Peter Dutton (Dickson, Liberal Party, Shadow Minister for Health and Ageing) Share this | Hansard source

Today Australians know for certain that they have a government that they cannot trust, a government that will say one thing and do the other. They have a government that is clearly a fraud. The Fairer Private Health Insurance Incentives Bill 2009 and related bills before the House impose a series of changes on the private health insurance rebates paid to Australians who have or who are about to take out private health cover. They are changes this government, the Prime Minister and the Minister for Health and Ageing promised would not happen. Perhaps they are changes that reflect Labor’s ideological hatred of and opposition to private health care or the result of this government’s reckless spending that will plunge our nation into the depths of record debt that will take decades to repay. Most likely, to be fair, they are both—a desperate government after its irresponsible cash splashes has returned to form and attacked private health as it seeks any means at its disposal to claw back cash as it racks up bigger and bigger budget deficits. All Australians will pay a price for these changes to the health insurance rebate introduced by the coalition government to reverse a rapid decline in the number of Australians with insurance during the Hawke-Keating years and to take the pressure off our public hospital system that that decline precipitated.

Those with insurance will pay more through higher premiums. Those who rely on public health treatment can expect longer waiting lists with more people seeking treatment. These changes are a direct repudiation of Labor’s supposed and publicly stated position in relation to private health insurance rebates before the last election. Any Australian who believed then that Labor would not attack private health was misled. Time and time again those promises were made, before the last election and many times since. Here is what the health minister said to the Australian people in a media release on 26 September 2007:

On many occasions for many months, Federal Labor has made it crystal clear that we are committed to retaining all of the existing Private Health Insurance rebates, including the 30 per cent general rebate and the 35 and 40 per cent rebates for older Australians.

The minister went on:

The Liberals continue to try to scare people into thinking Labor will take away the rebates. This is absolutely untrue.

Let us not forget a letter written by the Prime Minister, the then opposition leader, in November 2007, just days before the last election. The Prime Minister wrote to the Health Insurance Association and in his correspondence he said:

Both my Shadow Minister for Health, Nicola Roxon, and I have made clear on many occasions this year that Federal Labor is committed to retaining the existing private health insurance rebates, including the 30 per cent general rebate and 35 and 40 per cent rebates for older Australians.

Federal Labor will also maintain lifetime health cover and the Medicare Levy Surcharge.

One has to wonder what the 1.7 million Australians who now face lower rebates or no rebates at all think about Labor’s promises. They were reassured that this would never happen by none other than the Prime Minister in February last year when he told the Australian:

Private health insurance rebate policy remains unchanged and will remain unchanged.

That was followed in May last year by the health minister, who said on Macquarie radio:

We continue to support the 30 per cent, 35 per cent and 40 per cent rebate for those Australians who choose to take out private health insurance.

In October last year, this Minister for Health and Ageing addressed the annual Australian Health Insurance Association conference. What did she tell the delegates there? She said this:

Private health insurance consumers will still be able to claim 30 and 40 per cent rebate and Lifetime Health Cover incentives will remain in place.

As late as 24 February this year, Minister Roxon told the Age newspaper:

The government is firmly committed to retaining the existing private health insurance rebates.

Was the Labor government firmly committed to the rebates? Was it really? Or was that statement just more of the spin and subterfuge that this government descends to on a daily basis to mislead the Australian people? If that statement were true how does the minister explain evidence given by officials of the Department of the Prime Minister and Cabinet to Senate estimates last week that they first provided formal advice ‘within the budget process on the proposed means testing of the private health insurance rebates on 23 February this year’—on the very day that the health minister made her latest commitment to keeping the rebates in place unchanged. The two opposing positions were being expounded on the same day. The minister was saying that the government was committed to the insurance rebates; the bureaucracy under the direction of the government was preparing to gut them. Did the minister know? Did she deliberately mislead the public and media or is she outside the loop of decision making within this government, outside the loop of what is really happening?

The question is: is this minister for health a mere marionette for the powers that be in the Prime Minister’s office, the Treasury and the department of finance? The media should ask this question: did this minister mislead them or is she merely a puppet of Prime Minister and Cabinet? Whatever the answer—and, I repeat, this is a question that begs an answer—the budget delivered the lie to this government’s promises and we have before us these bills which are erroneously entitled the fairer private health insurance incentive bills. Of course, they are nothing of the sort.

These bills introduce three new tiers to the health insurance rebates. These are tiers that mean 1.7 million Australians who pay for private health insurance will face lower rebates and therefore higher premiums—1.7 million Australians who earn above $75,000 as singles or $150,000 as couples. Some will have the rebate cut to 20 per cent and others to 10 per cent, and some will get no rebate at all. Those on the new tier 1—earning $75,000 as singles or $150,000 as a family or couple—face, on health industry estimates, a 14.3 per cent rise in premium payments. On tier 2 the premium increase is effectively a 28.6 per cent slug. For those on tier 3, who will now get no rebate whatsoever, the premium hike is a huge 42.9 per cent. For those who opt to have no insurance, they can expect to pay more through the Medicare levy, with increases of up to 50 per cent.

