Warren Truss (Wide Bay, National Party, Leader of the Nationals) Share this | Hansard source

True to form, this Prime Minister and the government she leads are at it again—betraying the trust of the Australian people. The Gillard government is targeting families with private health insurance, treating them as cash cows and milking them to compensate for its own waste and incompetence. The government claims that these cuts to private health insurance rebates are just asking rich people to pay more for their health care. The Fairer Private Health Insurance Incentives Bill will in reality penalise the poor. It will penalise those most in need. If the government achieves its objective of driving people out of private health funds, many of them fit and young people, premiums will rise. They will rise for the poor, they will rise for the sick and they will rise for the pensioners—all the people least able to pay. Hospital queues will grow even longer. The victims of this bill are the people Labor once stood for—those who are sick, aged or disadvantaged.

Once people leave the private health system it is very expensive for them to get back in. The lifetime cover rules mean that premiums will be very high for those who leave their private health insurance and then later on realise they need this kind of assistance. So the government knows that if it can drive people out of private health insurance they are probably gone permanently, which achieves one of its philosophical objectives—to get rid of the private health insurance system. By phasing out the rebate the government shows how out of touch it is with struggling working families and the importance of their health care. The current health minister has just dismissed these people as 'millionaires'. Well, most of them are hard-working families of middle Australia who are not only taking responsibility for their own health care but also taking pressure off the public hospital system in the process. They are also paying taxes which fund other people's health care. They should be rewarded for saving the taxpayer 70 per cent of their own healthcare costs, not punished by a desperate, incompetent and financially strapped government.

The new penalty that the government is proposing to place on higher income earners who drop out is just another tax. As the Australian reported today, their calculations show that 'even after the premium rises caused by the means test on the rebate it will still be $719 cheaper for a family earning $258,001 or more to have basic health cover than pay the existing 1 per cent surcharge'. So this is not about trying to introduce any kind of incentive; this is simply another new tax—another new tax on a sector of the community who are already contributing significantly to our nation's healthcare costs.

I remind the House also that the Prime Minister, Julia Gillard, as the then shadow minister for health, told Laurie Oakes on the Sunday program in August 2004:

We will leave the 30 per cent private health insurance rebate undisturbed because we understand it's factored into family incomes.

She repeated the promise in September, telling the Australian newspaper, 'The private health insurance rebate is here to stay in its current form.' She also said, 'Labor is committed to the maintenance of the private health insurance rebate, and I have given an iron-clad guarantee on that on a number of occasions.' She said, 'I grow tired of saying this. Labor is committed to the 30 per cent private health insurance rebate.' All of these commitments have been made by the woman who is now Prime Minister, and people had a right, surely, to believe the government when she made those kinds of claims.

If you think that these are statements only made by the current Prime Minister, well, her current challenger was quoted in the Australian in February 2008 as saying:

The private health insurance rebate remains unchanged and will remain unchanged.

That was Kevin Rudd.

But it goes on. The then health minister, Nicola Roxon, said in a speech to the Australian Health Insurance Association's annual conference in October 2008:

Private health insurance consumers will still be able to claim the 30 to 40 per cent rebate, and the Lifetime Health Cover incentives will remain in place.

The health minister again told the Age newspaper in February 2009:

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

This government cannot lie straight in bed. Is it any wonder that the Australian people are fed up with them and their conniving and their barefaced deceit? As soon as they were elected in 2007, they moved to cut the private health insurance rebate. This is, I think, the third attempt. They have been at it all the time. And, in reality, the promise that they made to the Australian people was clearly empty.

But there is more at stake than just the veracity of this government, its shamed cabinet ministers and the rot that has set in to the very core of the Australian Labor Party. The complementary nature of Australia's public and private healthcare system is the envy of the world. These sectors are not in competition with each other; they work in tandem. The overwhelming majority of Australians recognise that the coalition got that balance right. People here recognise that the solely public NHS in the UK and the solely private system in the US are extremes to be avoided. The Speaker, I thought, put this argument very well when he spoke on this issue in September 2009. The member for Fisher, who is now the Speaker, said:

The best way to have a strong public health system is to have a strong private health system, and this government through the changes in this legislation will undermine both the private health system and the public health system. It stands condemned.

Those are the words of the Speaker himself.

In fact, taxpayers actually get great value for the money from the 30 per cent, 35 per cent and 40 per cent rebates on private health insurance. The numbers from the Australian Institute of Health and Welfare are telling. Under the current healthcare agreement between the Commonwealth and the states, public hospitals received, in 2009-10, $36.2 billion. They performed 41 per cent of all the surgery in Australia and 35 per cent of the elective surgery. According to the Australian Institute of Health and Welfare, as a result of the private health insurance rebates private hospitals received $2.1 billion. They perform 59 per cent of all surgery in Australia and 65 per cent of elective surgery. By any reasonable, rational assessment, taxpayers are getting bang for the bucks from the private health system, and that system is delivering value for money.

