Warren Snowdon (Lingiari, Australian Labor Party, Shadow Parliamentary Secretary for External Territories) Share this | Link to this | Hansard source

Before I begin, we should let the chamber know that the member for Gippsland's daughter is starting her Higher School Certificate this week. We need to wish her well, because I know her father is a handicap!

Darren Chester (Gippsland, National Party, Parliamentary Secretary to the Minister for Defence) Share this | Link to this | Hansard source

Ahem!

Andrew Leigh (Fraser, Australian Labor Party, Shadow Assistant Treasurer) Share this | Link to this | Hansard source

Does that go on Hansard?

Warren Snowdon (Lingiari, Australian Labor Party, Shadow Parliamentary Secretary for External Territories) Share this | Link to this | Hansard source

We wish her well, as we said earlier today. Good luck to her and to all her mates.

Darren Chester (Gippsland, National Party, Parliamentary Secretary to the Minister for Defence) Share this | Link to this | Hansard source

Well said!

Rob Mitchell (McEwen, Australian Labor Party) Share this | Link to this | Hansard source

If we could get back to the bill, that would be great!

Warren Snowdon (Lingiari, Australian Labor Party, Shadow Parliamentary Secretary for External Territories) Share this | Link to this | Hansard source

This Private Health Insurance Amendment Bill (No. 1) 2014 aims to suspend the indexation of taxable income threshold for the private health insurance rebate and the Medicare levy surcharge for three years. And, as the Bills Digest reminds us, the pausing of the indexation will mean that there are those without private health insurance cover whose incomes are likely to move into the income tier at which they become liable to pay the MLS—subject to the old bracket creep. Others may see the rate of their levy liability increase and, ultimately, the government revenue from the MLS will rise.

As the Bills Digest tells us:

Overall, the effect of pausing indexation is likely to shift the cost of private health insurance away from the Government and onto the consumer. This is proposed at a time when reports show that consumer contributions to the cost of health care continue to grow while government expenditure in real terms is falling. According to the Australian Institute of Health and Welfare, in 2012-13 government funding of health expenditure fell by 0.9 per cent in real terms for the first time this decade, largely as a result of a 2.4 per cent decline in the Australian Government's funding of health care. Meanwhile, out-of-pocket spending by individuals grew by 6.7 per cent over the decade (compared to government expenditure growth of 4.4 per cent) and the proportion individuals contributed to overall health expenditure also grew to a high of 17.8 per cent.

So, what this bill will mean, in short, is more people paying a health insurance rebate and more of those already in a fund effectively paying more as their income rises.

Those who choose not to be part of a private health fund will find themselves effectively paying more under the Medicare levy surcharge as their income rises. Again, just a very sneaky way of shifting costs from the government to the private insurers and, in particular, to people who would have otherwise thought they were safe from any increase in their liability had the indexation arrangements been pursued. So the suspension of the indexation arrangements will have a material and direct impact on many Australian households, and that is something which we all need to be concerned about. It does not surprise us in the context of this government because, as we know, to everyone in this place, even to the government benches, they have made a virtue out of breaking successive promises around commitments they made prior to the election—and here is just another example.

We know that the government believes that the rebate will contribute a total estimated savings of $599.3 million as a result of the pause in indexation. Of course, this saving is not going to go into providing more and better primary health care; it is not going to provide better chronic disease management. It is going to go to the health research fund. We in Labor obviously support health research. We have done so historically and we will continue to do so into the future. But what this government has done during the course of its time in government is to introduce policies that will change the way in which health care is delivered in this country and will move us away from the whole idea of a universal health scheme. At the same time, it will increase the cost to families so that they will bear the burden of the government's decisions. This is just another example of what the government has been doing. It is worthwhile saying to the members opposite that, even though they may not themselves accept liability in terms of a personal responsibility for the decisions which have been taken by the government and principally by the Minister for Health as the portfolio minister, they do have a collective responsibility for all of those decisions because they have supported them. We have now had the election promises broken: no cuts to health, no new taxes and the introduction of a GP tax. As I said, the $599 million will not go to immediately improving health outcomes for people or, in particular, addressing those people most in need in our community. Instead, it will go to this fund: the Medical Research Future Fund.

