Bob Baldwin (Paterson, Liberal Party, Shadow Minister for Defence Science and Personnel) Share this | Hansard source

I rise to speak on the Fairer Private Health Insurance Incentives Bill 2009 and cognate bills. This legislation outlines how the current Prime Minister of Australia has sacrificed the nation’s healthcare system through his reckless spending. As a consequence of Labor’s senseless budget, forward projections indicate that there will be one million unemployed by 2010-11, a record $58 billion deficit and a record net debt of at least $188 billion by 2012-13. These figures are all key markers of the failure of the Rudd Labor government’s economic management.

What do these figures mean in real terms—in terms that we all as Australians can relate to? What if I told you that due to Labor’s reckless spending the Prime Minister of Australia had to take out billions of dollars from the health system to help repay the biggest debt of any government in the nation’s history? This is exactly the situation at hand. Let me say this to you again so that there is absolutely no mistaking the issue: the Prime Minister is taking billions of dollars out of the health system to pay for his reckless spending and Australians are now paying for that reckless spending. They are being given $900 cheques in the hand by the Prime Minister whilst the Treasurer sneaks hundreds, if not thousands, of dollars out of our back pockets to pay back Labor’s debt record.

The Prime Minister should clearly state to the House, to the taxpayers and to the public—the public who voted him in because they thought they could trust him—where his priorities lie. The Prime Minister should outline where his moral campus resides. Is it that the Prime Minister’s morals fall short when he recognises that there is more popularity en masse, superficial as it may be, in handing out cheques to the public rather than fixing our healthcare system? Some have likened the Prime Minister to Robin Hood, but I disagree with this. Robin Hood stole from the rich to help out the poor. The Prime Minister is simply taking money from whomever he can and from whichever fund he can, not to help out others but to mask his reckless spending. But he is not doing a very good job of it. May’s budget revealed that two-thirds of the debt owed by taxpayers in 2012-13 will be due to spending decisions taken by the Rudd Labor government over the past 18 months.

Paterson families are far worse off under Rudd as indeed are all Australian families. 1.7 million Australian adults will immediately be affected by changes to rebates for private health insurance, facing either higher premium payments or higher tax payments through the Medicare levy. This includes nearly 50 per cent of all enrolled voters in the Paterson electorate—58,289 people who were deceived by the Prime Minister when they took him for his word that their private health insurance costs would not increase. I would like to quote the Prime Minister on a radio interview with Leon Byner on radio 5AA on 24 August 2007, ahead of the election. Byner said:

All right, now let me ask you a couple of questions that listeners have called in on. Lorraine wants to know if you are going to take off the rebate from private health funds which currently the Government supports—that’s the 30 per cent we’re talking about.

And Rudd’s reply:

Absolutely not.

It gets even better. In a letter to the Australian Health Insurance Association on 20 November 2007, just days before the election, the now Prime Minister, then Leader of the Opposition, 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 the 35 and 40 per cent rebates for older Australians.

What we see here is an absolute mockery. People can have no faith in what the Prime Minister says. They need to judge him by what he actually does. This Prime Minister guaranteed people that health insurance costs would not increase. In fact, for health generally, he said that the buck would stop with him. The fact is that all Australians will have to pay more for health care because of the Rudd government’s change to private health insurance. In short, Australians who earn over $75,000 will pay more because of the cuts to the private health insurance rebate, and if they drop out altogether they will still pay more because of the increased Medicare levy surcharge. Australians who earn under $75,000 per annum will pay more because of increased premiums due to younger and healthier people dropping out. Not only that, those who are uninsured will now have to wait even longer because of the increased pressure on the public health system as people begin to drop out of the private health scheme.

Public hospitals in my electorate, in places such Gloucester, Dungog, Bulahdelah and Tomaree, are already struggling under the pressure of limited resources and funding provided to them by the New South Wales state Labor government and the federal Labor government. Now Labor is introducing plans which will, consequently, increase this pressure. This can only be described as absolutely absurd. Yet the Prime Minister said that, when it came to health, the buck would stop with him. The Prime Minister’s decision to make these changes to private health insurance makes a complete mockery of his election promises which I outlined earlier—that is, he would fix the hospitals by June 2009. It makes a mockery of the fact that he guaranteed to people in interviews and in letters to the Health Insurance Industry Association that it would not change. Another quote that I kind of enjoy reading is from Nicola Roxon, when she was shadow minister for health. In a press release on 26 September 2007, before she became the minister, she said:

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 50 per cent rebates for older Australians.

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

We are standing here today debating a bill which will remove those rebates for some Australians. The only time the government changed its tune is more recently, since the election. I quote the Prime Minister at a press conference in his courtyard on 25 February 2008, when he said:

The private health insurance rebate remains unchanged and will remain unchanged.

The reason I keep quoting the Prime Minister and the health minister is to show a track record. They convinced people prior to the election that they were economic conservatives, which has proven to be a farce. The only thing they have done is show people that Gough Whitlam was perhaps an economic conservative, by way of example. They were also prepared to say to people that they were not going to touch the private health insurance scheme. Here today we are debating a bill which will do exactly that.

