Kerry Rea (Bonner, Australian Labor Party) Share this | Hansard source

I support the Fairer Private Health Insurance Incentives Bill 2009 [No. 2] and associated bills, which attempt to introduce a fairer private health insurance system. I listened with great interest to the member for Paterson as he gave a very gloomy and dim picture of a public health system that was in trouble. I listened to his litany of examples about people being forced to receive inadequate health care and medical professionals being concerned about the level of health care that they were able to provide.

What I find interesting is that the member for Paterson—and, indeed, many members of the opposition in speaking on this debate have used very similar examples—is somehow trying to say that this legislation, which is not yet law, is the reason the public health system and his constituents are facing such serious healthcare problems. I think we need to remind the opposition of the reality. Perhaps it is due to the 12 years of neglect by the previous government and the fact that the Leader of the Opposition when he was health minister for four years ripped $1 billion out of the health system and froze the number of GP places. Perhaps the report that the member for Paterson was referring to is in fact a reflection of the attitude the previous Howard government had towards health care. I doubt very much it is a result of this proposed legislation which is attempting to introduce a fairer private health insurance system by reducing the private health insurance rebate for higher income earners—hardly a measure that would have created the litany of examples produced by those opposite that reflect on our public health system.

The point I want to reiterate to the opposition is that we are not abolishing rebates for private health insurance and the proposals contained in this legislation are not the cause of the problems we are addressing in our public health system. A range of factors have contributed to that, and I certainly agree that it is due in no small part to the lack of federal government support in terms of funding, resources and policies when it comes to providing a better healthcare system.

This legislation is unapologetically about this government ensuring that we introduce a fairer private health insurance system. It is about ensuring that low-income earners do not subsidise higher income earners when it comes to health insurance rebates. I agree with the Treasurer: I do not think that the low-income earners in my electorate of Bonner should be subsidising my or my family’s private health insurance.

I took out private health insurance for a number of reasons. I have three children. I have very bad eyes and all three kids now wear glasses. All of us, including my husband and me, need dental care. There are a whole range of reasons, very practical, cost-effective reasons, that my family would take out private health insurance. It is not because I received a subsidy from the government. It is not because I received a rebate. It is because it was a health choice that I thought was best for me and my family and I therefore do not expect people on much lower incomes than mine, or than my combined income with that of my husband, to be subsidising the fact that I am in a position to make that choice.

What is important in the context of the opposition’s comments and in the context of this debate is that this legislation is just one small part of the very significant initiatives that have already been introduced by the Rudd Labor government to ensure health reform in this country which will provide a better overall healthcare system. The reality is that the health dollar is finite, that the population is growing and that the demand for health services within the population is also growing. We know that it is our responsibility as a government which provides funding for health care that we do two important things. It is a dual responsibility. We have to find a way of providing the best health services for the vast majority of Australians in this community. It is not about subsidising the health choice of high-income earners. The overall responsibility is to provide a balanced healthcare system that supports both private health choices and a good public health system while at the same time being very mindful of the fact that we are spending taxpayers’ dollars. We must be responsible in the way that we spend that money. We have to find a way of supporting a healthcare system that is cost-effective and efficient but also provides the best possible healthcare choices for all Australians, regardless of their position and their income.

We also know that, due to modern science and to great advancements in technology, particularly in the area of medical procedures and health care, the demand on the health dollar is changing. We are getting better at doing some things, but we are also discovering new procedures and new medicines that we as a government would like to support and make more affordable for all Australians. So it is also important that we acknowledge that health funding is an ever-changing, ever-moving feast. It constantly needs to be reassessed and re-prioritised as some procedures become redundant, some procedures become less expensive and we become aware of new procedures that require and deserve support to be made more affordable.

So we have to be very clever about the way we use the health dollar and we have to be mindful always of both changes in technology—medical advances—and changes in demand, because we are looking at a population which is living longer and which is increasing. We must be very careful and mindful of how we spend that dollar. Once again, I do not believe that subsidising the private health insurance costs of higher income earners is the most cost-effective and efficient way that we can spend a health dollar to provide a better health system in our modern world.

We need to look at what the government has already done to support the health system overall—a $64 billion COAG agreement on health. This involved unprecedented amounts of money and unprecedented cooperation between the states and the Commonwealth who, combined, are the people ultimately responsible for providing the healthcare system in Australia.

The expectation is that 99.7 per cent of people will retain private health insurance even when this legislation is passed. We are not talking about a drastic reduction in the number of people seeking private health insurance. We are not talking about a sudden rush on our public hospital system because of this legislation. All we are talking about is a fairer way of supporting affordable private health insurance in this country. Currently, 14 per cent of single income earners in this country who earn over $75,000 get 20 per cent of the total private health insurance rebate. That is just not fair. There is no other way to explain that statistic than simply to say, ‘It is not fair and we need to rearrange it.’ In the same way, 12 per cent of couples who earn over $150,000 currently get 21 per cent of the private health insurance rebate.

