Alex Hawke (Mitchell, 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 amendment be agreed to.

Ian Goodenough (Moore, Liberal Party) Share this | Link to this | Hansard source

I speak in support of the Health Insurance Amendment (Extended Medicare Safety Net) Bill 2014, which amends the Health Insurance Act 1973 to set the general extended Medicare safety net threshold at $2,000 for individuals and families, from 1 January 2015.

The bill also makes some administrative changes, allowing the chief executive of Medicare greater flexibility in determining family composition for the purpose of paying benefits by permitting that the use of forms of communication, other than written correspondence, such as telephone contact.

By way of background, the EMSN was introduced by the Howard government in 2004. It provides an additional rebate for out-of-hospital Medicare services after an annual threshold in out-of-pocket costs for out-of-hospital Medicare services is reached.

There are two thresholds, namely, concessional and general. The EMSN concessional threshold is for concession card holders and families eligible for family tax benefit part A. It pays 80 per cent of the out-of-pocket costs or the EMSN benefit cap, whichever is the lower amount, for out-of-hospital Medicare Benefit Schedule services, after a threshold of $624.10 per family or individual per calendar year is reached.

It is important that this bill does not make changes to this arrangement and that the threshold continue to be indexed according to the consumer price index. This ensures that those in most need in our community continue to be heavily subsidised. Those eligible for the concessional threshold include holders of Commonwealth seniors health cards, veterans healthcare cards and pensioner cards.

On the other hand, the EMSN general threshold is for non-concessional card holders and it provides for 80 per cent of the out-of-pocket costs or the benefit cap, whichever is the lower amount, for out-of-hospital Medicare Benefit Schedule services, after the current threshold of $1,248.70 per family or individual per calendar year is reached. Both EMSN thresholds are indexed annually by CPI, as specified in the Health Insurance Act 1973.

The bill's administrative changes are centred around the expanded scope for the chief executive of Medicare to confirm family composition when a family has or is about to reach the extended Medicare safety net threshold. This part of the bill removes an unnecessary administrative requirement, enabling more timely payments of EMSN benefits to entitled recipients.

Currently, the Department of Human Services can only make a request to a person in writing for them to confirm their EMSN family status. This part of the bill removes the request by Medicare to be only in writing, allowing the chief executive of Medicare to confirm the claimant's family status at the time by other means, such as telephone contact. This allows Medicare EMSM payments to be made in a more timely manner.

This bill is projected to save the budget $105.6 million and is included in the forward estimates. In effect, this implements a decision taken in the 2013-14 budget by the previous government, so it is not new. The cost of health care is rising due to advances in medical treatment and care as well as an ageing population with greater longevity and lifestyle factors. The recent Commission of Audit report has projected that over the next decade Pharmaceutical Benefits Scheme costs will grow by 5.4 per cent per year; Medicare Benefits Schedule costs will grow by 7.1 per cent per year; and hospital costs will grow by 10.4 per cent per year. It is therefore important that the government ensures that the public health system is sustainable in the long term. Unfortunately, government resources only stretch so far, and the public health system is under a great deal of cost pressure. Therefore, it is essential to take responsible measures to keep the health system sustainable.

My predecessor, Dr Mal Washer, took an active interest in health related issues and worked very hard during his 15 years in this parliament to advocate for improvements in the medical facilities available within the electorate. As a result of his dedicated work, the people of Moore now have access to state-of-the-art health services available locally. The centrepiece of health and medical care in my electorate is the Joondalup Health Campus. With approximately 650 beds, it represents the largest health care facility in Perth's northern suburbs. Of these, 498 beds are provided for public patients and 145 beds for private patients. The hospital provides 24-hour acute care from an integrated public and private campus, which includes an emergency department, an after-hours GP clinic, and a day procedure unit. Specialist services include paediatrics, orthopaedics, renal, oncology, obstetrics, gynaecology and ophthalmology, to name just a few. In March 2012 the theatre block was officially opened, which includes 12 operating theatres, twice as many as before; a nine-bed intensive care unit; a six-bed high-dependency unit; and a 10-bed coronary care unit. The new operating theatres are among the most advanced in Australia. They include four state-of-the-art iSuites with video and touch screen technology to enable surgeons to view and capture images from inside the body while they operate.

People living in Perth's rapidly growing northern corridor will be able to receive all the health care they need at the Joondalup Health Campus, which provides an extensive range of in-patient, outpatient and emergency services. A comprehensive range of medical, surgical and maternity services is available on the campus, including cardiology; ear, nose and throat; gastroenterology; obstetrics; orthopaedics; palliative care; and urology. A complete range of diagnostic health care facilities is available on site, along with comprehensive pathology, radiology, pharmacy and allied health services. The emergency department is operated by qualified staff 24 hours a day, seven days a week, with extensive critical care facilities including intensive care and coronary care units which are staffed by an experienced team of nurses and medical practitioners. Other on-site facilities and services include a purpose-built mental health unit, including secure accommodation; dedicated day surgery and endoscopy units; and a renal dialysis service.

A second integrated state-of-the-art $20 million regional healthcare facility opened its doors in 2013, Shenton House. Centrally located directly opposite the Joondalup Health Campus on Shenton Avenue, it provides the first cancer care treatment centre in Perth's northern corridor, with services including on-site radiation and medical oncology treatment as well as cardiology care and sleep studies provided by GenesisCare. The facility was developed as a joint venture between the Anglican Diocese of Perth, which originally owned the land, and Perth Radiological Clinic. Shenton House is licensed as a day hospital by the health department, with GenesisCare the only approved provider for a specialist medical centre in an area of need in Joondalup, introducing treatment options not previously available.

Perth Radiological Clinic operates an imaging department which occupies the entire first floor. It includes a start-of-the-art magnetic resonance imaging scanner, a cutting-edge low-radiation dose computed tomography scanner, a wing of ultrasound rooms, and a dedicated mammogram imaging suite. Cancer patients living in Perth's northern suburbs will benefit from the new PET-CT scanner, which stands for positron emission tomography—computed tomography. The new state-of-the-art PET-CT scanner is a very important tool for the diagnosis and management of many forms of cancer, especially lymphoma, melanoma and colorectal cancer. It is the first scanner of its type in Perth's northern suburbs and allows patients to have their scan done closer to where they live instead of travelling to Perth. Scans covered under Medicare will be bulk billed whilst scans not covered by Medicare will be performed at a discounted fee.

GenesisCare has invested more than $10 million on its premises, offering cancer care, cardiology services and the area's first in-patient sleep lab. The linear accelerator and allied equipment, which produces X-rays directed only at the cancer cells, represent an investment of approximately $4 million. A second machine is due and there is room for a third. About 300 patients a day will use the cancer and cardiology services. It is estimated that one-in-three Australians will contract cancer at some stage in their lives. Improved access for cancer patients needing radiotherapy and cancer treatments will contribute to higher survival rates. The provision of radiotherapy services in Joondalup means patients will avoid having to travel about 60 kilometres to Sir Charles Gairdner Hospital several times a week.

