Michael Keenan (Stirling, Liberal Party, Shadow Assistant Treasurer) Share this | Link to this | Hansard source

I will be brief in light of the fact that the Tax Laws Amendment (Medicare Levy and Medicare Levy Surcharge) Bill 2008 relates to another bill that the House will be debating once we have dispensed with this. These bills are related, and it is a little difficult to see why the government has chosen to debate them separately tonight.

It is just another one of the outrageous measures that we have seen today which show absolute contempt for this parliament and therefore contempt for the Australian people who elect their representatives to this chamber. What we have seen is a government that is totally off message as a result of the failure to fulfil their promises to the Australian people to bring down fuel prices. I see there has been another revelation tonight on Channel 9 by veteran reporter Laurie Oakes further exposing the divisions within the government and within cabinet. Of course, what we find is that they are desperate to try to change the story, so they come into this place and decide they are just going to ram through legislation in a way we never would have done when we were in government. They have no respect for this parliament, and therefore I believe they do not respect my constituents in Stirling or the constituents of the member for Moncrieff. It is very clear that the opposition oppose measures contained within this budget in relation to the Medicare levy surcharge, but we will be outlining our reasons for that in the debate on this subsequent bill. I will therefore let the business of the House proceed and move on to that.

Darren Cheeseman (Corangamite, Australian Labor Party) Share this | Link to this | Hansard source

Thank you, Madam Deputy Speaker Saffin; it is a great honour to speak in front of you. Yet again Labor has done the right thing by working families. Increasing the Medicare levy surcharge thresholds to $100,000 for individuals and $150,000 for families from 1 July 2008 will be yet another measure to take the pressure off working families. This measure, like our tax cuts, like our education support measures and like axing WorkChoices, will help working families. The guts of this issue are this: as a result of this change, many individuals will be up to $1,000 a year better off and couples will be up to $1,500 better off, and the 400,000 Australians without private health insurance who were being hit with this unfair tax will receive immediate tax relief. There are 400,000 Australians who will be better off under this budget measure.

Within my own electorate of Corangamite, this measure will have a very significant impact. Let’s have a look at what it will do in Corangamite. Based on calculations using census data, approximately 4,100 families will directly benefit from this measure. These local Corangamite families will be up to $1,500 a year better off—$1,500 is enough to pay for sporting fees for kids for a year for an average family. It is a lot of money for the average working family, and I think it is something the opposition just don’t get. It is about immediate financial relief to working families, and there are thousands of families in my own electorate alone.

But there is another issue at play here: the issue of choice. The decision provides Australians with more health choices. As we know, Liberal tradition is supposed to be all about choice. The Liberal theory was all about individuals of free will exercising choice. Today, as indicated by this debate, we know the Liberals have abandoned their tradition yet again. They have abandoned choice, just like they have abandoned working families. Our government supports working people and believes Australians deserve a real choice when it comes to their health care.

There are a couple of other historic things I want to point out about this measure. Firstly, it is about 10 years since the Medicare threshold was moved. The threshold has been frozen for a decade. When most other similar measures have been adjusted for changing circumstances, time has stood still on this one. In a way, it has mimicked the Liberals. It has moved about as far as the member for Higgins’s leadership bid, and that is nowhere. The only difference is that this has not been frozen by fear; it has been frozen because of Liberal policy paralysis.

Steven Ciobo (Moncrieff, Liberal Party, Shadow Minister for Small Business, the Service Economy and Tourism) Share this | Link to this | Hansard source

Madam Deputy Speaker, I rise on a point of order. I ask you to draw the speaker back to the substance of the bill, although he has basically no contribution to make on the bill. It would be better if he sat down rather than carry on with this kind of material.

Darren Cheeseman (Corangamite, Australian Labor Party) Share this | Link to this | Hansard source

We all know the former Treasurer is now frozen again, this time at the end of a plank. Will he jump, or will he crawl back onboard, grab a cutlass and join the other cutthroats on the Liberal ship? This Labor government, in contrast to the mutineers on the other side—

Steven Ciobo (Moncrieff, Liberal Party, Shadow Minister for Small Business, the Service Economy and Tourism) Share this | Link to this | Hansard source

Madam Deputy Speaker, I rise on a point of order. I appreciate the speaker’s swashbuckling adventures, but it is very clear that this is not relevant to this bill. I ask you to make the speaker relevant.

