Graham Perrett (Moreton, Australian Labor Party) Share this | Hansard source

I rise to speak in support of the Fairer Private Health Insurance Incentives Bill 2009 [No. 2] and cognate bills. Before I continue, I would like to go on the record and declare a conflict of interest: I do have private health insurance—like millions of other Australians—and my family is covered by it. Also, I cannot hide from the fact that I do earn more than $120,000. I just wanted to put that on the record.

This week the Treasurer released the new Intergenerational report, called Australia to 2050: future challenges. This report confirmed what most of us already know: Australia’s ageing population is a big pressure point for our health system. Unless we can magically discover Ponce de Leon’s fountain of youth—maybe somewhere out in the Balonne or on a property out in Western Queensland—the pressures on our economy are only going to get worse. As the population ages, more people will rely on health services. At the same time, health costs—the opportunities to spend money in the health system—are growing rapidly. It is just a reality that most of our health costs balloon as we age. They tend not to occur when we are 20, 30, 40 or even when we are 5, 10 or 15; it is much later in life that health costs skyrocket.

The report that the Treasurer delivered on Monday found that health spending would almost double in the next 40 years. That is incredible. It would rise to 7.1 per cent of our GDP in 2050. This means that we cannot continue the way we are going because our economy will be totally overwhelmed. Life and lifestyles as we now know them will come to a screeching halt. If we want our fellow Australians to be able to access the kind of health system that they expect and deserve, we cannot just take a business-as-usual approach. We cannot just stick our heads in the sand and say, ‘No, things are fine; we can continue.’ We need to respond to the research, to the hard data, to the empirical trends that, sadly, sit before us. The private health insurance rebate is an important tool for helping more Australians access private health insurance. It is a great example of the helping hand of government working with individual responsibilities. It is something that those opposite used to believe in; now they are retreating from that.

Since 2001, more than 1.2 million more Australians have taken up private health insurance, with 9.8 million people now covered. In fact, in the latest September quarter, the coverage of private health insurance has grown to 46.7 per cent, up by 0.2 per cent on the June quarter—something not mentioned by speakers on the other side, especially the first speaker for today, the member for Dickson, who is like Henny Penny Hanrahan when it comes to private health insurance—‘the sky is falling’. He says ‘we’ll all be rooned’ when it comes to private health insurance numbers. But, no, Henny Penny Hanrahan, the member for Dickson, has it totally wrong; we have actually had an increase, despite the calibrations that the Rudd government has sensibly brought in in the context of a constrained budget and an ageing population.

Not only does this mean that nearly 10 million Australians enjoy the benefits of access to private health care; it also takes pressure off our public hospitals. However, the current rebate is just not sustainable for the long term. That is why we need to recalibrate the rebate to ensure low- and middle-income Australian taxpayers are not subsidising the health insurance of wealthier Australians. As I said at the start, if I earn over $120,000—and all MPs would be in that bracket, certainly individually—why should the trolley boy at Woolworths at Moorooka subsidise my health needs? Why should the panelbeater at Coopers Plains subsidise my health needs? Why should the baker at Corinda subsidise my health needs? Why should the aged-care nurse at Sunnybank Hills subsidise my health needs? I know that the Liberals want to look after the big end of town, but by blocking this particular measure they are costing Australian taxpayers almost $2 billion over the forward estimates and $100 million out to 2050.

When will the Liberal and National parties have the courage to take the tough decisions to manage long-term fiscal pressures and ensure that all Australians have a sustainable health system? I remember a time when they claimed economic credibility, but that title has slipped away entirely. The opposition like to pretend that this bill will force thousands of Australians to give up on private health insurance and rely on the public health system. As I said, the previous speaker and Henny Penny Hanrahan, that voice of doom, said, no, people are going to turn away from private health insurance; but this view does not add up and it is not supported by the data and the research. It is just more of the smear and fear that we have come to expect from those opposite. The member for Dickson said that the Labor Party’s changes are about an ideological obsession. However, any sensible person, anyone with a shred of common sense, would see that it is about a commitment to delivering balance and common sense.

The Treasury estimates show that in fact 99.7 per cent of people are expected to remain in private health insurance. If we look at the last quarter’s data, maybe it will even increase. They predict about 6,500 singles and 5,500 families may have to drop their private health insurance—and let us hope that those numbers decrease. In fact, a survey conducted by the research firm IPSOS found that even fewer people would drop their private health insurance as a result of these changes. It is a much more valued product than those opposite claim. The reality is that around three-quarters of all policyholders in Australia will not incur any increase in their net premiums as a result of this bill before the House.

These changes to the private health insurance rebate are not being made in isolation. They are accompanied by a massive health reform agenda and increased spending on public health in areas like elective surgery and chronic disease prevention and other initiatives like GP Superclinics rolling out across the country—one coming soon to Moreton—and a significant boost to training more doctors, nurses and allied health professionals. Contrast that with the work of those opposite, where they ripped a billion dollars out of the health system. So for those opposite to complain about this recalibration is hypocritical, to say the least.

The Fairer Private Health Insurance Incentives Bill 2009 introduces a tiered system to better balance the incentives for people taking out private health insurance. For low- and middle-income earners the private health insurance rebate will remain unchanged. That is for singles earning less than $75,000 or families earning less than $150,000. Tier 1 will apply to singles with incomes of more than $75,000 and families with incomes of more than $150,000. For these people the rebate will be 20 per cent, increasing to 25 per cent at 65 years of age and 30 percent at 70 years. Tier 2 kicks in at $90,000 for singles and $180,000 for families. These are not necessarily people on struggle street, I would suggest. The rebate will start at 10 per cent, increasing to 15 and 20 per cent at the age brackets I mentioned above. The rebate cuts out at tier 3 and applies to singles on $120,000 and families earning more than $240,000. This legislation also changes the Medicare levy surcharge to encourage higher income earners to maintain their private health insurance. It does so by raising the levy to 1.25 percent for those in tier 2 and 1.5 percent for those in tier 3. The Medicare levy will remain unchanged at one per cent for those in tier 1 and below.

As healthcare costs continue to rise, we are going to see an increase in private health insurance premiums. That is just the reality of an ageing society and advancing health technologies. If we agree that we want private health insurance to be sustainable for the long term, we need to respond to these increasing costs. That is the Labor Party view of policy. We look for the long-term benefits to the nation and the long-term best interests of the nation, not short-term political expediency. Unfortunately, maybe sometimes that is the curse of opposition—and it certainly seems to be a baton that the new Leader of the Opposition has grasped with both hands. Rather than handing out government rebates to all and sundry, responsible government, far-sighted government, government with vision, demands that we fairly allocate government resources to those that need it most. This legislation strikes the right balance. It continues to support low- and middle-income earners while empowering those that have the ability to pay. As I mentioned previously, this measure will deliver $2 billion in savings over the next five years and ensures that private health insurance remains fair and sustainable into the future. I commend the bills to the House.

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