Joel Fitzgibbon (Hunter, Australian Labor Party, Shadow Assistant Treasurer and Revenue) Share this | Link to this | Hansard source

The Tax Laws Amendment (Medicare Levy and Medicare Levy Surcharge) Bill 2006 involves some routine annual amendments to the Medicare Levy Act that are required for the indexation of annual thresholds. The bill also amends the Medicare Levy Act 1986 to increase the Medicare levy low-income thresholds for individuals and for families. The dependent child/student component of the family threshold will also be increased.

The bill also increases the Medicare levy low-income threshold for pensioners below the age pension age so that they do not have a Medicare levy liability where they do not have any income tax liability. The A New Tax System (Medicare Levy Surcharge-Fringe Benefits) Act 1999 will also increase the Medicare levy surcharge low-income threshold in line with movements in the consumer price index. The individual thresholds will be increased, from $15,902 to $16,284. The level of the family income threshold will also rise, from $26,834 to $27,478. That threshold will also be increased by a further $2,523 for each dependent child or student. This 20 per cent phase-in threshold is effectively the imposition of an effective marginal tax rate on low-income earners. While Labor supports the measure, it does not reduce the EMTR effect; it simply shifts it upwards—which is an important point for the House to recognise and for the government to acknowledge.

The bill also proposes to increase the threshold amount for pensioners below the age pension age. The increase ensures that eligible pensioners do not have a Medicare levy liability where they face no income tax liability. The threshold amount for pensioners who are under the age pension age will increase from $19,252 to $19,583. The Medicare levy also applies at a reduced rate to taxpayers who have taxable incomes above the threshold amount but not more than the phase-in limit. For the 2005-06 year, the rate of the Medicare levy payable in these circumstances is limited to 20 per cent of the excess over the threshold amount that is relevant to a particular person. The phase-in limit for individuals has been increased from $17,191 to $17,604. The phase-in limit for pensioners who are under the age pension age will increase from $20,812 to $21,170.

There is no phase-in limit for families as the figure changes with the numbers of dependants. Instead there is a formula that limits the levy payable by persons with families to 20 per cent of the 2005-06 years for the amount of family income that exceeds their family income threshold. This range is increased where there are dependants. A Medicare levy surcharge of one per cent applies on taxable income in certain cases where taxpayers do not have private patient hospital cover. The surcharge of one per cent also applies to reportable fringe benefits in certain cases where taxpayers do not have private patient hospital cover. However, a family member who would otherwise be liable for the surcharge is not required to pay the surcharge where the total of the person’s taxable income and reportable fringe benefits do not exceed the individual low-income threshold amount. Unlike the Medicare levy, there is no shading in of the surcharge above threshold amount.

References to the individual low-income tax threshold amount of $15,902 in the Medicare levy surcharge provisions in respect of surcharge on taxable income are also being increased to $16,284. References to the individual low-income threshold amount of $15,902 in the Medicare levy surcharge provisions of the A New Tax System (Medicare Levy Surcharge-Fringe Benefits) Act 1999 in respect of surcharge on reportable fringe benefits will also be increased to $16,284. I want to make some general comments about health policy. On that basis it is now a good time to move the opposition’s second reading amendment. I move:

That all words after “That” be omitted with a view to substituting the following words: “whilst not declining to give the bill a second reading, the House:

(1)

condemns the Government and Minister for Health for squandering the opportunity to fundamentally reform our health system;

(2)

condemns the Government for failing to invest in rebuilding our health system, including Medicare, for the future, focused on prevention, early intervention and an ageing population; and

(3)

condemns the Government for its failings in relation to our health system, as evidenced by delivering a Budget containing hidden cuts and the related decision to sell off of Australia’s biggest not for profit health insurer, Medibank Private”.

As I think I have indicated, Labor supports the bill as it is presented to the House. It is an annual event that ensures that people are not disadvantaged by increases to the consumer price index but it is a disadvantage I want to talk about.

Ian Causley (Page, Deputy-Speaker) Share this | Link to this | Hansard source

Has the amendment been circulated?

Joel Fitzgibbon (Hunter, Australian Labor Party, Shadow Assistant Treasurer and Revenue) Share this | Link to this | Hansard source

I understand that the amendment has been circulated. I want to talk about a disadvantage in health policy in my electorate of Hunter. There are many examples of that—notwithstanding some of the pressures being felt by the public hospital system; something which creates victims right throughout the region—but I want to talk about a specific area of disadvantage: the inability of people living in Cessnock and Maitland local government areas, which includes Cessnock, Maitland and a number of towns in between, to access a general practitioner. If there is one priority in this place for all of us, it should be providing an opportunity for all Australians to seek medical assistance when and if they need it, not only for them but for their families.

We often talk about resident to GP ratios in this country. Generally speaking, while we would like it to be lower, the accepted resident to GP ratio is about 1,500 to one—that is 1,500 residents for every local GP. Unfortunately, in my electorate, that ratio often goes as high as 3,000 people for each general practitioner. That is double.

Peter Garrett (Kingsford Smith, Australian Labor Party, Shadow Parliamentary Secretary for Reconciliation and the Arts) Share this | Link to this | Hansard source

It’s too high.

