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

Firstly, I will read a few quotes which I think are instructive in terms of the government's mismanagement and, frankly, deception when it comes to private health insurance. The first quote is from the then Minister for Health and Ageing, Nicola Roxon, who on 24 February 2009 said:

The Government is firmly committed to retaining the existing private health insurance rebates.

I take you back to 25 February 2008, when Kevin Rudd was quoted as saying:

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

In fact, it was Mr Rudd as then Leader of the Opposition in November 2007 who said:

Both my shadow minister for health, Nicola Roxon, and I have made clear on many occasions this year that Federal Labor is committed to retaining the existing private health insurance rebates, including the 30 per cent general rebate and the 35 and 40 per cent rebates for older Australians.

I take you to Ms Roxon's press release on 26 September 2007:

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 and the 35 and 40 per cent rebates for older Australians.

I take you to statements made on Meet the Press, Network Ten, on Sunday, 23 September 2007 during an interview by Steve Lewis of the then health minister and soon-to-be-retired member for Gellibrand. Steve Lewis said:

Let's move to another integral part of the health system, the private health rebate, the 30% rebate. Labor has said "Yes, we will keep it," but you have not said whether you will keep it in total. Can you say now that Labor, if elected, will maintain all of the ancillary measures that encompass the private health rebate?

Nicola Roxon:

Yes, I can. We've committed to it. We've committed to the 30%. We've committed to the 35% and 40% for older Australians. It's similar to this safety net. We know that many people rely heavily on the assistance that is now provided and would not be able to have private health insurance if that rebate wasn't paid.

And lifetime health cover and others that go with it, we are committed to those. We understand that Australia now has a mixed health system, both private and public, and we need them both to be strong in order for the community to be able to get the services.

Steve Lewis followed up with this question:

So you will not wind back that 30% private health rebate, despite the fact that Labor has been ideologically opposed to it in the past?

Nicola Roxon:

No, we won't.

That gives us the detail of the former prime minister's position and the former health minister's position.

Let me take you to the current Prime Minister's position stated when she was the shadow minister for health in opposition:

On Thursday, October 13, the Minister for Health, Tony Abbott, asserted in parliament that prior to the last election, I had a secret plan to scrap the private health insurance rebate and he cited Mark Latham's diaries as proof of this proposition. Yesterday, Matt Price reported this claim by the minister as if it were a fact. The claim by the minister is completely untrue and should not have been reported as if it were true. The truth is that I never had a secret plan to scrap the private health insurance rebate, and contrary to Mr Latham's diaries, do not support such a claim … For all Australians who wanted to have private health insurance, the private health insurance rebate would have remained under a Labor government. I gave an iron-clad guarantee of that during the election. The difference between Tony 'rock solid, iron-clad' Abbott and me is that when I make an 'iron-clad commitment', I actually intend on keeping it.

The word that needs to be underscored in that quote is 'intend', because this Prime Minister has intended to do a lot of things. She intended to have no carbon tax. At the time of the last election this Prime Minister made the promise to the Australian people that there would be no carbon tax, but of course there was. This Prime Minister promised that there would be no changes to the private health insurance rebates. Of course, under her watch there have been. There have been consistent attacks when it comes to private health insurance, and it did not stop there. In a letter to the editor of the Courier Mail on 23 September 2004 the current Prime Minister said:

Your correspondent Russell McGregor should have no concern that Labor will 'erode' or abolish the 30 per cent government rebate for private health insurance. Labor is committed to the maintenance of this rebate and I have given an iron-clad guarantee of that on a number of occasions.

On 2 September, the current Prime Minister, as shadow minister for health, in a letter to the editor of the Hobart Mercury said:

I grow tired of saying this—Labor is committed to the 30 per cent private health insurance rebate.

Of course, we now find out that this is a government that has attacked private health insurance at every single turn. It does not matter whether it is this Prime Minister, the former prime minister or a future Labor prime minister, this Labor Party is ideologically opposed to private health insurance in this country, and all Australians can now see that.

There are a couple of bills before the parliament at the moment, and I want to touch, firstly, on the Private Health Insurance Amendment (Lifetime Health Cover Loading and Other Measures) Bill 2012. Again these changes go completely in the face of what this government has provided over a long period of time.

Who will be most affected by these changes? It will not be the rich that the Labor Party believe hold private health insurance policies and that somehow private health insurance is the playground of the rich. This will attack and drive up premium prices for people on all incomes that have private health insurance. So the 5.6 million people with private health insurance who have an annual household income of less than $50,000 and 3.4 million who have an annual household income of less than $35,000 will be among those who will be impacted by this cruel and callous change by this incompetent government.

Overall, 10.6 million Australians have hospital cover in this country, and if we do not have a good balance between the public and private system then this will be the demise of private health insurance in this country as we know it. We know one thing for sure. We know that when Labor was last in power between 1983 and 1986 Labor drove private health insurance coverage down to the low 30s, and they seek to do the same again. What all Australians have to know is that this government is not the friend of those who are privately insured, not the friend of those who seek to take some care for their own health needs. This is a government that at every turn has sought to destroy health insurance as we know it in this country. We also note that the full effect of the means-testing changes per se have not just been felt, because we know that PHIAC, the government agency, reported $1.2 billion in pre-payments in the June quarter as people attempted to defer the resulting premium increases. So we know that many of the changes that people will make either to downgrade their policy or indeed to exit private health insurance are yet to hit the system.