Advances in medical technology add to the quality of life of patients. However, there are significant costs added to the health budget by new treatments. The Medicare Safety Net ensures that individuals who reach the safety net threshold amount are paid an 80 per cent subsidy to minimise the financial burden and hardship. This is world-class in terms of granting public access to quality medical services at a heavily subsidised price.

In my home state of Western Australia, the state government is investing heavily in health care. Between 2008 and 2018, the Department of Health of WA is investing more than $7 billion in building new hospitals and improving existing health facilities, with support from the Commonwealth government and other partners. The flagship Fiona Stanley Hospital, which cost approximately $2 billion to build, is expected to be operational later this year. In addition, the $1.2 billion Perth Children's Hospital is currently being built on the Queen Elizabeth II Medical Centre site in Nedlands and will replace Princess Margaret Hospital as the state's dedicated children's hospital. The hospital will provide the best possible clinical care for future generations and will be the base for continuing WA's outstanding paediatric research.

In summary, the standard and quality of healthcare facilities available to the community has greatly improved over the years through new medical facilities being built, the advancement of scientific technology and breakthroughs in medical research. The cost of health care has also increased at a rapid rate as new revolutionary treatments are introduced and subsidised by the taxpayer. Faced with these considerations and an ageing demographic, it is the responsibility of government to ensure that the Medicare system remains affordable and sustainable for the long term. This bill is projected to save the budget $105.6 million and is included in the forward estimates, effectively implementing a decision taken in the 2013-14 budget by the previous government. I commend the bill to the chamber.

Shayne Neumann (Blair, Australian Labor Party, Shadow Minister for Indigenous Affairs) Share this | Link to this | Hansard source

I speak in relation to this particular legislation, the Health Insurance Amendment (Extended Medicare Safety Net) Bill 2014. When the member for Sydney was the minister for health and I was parliamentary secretary for health and ageing in the 2013-14 budget, we increased to $2,000 the general threshold of the extended Medicare safety net from 1 January 2015. The concession extended the Medicare safety net threshold and will be indexed as usual and will not be impacted by this particular legislation before the chamber.

In relation to this particular legislation, it has got to be remembered that the extended Medicare safety net was introduced to assist people with high out-of-pocket medical expenses. As the then President of the AMA Steve Hamilton said recently in a submission to the Senate Standing Committee on Community Affairs inquiry which was looking into this particular legislation:

The Extended Medicare Safety Net (EMSN) was introduced to protect individuals and families from high out-of-pocket expenses when their need for medical services outside the hospital setting was unusually high. The EMSN has helped many people access timely and affordable medical care, and is quite likely to have prevented downstream costs to the health system.

I noticed that National Seniors Australia, Michael O'Neill, in the submission to the same Senate Standing Committee on Community Affairs, said:

Research commissioned in 2012 by National Seniors Productive Ageing Centre revealed that 570,000 people age 55 years and over spend more than 10% of their income on health and about 250,000 spend over 20% of their income on health. Those with five or more chronic conditions spend $882 per quarter which is almost 6 times as much as those with no chronic conditions.

It is quite clear that Australians spend a considerable amount of out-of-pocket medical expenses each year. Often these costs are the difference between the fee charged by a medical provider for a service and the standard Medicare rebate received by a patient from Medicare. Medicare has historically subsidised a proportion of the Medicare benefit, MBS, fee for an out-of-hospital service with patients required to pay any higher amount the provider charges out of their own pockets.

Out-of-hospital costs are wide ranging. They include visits to GPs or specialists, services in private clinics and emergency departments, and a great many pathology and diagnostic imaging services. I note in that space, of course, the $7 co-payment that the current government is wanting to bring in in this budget with a saving of $3.5 million. That particular provision, it is estimated, will cost electors in my electorate of Blair about $6.4 million extra annually in terms of their medical needs. It will certainly have an adverse impact on my electorate and the health and medical costs issue for families and individuals in the electorate of Blair.

The Australian Institute of Health Welfare estimates that in 2011-12 out-of-pocket medical expenses were costing Australians $24.8 billion annually, or about $1,101 per person. Spending on medications account the lion's share of this $9.9 billion, followed by $4.7 billion on dental services and $2.9 billion on medical services. Out-of-pocket medical expenses are growing faster than any other health expenditure. The AIHW reported that between 2001-02 and 2011-12, these out-of-pocket expenses to individuals grew by 6.1 per cent in real terms compared with an average of 5.4 per cent for other expenditure.

The Extended Medicare Safety Net assists Australians to manage the often high costs of out-of-hospital medical services. Once spending on an out-of-hospital Medicare service exceeds the EMSN threshold in a calendar year, the Medicare rebate for these services increases to 80 per cent for the remainder of that calendar year. Subject to some capping, once the EMSN threshold is reached, eligible individuals and families get an 80 per cent discount, in effect, on their out-of-hospital Medicare expenses for the rest of the year. There are two levels. The concessional level assists Commonwealth concession card holders and family tax benefit part A recipients when their spending on out-of-hospital expenses reaches $624.10. Australians not eligible for the concessional rate must spend, currently, $1,248.70 before qualifying for the EMSN. That is called the general threshold.

Some background and history to this bill needs to be looked at. The EMSN was introduced in 2004, and its costs have increased. When the Howard government introduced the EMSN in 2004, it predicted it would cost $440 million in its first 3½ years of operation. In reality, it cost almost double that—$828 million—and this prompted the Howard government to increase the thresholds, both concessionally and generally, over the annual CPI increases. When Labor came into government, we took a consistent, reasonable and, I would suggest, equitable step to make the EMSN financially sustainable. We commissioned the Centre for Health Economics Research and Evaluation, based within the business facility at the University of Technology, Sydney, to review the EMSN, and they did a report confirming that out-of-pocket medical costs were actually growing quite significantly. While some Australians faced relatively low out-of-pocket medical costs, for others they were high and growing. The review reported that, despite the Howard government's increases to the thresholds in 2006, people in higher income areas were more likely to consult specialists and therefore:

We found that some 55 per cent of the ESMN benefits were concentrated to the top quintile of Australia's most socially advantaged areas, whereas the least advantaged quintile receive less than 3.5 per cent.

So the Howard government got it wrong in relation to this. The review expressed concern that, while the EMSN had increased affordability of high-cost medical services by the wealthier people in the community, it had had far less of an impact in lower socioeconomic areas. So it was concentrated in high income areas. Over 50 per cent of the funding went to obstetric and assisted reproductive services. Only eight per cent funded general practice consultations. The review found that, although the EMSN had made medical costs more affordable for cancer patients—and that is welcome, of course—the benefit was far less for those with complex needs such as diabetes. The review reported that the benefits had prompted some health providers to raise their fees, and this diluted the potential benefits to patients. The review found that the average provider's fee had risen by 4.2 per cent over inflation since the introduction and that the EMSN had accounted for 70 per cent of this increase.

