Ms Catherine King (Ballarat, Australian Labor Party, Shadow Minister for Health) Share this | Link to this | Hansard source

This bill seeks to amend the way the indexation of the private health insurance rebate is calculated. People will remember that Labor introduced changes to the Private Health Insurance Act in May last year. These changes created a base premium for each individual health policy. This was to be indexed annually by the lesser of the consumer price index and the actual increase in premiums by insurers. The changes were to come into effect in April.

The change made the government's expenditure on the rebate more sustainable and made more funds available to be invested in other areas within the health portfolio. The original bill introduced by Labor did not alter the premium-setting process. Rather the bill introduced a base premium amount that changed the way the rebate itself was calculated, ending its link to rise automatically with the commercial increases in premiums. Instead the base premium was linked to cost-of-living increases. The changes resulted in the indexation factor being the lesser of CPI and the actual commercial premium increase.

The change the government is proposing in this amendment has no effect on the substantive objective of the measure Labor introduced in government. The changes Labor made were about sustainability of health expenditure, with expected savings of around $700 million over the next four years. They will still be realised in this bill. At the time the original bill was presented by my colleague the member for Sydney, she quoted the then-Treasurer that the 'rebate currently costs around $5 billion a year and its growth rate of 6.3 per cent over the forwards is unsustainable'.

Despite the concerns raised by those opposite, the changes Labor made when in government to the private health insurance rebate, particularly in relation to means-testing, did not see more than a million people getting rid of their policies. Indeed, what we have seen is more people taking out private health insurance than ever before. The most recent data available from the Private Health Insurance Administrative Council demonstrates that more than 105,000 people took out private health insurance between June and September last year, and compared to the same time the previous year more than 255,000 Australians had private health insurance cover. In percentage terms, that represents the highest rate of insurance cover ever, with 47 per cent of Australians having hospital cover and 55 per cent having general cover. As a matter of principle, Labor believes it is very important that there is a sustainable private health insurance industry in Australia. It is important that we have the public-private mix to provide health insurance for Australians. As I have said, despite opposition raised at the time and comments that more than a million people would give up their cover, that simply did not happen.

The intent of this bill is to change the way insurers calculate how the rebate is applied. Instead of insurers calculating the application of the indexation based on each of their individual products, it will be applied based on a formula calculated using the average industry premium increase and the consumer price index. Labor believes that there should be greater competition in the private health insurance sector and that consumers should have access to information they can understand and that best enables them to select a policy representing value for money and providing the level of service they seek. To date the government has not demonstrated it shares the belief in promoting competition and doing what is right for Australian consumers.

Since the coalition came to government, the minister has announced the highest increase to private health insurance premiums in almost a decade. This decision was announced by the minister two days before Christmas, in what I would assume was a fairly cynical move designed to avoid public scrutiny. When Labor was in government, ministers would routinely take several months to approve increases to private health insurance premiums, often going back to insurers many times to ensure that premium increases were justified and that Australian consumers were getting the very best deal possible. Industry has put to me and other members of the opposition that with the changes proposed in this bill less administration will be required and, in turn, less cost which would otherwise be passed on to consumers.

The principal concern of Labor is that any changes not have a detrimental effect on a consumer's ability to understand their policy and that it should not become less affordable. It is also important that there continues to be strong competition in the private health insurance market, and that consumers are able to seek out the best possible policy for them and to move between products when that is not the case. I acknowledge representations from insurers that this amendment will require less administration and therefore less cost to consumers. Having talked to the peak body and to a number of private health insurance companies, I understand that this is a position now shared across the entire industry.

When Labor introduced this change last year, there was debate around the best implementation methodology and some insurers argued indexing the premium at an industry level would be easier to implement. From this bill, that is an argument that the government has accepted. One of the principal concerns put by the Department of Health at that time was that implementing the indexation at an industry level, as is proposed in this bill, would put small insurers at a competitive disadvantage. Having received representations from smaller insurers, including their peak body, I have accepted these representations and am satisfied that smaller insurers have stated that they should not be disadvantaged by these changes. I acknowledge that changes required with any legislative change will of course be more difficult to implement from an administrative perspective for smaller insurers than for larger insurers, which have more staff and more resources to make the changes.

Labor accepts that smaller insurers have argued this change will be easier for them to implement and will result in less administration. However, I remain concerned that the government has not indicated in the second reading speech, the explanatory memorandum of the bill or the briefing the minister was kind enough to allow me to have from the department how it will promote competition or better competition in the private health insurance sector, how it will ensure the interests of Australian consumers are protected and how this change in particular does that versus what was proposed originally.

It is worth reiterating the advice of the department last year which was contained in the letter from the secretary to the Senate legislative affairs committee inquiring into the original bill. The department's advice at the time was that the implementation method put by the Labor government in the bill was one that increased transparency and provided greater competition and certainty for consumers. The government does need to better explain how the new method proposed in this bill will improve competition and the capacity for consumers to get value for money. That being said, Labor will not oppose the bill. However, at the end of my contribution I will be moving a second reading amendment that highlights the opposition's concerns around the issue of competition.

The broader issue is of course what the government's longer term intention is in health and in private health insurance in particular. As is well known, the government has begun a scoping study as part of its plan to sell Medibank Private. The government is so confident of the benefits to the Australian public and Australian consumers of private health insurance and the sale of Medibank Private that it has engaged a public affairs consultant at a cost of $2,000 a day, as reported in the media today, to sell the benefits of the sale of Medibank Private. It has engaged independent PR consultants and has been paying them $2,000 a day since January, despite the fact that the scoping study into whether to sell Medibank Private is not due to be handed down to the government for several weeks, let alone it being made available to the public.

The other issue that is of concern is that the government have committed to reverse Labor's means-testing of the private health insurance rebate. They strenuously opposed it at the time and have said that they will now reverse that. That is a substantial cost within the health portfolio and I remain concerned about that commitment.

The other area that I remain concerned about in relation to private health insurance is the tacit approval and apparent support for the move by private health insurers into primary care. There is a trial currently being undertaken in Queensland and I am informed by the private health insurer undertaking the trial that it does not believe it is breaching current legislation. I think it is getting very close to entering into the private health insurance market where there is the potential for those people who have private health insurance to be provided with a better opportunity to access a GP than those people in the community who do not have the means for private health insurance. It is an area that I remain most concerned about.

As stated previously, this bill does not change the amount of money the government will save by indexing the private health insurance rebate—some $700 million. The question of course remains what the government will do with the savings that the original bill actually realised. The minister has yet to make any statements about what the government's priorities are in health or what the government plans to do to improve the health of all Australians. So far we have only seen concessions to industry that are to the detriment of consumers, cuts to the health portfolio, cuts to very important health infrastructure projects, cuts to front-line services that Labor committed to such as cancer nurses in integrated cancer centres, and also cuts to smaller organisations like the Alcohol and Other Drugs Council—the body that has been providing advice to governments, including on such matters as alcohol fuelled violence, since Robert Menzies was Prime Minister.

I remain concerned on two further matters in relation to this bill. Whilst accepting the propositions put to it by the private health insurance industry—and I have no reason to doubt that those propositions are correct—that the changes to the method of calculating the indexation will put significant administrative pressure on private health insurers, the government has not made the case for why this change in particular will improve competition and the circumstances for consumers.

