Melissa Parke (Fremantle, Australian Labor Party) Share this | Link to this | Hansard source

I want to take this opportunity to make some comments about the government's reforms in the area of private health insurance, and in the area of health policy more generally. It was only a fortnight ago that the parliament passed the Fairer Private Health Insurance Incentives Bill, in order to ensure that public moneys are applied as fairly and effectively as possible for the purpose they are meant to achieve, namely an equitable and high-quality health system for all Australians. That legislation puts in place a system to direct government funding where it is most needed—to low- and middle-income earners, and to older Australians—while also providing a strengthened incentive for those who can afford private insurance to take it up. In continuing its world-leading approach to fiscal responsibility and economic management, and in the context of the challenges posed by a growing and ageing Australian population, with projected health-cost-per-capita increases in the order of 66 per cent over the next decade, this government has introduced policy measures that will make a significant improvement to the fairness and efficacy of Commonwealth support for private health insurance. In so doing, we have also introduced further changes to the Medicare levy surcharge threshold, which at $50,000 for singles in 1997 applied to only 12 per cent of taxpayers but which, having remained unchanged 10 years later when this government was elected, had kicked in at a taxable income that represented only average earnings. When it comes to health services and health infrastructure, the emphasis must always be on a robust and predominant public health system, which is why the government has provided a 50 per cent increase in the Commonwealth contribution to public hospitals, why we have introduced the first dedicated mental health package and why we are committed to saving more than $2.5 billion by the appropriate moderate and carefully designed means testing of taxpayer subsidies to private health insurance companies.

In this debate it is important to remember that the United States, which has a much higher reliance on private health insurance and services than Australia, spends something like 17 per cent of its national income on health care, compared to nine per cent in Australia, for worse average health outcomes. In other words, they spend twice as much on health as a proportion of GDP as we do in Australia for worse health outcomes and for starkly less equitable health services. Yet under the Howard government private memberships grew, the cost of private memberships grew, the taxpayer cost of meeting those premiums grew and the public hospital system was neglected.

This government is committed to supporting a fair and efficient mix of public and private health services within the Australian health system as a whole. We will not abandon the public health system, as the previous government did. In fact we have increased, and we will continue to increase, the federal government investment in public hospitals and health services in keeping with Labor's ethos that the free public goods that we share, including health, education, and the environment, are the foundation of an egalitarian and closely bonded Australian society. That is why, under the new COAG health agreement, the government has allocated over $64 billion to public hospitals, including an extra $750 million to emergency departments like the one that operates at Fremantle hospital, a few hundred metres from my electorate office.

Our policy reform in the area of private health cover is not earth shattering and apocalyptic, as some of those opposite would have it. It is not going to open the floodgates to anything, least of all to a dramatic drop in private health membership. What it will do is make a small but important improvement to the efficiency and fairness with which taxpayer funds are spent to support those who choose private health insurance. As I have said, this change is entirely in keeping with this government's larger policy reform themes—namely, the need to redress the 11 years of public health system neglect under the previous government; the need to recalibrate Commonwealth government spending so that it is better targeted, more efficient and fairer; and the need to address the health services and health expenditure challenges that are inherent in Australia's projected population growth and demographic change.

Only this week we received the report that points the way forward on the issue of public funding for dental care. That is a challenge this government intends to confront, but of course we can only do that if we are prepared to make the right decisions, however difficult, when it comes to the application of public funds for the best and fairest health outcomes. That is what we have done and that is what we will continue to do.