Steven Ciobo (Moncrieff, Liberal Party) Share this | Link to this | Hansard source

I am certainly pleased to have the opportunity to rise to speak to the Private Health Insurance Amendment (Lifetime Health Cover Loading and Other Measures) Bill 2012 and the Private Health Insurance Amendment (Base Premium) Bill 2013, because these bills represent the continued assault by the Australian Labor Party on private health insurance and, more broadly, on the Australian community and in particular those that have the wherewithal and the ability to provide for their own health care through private health insurance. We know, and have known for a number of years, that the Labor Party has a philosophical opposition to private health insurance. We know the Labor Party's entire underpinnings are built off socialised medicine, and we know that, where possible, the Labor Party, in my view, would like to close down the private medical system.

Harry Jenkins (Scullin, Australian Labor Party) Share this | Link to this | Hansard source

Oh!

Steven Ciobo (Moncrieff, Liberal Party) Share this | Link to this | Hansard source

We have made that claim, and I note groans coming from the member opposite, but unfortunately Labor have form in this area. The Labor Party might groan about it while they sit in the chamber and they might like to pretend that in some way they have even passing interest in private health insurance, but the simple reality is that it is not supported by the facts.

I took the opportunity to run through some of the historical comments made by the some of the senior members of the Australian Labor Party. Nicola Roxon, on 24 February 2009, said in The Age:

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

Kevin Rudd, in a press conference on 25 February 2008, shortly after he was elected as Prime Minister of the country, said:

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

Kevin Rudd said further, in a letter to the Australian Health Insurance Association in November 2007:

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.

There are many examples of what Labor has said historically. Some might even remember the Prime Minister of the country standing and saying down the barrel of the cameras, six days out from the last election, 'There will be no carbon tax under a government I lead.' But, unfortunately, what is endemic—and some might even say, in keeping with the health analogy, pandemic—across the Labor Party is an inability to remain consistent or to tell the truth when it comes to policy positions of Labor. As with each of these statements from senior Labor figures and as with the current Prime Minister of the country, who said, 'There will be no carbon tax under a government I lead,' the simple reality is that you cannot trust this divided and dysfunctional government to remain true to its word.

Labor have at their core a philosophical problem with private health insurance, because they have at their core a philosophical problem with private health full stop. Do not just take my word for it. The former Leader of the Australian Labor Party Mark Latham belled the cat when he wrote in his diaries about the current Prime Minister's pathological obsession with tearing apart private health insurance. I quote from a letter to the editor from Julia Gillard in The Weekend Australian of 15 October 2005. Among a number of points in her letter, she says:

The claim by the minister—

and at that stage that was the current Leader of the Opposition, Tony Abbott—

is completely untrue and should not have been reported as if it were true.

That claim was that Labor were going to tear apart the private health insurance rebate. I go on quoting the current Prime Minister:

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.

She goes on:

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.

So we know that even Mark Latham, the former Leader of the Australian Labor Party, was concerned about the current Prime Minister's view on private health insurance. But once again there were the dulcet tones of the current Prime Minister—I am being generous, perhaps—making the claim that Labor had no intention to do anything about private health insurance or in any way to erode private health insurance.

But what do we know now? After six years of Labor—after they have had the ability to demonstrate their ironclad commitment to private health insurance and have had the opportunity on a repeated basis to demonstrate how fundamental they believe the private health insurance rebate to be—we have seen six years of erosion of support for private health insurance. Labor have taken every opportunity they have had to in some way remove or erode support for private health insurance. The bills before the House today are simply the latest nail in the coffin when it comes to the private health insurance rebate and support for private health insurance across Australia.

A number of people would say: 'Why is this so important? You Liberals and Nationals—the coalition—seem to be so obsessed with private health insurance.' The reason it is important is because, unfortunately, following six years of Labor, we have a situation that has arisen where Australia's debt profile has gone from having no debt and $20 billion surpluses under the coalition to now having debt that is reaching $300 billion and, more concerningly, is forecast in the forward estimates to reach close to $400 billion. The Labor Party have racked up over $190 billion worth of deficits since they were elected. The reason this is germane is because it goes to the very sustainability of Australia's health system. Private health insurance is important and support for private health insurance is important because the more people there are with private health cover, the more Australians that utilise the services of private medical practitioners and auxiliaries, the less demand is placed on the public health system.

We already have a problem in my city of the Gold Coast, Australia is sixth-largest city, where ambulances are frequently forced to do what they call 'ramping'. There simply is not the ability for the current public system on the Gold Coast to cope with the demands on the public health system. So people who are critically injured will be in an ambulance approaching the hospital and, if they are not as critical as someone else, they are just left in the ambulance on the ramp at the hospital until such time as the hospital is able to cater to that particular individual. That is meant to be a modern-day health system under Labor!

Although the Campbell Newman government in basically the 12 months since they have been elected have taken major strides towards dealing with the problems that they have inherited after nearly 20 years of state Labor government in Queensland, the reality is that it is going to take some time to repair all the damage that Labor did to our public health system at a state level. We do not have capacity for Australia's sixth-largest city to deal with the current demands on our public health system.

So what is the genius of federal Labor's approach? What have the rocket scientists over on that side of the chamber come up with? I know: let's further erode incentives for people to have private health insurance, so we push more and more people on to the public health system! That is the genius of federal Labor—more people in the public system! They are already ramping ambulances at hospitals. We already cannot cope with demand on the public system. We already see instance after instance after instance of people waiting for four, five, six hours in emergency departments to be treated, and Labor say: 'We'll push more people onto the public system. That's our great plan.' It takes a particular genius and vision to suggest that this is in fact the way forward! But this is Labor's approach. We knew that it was going to be Labor's approach because in their beating heart, when it comes to their philosophical direction on private health insurance, Labor do not like private medical. They want one big public health system and we are all treated the same and everybody is one of the comrades and we all go into the public system and we are dealt with there. That is the vision that Labor has for public health in this country. That is the reason why at every possible opportunity Labor pick away at the support that was built up over years by the coalition to encourage Australians to go in to the private system.

When the coalition was first elected—this is going back obviously quite some time—the percentage of Australians with private medical cover was quite low. We saw with insurance under the previous coalition government through the various reforms that the coalition put in place—the private health insurance rebate, the Medicare levy surcharge and Lifetime Health Cover—the number of people with private health insurance increase 75 per cent, from 6.1 million Australians to over 10.7 million Australians. It was 6.1 million Australians at the start of the coalition's period in government and 10.7 million at the conclusion of the coalition's period in government. What does that mean? It means that we had over 4.6 million people shift from the public system to the private system.