I would certainly ask the minister, in his summing up speech, to make a stronger case, understanding the administrative complexities, for why this particular change will be better for consumers as well. I also remain concerned as to what the government's intentions are in relation to private insurance overall and certainly what the government's intentions are to do with the savings that Labor was realising through the implementation of these changes. That being said, I reiterate that the opposition will not oppose the bill and I move:

That all the words after “That” be omitted with a view to substituting the following words:

“whilst not declining to give the bill a second reading the House note that the bill does not adequately demonstrate what additional competition will be achieved that is in the interests of Australian consumers”

Ross Vasta (Bonner, Liberal Party) Share this | Link to this | Hansard source

Is the amendment seconded?

Mark Dreyfus (Isaacs, Australian Labor Party, Shadow Attorney General) Share this | Link to this | Hansard source

I second the amendment.

Ross Vasta (Bonner, Liberal Party) Share this | Link to this | Hansard source

The original question was that this bill be now read a second time. To this the honourable member for Ballarat has moved as an amendment that all words after 'that' be omitted with a view to substituting other words. If it suits the House, I will state the question in the form that the amendment is agreed to. The question now is that the amendment be agreed to.

(Quorum formed)

Andrew Southcott (Boothby, Liberal Party) Share this | Link to this | Hansard source

I am very pleased to speak on the Private Health Insurance Legislation Amendment Bill 2013, which is very important. There are 10.6 million Australians who have some form of health insurance. In my electorate of Boothby, 76.3 per cent of voters are covered by private health insurance—either hospital cover or extra cover. In the previous six years, we saw people who hold private health insurance under constant attack from the Labor Party. Those 10 million-plus policyholders saw the value of their private health insurance constantly under attack. When Labor left office in 1996, the private health insurance industry was in a terrible state. When Labor left office in 2013, again they left the industry in a terrible state. They went to the 2007 election promising not to change the private health insurance rebate; yet in every budget when they were in government the Labor Party changed the rebate and reduced support for private health insurance. They broke promise after promise on private health insurance, putting the sector under significant pressure and creating uncertainty.

The coalition government are now cleaning up the mess left by the Labor Party, ensuring that private health insurance is sustainable and affordable. Given Labor's damaging policies, all insurers last year sought increases in their health insurance premiums. These applications were thoroughly scrutinised to ensure that each increase was justified. Over 2013, there was an eight per cent increase in benefits paid to health fund members, increasing pressures on the insurers. The premium increases will assist the industry to absorb these costs and will end the uncertainty created by Labor. A strong and viable private health insurance sector is necessary to ease pressure on the public health system. That is what this side of politics has always believed—that there is a very strong role for private health insurance.

Under the Howard government a number of changes were introduced to have sustainable private health insurance, including the private health insurance rebate and Lifetime Health Cover, which was introduced by the Howard government on 1 July 2000. This has been an important part of private health cover reforms that significantly increased private health insurance coverage. The intent of Lifetime Health Cover is that if you stay out of private health insurance after you are 30 you will pay an increased premium each year that you are out of private health insurance. This was intended to ensure that people take out private health insurance at an early age and maintain their cover.

From what we have seen, we can assure the 10 million Australians who hold private health insurance that they will have certainty, sustainability and stability in this. People who hold private health insurance—and who rely on it for visits to physios, dentists, optometrists or speech pathologists, for hospital cover and for maternity—can be sure that it will be sustainable under this government. You will see a sustainable private health insurance. We on this side believe that private health insurance has a very important role in taking pressure off the public hospital system.

Gary Gray (Brand, Australian Labor Party, Shadow Minister for Resources) Share this | Link to this | Hansard source

I congratulate the minister opposite on his portfolio and his elevation to the status of health minister. I wish him well. This is the first opportunity I have had to do that since the election and the first time since the election that I have been in the chamber making remarks on a piece of legislation.

Last week marked the 30th anniversary of Medicare. The nature of Medicare in the context of global healthcare systems is quite unique. It is unique in that it embraces a healthcare system which is a cocktail of both private and public. It is unique in that it is strongly supported by our community and has, over the 30 years since its introduction, been supported on the basis of a bipartisan approach in this parliament. From the election of the Howard government in 1996, where it was made very clear by Howard that there would be no attempt to remove or reduce Medicare, we have seen the system of health insurance through Medicare and through private health insurance only get stronger and provide for the people of Australia the best possible healthcare insurance systems. It is something of which we should be proud. We should stand back and take note of how our public systems and our private systems work effectively to the benefit of all Australians. It works seamlessly with our public hospital systems; it works seamlessly at the local practitioner level.

The Labor Party believes and always has believed that private health insurance plays not simply an important role but an extremely important role in the provision of healthcare support, certainty and peace of mind for members of our community. Personally, as a husband and as a father, I have always carried an optimum level of private health insurance. That is an attitude that was drilled into me by my father and by my mother. It is something that continues to cover my children and something that I will continue to do. I think it both prudent and good value for money. I also think Medicare is a system that is outstanding public administration. It is outstanding public policy and it in turn delivers an outstanding benefit to all Australians at a relatively small and highly efficient cost. It is a system of which we need to be proud.

We in the Labor Party believe in complementing our healthcare system of Medicare with private health insurance. We believe that the government has a responsibility to ensure that the health insurance industry remains sustainable, that insurance premiums are affordable and that the providers provide policies that are good value. The former Labor government supported the sustainability of the health insurance rebate by introducing the means-testing of the rebate and then by capping the rebate through the enactment of the Private Health Insurance Legislation Amendment Bill 2013. It is a further amendment to that reform that we are here to address today.

Despite the coalition's claim that Labor's reform would discourage uptake of private health insurance, there has in fact been a substantial growth in membership in recent years and, as a consequence, an increase in rebate expenditure. The most recent data available from the Private Health Insurance Administration Council tells us that 47 per cent of Australians have hospital cover and that 55 per cent have general cover. This means that private health insurance uptake at the end of the term of the former Labor government was the highest rate of insurance that we have ever seen in our country. That is a good thing.

As a local member of parliament I was subject, during the previous two terms of the former Labor government, to continued lobbying from the private health insurance industry. We received box upon box of forms generated by the industry to provide me as a member of parliament with views of my constituents. When I checked those forms with the electoral roll—when my office rang the people whose names had been recorded on those forms as a form of petition—we found that an alarmingly high proportion of the names on those forms did not match the informed views of the people who had filled in the forms. On too many occasions we found absolutely no knowledge at all that a person's name had been used on those forms.

I made the point privately with health insurers in Western Australia that I did not take their campaign seriously for that reason. I made the point that, although it appeared that box upon box of such petitions had been delivered—and on many occasions there were photographs in the local paper and in the West Australian of many of these boxes—they simply did not match a reality.

Here is the conundrum that I face: I strongly believe in the integrity of our private health insurance system. I strongly believe that the effective partnership that we have between public and private that works in the interests of all Australians and works in the interests of our healthcare system has to be taken seriously by all the players in it.

I was genuinely surprised when I looked at those forms, which had been provided by a private health insurer in Western Australia as an indicator to me of the sentiment of electors in my electorate of Brand that there was no way that a serious and objective view of those forms, cards and names could be taken by me as a member of parliament. It was in effect an abuse of people who did not know that their names and addresses were being used in such a way by a private health insurer—enough said about that; not enough said about the need to respond appropriately to this legislation.

Labor ensured that more money was made available to invest in our public healthcare system, which rightly remains not just a Labor priority but a priority, I believe, for all parliamentarians: money well spent supporting the health care of all Australians. Labor's health spokesperson, Catherine King, has already explained that the coalition's current amendment does not change the amount of money the government will save on the private health insurance rebate, nor does it alter the objective of Labor's intended measure; it just changes the way private health insurers make the calculations to apply.

