Craig Thomson (Dobell, Australian Labor Party) Share this | Hansard source

The sheer hypocrisy of the member for Dickson talking about the pressure on public hospitals and the dental system, is mind-boggling. When we think back to what the former government did, ripping billions of dollars out of the public health system and closing down the Commonwealth dental scheme, the audacity of the member for Dickson to come in here and cry out that he is concerned about the public hospital system meets no test of credibility with anyone. The government is rebalancing its range of policies supporting private health insurance so that those with a greater capacity to pay for their own private health insurance do so. We are doing that rebalancing through the bills that I am speaking in support of today: the Fairer Private Health Insurance Incentives Bill 2009, the Fairer Private Health Insurance Incentives (Medicare Levy Surcharge) Bill 2009 and the Fairer Private Health Insurance Incentives (Medicare Levy Surcharge—Fringe Benefits) Bill 2009.

Under these changes, the private health insurance rebate will remain unchanged for low- and middle-income earners. Higher income earners will receive a reduced rebate and, as incomes increase, the rebate will progressively fall. The changes to the Medicare levy surcharge will encourage higher income earners to maintain their private health insurance. These reforms will provide a fairer distribution of benefits, bringing government support for private health insurance into line with the principle underpinning the Australian tax transfer system that the largest benefits be provided to those on the lowest incomes.

Currently, approximately 14 per cent of single taxpayers who have incomes above $75,000 receive around 28 per cent of the total private health insurance rebate paid to singles. Under the new reform, these single taxpayers will receive about 12 per cent of the total private health insurance rebate paid to singles. Similarly, approximately 12 per cent of couple taxpayers who have incomes above $150,000 currently receive approximately 21 per cent of the total private health insurance rebate paid to couples. Under the new reforms, these couple taxpayers will receive about nine per cent of the total private health insurance rebate paid to members of couples. Treasury modelling estimates that under these reforms the number of people expected to remain in private health insurance will be virtually unchanged. Treasury is estimating that that will drop to 99.7 per cent of those who are there now. This is because those high-income earners who receive a lower rebate will face a higher tax penalty for avoiding private health insurance.

It is proposed that, from 1 July 2010, three new private health insurance incentive tiers be introduced to better balance the mix of incentives for people taking out private health insurance. Existing arrangements will remain unchanged for singles with incomes of less than $75,000 per annum and families with incomes of less than $150,000 per annum. Based on current projections, tier 1 will apply to singles with an income of more than $75,000 and families with incomes of more than $150,000. The private health insurance rebate will be 20 per cent, increasing to 25 per cent at 65 years of age and 30 per cent at 70 years of age. The Medicare levy surcharge for not taking out complying private health insurance will remain at one per cent. Tier 2 will apply to singles with incomes of more than $90,000 and to families with an income of more than $180,000. The private health insurance rebate will be 10 per cent, increasing to 15 per cent at 65 years of age and 20 per cent at 70 years of age. The Medicare levy surcharge for not taking out complying private health insurance will be increased to 1.25 per cent. Tier 3 will apply to singles with incomes of more than $120,000 or families with incomes of more than $240,000. No private health insurance rebate will be provided. The Medicare levy surcharge for not taking out complying private health insurance will be increased to 1.5 per cent. All income thresholds will continue to be indexed to wages according to movements in the average weekly ordinary time earnings. The income thresholds will also be adjusted for families with more than one child in the same manner as existing arrangements for the surcharge—that is, $1,500 for the second and each subsequent child.

In my electorate of Dobell, on the north of the Central Coast region of New South Wales, we have one of the lowest median wages in the state. Clearly, lower income earners who are my constituents would not think much of the idea that their taxes are helping subsidise the private health insurance rebates of high-income earners, especially if these people on lower wages simply cannot afford private health cover. This system will make the rebates fairer. In Dobell working people face many struggles and challenges. They endure long hours each day away from their families, because over a third of them commute to and from Sydney, a two-hour trip each way. In many cases rising food and rent costs place additional pressures on their livelihoods and a fairer private health insurance system means we can better maintain the balance between public and private health systems.

There will always be many families who cannot afford private health cover, but those people will be more secure in the knowledge that this government is committed to improving the public health system. Let us start with the hospitals, which are of course the most visible face of the health system. It is no secret that many of our public hospitals are under severe pressure as our population ages and the burden of chronic disease takes hold. The emergency department of Wyong Hospital, in my electorate, is the fifth-busiest in the state. And as we come into winter, it will be busier than at other times of the year.

The Rudd government recognised this increased pressure on hospitals and took action at COAG last November. The 2009-10 budget implements that historic agreement. It includes the biggest ever funding deal for our public hospital system—$64 billion over five years. This is nearly $20 billion more than the previous healthcare agreement, a massive increase of nearly 50 per cent in funding for our public hospitals. These reforms are about improving health systems, not just money, important though that is after years of neglect by the previous government. We have already seen results from our $600 million blitz on elective surgery waiting lists, with an extra 41,000 procedures last year, 16,000 procedures above the target.