We responded to that review by placing caps on the benefit available to the particular services identified by the review to account for over 50 per cent of the funding—obstetrics and reproductive services. We added further caps in 2010 to maintain consistency between the existing capped items or following a cost-benefit recommendation from the Medical Services Advisory Committee. In 2012-13 the Labor government extended the benefit caps to about 500 out-of-hospital services, including all consultations, including allied health, 38 procedural items and some surgical procedures. The new caps were calculated on the basis of the MBS fee and provided a maximum amount of benefit payable for a Medicare Benefits Schedule item, regardless of the actual fee charged by the doctor, specialist or other medical professional.

We received further advice from the Centre for Health Economics—an evaluation review in 2011. That review indicated that capping had put the EMSN on a more sustainable financial footing, fixing up the problem caused by the Howard government, who got it wrong back in 2006. The following year the Department of Health and Ageing reported the expenditure. It once again continued to increase following the introduction of capped arrangements, lifting eight per cent from $342 million in 2010 to $369 million in 2011. This was subscribed by DoHA to significant growth in aesthetic services and particularly in operations. We responded to that by maintaining the financial stability of the system.

In the 2013-14 budget, we took a pretty difficult—but we thought necessary—decision to increase the general EMSN threshold from $1,248.70 to $2,000. I commend the government for taking up Labor's budgetary item in 2013-14 and carrying this out. We maintained threshold concessions so that those who require them the most—pensioners and low-income families—will continue to benefit from them. We took a principled decision on the basis of equity in relation to this issue. I wish the current government had also looked at issues of equity and fairness in their current budget. That does not seem to have been a focus of their current budget, particularly in areas of health and ageing.

We means tested the private health insurance rebate also in relation to this space, and we reduced the rate paid to those on the highest income. That measure was forecast to save $2.78 billion over the forward estimates. I notice that some people opposite—including the member for Bowman who I might have heard talk about class warfare and all kinds of stuff when we did that—have not really altered what we were doing in relation to this space. They claim that the means testing of the private health insurance rebate would cause millions to drop out of private health insurance, but that was wrong of course. Over 120,000 people took out private health insurance in the six months following the introduction of means testing.

So we made some changes. We also did a number of things including the phasing out of the net medical expenses tax offset by 2019. In government we invested massively in health and ageing. We did the $4.6 billion dental reform package, we did some landmark reforms in terms of mental health and prevention—$2.2 billion—yet the current government seems to have adopted complete abdication of preventative health. They are getting rid of the Australian National Preventive Health Agency and cutting funding everywhere across the forward estimates in relation to preventative health programs in alcohol, drugs, tobacco et cetera.

This is a particularly important piece of legislation that we think was important as a budget measure. I commend the current government for doing it. It implements a policy decision of our government. It was a tough decision. It was a fair decision in order to maintain the financial sustainability of the health budget, and we on this side of the chamber are always the party of financial prudence.

Those opposite, in the last financial year, have increased the debt and deficit in this country. If you look at the Pre-Election Fiscal Outlook, there was $30.1 billion debt under us and under this mob it is $49.9 billion. They are the party of financial profligacy. We on this side made the hard decisions in health, private health insurance and the increase in the threshold that is here in this legislation. Those opposite always whinge and complain and carp, but the legislation before the chamber is an important but fair decision.

We protected those most at risk—low-economic status low-income families and pensioners—by the budget decision we made in 2013-14. The current government has picked up that point and I commend them for it. But they hit them hard at every turn in this deceitful and betraying budget, making health care more expensive and less accessible. Frankly, I think that is a shame, a tragedy and a disgrace. I commend them for this legislation but not for the broken promises on health cuts and taxes across the board.

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

This is one of the few Labor MPs who, when he runs out of material from his carefully prepared and rote read speech, actually gives it a go from behind that lectern. He just keeps talking for another couple of minutes at least to avoid the embarrassment of being a shadow spokesman who cannot even get to his time. This is a person who has been highly critical of Howard government initiatives, like the Health Insurance Amendment (Extended Medicare Safety Net) Bill 2014, which actually gives us the finely balanced public and private health system that we enjoy today. To hear him quoting Private Healthcare Australia talking about projected losses from private health insurance belies the fact that tens of thousands of people downgraded their private health cover. Everyone in this room knows the extraordinary pain that privately insured Australians have been subject to as a result of Labor's nickel-and-diming of the private health system.

But today, we talk about the Extended Medicare Safety Net. This is one piece of elegant social policy, that takes on probably the most challenging part of health costs and health inflation, and yet hits up against those two barriers that we all learn about in economics 101—those are moral hazard and adverse selection. They are the two challenges for this policy. It is not easy. But, of course, it is easier if you are a Labor speaker. You can just gloss over everything. You can go on about how Liberals are bad for poor people and that kind of simple, visceral argument that most people have grown tired of.

In the main, Australians are hardworking, engaged people, caring about their health and education. They want a system that gives them choice. The Medicare safety net and the extended safety net do just that. It says to people that regardless of your background, whether you are a concession holder, a family tax benefit recipient or simply a general recipient, there is a threshold there for you after which 80 per cent of your out-of-hospital Medicare item related expenditures will be covered by the government. For Labor to slither in here and say to you 'Poor people did not benefit enough' belies the fact that 50 per cent of procedures—in some cases more—are done in the public hospital system where there is no out-of-pocket expense. It is for people who accrue an out-of-hospital expense on a Medicare related issue.

Medicare is used as a formula to fund a public hospital. By definition, you do not have an out-of-pocket expense when you go into a public hospital for admission. Therefore, it is not of any great concern to you. The extended safety net is there when you accrue general practice, pathology, radiology and out-of-hospital expenses in the private sector. By definition, if you are privately covered, you will accrue more of them. If you only visit a bulk-billing doctor and a public hospital, you will not accrue many out-of-pocket expenses. The average person will accrue around $50 a year. You do not even get to the safety net to begin this discussion about an Extended Medicare Safety Net. So please do not believe the rubbish that Labor peddles in here about rich people and poor people.

The reality is that we know about 11,000 Australians do hit that horror figure of $2,000 out-of-pocket health expenses. For all the elegance and the brilliance of the Australian health system, we still do have a significantly larger out-of-pocket issue than many European countries. That is made up for with a generous welfare system. We always have to be mindful of out-of-pocket expenses. So the Extended Medicare Safety Net of March 2004 was really born of the then health minister Tony Abbott, who found a solution to these periods in the life cycle where health expenses are out of control. They may include cancer, diabetes, assisted reproductive technologies and, of course, having a baby. So many people elect to have a baby in the private sector and find these enormous out-of-pocket expenses. For following years those simply did not occur. It is an excellent way of solving that very specific problem.