We accept that these new amendments will streamline calculations and we support their implementation; however, the intent of Labor's proposed implementation model was to create greater competition and transparency for consumers. It remains incumbent upon the government to demonstrate how this bill will increase competition and transparency. We in this parliament know and understand both the allocative power of a market and that markets cannot work without proper information and transparency, and that is why an efficiently operating market and the transparency measures to which I referred are critically important.

In 1984 when former Prime Minister Bob Hawke reintroduced universal health care after the Whitlam government's Medibank scheme was repealed in large part by the subsequent Fraser government, there was a moment of great pride in our parliament. The work that Neal Blewett and the highly professional staff in the Commonwealth Public Service did to create Medicare in 1984 was simply second to none. It was a symbol of the egalitarian nature of our nation. It was a symbol of the public administration's capability to deliver a universal healthcare system that was fair, effective and addressed the needs of the by then many millions of uninsured Australians—a story very familiar to those who have watched North American politics in recent years.

Uninsured families were exposed to crippling costs and a healthcare future that was simply not the future that we aspire to in this place for our nation. Medicare put in place not simply a safety net but the best possible framework for supporting the population in its primary healthcare needs and making that system work effectively between GPs and our hospital system.

Medicare only became stronger and better. The Health Insurance Commission's capability of delivering health insurance through Medicare marks itself as a global leader in public administration. It marks the capability of our Australian Public Service and it marks some of the greatest aspirations of our parliament and of successive governments to ensure effective spending of taxpayer dollars, of ensuring that a dollar spent on health care through Medicare is spent in the most effective way for our families.

Last week I attended my local Medicare office in Rockingham to celebrate the 30th anniversary of Medicare. We cut a cake. The clients and the staff in the Medicare office shared in the enjoyment and the entire office engaged in that. We discovered that two of the current employees in the Rockingham Medicare office had been working for Medicare for 30 years, for all of its life.

They reported proudly that Medicare was not just a good employer and that their work in the Rockingham office was not simply something that they enjoyed; it was something in which they took great pride, because they could see an organic link between good work as a public servant in that office and the direct impact on the health care of the community in which they lived and in which their children grew up.

In that office there were two young children, each too young even to go to school, attending at Medicare on one occasion with mum and on another occasion with mum and dad. How wonderful it was to note that both mum and dad, in both cases, were themselves younger than Medicare itself. It shows the virtuous circle that has been created in healthcare delivery by a strong public system through Medicare and a strong private system through private health insurance. It shows the need that we all have to ensure this system continues. It shows the requirement on our government and on our parliament to ensure that at the most basic level our health insurance remains affordable and that Medicare remains the best possible delivery system that we have in this nation for a universal healthcare system, and it shows that we in this place need to be constantly vigilant to ensure that the way in which these systems work is as good as it can possibly be and lives up to the highest expectations and aspirations not just of government but also of those Australians who need the best healthcare system.

We all need the best healthcare system from time to time, and we in this place have a responsibility to make sure that our healthcare system is as good as it can be. I took great pride in being with my Medicare workers last week and I take great pride in Medicare. I make this statement: I will continue to support a healthcare system that supports Australians—and so should this parliament.

Andrew Laming (Bowman, Liberal Party) Share this | Link to this | Hansard source

I find myself here a very proud Australian. I am very proud that we have such excellent health and education systems in this country—systems to which the rest of the world turns. Part of the benefits of our health system is the option that we provide every Australian to take up private healthcare if they wish. Of course, devising the private health insurance rebate—the 30 per cent rebate that saved private health in this country—was a massive achievement of the Howard government in the late 1990s. Together with community rating and the incentives to take out private health insurance early and to allow for penalties for those who drop their private health insurance and choose to join again for a later date, we can now proudly boast 47 per cent hospital and 55 per cent general private health cover in this country. They are important numbers. Just like we have independent school education in this country, we are the only country in the world where, on average, typically one in two citizens has private health insurance and also accesses for their children independent education. Having those two sectors strong and thriving—and, yes, potentially at times competitors—is possibly the best combination and the best blend of services one could hope for.

This morning I want to focus on health and the importance of this very important bill, the Private Health Insurance Legislation Amendment Bill 2013, which simplifies the operations of private health insurance. What is most important of all is that every family in this country should have the option to pay more for better health services if they so choose. It has been a generational battle with the party on the other side of this chamber to protect the right of Australians to access private health insurance if they choose to do so. Despite the smooth words of the previous speaker, this has at times been a dirty, ugly battle. It has involved Labor Party pre-election promises that private health insurance would not be touched, but, like many of their pre-election promises, that is not actually what transpired.

A private insurance sector, and the private hospital sector that hangs off that, and all of the great Australian health practitioners who work in both the public and the private health space are completely reliant on trusting that a federal government can stick by its words and provide the fundamental conditions where private health can thrive. That was not always the case. We saw the numbers erode under Hawke and Keating. We saw a rearguard rescue effort that saw the number and percentage of Australians with private health insurance recover in the 1990s, and I am pleased to say that those numbers continue to grow—albeit slowly—even to this day.

The great falsehoods that have been promoted by the other side are quite simple. One is that every dollar that is spent on private health insurance is a dollar ripped away from public hospitals. The second one is that every dollar that people spend on private health insurance in some way creates a two-tiered health system. That is right: a two-tiered health system where one group of people can only dream of being on the other tier of healthcare. But, in reality, this is typically said by Labor members of parliament—one of which I can hear bellowing right now—who do not actually talk to the very families who scrimp and save the dollars to be able to afford those rising premiums each year if they do choose to have private health cover. They also want to preserve their right to send their children to an independent school if, for their own reasons, they choose to.

The party on the other side of the chamber has fought against that every step of the way. Running through their veins, running through their entire circulatory system, is a desire to be as tough as they can on people who take up private health or choose to send their children to an independent schools. That is okay; that is banter in this chamber. If it were only that it would be okay, but what has happened is that our entire health and hospital system has been held hostage to a Labor government taking power once every decade and undermining the very principles of private health insurance.

I do not need to list what is already in the Hansard and has been described many times, but it was a Labor government that before the election would promise you everything was okay and the moment they were elected they would nickel and dime the private health insurance system, finding ways to make it even harder for you to meet your premiums. Though they denied it, up would go premiums every year at between six per cent and eight per cent, and the families of Australia paid the price for that insecurity that the Labor government imposed upon Australians.

Let us think of it another way. If you go to a hospital emergency department, it is 100 per cent free. If you go to see your doctor and you discuss the doctor's billing arrangements, you will be bulk-billed 100 per cent free. If you go to child care and you are under a childcare rebate, that will be almost completely free. If you go to university, it will be free.

But, suddenly, when you decide to actually leave the public health system, unburden it, and pay your own way, that mob over there resent that you get a 30 per cent rebate back on those expenses. They resent that. That is ridiculous, isn't it? I think they know deep in their heart it is. If you choose to send your child to an independent school, we happily rebate to every one of those independent schools between 30 per cent and 80 per cent of the cost of the education of your child, who does not go to a state school. And that has been a battle as well. So, in relative terms, the 30 per cent rebate is, I think, utterly defensible.

Let us think of the family right at the margins considering whether or not to take up private healthcare. They will think about whether they can afford the policy with the 30 per cent reduction. Self-evidently, if it was 30 per cent more expensive, thousands and thousands of families would drop out. We know that from research that is publicly available. Having that 30 per cent rebate draws people who would otherwise be in the public hospital system to pay for their insurance every year to use the private system. The other 70 per cent comes from their own pocket and funds the construction of private hospitals that will be there when we retire, that will be there for future generations who choose to use the private system. That 70 per cent of money would never be there were there not a 30 per cent rebate in the first place. This is billions and billions of dollars that pay for those private hospitals that are there at those moments when you have a severe condition, a public hospital will not treat it quickly and you have the option of quickly seeing a private doctor at the private hospital for a consultation and still get most of the cost of that visit back on Medicare. That is right: the private hospital system provides an alternative to public care that actually raises the quality and the expectations of our public system.

