Nicola Roxon (Gellibrand, Australian Labor Party, Minister for Health and Ageing) Share this | Hansard source

in reply—I thank the members for their contribution to this debate. I must admit that the member for Moncrieff did not really take the opportunity to talk about anything particularly relevant to the Fairer Private Health Insurance Incentives Bill 2009 [No. 2] and cognate bills, but I am pleased that he has put on the record his request for a GP superclinic in his area, something that until today he has been vehemently opposed to. We will note his request for that proposal to be expanded into his electorate.

I am pleased to be summing up on these bills, which are very important to us. I am a little disappointed that those opposite who took the opportunity to speak did not really come up with any decent reason for opposing these bills and unfortunately filled their speeches with a whole range of mistruths, including some of the highlights like ‘nothing having happened in two years in health’, when actually we have been rebuilding block by block our health system after the current Leader of the Opposition spent all of his time in government pulling investment out of our health system, capping GP places, ripping a billion dollars out of public hospitals and neglecting our workforce shortages.

I think it is interesting that the member for Moncrieff and others are still using the entirely discredited figure of one million people being anticipated to move as a result of this measure into the public hospital system. Even the private health insurers themselves agree that that figure is no longer credible, and I am surprised that the Liberal opposition are continuing to use these figures.

These bills, a combination of three bills, give effect to our 2009-10 budget measure to introduce three new private health insurance incentive tiers for the rebate. These bills have previously been debated in the House, and after previously being passed in the House were defeated by the Senate at the second reading on 9 September. This legislation is needed to bring fairness to the private health insurance rebate. We believe that reforms are needed to make the rebate sustainable for the future.

The Senate, by taking the action that it did, dismissed one of the government’s key measures to appropriately deal with the global financial crisis. Its obstruction of the government’s budget and the defeat of these bills has caused a $2 billion impact to the budget over the forward estimates. Treasury estimates that, if the bills are not passed, that will increase total health spending by the middle of the century—that is, 2050—to 0.15 per cent of GDP, or by about $100 billion over that period. That is why the government has reintroduced these bills to the House and, after members’ consideration, will be submitting them to the Senate once again.

Government support for private health insurance needs to be directed to those hardworking Australians who need the assistance most, not the high-income earners who do not. Hairdressers, secretaries and taxi drivers will continue to receive benefits but not millionaires or politicians, who do not need it. Importantly, the vast majority of people keep their benefits. It is estimated that 90 per cent of Australians with private hospital cover will be totally unaffected by these changes. The government does support a mixed model of financing and delivery for health services in Australia, but, as the Intergenerational report highlights, private health insurance is going to be the fastest growing aspect of this health expenditure. As I have said, the Commonwealth cost of the rebate—and these figures have been released previously—has ballooned over the past decade from about $1.5 billion in 1999-2000 to $4 billion last year. This spending is not sustainable, particularly in light of the global financial crisis. Since the 2008-09 budget, tax receipts have been revised down by $170 billion, and the $2 billion of net saving in this package will ensure that the government’s commitment into the future for the rebate remains sustainable. I am pleased that the shadow health minister is here. Someone who previously had a role of some financial responsibility in the former government would be very aware that these figures presented a great problem for the budget, for the community and for the sustainability of private health insurance in the past, something that the new opposition finance spokesperson is clearly aware of and the reason he is leaving open the option of supporting this measure when it comes into the Senate.

The way that we can still maintain a high level of insurance is by using the other levers that we have, such as the Medicare levy surcharge and Lifetime Health Cover. A key element of the way this package of bills was designed was to ensure that Australia does maintain a high level of private health insurance membership. In fact, 430,000 more people have taken out private hospital cover since this government was elected, and the opposition’s claims that previous changes were going to lead to a massive decline of people in private health have been shown to be patently incorrect. In fact, the reverse has happened. The opposition at the time inaccurately claimed that previous bills would have an impact, and now they are crying wolf again, claiming that these bills will cause hundreds of thousands of people—or, as the member for Moncrieff just said in his contribution to the debate, a million people—to drop out of private health insurance. There is simply no evidence to support these outrageous claims. They are not based on the facts, and we are very confident that we have the mix of incentives and benefits right to ensure that the participation rate remains at high levels. As I say, this hyperbole is designed more to get on the TV news than it is to actually make sure we have a sustainable health system for the future.

Treasury projections are that only 25,000 people are estimated to drop out of hospital cover. These Treasury estimates have been supported by the independent Ipsos private health insurance survey conducted by the industry, not by the government, where the results show that only 15,900 people would drop their hospital cover, based on members’ responses when the package was explained to them. My department estimates that the small reduction in hospital coverage is estimated to result in only 8,000 extra admissions to public hospitals over two years, and this represents an increase of less than 0.1 per cent of the 18 million presentations to public hospitals over the same period. Even the President of the Australian Medical Association, Dr Andrew Pesce, agreed, saying that the AMA’s own modelling showed ‘there isn’t going to be a huge dropout rate at this stage’. That is something that he said on Meet the Press. The peak public hospital body, the Australian Healthcare and Hospitals Association, an organisation that you think would be fearful of any figures being sustained at the levels that the opposition are suggesting might be, have said that there will be ‘little or no impact on the numbers of people with private health insurance’. But, as I have noticed, there is one politician on the opposition side who has spoken honestly about this legislation. The finance spokesperson, Senator Joyce, who holds the job that Mr Dutton would dearly love to hold, has said that the opposition should consider this legislation with an open mind. He said that if there is a net saving you would have to positively consider it.

The opposition now seems to be in total disarray about this issue. The opposition leader’s response to Senator Joyce’s call was to say:

Politicians should be open-minded in a general sense, but it is a very strong position of the Coalition that we don’t support the Government’s proposal …

This sort of general sense compared to reality—that they are just going to oppose anything that gets put before them—is I think going to present some problems for Senator Joyce. But ultimately he has a vote in the other place, and, when the bill comes to the other place, we will be expecting him to act in accordance with good sense and logic.

We are concerned that the opposition leader’s role, it seems, is just to oppose everything that the government does. He is happy and ready with a complaint about everything in the system, which is something that the shadow health minister is very fond of as well. But they have no solutions—not a single solution—to any problem that they persistently complain about. That is what they did when they were in government, but now that we are in government we are determined to take some of the actions that are needed to have a sustainable health system into the future.

So we call upon the opposition not to be obstructive and threaten the sustainability of the budget but to do what Senator Joyce has called for and support this measure. The Minister for Finance and Deregulation and I have written to Senator Joyce offering him further evidence and briefing and further information if he needs it on how this net saving will be achieved for the budget. This measure will make our private health insurance system fairer and more balanced. It is necessary for our health system and for our federal budget. I would like to thank the departmental advisers who have worked on this legislation in great detail. I commend the bill to the House.

Question put:

That this bill be now read a second time

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