This government is absolutely denying the obvious. The obvious is that it is an environment where people have huge cost of living pressures, where people have electricity prices going up because of the carbon tax, where their petrol prices are going up because of the carbon tax, where if they are in small business they are facing the impost of the carbon tax every time the delivery truck arrives at the back door. We know that every time the lights are turned on in aged-care facilities, we know that every time an emergency department needs to operate, as they do 24 hours a day in many hospitals around the country, the impost of the carbon tax is felt. And we know that through all of those cost of living pressures that ultimately are borne by consumers in this country it makes it harder, not easier, for people to pay their private health insurance.

Why would this government want to slug people with private health insurance? First, as I say, because they are ideologically opposed to private health insurance but, secondly, because they have wasted billions of dollars. If you want to know why the government have made change after change in a negative way to the health system in this country, not just in private health insurance but elsewhere, it is because they are desperate for cash. This government racked up well over $300 billion of debt. They are marching through that self-imposed ceiling because they have wasted billions of dollars and therefore they have had to rip money out of the pockets of patients in this country to try and patch up their dodgy budget that was announced only a couple of weeks ago by this incompetent and discredited Treasurer.

This bill is no different. This bill provides savings, and that is why the coalition will oppose the lifetime health cover loading and other measures bill, because this government seeks to attack these privately insured yet again. We know that if the government had its way it would collapse private health insurance in this country. That is the policy of the Greens as well, because they seek to destroy private health insurance in this country. We have fought Labor as best we can at every turn. At every turn we have said to the Labor Party that this will have a negative impact. Wherever we can we have opposed those bills, sometimes unsuccessfully, but we continue to try and hold this bad government to account. The means-testing changes previously introduced by the government have already created around 12 different pricing structures for premiums. This government at whatever chance it has been given has tried to make more complex the offering of private health insurance products in this country and people know that this is a government that is not wedded to private health insurance.

The bill ceases direct claiming of the private health insurance rebate through the Department of Human Services, known as the incentives payment scheme. This is to take effect on 1 July 2013. The coalition acknowledges that very few people access the rebate through the scheme and 99.9 per cent of rebate claims are said to be made by the premium reduction scheme or through tax offset claiming. It is claimed that this will reduce somewhat the administrative burden for the Department of Human Services, insurers and the ATO.

As I say, we have tried wherever we can to hold this bad government to account, and I want to now turn very quickly to the second bill for discussion, the Private Health Insurance Legislation Amendment (Base Premium) Bill 2013. It is true that this government is in its dying days. There is no question about the fact that this government has let down 23 million Australians. The members opposite are under enormous pressure as they travel around the country because not just in health but across portfolios we have seen daily evidence of their incompetence when they say one thing before the election but they do another thing after, of their incompetence when they say to Australian families, 'You have to tighten your belt because this is a tight economic environment,' and yet at the same time families see this government wasting billions of dollars. They say to the Australian public, 'These are tough times and we have to cut back on certain areas,' and yet the public see this government going out and spending money in advertising programs. This is a government that goes from bad to worse, and what we are seeing in the dying days is not considered legislation that it brings before this parliament but simply an ideological attack, and this bill is no different.

The problem is that this government has racked up, as I said before, significant debt. When Peter Costello and John Howard came into government in 1996 they were inheriting a debt of $96 billion. It took 10 years to pay that debt off. Over the course of 1996 until the government lost office in 2007, when Mr Rudd was elected as prime minister, we ran up $70 billion of net assets, not debt

We left this government with $70 billion of net assets. Not only that; it had $20 billion in the bank. And what do we know now, only five or six short years later? We know that this government or a future government is going to have to seek approval to push the debt ceiling out beyond $300 billion, and yet this government started with no net debt and with money in the bank.

We now know that this government has at every attempt tried to patch up the dodgy figures, but finally a fortnight ago the figures caught up with this Treasurer. They promised on hundreds of occasions that they would deliver a surplus. They never did. And do you know what, Mr Deputy Speaker? They never will. They have not delivered a surplus since 1989. They promise a surplus in every year. They did it during the Hawke and Keating years. They have done it every year. And this Treasurer will go down not only as the worst Treasurer in Australia's history but also as a Treasurer who promised a surplus every year but failed to deliver one in any. That is why we find ourselves in a very difficult position in the dying days of this government. They are proposing bad policy, but all of us are mugged by the reality of the debt that they have created. So they are rushing through legislation that is not properly thought out, and we have grave concerns about a lot of what this government is doing and in relation to this bill we are debating at this point in time.

We have a party process that we need to go through. The government have rushed this bill on for their own political end, not having any consideration whatsoever for the conventions as they operate in this place, and we will have a discussion within our party room tomorrow, which is the normal course of events for legislation to be decided by the party room. Then we can make further comments on this bill. But have no doubt about it: this bill is designed by the government not to try to improve the lot of private health insurance; in fact, this is a detrimental bill, and we acknowledge that. This is a detrimental bill by a bad government; it comes, though, at a significant savings of almost $700 million to the government, so it is not insignificant in the money it proposes to save for the Commonwealth.

But I say again to the Australian public that this is a government that has a proven track record not just over the course of the last five or six years but also over the 13 years when they were previously in government. That was to attack at every opportunity those Australians who have private health insurance. I can say with confidence as we run into the next election that private health insurance premiums will always be more expensive under a Labor government than they will under a coalition government. The coalition, both in government and now in opposition, have made every attempt possible to provide support to those 10½ million Australians who are privately insured. We want to make sure that we get a good balance between public and private health in this country, and I want to make sure that, if we win the election, we have the greatest capacity to strip every dollar away from these new bureaucratic structures that the government has created, away from the wasteful spending programs and put it into areas like private health insurance, trying to beef up our primary care response, trying to rebuild general practice that this government has sought at every turn to tear down.