This is not simply a statistic that reflects that, as a percentage of the population, they are getting a greater share of the rebate; we are talking about a particular sector of the population which is earning what are considered, in this day and age, to be very good incomes. I find it amazing that the party which considers itself to be the party of small government, the party of free enterprise and the party that supports the free market, is contradicting every single one of those principles by opposing this legislation. High-income earners do not have private health insurance because they get a government rebate. As I have already said, from my own experience, that of many of my colleagues and that of people I talk to, high-income earners take out private health insurance because they want that choice, because they want the medical services that they can access and because they know that having private health insurance is a better way of providing good health care for themselves and their families. That is why they take out private health insurance.

The health insurance companies themselves are private companies. They are in a competitive market. They have good marketing analysts, they have great PR strategies and they have great advertising campaigns. They are in the business because they have a product to sell and they believe that they can match or better their competition. They are not saying, ‘We will become a private health insurance company because the government will support people to take out our product.’ They want people to choose their product because they believe that they can provide the best healthcare options in the private health insurance system. So to say that reducing the rebate for people on incomes of over $75,000 and families on incomes of over $150,000 is about attacking and putting too much pressure on our public health system does not recognise those people’s ability to make a choice and to pay for it, and it does not recognise the fact that private health insurance companies are out there selling a product. The companies do not necessarily need those people to have government rebates to choose their product.

In terms of the issue about subsidy, it really surprises me that the opposition do not understand that there are still eight million low- and middle-income earners whose rebates will not change under this legislation. We are not attacking the rebate system. We are not removing private health insurance rebates. This legislation is not about completely removing a benefit; it is about providing balance. It is about understanding that a government’s responsibility first and foremost is to provide a healthcare system which supports, maintains and upgrades our public health system. We also acknowledge that the private health sector provides people with options that can relieve pressure on the public health system. Therefore, it is appropriate that the government also step in to support low- and middle-income earners by giving them an affordable option to taking out private health insurance. It is not about supporting private health insurers; it is about giving all Australians an affordable option on health choice. We have to remember our responsibility as government health funders and our responsibility to support Australians to seek out the best health options they can. It is not about simply providing a rebate for the sake of it.

The doom and gloom that is painted by the opposition—if they support this legislation, which they have clearly said they will not—raises a number of assumptions that I think are quite interesting. For example, as I have already said, there is an assumption that 0.3 per cent of people may choose to drop out of private health insurance because of these changes—we must remember that we are actually still supporting the 99.7 per cent who are still in there—and that that will suddenly put such great pressure on our public hospital system that it will fall over. As we can all see, that is nothing more than a scare campaign about this legislation. We know that people will not be rushing to the casualty departments tomorrow because they do not have private health insurance. We know that people will still look at their budgets and their healthcare needs and make the best decisions for themselves and their families.

I also want to say to the opposition that trying to drum up a fear and scare campaign around the pressure on our public health system as a result of this legislation is totally wrong. All they are doing is reminding every single Australian that our public health system is in need of major reform, support and upgrading because of their 12 years of neglect—not because of a proposed piece of legislation. It is also important to remind the opposition that if they want to support the private health insurance industry they could support the government’s measures on preventative health. They could do that rather than opposing this fairer approach to the way that government rebates are administered, rather than opposing this legislation which is about providing affordable healthcare options to those who need them and acknowledging that those on higher incomes are in a financial position to make their own health choices and will do that. If the opposition were to support the government’s measures on preventative health, they would be supporting the public health system and the private health system, and I think that would be welcomed by private health insurance companies.

Preventative health can not only significantly reduce the pressure on our public health system; it can also support an ever-growing market for the private health system. We all know that our private health insurance companies are now offering a vast range of products that are about preventative health and allied health services rather than just hospital or dental care. We all know that you can claim gym membership, you can get physiotherapy costs covered, and you can get a whole range of allied preventative health measures claimed through your private health insurance company, because those companies understand that that is the best way of reducing health costs. They also understand that in this day and age it is becoming increasingly popular, throughout the whole of the Australian community, to look at ways of getting healthier and fitter and to find ways to avoid becoming victims of chronic and acute diseases and avoid having to rely on a public health system when it comes to injury or major illness.

I say once again and reinforce in closing: please would the opposition get over their ideological opposition to this and appreciate that this is a fairer way of distributing the public health dollar. To really support people who take out private health insurance and to ensure that private health insurance and the private health system continue to flourish and grow, you need to actually acknowledge the importance of preventative health. We need to start looking at policies, programs and government support for that area. Indeed, supporting the Preventative Health Agency would be a very good start.

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