Dennis Jensen (Tangney, Liberal Party) Share this | Link to this | Hansard source

I rise today on behalf of millions of Australian working families who have been betrayed by this Prime Minister and his government. Indeed, it is on behalf of all Australians who want a viable health care system which effectively combines both public and private sector participation that I speak today. And it is on behalf of all Australians who would like to see politicians compelled to speak the truth that I am obliged to ask today whether members opposite know the meaning of the word ‘promise’. Let us start with that point.

Three times at the last three federal elections the Labor Party made unequivocal promises not to change the tremendously successful private health insurance rebate system introduced by the Howard government. In three separate campaigns the members opposite gave their word that they would not change this. It took three goes before the electorate was willing to swallow that one, and now they are finally seeing the true value of Labor’s word. In September 2007 the current Minister for Health and Ageing, then shadow health minister, issued a media release saying:

On many occasions for many months, Federal Labor has made it crystal clear that we are committed to retaining all of the existing Private health Insurance rebates, including the 30 per cent general rebate …

Minister Roxon added:

The Liberals continue to try to scare people into thinking Labor will take away the rebates. This is absolutely untrue.

Yes, you were crystal clear, Minister. You clearly misled the Australian people. We were not trying to scare anyone. We saw through your spin and warned the public that you could not be trusted—and we were right. But do not worry, Minister. You were not alone. The Prime Minister was feeding Australia the same lie. He even repeated it in February last year, saying:

The private health insurance rebate policy remains unchanged and will remain unchanged.

Not much room for manoeuvre from that one, Prime Minister. Let us not forget the Treasurer, who on the eve of handing down the budget last month said:

… we take our commitments seriously and we have followed through on the commitments that we gave …

So there we have it. The members opposite have for years been telling Australia they would not change the private health insurance rebate system and, with the paint barely dry on their new parking bays after taking government, they are trying to break that promise. Such blatant breaking of promises threatens to give even the notoriously unreliable Labor governments a bad name.

So why are members opposite so set on stripping the rebates from so many of the working families they so assiduously courted in the election campaign—the ones the Prime Minister referred to more than 20 times per speech on occasion—as he laid the foundations for a government of broken promises? You can just see the Prime Minister, the Treasurer and the rest of the champagne-set socialists sitting around ahead of the budget pondering how to polish up the figures given the mess they made of responding to the global financial crisis. ‘Here’s a great idea,’ they said as they swilled their chardonnay. ‘Let’s cut the private health insurance rebate and we’ll make out that it is going to hit rich Liberal types. The battlers will like that. The working families will lap it up.’ Well, they were wrong.

My electorate is full of working families. Nearly three-quarters—74 per cent—of all voters in my electorate of Tangney have private health insurance. The vast majority are not wealthy people; they are hard-working responsible citizens who, through planning and through informed choice, opted to take out private health insurance under the rebate system we implemented. Unlike the Prime Minister, I know these working families well. I deal with them every day as a member of parliament. I live in their community. Our children go to school together. We all do our shopping at the local supermarket. The Prime Minister only seems to have contact with working families when he stumbles across them during his torturous construction site appearances or when he is shouting at them on planes. They are not rich but many are comfortable because they spend very carefully, unlike the government, which seems to disperse cash with reckless abandon.

The rebate scheme made it worth while for them to take up private health insurance. The planned changes will force all to reassess that position and many will find it no longer worth while. The cuts were appealing to the government on the most basic level: slash the rebates and the yawning chasm in the national kitty would be marginally smaller, they thought—or, rather, they did not think.

The government’s own figures show 1.7 million people will face big hikes in health insurance costs and taxes under this plan. Here is what the Minister for Human Services told the Senate:

Around 1.7 million adults, or around 10 per cent of the adult population, with income above the surcharge threshold will be affected by the changes. This is made up of around 1.6 million adults—that is, 630,000 singles and 490,000 families—who will receive a reduced rebate and therefore pay a higher net premium. Around 130,000 adults will be liable for an increased surcharge.

Just to make clear what he is saying, that is 1.6 million people who will have their rebates reduced or eliminated, meaning effective increases in the premiums of up to 42 per cent. And those 130,000 people he referred to would be looking at Medicare levy surcharges rising by up to 50 per cent. Of course, this does not take into account the millions of others who will face higher premiums as more people opt out of the private health insurance system. For everyone who opts out, the remainder will have to pay a bit more.

The government is trying to claim that only 25,000 people would opt out—a number which, like most of their figures, seems to be plucked out of thin air. But there is no need to take my word for it: ask those who are in the front line of health service delivery, the ones who will be left to pick up the pieces if the government wrecks the system by pressing ahead with these proposed changes. ‘The damage that will cause to the public hospital system and to the patients that need care is going to be significant,’ said the outgoing AMA President, Dr Rosanna Capolingua.

Because people will drop out of private health insurance, private health insurance premiums will actually increase. There is an estimate that they will increase about five per cent over and above the five per cent annual increase. So we are talking about a 10 per cent hike in private health insurance premiums for those who want to continue to have the security of private health insurance. For many, that will push them over the edge. Those people are the ones who are the most sensitive and vulnerable: the chronically ill, those who are disabled, the pensioners, the self-funded retirees and the families who save for their private health insurance. Then there are the young people who have chosen to take up private cover and had the incentive of not paying the government tax, the Medicare levy surcharge. They have been supported with the 30 per cent private health insurance rebate. Also, if you are under 30 when you take out your insurance you benefit from the lifelong community rating. On top of that, when you need care and when you need to get to hospital, you can access that care in a timely and clinically appropriate manner. Those people have now had a message from the Treasurer not to keep their private health insurance and, for the younger people coming up, a message not to bother taking it out. They are going to fall into the public sector. The same Treasurer is going to have to pay the states compensation for the extra people who are going to be putting more pressure on our public hospitals.

Across the country we believe that somewhere around 600,000 people at least and up to one million people will drop out of private health insurance cover due to the change in the Medicare levy surcharge income thresholds. That is  the thing now: they will not renew their premiums. At the time of premium renewal or when they are doing their tax they will not bother to take out private health insurance. That is the choice they will make. The fallout will happen over this year. That will cause pressure immediately from young people’s needs in public hospitals—the sporting injuries and young couples making babies will fall into the public hospitals and maternity hospitals looking for care. That will happen instantaneously and will continue over time. The drop-out from private health insurance will push the premiums up. The premiums will become unaffordable for others and they will start to drop out as well, and they are the ones who are more senior or more chronically ill. The burden on the public sector will then be huge. The hospitals are on their knees now. All I can say is that they are going to be flat on their backs.

Government Members:

Government members interjecting—

Dennis Jensen (Tangney, Liberal Party) Share this | Link to this | Hansard source

Members opposite may laugh, but this is from the AMA President, Dr Rosanna Capolingua—

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 and the member for Tangney will have leave to continue speaking when the debate is resumed.