I can say with confidence that this coalition will not tolerate the excesses of the bureaucratic spend that this government has presided over, over the course of the last six years. Yes, we have hardworking and well-intentioned health officials at the Commonwealth level in this country. The problem is that we cannot afford to continue growing at the 30 per cent that the Labor Party has presided over, over the course of the last six years. If we do that—if we are spending billions of dollars on the dozen or so new bureaucratic structures that have been created—it starves us of the opportunity to help people who have been unwell and, in particular, the aged in this country, who want to get in to see a doctor on time, who do not want to languish on elective surgery waiting lists for years, who do not want to wait with sick children in emergency departments for hours upon hours. But part of the reason we have some of those outcomes in our health system is that Labor makes a deliberate decision to placate the unions and to build up the numbers within bureaucratic structures. That will not be tolerated if the coalition is elected. Our argument to the Australian people will be that we can manage the health portfolio more effectively than this party.

I close on this note: if the coalition is successful at the September election, our desire will be to rebuild general practice and to get a good balance between the public and private system in this country. But we will have tough decisions to make—tough decisions because of the debt that this government has thrust us into, and that relates to this bill as much as it does to other bills that come before us. The government really has thrust us into an urgent situation because of the debt that they have racked up, and that makes decisions very difficult for all of us in this place just as it does for families and small business people around the country. That is the situation that Labor has created, as they always do in government. It seems that history demonstrates to us that it is always then upon the shoulders of a coalition government to right the wrongs of a bad Labor government.

Bob Baldwin (Paterson, Liberal Party, Shadow Minister for Tourism) Share this | Link to this | Hansard source

As I rise to speak on these bills tonight, it is abundantly clear to me and members in this House on our side that this government is paying for its financial waste and mismanagement with the health of the Australian taxpayer. Recently I received an email from one of my constituents—Richard Grigg of Tenambit—who writes: 'The government has placed two pieces of legislation about private health insurance on the parliamentary program for debate on Monday and subsequently. Both of these pieces of legislation will make it progressively more and more expensive for me to remain insured. And, of course, if people like me drop out of or downgrade their insurance, there will be increasing pressure on the public system.' I am pleased to place on the Hansard record Mr Grigg's views. And that is not an isolated case of being contacted in my office with people expressing concerns about what will increase the cost of private health in this country.

I rise to speak on these important bills in the context of what they mean for electorates with the sorts of demographics like those of my electorate of Paterson and my parliamentary neighbour's adjoining seat of Lyne to the north. The previous coalition government's private health insurance reforms, in the form of rebates, the Medicare levy surcharge and Lifetime Health Cover, saw the number of people with private health insurance increase 75 per cent from 6.1 million to over 10.7 million people.

I have worked hard as the local member to promote, protect and defend this system because I know what the impact would be on an electorate like mine without it. The Prime Minister and other Labor members have, over many years, repeatedly ruled out any changes to the private health insurance rebates. Hand on heart, standing firm, they ruled out any changes.

In fact, if I go back to 23 September 2004, in a letter to the editor in TheCourier-Mail the current Prime Minister, as then shadow minister for health, made it abundantly clear she would maintain the rebate, and I repeat for the Hansard record: 'Labor is committed to the maintenance of this rebate and I have given an ironclad guarantee of that on a number of occasions.' Well, that 'ironclad guarantee' has about the same amount of justification, balance and truth as: 'There will be no carbon tax under the government I lead.' This Prime Minister will say and do anything to get into power and hold power, even if it is at the expense of the health of the people of Australia.

Labor is totally wrong to imply that private health insurance is for the rich; 5.6 million people with private health insurance have an annual household income of less than $50,000 and 3.4 million have an annual household income of less than $35,000. In my seat of Paterson, the average weekly income for families without children is $1,841. The average weekly income in New South Wales and Australia is $2,120 and $2,081 respectively. For families with children, where the family budget has to stretch to cover private health insurance along with all the other significant costs of raising children, the average weekly income is $2,133 and the New South Wales and Australian averages are $2,370 and $2,310 respectively. Increasing the cost of private health insurance, along with the increased cost of living through things such as the introduction of a carbon tax, will only see people reduce their private health insurance.

The Private Health Insurance Amendment (Lifetime Health Cover Loading and Other Measures) Bill 2012 and the Private Health Insurance Legislation Amendment (Base Premium) Bill 2013 will have significant and important consequences for the New South Wales mid-to-north coast with its large retiree populations. I spoke on the Private Health Insurance Amendment (Lifetime Health Cover Loading and Other Measures) Bill 2012 in February this year, so today I will address the companion base premium bill.

The ability of retirees to access health care in regional and rural areas is generally paid for with private health cover and it is vitally important—just as it is in the electorate of Lyne to the north and other electorates with young families and high proportions of retirees. You see, in an electorate like mine, there are not a lot of hospitals. So people—particularly aged people who need fairly urgent services—will travel to the private hospitals to get their needs addressed, whether it is for a hip replacement or a shoulder replacement or a range of other operations. And they rely on their private health insurance to be able to get access to these services quickly.

For the record, there are 27,058 people in my electorate of Paterson aged 65 and over. Many of these people are self-funded retirees trying to make their savings last and living off interest but writing down capital. They are the people struggling under the added costs, as I said, of such things as the carbon tax as winter sets in, trying not to use the heating. The government should speak to the Council on the Ageing if it does not think this is a real problem out there in the community. These are the people who are trying to do the right thing by taking on private health insurance so they do not become a burden on the public system.

