Rowan Ramsey (Grey, Liberal Party) Share this | Hansard source

I am addressing the Tax Laws Amendment (Medicare Levy Surcharge Thresholds) Bill (No. 2) 2008, the bill to raise the Medicare levy surcharge thresholds. The state healthcare system is creaking by anybody’s standards. We all read the newspapers on a regular basis: waiting lists, beds in corridors et cetera. The states are, by all accounts, according to the papers last week, demanding billions of the federal government to fix what they see as the problems in public health. This will indeed severely test the Prime Minister’s pledge to end the blame game between the states and the Commonwealth on the health portfolio. It is with surprise then that we see this bill coming forward to actually increase the load on the public health system.

I refer to moves in South Australia of recent times by the South Australian government to introduce a new country health plan. I have spoken about it in this place on a couple of occasions before. The South Australian government proposed that 43 hospitals in regional and rural areas be downgraded to GP Plus Health Care Centres, which is, I think, a public service euphemism for bandaid centres. There was a large degree of public outrage. There have been public meetings all over the state. In my electorate, we had 400 at a meeting at Cummins and 800 at a meeting at Yorketown, all outraged by the fact that these local services, these local hospitals, which local communities have worked very hard to build, were going to be downgraded. In fact, at Yorketown, the public were told by a health official that, when they needed more care than their local first aid centre could accommodate, people could just quietly travel the 4½ hours to Whyalla, which was going to be their regional hospital, and pick up the health care they needed there. In fact, this town is only two hours drive from Adelaide, so you can understand how the public would be outraged with some of these suggestions.

As a result of that, the government has had to recant and install a committee to go back and draw up a new country health plan. I am not surprised it has had to do that. But, on the basis of this, one has to ask what it was trying to do—and what it was trying to do was save money. The reason it was trying to save money is that hospitals are under pressure. We all know hospitals are under pressure. This move to increase the threshold will only increase that pressure on public hospitals. Historically, health as a proportion of GDP keeps growing. In 1987, it was 7.4 per cent of GDP. In 1997, it was 8.3 per cent of GDP. By 2007, it had grown to nine per cent of GDP at a time when our gross domestic product had grown by a number of times. This bill just loads up the systems further.

I would like to tell you a little about my involvement with country hospitals in the past before I came to this place. I spent 10 years on my local hospital board, seven as chairman, and three years as chairman of my local area health association. Money has always been short in public health. This is not a new thing just happening at the moment. Money is always short, and this will continue. Health is going to take an increasing part of the Australian economy over the next 40 years as we deal with our ageing population. One of the things we used to do was sit around and work out how, in a hypothetical way, we could divide up the health budget in a fairer and more meaningful way. At what stage do you stop providing services to people? When should we just let them pass away? When is the public dollar wasted? Thankfully, we have not reached that stage yet, and I hope we never will. That was always the absolute commitment of the people that we worked with, but it just brings home how difficult these balancing acts are.

We must ask what role private health insurance and the private hospitals play in this system. At the moment, we have 44.7 per cent of Australians, or 10.9 million people, who have private health cover. This is up from the 33.9 per cent—falling at two per cent a year—at the time the previous Labor government fell to the Howard government. I think, if we had allowed that situation to continue, we would probably be down to a level of 25 per cent of public insurance at the moment or lower. The industry would have collapsed. The government says that we on this side of the House want to force people into private health care. Far from it. We want to encourage people into private health care. We want them to make a choice which is good for them and good for Australia. Over the past dozen years or so, we have done this through the system of taxation rebates where 30 per cent rebates are offered to people under 65; 35 per cent for those from 65 to 70; and 40 per cent for those over 70. Add the Lifetime Health Cover and the Medicare levy surcharge. All of these programs were opposed by the Labor Party. The Labor Party has had the private health industry, the private hospitals and the private insurance industry clearly in its sights for many, many years. This latest move is just the latest expression of that.

