Shayne Neumann (Blair, Australian Labor Party) Share this | Link to this | Hansard source

I am standing here a little earlier than I thought I would be, but I am pleased to be able to speak on this piece of legislation, the Tax Laws Amendment (Medicare Levy Surcharge Thresholds) Bill (No. 2) 2008. I rise to speak in support of the bill. The Medicare levy surcharge is a one per cent increase on top of the Medicare levy for individuals and families who do not have private hospital cover. The threshold is currently set at $50,000 for individuals and $100,000 for couples and families. This piece of legislation will increase the threshold to $75,000 for individuals and $150,000 for couples and families, and it will index these thresholds against wages growth in the future. I fully support this piece of legislation.

Originally, the previous, coalition government brought in the Medicare levy surcharge situation and it was supposed to be geared towards high-income earners, but in fact, as wages grew, more and more people became trapped and had to pay this particular tax in circumstances where they never actually anticipated they would have to. The member for Dickson, now a shadow minister, was then the Assistant Treasurer. In August 2006, he was asked a question on notice. He revealed that, in 1997, 167,000 people paid the surcharge; by 2001, 198,000 people paid it; by 2002, 235,000 people paid the tax; by 2003, 282,000 people paid the tax; by 2004, 362,000 paid the tax; and by 2005-06 it had risen to 465,000 people paying the tax. This is quite outrageous.

Effectively what had happened was that a tax trap had been set by the previous, coalition, government which caught more and more working families, as the minister for health described it. The figures I have just outlined she described in her second reading speech on 25 September 2008, and I think it is worth the Australian public actually knowing these facts when we consider this bill. So the previous, coalition, government set this tax trap which caught more and more Australians to the point where people earning below what a lot of people would describe as an average full-time wage were faced with a stark choice that affected their hip pocket: the choice between taking out private health insurance, which they really could not afford in the circumstances, or paying a tax which was only supposed to apply to high-income earners. That is the legacy of the coalition when it comes to the Medicare levy surcharge: a tax was set that trapped more and more Australians to the point where nearly half a million Australians were trapped by this tax.

So what did we do? We said in the budget that we would raise the threshold to $100,000 for individuals and $150,000 for couples and families. We set about effectively giving the Australian public some tax relief. What did the coalition do? They opposed it on spurious grounds. I think that what has happened is they have listened, but they have listened to the wrong people. They have not listened to the working families in this country; they have listened to the big private health insurers. We want to give tax relief to Australian families and individuals—we want to do that—but we cannot get it through the Senate on the basis of what we previously announced. We have talked to the private sector, we have talked to those sitting on the crossbench just across the corridor, we have talked to other stakeholders and we have come up with an alternative. Instead of lifting the threshold for individuals to $100,000, we are now proposing to increase it to $75,000 while retaining the couples threshold of $150,000 which we proposed in the budget. We have listened carefully and we want to help.

The measure that we are trying to bring through this House today will give immediate tax relief to about 330,000 Australians, and that is a lot of people. Put it in the context of those people—465,000 Australians—paying this tax in 2005-06. For an average income earner, earning about $60,000 a year, this will deliver about $1,200 in their pocket in the first year. For those people who live in my constituency of Blair in Queensland, that is a lot of money. I think the average taxpayer and the average person living in my electorate would think that $1,200 is a lot of cash. If they had that money in their pocket, it would be a bit easier when they went to the supermarket, it would be a bit easier when they had to buy schoolbooks for their kids, when they had the choice of being able to afford to buy either shoes for soccer or uniforms for kids at school, or to take the kids to the movies, or just to buy some luxuries that high-income earners can afford. One thousand two hundred dollars is a lot of money, and if they had that in their pocket they could do a lot with it. It really is incumbent upon those sitting opposite to pass this legislation, not to oppose it here and not to oppose it where the red carpet exists. We want to give real choice to families and we want to put money back in their pockets. We do not want to force them into an alternative which they cannot afford to pay.

If the coalition had indexed this, like they should have, you would be looking at something like $76,000 for individuals and $152,000 for families. That is what the Australian Private Hospitals Association says. Access Economics, in a report for the AMA, and the minister in her second reading speech said a similar thing: a $70,000 threshold for an individual and a $140,000 threshold for a couple. Access Economics said, and the minister reported, that this would restore the system to its previous real levels if this were the goal.

I wonder what the goal of the previous coalition government was and what their goal is now. We have suggested $100,000 for individuals and $150,000 for couples, and they will not cop it. They will not allow tax relief to the Australian public. So we put up $75,000, and we are hoping that they will do the right thing. I am not confident, because it is not always in their DNA to do the right thing when it comes to helping working families in this country. You only need to look at the Work Choices legislation of the last parliament to see what they really think about working families.