The government describes this as a rebalancing of the rebate system, one that, I repeat, was never flagged in any way, shape or form before the last election and one that the government was denying would happen as late as three months ago. The government says these changes will see 25,000 people opt to drop out of private health insurance, with estimates that another 40,000 will downgrade their insurance. The government has chosen the lowest number it could find to again spin that there will be little impact from these changes.

The private health sector does not believe the Treasury estimates one iota, and why would they? The health minister put out these figures and the Minister for Human Services tried to spin them to the Senate—only to find out that he had to correct the record, finally admitting that 1.7 million Australians with health insurance would be impacted on as a result of these changes. So he had to move his figure from 25,000 being impacted to 1.7 million people, excluding children, being impacted. That exposes the incredible spin not just of this measure but, of course, of the modus operandi of this government in so many other areas.

The industry thinks even that is a conservative estimate of the impact of these changes. Its calculations increased by a minimum tenfold the number of people who might drop their insurance coverage. They fear that not 25,000 but 240,000 people could drop their hospital insurance coverage, that more than three-quarters of a million people might drop ancillary coverage and that almost that number—around 730,000 people—might downgrade their insurance levels. All up, they estimate that some 2.4 million Australians covered by health insurance will be impacted in some way by these changes.

What does that mean for our health system? It will transfer patients, treatment and costs to the public side of the ledger. The Prime Minister said that he was going to fix public hospitals. This is the sort of underhanded ‘fix’ they talk about around a race track. This ‘fix’, the private health sector estimates, could transfer almost 75,000 extra treatment episodes from the private to the public health sector over a year, meaning that public hospitals would have to accommodate an extra 190,000 bed days at a cost of some $200 million. Four million allied health services would no longer be covered by private health insurance, at a cost of over $200 million. Almost two million dental care treatments, for which private health insurance would have paid almost $100 million, would also no longer be covered.

It is little wonder then that the Australian Health Insurance Association says that every single one of the more than 11 million Australians with some form of private health insurance will have to pay more for their insurance. One million of those, one million people, live in households where the annual income is less than $26,000 per annum and they are going to face higher premiums to keep that cover. That is what the Rudd government calls rebalancing of the rebates. The Australian Medical Association agrees that many Australians will now have to pay more for their insurance. The Royal Australasian College of Surgeons expects the measures to ‘place a greater strain’—in their words—on Australia’s public hospitals, ‘driving poorer and more vulnerable Australians back into the public system’. The Australian Private Hospitals Association is also critical of the measures in this bill. In their words the result will be to:

… put more pressure on our already overstretched public hospitals. Destabilising the current balance between public and private is not just bad policy; it is ultimately unsustainable and therefore irresponsible.

I would like to take up the point of sustainability. This minister, in her second reading speech, talked considerably about sustainability. These new arrangements, she said, were all about keeping the balance between private and public health services sustainable. What has happened between the Rudd government’s first budget when this Labor administration was fully committed to the rebate and now? Around 360,000 more Australians have taken out private health insurance and qualified for the rebate. Does that make it unsustainable? Hardly. That is an increase of around four per cent in the number of people with insurance. It is a false argument from this health minister, more spin and more rhetoric to cover up this attack on private health, which Labor has long hated. It is ideologically driven and, clearly, poorly thought through.

This government is desperate to find savings in its budget and it does not need to attack private health insurance to do so. The savings it needs in order to try to cover some of its reckless spending can be made elsewhere. The coalition, of course, has suggested an increase in the excise on tobacco. A 12½ per cent increase in excise on cigarettes or about three cents on each cigarette would deliver the same amount of savings or more than projected from this attack on private health insurance rebates.

The government has claimed that rebate changes will generate savings of around $1.9 billion over four years, though I point out its figures are certainly more than rubbery. What the budget says and what the minister has presented to this House in the bill’s explanatory memorandum are different: the memorandum predicts the $1.9 billion figure, while the budget papers provided a lower estimate of $1.75 billion. So much for the government’s attempts to attack savings from our suggested cigarette tax increase: the Treasury figures used in Labor’s attempt to discredit this suggestion show that it would in fact deliver more to the budget bottom line, some $2.2 billion over the forward estimates. And that is not to mention the wider health benefits of fewer people smoking and less call on the nation’s health services, the health dividend of a rise in cigarette excise and subsequent decrease in smoking. Smoking is the single biggest preventable cause of death and disease in our country. Its cost to the nation is some $31.5 billion annually. It is responsible for more than 15,500 deaths. Yet this government prefers to drive people away from insuring for their own health, as opposed to considering measures that have such obvious health benefits to the nation and the economy. So the options are there for this Prime Minister, for this health minister and for this government to take some real decisions rather than following a disastrous, ideological bent that will damage our health system.