I stress that those 4.6 million people still pay their taxes to fund the public system, but they, of course, reduce their utilisation of the public system. They fund it but they do not use it, because they take advantage of paying additional premiums to use the private system. That was the track record of the coalition. Over the past six years, though, as I have indicated, Labor has picked away at the support for private health insurance so that more and more of those people shift back on to the public system. So at the very time that Australia is experiencing a fiscal emergency as a consequence of this government's reckless and wasteful spending, Labor are pushing more and more people into the public system so it is going to cost taxpayers more and more money.

We know and we have seen the kinds of frankly rabid solutions that have been put forward by the Greens with respect to private health insurance, so I am not surprised that some of that has infected the Labor Party in terms of this pathological objection to providing support for private health insurance. But the reality is that there is a good public policy reason for it. Under the bills before the House today we are going to see the rules change once again. Under Lifetime Health Cover the coalition put in as part of the incentive was a two per cent loading for each year that someone did not have private health insurance once they reached the age of 30 up to a maximum of 70 per cent loading. What we said was that, in this instance, if someone then took out private medical cover, after a period of 10 years that loading would be abolished. In addition to that, we provided the rebate on the full amount of the premium, including the loading.

Now Labor is picking away at that, so that someone who may, for example, in good faith, have been at year 9 of paying their private health insurance, about to see the abolition of the loading, now, thanks to the proposed changes that Labor is going to put into effect, all of a sudden the goalposts have shifted and that person continues to be faced with the loading. The consequence, once again—entirely predictable, very straightforward—is that people will drop their private cover and shift back into the public system.

I remind all Australians that next time they go to the hospital, if it is an emergency, and they sit there waiting for four, five, six, seven hours, they can thank the Australian Labor Party for that wait. Labor's policies are making it worse because they drive more and more and more people onto the public system. In essence, what we see are the consequences of poor economic management. If Labor had not racked up more than $190 billion worth of deficits, if we did not have debt soaring towards $400 billion, then we would not be forced to have policies like these which extract every last bit of support essentially from private health insurance.

The coalition has a proud track record of providing support for Australians who want private health insurance: to reduce their premiums, to encourage people towards private health insurance, to encourage people who pay their tax for the public system to also get just a little bit of support when it comes to their private health insurance. Labor is not interested in that. Labor cannot afford to do it. And the fundamental problem now is that our ability to provide that support has been effectively completely destroyed by Labor's wasteful spending over the past six years.

Alex Hawke (Mitchell, Liberal Party) Share this | Link to this | Hansard source

I want to acknowledge the member for Moncrieff's elegant contribution in relation to budgetary management. It is certainly the case that we are here today witnessing a government producing a series of very bad budgets, with consequences for the lives of all Australians. But it is not just bad budgets that produce the bills that we see before us, including the Private Health Insurance Amendment (Lifetime Health Cover Loading and Other Measures) Bill; it is the ideological crusade that the Labor Party have been on for some time to rewrite key fundamental planks of Commonwealth legislation so they are of their own ideological making.

There is no doubt the Labor Party believes in the stick approach to government rather than the carrot, not recognising that human behaviour best responds to incentives and not to punishments. We do need a system of incentives in Australia to ensure that we have a complementary health system where we have both a public system and a private system. For the Labor Party to continually set up health care as a battle between public and private systems is to the detriment of both systems. It is very important that the government provide proper incentives for people to pay for their own health care, and to pay for as much of their own health care as they can afford. That system produces a better outcome not just for people with private health cover but for the public system as well. As former minister Martin Ferguson said last night, we have to grow the pie in order to share it. He made an elegant point as a member of the Labor Party in saying that we have to grow that pie to share it better. That means a bigger private health system, with more people who can afford it paying for it, to enable people who cannot afford it to use the public services. The points that we see in this legislation in the dying days of this government are exactly along this approach: rewrite legislation in a way that suits their ideological agenda, which has always been antithetical to private health insurance in Australia.

What is wrong with private health insurance in Australia? In my electorate about 86.5 per cent of people have some form of private health insurance. It is a great figure. It is a figure I am proud of because people are making a contribution to their own health care, investing in it and ensuring that the burden is not put on people in areas who can afford it less. The biggest concern with this legislation before us today is that premiums will rise as a result of it. We estimate that in some cases the rise could be up to 27.5 per cent from 1 July. That is a big premium increase and a big cost-of-living increase. Who will be affected by such an increase in private health insurance premiums the most? It will be those low-income earners and families on lower incomes who put aside money for their private health insurance to take care of their families the best way they think appropriate. They will feel the biggest impact of the government's measures at a critical time in our economic cycle. No wonder we are here today opposing it.

We are certainly concerned about the affordability of private health insurance in general and about the operation of private health insurers with the increased complexity and red tape that will be brought in if this bill is passed by the House. There is no doubt that the government has a view to rewrite key Howard government measures. Lifetime Health Cover was a key Howard government initiative which came into effect on 1 July 2000. We understand it is a loading on private health insurance premiums 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, and a cap of 70 per cent is applied. This measure was always intended to ensure people take out private health insurance at an early age and maintain their cover. It is a worthy objective and it has had reasonable success.

In the Senate inquiry into this measure, the Department of Health and Ageing, the government's own advisers, stated that statistics from the Private Health Insurance Administration Council indicate that Lifetime Health Cover has had a positive effect in supporting private hospital membership, with an 18.7 per cent increase in the number of 30- to 34-year-olds taking out private hospital cover since its commencement in July 2007. So, as a policy mechanism, even the Department of Health and Ageing are saying, 'This is working—this is producing people in the age category of 30 to 34 increasing their private hospital cover and supporting them to carry it through into older age.' It is a measure that is delivering. But, of course, we understand that the government has no respect or regard for measures that work if those measures disagree with its ideological position. We have seen that in relation to the border protection regime put in by the Howard government—measures which were changed because of an ideological difference and which altered a functioning legislative framework and produced the disastrous results we have seen.

What consequences will be felt by the private health providers, what consequences will be felt by those in the 30- to 34-year-old category, what consequences will be felt by the public health system when the government, for purely ideological reasons, comes along and says, 'This measure is working pretty well, but now we want to alter the very system that is producing 18 per cent more 30- to 34-year-olds taking out private hospital cover of their own volition and maintaining it'? It is very disturbing. It is one of the reasons we are very concerned about the government's approach to private health, never mind that the Prime Minister and Labor members opposite repeatedly ruled out before the elections that they would have any agenda to do such a thing.