But what did we discover? The previous speaker did allude to this. We discovered something called provider leakage—that is, of all the money provided through the safety net system, how much ended up in whose pocket. In the game, we call that tax incidence. We realised that, for certain areas that consumed half of the safety net, about 78 per cent of it was going straight to doctors. This brings up the issue of moral hazard. This is that communication across the table that none of us is ever really present at, unless it involves our own health. This is where a doctor will say, 'This is going to be expensive, but there's a safety net there so I don't want you to worry. Once we go over this element, virtually all of it is paid for by someone else, your neighbour, the guy down the road or the government.' That is why the 80 per cent element was there: to try to retain some form of price signal for the patient. But, of course, what we found over time was that those initial estimates that it would remain at about $400 million over the forwards reached $400 million a year. It was just growing in a couple of those specific areas, as I mentioned, particularly obstetrics and ART. It is okay to do all the analysis about who was benefiting from the safety net, but I want to tell you something clearly. When you get out of bed you do not say to yourself, 'Not much on today. I wouldn't mind going down to the hospital to accrue some out of pocket.' That is not the way I would like to spend my day. People do not say, 'I would rather not watch the State of Origin. I would rather go down and see how much money I can rip out of the health system.' People in hospitals are there for a reason. They are there to give the best possible care this country can deliver.

So whenever we pause for a moment and look at our out of pockets, let's remember that this is not something we enjoy spending. It is not something that is put onto a credit card and you are told to go for your life. The issue here is the one that I have mentioned.

The second point is the adverse selection. This was the risk that in just a couple of areas we had a real hint that in particular postcodes, for instance, there was a ballooning of these expenses and there was very little means for the government to contain it. There are two solutions to that adverse selection dilemma. The first was Labor's approach, and the second is ours, with this legislation today. Labor's approach was simple. It talked about chopping off and putting hard limits right across sectors, regardless of the people involved and regardless of what was happening. This caused enormous pain for people who were going through IVF. None of us for a moment want to contemplate the notion that we would ever ration IVF for a needy couple. The reality is that we are virtually the only country that does not put severe age restrictions on IVF nor limit how many cycles people can attempt. Virtually every other country does this. So it is already a very generous system.

But the point is that if this is being consumed, if it is consuming a quarter of the extended Medicare safety net, then clearly it was just going straight out of the government's hands and straight into the pockets of providers. I appreciate that delivering health care is expensive, but that argument that there has to be some form of equality across the sectors was important.

I note that previous speaker very elegantly summarised the overview of the 2009 report. He virtually got it word for word. It sure helps when you are reading notes. But whether you have diabetes and accrue $369 of expenses on average or cancer at $1,000, the whole point of this system is that you need something way more nuanced. You need the ability to identify where you are getting provider leakage, and then to act. The bill simply says that a minister can keep a watching brief through the department on movements that are often quite fast within the provider community in health, and actually act with an instrument that is very similar to a disallowable instrument. Parliament has the opportunity to disallow. It sits over on the other side for the required number of days and gives everyone the chance to see whether or not they agree. That allows you to crack the walnut without a sledge hammer. Just pick up that one little area where there is concern, when we are overviewing through a professional services review how the money is spent, and get it fixed. It is a nuanced solution.

But let no-one on the other side of the chamber traduce the idea of a Medicare safety net, because that is one of the great reforms, after Michael Woolridge's 1990s private health insurance reforms, that have shaped the nation. It disappoints me somewhat that the Labor Party is always stating that they are the guardians of the health system, but when they are in power it is fascinating how little they can do with the health system, and how all the problems that were challenging us and just evolving in 2007, like the Medicare safety net blowouts, are still there for us to catch when we come back into power. So for all of the protestation about how much you love and care for the health system, this is a party that can nickel and dime private health insurers and make life tough for them, and go to eye surgeons and cut their rebate in half for no good reason whatsoever—only to have it backflipped again when Kevin Rudd, was it, was trying to survive as Prime Minister. He said 'Jettison the barnacles. Find me a solution to this one.' Lift the health minister out of the red zone because he is being beaten up by a tiny band of eye surgeons who are saying, 'For goodness sake, what are you doing to blindness when you halve a cataract rebate.' This was Labor's reform at its heart. Just halve a rebate. That seems like a quick way to save some money.

This is how you have a better working health system and you save the money at the same time. It is a system that allows people still to get access to health services but does not let individual sectors get away from us. There is a certain conflict for me, as a former specialist. But to be honest, we do not exist in a world where we set the price and everyone has to pay it. It is not that simple. In city areas where there is plenty of provision of services and there are plenty of specialists like me, of course they are looking over their shoulders seeing who is charging what. There are plenty of mechanisms and competitive tensions around price, even for a doctor.

The second point is that there is communication between doctors and patients and the receptionist at the front desk all the time about price. So don't for one minute believe the Labor rhetoric that this is just doctors charging whatever they want. Sure, there were areas where people knew that the Medicare safety net was going to cover 80 per cent of the expense, but this is the solution: an ability to individually isolate an item or a sector and address it. That is what will actually save us more money in the Medicare safety net, to make it more generous in the future.

Before I sit down it should be mentioned that we have reduced those thresholds for eligibility down to $600, $700 and $1,000 respectively. It is a small, but not insignificant, thing in the budget that has not received enough attention. That will make it even more certain that people who have these precipitous expenses can be looked after by the Medicare system.

We can bat backwards and forwards who is the best friend Medicare has ever had, but one thing is for sure: we have found that over the last six years there were a lot of abortive attempts at improving the health system which really led to nothing. In this bill—and I commend it strongly; I am delighted to see the other side supporting it—we have a common sense, targeted approach to a piece of legislation that has served this nation well. I hope the extended Medicare safety net will continue to help.

Jill Hall (Shortland, Australian Labor Party) Share this | Link to this | Hansard source

This bill increases the general extended Medicare safety net from $1,248.70 to $2,000. It is what the government reports as a savings measure and will save $105.6 million over four years. It is included in the forward estimates from January 2015.

The fact it is reported as a savings measure says a lot about this government's approach to health care and Medicare. Its approach is to save money. It is not an approach of delivering quality health care to Australian people. It is not about putting in place the best health system we could possibly have in this country. It is not about saving health dollars by putting in place a strong preventative health program. It is not about designing a health workforce that will be there to cope with the needs of Australians into the future. Rather, it is about saving money. It is about cutting costs. It is about the budget bottom line and it is very short-sighted.

Often, cuts lead to poor health outcomes. I think the government will be surprised at the poor health outcomes that come from their GP tax, for instance. That $7 GP tax is going to act as a disincentive for Australians to attend their doctor—to go along and see their doctor when they are sick—as it is well noted that price is a determining factor in whether or not a person attends their GP. When this threshold is lifted, it means people will incur a greater out-of-pocket expense before they can get assistance.