Further, public hospitals in the last decade or so have woken up to something very interesting. If a public hospital can increase the quality of its service, people with private cover will say, 'I'm happy to stay at this hospital tonight,' and all of the money is paid by the private health insurer direct to the public system. This has become a massive earner for our public hospital system. If you travel to Brisbane, with the big, fancy, shiny Princess Alexandra Hospital, with the lovely wide corridors and the impressive meal service—I am very proud of my local public hospital—many private patients say, 'I'll stay here, thanks.' When I talk to the private hospitals, with their pokey 1950s corridors and their ageing infrastructure, many of them say, 'We envy the impressive public hospital infrastructure, which has been funded mostly by state governments that are now drawing a lot of custom away from us.' What I am describing is genuine competitive tension that is constructive, that delivers better services for Australians and gives them two options, and you cannot ask for more than that. You know that you are better off with two choices than one. In a country where your only hospital is full, refuses to see you or refuses to change your hip, it is awfully nice to have another option in your back pocket. The coalition fought for that second option against incredible resistance from the other side. We are the architects of it, we designed it, we supported it and that is why today we stand here simplifying the legislation that was dreamt up at five minutes to midnight in the previous Labor government's term. Yes, they found another way to nickel-and-dime Australian families: this time it was to not index the rebate each year. As hospital costs went up, they said, 'No', we will only raise it by the lesser of the commercial premium or CPI.' Everyone knows CPI is only going to be two or three per cent so there would be a six per cent gap that was never to be rebated by the government from the moment they dreamt up this idea.

Today we go partially to redressing that injustice by removing that complex indexation measure that has an acronym so unctuous and so complex it cannot even be pronounced, so I am glad to see the end of it in legislation. Instead we will use a very simple indexation measure which the sector itself supports. We have moved from an era where a Labor government did not listen to the private sector to an era now where it has a say in decision-making like everyone else. Do not forget that this is not about wealthy insurers; this is not just about big, fancy, shiny hospitals; this is about everyday average Australians being able to afford private health if that is where they choose to invest their money. The only thing this chamber has to do is to make sure it remains as affordable as possible for those average Australians. Keep in mind—the numbers do not lie—that 10 per cent of all people with private health insurance have incomes less than $25,000 a year. There are some people with low incomes that choose above all else to be privately insured. They may forsake independent education to do that. They could forsake living in a larger home to do that but they retain the option if they think health care is more important to them than anything else to get the best care in the world—and that is fair enough for me. From where I see it, every Australian deserves that choice.

Historically this has been an unseemly battle between two political parties over something where there should be no argument. There should be no argument over giving Australians this choice and the ability to access private health care as a completely viable alternative to our fine public health system. We are a nation with strong welfare, pensions and safety nets around MBS and PBS to ensure that nobody misses out on the highest-quality public hospital care. So why should there not be another option for people who choose to invest in it?

As I said earlier—and it is rarely vocalised in the media—for every person availing themselves of the 30 per cent rebate who otherwise would not take out insurance, that person is reaching into their pocket and adding 70 per cent of that rebate, thousands of dollars a year, into Australia's health system for the future. As we all know and those in the camber would be aware, it is all fine when you turn 60, suddenly start getting a sore hip and realise that you cannot get into the public system to then seek out private cover. But we have not made it possible for everyday Australian families to access private health insurance, to pay into the system early and so there will be nothing there when they really need it.

The private health insurance system is utterly vital because it funds the infrastructure. It means the hospitals are there 20 years ahead of when we need them. Isn't that a revolutionary notion? In an age where government operates in debt and does not build roads for today let alone yesterday, we have one sector in this country building the infrastructure even before we need it so there will be beds there when we need them, and that is the great and unsung benefit of private health insurance.

This is only a start. Today's legislation, I concede, is a small modification to make it simpler to operate, to remove the complexity which we all here have begun to associate with legislation produced by the previous administration. It is welcomed by the sector. What was dreamt up here was not dreamt up by the health department. I need Australians to know that the nickel-and-diming of Australians over their private health insurance was all done by Labor's Treasury department. These were Treasury motions to save money. It was never the health department saying, 'We can make the system work better by reform.' If you go through the last six years of Labor health reform, it was exclusively driven from Treasury, from a Treasury desperate to minimise the damage being done by an overinflated stimulus during the GFC. The debt that we now carry—$123 billion net debt—was, I suppose, as little as Treasury could manage given the context of the Labor leadership at the time.

Now we have a small chance to redress it. Now we have a small chance to look Australians in the eye and say to them, 'We are a friend of people who take out private health insurance, just as we are of every Australian who accesses the public hospital system, the GP bulk-billing system and our wonderful PBS.' These are the four strong pillars of the Australian health system. It is my regret, when I look back at the last 10 years in this place, that, as far as our opposition here is concerned, Australia's health system only has three pillars. There is a very significant problem with that. We have never been able to talk with the other side of politics about genuine, smart and clever reforms, because, the moment you do, there is an instant debasing debate about whether a dollar is being spent in the private sector that should have been spent in the public.

This debate is over, for any unbiased observer. You can go to Joondalup hospital and see the most efficient emergency department in this country, and it is a private emergency department. I am not for one minute saying that that is the only way to go, but if there is one thing you remember from this contribution today it should be that we must keep both sectors strong, well resourced and well supported and never should anyone who is a private health insurer, anyone who is running a private hospital or anyone who accesses private hospitals feel less of an Australian because of a Labor government that is continuing to nickel-and-dime them as they seek out the best health care they can.

Nick Champion (Wakefield, Australian Labor Party) Share this | Link to this | Hansard source

Listening to the previous speaker in this debate on the Private Health Insurance Legislation Amendment Bill 2013, you would have thought that Labor was still in government. I do not think he has caught up. His conclusion did not seem to reflect the reality that the coalition are in government, they are making changes and they are responsible for these things now. I would point out a few facts for the benefit of the gallery, who were constantly addressed during the previous speaker's contribution. More than 105,000 people took out private health insurance between June and September last year. Those are the Private Health Insurance Administration Council's own figures. In the previous year, some 255,000 extra people had private health insurance in Australia. In percentage terms, that is the highest it has ever been. That would seem to indicate that there is not really a very strong linkage between the private health insurance rebate and the level of coverage in the community.

We saw that when the rebate was first introduced by the Howard government. They threw money at the private health insurers, and the rates of insurance held by Australians did not go up, just as they did not go down when we means-tested the private health insurance rebate. What drove those numbers higher was things like Lifetime Health Cover. That is, it was the penalties that were introduced by the Howard government—taxation penalties, penalties allowing private health insurers to, in effect, make different conditions for people dependent on when they joined, whether they joined when they were young or later in life. It was those changes—the penalties, the stick in the 'carrot and stick' arrangement—that drove up private health insurance rates.

I guess this reflects a conservative approach, which has traditionally been to throw money at the private sector in the vain hope that, if you provide some tax concession, people will take out a private product. We heard the phrase 'nickel-and-dime' before, but their modus operandi has been to starve the public system, to starve Medicare, to constantly cut back, to make massive cuts to the funding that goes to states for our public hospital system. That was what they did in the Howard government. That was reversed under the previous government, and we now await the audit commission. We know what the audit commission will recommend. It will recommend big cuts to health, and that is what we are waiting on now.