We always knew they would have this agenda. We have always said Labor have an anti-private health insurance agenda and that they see it as the enemy, not as complementary with the systems, and they do not see them as complementary systems—as they should be regarded—and as beneficial to each other. They have a view that private health insurance is to the detriment of public health and that they will take measures in government to undermine the viability of private health—and that is what we have seen. We do know that the Prime Minister has a penchant for breaking promises and certainly this represents another set of broken promises from this Labor government. They say one thing before an election and do another thing after.

At the moment there are about 10.7 million Australians who have hospital cover and the government's already existing changes to private health insurance are having an effect. The government's Private Health Insurance Administrative Council found that in the five years to 2012—that is, from 2007 to 2012—'exclusions and restrictions may have become much more prevalent and that the increased use of exclusions may work against the policy objective of private health insurance in easing the burden on public hospitals'. That is from the government's own Private Health Insurance Administrative Council. So where are the government members to defend this measure today and say this is a great measure and this is what we need? Well, they have run out of speakers. There is a certain shame that comes with this measure coming into the House because many government members know that this could potentially increase the burden on the public hospital system.

We have certainly seen federal Labor spending approximately a billion dollars to establish 12 new bureaucracies which appear immune to cuts while funding for private health insurance and public hospitals and dental health has been slashed. I want to highlight again that our main concern is that these changes in the bill to Lifetime Health Cover will increase premiums in the private health insurance industry and, according to reports, by up to a third. It is a very concerning figure.

It is the case that the coalition strongly supports private health insurance. This bill, which was introduced last year, also has many concerning features in its provisions which could add complexity to the private health insurance sector as well as raise those premiums by up to a third. We certainly do not support the Lifetime Health Cover component of this bill. As for the insurance reforms, in the form of the rebates, the Medicare levy surcharge and the Lifetime Health Cover, I saw that the number of people in this country with private health insurance increased overall by about 75 per cent, from 6.1 million to over 10.7 million, in recent years and I think that figure is a very important one for the House to note. So that is an increase from 6.1 million to over 10.7 million of people with private health insurance. Again, as the government's own body points out, the reduction in burden on the public sector from that resultant increase is probably unable to be modelled. This is at a time when if you go to any state government and ask them, 'How is your public health system going?' they will say: 'Well, the pressures are extreme, the burdens are high, the costs are getting out of control. We don't know how we are going to meet our future demand.' So why would the federal government, at the Commonwealth level, seek to introduce legislation to increase the burden on the public health sector? It makes no sense. One of the best things we can do at a Commonwealth level is provide a system of incentives to allow people, those who otherwise would not afford it, to have their own private health insurance and to seek to use that as much as possible and thereby relieve the burden on those state systems. So why we have this legislation before us today can only be put down to the ideological belief of those opposite in government that their ideology that there should be no private health insurance system, is better. But, of course, what we know from practical experience throughout the country over many years is that the complementary nature of the public and private systems produces the best benefits for everyone in this country and it needs to be strongly supported.

We as a coalition are aware of the budgetary pressures that exist. That is the reason why the Leader of the Opposition has rightly said that we will support the government on its cuts to the budget ,whatever form those cuts take, because we are in such a perilous situation. An emergency created by the Treasurer of his own making—and of the government's own making—over the last five years has put us in the position where we have to support measures that save us from a budgetary crisis, so the coalition is stuck in a position where we do strongly support the private health insurance sector. I do hear the voices of my constituents when they raise extreme concern over what the government is doing to our country, both in a budgetary sense and in a private health insurance sense. However, we have agreed to support cuts. This is not an approach that a coalition government would ever take. This is certainly not a measure that you would ever see from a coalition government. You will see measures from a future coalition government that support the private health industry and ensure we have a complementary healthcare system in Australia between the public and private systems. We do not see government as a system of punishments in legislative form but always as one of incentives to ensure that people can access the best benefits possible.

Steve Irons (Swan, 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. I have spent a great deal of my time as a member of this place talking about issues surrounding health. As the Deputy Chair of the Standing Committee on Health and Ageing for over four years, it has been an area that I have taken a special interest in and also since being in parliament. I know from all of the people in my electorate that I speak with about this issue, as well as the many individuals and stakeholders I have met and spoken with through my committee work, that it is a policy area of critical importance to millions of Australians. When it comes to health, Australians simply want better outcomes—not excuses and not broken promises but better outcomes. That is why I find it so disappointing when I hear members from the government side so often contributing to this debate based on the politics of envy. Instead of viewing these issues with a focus on better health outcomes, government members revert to type and turn even health care into divisive class warfare pitting different members of the Australian community against each other for political aims.

This approach of the government on this topic reflects the chaos that they have often found themselves in over the past five years. We have seen health ministers and Prime Ministers come and go over this period in what history will look upon as one of the worst if not the worst governments in Australia's history.

As reflected in the bills before the House today, most of the government's policy has been driven not by wanting to improve our health system but by fiscal desperation after years of wasteful government spending and, as the member for Mitchell said, by ideological policy.

In the weeks leading up to the recent budget, we witnessed the government trying to convince the Australian public that they were innocent victims of circumstances; that revenues for the Commonwealth had inexplicably collapsed. The government's explanation for their poor performance is quickly refuted by looking at the real numbers over the past five years. Revenue has increased by $80 billion while spending has increased by $120 billion, thus bringing us from a roughly $20 billion surplus in the last year of the Howard government to the $19.4 billion deficit announced by the Treasurer in this year's budget.

This is a government with a spending problem not a revenue problem; that is plain for all to see. The immense waste of this government has put pressure on all areas of government, as good public policy is put aside while the Treasurer desperately tries to get the budget under control; not by the next parliament but the one after that.

The bills before the House today are yet another example of that waste. Commonwealth government health expenditure already stands at about $62 billion, or 16 per cent of government outgoings. As is well documented, we face a range of demographic and medical challenges that will lead this expenditure to grow in real terms as it has consistently done over the past decade in Australia.

The state of the budget under this government represents the biggest threat to our health system over the next decade with the Treasurer delivering the five biggest deficits in Australia's history and gross debt pushing the $300 billion debt ceiling. The need for increased spending on health, combined with an environment where our budget position is extremely weak, is of great concern.