This government does not understand how hard it is for families, pensioners, students and all those young people out there just getting started to make ends meet. It is only once that gap in expenditure exceeds $2,000 that a person will be able to make a claim. If you are a pensioner, it is at a lower level, but currently you still need to have an out-of-pocket expense of $624.10—and that will also be increasing. That is a significant amount of money for a pensioner to have to pay; and $2,000 is certainly a significant amount of money for a person who has young children, and is struggling to make ends meet, to pay.

On Saturday I held a Medicare rally in Shortland electorate. I was supported by the member for Newcastle, the member for Charlton and a surprise attendee, the state member for Swansea, who subsequently put out a media release saying that the GP tax was bad policy. He is a Liberal member and he condemned the Abbott government. He says the NSW government opposes this move because it is bad health policy. It means that people will have a greater out-of-pocket expense and instead of going to the doctor, they will get sick and not take their medications.

There have been studies undertaken in relation to the impact of out-of-pocket expenses. A recent report from the New South Wales Department of Health indicated that 15 per cent of people in New South Wales skipped a medical appointment, tests or medication due to cost, and 23 per cent reported spending more than $1,000 a year on health care out-of-pocket expenses. It is important to note that internationally Australia ranks fifth highest for out-of-pocket healthcare expenses among OECD countries. The highest out-of-pocket expenses are pharmaceutical, followed by dental and then doctor attendance—in the order of just over $2 billion.

It is bad policy to put in place a measure that is going to lead to Australians not attending the doctor because one of the best ways to manage healthcare costs in Australia is to keep Australians healthy. In an era when we have increased obesity and a rise in diabetes, and new approaches to treating cardiovascular disease and cancers, it is important that people undertake treatments early and in a sustained manner. If a person fails to undertake the treatment that they need, then they will become sicker, and lifting the threshold is going to increase the costs to individuals. That means a family will incur an extra $751.30 out-of-pocket expenses before they are eligible to claim on the EMSN.

Deputy Speaker Jones, I do not know about your electorate or those of members on the other side of this parliament, but I know that we on this side of the parliament have been lobbying vigorously. In addition to the GP tax and other aspects of this budget, over a long period of time one of the most common issues raised with me by my constituents in relation to health is out-of-pocket expenses. What we are saying to them is, 'You have to pay more. Your out-of­- pocket expenses have to be even greater before you get any assistance from the government.' In actual fact, as well as lifting the safety net, the government is requiring—is set to legislate—to have doctors charge a $7 GP tax each and every time a person visits them and that is going to increase the out-of-pocket expenses. That is going to make it harder for people to attend the doctor.

The rally that was held on the weekend—and I have mentioned this a couple of times already in the parliament today—was attended by 500 people. The thing I found most overwhelming was when the Assistant Minister for Health asked, 'Who in this crowd has never been to a rally before?' and 80 per cent of the people raised their hands.

I was particularly moved when an 87-year-old lady came up to me at the start of the rally and said, 'I have never been to a rally in my entire life. This is a first for me. But I feel so strongly about having to pay more for medical expenses. I feel that, if I go to the doctor and I have to pay this GP tax on top of all the other things that I have to pay, including my medication, I'm just not going to be able to cope financially.' She was a sprightly 87-year-old with one of her friends from the retirement village she comes from. Just as I was leaving the shopping centre at the front of the Belmont Medicare office, which the Labor government reopened after the Howard government closed it, a gentlemen came up to me who was 92 years old. He had never been to a rally before in his life. I will have to well and truly admit that the 96-year-old who came up to me on the foreshore had been to many a rally in his lifetime. He was there being as active as he always was, saying no to the Medicare tax.

What I am trying to do here is create a picture of people in my electorate—and it is an older electorate—who feel so strongly about out-of-pocket expenses and the impact that will have on their lives and on their health. People like that man and that woman are prepared to come out. As well as having elderly people attend the rally, we had families and young people. A really broad cross-section of society attended our rally and march on Saturday.

The march went from the shopping centre where the Medicare office is and around the corner to a set of lights. I was at a function on Saturday night and one of the business owners said to me that she could not believe the number of people who had turned up. This was just in the suburb of Belmont in the Shortland electorate. People had come from other areas within the Hunter and the northern part of the Central Coast, because they were so concerned about the increase in out-of-pocket medical expenses. That is what this legislation is about: increased out-of-pocket expenses.

Another interesting speaker that we had at the rally was an accident and emergency nurse from Belmont Hospital. He stood up and expressed his concern about the fact that the GP tax, the extra out-of-pocket expense that people would pay in the community that he works in—the community that I represent—would lead to an increased number of people presenting at the accident and emergency department at Belmont Hospital. I believe that is a real concern. It will lead to the system being clogged. It will lead to people having to wait a very long period of time if they are going to access the services of the accident and emergency department. There has also been talk that the government is thinking about a hospital tax—charging $5 for a person to attend the accident and emergency department.

This is really difficult for people to come to terms with in the area I represent. I see the member for Paterson joining us here. I say to him that I had one of his constituents travel over two hours by public transport to visit me to raise issues around the increase in health costs—he is on a disability support pension, his wife is on a disability support pension and their daughter has been seeking medical assistance at the John Harper hospital. They came to see me because they are so concerned about the impact the out-of-pocket expenses will have on them. To be prepared to travel for two hours via a public or private bus company, as these people did, shows what a concern the increases in medical expenses are to people in the community.

I say to the government members here in the chamber that you might think I am just a member of the opposition standing up and rabbiting on about the impact of this $7 GP tax. But, believe me, they are real people out in the community that are going to be hurt by it. They are real people that cannot afford to pay this. This is going to have an adverse health impact on our community. Please, stand up in your party room, talk out against it and support the people that you have been elected to represent in this parliament.

Bob Baldwin (Paterson, Liberal Party, Parliamentary Secretary to the Minister for Industry) Share this | Link to this | Hansard source

I rise today to speak to the Health Insurance Amendment (Extended Medicare Safety Net) Bill 2014. I rise for the people in my electorate who have experienced frustration from the health system, the people who have endured the hardship through the many years of Labor's mismanagement of our health system and the people who need the help the most but who were made to suffer the most inhumane experiences to access the health system.

I cannot believe I just listened to a speech by the member for Shortland, which typifies the hypocrisy that occurs with Labor. She attacked this bill. But this bill was a Labor budget measure put in the last Labor budget. I did not hear one single word from the member for Shortland after that Labor budget on those measures. But here today she criticises this government for implementing a budget measure put into place by the former Labor government.

This bill will amend the Health Insurance Act 1973 to increase the general extended Medicare safety net thresholds and introduce minor administrative changes. These measures are a significant change to the Medicare system. It is important to note, as I said, they were a commitment taken by the previous Labor government in their last budget. As I said, to hear the member for Shortland blame us for this situation is hypocritical to say the least. She should come in here and apologise to the people.