I do not know where all of this fits in with the famed line in the sand that the Treasurer apparently has drawn, or the end of the age of entitlement. We are told constantly, day after day, about how workers in several industries should not rely on public subsidies and should tighten their belts and should be prepared to give up wages and conditions that have been fought for and won over rounds of enterprise bargaining. That is what we have been told in other areas. If you are in the auto sector, apparently there cannot possibly be any investment of taxpayers' money to secure your jobs or your industry in a time of extreme economic conditions, in relation to our dollar and other things. But apparently the private health insurance rebate—which does not go directly to consumers; it is paid directly to the private health care funds; it bypasses the individual; it just gets taken off your premiums—the public money that is paid to private insurers, is somehow this sacrosanct part of a public-private partnership that cannot be touched.

I just wonder how the government is going to reconcile those two conflicting notions—on the one hand, the end of the age of entitlement and, on the other, this desire to extend the rebate to high-income earners and to all and sundry. They opposed every set of means-testing of the private health insurance rebate during our time in government. Every single time, they opposed it, despite apparently the end of the age of entitlement.

It appears to me—and it would appear, I think, to most fair-minded Australians—that the approach of the Abbott government is dual. Which rule will apply in relation to the spending of taxpayers' money depends on which industry you are in. If you are in automotive manufacturing then any industry assistance is bad and you should lose your jobs, lose your wages and conditions and face the dole queue, but if you happen to work in the private health insurance industry then you will be deserving. To suggest that private health insurance rebates should be in some way curtailed is un-Australian, according to the previous speaker.

So there is this duality, and behind that there is their standard modus operandi of cutting in the public sector and throwing money at the private sector. In the end, what they want to create is—and let's make no mistake about it—an American-style health insurance scheme. That is, you pay top notch—you pay a lot of money for insurance in America—and, if you do not pay, you fall out of coverage or the health insurer can squib out of covering you for some disease or health issue, then you fall back on a very basic set of conditions. I think that is wrong. Health should not be linked to your income; it should be linked to your health needs, and, as a nation, the fundamental thing that makes us fair in this country has been our commitment to universality of health coverage and Medicare. Most Australians know that, and they reward governments that take care of Medicare and they dispose of governments that do not, because they know that it is critical to a fair go, to the national character and to our sense of ourselves as Australians—not just in a historical context, but also going forward. We want fairness, and we know that, unfortunately, during conservative governments in this country—not all the time, but some of the time—they set out to smash the universality of the system and, with that, the equity that underpins the country.

The tragedy is that it is Liberal and coalition voters who have the most to lose in this situation. One of the things we found when we did healthcare reform in the previous parliament under the Rudd and Gillard governments was that, if you had cancer, the type of treatment you got and your survival rate for those cancers directly correlated with how far away you lived from the CBD. The further you lived from that, the worse chance you had of surviving cancer. In South Australia, that meant if you lived in Clare, Blyth or Burra—places in my electorate and northwards—then you had to travel a very long way to treatment. You were looking at driving in some weeks for chemo every day or every week. What that meant was that your survival rates were not very good and you were constantly admitted to hospital.

One of the things I am most proud of in relation to the previous government—and it is one of the things that we do not talk about, that will not be listed in any of the newspapers today or tomorrow and that will probably only get a mention in history books—is that we opened cancer centres around the country in regional areas. If you go to Clare Hospital today you will find people in a modern chemo unit getting treatment. Instead of driving three or four hours, they might be driving half an hour or an hour. They are being treated in a hospital in their local community by people they feel comfortable around and do not have to battle the big cities. It is the same in the metropolitan bit of my electorate in places like Elizabeth, the working class community based around Holden. There were no cancer facilities north of Gepps Cross, so you had to go into the centre of Adelaide to get those sorts of treatments. One of the best things the previous government ever did was to fund those things.

I think that underlines the point that people who live in regional and rural communities—who tend to vote conservative—actually have the most to lose when the government cuts from the public sector and gives to the private sector. The private sector is generally not interested in regional, rural or remote areas because there is not a dollar in it. Only the public sector can reach out to the bush, to the country and to regional communities. We hope that the government looks at the pragmatic and practical nature of these things and realises that we are a country that a) desires universality in our healthcare system and b) pragmatically needs it as a matter of course.

This bill, despite all the debates about it, is a simple bill. It changes the way that we index the cap on the private health insurance rebate. This is related to some $700 million in savings—$700 million in savings. We hear all this hoo-hah about SPC and the quibbling over giving $25 million to them to save some 5,000 jobs of farmers and factory workers in Shepparton, and yet here is a saving which they would not have and they are not the authors of—it is a previous government that is the author of these savings. They will the savings and they will talk about the importance of private healthcare rebates and say that they would not have touched it, but let's be clear about it. The effect of their ideology is to hand a tax concession to people on high incomes who can afford to pay the full tote.

This bill is important. It brings forward savings to the taxpayer. It allows us to spend that $700 million on things like cancer centres in rural communities—places like Clare, places like Gawler—and even in the outer suburbs, in places like the Lyell McEwin Hospital. When you make those savings, when you rigorously apply logic to the system, you can then afford to do other things. We know that healthcare inflation is rising. We know that that is because of the technology available now. It is running much faster than normal rates of inflation, and that means that we have to make more efficiencies in our healthcare system or we have to spend more.

The previous speaker would have you believe that, if only we spent more on private health insurance, that is an effective way of dealing with that problem. But in fact we are going to have to have serious discussions about what our hospitals do, when they do it and how to tackle that issue of ever-rising costs and do it efficiently. I do not think we can afford to be handing money through tax concessions, through rebates, to high-income earners. I think we should make those people pay their way. Let's be plain about it. That is what the previous government decided to do. We have saved the taxpayer an enormous amount of money over the course of the forward estimates. Despite all the rhetoric of those opposite, they will not reverse those changes, because they were sensible and prudent and they were made because they were the right thing to do, not because of any budgetary constraint.

The Labor Party, as always, supports the universality of health care. It is a fundamental thing, I think, to the character of this country, and we will continue to defend it against the actions of the government.

Natasha Griggs (Solomon, Country Liberal Party) Share this | Link to this | Hansard source

I just want to pick up on a point that the member for Wakefield made in saying that the private sector is not interested in investing in the regional and remote areas. What a load of hogwash! I live in a regional centre, and there are plenty of private sector people who want to come in and invest in the Territory. Have you heard of Northern Australia, Member for Wakefield?

Nick Champion (Wakefield, Australian Labor Party) Share this | Link to this | Hansard source

I lived there. I lived in Darwin.

Natasha Griggs (Solomon, Country Liberal Party) Share this | Link to this | Hansard source

Well, you do not live there now. You do not live there now, Mr Champion. Let me tell you: there are plenty of people who want to invest in Northern Australia.

The Abbott government does understand just how important it is to have a strong private health system to support a dynamic public system. It really does. In the Territory, this is very, very obvious. The coalition recognises the importance of planning for the long term to meet the challenges that will come with an ageing population. We plan to continue to encourage growth of the private health system in order to relieve some of the pressure that our ageing population is putting on the public system. This happens in my electorate of Solomon. That is why it is very important that we have a very solid, vibrant, private health system.

The growth and stability of the private health system in my electorate is of particular importance. Under the previous government, we all saw that there were attacks on our private health system, in turn increasing pressure on our public system and putting the health of my constituents at risk, and I was not happy about that. I know that this government will protect our private health system and ensure the stability and certainty of health care for my constituents in Darwin and Palmerston.