What is infuriating about these proposed changes and the state of the budget is that, while the government are content to rip money out of private health insurance, they have still managed to find room in the budget to fund a $10 million advertising campaign for Medicare Locals in the period leading up to the September election. When money should be invested in front-line services, this government manages to revert to politics and an obsession with political survival above all other considerations.

The government's focus should be to get every possible dollar away from the excessive administration of bureaucratic function and redirect it to patient services. What they have done over the past five years is increase the number of statutory agencies in the portfolio and the number of government funded entities, and increased the number who are employed in the portfolio by nearly 30 per cent, whilst government cuts have adversely affected patients, clinicians and the hip pockets of everyday Australians. These 12 new agencies have cost around $12 billion to establish, and appear immune to cuts, whilst funding has been slashed for private health insurance, public hospitals and dental health through the closure of the chronic diseases dental scheme.

This fiscal irresponsibility and the misguided priorities of this government bring us to the latest changes to private health insurance. Lifetime Health Cover was introduced by the Howard government in 2000 as part of reforms that significantly increased private health insurance coverage across Australia. Lifetime Health Cover 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, with a cap of over 70 per cent applied. This policy setting is intended to ensure people take out private health insurance at an early age and maintain their cover. The second component of this bill ceases direct claiming of the private health insurance rebate through the Department of Human Services known as the incentives payment scheme.

The coalition has long understood the important role the private health system can play in reducing pressure on the public system. Reduced pressure helps keep spending pressure under control so that policymakers can target more resources to those most in need, and therefore deliver better outcomes for patients. 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. This is a trend the current government has recklessly sought to undo, and the bills before the House today are just the latest attack on the private health system.

The $386.3 million saving from this bill is in addition to savings of $2.8 billion resulting from means-testing changes to the private health insurance rebate that were implemented on 1 July 2012. As outlined at the start of my speech, these changes have been announced in an environment of fiscal emergency. The Prime Minister and Labor members over many years repeatedly ruled out any changes to the private health insurance rebates. Through MYEFO and means-testing changes, Labor's broken promise on private health insurance amounts to nearly $4 billion. That is $386 million through changes in this bill, $700 million from limiting the government contribution to the rebate by a maximum of CPI, and $2.8 billion from means-testing. Of course, all this is framed around a dated class war campaign by Labor. Labor is wrong to imply that private health insurance is for the rich. Five point six million people with private health insurance have an annual income of less than $50,000, and 3.4 million have an annual household income of less than $35,000.

From Langford to Belmont to South Perth and Salter Point in my electorate, these changes unnecessarily increase cost-of-living pressures and are hurting many hardworking families and individuals in my electorate of Swan. During a campaign to save our local GP clinic in Belmont last year, my office received hundreds of calls from patients desperate to have their health services protected. I know that, when the government makes policy at the expense of front-line services, it is people like Dr Sri and Dr Pang and their thousands of patients who feel the brunt of these costs.

In a letter to the editor of the Hobart Mercury on 2 September 2004, the Prime Minister—then the shadow minister for health—wrote:

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

Well, Prime Minister, Australians are growing tired of broken promises and the lack of integrity with which this government goes about its business.

Many Australians from lower and middle-income brackets use private health insurance. In my electorate of Swan, 79 per cent currently have private cover. That is over 89,000 individuals. They are all paying the price for Labor's irresponsible budgets and broken promises on private health insurance. The remainder of my electorate, who rely solely on the government system, are also hurt as increasing costs in the private system force more and more people back to the public system, further crowding our hospitals and increasing pressure on front-line services. Cost-of-living increases in WA are biting already due to the mining tax and the carbon tax. Labor's broken promises on private health insurance are making it even worse. Whilst the government is paralysed by its obsession with political survival, I hear every day of the hardship these changes place on real people in my electorate—people like Eric Van Der Kooij from Wilson, James Donnelly from Cloverdale and Sue Ball from Como. These individuals, as well as tens of thousands in my electorate who rely on our health system, are being hit with extra costs.

The government's changes to private health insurance are already having an effect. The government's own Private Health Insurance Administration Council, PHIAC, have announced:

… in the five years to 2012 that exclusions and restrictions have become much more prevalent.

They have also noted:

… the increased use of exclusions … may work against the policy objective of private health insurance in easing the burden on public hospitals.

In addition, the full effects of Labor's means-testing changes are yet to be felt. PHIAC have reported $1.2 billion in prepayments in the June quarter as people try to defer the resulting premium increases. Many policyholders prepaid for 12 months or more, delaying the pain of Labor's cuts.

Public hospitals are already struggling under a $1.6 billion cut to the 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 the reversal of its position, but only for Victoria, further adding to the chaotic policy environment.

It is reported that changes to lifetime health cover in this bill will increase premiums by up to 27.5 per cent on 1 July 2013, a direct hit on lower income Australians. The change will add extra complexity to the private health insurance system. The means-testing change has already created around 21 different pricing structures for premiums. These increases in the administrative burden are being implemented with only a short time frame for private health insurers to change systems by 1 July 2013, further increasing their costs for compliance.

Presently the Lifetime Health Cover loading is removed after 10 consecutive years of hospital cover. Once again, the government is changing the rules. There will be people who make household spending decisions based on the current policy and who will be close to having their loading removed having paid the loading in good faith and abiding by the appropriate rules. Now they could be hit with a 27 per cent premium increase and forced to drop their cover.

Unfortunately for Australians, this government takes a highly ideological approach to this policy area. Regardless of outcomes and regardless of the clear benefit of reducing pressure on the public hospital system, this government is yet again reducing incentives for Australians to invest in private health insurance. The changes can only be bad for Australians, as lower-income patients are priced out of the private system and our public system suffers from the increased burden.

The coalition supports private health insurance. This bill adds more complexity to private health insurance and will raise premiums for Australians on lower incomes. It will force more people to drop down their level of cover. It will add to the cumulative effect of Labor's attack on private health. The coalition will oppose the changes to the Lifetime Health Cover. The coalition has been listening and we stand ready to make a difference. If we have the privilege of forming the government after September our priority will be to invest where we can best benefit patients. We cannot undo Labor's damage from day one. There is no money in the bank to immediately reverse the cuts or right their attacks. It will be through restoring Australia to good economic management that the careful investment in our health system can be made into the future and the right outcomes achieved for my electorate of Swan and all Australians.

