Andrew Southcott (Boothby, Liberal Party) Share this | Hansard source

A few years ago, former health minister Neal Blewett gave the John Chalmers oration at Flinders university. In an excellent oration, he made the point that the issue with private health insurance is one of the key divides in Australian politics. The point he made was that you do not get this in other similar countries like Canada where they do not have a system of private health insurance or in the UK where private health insurance is much smaller. So we have had a lot of debates about private health insurance in this chamber.

The Private Health Insurance Amendment Bill (No.1) 2014 deals with the private health insurance rebate, the Medicare level surcharge and also the Medical Research Future Fund. We know the approach that the previous government took when they dealt with private health insurance. Kevin Rudd went to an election saying that he would make no changes to the private health insurance rebate. But we know that when the former Treasurer saw how much was being spent on the private health insurance rebate, he came along loaded for bear. It was one of his big targets. Despite what they said before the election, in every budget they made attacks on private health insurance.

This is a modest savings measure of the order of $599 million over the forward estimates. It pauses the indexation for both the rebate and the Medicare levy surcharge. What it does is slightly shift the contribution between what the government pays and what individuals pay. Having said that, we need to look at the private health insurance market in Australia. What we generally see is that coverage levels are healthy. The coverage levels under the previous Hawke-Keating Labor government fell to 30 per cent and even below. We then had a problem whereby private health insurance was increasingly going up, young fit healthy people were dropping out, we were seeing premiums rise and it was becoming an unsustainable system. We stopped that with private health insurance rebate. This was a Howard government initiative. It was not just the rebate but also the Medicare levy surcharge and lifetime community rating which led to a system whereby we see overall 45 per cent of the population now holding private health insurance.

It is estimated that this measure will only affect four per cent of the 6.2 million private health insurance policies. It will not affect individuals whose income remains below $90,000 or couples and families with an income that remains below $180,000. Very importantly, all of the savings from this will be invested in the Medical Research Future Fund.

There is in Parliament House tonight a dinner for the Association of Australian Medical Research Institutes. There is a long line, a huge cast of opposition members who are there to pledge their support for medical research. But what we do need to do in this House is find savings so we can actually establish the Medical Research Future Fund. We know how the previous government dealt with funds like this. We had a Higher Education Endowment Fund but that was gone in the first budget—a capital fund spent as income. We started the capital for the Health and Hospitals Fund—again, that was spent.

We are confident that using the principles established with the Future Fund that we can establish a $20-billion Medical Research Future Fund. This is something that the medical research institutes are looking forward to. Once established, this capital fund will have an income stream available which can deliver an additional $1 billion into medical research every year, effectively doubling what we spend now.

This fund will be the largest research fund of its kind in the world and it builds on our world-class medical research capabilities. Let us never forget that when the Labor Party were previously in government they had a plan, in 2011, to rip $400 million from medical research. We saw continuously that the previous government continually broke their promises on private health insurance. They repeatedly promised that they would not change the private health insurance rebate, but they did. The means tested the private health insurance rebate in 2009 and 2011. They removed the 30 per cent rebate on Lifetime Health Cover in 2012, and they made changes to the indexation arrangements for the private health insurance rebates last year.

When I look at my own electorate of Boothby, what I see is that the percentage of voters in the electorate who hold private health insurance is over three-quarters. Over three out of every four voters hold private health insurance. These are the latest figures provided by Private Healthcare Australia as of 1 January 2014. The percentage is not as high for hospital treatment insurance—about two-thirds, or 66 per cent of voters hold private health insurance. But for general treatment insurance—which is for the allied health and ambulance, that sort of thing—there are 75 per cent of voters who hold that private health insurance.

What Neal Blewett said in the John Chalmers Oration remains true. Private health insurance has been a key divide in Australian politics. When Labor are in government they continually attack those people who hold private health insurance, those 10 million plus Australians who see the benefits in having a choice of doctor and a choice of hospital and who are playing a part in taking pressure off the public system.

This government is very proud of its commitment to medical research. The Prime Minister, when he was health minister, made a significant $15 million contribution to starting the Flinders Centre for Innovation in Cancer, the Flinders cancer centre. The current health minister, in opposition and in government, has been a strong supporter of medical research. I have said before that the previous government tried to rip $400 million from medical research in the 2011 budget. What we see in this budget is that federal government spending on health and medical research through the NHMRC is expected to reach a high of $859 million.

This bill will start the first amount of money going into the Medical Research Future Fund, and it will start from January next year. It will be managed by the future fund board, and what it will do is provide significant investment for the important medical research that is going on in Brisbane, in Parkville, in Western Sydney and in places like SAHMRI and Flinders in South Australia. Medical research has a key role in making our health system sustainable in the future. We have seen in recent announcements the government is committed to investing in innovation, infrastructure and programs which have long-term economic benefit.

The initial funding to the Medical Research Future Fund comes from the savings that we have announced in this budget and also $900 million which was left over from the Health and Hospitals Fund. We have got a strong track record in medical research. Under the previous Howard government we had the Wills review and then, through then health minister Michael Wooldridge, we saw an initial doubling of the amount of money we spent on medical research. We saw over time the spending on medical research through the NHMRC going from $131 million in 1995-96 to $715 million in 2010-11.

When we look at what some of the key stakeholders say about this policy, the McKeon review said:

There is a strong case for HMR investment given the high social and economic returns.

Again, from the McKeon review:

Investment in HMR is affordable and should be a priority for Australian Governments, given the size and nature of returns available.

That really does summarise the issues that are involved in this bill. It is a small savings measure but it will involve the first contribution, after the money that was left over from the Health and Hospitals Fund, into the Medical Research Future Fund, which all of the medical research community in Australia are looking forward to.

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