Janelle Saffin (Page, Australian Labor Party) Share this | Link to this | Hansard source

In this place we engage in robust debate, and that is what has been going on on both sides. The member for Corangamite may continue, and I remind the member to speak to the bill at hand.

Darren Cheeseman (Corangamite, Australian Labor Party) Share this | Link to this | Hansard source

This Labor government, in contrast to the mutineers on the other side, is working with the states and territories to turn around our public health system. We are totally committed to the public health system and Medicare, something that the others are not. We are investing an additional $1 billion over the next 12 months through the Australian healthcare agreements and an additional $600 million for those on elective surgery waiting lists. That is part of a broader $3.2 billion investment in health and hospitals in this year’s budget aimed at improving the quality of our hospitals and at keeping people well and out of hospital.

Those on the other side really are having a lend when they attack us for funding health. I ask: what did they think the impact would be when they sliced around $1 billion out of our hospitals budget in 2003? We are the party that believe in looking after the health of all Australians, not just those who can afford it, and in doing what we can to take pressure off working families.

I have read the concerns from insurers about growing outlays. It is not unusual to hear these concerns, and it is not surprising that health businesses would bring this to the fore in protecting their turf and their market share. The truth is I cannot remember ever having heard insurers say outlays might be normal in any one calendar year. But the fact is that outlays paid by insurers have decreased over the past decade from around 87 per cent to 82 per cent, which is a drop of five per cent. I have not heard that fact widely disseminated in the media by the industry recently. Realistically, while the participation rate may be lower in the short term, this also results in lower benefit outlays for the insurers.

The underlying growth in private health insurance coverage over the next four years is expected to more than account for the loss in coverage from the surcharge threshold increase. While benefits paid are a significant contributor to private health insurance premiums, the amount of benefits paid does not give the whole picture of the financial position of the insurer and the ongoing need for premium increases. For example, it does not take into account investment income, management expenses, contribution income and membership growth. It is important when making decisions to take into account the complete picture, and that is what our government has done.

It is very important that decisions are made on facts not flummery, and in this debate we have had a lot of flummery. Here is just one example. We have recently had two different estimates from the AHIA chief executive, Michael Armitage, of the number of people who will opt out of private health insurance. The estimates came a week apart. One said 400,000 and the other said 900,000. That is a margin of error of 125 per cent. I note that one of these estimates came from research by the well-known firm Crosby Textor. Let us hope they do not allow this margin of error in their election polling for the Liberal Party, or maybe that is the explanation for the debacle when the Liberals took their policies to the Australian people last year. Of course, there are other reports on the private health insurance industry impacts, a number of which greatly undercut and discredit the opposition’s fearmongering and exaggerated assertions on this issue.

We absolutely support the private health insurance rebates; we always said we did. We want to give people incentives to take out private health insurance, not whack them with a big tax slug when they cannot afford it. Labor is committed to decent health care for all Australians. In addition to our other commitments to health and hospitals, including an additional $1 billion for hospitals this year, we have committed to: up to $600 million to clear elective surgery waiting lists; another $780 million for dental health; $275 million for GP superclinics; and the establishment of a Health and Hospitals Fund, which demonstrates the government’s commitment in partnership with state and territory governments to equipping Australia’s health and hospital system for the future. Labor is a party of more investment in health care. The Liberals are a party that loathe Medicare. For years they tried to axe it. They would still like to do it, and they would do it only that Medicare is incredibly popular with Australians. Labor is the party that brought in universal health care and a system to which the rest of the world looks as a model.

Michael Keenan (Stirling, Liberal Party, Shadow Assistant Treasurer) Share this | Link to this | Hansard source

Madam Deputy Speaker, I rise on a point of order going to relevance. This bill is about 1⅓ pages long. The second reading speech on it was three paragraphs long. I have a feeling that this member might think he is actually debating the bill that is coming on.

Janelle Saffin (Page, Australian Labor Party) Share this | Link to this | Hansard source

Could the member tell me what his point of order is?

Michael Keenan (Stirling, Liberal Party, Shadow Assistant Treasurer) Share this | Link to this | Hansard source

It goes to relevance.