I rise to speak on the Private Health Insurance Legislation Amendment Bill 2013 and support the coalition's plan to untangle the mess that Labor has left behind in our health system. This bill seeks to reduce the burden placed on our private health system by the previous Labor government's private health insurance base premium measures. The Labor government placed enormous regulatory burdens and implementation difficulties on our private health system, in turn complicating our system and confusing our consumers, who are our constituents.

Under the previous Labor government's changes, the government's contribution to the rebate on private health insurance would be capped and indexed by the lesser of the consumer price index or the actual increase in premiums from 1 April 2014. This would apply to every one of the 34,000-plus policy products. This measure that the previous government proposed would apply at a policy level, resulting in a complicated and costly system.

This bill will change this process by using a single rebate adjustment factor across all policies. The adjustment factor will be a ratio representing the proportion of the increase in the consumer price index compared to the average private health insurance premium increase. These changes will greatly reduce the complexity for consumers and make it easier to compare products at an industry level. It is estimated that the changes will save the private health insurance industry approximately 80 per cent of the administrative costs associated with policy level implementation.

This government recognises the importance of supporting our private healthcare system, as did the former Howard government, which left office with a legacy encouraging the uptake of private health insurance, supporting those Australians who wished to take out private cover for their families, while supporting a vibrant public health system. Following the former coalition government's introduction of measures to support private health insurance, including the private health insurance rebate, Lifetime Health Cover and the Medicare levy surcharge, the number of people with private hospital cover grew dramatically from around six million people in the late 1990s to nine million people by late in the year 2000. This has always been the coalition's approach to health care: reduce complexity in the private system and encourage those who can take out private health insurance to cover their family in times of sickness and of health. Yet the Labor Party continues to destroy our system with red tape, regulation and confusion. Mr Deputy Speaker, you know that that is the Labor way.

As I always maintain in my representation of the people of Solomon, we are in a unique position in the Territory and providing health services in such a vast and remote jurisdiction faces extra difficulties in comparison to other major cities. With the Territory's increasing ageing population, more than ever we require the support of the private health system to relieve the pressure on our public system. According to Private Health Care Australia, there are 35 private health insurance funds providing cover in the Northern Territory—a significantly smaller number than other states and territories. Nevertheless, they are there. As at September 2013, the Northern Territory had 99,983 people covered by some form of private health insurance. This included 93,386 persons with hospital cover and 99,871 persons with general treatment cover for ancillary care such as dental, chiropractic and optical services. That is around 50 per cent of the Territory's population covered by some form of health care. Yet the previous Labor government did not recognise the importance of supporting our private health system. Could you imagine the state of public health care if 50 per cent of the Territory's population suddenly relied on the public system? With that figure being Territory-wide, we can assume that the percentage in my electorate of Solomon would be much higher. Additionally, hospital coverage in the Northern Territory increased by 4.3 per cent from September 2012 to September 2013, while general treatment coverage increased by around five per cent. In the year ending September 2013, private health insurance paid benefits for over 1,000 public hospital episodes that would otherwise have been paid for by government. This is an extremely significant assistance to the public health system. We are experiencing an influx of people moving to Darwin and Palmerston and with our public system struggling to cope, there has never been a more important time to support our private health system.

The coalition recognises the importance of investing in both our private and public systems here in the Territory. That is why I pushed so hard for a new hospital in the Territory and Minister Dutton listened. I am delighted that the Abbott government has committed to $110 million of investment for a new hospital in the Palmerston area, with the Country Liberal government contributing $40 million. That $150 million for a new hospital in my electorate will alleviate strains on Royal Darwin Hospital and help to provide first-class health care to the people of Darwin, Palmerston and the greater rural area.

I commend the bill to the House.

Joanne Ryan (Lalor, Australian Labor Party) Share this | Link to this | Hansard source

The Australian Labor Party has always known the importance of a sustainable private health insurance sector, and the indexation of the private health insurance rebate is an important part of keeping this sector sustainable. It is often said that one's health is one's wealth. If this is true, it is fair to say that a nation's wealth is the health of its people. No party understands this better than Labor. Time and time again Labor has come to the defence of our nation's health system. Time and time again we have rebuilt it after the conservatives have recklessly slashed budgets and relentlessly sought to tear down Medicare. Time and time again, it has been Labor that has had the courage to tackle the threats to our nation's health by listening to health professionals and formulating sound health policy.

But Labor also understands that this comes at a cost. Health expenses count for 19 per cent of Australian government expenditure. We must always be looking at ways to make savings and strive for efficiency, but not at the cost of the health of our citizens. The indexation of the private health insurance rebate is expected to raise about $700 million in savings over the forward estimates. This is money that can be reinvested into the health system, a system that the Prime Minister himself commended as being 'in pretty good shape' after the stellar work done by the previous Labor government, work led by former health ministers Nicola Roxon and our Deputy Leader, Tanya Plibersek. This bill will not affect the amount of money saved on the private health insurance rebate, and it maintains the integrity of the former Labor government's intent. This bill aims to change the way private health insurers make the calculation to apply and administer it.

I was a school principal in my previous life. I therefore understand paperwork and the burden of administration. I also understand the time and effort required when implementing new systems. As a principal, I was privy to the amount of work involved when new processes were introduced, and I know firsthand how much of my staff's time was taken up with administration. So I am sympathetic to the health insurers and their wish for the quick and efficient implementation of this legislation, and I support this bill and its aim. But I would like to highlight that the rights of policy holders should not be diluted or lessened by health insurers' understandable aim to reduce their administrative burden as a result of this amendment.

When the Labor government introduced this change in May last year, there was a debate centred around whether the indexation of the rebate should be calculated at the product level as implemented, at industry level, or at the individual insurer level. The Department of Health and Ageing was concerned that proposing the indexation at industry level, as this bill does, would put smaller insurers at a competitive disadvantage. We on this side of the House, and I assume many of those opposite, value the importance of not only a competitive private health insurance market but one that offers a diversity of choice. This is why I share the concern held by the Department of Health and Ageing and those raised by the member for Ballarat earlier that this amendment may put smaller insurers at a competitive disadvantage. At the core of Labor's proposed implementation model was an aim to create greater competition and transparency for consumers. It is now up to the government to show how this bill will do just that. It is now up to the government to reassure the smaller insurers that they will not be at a competitive disadvantage. It is now up to the government to reassure that private health insurance consumers will not suffer through lack of choice, and that they will not suffer the adverse effects of being at the mercy of an uncompetitive market.

As I said earlier, Labor is and has been committed to there being a sustainable private health insurance sector, so it stands to reason that we support measures that enhance competition. But we go further—we stand up for consumers too. This is what separates us from those opposite. While the coalition consistently sides with big business, Labor advocates for consumers and stands up to a government that cares little for the rights and needs of the average Australian. Labor is the only party that can see the value of, and advocate for, a competitive marketplace that enhances the health and wellbeing of its population and not just the health and wellbeing of big business.

Like many in this place, I am a student of history and I think that examining the past reveals much. So let us take a look at this government's record when it comes to private health insurance so far. This is the government that has approved the biggest increase to private health insurance premiums in almost a decade. This is the government that tried to sneak through these changes, making it more expensive for every Australian with a private health insurance policy, just two days before Christmas. This is the government that says it wants the private health insurance industry to have a greater involvement in the delivery of health care, but, really, they are seeking to destroy Australia's system of universal health care by creating a two-tier health system. This is the government that, the public are hearing, intends to sell Medibank Private while failing to demonstrate in any way how it will improve competition or help Australian consumers—not a single argument as to why we should sell an asset like Medibank Private.