When the current minister was in opposition he made a number of statements about his support for universal health care. He made a virtue of those statements. Indeed, in his contrition to the debate on the bill to means test the private health insurance rebate in 2012, the then shadow minister for health, now Minister for Health, said:

In our country we have a universal health system. That means that, regardless of whether you earn one dollar or a million dollars a year, if you have a heart attack, are involved in a motor vehicle accident, have a crook hip, need oncology treatment or whatever, you can turn up at a public hospital and demand treatment free of charge. That has been an underlying principle supported by both sides of this parliament for a very long period of time—and long may that be the case. A universal system says to people that, in a country like ours in the 21st century, the best available services will be provided.

How is it that we find ourselves in the position that we are in today? How is it that we find ourselves in a position where the government not only is claiming $599 million worth of savings but also has cut in excess of $57 billion out of public hospitals and at the same time wants to introduce a GP tax which will have a direct and material impact on the universality of health care?

It is hard for me to fathom how anyone in the government could go to their communities with these changes and say that they still believe in universal health care. How can you argue that, as a result of the changes that you are proposing in the health system, people who are currently being bulk-billed will be required to pay a surcharge? And we are told that it is the doctors who will make the decision as to whether or not the surcharge will be paid. Of course, what we are doing is transferring the responsibility of the healthcare system to the patients and to the doctors so that the patients will pay more and the doctors will lose money in every consultation. We now know that as a result of the changes which are being proposed, there will be more than 600,000 fewer medical imaging services in the first year. The reason there will be fewer services is obvious: it is because, according to the Australian Diagnostic Imaging Association, previously bulk-billed patients now face costs of up to $1,263 for a liver cancer diagnosis, $1,326 for a thyroid cancer diagnosis, $2,207 to diagnose liver metastasis and $712 to diagnose breast cancer.

What will that mean? That will inevitably mean that people who should be seeking care and who should be seeking a diagnosis for an ailment will not. Ultimately, it will inevitably lead to people dying earlier than they otherwise should have, people suffering for extended periods for not having their particular ailment properly addressed, people not having the proper drugs or people not having the proper treatment. This seems to not matter a jot to the government or to the members opposite.

I say to members opposite that you have a responsibility in this place. As the governing parties, you have a responsibility to abide by the promises you made prior to the last election, which clearly you do not feel disposed to do. But, most importantly, you have a responsibility to ensure that each and every Australian gets a fair shake. I could not agree more with the statement made by the now Minister for Health in his previous contribution to the debate in this place about the importance of the universality of health care. But what we are seeing now is this government contradicting that commitment, walking away from it very directly, and making certain that, as a result, many Australians will suffer in a range of ways. Not only will they suffer because they do not access treatment but, if they are able to access the treatment in the first instance, they will be required to pay the costs. And that will have an enormous burden on many households.

The people who will be most disadvantaged will not be the people who live in the Prime Minister's electorate. I dare say they will not be the people living in the member for Boothby's electorate. But I know where they will be. There will be some in the member for Gippsland's electorate. There will be a lot of them in the member for Gippsland's electorate. There will be a hell of a lot in my electorate and the member for Rankin will have many in his electorate. These are the people of Australia who can least afford not to access medical care yet what we see is a deliberate attempt of this government to move people out of the health system or away from getting treatment as a result of their ideological commitment to their hideous approach to addressing what they call a budget crisis—which of course there is not.

So it seems to me that members opposite need to counsel the Prime Minister. They certainly need to counsel the Minister for Health because I know, when they go to the election in a couple of years' time, people will mark them down and properly mark them down for their dishonesty, for the way in which they have dealt with the Australian community and, most importantly, for attacking the health system in the way in which they are proposing to do. It is not fair; it is not reasonable.

I talked about communities who would miss out. I need to refer to my own communities in the Northern Territory. The most impoverished Australians live in very remote communities. I mentioned the member for Gippsland but, in regional and remote Australia, the people with the poorest health outcomes in this country will be affected more by the changes being proposed by the government than any other Australians. It is not fair, it is not reasonable and it should not happen.