Joel Fitzgibbon (Hunter, Australian Labor Party, Shadow Assistant Treasurer and Revenue) Share this | Link to this | Hansard source

The member for Kingsford Smith is right to say that it is far too high. It is double the acceptable level. Twice as many people as the acceptable standard are trying to see GPs in my electorate. This is a crisis situation. People cannot get to see a doctor. I have real examples of this. Newspapers in the past have asked me whether I can give real-life examples of people who physically cannot access a doctor, and I have been able to provide those real-life examples. In some cases it has been a pretty sad story, where children have failed to secure the services of a general practitioner when they have really needed it. We often hear in this case that that forces them to wait at the local public hospital. Not only does that inconvenience the family and actually put lives at risk but it also then becomes a cost-shifting exercise between the Commonwealth and the state. If you go to the GP, the major cost is borne by the Commonwealth; if you go and line up at the public hospital, then the major cost is borne by the state government. So there is a significant cost-shifting issue here.

When will the government finally acknowledge and recognise this is a problem and do something about it? How long can communities like Cessnock and Maitland continue to soldier on without a basic right—the ability to access a general practitioner when that is the family’s requirement?

One of the big problems with the current system is this system of RRAMA classification. The RRAMA classification classifies towns on their rural remoteness. Obviously the more remote you get, the more difficult it can be to secure GPs. In the cities, where lifestyle choices are attractive, GPs are pretty easy to find. That is why bulk-billing rates are so high in Labor strongholds like some areas of Western Sydney and so low in Labor strongholds in rural Australia. It is simply is a matter of competition: if you have a doctor on every corner, there is going to be intense competition—doctors fighting for patients, in effect. In a normal market it would drive the price down, but what it does in this market is push the doctors into offering bulk-billing services. In other words, the patient does not have to pay any out-of-pocket expenses.

But in rural and regional Australia, where doctors are much more thin on the ground, there is no competition. In fact, there is a disincentive to bulk-bill because, if you are a hardworking GP—and all the GPs in my area and, I am sure, in all of Australia, are hard working—you do not want to be attracting additional patients. You cannot deal with the patient load you already have. So the response, of course, is not to bulk-bill—put a price signal in there so people do not come to the doctor. I am not imputing any bad motive upon the doctors. They can only work 24 hours a day, not 26. It is not surprising, therefore, that they would want to put that price signal in place. Again, in Western Sydney and many city areas, where the lifestyle is attractive, the competition is intense, and the best way for doctors who are undersourced to attract patients is to bulk-bill. That is why that discrepancy applies so obviously.

The RRAMA classification is wrong in its implementation and it is wrong in fact. You cannot assume that because an area is rural it is more difficult to secure a doctor. In fact, some rural areas are very attractive to doctors, for various reasons. Big regional centres can offer their attractions. Some people might want to work in a rural area because they are from rural areas themselves, and that is an attraction to them. This is why we have to get more local people to do their medical degrees in regional universities. The people most likely to practise in rural and regional areas are people who come from rural and regional areas in the first place. The more people we can get coming back to those areas, the more doctors we will have, the more competition we will have, the more demand for patients we will have and of course the more bulk-billing we will have in those regional areas.

The RRAMA classification system is full of those anomalies. I have spoken with the minister for health about this issue and I agree with him when he says it is very difficult to start pushing RRAMA boundaries around. We have RRAMA 1 for city and metropolitan areas, we have RRAMA 2 for other metropolitan areas, we have RRAMA 3 for regional areas and RRAMA 4 for, I think, rural areas. It goes on and on and on. When you use these arbitrarily drawn lines and you start moving them around, just as in the case of thresholds in tax policy, you create another problem and therefore you create another anomaly. So I agree with the minister for health that it is difficult to deal with the issues facing these so-called ‘other metropolitan’ or RRAMA 2 areas by just shifting the boundary a bit further, because just beyond that boundary there is likely to be another community with other problems just as intense as the problems of those who were previously outside the RRAMA 3 area.

Boundary adjustments will not do the trick. It only exacerbates the problem or spreads it to other places. We have to jettison this idea of drawing these arbitrary lines and having people rely on those arbitrary lines for access to basic health services. The government should have learned by now that you cannot take this one size fits all approach to public health policy, just as it should have learned that you cannot take a one size fits all approach to taxation policy as it applies to small business. That policy last year drove more than 2,000 small business operators to the wall. You have to start taking a town by town approach to these classifications to ensure that these additional initiatives governments take to help create more GPs in their local areas are applied to towns in need and not just towns that might fall within one particular boundary. Under the RRAMA 2 classification, Cessnock and Maitland cannot get access to those initiatives that are provided to try to lift GP numbers in those local areas.

I will give the minister for health his due. He visited Cessnock recently and discussed some of these issues with us. I was delighted with the time he gave to those health professionals he spoke with, the time he gave to those consumers he spoke with, but, alas, I saw no initiative in the budget whatsoever that is going to address the doctor shortage crisis in the LGAs of Cessnock and Maitland. Today, as I close this debate, I appeal to the minister for health, in his presence, to have another look at those areas and do something about that GP crisis.

David Hawker (Speaker) Share this | Link to this | Hansard source

Order! It being 2 pm, the debate is interrupted in accordance with standing order 97. The debate may be resumed at a later hour and the member will have leave to continue speaking when the debate is resumed.