Tanya Plibersek (Sydney, Australian Labor Party, Minister for Health) Share this | Hansard source

I thank the member for Fremantle for her very important question. Many Australians benefit at different times in their lives from benefits like the family tax benefit to help raise their kids, Austudy when they are studying and perhaps the age pension as they age. What these benefits have in common is that they are means tested so that the greatest benefit goes to the people who need them most.

The private health insurance rebate acts in exactly the opposite way. The greatest benefit goes to the people who need the least help. Take the example of a bank teller who is on $50,000 a year, a bank executive who is on $500,000 a year and the head of the bank who is on $5 million a year. They each get exactly the same rebate if they have the same private health insurance. What is even worse is that the people on the higher income are likely to have more expensive insurance, so they are going to get a greater benefit from taxpayers. If the teller cannot afford private health insurance on $50,000 a year then her tax dollars subsidise the private health insurance rebate of the person earning $500,000 and the person earning $5 million a year.

The total cost of this private health insurance rebate is about $5 billion a year, and if we do not make these modest changes that leave around 20 million Australians unaffected we will see the cost of this private health insurance rebate blow out by $100 billion over the next 40 years.

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