Luke Hartsuyker (Cowper, National Party, Deputy Manager of Opposition Business in the House) Share this | Hansard source

I welcome the opportunity to speak on the Private Health Insurance Amendment (Lifetime Health Cover Loading and Other Measures) Bill 2013. Lifetime health cover loading legislation epitomises why so many Australians are turning their backs on this government. If members opposite are concerned why they have lost the trust of millions of Australians; if members opposite are concerned and would like an insight into why Australians believe this country is going down the wrong track; or if members opposite are seeking a snapshot of why Australians believe this government is out of touch, then I would suggest that those members should cast their eye over this lifetime health cover loading legislation we have before us today.

What lifetime health cover loading legislation represents is just another broken promise by this federal Labor government. On the back of the Prime Minister's broken promises on carbon tax and delivering a surplus, we now have another broken promise from a Prime Minister and a government which believe they have a mandate to say one thing and do the exact opposite. Another broken promise from a Prime Minister and a government which treat Australians as real mugs. Another broken promise from a Prime Minister and a government which will do anything to hold onto power and will make ordinary Australians pay the price for the government's own waste and mismanagement.

I say this because the government had claimed prior to both the 2007 and 2010 elections that they would retain the private health insurance rebate in its totality. But the reality is that the lifetime health cover legislation we are talking about today is just another step in the government's commitment to dismantle the private health insurance rebate. Last year, we saw the government break its promise to retain the rebate when it introduced means testing for private health insurance. After wasting billions of dollars on border protection, after wasting billions on overpriced school halls and blowing billions on installing pink batts and then taking them out again, the government targeted the wallets of Australians with private health insurance.

Through the introduction of means testing the private health insurance rebate, the government has effectively dumped the principle of universal health care, which is based on the same Medicare rebate going to everyone and the same private health insurance rebate also being available to everyone. With the stroke of a pen, Labor abandoned its pre-election commitment and deserted 12 million Australians who have private health insurance.

I would like to take a few moments to remind the members opposite why this decision was a breach of trust. In the lead-up to both the 2007 and 2010 elections various senior members from this government were questioned about their commitment to the private health insurance rebate. Let me remind the House what the response to those questions was. Just a few weeks before the 2007 election, the member for Gellibrand and then shadow minister for health was asked a question on Meet the Press on the Ten Network in September 2007, and this is what she said. Steve Lewis from News Limited asked:

Let's move to another integral part of the health system, the private health rebate, the 30% rebate. Labor has said, "Yes, we will keep it," but you have not said whether you will keep it in total. Can you say now that Labor, if elected, will maintain all of the ancillary measures that encompass the private health rebate?

NICOLA ROXON: Yes, I can. We've committed to it.

I would just like to repeat that. She said:

Yes, I can. We've committed to it.

After the 2007 election, Prime Minister Rudd was further questioned in 2008, and this is what he said:

The Private Health Insurance Rebate policy remains unchanged and will remain unchanged.

In 2009, the member for Gellibrand was the federal Minister for Health and Ageing and was again asked about the government's commitment to private health insurance rebates. This is what she said:

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

And of course the current Prime Minister, Julia Gillard, when she was the shadow minister for health, said the following:

YOUR correspondent … should have no concern that Labor will "erode" or abolish the 30 per cent government rebate for private health insurance. Labor is committed to the maintenance of this rebate and I have given an ironclad guarantee—

I think that the member for Denison had an ironclad guarantee on gambling reform too—

of that on a number of occasions.

Today, in 2013, we have now seen federal Labor under the leadership of this Prime Minister wind back their commitment to the private health insurance rebate to the tune of some $4 billion. The rebate has become the government's cash cow to bankroll their own waste and their own mismanagement.