The previous Labor government put this measure in place to save $105.6 million and it was included in the forward estimates, so the current government is compelled to implement this change or make cuts in other areas. It is because of the financial system that was bequeathed to us by the former Labor government that we have no choice but to implement this change. We would not be in this situation if Labor had not left us in such an awful deficit position. The debt is mounting by $1 billion a month just in interest payments.

Families would not have to reach into their already stretched household budgets to fund essential treatments and keep their families healthy, pain-free and, in some situations, alive. As I said, it was implemented in the final Labor budget. For the member for Shortland to come in here has proved again she is nothing short of a hypocrite who will say and do anything to satisfy the needs of her constituents without telling the truth. I know Australians are already finding the current budget situation tight but we did not push this bill forward.

Opposition Member:

An opposition member interjecting—

Ewen Jones (Herbert, Liberal Party) Share this | Link to this | Hansard source

You will have your chance.

An opposition member: It is unparliamentary. Ask the member to withdraw.

If it will assist the House.

Bob Baldwin (Paterson, Liberal Party, Parliamentary Secretary to the Minister for Industry) Share this | Link to this | Hansard source

I did not call her a liar. I said she did not speak the truth.

Ewen Jones (Herbert, Liberal Party) Share this | Link to this | Hansard source

It was unparliamentary language.

Bob Baldwin (Paterson, Liberal Party, Parliamentary Secretary to the Minister for Industry) Share this | Link to this | Hansard source

The truth is not unparliamentary. Calling her a liar would be unparliamentary.

Ewen Jones (Herbert, Liberal Party) Share this | Link to this | Hansard source

It would assist the House.

Bob Baldwin (Paterson, Liberal Party, Parliamentary Secretary to the Minister for Industry) Share this | Link to this | Hansard source

I will withdraw. But I can almost guarantee that this member who just raised an objection will blame the government for this bill yet it was their measure put into place with their last Labor budget. I know Australians are already finding the current budget situation very tight but we did not push this bill forward. We would not be in this position if Labor had not gone on a reckless spending spree before realising that it would all have to be paid back with money eventually. Now everyone, every Australian, has to share the load. We need to work hard to pay the bill that Labor has left us. It is the only way we will be able to get back into the black. It is unfortunate that Labor decided to select the most disadvantaged group of all of them.

The basics of this bill include the fact that there are two Extended Medicare Safety Net thresholds: the threshold for Commonwealth concession card holders and the general threshold for all other Australians. From 1 January 2006 the concessional threshold increased to $500 and the general threshold increased to $1,000. The thresholds are indexed to the consumer price index at the start of each calendar year. In 2014 the concessional threshold was $624.10 and the general threshold was $1,248.70. As announced by the previous Labor government in the 2013-14 budget, the general threshold of the Extended Medicare Safety Net will be increased to $2,000 from 1 January 2015. The concessional Extended Medicare Safety net threshold will be indexed as usual and not be impacted by this bill.

This bill is believed to contribute to a more sustainable Medicare system. This was the Labor plan. So, again, for the member for Shortland—whom we did not hear a peep out of after the last budget—to come in here and make such statements is moronic hypocrisy, and she should pack her bags and go home. Under the Medicare system, once the relevant annual threshold has been met, Medicare will pay for 80 per cent of any future out-of-pocket costs for Medicare-eligible out-of-hospital services for the remainder of the calendar year. The Extended Medicare Safety Net will then provide my constituents and their families with an additional rebate for their out-of-hospital Medicare services once an annual threshold of out-of-pocket costs for out-of-hospital services is reached. These out-of-hospital services include GP and specialist attendances and services provided in private clinics and private emergency departments.

These measures will impact on the lives of constituents in my electorate who desperately need assistance and medical services—people like Suzanne Robertson. Suzanne is a constituent who lives in Forster, on the north coast of New South Wales, who contacted me for assistance on in-home day care following issues accessing help from other avenues. Suzanne is the mother of two little boys, Alec and Oliver, who are struggling with a condition known as twin-to-twin transfusion syndrome. Right from the beginning of their lives they struggled to reach any of their developmental milestones. Both boys required intensive physiotherapy, speech therapy and occupational therapy just to get them to the stage that they are at today.

Oliver has been diagnosed with auditory neuropathy, global learning delays, congenital hypothyroidism, sensory modulation dysfunction, macrocephaly, mild cerebral palsy, a mild intellectual disability, possible mild autism and hypotonia and is profoundly deaf and has pronating flat feet. Oliver had his first cochlear implant in March 2011 and is on consideration for his second cochlear implant. But, due to his auditory neuropathy, this may not happen. On a weekly basis alone, the schedule consists of sessions with a speech pathologist, occupational therapist, physiotherapist, teacher of the deaf, Auslan tutor and support teacher and cochlear implant habilitation and mapping—the list goes on and on. His brother, Alec, was diagnosed with global learning delays, sensory disorder, hypotonia, insecure attachment disorder and pronating flat feet. He has weekly therapy sessions with a physiotherapist, a speech therapist and an occupational therapist. Up until recently Suzanne had a carer who was able to assist her with the boys and the therapy sessions, even helping the boys with socialisation. But, over the years of Labor power, more and more was taken away from this family, including their carer. I had to go begging to the minister each and every time to get the carers replaced and the contracts continued for this family.

Having the carer around helped Suzanne, as she knew there was someone there to help her who was almost a part of the family. It was a huge relief to her with the heavy load that she carried. Her load became increased when the carer was taken away. Because of the lack of funding, these therapies can cost Suzanne up to $251 a week, without factoring in the cost of regular travel to Newcastle and Sydney and Oliver's specialised equipment needs. Suzanne says that she spends at least three days a week in her car travelling to specialist appointments in Newcastle or Sydney as the specialists either do not exist in the Forster area or charge outrageous prices. Factor in a car breakdown and the mounting medical bills and you can see that the system has left Suzanne in a very dire position. Suzanne's kids are sick and need more assistance and management than standard hospital care can provide. They need ongoing support for out-of-hospital costs so that they can continue to improve their quality of life whilst dealing with their illnesses.

Another part of the amended bill is the increase in the levy. This increase is not new, nor was it introduced by this government. The increase was announced by the previous government in the 2013-14 budget, when it was announced that the general threshold of the extended Medicare safety net would be increased to $2,000 from 1 January 2015—more costs for an already overburdened family.

Another family that will not benefit from the change in the increased levy and out-of-hospital services is the Weir family. Earlier this year I met this amazing family when invited by my constituent and their grandfather, Chris Walker, to join him and his grandsons, Jordan and Logan Weir, at the Rare Disease Day 2014 BBQ lunch. The brothers were born with the rare disease, X-Linked Chronic Intestinal Pseudo Obstruction, which affects the gastro intestinal tract and its ability to absorb or propel food and nutrients. As a result, Jordan and Logan cannot eat or drink and are machine fed an intravenous solution, Total Parental Nutrition, 18 hours a day.