Fifty thousand dollars is not a high salary. That is the current level for an individual. As Australian Liberal Senator Simon Birmingham conceded, it is not a high salary. He said it is a working salary. And it really is. If you earn $50,000, you are not rich—you struggle to pay your mortgage and you struggle to pay your education expenses for your kids. It is hard to put food on the table for your family and for yourself. For anyone, it is hard to meet the costs of living. Those opposite should do the right thing by those on low incomes. It is important to provide relief for the Australian public in this regard.

We support the idea of the public and private sectors being involved in the health needs of our community. In my electorate we have some good public hospitals. We also have a great private hospital in Ipswich, St Andrew’s Hospital, not far from where I live. We have got a terrific public hospital, Ipswich general hospital. I had the great privilege for many years to serve on the local community health council. It was a great privilege to go to the rural hospitals in my electorate, places like Boonah and Laidley and others, to see the care that nurses and doctors and those allied health professionals provide.

The public use both public and private sectors when it comes to their health needs. What we are doing here is about getting rid of an unfair tax on average, battling Australian households. The income threshold for the Medicare levy surcharge has not changed since 1997. That is 11 years ago, and it is high time it was changed. When it was first brought in, the then Minister for Health and Family Services, Michael Wooldridge, said:

High income earners will be asked to pay a Medicare levy surcharge if they do not have private health insurance. These are the people who can afford to purchase health insurance …

I really wonder about those opposite. In the last 11 years, have they gone to the supermarket, have they bought a car, or have they bought a house or paid rent for premises? The cost of living has increased enormously during that time. We have seen, correspondingly, salaries go up during that time as well.

They come up with a number of arguments which I think are quite fallacious when it comes to this particular legislation. They claim it is going to put too much of a burden on our public hospital system. Let me tell you: we have put in $1 billion extra to help states and territories with respect to the public health and hospital system in this country and $600 million for elective surgery. That is in great contrast to those opposite. Those opposite failed when it came to this area.

On 5 October last year the Australian Institute of Health and Welfare released a report which exposed that from 1995-96 to 2005-06 the former coalition government share of public hospital funding decreased from 45.2 per cent to 41.4 per cent. Those state and territory governments that they much maligned took up the slack. They increased their funding over the same period from 45.8 per cent to 50.6 per cent. Even the former Minister for Health and Ageing, the member for Warringah, had to concede that. It took a bit of oral surgery to get it out of him, but he had to concede that that was what had happened. Those opposite failed. It is a bit rich for them to give us lectures when it comes to the public health system in this country. It is quite extraordinary they go to that extent.

You have to ask why they are complaining about this legislation. If they had such a great commitment to the public health system of this country, why didn’t they put more money into it? Why didn’t they put in the extra billion dollars that we put in? Why didn’t they put in the $600 million that we put in for elective surgery? I can tell you why: because when it comes to so many things of a public nature—whether it is public education, public health and the like, or even Medicare—they do not really believe in it. They say they do, but they do not. They defund it if they get a chance. If they ever come back to sit on these benches, we will see the same. It is the same thing with education.

It is about time they did the right thing. It is about time they listened to the Australian taxpayer who wants a break. It is about time they put up or shut up and it is about time they showed some degree of commitment to helping those they claim they are helping, those they should have helped for so long. It is time they actually delivered and stopped thinking that we are living in a mid-1970s time warp where they can obstruct our legislative agenda and try to cut back the surplus. I really wonder if they think it is 1974-75. We have moved beyond that. It is more than 30 years since that time. It is about time they stopped obstructing our legislative agenda, which the people of this country voted for last year. Let it go through. Let the government govern. Give the Australian taxpayers a break when it comes to this particular piece of legislation. It is time they did the right thing by the Australian taxpayer. I commend the bill to the House.

Peter Dutton (Dickson, Liberal Party, Shadow Minister for Health and Ageing) Share this | Link to this | Hansard source

It is my pleasure to contribute to what is a very important debate about the future of health services in this country and about how the federal government is going to contribute to the private health sector and to the public health sector, with the overall aim, we hope, of improving the system generally for all Australians. The first point that needs to be made in the debate on the Tax Laws Amendment (Medicare Levy Surcharge Thresholds) Bill (No. 2) 2008 is about the origin of this policy that is being proposed by the Rudd Labor government. Many people will recall a debate about health in the run-up to the November election last year. They will recall certain promises and obligations that were undertaken by the then opposition, now government, in relation to health. They will remember a number of promises that were made, in marginal seats in particular, in relation to so-called superclinics. They will recall a number of other funding arrangements that were promised by the Labor Party. But what the Australian public will not remember is a promise or any utterance in relation to the particular policy which is being advanced by this ideologically driven government at the moment.