Michael McCormack (Riverina, National Party) Share this | Link to this | Hansard source

The Private Health Insurance Legislation Amendment (Base Premium) Bill 2012 debate is important and once again underlines the Gillard Labor government's rank hypocrisy and incompetence. Private health care is a vital service to this nation and something which often fills the void in our public hospital system. Like my coalition colleagues, I am deeply concerned about Labor's attack on private health care. The changes that this bill seeks to enact will affect the Lifetime Health Cover provision, which was enacted by the Howard government 13 years ago. The Lifetime Health Cover is a loading on private health insurance premiums which is applied at a rate of two per cent for every year when someone over the age of 30 years takes out hospital cover. A cap of 70 per cent is applied. It is designed to ensure people take out private health insurance at an early age and maintain their cover.

Presently, the government pays the private health insurance rebate on the value of the total premium paid by the policyholder, including the LHC loading component. A second component of the bill ceases direct claiming of the private health insurance rebate through the Department of Human Services incentives payment scheme. This will take effect on 1 July 2013. The explanatory memorandum states that very few people access the rebate through the scheme and 99.9 per cent of rebate claims are said to be made by way of the premium reduction scheme or through tax offset claiming—that is if you can believe that. The $386.3 million saving from this measure is on top of savings—call it 'cuts'—of $2.8 billion resulting from means-testing changes to the private health insurance rebate implemented on 1 July 2012.

The Howard government sought to ensure that people take out private health care at an early age and maintain their cover; yet the Labor government is seeking to claim the savings announced in the most recent Mid-Year Economic and Fiscal Outlook by attacking private health care and those the Lifetime Health Cover sought to benefit. This is after Labor and the Prime Minister herself repeatedly ruled out any changes to the private health insurance rebate. Through announcing these changes and through means-testing, it looks as though private health insurance rebates are another broken promise from this broken Labor government.

We are only debating this today because the government is rushing this legislation through the parliament. Haven't we heard that time and again—Labor rushing legislation through this parliament! This bill was introduced only in the last sitting week. Because of this government's desperation, it has denied the opposition the ability to properly consider the legislation—and obviously that is the tactic of the Gillard Labor government. Here we see, again, the trickery—the smoke and mirrors—the desperation and the deceit of this government. The government is being tricky by introducing this bill in cognate with the bills which were debated last year. It is a swindle—it is a typical Labor swindle.

But this is not anything new to the people of Australia. They know full well the waste, the chaos and the mismanagement which has occupied this government now for 5½ sorry years. They know Labor's economic mismanagement is why it is trying to save money through changing the way private health care works. Again, it is a class warfare attack. We have heard the member for Hotham—indeed, we heard yesterday the member for Batman—talk about the fact that this class warfare has to end.

In short, we are debating this today because the Labor government's mismanagement is such that we are facing a budget emergency. As such, the coalition is very concerned about Labor's latest attempt to recoup that money, including the fact that this change will make private health insurance more expensive for Australians regardless of their age and income. Given the way these changes are set up, the effect will not be felt by individuals, families or the health system until April of next year—well after the 14 September election.

The means-test cutting which this government announced last year has yet to be felt, with around $1.2 billion in prepayments made as people seek to avoid the financial consequences of Labor's means testing of benefits. We are deeply concerned that this bill will add even more complexity to the private healthcare system.

As I said, this all comes after repeated assurances by the Prime Minister and by the government that they would not change the private health insurance rebates. I quote the then health minister, Nicola Roxon, the member for Gellibrand, in The Age newspaper on 24 February 2009 as saying:

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

This came after a further assurance on Meet the Press on 23 September 2007 that Labor had 'no plans' to change the private health insurance rebate. And as far back as 2 September 2004, the then shadow minister for health and now Prime Minister said that she was 'tired of saying this' when referring to Labor's so-called commitment—its supposed commitment—to the private health insurance rebate. Yeah, right!

In a letter to the editor in The Courier Mail on 23 September 2004, the now Prime Minister said that she had given an ironclad—ironclad! Do you believe that?—guarantee that the private health insurance rebate was to stay under a Labor government. But that iron was not to be. That iron did not even erode, that iron did not even rust; it just broke. It snapped, like many of the promises this broken government has given to the Australian people who, let me tell you, Mr Deputy Speaker, deserve better. They deserve a lot better.

An ironclad guarantee made by the shadow minister for health then is now but a savings initiative for this Prime Minister. This is the same Prime Minister who once spoke with great passion about getting a fairer deal for the working families of this country. Yeah, right! These are the same working families that this attack on private health insurance rebates targets the most.

The Prime Minister should well have listened to the former Premier of New South Wales—indeed, a former health minister of New South Wales—Morris Iemma, who once said that by 2030 the incremental increase in health spending in New South Wales would have resulted in the entire New South Wales budget being required to fund health. Morris Iemma, who actually is a good man, was the New South Wales Minister for Health from 2003 to 2005 and the Premier from 2005 to 2008 until, unfortunately, the faceless men of Sussex Street caught up with him. But he is a good man, and it was a good quote and a good comment. The trouble is that by attacking private health it just puts a further strain on the public health purse.

This is the same Prime Minister we now have who, as I said, spoke with great passion when she was in a shadow role but now as Prime Minister is doing nothing but attacking private health and doing nothing but breaking her promise. In my Riverina electorate some 54.5 per cent of my constituents have some form of private health insurance. These constituents form part of the 12.4 million Australians who have private health insurance. These changes that Labor wants to rush through this parliament with indecent haste would seek to make private health care more expensive, more out of reach and more complicated for the 72,583 people in the Riverina who rely on such a scheme to support them in times when they need health care.

These changes will force the majority of my electorate to bear the brunt of Labor's economic mismanagement. I was contacted by many constituents to voice their concerns about these changes. Many of those constituents—the minister at the table, the member for Lindsay, might be interested to know—were once rusted-on Labor supporters, once rusted-on Labor voters, but they know the system is broke, they know the government is broke and they know that unfortunately this country is broke.

A husband and wife from Coolamon, who are self-funded retirees, have been in a private healthcare fund from the ages of 17 and 15 respectively. As with many self-funded retirees, this couple—good people; good, salt of the earth country folk—are concerned about the uncertainty of their future with low interest rates and the impact of the global financial crisis on their nest egg, on their savings. Given that, they say they are very worried about the cost of private health care growing with these changes. And these people are getting older; they are going to need to be calling on their private health care. But they now face the very real prospect that they will not be able to afford it. And why? Because this Labor government is broke and it has sent this country broke.