They require considerable care at home, including care and drainage of the intestinal tubes, central line care, parenteral nutrition administration, frequent hospitalisation for care and complications of the central line as well as medical and nutritional monitoring. The risk of life-threatening central line infections for these young boys is extremely high. Jordan and Logan need a safe area in which to play during the time they are connected to these machines. It is a full-time job for the family to look after these boys in a hospital environment within their own house. The whole family—parents Brooke and Michael, grandparents Chris and Tanya and Brooke's sister, Katie—is involved.

I supported this family earlier this year as they, in coordination with a local gym, held a charity fun run to raise funds. People in the community came on board and provided assistance to help adjust their backyard so that the boys had a safe environment in which to play. But more needs to be done. These boys do not have a cure so we can only assist with helping them with out of hospital service costs. This family was abandoned by the Labor government. They had to take control of their financial state and organise charity events just to support these children. If only the Labor government had taken control of their own financial ineptitude and organised a solution.

I have received many emails on this issue from many constituents with differing situations. These range from premature babies with illnesses from the birth to the elderly who are dealing with chronic diseases that have plagued them their entire life. Remember: this is the Labor government that took away the Medicare Chronic Disease Dental Scheme, which provided much-needed support, particularly in regional areas where people could access services locally.

I acknowledge that many people feel that the budget is going to be tough on Australian families, the sick and the disabled—indeed, on every Australian. But the untruths being peddled by Labor, the ones who got us into this massive black hole of debt—are beyond the pale of reality. They continue on with their mantra chant about pensions being cut. Pensions are not being cut, concessions are not being taken away and health care will not be killed off. This is a Labor government who will do one thing, say another and then blame someone else for the situation they got this country and this system into. As I say, I tire of the hypocrisy coming from the bench opposite for the problems that they have created and the solutions that they put forward. They take no care nor responsibility for their actions. They are to be condemned for their actions.

Stephen Jones (Throsby, Australian Labor Party, Shadow Parliamentary Secretary for Regional Development and Infrastructure) Share this | Link to this | Hansard source

It is a pleasure to be speaking on this bill, the Health Insurance Amendment (Extended Medicare Safety Net) Bill 2014, and to be following two MPs from the Hunter Valley, the member for Paterson, who directly precedes me, and the member for Shortland. I had the great pleasure of visiting the Hunter Valley on the weekend and joining with them and many hundreds of members from the local community in a conversation about the future of health care in this country.

We are in the midst of a national debate about how we organise and how we fund our health system. The unfortunate thing about this debate is the way the government is handling it, because the process is almost as confused as the policy itself. It is almost like we have a sheet of salami so long and we are slicing it up into little bits and throwing a few of those little bits into the parliament every month or so. Nowhere does the parliament have the opportunity to have a debate about the policy changes as a whole. It was this concern that moved the member for Ballarat to move amendments in her speech in the second reading debate to ensure that debate on this bill encompassed a debate on all of the government's proposed changes to the health system. I seek to direct my contribution this evening to those changes.

I see the member for Paterson has left the chamber. He talked about the alleged untruths that were being spoken in relation to the government's budget proposals. I am quite sure that he was not referring to his own parliamentary colleague, the member for Swansea in state parliament, who said, when I was in the Hunter valley on the weekend, that he did not support the federal government's changes. He said he opposed them, because he thought they were bad for the health system. I am quite sure the member for Paterson was not referring one of his Liberal Party colleagues as one of those people telling untruths. I am also quite certain that he was not referring to the New South Wales Liberal Party Treasurer, Mr Andrew Constance, who said, when he delivered the New South Wales government's budget last week:

There is no point pretending that the broken agreements of the Federal Budget won’t hurt the people of New South Wales.

It is quite clear that they will hurt people in New South Wales.

The table in the document I have here, the state government budget papers, tells the story. You have a slippery dip going in one direction, and a table in the other. Quite clearly, the Treasurer is concerned about the cuts to hospitals—about $3 billion worth of cuts to hospital funding in New South Wales. The state member for Swansea is concerned about that. Obviously the member for Paterson does not share those concerns.

The process that we are dealing with is as confused as the policy itself. The government is attempting to sustain an argument that the costs in the health system are out of control, that this is a recent discovery and that these steps need to be put in place otherwise the whole thing is going to collapse. We have heard the Prime Minister, the Treasurer and the Health Minister oft quote: '10 years ago Medicare cost around $8 billion a year, and today it costs closer to $20 billion'—I think it is around $18 billion to $19 billion, but we will not quibble over that. 'The PBS 10 years ago cost $5 billion; today it costs $9 billion.'

Those figures, left alone, have a seductive force. But, when you interrogate them, you begin to understand that this is tosh on stilts. It is absolute tosh on stilts. I had a look at it, and the only valid test of whether health costs are in control is to have a look at the percentage of cost as a proportion of the overall government outlays. That is the only true cost. If costs are running out of control, you would expect there to be an intense disproportion in the growth of health costs as a percentage of overall government outlays.

So I had a look at this. In 2003-04, Medicare was costing around 4.8 per cent of total government outlays. If the costs were running way out of control, if we had a budget emergency, you would expect to see a figure that was maybe three, four or five times that number. But, when you look at the percentage of government outlays for Medicare in 2013-14, what is it? It is 4.6 per cent. That is actually 0.2 per cent less than it was in 2003-04. So, far from seeing health expenditures at emergency levels, they are 0.2 per cent less than they were in 2003-04 as a percentage of total government outlays.

I wanted to see whether the Medicare expenditure was a complete anomaly when compared to the PBS expenditures. If we saw an emergency in terms of our healthcare spending, you would expect that our PBS figures, as a proportion of government outlays, would be five, six or seven per cent more than they were 10 years ago, because this is the reference point that the government uses. In 2003-04 the PBS as a proportion of government spending was 3.2 per cent. What is the figure today? It is actually a percentage point less—2.3 per cent. It has dropped almost a complete percentage point as a proportion of government outlays. So this massive scare campaign—this tosh on stilts—that the government is seeking to execute its argument to radically overhaul the whole policy arrangement and funding arrangements through our healthcare system is nothing more than a complete beat-up.

They often like to present themselves as the team that are able to find savings and present Labor as the team that are unable to find savings either in our health budget or in any other part of our budget. It is a damn shame that the member for Paterson did not wait around to hear some of these contributions, because I am sure he would have liked to know that if you look at the big health saves, if you look at the big savings that the government is finding in its health portfolio in the 2014-15 budget, they are actually initiatives that were introduced by the former Labor government. The heavy lifting is in initiatives that were introduced by the former Labor government.