Alan Griffin (Bruce, Australian Labor Party, Minister for Veterans' Affairs) Share this | Link to this | Hansard source

Madam Deputy Speaker, I rise on a point of order. This bill relates to issues around taxation laws and Medicare levy surcharges. The bottom line is that the member is entirely relevant and the shadow minister should sit down.

Ms Anna Burke (Chisholm, Deputy-Speaker) Share this | Link to this | Hansard source

The fact that a bill might be one page long and the second reading speech three paragraphs long does not give credence to the point of order.

Steven Ciobo (Moncrieff, Liberal Party, Shadow Minister for Small Business, the Service Economy and Tourism) Share this | Link to this | Hansard source

Madam Deputy Speaker, I rise on a point of order. Standing order 77 is very clear on this. This debate is an anticipation of the next listed matter of government business. It is not the opposition’s fault if the government is unable to work out whether or not a debate should be cognate. Under standing order 77—

Ms Anna Burke (Chisholm, Deputy-Speaker) Share this | Link to this | Hansard source

Would the member for Moncrieff please take his seat.

Roger Price (Chifley, Australian Labor Party) Share this | Link to this | Hansard source

Madam Deputy Speaker, could I draw to your attention that the anticipation rule was removed by the coalition in the last parliament. There is no anticipation rule in the standing orders.

Ms Anna Burke (Chisholm, Deputy-Speaker) Share this | Link to this | Hansard source

There is no point of order. Speaking on relevance: the title of the bill is Tax Laws Amendment (Medicare Levy and Medicare Levy Surcharge) Bill 2008. When we are dealing with relevance, the first point of reference that I have to go to is the title. The comments that the member is making in his contribution are being directed to that. It is a robust chamber. We do engage in wide-ranging debate and there is latitude on both sides. There is no point of order.

Darren Cheeseman (Corangamite, Australian Labor Party) Share this | Link to this | Hansard source

Once again, we see the Liberal Party over there trying to hide their true intention, which is to strip back the right of working Australians to access a free health system. Nevertheless, this is a taxation arrangement that I strongly support. I have highlighted, significantly, the impact that this will have in my electorate. It will have a very positive impact in my electorate. I know that people on this side of the House very much look forward to the significant savings for working families and to the opportunity for real, genuine choice—a principle that we on this side of the House strongly support. I am very pleased to be able to articulate to the House my views on this issue.

Bernie Ripoll (Oxley, Australian Labor Party) Share this | Link to this | Hansard source

It is a great pleasure for me to speak briefly on the Tax Laws Amendment (Medicare Levy and Medicare Levy Surcharge) Bill 2008 because this is all good news. The amendments in this bill are all good news and will do some very good things in terms of thresholds and the Medicare levy. That will mean a lot to a whole range of consumers who expected Labor to do this on coming in, because this is a fulfilment of an election promise. Can I note on the importance of this bill that the Liberal Party takes it so seriously that they have just one speaker.

Michael Keenan (Stirling, Liberal Party, Shadow Assistant Treasurer) Share this | Link to this | Hansard source

Madam Deputy Speaker, I rise on a point of order.

Bernie Ripoll (Oxley, Australian Labor Party) Share this | Link to this | Hansard source

How can there be a point of order?

Michael Keenan (Stirling, Liberal Party, Shadow Assistant Treasurer) Share this | Link to this | Hansard source

Madam Deputy Speaker, we are discussing a bill that is 1½ pages long and that essentially just changes some very—

Janelle Saffin (Page, Australian Labor Party) Share this | Link to this | Hansard source

Would the member for Stirling take his seat.

Michael Keenan (Stirling, Liberal Party, Shadow Assistant Treasurer) Share this | Link to this | Hansard source

Madam Deputy Speaker, these bills should have been debated in a cognate way if this was to be freewheeling discussion about the Medicare surcharge.

Ms Anna Burke (Chisholm, Deputy-Speaker) Share this | Link to this | Hansard source

Would the member for Stirling take his seat. Member for Oxley, continue and just be mindful of the title of the bill.