The government’s investment also includes a $750 million injection to reduce pressure on our stressed emergency departments. The budget delivers a substantial increase in our nation’s hospital infrastructure. This year the government’s Health and Hospitals Fund will open with $3.2 billion on the way to fund 32 important new projects across the country. We are also putting in place structures to improve the long-term performance in services provided by our hospitals. All governments have agreed to report against a comprehensive set of performance indicators across the health system. And we are taking steps towards the introduction of activity based funding for public hospital services.

These initiatives will improve the performance and the accountability of the health system. A quick look at what the budget is delivering will indicate the strength of the Rudd government’s commitment to Australia’s health system: $64 billion over five years for our public hospital systems, an increase of $20 billion; $3.2 billion from the Health and Hospitals Fund for three key reform areas; $1.5 billion over seven years for hospital infrastructure of national significance; $1.3 billion over six years to deliver nationally consistent cancer detection, treatment and care, supported by two comprehensive cancer centres and up to 10 regional cancer centres, and an upgrade of BreastScreen Australia’s equipment to digital technology; $430.3 million over six years in translational research infrastructure across mental health and neurological disorders, child health, Indigenous health and chronic diseases; $134 million to reform and enhance incentives to encourage doctors to work and stay in our rural and remote communities, with changes to the geographic classification that will result in more than 2,400 doctors becoming eligible for support for the first time; $120.5 million over four years to provide greater choice in maternity services by expanding access to services provided by qualified midwives, additional scholarships and a new 24-hour helpline to support women and their families before and after birth; and, $59.7 million over four years to provide highly skilled nurse practitioners with appropriate access to MBS and PBS from November 2010, which will allow doctors to focus on tasks that require their level of skill and expertise and which is coupled with an investment to increase the GP workforce by 35 per cent.

In my electorate of Dobell I was recently very pleased, along with the health minister, to announce the successful tender for the government supported GP super clinic, which will be located in the fast-growth area of Warnervale. An experienced team of professionals which currently runs the Toukley Medical Practice and another practice at Tuggerah will operate the new super clinic, to be known as the North Central Coast GP Super Clinic. The government’s agreement with Warnervale Medical Services will see a temporary GP clinic operating in Woongarrah within four months while preparations are made to house a permanent state-of-the-art clinic in the new Warnervale City development by 2011. The North Central Coast GP Super Clinic will bring together additional GPs; specialists; allied health professionals; and pharmacy, radiology, pathology, rehabilitation, dental, physiotherapy and psychology services, all in one convenient location, with many of those services bulk-billed. As well as providing families and people with chronic diseases access to affordable care by general practitioners and health professionals, the new GP super clinic should also relieve pressure on the Wyong accident and emergency department—which, as I have already stated, is the fifth-busiest in the state.

Through the bills I am speaking about today we are also determined to maintain an appropriate balance between the public and the private health systems. This rebalancing of the private health insurance rebate is not expected to have a significant impact on private health insurance membership. The consequence of that is that we do not expect these changes to have an adverse impact on public hospital attendances. We know for a fact that last year’s changes to the Medicare levy surcharge had no negative effect on health fund membership. In fact, membership has increased in the last two quarters. Mr Deputy Speaker, you will remember the loud protestations we had to the contrary from those opposite.

To sum up, these changes mean that high-income earners will receive fewer government payments for their private health insurance but will face an increase in costs should they opt out of their health cover. Singles and families with incomes below the Medicare levy surcharge thresholds—around three-quarters of all policy holders—will not incur any increase in their net premiums as a direct result of this measure. Policy holders under 65 years of age will continue to receive a 30 per cent rebate on the cost of their health insurance premiums. Those aged 65 to 69 will receive a 35 per cent rebate and those over 70 will receive a 40 per cent rebate. Spending on the current private health insurance rebate is growing quickly and it is expected to double as a proportion of health expenditure by 2046-47. These changes, through these bills, will result in a saving to the government of expenditure of about $1.9 billion over four years.

The government had tough choices to make in this budget; tough choices to maintain jobs and put in place vital infrastructure while providing long-term savings. Means testing the private health rebate was a tough decision that the government made. The private health industry should have confidence in their products. The private health system is an important part of our overall health system. There are many people in my electorate who do use private health and are very happy with the services they provide. It does not seem too controversial to assume that most high-income earners will continue to have private health insurance because they want it, regardless of the rebate.

We have heard before in this place that the sky will fall in if we bring fairness into government policy regarding private health insurance, and I am sure we will hear it again in the contributions from those opposite. We have heard the opposition cry wolf on these matters before and they will again. We must remember that last year we were told by the opposition that we were the great wreckers of private health in Australia if we dared to increase the income threshold for the Medicare levy surcharge. Of course, they were proved wrong and they will be proved wrong again in relation to this debate. We had the extraordinary musings from the Leader of the Opposition on this subject. He said:

… in an ideal world, every Australian would have private health insurance.

We would have to go back to Fightback to see the coalition release such a candid attack on our universal health system as we saw by the Leader of the Opposition. A strong universal health system is the cornerstone of our health system. It is what the vast majority of people in my electorate of Dobell believe. The Leader of the Opposition is out of step with community sentiment. He will never ever lead this country if that is how he feels about health care. These reforms will ensure that the government’s support for private health insurance remains fair and sustainable in the future. I commend these bills to the House.

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