That is the point: without a private health system, adequately supported, there will be a massively increased burden on the public health system. People in electorates like mine, with its high aged demographic and lots of young families who require access—and, quite often, urgent or instant access—to hospitals do not need to be stuck on the waiting list.

I would now like to address some related health issues in relation to this bill. In Australia, according to the most recent census, 80.2 per cent of services are bulk-billed—that is 95,576,188 services per annum. In my electorate of Paterson, 566,357 treatments are bulk-billed out of 722,685 services. Despite the large retiree population in places like Port Stephens, Nelson Bay, Anna Bay, Forster, Tuncurry and right up the coast, we come in at 78 per cent—just under the national average. For the benefit of the Labor candidate for Paterson I am going to send the Hansard transcript of my remarks today, along with the speech I delivered in this place in February this year, to him and his campaign team. You see, on 9 April 2013, to quote the Maitland Mercuryof that day:

Mr Marshall—

my opponent—

who is spruiking the Country Labor brand—said a Labor focus in Paterson would provide residents with better health care, education and transport initiatives.

He said there was a severe shortage of GPs in the Port Stephens area which needed to be rectified as more people moved to the area, and he wanted a super health clinic built in Nelson Bay.

I will repeat that—he wanted a super health clinic built in Nelson Bay:

“When I moved here it took me 11 times to find a GP because all of their books were full—people need to be able to see a doctor,” he said.

Let us be clear: he said that the reason he was running for Paterson was that he had had to wait weeks to see a GP. In fact, my opponent called for a GP Super Clinic to be provided at Nelson Bay. I was pleased to inform my opponent that the GP Super Clinic at Nelson Bay had actually been in operation since 16 May 2010. People in this House would remember the then minister, Nicola Roxon, being at the opening and actually coming here on the floor of the chamber and presenting me with a photo of me attending that opening with her. That says a lot for their candidate, who does not even understand Labor policy or its achievements in my electorate. I indicated to him that perhaps he could visit Nelson Bay, considering that he wants to represent the people there. He would not miss it, because this clinic is in one of the main streets. I even took a photo and sent him a photo of the clinic in case he lost his way.

Just for the record, the Nelson Bay clinic bulk-bills seven days a week, whether or not you are a concession card holder. There are four doctors available on most days. It promotes preventative health, including pap smears and melanoma tests, along with allied health services such as physiotherapy, podiatry, speech pathology and dietetics.

An estimated 50,000 bulk-billed patients presented at Nelson Bay clinic in the last 12 months. This includes all Port Stephens residents, all Indigenous and Torres Strait Islanders, concession card holders and children 15 years and under.

I would encourage my opponent to actually visit the area to gain an understanding of the health needs of the people in the electorate of Paterson, as diverse as it is. The issues are different depending on whether you are in Dungog, Forster, Tuncurry, Bulahdelah, Seaham or Karuah, to name but a few. The one thing they have in common, like all areas of Australia, is that their population is rapidly ageing. My electorate of Paterson and other areas where Australians hope to one day retire will bear the weight of the impact far more than others. In fact, a table from New South Wales Health statistics, applying to the Dungog LGA alone, shows that 23,628 hospitalisations were recorded in 2007 when Labor took office. In the period 2008-10, 33,724 hospitalisations were recorded.

Labor's private health insurance cuts are already putting more pressure on public hospitals, which are already struggling under the $1.6 billion cut to hospital funding in Labor's MYEFO. This includes retrospective cuts to public hospital funding that has already been spent and allocated in 2011-12 and 2012-13. It has caused the closure of public hospital beds and operating theatres and delays to elective surgery. The government has since announced a reversal of its position, but only for Victoria. I would like to hear my opponent's views on private health insurance for people both in the Dungog shire and all over my electorate if, God forbid, his party is re-elected.

This government's appalling disregard for the health needs of the people of Paterson is reflective of the approach taken by this Labor government in general. Bulahdelah lost its GP quite some time ago when Dr Habashi had to retire. The call has gone out from the community and me to get a new doctor. One thing that would make Bulahdelah more attractive to a new doctor would be for it to be designated an area of need. But this government has failed to step up to the plate and sign for an area of need.

I understand that currently there is a doctor who might be considering taking it on as a VMO. I am equally as harsh on the New South Wales government and Hunter New England Area Health Service for not facilitating that, because what is most important here is the health concerns of my constituents; without a doctor in Bulahdelah, it places at great risk the operations of the hospital but, more particularly, the work being done at the Great Lakes Nursing Home. So I say to all levels of government, state and federal: get off your backsides and do what you can to facilitate doctors coming into our town. Anything else is just not acceptable, and I am sure that members in control and in positions would not tolerate or accept this situation in their own electorates.

I have real concerns, as I said right at the very beginning, that this government is paying for its financial waste and mismanagement with people's health. We have already seen that evident in the way that this government abolished the Medicare Chronic Disease Dental Scheme program in December 2012. Yet, in 2014, the funding comes in for its replacement.

This is not about good health care. The government talk about good health care but do not actually understand good health care. If you take a model away and you hold onto the funding before you introduce another model, then the only people who suffer are those with chronic diseases and illnesses. They are suffering and paying for it because of the government's economic mismanagement. They are taking the money off those most in need and putting it in their own pockets to pay for their waste and mismanagement, a hallmark signature of the government.