Despite the constant criticism from the coalition when in opposition, the number of people with private health insurance was at its highest rate in Australia's history under a Labor government. Unlike so many of the Abbott government's assertions, this can be backed up by statistics and data. The most recent data from the Private Health Insurance Administration Council shows that over 105,000 more people took out private health insurance between June and September last year. Compared to the same time in 2012, more than 255,000 Australians had private health insurance cover. In percentage terms, this represents the highest rate of insurance cover ever, with 47 per cent of Australians having hospital cover and 55 per cent having general cover.

It was under the former Labor government that a means-tested rebate for private health insurance was introduced. This meant more money available to invest in our health system, more money to fund much needed and lifesaving medicines, and more money to build important health infrastructure like the network of regional integrated cancer centres. Labor did this because the health of every single Australian has always been our priority. We see this in our proud history in wider health reform. We are, after all, the party of Medicare, the party of the Pharmaceutical Benefits Scheme, and the party of the National Disability Insurance Scheme. Under a Labor government, Australians had greater access to more doctors and more nurses, as well as a record number of GPs and health professionals being trained. It was a Labor government that ensured that seeing a dentist became as easy as seeing a doctor for 3.4 million Australian kids, that pensioners and low-income earners gained access to improved dental services and that our young people gained access to a dedicated and committed mental health service in headspace. It is always Labor that cares about the health and wellbeing of everyone in our community. It was under Labor that bulk-billing became easier and more accessible.

I see Labor's commitment to health demonstrated in my electorate every day. I see it in the tailored and integrated health care provided by our South Western Melbourne Medicare Local. I see it at the Werribee Mercy Hospital, which received $28 million in funding to build a 30-bed sub-acute service and a community rehabilitation centre. I see our commitment to health care when I visit the soon-to-be-opened Wyndham Vale GP superclinic. And I know I will see it when our local headspace opens, providing much needed mental health services to our young people. I see Labor's commitment to health every day, because we believe that every Australian, young or old, wealthy or not, deserves great health care.

But imagine if this free and fair system did not exist: if we had a government that did not recognise how important funding health infrastructure and services was; if, instead of having equitable access, seeing a GP depended on how much money you had in your pocket, not how much your need was; if concessions to business and industry were more important than the health and wellbeing of the Australian population. We do not have to imagine too hard, unfortunately, because under this government it could become reality.

In contrast to Labor, Mr Abbott was the health minister that cut $1 billion from our hospitals and health services. It is his party that has failed to commit to Medicare Locals and that failed to see just how important services like Medicare Locals are to communities like mine. This is also the party that opposed the introduction of GP superclinics, and the party that refuses to acknowledge existing care shortages and see the benefit of holistic health services like the Wyndham Vale GP superclinic. It is also this party that seeks to impose a tax upon the sick—in other words, a tax upon the most vulnerable in our community. Because, despite their promises to the contrary, this is not a party that cares about the health of every Australian. Instead, it is Labor that stands for universal access to health care so the most vulnerable Australians can access the highest quality care available. And it is Labor that supports a sustainable private health insurance sector.

Amanda Rishworth (Kingston, Australian Labor Party, Shadow Parliamentary Secretary for Health) Share this | Link to this | Hansard source

I am pleased to rise to talk on the Private Health Insurance Legislation Amendment Bill 2013. I think from the outset it is important to note that I and Labor have always supported a sustainable private healthcare insurance system. Indeed, the support for the private health insurance system has been an important complement to our universal public healthcare system. Labor has always advocated for a universal public healthcare system. It is something that I raised in my first speech here in this parliament—the importance of ensuring that, whatever your circumstance, you can actually get access to public health care. Indeed, it is certainly recognised around the world how accessible our public healthcare system is. I do plead with the government not to dismantle it and not to add a $6 fee that will rise and rise and rise—a copayment to visit a GP. I hope they do see sense in that proposal and rule it out, because having a universal healthcare system, a system that allows you to get medical help when you need it and that is affordable, is incredibly important. But there is also the complementary private health insurance system which is an important complement to the public system. It allows people to pay a contribution to get other services or discounts that they might not otherwise have been able to.

Labor has always believed in ensuring that our private health insurance sector is sustainable. That is why we moved, in the last parliament, to raise a number of savings measures over the forward estimates to ensure that does happen. We brought in means-testing for the private health insurance rebate, which was an important sustainability measure for government in terms of the subsidy. Unfortunately those on the other side railed against this continually, with apocalyptic predictions about what would happen. What we have seen is that the number of those taking up private health insurance has actually increased. All the concerns, the predictions of the whole system falling apart, have not eventuated. Indeed, it seems a very sensible measure to means-test those who can afford it—who can actually pay without getting a rebate from government—while still targeting those who do need assistance to take up private health insurance. Self-funded retirees and a lot of pensioners continue to choose to take out private health insurance and they are the ones we targeted to ensure they get support. The government railed against that while in opposition, but now we do not hear too much from them. They said they were going to repeal the means-testing and get rid of it; now we hear that commitment change somewhat, because they have seen the light. They have realised it did not lead to the huge problems they predicted. In fact, as I said, we have seen those numbers increase in real terms.

Labor is committed to sustainability, and that is why we will be supporting this bill. It makes the same savings over the forward estimates as proposed under Labor: approximately $700 million. It is a sensible and sustainable way to support the private health insurance rebate and the government's contribution to it. I really hope that we will see some sense from the current government when it comes to private health insurance.

They are pretty sneaky, this government. Despite publicly saying they have made no preconceived decision and have no intention of selling off Medibank Private, we now know from reports in the paper today that they have engaged someone from a consulting company on $2,000 a day to prepare a communication strategy to prepare the public for the sale of Medibank Private. That is pretty tricky, without proper public debate or the release of the report that was meant to guide the government in their decision-making. They have pre-empted that report and made their decision. They are working out how they can best pull the wool over the eyes of the Australian people by paying a consulting company $2,000 a day. That money would be better reinvested into our health system to ensure that people can see a doctor or get into a hospital when they need to. They could invest in the infrastructure around this country which is so important and necessary.

I hope that the government will be transparent with the Australian people—that they will come clean about what their intentions for Medibank Private are and provide information to the Australian people about what their reasoning is and what the report said. One can only assume that if they have made their decision they have actually received that report, but of course that is unlikely. It seems this is a decision that has already been agreed to.

It is important that, as we move forward, we look at both sustainable private and sustainable public healthcare systems which complement each other rather than overtake each other. I know the shadow minister was in here talking about some concerns around ensuring the private sector does not stop the public sector from flourishing, and I certainly share those concerns.

The other key element, when it comes to private health insurance, is the role for government in determining what those premiums are. I was very disappointed, at two minutes to Christmas, when the minister rubber-stamped the largest premium hikes we have seen in a decade. For those out there who are choosing to take out private health insurance it is an important investment to make, but it does cost. There is a role for government to get private health insurance companies to justify that increase. When Labor was in government we spent a lot of time working with the private health insurers to determine what was a reasonable hike in premiums. Under the coalition, companies came and proposed an increase and the minister, without a thought for the cost-of-living increases it would impose on families, just rubber-stamped it. It was the largest increase in close to a decade.

I would ask the minister, when that time comes around again, to think especially of those who are contributing to the cost of private health insurance. Give some thought to them. Give some thought to the premiums they are paying. Really ask some tough questions—do not just rubber-stamp. Ask some tough questions about why this rise is justified. Maybe it is just that the minister is learning; he is starting to adjust himself to being the minister. But he should ask some tough questions and get a justification of why insurance premiums have to rise, because it does have an effect. It has an effect on families, and it was quite cruel to do that just before Christmas. I am sure the government felt that if they brought it in just before Christmas it could just be swept under the carpet and no-one would notice—but people in my electorate noticed. They noticed the increase and have asked me to pass on to the government their request to give some consideration to their cost-of-living issues.

