Nicola Roxon (Gellibrand, Australian Labor Party, Minister for Health and Ageing) Share this | Hansard source

in reply—I thank the members who have taken part in the debate on the Tax Laws Amendment (Medicare Levy Surcharge Thresholds) Bill (No. 2) 2008. This bill will increase the Medicare levy surcharge thresholds for individuals and families, delivering immediate relief to many thousands of Australians on modest incomes, as we have heard from many speakers on this side of the House. The surcharge imposes a one per cent increase in the Medicare levy liability on individuals above the threshold who do not have private health insurance for hospital cover. This bill increases the thresholds from $50,000 to $75,000 for singles and from $100,000 to $150,000 for couples and families. The amendments will apply to the 2008-09 year of income and later years.

In addition, the singles threshold will be annually indexed to movements to average weekly ordinary time earnings and will increase in $1,000 increments. I note for the House that, in order to ensure that taxpayers are not disadvantaged by the change in the singles threshold that was proposed in the budget announcement, the law will be amended so that as long as the taxpayer obtains appropriate private health cover before 1 January 2009 they will avoid the Medicare levy surcharge for the period 1 July to 31 December 2008.

The Medicare levy surcharge was introduced in 1997 with the stated goal of targeting high-income earners. Wages have increased more than 55 per cent since then, pushing many people on modest incomes who cannot necessarily afford private health insurance into the net. Hundreds of thousands more Australians on modest incomes have been paying this tax each year as the threshold lost relevance with wages growth. Families with two income earners on $60,000 each who have been paying this tax would get relief via this bill of $1,200 in a year, an amount not to be sneezed at—although the Liberals are very dismissive of it.

We need to remember that these thresholds were not developed through some scientific or empirical methodology. Former health minister Wooldridge has admitted that they were negotiated with Senator Harradine over a bottle of Jameson whiskey.

The increase in the thresholds delivers tax relief and, if passed, will help reduce financial pressure on many working families who would have previously been subject to the Medicare levy surcharge. This measure will provide an immediate benefit for 330,000 taxpayers who will no longer be liable for the Liberals’ unfair tax. In addition, it will benefit over two million Australians by providing them with a real choice in their decision to take out private health insurance without the imposition of a penalty. That choice is supported by a rebate of between 30 per cent and 40 per cent for those who do take out insurance, but the tax penalty will only remain for those well above the average wage.

The Liberal’s new health spokesman has not covered himself in glory in debate on this particular bill. He said that if we wanted to provide tax relief we should use the tax system. Excuse me: this is actually using the tax system. The tax his government increasingly used as a penalty is paid through the tax system. This is a tax laws amendment bill. So that argument is a particularly silly proposition.

Those opposite have said that this measure will drive hundreds of thousands of people to join hospital waiting lists, painting a picture that all 330,000 people who will get tax relief if this measure is passed will immediately be struck ill or need a hip replacement—something we of course know is not true. In fact, the 330,000 who most immediately benefit from this tax relief are the ones already reliant on the public health system. They cannot add further to the waiting lists if they have needs; they are already on those lists and the Liberals are ignoring those people.

If we want to look at public hospitals and waiting lists, let us look at what we have already done. In contrast to those opposite, who when they were in power pulled $1 billion out of hospital funding, this government in its short time in office has already injected an extra $1 billion back into our public hospitals. The government has also committed a further $600 million to reduce elective surgery waiting times, especially for those patients who have been waiting for longer than clinically recommended. Already more than 14,000 people have had surgery as a result of this Commonwealth money for elective surgery blitz. I see the opposition spokeswoman for ageing rolling her eyes, but I need to tell you that that is 14,000 more people than you helped during your entire time in government. Not a cent of Commonwealth money during the period of the Howard years was targeted towards elective surgery, so this new-found concern by those opposite about public hospitals is simply fake.

Further, we will establish a $10 billion health and hospital fund which will be available to fund major health infrastructure, new medical technologies, new medical research facilities and other infrastructure that will help to drive the reform that is needed in our health system. This is the biggest Australian investment in health infrastructure ever.

The government has committed to maintaining the private health insurance rebate, which provides support to the private health sector to the tune of approximately $3½ billion a year. Contrary to some of the overblown contributions from those opposite, Labor is far from throwing the private health sector out into the cold. In fact, the government has expressly made it clear that it believes the old paradigm of a split between public and private health systems is no longer a viable policy perspective if indeed it ever was.

We have also committed to maintaining the Lifetime Health Cover measure, which kicks in at the age of 30. We can see that this amendment bill is not an isolated reform. It manages to provide much-needed tax relief and at the same time it has been coupled with a massive investment in the public sector and the maintenance of carrots and sticks in the forms of the private health insurance rebate, Lifetime Health Cover and a surcharge for people on higher incomes.

So let us stop this false debate. If the Leader of the Opposition wants to provide tax relief, he can do it right here and right now—hundreds and thousands of Australians will thank him for letting us provide them with this much-needed relief—or he can leave them shaking their heads wondering what it is that the Liberal Party stands for. It is time to make that clear, to vote for or against tax relief for 330,000 Australians, and he can do it right now.

Question put:

That this bill be now read a second time.

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