I say to this government: wake up to yourself. You should not be messing with people's health. With this bill, along with all the other bills in relation to health that this government has put forward, you attack private health insurance and you will put a burden on the rest of the system. That burden on the rest of the system will affect health services provision to each and every Australian, particularly those most disadvantaged—the exact same people who Labor claim they champion each and every day. Introducing bills such as these is a blinded approach and all you are going to do is further affect those who are severely disadvantaged in our area.

Ken Wyatt (Hasluck, Liberal Party) Share this | Link to this | Hansard source

I rise today to speak to the Private Health Insurance Amendment (Lifetime Health Cover Loading and Other Measures) Bill 2013. The changes within these bills are yet another in a long line of betrayals of the Australian people by this Labor government and will be yet another turn of the vice for over 71,000 people within my community who have private health insurance and who are going to be hit by higher costs as a result. This is another broken promise. This government has promised time and time again that it would not make changes to the private health insurance rebate.

The Prime Minister herself is on the record, as far back as 2004, as the then shadow health minister, giving guarantees that the private health insurance rebate would not be changed under a Labor government. In September 2004, she said:

I grow tired of saying this—Labor is committed to the 30 per cent private health insurance rebate.

And then again, in 2005, she gave what she called an ironclad guarantee that she would not be making changes to the private health insurance rebate. She said, 'For all Australians who want to have private health insurance, the private health insurance rebate will remain under a Labor government.' Even then the health minister Nicola Roxon is on the record as saying in 2009 that:

The government is firmly committed to retaining the existing private health insurance rebates.

But just like every other promise that this Prime Minister and her ministers make it is not worth the breath in which they say it. This government is trying to extract a pound of flesh from the Australian people with these changes to the private health insurance rebate.

Lifetime Health Cover was introduced by the Howard government and has been in effect since 1 July 2000. LHC is a loading on private health insurance premiums that is applied at a rate of two per cent for every year that an individual is over the age of 30 when they take out hospital cover. A cap of 70 per cent is applied. It is intended to ensure people take out private health insurance at an early age and maintain their cover. And it has been successful, with the number of people with private health insurance increasing 75 per cent from 6.1 million to over 10.7 million people.

Currently, the government pays the private health insurance rebate on the value of the total premium paid by the policyholder, including the LHC loading component. This is yet another case where the government is unable to reign in the waste and mismanagement in the areas it needs to and is instead trying to rip funds out of the pockets of Australian families—families who use private-sector funding to access the range of medical services that they need.

These changes are going to put a bigger burden on families in my electorate. These cuts will further add to Labor's cost-of-living burden on working Australians. After years of waste and mismanagement, Labor is hiking prices for working Australians to pay for their own fiscal incompetence. This is not a decision that has short-term implications; this will have far-reaching effects.

Singles, couples and families join private health care funds to ensure they have access to the quality of care that they may need for themselves or others in their family. These services may include hospital cover, general dental, major dental, optical, physiotherapy, chiropractic, natural therapies, elective surgery, pregnancy and birth services. They also include hospital services such as removal of tonsils; dental surgery; appendicitis treatment; ankle, knee and shoulder arthroscopy and selected minor shoulder procedures; and treatment for accidents requiring urgent medical attention.

Individuals and families will join a private health fund to cover their particular needs, irrespective of what they are. But, despite these wide-ranging benefits, some families will not be able to face the increased cost of living that these changes will bring, and there is no doubt that the changes will result in greater pressure on our public hospital services.

The full effect of Labor's means-testing changes have not yet been felt, with PHIAC reporting $1.2 billion in prepayments in the June quarter as people tried to defer the resulting premium increases. Many policyholders prepaid for 12 months or more—delaying the pain of Labor's cuts. Of all Australians with private health insurance, 5.6 million have an annual household income of less than $50,000 and 3.4 million have an annual household income of less than $35,000. These are not people who can afford to have additional costs added to their bills. The changes to Lifetime Health Cover in this bill will increase premiums by up to a reported 27.5 per cent on 1 July this year.

Many people are likely to drop or downgrade their cover. Private health insurance will become expensive for people who retain their cover. A deterioration of the risk pool will cause upward pressure on premiums for all 12 million Australians with private health insurance. More people will be forced onto long public hospital waiting lists.

Public hospitals are already struggling under the $1.6 billion cut to hospital funding in Labor's MYEFO, and this will only add more pressure on administrators within those hospitals as to the decisions they will make, in terms of the access and the levels, with respect to the queuing of people for particular surgery. Even pensioners and the elderly wanting the peace of mind of private cover will not be spared from these cuts.

These cuts will put undue pressure on the public health system. More people will be forced into overstretched public hospitals. Australia relies on viable and strong public and private health systems for their health care. The coalition believes all Australians should have access to affordable health care and real choice in managing their healthcare needs. The previous coalition government's introduction of the rebates, the Medicare levy surcharge and Lifetime Health Cover saw the number of people with private health insurance increase, as I said earlier, by 75 per cent from 6.1 million to over 10.7 million.

People in my local community are already hurting. This will make it much worse. Already people in Hasluck, and likely elsewhere in Australia, are concerned about the overall cost of health care. In fact, recently released National Health Performance Authority figures have revealed that one in seven people living in Perth have put off seeing a doctor because of the cost. One constituent wrote to me expressing his concerns:

We struggle to afford our payments now on a part pension.

This constituent of mine and his wife have had private health insurance for 47 years—since they were first married. He cannot help but see the injustice that, at a time when health care is of critical importance in their lives, the government is trying to make it more and more difficult for him to continue to afford to pay.

