Ian Macfarlane (Groom, Liberal Party, Shadow Minister for Energy and Resources) Share this | Hansard source

It lays bare many of the false assertions made by the Prime Minister and the Minister for Health and Ageing about their treatment of private health insurance, were they to be elected. As we know, the truth is far from what was said by the current Prime Minister and health minister prior to them being sworn in, when they occupied this side of this House.

As we know, the Fairer Private Health Insurance Incentives Bill 2009 and related bills amend various acts to give effect to the measure to introduce three new private health insurance incentive tiers. We know this means that for singles and couples there will be an increase in their premiums. Singles earning between $75,001 and $90,000 and couples and families earning between $150,001 and $180,000 will receive a 20 per cent rebate if they are aged up to 65 years. Singles earning between $90,001 and $120,000 and couples and families earning between $180,001 and $240,000 will receive just a 10 per cent rebate if they are aged up to 65 years. Of course, singles and families earning above these thresholds will receive no rebate at all. The bills also increase the rate of the Medicare levy surcharge that certain taxpayers will be liable for if they do not take out private health insurance.

These changes significantly alter the 30 per cent private health insurance rebate introduced by the coalition. The purpose of that rebate was to encourage people to take out private health insurance, thereby reducing the pressure on the public hospital system. The coalition introduced an open-ended private health insurance rebate because every dollar rebated was matched, not once, but twice, by the privately insured person who contributes towards the health system as a whole.

Madam Deputy Speaker, I am not one to often reminisce in this House but when you and I came to this chamber in 1998 and I sat next to a gentleman called David Jull, I asked my first question in this House on private health insurance. I asked the Prime Minister to inform the House of any proposals which would benefit the 20,000 people in my electorate of Groom, who were then covered by private health insurance and would therefore receive the Private Health Insurance Incentive Scheme. I asked:

Will these proposals also benefit people who are not eligible for the Private Health Insurance Incentive Scheme but who have private health insurance?

That was an extraordinarily eloquent question put together by a freshman to this House! At no stage was I given much assistance by many. The response to that question is far more serious. What the answer from the Prime Minister outlined was that, then, there were 20,000 people in my electorate who had private health insurance and that around 45,000 people would in fact benefit from the incentive scheme. The Prime Minister went on to highlight the fact that:

There are literally tens of thousands, indeed, hundreds of thousands of Australians, who scrimp and save to give themselves the security of private health insurance. They are entitled to a greater reward than the insult they receive from those who sit opposite—

referring then to the Labor Party who sat behind me. The Prime Minister went on to say:

The enemies of private health insurance are the members of the Australian Labor Party.

This was 1998 but was not the first time that was said. It was in fact said previously by someone we all know, or some of my vintage certainly know, and at times some watched what he said because he is, quite frankly, far too honest for his own good, in this regard anyway. That person was a man by the name of Senator Graham Richardson, a Labor senator and minister, and he was a Labor health minister, if I recall correctly. It is interesting as I quote from the answer to my eloquent question what the Prime Minister recalled, as he in fact quoted what Senator Graham Richardson had said before the government moved to act on this incentive back in 1998:

On Labor’s side, of course, they simply do not want to acknowledge that private health care matters. There is an ideological bent here that says, ‘Medicare is perfect,’ which is ridiculous. ‘Therefore, it cannot be changed,’ which is also ridiculous. ‘Therefore, nothing should be done about private health’—

Great stuff but Senator Richardson goes on to say—

… which is also ridiculous because the one thing they—

the Labor Party—

do not want to acknowledge is that private health insurance matters. What they do not want to acknowledge is that as these people are dropping out of private health insurance they are simply queuing up in the public health system and have to be looked after.

The reality is that in 1998 the then Howard government moved to address two issues. It moved to provide an incentive for people to privately insure and to make a significant contribution to their health costs on the basis that it knew that if we did not do so the public health system would never survive. What we are seeing now as Senator Richardson predicted so aptly in that candid answer—I suspect after he left the Senate—is that the Labor Party are ideologically opposed to private health insurance, they are ideologically opposed to people who want to look after themselves and they are oblivious to the consequences of a fall in private health insurance.

Almost 12 years later, we are now seeing that spectre revisited. The changes proposed by the current government are purely and simply a broken promise, and as the Prime Minister and health minister have repeatedly promised that they would not touch private health insurance, that is seen to be simply not true. They made the promise in the lead-up to the election and repeated it when in government. As recently as February this year the health minister stated in the Age newspaper:

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

Even the most fair minded person would know that for what it is. The reality is that that promise has been broken, that that promise has been revealed as expendable, and in the face of record debt that the Rudd government has incurred through its reckless cash splash, it reverts to its old type and attacks those who help themselves. These bills are entirely a consequence of bad financial management by the Rudd Labor government coupled with blind ideology. The people of Australia took the Prime Minister on faith, faith that has now been traded in as the government tries desperately to hide the consequences of its poor economic management and its reckless spending. Australians are now paying the price for that recklessness with higher health costs.