Despite the fact that the Labor Party had this policy worked out and despite the fact that they had the detail of this particular policy at the time of the last election, in the run-up to the last election the now Minister for Health and Ageing, then shadow health minister, stated that they would not be releasing details of this policy during the election campaign. Many opposite have heralded this policy as a way in which they can cut taxes for Australian families or for older Australians and a way in which they can provide support to the health system generally around the country. But they did not think it was such a good idea to make those same claims in the run-up to the last election. If this was a rolled-gold policy from Labor, why wouldn’t they have released the details, having worked out the details prior to the last election? I will tell you the reason why, and most Australians understand this as part of this debate.

This is a government which is driven by ideology, a government which at its core is opposed to the private health system in this country. This is a Trojan Horse way of disrupting the private health system, which provides coverage to many Australian families and older Australians right around the country. In this country, we have to make sure that our public hospital system is properly funded. The states over the last decade or so have had an appalling record in terms of health management and the way in which they have managed our hospitals in particular and our emergencies services in general. It is certainly a disgraceful period in this country’s history when you see our health systems run down. To see a further attack in the form of this bill shows exactly what this Labor government is about. This is not about delivering a tax cut and it is not about increasing thresholds to provide better outcomes for families. It is about attacking the private health system.

If the Rudd government wants to provide tax relief to Australian families then it should put forward a bill to do so. If it wants to make sure that Australian families pay less tax then it should do that through the tax system. If this government wants to provide tax cuts to middle-class Australians and to lower income Australians then it should put such a bill forward—we would vote for it—the same as we did when we were in government, reducing taxes right across every threshold in this country. We will support good legislation which provides tax cuts to Australians that are adequately funded, properly funded and well thought out.

This is not a policy about providing tax cuts. This is a policy which will force millions of Australians in the long term onto queues in public hospitals. It will force potentially hundreds of thousands of people, or on some estimates up to a million Australians, out of private health. It will ultimately make the private health system in this country unviable. It will drive up premiums for people who remain in the private health sector. That is why this is bad legislation. That is why the coalition is opposed to it. It is why Independent senators and Senator Fielding have also questioned this legislation. It is ultimately why many advocacy groups and many people who are concerned about the long-term viability of the health system in this country have come out in opposition to this policy.

When we look at some of the estimates that are made, we find they are quite disturbing. Access Economics and PwC show that anywhere up to one million people will leave private health insurance if the government achieve their ultimate goal in relation to this policy. They are a government which is intent on attacking private health because they do not believe in private health. Despite all of the rhetoric and all of what they say to the contrary, the proof is in what they present to the parliament in the form of this bill. If it was such a good bill and if it was such sound policy, either health policy or economic policy, why not introduce it to the Australian people in the run-up to the last election? The reason is that most Australians would have seen through this policy very, very quickly.

This policy in its original form has already been rejected by the Senate. The government have made amendments to the bill to reintroduce it to this chamber for further discussion and, they hope, to pass it through the other place as well. But they need to answer the fundamental questions about why it is right to drive people out of private health, in particular younger people, which will have a dramatic impact on the rising cost of premiums, particularly for older Australians.

Many people, particularly older Australians or those who want private health insurance for a young family or because they are infirm, regardless of their age, decide to take out private health insurance because it provides them with a blanket of security. Particularly at a time of life when they may be approaching further health difficulties, they want the support of private health cover. By driving out, in particular, younger people—who predominantly do not claim on private health—who are in that insurance pool, this bill will dramatically increase the premiums for those who remain, who are predominantly older Australians. That is bad policy, it is a bad outcome for all Australians and it is why it would ultimately be a bad outcome for health in this country. It makes no sense at all to drive people out of private health and onto public hospital queues that are already stretched to breaking point across every state and territory in this country.

I will give you one example of health management. In Queensland at the moment the Bligh government—with a decision that was originally formulated, as I understand it, by the Beattie government—has decided to close the Royal Children’s Hospital in Brisbane. Now, that is an appalling outcome for families on the north side of Brisbane. It is an appalling outcome because it will mean that people who have to travel long distances with sick children will not have the same services that they currently enjoy. From all of the professional advice that I have received, I can say that it would result, long term, in a bad outcome if there were an epidemic and we were trying to provide all those services needed by young children who are most sick. I think it underscores the fact that Labor is a side of politics which does not have the capacity to introduce, maintain and implement a good health policy. If we get the same style of management of the health system at a federal level that we have had from Labor at a state level over the last 10 years then pity help the health system in this country over the next decade or more.