Given their age, my Coolamon constituents told me they are reluctant to drop out of the scheme as it is something they may soon require. Instead, sacrifices will have to be made in other areas in order to afford the cover they need. But these people are also facing daily struggles with paying the cost of living. Changes to the cost-of-living pressures were brought about by the economic mismanagement of the Labor government. Here is a quote that this fine couple said:

We feel like second class citizens. The government must remember: we are the ones who have worked and helped grow this nation's economy over the last 40 years, but these changes are pricing us out of the market.

The dwindling savings of many self-funded retirees like my constituents are forcing them to reconsider the type of cover they want or if having private health care is affordable at all. Unfortunately, we have gotten to that situation.

My constituents said, 'If too many people can't afford private health, then the strain on the public system will be immense'. Again, I hark back to those wise words of Morris Iemma, those wise words of somebody from old Labor who knew the value of public health spending, who knew the value of private health. He was a good man—he is a good man, Morris Iemma—but unfortunately now he must look with great regret at what is happening in Canberra. He must look with great regret at how the Prime Minister and her Labor government have taken this country down the path of deceit, of sending our country broke and of now making these unnecessary and unaffordable changes for most Australians to the private healthcare system.

'Scaling back our cover or dropping out entirely is a fear we live with,' said my Coolamon constituents. And they are right. They are passionate about their country, like all the good folk of the Riverina, but they want fairness. They want a better deal. They want equity. They are not getting it from Labor. Like many of their generation, my constituents are not looking for a handout. They have worked hard all their lives, and now they just want to enjoy their retirement without the stress and worry of spiralling health costs. They just want to be left alone to do what they want to do in their retirement. This government is just all the time putting its hands in the pockets of my constituents from Coolamon. Putting its hands in the pockets of ordinary everyday Australians; making out as if these people do not deserve something because once upon a time they earned too much money, because once upon a time they saved to provide for themselves in their twilight years. But now we have Labor reaching in like a thief in the night, stealthily reaching into their back pockets and taking the money out while at the same time with its economic incompetence making it so hard for these people with their day-to-day living costs.

The coalition's policy had been helping my constituents enjoy their retirement with the peace and the safeguard of knowledge their health care would be all right when they needed it most. You would have thought, given the repeated assertions by the Prime Minister, by the government, that my constituents had a friend in the Labor Party when it came to private healthcare rebates. But the words 'friend' and 'Labor Party' do not belong in the same sentence. It appears these constituents are just another number in a long line of Australian people who will have to bear the brunt of the absolutely disastrous way the Labor government has run this country. This is why the coalition and I share the concerns of my constituents about the impact these changes to private health insurance will have on the 54½ per cent of the people in the Riverina and around 12.4 million Australians who rely on private health care.

The government has a chance to instil confidence and certainty in these people, who face such an uncertain future under these changes. The government has a chance to make good on repeated assertions that it would retain the private healthcare insurance rebate. But do you think the government will do it? I do not think so. Instead that is why we are having this debate today.

The question remains as to whether they will do it. Like everything else with this Labor government, they will not. They make these changes, they bring them in at the last minute, and who do they hurt? It is the retirees, the people who put away to save money so that they can enjoy a decent and equitable life in their twilight years, who are going to be, unfortunately, calling on that private health insurance. They are getting older, they are joining the grey nomads, they are joining the ageing population. Just at that time, when they need support and help the most, what happens? Labor strips something away from them, forcing the price of groceries up with a carbon tax, forcing the prices of fuel up, and, now, changing private health insurance to make it so much more difficult for my Coolamon constituents and for the 54½ per cent of Riverina people with private health insurance who I represent.

Many of them, Minister, member for Capricornia, who are sitting up the back, used to be rusted-on Labor supporters. But they continually ring my office and say: 'What the hell is going on? I've voted Labor all my life but let me tell you: I can't wait for 14 September. I can't wait to cast my vote for the first time ever for the coalition. I can't believe I'm doing it but I'm going to have to do it because of the changes that this government has brought in.'

This is the latest in a long line of eleventh-hour changes that this Labor government is trying to rush through this parliament—as it has done with everything else. All the time they are hurting Australians, particularly regional Australians, who do it tough enough as it is without having this government once again, like thieves in the night, putting their hand in the back pocket of good, hardworking, decent, tax-paying Australians and taking their money away from them.

Dan Tehan (Wannon, Liberal Party) Share this | Link to this | Hansard source

It gives me no joy to be here debating the Private Health Insurance Amendment (Lifetime Health Cover Loading and Other Measures) Bill 2012 and the cognate bill today. I really wish that these bills were not here before us. The bills really say three things. They say that we have a budget emergency in this country at the moment; they say that we have a government that does not understand the cost-of-living pressures on the Australian community; and they show that we have a government which has lost the confidence and the faith of the Australian people because it continually breaches the trust of the Australian community that it purported to have.

I will start on that trust issue first, because it goes back a long way. It goes back to 2005, when Mark Latham belled the cat on the current Prime Minister. Mark Latham wrote in his diaries that the current Prime Minister had no belief in private health insurance, did not think that it should exist and in reality would have been happy if everyone was forced onto the public system. The current Prime Minister said that that was not true. She said, in a letter:

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.

There is some laughter in the chamber. Sadly, the best we can do is laugh, because the truth is that it is factual. As we have see on other issues, we cannot now take the word of this government. We cannot take the word of the current Prime Minister. It is a sad state of affairs when the trust between the government of the day and the Australian community has broken down to such a degree. It is not pleasing to have to stand up here and detail that lack of trust, that deceit. Really these bills should not be before us today, because we have heard from the former shadow health minister, now Prime Minister, that she believed in private health insurance; we have heard from the former health minister under the Rudd government that they believed in private health insurance; and we had from Kevin Rudd himself, when he was Prime Minister, an ironclad commitment in this regard. Yet here we are today and what we have in front of us is Labor government bills which want to erode private health insurance. The rebate, the loadings, the base premiums—you name it, they want to erode it because they want to get rid of it. What we have before us today is an ideological campaign against the private health sector in this country.