Another of my constituents wrote to me saying:

I am finding the increases in all of the various costs which I now pay are making it considerably more difficult to budget. If I do give up my health insurance I will need to go back to a public hospital if I get sick, where the waiting lists are too long.

Another one of my constituents wrote to me saying:

I just want to register my concerns that the Gillard Government is planning to withdraw the health insurance rebate, which will mean my family will not be able to continue to afford private insurance and will therefore rely on Medicare only.

My daughter has chronic Crohn's Disease, for which she is hospitalised at least 2-3 times per year.

We are under the public health system however use our private health insurance for each hospital stay, resulting in the hospital receiving the hospital insurance value to off-set her stay, with no out of pocket expenses to us.

If we are forced to withdraw from private insurance, then this cash flow for the hospital will also be withdrawn.

Those sitting opposite claim to care for all Australians; they claim to care for the downtrodden. But what we are seeing here is those opposite taking every opportunity to walk all over Australians who are already doing it tough. We are seeing a government that is prioritising its own survival and its addiction to spending over the future of Australian families and the health of our nation.

Any changes to private health insurance premiums impacts on families considerably. I have talked to many constituents when I have been doorknocking and it is a concern that they raise regularly, expressing their disappointment that the government has taken away the opportunity for them to be fully fledged members of a fund that gives them so many options. The point that so many of them make particular reference to is how important it is for them to have the choice of a public hospital or a private hospital; if the matter is urgent, then they have the opportunity of having that addressed much sooner than having to sit and wait in elective surgery lists. Their access to professional care seems to be much more expedient. The loss of that will mean that we will see some making decisions in which they do not access healthcare frequently or earlier, thereby compounding the health problem they have and creating a higher cost, in the end, to both the Commonwealth and the state in the use of hospitalisation processes in order for their illnesses to be treated.

I thank you, Deputy Speaker, for the opportunity to speak on the Private Health Insurance Amendment (Lifetime Health Cover Loading and Other Measures) Bill 2012.

Wyatt Roy (Longman, Liberal Party) Share this | Link to this | Hansard source

I rise tonight to speak to the Private Health Insurance Amendment (Lifetime Health Cover Loading and Other Measures) Bill. Can I begin by saying what a privilege it is to follow the member for Hasluck, a member of this House who has a great depth of knowledge in this particularly important area of public policy.

This bill is twofold: it seeks to restrict the private health insurance rebate from being payable on the component of private health insurance premiums with a Lifetime Health Cover loading; and it stops direct claiming of the private health insurance rebate through the Department of Human Services, known as the incentive payments scheme, and makes minor amendments to the Income Tax Assessment Act and the Taxation Administration Act to reflect this change.

The government says most people claim rebates through tax offsets and eliminating the incentive payments scheme would reduce the administrative burden on insurers, the Department of Human Services and the tax office. This Labor government had repeatedly promised that there would be no change to the private health insurance rebate. It maintained this charade right up until the 2009 budget, when it announced that means-testing would be retrofitted to the rebate. The change to means-testing, effective from 1 July last year, was a means in itself to prop up the government's sagging bottom line. The move has resulted in savings of $2.8 billion. Likewise, these new changes are nothing but a cash grab aimed at clawing back more than $380 million over four years to help fill the unfillable—a black hole of government debt, which has now eclipsed $250 billion.

Lifetime Health Cover was introduced by the Howard government on 1 July 2000 as part of reforms that significantly increased private health insurance coverage. It is a loading on private health insurance premiums calculated at a rate of two per cent for every year that a person is over the age of 30 when they take out health cover. The cap is 70 per cent. It was devised to encourage people to take out private health insurance sooner rather than later and to maintain their coverage. Currently, the private health insurance rebate is paid on the value of the policyholder's total premium—including the Lifetime Health Cover loading. If this bill were to be legislated without amendment, 1.1 million Australians would face an immediate hike in private health insurance premiums. And because means-testing has already reduced, and in many cases removed, the rebate for higher income earners, it is lower income earners who will disproportionately bear the weight of the increase.

Half of the 11 million Australians with private health insurance have incomes less than $50,000; three million of them have annual household incomes under $35,000. So the circle is complete. This Labor government, after launching attack after attack on private health insurance, has now taken the war to the people who arguably have most to lose. They are the more modest income earners to whom Labor has traditionally spruiked its working-class narrative. Labor cannot count on these Aussie battlers anymore. That is because the Aussie battlers cannot count on Labor.

As coalition members, we strive to help everyone to help themselves. We call it a hand up, not a handout. The private health insurance rebate is such an incentive. In the community I represent there are a lot of vulnerable people—not particularly well-off—who rely on insuring privately for their health, wellbeing and peace of mind. They include the chronically ill and families who have children with a disability. But private health insurance not only assures them of the best possible healthcare; it acts as a circuit-breaker for the heavily strained public health system. Reducing public hospital pressure is vital if we are truly in the business of delivering optimum care.

Last year, a leading doctor from my region hit the headlines for all the wrong reasons. He warned locals that ballooning waiting times at Caboolture Hospital had become critical. More than half of all Caboolture emergency department patients were waiting 52 minutes or more just to be seen. This followed a 2010 AMA report that revealed the hospital was running, on average, at more than 100 per cent occupancy. Eighty-five per cent is considered a safe occupancy rate.