The shadow minister for health has moved an amendment highlighting the importance of competition in this sector. I certainly concur with the shadow minister on that amendment. I think the amendment is very sensible. We need to ensure we are not only improving competition in the sector—and I think we are providing the groundwork for that—but also standing up for consumers. Those on the other side might not think there is a role for government in that but certainly we on this side of the House think that is also really important.

I commend this bill and the amendment to the House. I ask the government to continue focusing on delivering good outcomes for consumers and not just to rubber-stamp increases in premiums that have no clear justification and have no hard questions asked of them. When this time comes round again I ask that the minister give that proper consideration.

Andrew Giles (Scullin, Australian Labor Party) Share this | Link to this | Hansard source

I rise to make a brief contribution in support of the shadow minister for health's second reading amendment to the Private Health Insurance Legislation Amendment Bill 2013. As the member for Kingston just indicated, this amendment will put this government to its proof in terms of competition—a value often espoused by members opposite—and clarifying the support for consumers in this industry.

The bill amends the Private Health Insurance Act 2007 to make clear that a single rebate adjustment factor to be determined in accordance with the private health insurance incentives rules will be applied to all rebates. The bill amends the implementation of the indexation of the rebate by applying a single rebate adjustment factor to all types of insurance products. I note the Minister for Health described this as a move to redress implementation concerns in this legislation. This should make it easier for consumers to understand and cheaper for private health insurers to administer. I will speak to the questions of consumers later. Private health insurers, including small insurers, have also argued that these changes would be easier to implement. I understand that is an important and significant consideration to be borne in mind.

Labor stand for universal access to health care. We are proud to be the party of Medicare, which is 30 years old this month—a birthday all Australians have celebrated. The most vulnerable Australians must be able to access the highest quality of care available based on need not financial capacity. Today of all days we must recognise this when we have come together in a bipartisan manner to work towards closing the gap on Indigenous health outcomes.

Labor also supports a sustainable private health insurance sector. I note that, despite what was said by members opposite when they were in opposition and indeed today in this debate, when Labor was last in government the number of people with private health insurance was at its highest rate in Australia's history. The means testing of the private health insurance rebate that Labor introduced in government meant simply that there was more money available to invest in life-saving cancer drugs and to build health infrastructure, like the network of regional integrated cancer centres. In short, there was more money available to get maximum value from our health expenditure to deliver better and fairer health outcomes for Australians.

Despite the constant negativity of the coalition in opposition, people did not cancel their private health insurance in droves. It was quite the reverse. Instead, more people than ever have private health insurance, both in percentage terms and in real numbers. I am grateful for the member for Wakefield's contribution on this point.

Labor recognises it is important to have a sustainable private health insurance sector in Australia, as I have said. The indexation of the rebate, the concession, was introduced by Labor in order to make more money available to invest in health. It is expected to realise about $700 million in savings over the forward estimates. Importantly, this legislation does not change the amount of money the government will save on the private health insurance rebate; nor does it alter the objective of the former Labor government's intended measure. It simply changes the way private health insurers make the calculation to apply. The intent is that this will require less administration on behalf of those insurers, and that is something to be encouraged.

Labor will always support measures that enhance competition. This is consistent with our position that we need to have a sustainable private health insurance sector in this country working cooperatively, as the member for Kingston said a minute ago, with the public system. When we are talking about private health insurance we cannot but mention the highest increase to private health insurance premiums in a decade that took place on 23 December last year. There was an announcement made—absent consultation—at a time when most Australians were concentrating on other matters. This evidences very little concern for consumers.

Now I turn to the real concern for consumers, a matter squarely addressed by the amendment moved by the shadow minister. If this bill will make it easier for consumers to understand their policy then that is to be welcomed, but the government has not as yet adequately demonstrated how it will stand up for consumers. This area of private health insurance is complex for consumers with complicated products. It presents real challenges that will require some working through. The amendment proposed by the member for Ballarat draws this out. It asks them to demonstrate what additional competition is in the interests of Australian consumers. That is a fair enough proposition, so it should be supported by the government.

Health was a priority for Labor in government and it always has been. Of course it is a priority for us now. We are committed to a world-class universal healthcare system today and into the future. On the other hand, this government is yet to demonstrate its positive agenda for health—in particular, its real commitment to our public hospital system and to Medicare as a universal safety net, a matter canvassed before the good burghers of Griffith in recent days. Instead, we have seen what appears to be the privatisation by stealth of Medibank Private, absent any consideration of its impact on competition—a matter very relevant to the broader debate this bill touches upon.

With the Commission of Audit about to hand down its findings that will shape the next federal budget, people in Scullin are anxious. They are anxious about health care; they are anxious about Medicare. They see the difference between Labor's commitment to health and the coalition's. They see it in a physical form with the GP superclinic in Mill Park, opened last year and delivering important health services. They see it in the Teaching, Training and Research Precinct at the Northern Hospital in Epping—a fantastic initiative of the Labor government that will deliver high quality services and world-class research and will do great things to keep the best quality health professionals working in the outer suburbs and not draining into city centres. They also see the work of our Medicare Local for the northern suburbs of Melbourne—a great body which remains under threat.

In supporting the opposition shadow minister's amendment to this bill, we are broadly supportive of the principles it embodies to make administrative adjustments to sound Labor legislation to release more funds to deliver better health outcomes for Australians. The amendment seeks to clarify this and to put the government again to its proof on the question of competition and to ensure that the interests of consumers of private health insurance products are at the centre of this debate. But we cannot forget the broader remit of the health debate that is before us because that is what is on the minds of the people I represent in this place.

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

I thank all of those members who have contributed to the debate on this bill. The Private Health Insurance Legislation Amendment Bill 2013 simplifies implementation arrangements of the previous government's base premium measure. The previous government's changes would have applied at a product level and would have effectively led to a different rebate for each policy type—cumbersome to administer and difficult for consumers to understand.

This bill amends the Private Health Insurance Act 2007 to create a single adjustment factor under a legislative instrument. The rebate will be adjusted uniformly across all insurance policies each 1 April by a factor to be determined in accordance with the private health insurance incentives rules. The adjustment factor will be a ratio representing the proportion of the increase in the consumer price index compared to the average private health insurance premium increase. Industry has advised that this bill will result in a significant administrative saving to the costs of implementing the previous government's base premium act. The bill also makes a minor amendment to clarify the definition of 'restricted access group'.

I note the shadow minister's concerns, late found as they may be, in relation to private health insurance and consumers. It is the case that when Labor were in power they attacked private health insurance at every turn, at every budget, and even promised before elections that they would not make adverse changes to private health insurance that would affect the almost 11 million Australians with private health insurance. But, true to form, as they did in the Hawke-Keating years, they did so again in the Rudd-Gillard years. People understand that Labor do not appreciate, support or see as part of the health future the private health insurance product, and for that they should be condemned. So we will not be supporting the shadow minister's second reading amendment, and I commend this bill to the House.

Ross Vasta (Bonner, Liberal Party) Share this | Link to this | Hansard source

The original question was that this bill be now read a second time. To this the honourable member for Ballarat has moved as an amendment that all words after ‘That’ be omitted with a view to substituting other words. The question now is that the words proposed to be omitted stand part of the question.

Question negatived.

The question now is that the bill be now read a second time.

Question agreed to.

Bill read a second time.