Without those measures, as I said, we would probably be down to 25 per cent or lower. Billions of dollars would not clear the backlog. The premise of these measures is that it is better for the taxpayer to pay 30 or 40 per cent of patients’ hospital bills than to pay 100 per cent. Why not allow those who can in our community, those who have capacity, those who want to have a choice, to pick up the extra? That is what they get—they get a choice. To maintain that people do not want a choice is, of course, a ludicrous proposition. What holds people back is that they cannot afford the choice.

The government initially planned to shift the thresholds even higher to $100,000 for singles, and it drew widespread condemnation from the industry and from people at large. It is just a sign that the government really does not understand what the ramifications of this move will be. Predictions by Access Economics and Pricewaterhouse are for a dropout figure of around one million people by 2012. On original estimates, even the government figure of 644,000 in the rising unemployment situation that we face at the moment, which the government and the Treasurer have acknowledged only in the last few days, these would have to be conservative figures. Because the government was forced to acknowledge the problems, not just here but in the community at large and certainly in the Senate, the new amendments have dropped the thresholds to $75,000 for singles and maintained the $150,000 for couples.

Now the government figures show that only—only!—583,000 people are going to drop out of private health. The member for Braddon has just made a spirited speech telling us that we are overselling the fact that people are going to be dropping out of private health. I point out to him that the government’s own figures are saying that 583,000 people are going to drop out of private health. That is a very substantial number. While I am on the member for Braddon, I point out that he asked the question, ‘Why did the previous government allow the private health industry to put up its fees faster than the growth in the CPI?’ That is exactly what the current Minister for Health and Ageing said a little over 12 months ago when she was the opposition spokesperson for health, and as soon as she became the health minister she approved an increase of almost five per cent in fees. It makes you wonder. It is very easy to throw these stones from opposition, but when she was in the seat she acknowledged that health inflation runs in front of the CPI.

Only 583,000 people, by the government figures, are now going to drop out of their private insurance. That means that the taxpayer is going to pick up 100 per cent of the bill for those 583,000 people instead of 30 per cent of the bill. This will have serious ramifications and will be an ongoing impediment to the health budget going forward. As a result, we are going to need a number of new facilities around Australia that we would not have needed without these changes. One can only surmise that this is just the thin end of the wedge and that the government clearly has the private health industry in its sights, as the Labor Party has for the last 30 years.

We are going to need new facilities, and we will have underutilisation of the private hospital system that exists at the moment. You cannot shrink the market by seven to eight per cent and expect to be running at full capacity. Access Economics predicts that 770,000 extra incidents will end up in the public health sector on an annual basis by about the year 2012. The government talks of tax relief, saying that families need tax relief. Shifting the demand from the private health sector to the public sector will ultimately lead to higher taxes, not lower. There is no other answer. As we have to build these new facilities and fund the extra admittances, there will be an increased demand on the Australian taxpayer. Unbelievably, this policy will reduce government outlays on health. By the budget figure, there will be a saving of $354 million through payments of fewer rebates to fewer policy holders at the same time as putting almost 800,000 extra patients in public hospitals. Of course there will be extra strains on the system.

The government expects that the young and healthy will drop their private health insurance first—they are the lowest users of health services. Private health companies will have no choice but to raise their premiums. There is no allowance for the second wave effect. The government has no modelling to show what will happen once the premiums rise. At the moment it is basing its figures on the current premiums, but we know the premiums are going to rise. Older Australians are the biggest users of the health dollar and they have a track record of maintaining their health cover through thick and thin, but they cannot be stretched forever. There is no pension increase in sight, something that has been raised in this House on a pretty regular basis of late, and they will be asked to foot a heavier bill for their private health insurance. There is no doubt that large numbers of these people will say, ‘I can no longer do this.’ So this move, which on the surface has some attraction for the punter out there on the street, Mr Joe Average, will in fact lead to higher taxation for them in the long term, it will lead to added strains on the public health service, it will lead to unused capacity in the private health sector, and it should be opposed.

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