According to the Department of Health and Ageing, 600 beds and 52 emergency bays will be required to service the rapidly-expanding community by 2026. That is basically a tripling of current resources. In this context, Labor's axe-wielding on affordable private health insurance is not only reckless but also dangerous. It is tragically probable that the outcome of policies which force people to drop out of private health care and push them up against the doors of overflowing public hospitals will end in needless loss of life.

But this Labor government's plundering of health support in our community does not stop there. In last year's Mid-Year Economic and Fiscal Outlook, the federal Treasurer, Wayne Swan, stripped $342 million from health funding to Queensland—his home state. When this onslaught began, with the then Rudd government's means-testing decision, a staggering 1.7 million Australians, by Labor's own admission, faced reduced private health insurance rebates and therefore higher net premiums. That is around 10 per cent of the adult population. With the means tests becoming effective last July, the true picture is worse. About 2.4 million people are directly hit. They must absorb immediate increases in their premiums of up to 14 per cent, 29 per cent, or 43 per cent depending on their income. In the electorate of Longman, almost 50,000 residents covered by private health insurance have been impacted directly. That is more than 40 per cent of the community.

With no let-up in Labor's demolition of private health insurance, the pain will only mount for those who maintain the ability or strength to find the money for their premiums. It is estimated that the loss of younger health insurance members due to prohibitive costs will increase all premiums by 10 per cent. Surely it is a fundamental right of all Australians to expect that they will receive first-class health care. The coalition believes this is best achieved by providing choice, with affordable access to quality providers. Health is not an ideological playground nor should it be a forum for social engineering, but that is exactly what we have seen from this approach from Labor. Labor is philosophically opposed to the notion of choice and, further, is fiscally hamstrung by the reality of budget deficit after deficit and its failure to deliver a much-mooted surplus—of course, another torn-up contract with the Australian people.

Labor's dismantling of private health insurance will add even more cost-of-living pressures to families and shift a more onerous burden to public hospitals as people downgrade their cover. This federal Labor government has proved to be an abject failure in delivering on health. It has added layers of bureaucracy which have resulted in a detachment from patient care. Labor's administration has been underscored by broken promises on the private health insurance rebate, hospital funding and extending the Medicare safety net. And the tentacles of this deception reach back a very long way.

On 23 September 2004, the Prime Minister, when then the shadow minister for health, wrote in a letter to the editor of TheCourier-Mail that there should be no concern that Labor would—and I quote—'erode or abolish the 30 per cent government rebate for private health insurance.' They were the Prime Minister's words. The Prime Minister, then the shadow minister, went on to say:

Labor is committed to the maintenance of this rebate and I have given an iron-clad guarantee of that on a number of occasions.

On 25 February 2008, former Labor Prime Minister Rudd stated at a press conference:

The Private Health Insurance Rebate policy remains unchanged and will remain unchanged.

And on 24 February 2009 it was reported in TheAge that the member for Gellibrand and then Minister for Health, Nicola Roxon, said:

The Government is firmly committed to retaining the existing private health insurance rebates.

Another broken promise.

For the coalition, the private health insurance rebate is an article of absolute faith. In government, we will restore it as soon as budgetary circumstances allow. By repealing the carbon tax and reinstating health insurance rebates the coalition can, and will, alleviate cost-of-living pressures and help return family budgets to good health. After all, the previous coalition government created the private health insurance incentives that were snapped up by Australians. The introduction of rebates, the Medicare levy surcharge and Lifetime Health Cover saw the number of people with private health insurance leap 75 per cent—from 6.1 million to more than 10.7 million—and, for everyone else, access to the public system was obviously enhanced.

The coalition will restore stability and confidence in vital programs such as the Pharmaceutical Benefits Scheme, which has been afflicted by chaotic policy changes under Labor. We will regenerate general practice. A coalition government will reprioritise funding from bureaucracies to ensure that clinicians, local boards and, above all, patient care are at the core of our health system.

Households are now paying too heavy a price for Labor's waste, incompetence and failure to control the budget. When you have got major issues of ramping at public hospitals, bed block and ambulance bypass you have got to make sure that you are doing everything in your power to reduce the pressure. There are a lot of people living on the margins—people who the Labor Party say are well-off. These are by no means wealthy individuals. They rely on private health insurance for reasons of preference, security and responsibility. Instead of attacking those who look after themselves, we should be championing them.

Jane Prentice (Ryan, Liberal Party) Share this | Link to this | Hansard source

I rise to speak on the Private Health Insurance Amendment (Lifetime Health Cover Loading and Other Measures) Bill 2012. This bill includes two changes to private health insurance coverage in Australia. First, the bill will restrict the private health insurance rebate from being payable on the component of private health insurance premiums with a lifetime health cover loading. This step represents a removal of a measure implemented by the Howard government in 2000 which significantly increased the number of people taking up private health insurance coverage. The second change ceases direct claiming of PHI rebates through the Department of Human Services and makes minor amendments to the Income Tax Assessment Act 1997 and the Taxation Administration Act 1953 to reflect this change.

Firstly, I would like to remind the House of the real reason behind the changes today. What the Labor government is proposing today is to decrease the rebate for private health insurance, which will make private health insurance more complex and more expensive for more than 1.1 million Australians out of the approximately 12 million who currently have private health insurance. This, in turn, will disproportionately impact low-income earners. The Gillard government is doing this because it has mismanaged the economy. It has run out of money and broken its promise to deliver a surplus. So it is going to make already-struggling Australians pay more for health insurance in order to save $386 million over four years.