When the then Western Australian health minister gave evidence in relation to this particular bill, when it was scrutinised by a Senate committee, he advised that the extra burden on the health system from driving people out of private health—and putting more procedures onto waiting lists in public hospitals around the country—would cost Western Australian taxpayers $50 million in one year. No doubt there has been some cosy deal stitched up between the federal Labor health minister, the state Labor health ministers and the territory Labor health ministers as to how the states are going to be compensated for these extra procedures in state hospitals. If that figure is multiplied out round the country then this will not be a bill that saves the government any money at all; it will be a bill that delivers worse health outcomes for people who are queuing on waiting lists at the moment in public hospitals, it will drive up the price of private health insurance for those who remain in private health and it will have a bad outcome in the long run as well because it will be more costly to the taxpayer at a federal level.

For all of those reasons it does not make any sense. If the Labor Party have a hidden agenda they should come out and talk about it. That is certainly what a lot of commentators are saying. A lot of people believe that this is a government hell-bent on implementing policy thought bubbles, not one that thinks through policy decisions. They are going out there trying to get media headlines but not thinking through the ramifications of the announcements. This is a government which is not yet 12 months old but already notorious for having these thought bubbles, for referring matters off to committees, for not being decisive and for not having the capacity to lead our nation in the way in which it deserves to be led. This is a trying time for our economy, it is a trying time right across the world, and the Australian people want the economy properly managed in this country so that ultimately we can provide more support to areas of public policy—in particular, the area of health.

We need to make sure we have a sustainable system into the 21st century. We need to make sure that Australian families, when they want to see their doctor, are able to see their doctor. We want to make sure that we have a health system that if people choose to go into a private health arrangement that takes a burden off the public health system then that it should be encouraged, not discouraged. This should be a public health system where, if people want to have arrangements that will allow them to age in their homes or to have access to world-class facilities as they age in our society, then they should have unfettered access to those services.

This is a bad bill because it does not achieve any of those principal aims. It will not save money, as the government predicts—they talk about it being a tax cut but this will ultimately, on the government’s estimates, be a savings measure—and if they want to implement some sort of tax reform or some sort of positive tax outcome for Australian families and older Australians they should do it through the tax system. That is a point that needs to be made.

I only have a few minutes remaining before we go into question time, and I intend to continue to contribute to this debate when it is reconvened, but I want to make it very clear to the House that the coalition remain committed not just to the public health system in this country but also to private health. We want to make sure that we have a sustainable system. We want to make sure that people recognise that under the coalition government, when we came in in 1997 the private health participation levels were quite low—they were at 33.9 per cent. They increased to 44.7 per cent. That was as a result of three definite pillars of good public policy: firstly, the 30 per cent rebate for 65-year-olds and younger, the 35 per cent rebate for 60- to 70-year-olds and the 40 per cent rebate for over-70-year-olds; secondly, Lifetime Health Cover; and, thirdly, the Medicare levy surcharge.

If this is a government that is hell-bent on destroying the private health industry in this country and forcing hundreds of thousands of procedures onto public hospital waiting lists then they are going the right way about it. But if they want to work together to make sure that we have a system which will cater for our ageing population and to make sure that we can restore confidence in the public health systems around the country then they should be coming to a sensible compromise. They should not be suggesting that this bill is about a tax cut when it is about anything but. This bill, make no mistake, is about an attack on the private health insurance industry. It is about an attack from an ideological basis, which in the 21st century is unjustifiable. The Labor government need to be honest with working Australians—or ‘working families’, as they like to put it—and they need to be honest with older Australians who are going to suffer as a result of this policy. They need to recognise that this will ultimately be quite damaging to those people.

This government needs to be decisive in its actions, because at the moment it is not decisive in any area. This is a government which is hell-bent on referring matters to committees. They have not thought through this policy properly. They certainly do not understand the ramifications. Many right around the country are describing what the effect would be of driving a million people out of private health into the public health system: hundreds of thousands will be driven onto hospital waiting lists. It is bad policy. It is not well thought through. It is a policy which Labor knew about prior to the last election but which they did not disclose to the Australia people because they knew that the Australian public would see right through this policy straightaway.

The call today is on the health minister to be honest with the Australian people about the costings and about why it was that in the first place she did not support this policy—this was an invention of the Treasury, not Health—and she needs to explain to the public why she is out there supporting a policy which is going to provide worse health outcomes than even the state governments are able to provide. It is pretty important to recognise as part of this debate that this federal Labor government is conducting itself in exactly the same way as the state Labor governments manage their health systems—and that is a bad outcome.

Harry Jenkins (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. The member for Dickson will have leave to continue speaking when the debate is resumed.