The counter argument is: if you put the rebate dollars into the public hospital system, then the public hospital system will be better. Well, of course, the government is not proposing to do that. They have no plans to transfer the money that they are going to save as a result of the cuts to the rebate, to actually deliver more money for hospitals. Adding another $2.1 billion, if that is the amount that would be provided, to the public hospital system would just be a drop in the ocean compared with the $36.2 billion it already gets. It would just be swallowed up by the same inefficient, state based bureaucracy that milks the system now. But the government is not proposing to transfer any of the money it receives from these cuts to the private health rebate to the hospitals. So the exodus of patients from the private to the public system would cause a new and deeper crisis in public hospitals, adding to the stress and workloads of doctors, nurses and hospital staff, and adding more people to even longer waiting lists.

Everyone knows that, once the insurance pool shrinks, premiums will go up. Adverse selection will mean that the sickest people will remain in hospital in private health cover and their premiums will go up. Research by Deloitte last year shows that 1.6 million people in the government's targeted annual income branches will dump their private health hospital cover with another 4.3 million downgrading. This initial exodus will force up the premiums by an estimated 10 per cent, and that is money that Australians cannot afford. It always needs to be remembered that 5.6 million Australians with private cover earn less than $50,000 a year. They cannot afford increases. The premiums are already high. They are already enough to make families struggle and pensioners to go without. I never cease to be amazed at the number of pensioners who tell me how desperate they are to keep their private health cover and they do without so many things which other people enjoy, because this is a priority for them. This government proposes to penalise those pensioners who have made so much sacrifice over the years because their premiums are going to up.

We already know that hospitals are overrun and Deloitte estimates that more than 845,000 extra admissions would pour through public hospital doors as a result of reduced rebates. The public waiting lists are already on the rise. The Australian Institute of Health and Welfare reported that average waiting times for elective surgery are on the rise after a two-year period of stability. Means-testing the rebate will drive those waiting times higher in the public system. If you are waiting six months now, it will probably be 12; if you are waiting three years, you will wait four years.

Today, a quite staggering 52 per cent of Australians hold private health insurance. That is remarkable and something we should be proud of. It is only possible because of the rebate and particularly the accelerated rebate for older people. People electing to take responsibility for their own health care alleviate pressures on public hospital beds. Even people without private health cover think that the private health insurance rebate is a good idea. They instinctively make the connection between more people in private hospitals equals less competition for public beds. They also see private hospital care as worthwhile and they aspire to have it for themselves. They also accept that people who take personal responsibility for their own health care are entitled to get something back for doing so.

The Gillard government's old-style Labor class warfare is woefully out of touch with the values and aspirations of ordinary Australians, who fundamentally understand the benefit of affordable private health care operating in partnership with the public hospital system. It is not often understood that 40 per cent of regional Australians hold private health insurance and, bearing in mind that there are limited private services available in regional communities, that is a remarkable statistic. Regional Australians know that there may be times when they need special care, that they may need some treatment for cancer or a hip replacement or the like. Even though they may have to travel a thousand kilometres to have the treatment they want with the doctor of their choice and at a time they want it, they are prepared to make that sacrifice and to pay the high premiums.

I am very concerned also about the impact of these proposed changes on private hospitals in regional centres. Many of them already struggle. I have three in my own electorate. St Stephens Hospital in Maryborough, where I have to admit I have been a patient once or twice, is actually teetering on the brink. If there are fewer people with private health insurance in my electorate, I fear I will lose a whole hospital. The government has no plans to help St Stephens in Maryborough stay open. It has not been prepared to offer any assistance, so this valuable hospital service may well be lost to the community. What this government is doing today will be critically watched by the staff and the people who work in St Stephens, and by those people who for several generations now have valued its services. There will be similar problems for the Cooloola hospital in Gympie, as it faces the prospect of fewer privately insured people and fewer people able to use that facility.

Regional communities with private hospitals benefit not just from the facilities but from the specialists those hospitals attract to town. There are so few specialists in country Australia as it is, but with no private health cover or reduced cover there will be even fewer. Patients will have to travel further at greater cost to consultants and treatment, and that also includes poor people who do not have private health insurance because the specialist simply will not come to town anymore.

This is a very short sighted piece of legislation. The Gillard government is raiding families with private health insurance to patch up its haemorrhaging budget. It would be far better if it got its own financial affairs in order and stopped the waste so that people could have better hospital care of their choice and maintain this support for the private hospital system and for private health insurance, which has contributed so much to the quality of Australia's health system.

See this speech in context