Bernie Ripoll (Oxley, Australian Labor Party) Share this | Link to this | Hansard source

Always, Madam Deputy Speaker. As I said—(Quorum formed) I have to thank the opposition for bringing in an audience for me. I always appreciate that; it certainly does make speaking in here a lot more fun. It is a bit rich of the Liberal Party to come in here and complain about the amount of time they have to speak on bills, about democracy, about being heard out, about not being gagged and about getting enough speakers, but when somebody from the government stands up to speak on a perfectly legitimate bill, they try to shut us down. Calling quorums on people trying to speak on the Tax Laws Amendment (Medicare Levy and Medicare Levy Surcharge) Bill 2004 is a little bit too rich.

The important thing about the bill is that it brings into line some very important issues: readjusting thresholds and making sure that the right people are paying the right amount when it comes to levies and surcharges, and that people are not being disadvantaged by either the Medicare levy or the Medicare levy surcharge. This bill brings into line the low-income thresholds and the Medicare levy surcharge provisions, and they will be increased in line with the consumer price index. These increases will apply to 2007-08 and later income years as well. It also makes sure those thresholds are aligned for individuals as well as for families.

As people understand, the Medicare levy is imposed at a flat rate of 1.5 per cent on a resident’s entire taxable income. However, low-income earners are not liable for the Medicare levy. In addition, a person does not pay the full 1.5 per cent rate of Medicare levy once their income exceeds that relevant threshold. What we have done in our amendments is to make sure that those thresholds and levies are at the right position. Low-income individuals and families will continue to be exempt from the Medicare levy or surcharge. That means that because the Medicare levy thresholds have not been changed since 1997, this is a huge leap forward to catch up to where those levies ought to be. I will give an example: where those thresholds applied on incomes of $50,000 for individuals and $100,000 for couples without private health insurance, the Medicare levy surcharge threshold will be changed to $100,000 for singles and $150,000 for couples.

I know that these changes have attracted some criticism, although I think they are very good quality moves. The criticism has come from the Australian Health Insurance Association and from the Australian Medical Association. They have expressed concerns that this may lead to a mass exodus of people from private health insurance schemes and that, in turn, it will stretch the public hospital system. I assure them that while some people may exit the private health insurance system because of these changes, it is a proper readjustment in terms of the impost that was placed on those individuals in the first place. To say that it will stretch the public hospital system is without base. The reality is that there are a whole range of people who are in private health insurance, particularly young people, who are only there because of penalties they otherwise might face. They take out the very minimum of cover so they do not have to pay the surcharge based on their income, and then take out a copayment system where they are trying to get upfront benefits for that. So there is no real win in it for them or for the private health insurance companies. This will realign those systems to be a proper reflection of where they should be. It is also an advantage that will increase the Medicare levy low-income threshold for pensioners below age pension to ensure that they will not incur a Medicare levy liability where they do not have an income tax liability. This will happen from this budget forward.

As I said, I did not want to speak long on this bill but just make a number of points. This bill is good policy, it is keeping the commitment that Labor made prior to the election and it is a readjustment—something that is long overdue, something that the previous government should have done a long time ago and did not do. We will be very keen to follow through on these amendments. I would suggest that maybe the opposition look very closely at these amendments and support them. I would also suggest they have a very close look at the way they are using interjections, using points of order that are not points of order, using quorums and whatever other mechanisms they think are available to them to disrupt debate and take away the opportunities of government members in this place to have a fair and open hearing—something that this opposition was very good at when they were on this side.

Alan Griffin (Bruce, Australian Labor Party, Minister for Veterans' Affairs) Share this | Link to this | Hansard source

What can I say after that? I thank the members who have taken part in the debate, particularly the member for Oxley for, once again, a very erudite performance. We have been debating the Tax Laws Amendment (Medicare Levy and Medicare Levy Surcharge) Bill 2008. These changes will ensure that low-income individuals and families will continue to be exempt from the Medicare levy or surcharge. This bill will increase the Medicare levy low-income thresholds for individuals and families in line with increases in the consumer price index. The low-income threshold in the Medicare levy surcharge provisions will similarly be increased. The bill will also increase the Medicare levy threshold for pensioners below age pension age to ensure that, where these pensioners do not have an income tax liability, they will also not have a Medicare levy liability. The amendments will apply to the 2007-08 year of income and later income years. I note that indexation of the Medicare levy has enjoyed bipartisan support for a number of years. I again would like to thank those who have participated in this debate. I commend the bill to the House.

Question agreed to.

Bill read a second time.