The worrying thing about it is that it goes to the cost-of-living pressures that this government keeps forcing upon the Australian people. The previous speaker, the member for Riverina, quoted the statistics, but I think they are worth repeating for the House: 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. So what these changes are doing is increasing the cost-of-living pressures on 5.6 million people with a household income of less than $50,000 and 3.4 million people with a household income of less than $35,000. These are the people who are already struggling with higher electricity, gas and water costs, and higher rates. These are the people who were told by this government that those cost-of-living pressures were going to be addressed. Yet what do we see before us today? Once again, those cost-of-living pressures are not being addressed. As a matter of fact, they are being added to by these bills that we have before us.

The other aspect of these bills is that these are budget emergency bills. We have them here before us because this government cannot manage the nation's finances. It is sad that we have to be here today, because we were told by the Prime Minister and by the Treasurer that the nation's finances were in good shape, and we were told that repeatedly. When you combine the number of times that the Prime Minister and the Treasurer told us that we were heading for a surplus this year, it is over 500. Yet what was delivered in the budget a few weeks ago was, once again, the stark reality that this government has a spending problem, that this government cannot manage money, that this government cannot control the nation's finances. A budget deficit of some $18 billion to $19 billion; the five largest budget deficits in Australia's history; net debt ballooning beyond $150 billion; gross debt ballooning beyond $300 billion; the Treasurer not having the courage to say that he will be the one who comes back to this parliament asking for that debt ceiling to be raised on our gross debt limit—that is what we saw in the budget. Also, it was a budget that was meant to be for growth, yet we saw, when we looked at the figures, that growth actually declines. It was meant to be a budget which was about employment. Yet what did we see when we looked at the figures? Unemployment actually increases. That is why we have these bills here. It is the incompetence of this Gillard Labor government, headed by the Treasurer Wayne Swan, to manage the nation's finances.

So what have they had to do to try and get the budget back in order? They have had to add to the cost-of-living pressures on the Australian people. That is what these bills do. There is a little bit of joy in being here in the House this afternoon, and that is because, when it comes to Lifetime Health Cover loading, the coalition are going to oppose the changes and we will restore the system if the Australian people put their faith in us on 14 September. That gives me some joy. I also wish that we were doing the same with the other bills, but the sad reality is that at this very moment, given this budget emergency, we cannot.

But I would like to add that what we have seen from the Leader of the Opposition and from the shadow minister for health is a very firm commitment that we will do what we can, if the Australian people vote us in on 14 September, to restore the private health insurance system to where it was—to where we were seeing growth in people taking it up and to where we were seeing it help to alleviate the pressures on the public system. We will make sure that those people who do want to take up private health insurance and who do want to carry some of the burden for the health expenditure of this nation get assistance in doing so, and that they are not just dealt extra pressures on their family budget, time and again, by the government. So that is one of the extremely pleasing things about being here in the House today.

The first is that we are going to oppose the Lifetime Health Cover loading aspect. Sadly, on the second aspect—the base premium—we cannot, given the budget emergency. But there is a commitment for us to restore it and revoke the other changes which have been made with regard to the private health insurance rebate, and we will implement those changes when we can. And we will need to, because as we have seen from the reports—and there is a Port Jackson Partners report that I would recommend those in the House read—on what is going to occur as a result of these measures, sadly, the impact of these changes on our private health insurance system will grow and grow, especially after a couple of years. Hopefully, if we get the chance, we will be able to get the budget back in shape in two years time and then we will be able to look, once again, at addressing some of these issues, because addressing them is what we need to do.

One of the issues which I have had the most feedback on in my electorate has been the government's changes to the private health insurance system. It is worth noting—and the member for Riverina did this—that it is not coalition voters who are worked up about this issue; it is Labor voters. They understand what is happening here. They understand the cost-shifting which is going on from Wayne Swan and his incompetent budget management back to them. They are the ones who are bearing the brunt of that incompetence. They are being asked to pay for the Treasurer's waste and spending in these bills, and they are angry about it. As the member for Riverina noted, they are so angry that they are going to change their votes at the next election. That is the feedback we are getting in our electorate offices.

I would like to congratulate the private health insurance sector for the mature way they have dealt with these changes. The government has really just been foisting changes upon them without properly consulting with them and without properly entering into negotiations with them. As a matter of fact, I have heard that, in some of the representations at some of the consultations which have taken place, the government has been almost downright rude in the way that it has dealt with the sector. Yet the sector has continued to deal with the facts on this issue and to present the facts and show the damage that will be done to our health system as a whole if we keep impacting on the private health insurance aspects.

I applaud the way that they have gone on with it and I make this commitment from the coalition side: we will, if we are elected on 14 September, make sure that the door is always open to talk, discuss and have proper consultations with you on this issues. The shadow health minister, Peter Dutton, has had very good relations with the sector and he is committed to those relationships continuing—as is, I am sure, the Leader of the Opposition, who demonstrated his commitment on these issues when he was health minister.

This is not a great debate for me to be involved in. I would prefer that I were not here. The two bills before us are bills which I wish were not before the House. I am pleased to be able to say, when it comes to the Lifetime Health Cover loading aspect of the bill, that we will be opposing that. It does not please me to say that, due the budget emergency, we are going to have to let the Private Health Insurance Legislation Amendment (Base Premium) Bill through. But it is pleasing that there is a commitment from this side of the House to make sure that, when we can, we will restore the private health sector to where it was under a coalition government and ensure that the sector continues to grow. That is a commitment I hope that the electors in my community and across Australia have heard and will trust us on.

Rowan Ramsey (Grey, Liberal Party) Share this | Link to this | Hansard source

No wonder politicians are held in such low regard in Australia today. Every day the cause of democracy is being weakened. There is a complete lack of trust. We have seen 5½ years of betrayal of trust. Mr Deputy Speaker, you could—anyone could—go into the street and ask people what they think of the Prime Minister today and what they think of the government's solemn promises. I will list a few of them. The government promised: 'There will be no carbon tax under the government I lead'—we know what has happened to that one. They promised a return to surplus—it was a cast-iron guarantee—500 times. They promised no new taxes—remember that one? That was way back before the alcopops tax, which, incidentally, we now learn has raised $4½ billion but has not reduced alcohol consumption one bit—not one jot, not one tittle. That reminds me of another promise, Kevin Rudd's promise before the 2007 election to not change superannuation—'not one jot, not one tittle'. The government promised Australia a tax cut only last budget. That commitment has already gone. We had a promise to build 2,650 trade training centres, and at this stage only 241 are built. And the government promised not to touch the private health insurance rebates. In fact, former Prime Minister Kevin Rudd said in 2007, before the election:

… 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 know, Mr Deputy Speaker, you only just heard this quote from the member for Wannon, but it is such a good one that I think we should revisit it. It is from the current Prime Minister in 2005:

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.