It is now very clear to all Australians that last year's introduction of means-testing the private health insurance rebate was simply the first step in winding back the subsidy. The government ignores the fact that everyone with a private health insurance rebate will pay more for their private health insurance because of the means-testing. While there are a range of views on what the eventual impact will be, Deloitte's study highlights how federal Labor simply does not understand the importance of private health insurance. The study revealed that having higher premiums for higher income earners, who are generally younger and healthier, will eventually cause around six million Australians to drop out or downgrade their private cover. It is estimated that this will raise premiums for everyone else by around 10 per cent. That is a 10 per cent rise for 3.4 million privately insured Australians earning under $35,000 a year, in addition to the 30 per cent increase for higher income earners. These people are already suffering from rises in the cost of living as a result of the carbon tax and a host of other new levies, fees and charges which this government has imposed on both businesses and consumers. It is beyond belief that the government, which constantly claims to be standing up for the worker, would milk the savings of low-income earners who are easing the pressure on our public health system by taking out their own private health insurance.

We must remember this important point: this lifetime health cover loading legislation is a further attack on private health insurance, which has an impact on health funding in general, because, in subsidising 30 per cent of private health costs, the government avoids having to subsidise nearer 100 per cent of public health costs. We all know that the public health system is already under extreme pressure. These private health insurance cuts will put more pressure on public hospitals, which are struggling under the $1.6 billion cuts to funding under Labor's MYEFO. These cuts have caused the closure of public hospital beds and operating theatres and delays to elective surgery.

As more Australians drop or downgrade their private cover because of the government's dismantling of the rebate, the pressure on the hospitals and the broader health system will only increase. The Deloitte study I referred to earlier showed that as a result of the cuts already made—that is, cuts that do not include the legislation we are debating today—a reduction in the number of Australians with private health insurance will lead to a further 845,000 patients over the next five years seeking treatment in public hospitals. Paying for these additional procedures will cost the states an estimated $3.8 billion a year.

It is against this backdrop of means-testing the rebate that the government has now introduced this legislation which I am speaking about today. If passed, the legislation will restrict the private health insurance rebate being paid on the part of the premium with a lifetime health cover loading, or LHC loading. The lifetime health cover loading is applied at a rate of two per cent for every year that an individual is over the age of 30 when they take out hospital cover. Currently the rebate is paid on the total premium, but the government intends to remove the rebate from any LHC loading. With the government's budget in complete disarray, Labor announced in last year's MYEFO that it would dip its hand into the back pockets of those with private health insurance to try and prop up their disastrous budget balance sheet. The government also announced in MYEFO that the government's contribution to the rebate would be capped and indexed to the CPI or premium increases—whichever is the less.

All these announcements further undermine the rebate offered to those who pay for private health insurance. It is forecast that withdrawing the rebate on the LHC loading will see 1.1 million Australians pay more for their private health insurance. Many of those who will be hardest hit will be low-income earners. High-income earners will not be hit, because they lost their rebate when the means testing was introduced.

As the shadow minister for health and the member for Dickson has pointed out to me, the government's own body, the Private Health Insurance Administration Council, has expressed reservations about the changes the federal government is about to make to this rebate. After acknowledging the exclusions and the restrictions of the rebate had become 'more prevalent', the PHIAC said the increase in exclusions may 'work against the policy objective of private health insurance in easing the burden on public hospitals'. Whilst that might be stating the obvious, it just confirms how desperate this government has become. A number of constituents in my electorate have contacted me concerned about what federal Labor is doing to the health insurance rebate system. This is what one constituent said in an email with regard to the lifetime health cover loading:

I have heard that more changes might soon be made to the Private Health Insurance Rebate, which will make it even more expensive for me to be insured.

I am emailing you to ask you to vote against these changes, as I am finding the increases in all the various costs which I now pay are making it considerably more difficult to budget.

If I do give up my Health Insurance I will need to go to a public hospital if I get sick, where the waiting lists are too long. Please do not vote for the legislation.

This is an insight from just one Australian, out of the millions of Australians who will be impacted by Labor's ongoing dismantling of the private health insurance rebate system through this lifetime health cover loading legislation.

In conclusion, just like the carbon tax, this legislation is a breach of trust with all Australians. It is a further reminder that when it comes to federal Labor you simply cannot trust them to do what they say they are going to do. This mistrust has Australians now living in a land of uncertainty, which is sapping the confidence of families and businesses alike. As I said at the beginning of the speech, if the members opposite want to know why Australians are completely disillusioned with this government, they need look no further than this legislation. It is bad for Australians with private health insurance, it undermines our system of universal health care and it betrays the trust which is so important to the self-esteem of the nation.

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