Under the Hawke and Keating governments, the last Labor governments that left this nation mired in debt, the number of people with private health insurance had fallen to just 30 per cent of the population. The previous Howard government, through the rebates and a series of other measures, reversed that fall to a situation where some 44.6 per cent of Australians are covered by private health insurance. That is around 9.9 million Australians with hospital cover. Public hospitals are already stretched to breaking point by the mismanagement of successive state Labor governments. Imagine just how worse off things would have been with a Labor federal government continuing to drive people out of private health insurance over the past decade. That is exactly where this government is headed now. This is not its first attack on private health, and it certainly will not be its last.

The coalition is opposed to these changes to the private health insurance rebates. We will oppose these bills. We will oppose them for the reasons that I have outlined. In summary, I want to underscore a couple of points. This Prime Minister went to the last election promising the Australian public that he would end the blame game and that he would fix public hospitals. Over the course of the past 18 months since this government was elected there has only been increased pressure on our public hospitals. The daily examples that we see in our newspapers, the horror stories that people out in the community—particularly rural parts of our country—are experiencing on a daily basis remain completely unacceptable. We have to recognise that things have not improved in our public hospitals over the course of the past 12 months. In fact, in many cases they clearly have deteriorated to a point well beyond unreasonable. I suspect that this continuing attack by this government on private health will result in people moving from their private cover into the public system. That will have an impact not only in relation to hospitals, but also in relation to dental—a very important debate in this country. This will put extra pressure on the provision of public dental services around the country. That will be felt nowhere more than with older Australians. This government will have the responsibility for having made it more difficult for those Australians, particularly those low-income Australians, particularly those older Australians on low incomes who have private health insurance, to receive those dental services. And if they have to join public queues, then that will be a great travesty for them indeed.

We need to recognise that many Australians at the moment are maintaining their private health insurance in difficult circumstances. Many Australians are facing great stress economically because of this mismanagement of the Australian economy by the Rudd government. Many people have had their overtime cut. Many people are in households now where there is only one person working and the other person is not working. We have a very strongly held belief that many of these people potentially will lose their private health insurance at a time when they can least afford to, and that will put extra pressure on this public hospital system. This will put extra pressure on the funds that are trying to provide economies of scale so that they can keep at a minimum the price rises for people who do have private health insurance and will maintain it even in difficult circumstances.

The most important thing to remember out of this debate is that many people have maintained their private health insurance or have been attracted to private health insurance not only because of the incentives that were put in place when the coalition was in government but also because they are dead scared about going into public hospitals and utilising services, despite all of the good work of those doctors and nurses and professionals who, on a daily basis, provide those services to Australians in need. Many Australians are concerned that states, in running down the health system, have made it necessary for these Australians to maintain their private health insurance. This government is going to put a further nail in the coffin of private health.

In these difficult economic circumstances created by this government, we have offered up an alternative. We have said to the government, ‘This is a measure which, on your figures, rubbery as they are, projects savings of $1.9 billion over the estimates.’ As the Leader of the Opposition said in his budget reply speech recently, in opposing this measure we will do the economically responsible thing—that is, provide an offset for blocking the savings measure. We have put up an increase in tobacco excise across the board of 12½ per cent. We are not reckless like the government in some of their tax proposals, where we would suggest just increasing the tax on one particular tobacco product, which would only see people move into other brands of cigarettes, and we have put forward a well-considered, well-costed policy that gives the government a very stark choice. It can retreat from its ideological attack on private health insurance, and, at the same time, it cannot lose revenues by supporting this coalition’s very responsible measure in relation to the increase of the tobacco excise. For that reason, I move:

That all words after “That” be omitted with a view to substituting the following words:“the House declines to give the Bill a second reading, and calls on the Government to offset the revenue that would have resulted from the enactment of this Bill and the associated bills, the Fairer Private Health Insurance Incentives (Medicare Levy Surcharge) Bill 2009 and Fairer Private Health Insurance Incentives (Medicare Levy Surcharge – Fringe Benefits) Bill 2009, by increasing the excise on tobacco”.

This will act as a true test of the government’s position on the move by the opposition to offset the arrangements associated with the costings around this bill. We have a responsible measure on the table. We are calling on the government now to support the increase in the tobacco excise as opposed to stripping away support to millions of Australians who have private health insurance. We do not want to see people drop their private health insurance. We do not want to see extra pressure on the public health system. We want to make sure that we say to the Australian people that the coalition remains committed to supporting not just our private health insurance system but also our public health system. We want to make sure that we make it sustainable into the future and we want to be economically responsible at the same time.

We have put forward a challenge to the government and it is detailed in this amendment. We say to the government: support the coalition’s position to increase the tobacco excise and you will have an opportunity to prove to the Australian people that you are not just on some ideological bent but that you support what the coalition has put forward and that is good health policy. It relieves some of the stress for people who will present with conditions as a result of having smoked, in some cases for a short time and in other cases over a lifetime. We say to those people that this is the decision that the government needs to make: does it support the coalition’s position to preserve the arrangements around private health insurance so that we do not put extra pressure on the public health system and at the same time prevent the economic situation in this country from getting even worse under this disastrous government by increasing tobacco excise?  That is why I move this amendment and why the coalition will be opposing these bills.

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