The biggest, of course, was the accelerated PBS price disclosure, which will find about $3.8 billion worth of savings over the forward estimates. Nowhere did I hear the member for Paterson or any of the other government speakers refer to that Labor government initiative in terms of their overall health portfolio saving. The other area you might like to look at, Deputy Speaker, because it is one of the fastest growing uncapped areas of health expenditure, is the private health insurance rebate. We fought tooth and nail against members opposite when we introduced that legislation to means-test the private health insurance rebate. People like me on good salaries do not put an overburden on the tax expenditures of the Commonwealth because we can afford our private health insurance, and we do not need a tax expenditure from the government to enable us to do that. They fought tooth and nail against us doing it. They bagged $2.8 billion worth of savings over the forward estimates because of this initiative alone. So there will be $6.6 billion worth of savings from these two initiatives alone.

Now, let's stack that up against what these heroes of financial rectitude are doing, because if we had a crisis in our health expenditure, and if this is the team to fix it, you would expect to see some sense in their policy prescriptions and their funding arrangements. If the co-payment—the GP tax—were truly a measure introduced to inject more revenue into the Medicare system, you would expect the revenue from the GP tax to be flowing back into the Medicare system. That would be a logical move. It would be one that we would oppose, but it would be a logical move. You would say, 'Okay, this is a genuine co-contribution.' We call it a tax because if it were a genuine co-contribution the revenue would be going towards funding the Medicare Benefits Schedule. But it is not going towards funding the Medicare Benefits Schedule; it is going to fund a cause, albeit a worthy cause—medical research. So it can be seen as nothing more than a hypothecated tax. It has got absolutely nothing to do with rectifying this false crisis that they have invented because, quite frankly, they just do not support Medicare.

That is the first problem with the GP tax. The second conceptual problem with the GP tax is that it is built on a false assumption. Everywhere you look there are false assumptions. They seem to think that people are visiting the doctor too often. They seem to have this theory that there are a whole heap of people who are bored and lacking reading material out there, and they are rushing down to their bulk-billing doctor so they can catch up on back issues of The Australian Women's Weekly and National Geographic. Nothing could be further from the truth. Deputy Speaker Griggs, you and I know that in this day and age, when people have to put in place childcare arrangements, get time off work and put all sorts of personal arrangements in place just to get down to the doctor, they do not need another barrier. They are not going there because they are bored, and they are not going there because they are hypochondriacs. They are going there because they need to.

The Treasurer is fond of quoting a figure from the National Commission of Audit. He seems to think that the average number of times that people are visiting the doctor is 11 times a year. You would think that if you had commissioned people to look into this figure they would actually get their facts right. He was looking at the wrong column. It is actually six times a year, not 11 times a year. You would think that, if they put in all that time and effort and had all the resources of government available, the least they could do is to get their facts right. This is a confused policy which is attempting to address a problem that does not really exist.

In government, we were willing to ensure that the costs of both the PBS and Medicare were addressed through sensible savings and through sensible reforms, and we remain committed to doing that. The legislation before the House is indeed one of those measures. I admit that it was a coalition government that first introduced the extended Medicare safety net, but it was a Labor government that had to put in place initiatives to ensure that it was not rorted. We did that through capping arrangements—as you would know, Deputy Speaker, having been a former worker in the health system. We are willing to support logical arrangements that are well crafted and deal with an actual problem, but not this absolute farrago of confused policies that we see as part of this debate.

In the minute or so that I have left, I would like to make a few observations about the impact of the government's health policies on regional and rural Australia. It is in regional and rural Australia that out-of-pocket health costs are higher, that incomes are lower and that the chronic disease rates are higher. There is also a higher proportion of the Indigenous population with poor health conditions, suffering a lot of chronic disease issues. Indeed, that is one of the reasons why there are disproportionately bad health outcomes in rural and regional Australia. It is for this reason that we need to ensure that our policies are not crafted in a way that is adversely affecting health outcomes in rural and regional Australia. The propositions which are being debated, which were introduced in the budget—which are a part of and envisaged by the member for Ballarat's amendment to broaden this debate—go directly to those issues. That is why we should not be debating this proposition in isolation from the other policy changes that are before the Australian public and that should properly be before this parliament as we debate these proposed changes to the Medicare safety net. (Time expired)

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

I thank the members for their contributions, particularly some of the more sensible contributions from the member for Moore, the member for Bowman, the member for Paterson and others on the government side as well. I will very quickly respond to a couple of the points made by the previous speaker, the member for Throsby. I remind the member for Throsby that this denial process, this stage of grief that the Labor Party are going through at the moment, will not result in their return to government anytime soon. They are certainly suffering the same fate in relation to their approach to border protection. They are facing it, as we saw, with the naming of the member for Lilley today in relation to their denial about the state budget and they have certainly denied the state of health care in this country. They defied the independent evidence that was provided to the former Rudd and Gillard governments in relation to the commissioned work by Bennett and McKeon. The important thing out of those two pieces of work is that both of them suggested to the previous government that health was unsustainable.

A division having been called in House of Representatives—

Sitting suspended from 18:15 to 18:35

I thank the members for their contributions to the debate on this bill. The bill amends the Health Insurance Act 1973 to increase the general or upper extended Medicare Safety Net threshold. A lower threshold, which is accessed by concession card holders, will not be affected by this bill. This bill also removes the outdated requirement for the chief executive of Medicare to only be able to request in writing the composition of a family for the purposes of the extended Medicare Safety Net. This bill does not remove the requirement to confirm family composition but allows the chief executive of Medicare to use other methods such as calling patients by telephones. This will mean that patients will be able to receive their benefits in a more timely manner. Patients who would prefer to have this request in writing can continue to do so.

This bill supports the implementation of the 2013-14 budget measure to increase the general extended Medicare Safety Net threshold to $2,000 from 1 January 2015. This bill was referred by the Senate for an inquiry by the Senate Community Affairs Legislation Committee. On 16 June the committee recommended that this bill be passed in its current form.

This bill will deliver a decrease in expenditure for the extended Medicare Safety Net. This is important for supporting the sustainability of the extended Medicare Safety Net so singles and families can continue to receive additional assistance with their out of pocket costs.

The bill also reduces the administrative burden on the Department of Human Services whilst providing consumers with greater choice in how they communicate with the department.

This bill achieves savings by increasing the threshold to qualify for benefits for a significant proportion of the population. However, it does not address the complicated and confusing safety net arrangements which have developed over many years.

As announced in the 2014 budget, this government will amalgamate the three Medicare safety nets from 1 January 2016. For the first time since 2010, the Medicare Safety Net will apply consistently to all MBS services. The new Medicare Safety Net will distribute safety net benefits more and support the long-term sustainability of the Medicare arrangements. I commend the bill to the House.

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

The question was that the bill now be read a second time. To this the honourable member for Ballarat has moved an amendment that after all the words after 'that' be omitted with a view to substituting other words. The immediate question is that the amendment be agreed to.

Question negatived.

Original question agreed to.

Bill read a second time.

Ordered that this bill be reported to the House without amendment.