Eighteen months ago this country had no debt and cash in the bank. Now we think we have, depending on which day it is and whether it is the Prime Minister or the Treasurer giving the answer, somewhere between $300 billion and $315 billion worth of debt, and that is assuming that they are telling us the whole story. If they are not, the Australian people will hold them to account. The Australian people will hold them to account if it turns out that they need another $40 billion for broadband and another $40 billion for road and rail infrastructure and another $26 billion for the Rudd bank. As a result of this unprecedented debt, the Rudd Labor government is now going to trash the real achievements that have been made in health over the last decade.

Let us go to some statistics. Some 9½ million Australians are covered by private health insurance. That is 45 per cent of the population. Madam Deputy Speaker Burke, you would be interested to know that in my electorate, as a consequence of the incentive introduced by the government when you and I came into this place, private health insurance is no longer held by 20,000 voting people but by 52,984 voting people. That has to be a success by any measure. The total number of persons covered in my electorate as a result of that incentive, the same incentive that this government is now trashing, now stands at 76,196.

We are seeing sheer desperation on the part of the government to find savings to fund their debt and their deficit due to their lack of control over their spending. The sad consequence of that is that they will unravel 10 years of work whereby we were able, in the case of my electorate, to double the number of people who were taking charge of their own health costs and spending their own money to ensure that they receive the health care they need. As we heard from former Senator Richardson, it appears the Prime Minister, under the same ideology, is now punishing the people who have elected to take out private health cover as part of Labor’s innate hatred of the private health insurance industry. This poorly considered, ideologically driven policy, which the Prime Minister attempted to describe as being like Robin Hood, sees a million Australians with private health insurance living in households with annual incomes of under $26,000 being affected by the change.

The inevitable outcome of the government’s broken promises and reckless spending will be that private health insurance premiums will be driven up. People will drop out of the private health cover system and Australia’s already pressured public health system will face even more stress. While the government claims 25,000 people are likely to drop out of private health cover because of these bills, this figure is at odds with the industry’s. Quite frankly, when I have to choose between the figures that I see daily put up by those on the opposite side and the figures of those in the industry, who have a working knowledge of this matter, I am always inclined to believe the industry. Those in the industry know—because they have experienced this for over a decade—and are expecting the 25,000 figure to be out by a factor of 10. The health insurance industry predicts that almost 250,000 people are likely to drop out of private health cover. On top of that, another 730,000 are likely to downgrade their hospital cover and 775,000 are likely to drop their ancillary cover. Australians will then be paying the price of this government’s sustained attack on health insurance.

The Rudd government’s determination to attack private health insurance will see people drop out simply because they cannot afford the higher premium increases. This will restart the catastrophic premium membership debt spiral of the 1980s and 1990s. It took the Howard government to rectify what Labor had done in almost wiping out private health insurance. The coalition believes in the right of all Australians to take charge of their own healthcare needs and plan for the future. We have always worked hard to deliver the incentives to promote the uptake of private health insurance and take the pressure off Medicare. Australians deserve a strong and well-balanced health system that supports Medicare as a cornerstone and also encourages self-reliance. The Rudd government is determined to undermine that system and those aspirations.

In conclusion, I say that, in opposing this measure, the coalition realises that there needs to be some offset in ensuring that the government gets whatever money it can to address, as best it can, its enormous debt and deficit, and we have proposed an excise on tobacco instead. Given all the things that I have done in my life, particularly all the crazy things that I have done in my life as one does occasionally when one is young, I have only one regret: that I smoked. Here we have a measure that will not only provide the government with money but may prevent people from smoking. There is no doubt that there is a direct correlation between increasing the price of cigarettes and encouraging people to give them up. There are a whole heap of other things that you need to do to encourage people to give up—and I know as I am expert. I ‘gave up’ four times. On the fourth time I was successful. Increasing the price of cigarettes by only 3c will give the government the money it so desperately needs while providing an added incentive, an added reason, for people to give up cigarettes.

I know those on the other side try to argue that in fact this would not return enough money to the government coffers. I assure those who sit opposite, and the Treasurer himself, that the Treasury’s own figures show that over the life of the forward estimates such an increase in cigarette excise would more than cover the cost of retaining the private health insurance rebate in its current form. There is also the added benefit of discouraging people from smoking. Not only will they live longer but they will place less pressure on the health system, which, as a result of this bill and related bills, is well and truly going to be stretched far beyond how it is already stretched now. The Prime Minister needs to address the real issues in Australia. Taking money from people who want to be self-reliant and make their contribution to ensuring their health outcomes, so taking pressure off the public health system, is not a sure-fire way to make this country a better place. Those who sit opposite should reflect on what they are going to achieve with these bills and not continue this relentless attack on private health insurance. I oppose these bills.

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