Andrew Southcott (Boothby, Liberal Party, Shadow Parliamentary Secretary for Regional Health Services, Health and Wellbeing) Share this | Hansard source

We have been here before. The Labor Party, when they were last in government, could not wait to get their hands on private health insurance, and they made a number of decisions in the first few years of the Hawke government which amounted to a 40 per cent withdrawal of the support for private health insurance. We saw private health levels fall from around 50 per cent in 1983 to the point where they reached a low of 30 per cent a little more than 10 years ago. Private health insurance plays a very important role in keeping pressure off public hospitals. It provides for people to have choice of doctor and choice of hospital, but it really plays a critical role in reducing waiting lists and keeping pressure off the public hospital system. So, as the previous government, we introduced a number of reforms: the private health insurance rebate, lifetime health cover and an increased rebate for people over 65 and over 75.

It is no secret that the Labor Party has always been opposed to private health insurance. Anyone with any passing familiarity with debates on health policy would be well aware of that. The Latham Diaries is a very good guide to what the view of the Deputy Prime Minister on private health insurance was when she was the Labor Party’s spokesperson on health. That is why there was great interest by the public in knowing what the Labor Party would do with private health insurance. Let us have a look at what they said before the election. Before the election, when Kevin Rudd was interviewed by Leon Byner on radio FIVEaa on 24 August 2007, Leon Byner asked:

… 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 for private health funds which currently the Government supports, that’s the 30 per cent we’re talking about?

Kevin Rudd replied:

Absolutely not.

The Prime Minister, when Leader of the Opposition, in a letter to the Australian Health Insurance Association, 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.

The Prime Minister, in a press conference in the Prime Minister’s courtyard on 25 February 2008, said:

The Private Health Insurance Rebate policy remains unchanged and will remain unchanged.

The current Minister for Health and Ageing, in a media release when she was shadow minister for health on 26 September 2007, 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.

On 24 February 2009 Nicola Roxon told the Ageand this was at a time that we now know she was seeking advice on the means testing of private health insurance rebates:

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

What this means is that with the Labor Party it is very important to always look at the fine print, because in each of just two budgets they have already withdrawn government support for private health insurance.

We would like to know what their plans are if they are re-elected this year. The 46 per cent of Australians who hold private health insurance have a right to know what the Labor Party plan to do if they are re-elected. With Labor it is not just what they say; it is what they do. Everyone knew that the Labor Party were to do this, so why did they lie before the last election? Why have they broken this promise? This is a clear breach of a promise they made—of commitments they made—prior to the last election. They promised not to alter the private health insurance rebates.

What this now means is we return to the bad old days where you saw people dropping out of private health insurance. As the people who stayed in private health insurance were older and were more likely to claim, we saw rising premiums and a vicious circle occurring. This is what happened when Labor were last in government. We saw a dramatic decline from 50 per cent to 30 per cent of the population being insured. It dropped to a point where the structure we had was almost unsustainable. According to details given by the Department of Health and Ageing to the Senate inquiry, 25,000 Australians are predicted to drop their hospital and general treatment cover. A further 10,000 people who currently have hospital and general treatment cover are expected to keep their hospital cover and drop their general treatment cover. Another 5,000 people with general treatment cover will drop that cover. That is very modest compared to other predictions which are around, such as research undertaken by Access Economics which showed that four times more people than predicted by Treasury may go without private health insurance as a result of changes to the private health rebate and the Medicare levy surcharge.

What we know is that there is enormous concern in the community about quality of treatment in public hospitals, about access to treatment and about waiting lists. Another thing that the Labor Party promised to do in government was fix the public hospital system. They set a deadline of the end of June 2009. We are already seven months on from that deadline and nothing has happened. This is another very clear case. Labor promised before the election that they would fix public hospitals. The Prime Minister famously said, ‘The buck stops with me.’ Now we see, more than two years on in government and more than seven months after their own deadline, that nothing has happened on public hospitals. What we see, importantly, on private health insurance is that Labor have taken measures which will add further pressure on the public hospital system. We saw only this week the embarrassment to the Labor Party in which the Prime Minister claimed that this measure would save $100 billion over the next 40 years. He claimed that was in the Intergenerational report. The Intergeneration report made no mention of this at all; in fact, the measure that we are considering is a savings of $1.9 billion over the next five years.

Turning to my electorate of Boothby, I know that private health insurance is an important issue. There are 93,685 people who are covered with private health insurance. Seventy-one per cent of voters hold private health insurance, 63 per cent of voters hold hospital treatment insurance and 69 per cent hold general treatment insurance for ancillaries and so on. These are about 20,000 singles and 20,000 families who are insured. As I said, more than 90,000 people are covered with private health insurance. One of the things that I have always had impressed upon me by constituents is the importance of having tax deductibility as an incentive for people to take out private health insurance. The measures such as tax deductibility through the private health insurance rebate, the lifetime health cover and the Medicare levy surcharge have led to the point where we have more than 45 per cent of people covered by private health insurance. That is a big jump from what it was when the Howard government was first elected, where it was languishing in the low 30s.

In my electorate there are a number of hospitals—Flinders Private Hospital, Blackwood and District Community Hospital and Griffith Rehabilitation Hospital—and outside of my electorate but used by many people in my electorate is the Ashford Hospital as well, so this is a very important issue for my electorate. We have more than two-thirds of people holding private health insurance. This is a very simple issue. The Labor Party before the election said one thing, and they have done another thing in government. The Labor Party in two budgets have on two occasions withdrawn support from private health insurance. What my constituents and the public would like to know is what their plans are if they are re-elected. This is the second time we have considered this bill, and the opposition remains opposed to this. This is a clear breach of the promise.

If this bill is passed, all Australians will be paying more for their health. In fact, using the government’s own figures, Australians will be paying something like $100 billion more for their health over the next 40 years. People who are on incomes above $75,000 will see increases in their premiums or the Medicare levy surcharge. People who are on incomes below $75,000 who hold private health insurance will see increased premiums as a result of dropouts and these cutbacks to the private health insurance. People who do not hold insurance will have to wait longer, because there will be more people in the public hospital system. There will be more people in the public system, adding further pressure to that. This was not just a promise they made in the election. This was, as I said at the start, repeated many times by the Prime Minister. It was repeated many times by the minister for health. It is another broken promise by the Labor Party, and the opposition remains opposed to it. We believe that private health insurance plays a very important role in our health system. It is very important in taking pressure off the public hospital system. We will be fighting for this to be retained.

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