I could go on all day listing quotes from prime ministers Rudd and Gillard and the member for Gellibrand when she was Minister for Health. For almost a decade, they told the Australian community that they would not touch the private health insurance rebate and they told them of their commitment, their ironclad guarantees, not to cut the rebate. In 2009, when the member for Gellibrand was the health minister, she said:

The government is firmly committed to retaining the existing private health insurance rebates.

That was right before the minister twice tried to cut the rebate only to be rebuffed twice by the Independents.

In February last year the new Minister for Health, the member for Sydney, was successful in her attempt to cut the private health insurance rebate while at the same time significantly increasing the Medicare levy. This meant that more than two million Australians were made worse off, including more than 100,000 people who have private health insurance in the electorate of Ryan—as estimated by Private Healthcare Australia. Unfortunately, we know that this Gillard government has no qualms about breaking its promises to the Australian people. Today's bill represents yet another broken promise.

In total, Labor's broken promises amount to nearly $4 billion of cutbacks for Australians with private health insurance—the cuts in the Mid-Year Economic and Fiscal Outlook combined with the changes to means-testing. In today's bill Labor is cutting $386 million. It cut $2.8 billion by means-testing the rebate and $700 million in its announcement to limit the government's contribution to the rebate by the maximum of the consumer price index. At the same time, the Gillard Labor government has spent approximately $1 billion creating 12 new bureaucracies, which are immune to cuts, while it has been reducing funding not just for private health insurance but also for public hospitals and dental health by closing the Chronic Disease Dental Scheme. In this year's budget, the Treasurer cut over $1.8 billion from Medicare rebates, the extended Medicare safety net and the net medical expenses tax offset. There will be no increase to Medicare rebates between November 2012 and July 2014, which will mean that the continued growth in the cost of delivering health care will be passed on directly to Australian patients.

In December 2012, health funding from the federal government to the states was cut, including a cut of $103 million in my home state of Queensland. At the time, the Minister for Health in Queensland, Lawrence Springborg, indicated that that was equivalent to over 2,000 nursing jobs until the end of the current financial year. All state ministers are concerned about the total of $1.6 billion in cuts announced during MYEFO, as well as the cuts in today's bill. Ultimately, further cuts to private health insurance will place further strain on the already stretched public hospital systems and will cause the closure of public hospital beds and operating theatres and delays in elective surgeries.

As I have previously said, the Labor government's cuts have added further pressure on top of increases to prices and the cost of living. The Private Health Insurance Administration Council has admitted that 'exclusions and restrictions to private health insurance access have become much more prevalent' and exclusions 'may work against the policy objective of private health insurance in easing the burden on public hospitals'.

Many constituents have emailed me, such as Janice Johnston and Lynette Hitch, indicating their opposition to yet further changes to the private health insurance rebate. They say:

I have noticed some news recently around the changes to the Rebate for my private health insurance, and I want to ask you to be sure to vote against this.

I need the rebate to make health cover more affordable for me and my family, and I would not want to have to go onto public hospital waiting lists if I needed healthcare.

The rebate is one of the only direct benefits I get from the Government, despite working hard to pay for a better life for my family. Please don't make it even harder for me.

They also go on to say:

I am very surprised that there are more changes to my Health Insurance Rebate being debated in the Parliament. It seems to me as if every time the Government wants more money, I end up paying more for my health insurance.

If I am forced to drop cover for my family and myself because of the cost increases the changes will cause, I will have to go onto the Public Hospital lists, which are already stretched.

You can keep private health at a price I can afford by not allowing the changes.

These are the concerns of not just pensioners but struggling students, singles, families and self-funded retirees. They are already struggling with increasing cost-of-living pressures from electricity prices as a result of the carbon tax and huge increases in the costs of food and child care, and now the government is going to further punish Australians who want to take control of their own health care. These constituents can see that, while they are struggling, they have a government that is simply making life tougher.

This bill makes two main changes. Firstly, it restricts the private health insurance, or PHI, rebate from being payable on the component of private health insurance premiums with what is called a Lifetime Health Cover, or LHC, loading. The LHC was a measure that the Howard government introduced which resulted in a significantly increased number of Australians taking out private health insurance. The Lifetime Health Cover is a loading on private health insurance premiums that is applied at a rate of two per cent per year for every year that an individual is over the age of 30 when they take out hospital cover. The loading is an incentive, therefore, for Australians to take out private health insurance at an early age and maintain their cover.

Currently, the government pays the private health insurance rebate on the value of the total premium paid, including the LHC holding component. Therefore, by ceasing the payment on their PHI premiums, today's bill makes it even more difficult to maintain that PHI cover. At present, someone's LHC loading is removed after 10 continuous years of hospital cover, so there will be people who are very close to their loading being removed, having paid the loading in good faith and abiding by the appropriate rules and regulations. Now, the federal Labor government is changing the rules for ordinary Australians. Now they could be slugged with an increase of as much as 27 per cent in premiums, according to Private Health Care Australia.

The Senate Community Affairs Legislation Committee, to which this bill was referred in November 2012, released its report on 12 March 2013, including a dissenting report by the coalition senators. The coalition senators noted their concerns with the bill, particularly its adverse consequences for low-income families, its consequences for the affordability of private health insurance, the consequences for the operations of private health insurers and the consequences for increased pressure on the public health system.

Maria Vamvakinou (Calwell, Australian Labor Party) Share this | Link to this | Hansard source

Order! It being 8 pm, the debate is interrupted in accordance with standing order 34. The debate is adjourned and the resumption of the debate will be made an order of the day for the next sitting. The member will have leave to continue speaking when the debate is resumed.