Who is supporting the coalition stance on this? The Australian Private Hospitals Association are in support the coalition’s view that the Prime Minister turned on the Australian public when they clearly broke their election promise. The association’s CEO, Michael Roff, stated on 12 May 2009:

The changes to the private health insurance rebate announced in tonight’s budget are a clear breach of election promises made by the Rudd Government. The changes will lead to a system that is confusing, complex and costly for those millions of Australians who take responsibility for their own health care costs.

Perhaps what is most infuriating is that these increases in private health insurance premiums and the Medicare safety net levy could have been avoided. They could have been avoided if the Rudd Labor government had not, to use their own terminology, ‘spent money like a drunken sailor’.

However, the Rudd Labor government still have the power to stop penalising all Australians by their reckless spending—that is, if they listen to the coalition and take our advice on how to amend the situation. The coalition are in a prime position to advocate such advice, with their far superior track record of economic and health system management. Simply put, the Rudd Labor government could avoid having to increase private health insurance premiums for those earning over $75,000 per year by enforcing increased taxes on tobacco. An approximate 12.5 per cent increase in the excise on tobacco would pay for the hole in the budget created by the Rudd government’s reckless spending and provide positive health outcomes. The coalition’s proposal has been widely supported by third-party groups, including the Heart Foundation, the Australian Medical Association, Quit, Professor Simon Chapman, of the University of Sydney, Professor Harry Clarke, of La Trobe University, and many others. The executive director of Quit, Ms Fiona Sharkie, said on 15 May, 2009 that increasing the cost of tobacco products is the single most powerful way of driving down smoking rates. She also said:

There is absolutely no doubt that increasing cigarette prices will save thousands of lives that otherwise would be lost to the devastating harms of tobacco. Research consistently shows increases in the real price of cigarettes are crucial to reducing smoking rates.

The Prime Minister’s claim that such a proposal would leave a hole in the budget is just clever and manipulative politics. He is relying on Treasury modelling over 10 years, well beyond the current forward estimates of this budget. In fact, Treasury figures confirm that, over the life of the budget forward estimates of four years, an increase in cigarette excise would more than cover the cost of retaining the private health insurance rebate in its current form—that is, $2.2 billion to cover $1.9 billion. As smoking prevalence reduces because of the increased excise, there would be additional savings through reduced demand for health services.

The Prime Minister is quite blatantly throwing around lies in an attempt to distract the Australian public from his spiralling and out-of-control debt and broken promises. Furthermore, the changes to the private health insurance rebate are just the latest phase in Labor’s unrelenting war against private health insurance. Labor hate private health insurance. They hate the fact that individuals should and can choose what type of insurance coverage they want and what sort of health system they want.

The coalition believes in the right of all Australians to take charge of their own healthcare needs and plan for their own future. We have always worked hard to deliver incentives to promote the uptake of private health insurance and take the pressure off Medicare. People will drop out because they cannot afford the much higher premiums, and that will restart the catastrophic premium membership death spiral of the 1980s and 1990s, when Labor almost wiped out private health insurance. The Prime Minister claims that the coalition does not support Medicare, but the facts speak otherwise. The previous coalition increased funding of Medicare from $6 billion to $12.5 billion—a 48 per cent increase in real terms—and this at the same time took the pressure off the public hospital system by increasing private health insurance coverage from 34 to 44 per cent. The coalition is the best friend Medicare ever had.

Eleven million Australians choose to pay their own hard-earned money for private health insurance in order to have a choice in their health care. It does not have to be one at the expense of the other, Prime Minister. As our nation’s chosen leader, you should be promoting our democratic right to freedom and choice—the freedom to choose the level of cover which suits us, not simply a base minimum that we can afford due to increased costs. Australians deserve a strong and well-balanced health system that supports Medicare as a cornerstone but also encourages self-reliance. After the massive cash splash, Australians are now being asked to pay for Labor’s reckless spending with higher health costs. The Prime Minister is taking billions of dollars out of the private health system to pay for his reckless spending. Australians are concerned not only about the impact of the colossal amounts of debt on future generations but also about the fact that they are already paying the price now. The Australian Health Insurance Association could not have agreed more when it stated on 12 May:

The Rudd Government’s decision to dismantle the private health insurance rebate will place increased pressure on the public hospital system and will force up premiums for those Australians who take responsibility for their own health care by taking out private health cover.

Every single one of the more than 11 million Australians with Private Health Insurance (one million of whom live in households with an income of less than $26,000 pa) will have to pay more for their private health insurance as a direct result of this policy.

Labor has lost control of the nation’s finances. Eighteen months ago we had no debt, and cash in the bank. Now, Labor is plunging Australia into more than $300 billion worth of debt and Australia’s health system is suffering because of it. At the same time as racking up unprecedented government debt, the Rudd Labor government is now going to trash the real achievements made in health over the last decade. The government needs to step up and make a decision: do they increase the cost of private health insurance and subsequently increase the pressure on the public health system or do they increase the cost of tobacco and consequently reduce the rate of people taking up smoking, which will relieve some of the burden that smoking places on the health system? For the sake of Australia’s public health, Labor needs to think now about how their reckless spending will have a devastating consequence for future generations. It needs to come up with real solutions, not just bandaids that put the cost back on the Australian public.

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