have been offered continuing employment with the state government with no disadvantage. Finally, a north-west regional community advisory body will be established to oversee health outcomes for the region, and of course the Mersey will play a very important part in providing that health care in my region.

To conclude, the Rudd government has made considerable commitments to my electorate in terms of health outcomes. These range from $1.25 million for mental health in the region through the Sisters of Charity trauma counselling services, which provide services for the whole of Tasmania but are based in my region, to an offer of up to $7.5 million for two super clinics in the Devonport and the Burnie areas. I was very pleased to have attended two meetings in relation to the potential of the super clinics and what they can mean for a region. I hope that a number of innovative models will come forward to access that funding and provide even better healthcare services.

I would also like to acknowledge the work of Jane Holden who is currently the CEO of the North West Regional Hospital, which is based in Burnie but in actual fact she will have overview of the Mersey as well. Jane is a great breath of fresh air to my region, someone who believes in an integrated approach to providing health services, someone who believes that the hospital is really the last resort rather than the first resort, someone who believes in linking with ITC but working very closely with all health professionals and someone who sees the GP as the hub of health care, with the allied health service providers and the hospital playing their part in relation to that.

A reduction in the Medicare levy surcharge may not be something that people see as a direct benefit to the health of the people of my region or Australia but it will play its part in providing genuine choice for those who want it and considerable tax relief for those who need it. It will help restore the balance for many families and encourage them to look at their healthcare needs, and it is with this in mind that I commend the bill to the House.

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