I want to repeat that last bit:

… when I make an "iron-clad commitment", I actually intend on keeping it.

Surely nothing could be further from the truth.

Not once, not twice, but three times, this government has adjusted private health cover. First the means-testing; then the bill on lifetime cover rebate, which is actually being debated in cognate today; and the axing of genuine indexation of the rebate. It will take years to rebuild the trust. Australia needs a government that does what it says it will do, and asks the electorate for approval when it wants to completely contradict its previous policy.

The government is very fond of quoting John Maynard Keynes, when he said, 'When the facts change I change my mind. What do you do, sir?' That is quite right. When the facts change we should change our minds. But if the government is going to do a 180-degree about-face—as is the case with this bill; it is a major change in government policy—surely the government should ask for a mandate.

The government is also very fond of turning to John Howard and saying that he changed his mind on the GST. We know that John Howard did change his mind on the GST but he went back to the people and said, 'What do you think?' and the people agreed with him. That is what this government should do. And that is what a coalition government will do. It will be a return to predictable, consultative and stable government.

But predictable, consultative and stable government is not the Labor Party's agenda—certainly not on this issue. Sadly, they are implacably opposed to incentives that encourage individuals to pick up some of the strain, if they can, to contribute to their own health requirements. Sadly, the Labor Party are opposed to many things in the private sector. They are opposed to the private school sector. They do not much like the private aged-care providers, and they certainly do not support private health or private health cover.

There was a long-term lift, Australia-wide, in people electing to take a responsible path and take out health cover—to the point where more than 12 million people have cover: about half—following the reforms of the Howard government, which drew people back into private cover. One of those reforms—a very important reform—was the introduction of Lifetime Health Cover, which provided a loading of two per cent for every year that an individual is over the age of 30 when they take out their cover. A cap of 70 per cent is applied. That has been a policy for the future. It is not the kind of initiative that reaps great changes overnight but it changes long-term behaviour. The rise in the rate of health insurance cover around Australia is a demonstration of that.

The government does not seem to get the idea that if an individual pays for their own health needs that is something the government—the taxpayer—does not have to pay for. It frees up resources to spend on other kinds of government programs, like the National Disability Insurance Scheme, for instance. And the system is creaking, despite the government's guarantee to fix the health system and to fix the 'blame game'—another oldie but a goodie; remember that claim. In fact, very little has changed. I do not say these are easy things to fix. In fact, like many things in politics if they were easy to fix they would have been fixed years ago. But perhaps we will never fix—for the purpose of this sentence I would put the 'fix' in italics—the health system. Perhaps we will never have a permanent solution to all the problems in the health system, but what we need is a steady, methodical approach to addressing the long-term funding and technical challenges of health. What we should not do, though, is claim that we are able to fix the problem, as if there was one, simple, silver bullet that would take away all problems for ever. Certainly, this government has not done so.

Even a cursory perusal of the latest intergeneration review will tell even the most intellectually challenged person in Australia that we have a serious issue in front of us. Health costs are going to keep rising. We will, on average, live longer. We will require more care. New technologies will keep us alive for longer, and almost certainly as a result of that we will require further medical assistance on another day. The health system will continue to make greater and greater demands on the budget.

Surely, whenever a person takes personal responsibility by making a financial commitment, the load is lightened on the rest. Simply, if there was no private health insurance the public health system would collapse, virtually overnight. The bills that we are debating today will not kill off private health or the private health insurance system, but they will almost certainly decrease membership. The axing of the lifetime cover levies will certainly cut the number of fit, healthy, young people signing up. Why would they sign up to a system that is costing them so much when, at that stage of their lives, they are so unlikely to access it?

I would like to come to my electorate of Grey. You would think that it would have quite a low level of private health insurance. After all, according to the ABS 2011 census, the median age of the electorate of Grey is four years above the national average, at 41. The median weekly household income is $870, or $364 below the national median. However, the best figures I can find in this matter suggest that the private health cover in the electorate of Grey is at 52 per cent, or about four or five per cent above the state figure. I think that is quite remarkable. It is doubly interesting because, in fact, there are just two not-for-profit community hospitals in the whole electorate. So, for all but about 3,000 residents there is no local alternative to the local state hospital, and, in many of the smaller towns at least, there is no choice of doctor. One could well ask, given these circumstances: 'Why are these people so loyal to private health cover?'

Certainly, the lifetime cover levies are part of the reason that people join in the first place and stay with private cover. They fear they may not be able to afford to rejoin at a later time in their life when they are more likely to need specialist care, perhaps hospitalisation in the city.

The Lifetime Health Cover is a great encouragement for people to join up young when they are healthy and to stay in the system, and eventually the system will repay that faith. Lifetime cover has been a very good move and removing it is a great risk to our long-term health planning and covering our national needs. In fact, the biggest increase in private health cover over the last 10 years came about at the time of the implementation of the lifetime cover levies.

Changing the rebate formula must lead to premiums rising faster than they would have otherwise. We cannot say whether this will lead to an alarming dropout rate. We do not really know until it is implemented, but it will be very surprising if it does not. Australia is paying a very real price for Labor's chronic mismanagement of the economy. We are in a crisis—$370 billion debt will be accumulated some time in the next four years according to the budget papers. There is no doubt that some serious decisions have to be made with the budget. That is why, reluctantly, the coalition is supporting the change to the mechanisms that set the rebates.

We are in the dying days of this parliament. We are down to the last 13 days that the parliament will sit, as far as we can tell, even though nothing is cast in stone, and the parliament is trying to deal with the Gonski bills, the Australian Education Bill, and the National Disability Insurance Scheme, and even the rushed actions for the aged-care industry. Once again, there is an unseemly rush to shove legislation through the legislative process in what is effectively the last couple of weeks of parliament. Many of the bills are ill-considered. One even wonders if the government has its heart in many of these measures and is not trying to leave a damaged economic platform for an incoming government to deal with. If the government had any plan, if it had any idea, if it knew what it was doing and if it had consulted with industries, it should have sensibly made these changes before this time instead of rushing these bills through. The Labor Party have been in government over 5½ years, yet we have this rush of legislation in the last 13 days of parliament.

Debate adjourned.

Ordered that the second reading be made an order of the day for a later hour this day.