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

A few years ago, former health minister Neal Blewett gave the John Chalmers oration at Flinders university. In an excellent oration, he made the point that the issue with private health insurance is one of the key divides in Australian politics. The point he made was that you do not get this in other similar countries like Canada where they do not have a system of private health insurance or in the UK where private health insurance is much smaller. So we have had a lot of debates about private health insurance in this chamber.

The Private Health Insurance Amendment Bill (No.1) 2014 deals with the private health insurance rebate, the Medicare level surcharge and also the Medical Research Future Fund. We know the approach that the previous government took when they dealt with private health insurance. Kevin Rudd went to an election saying that he would make no changes to the private health insurance rebate. But we know that when the former Treasurer saw how much was being spent on the private health insurance rebate, he came along loaded for bear. It was one of his big targets. Despite what they said before the election, in every budget they made attacks on private health insurance.

This is a modest savings measure of the order of $599 million over the forward estimates. It pauses the indexation for both the rebate and the Medicare levy surcharge. What it does is slightly shift the contribution between what the government pays and what individuals pay. Having said that, we need to look at the private health insurance market in Australia. What we generally see is that coverage levels are healthy. The coverage levels under the previous Hawke-Keating Labor government fell to 30 per cent and even below. We then had a problem whereby private health insurance was increasingly going up, young fit healthy people were dropping out, we were seeing premiums rise and it was becoming an unsustainable system. We stopped that with private health insurance rebate. This was a Howard government initiative. It was not just the rebate but also the Medicare levy surcharge and lifetime community rating which led to a system whereby we see overall 45 per cent of the population now holding private health insurance.

It is estimated that this measure will only affect four per cent of the 6.2 million private health insurance policies. It will not affect individuals whose income remains below $90,000 or couples and families with an income that remains below $180,000. Very importantly, all of the savings from this will be invested in the Medical Research Future Fund.

There is in Parliament House tonight a dinner for the Association of Australian Medical Research Institutes. There is a long line, a huge cast of opposition members who are there to pledge their support for medical research. But what we do need to do in this House is find savings so we can actually establish the Medical Research Future Fund. We know how the previous government dealt with funds like this. We had a Higher Education Endowment Fund but that was gone in the first budget—a capital fund spent as income. We started the capital for the Health and Hospitals Fund—again, that was spent.

We are confident that using the principles established with the Future Fund that we can establish a $20-billion Medical Research Future Fund. This is something that the medical research institutes are looking forward to. Once established, this capital fund will have an income stream available which can deliver an additional $1 billion into medical research every year, effectively doubling what we spend now.

This fund will be the largest research fund of its kind in the world and it builds on our world-class medical research capabilities. Let us never forget that when the Labor Party were previously in government they had a plan, in 2011, to rip $400 million from medical research. We saw continuously that the previous government continually broke their promises on private health insurance. They repeatedly promised that they would not change the private health insurance rebate, but they did. The means tested the private health insurance rebate in 2009 and 2011. They removed the 30 per cent rebate on Lifetime Health Cover in 2012, and they made changes to the indexation arrangements for the private health insurance rebates last year.

When I look at my own electorate of Boothby, what I see is that the percentage of voters in the electorate who hold private health insurance is over three-quarters. Over three out of every four voters hold private health insurance. These are the latest figures provided by Private Healthcare Australia as of 1 January 2014. The percentage is not as high for hospital treatment insurance—about two-thirds, or 66 per cent of voters hold private health insurance. But for general treatment insurance—which is for the allied health and ambulance, that sort of thing—there are 75 per cent of voters who hold that private health insurance.

What Neal Blewett said in the John Chalmers Oration remains true. Private health insurance has been a key divide in Australian politics. When Labor are in government they continually attack those people who hold private health insurance, those 10 million plus Australians who see the benefits in having a choice of doctor and a choice of hospital and who are playing a part in taking pressure off the public system.

This government is very proud of its commitment to medical research. The Prime Minister, when he was health minister, made a significant $15 million contribution to starting the Flinders Centre for Innovation in Cancer, the Flinders cancer centre. The current health minister, in opposition and in government, has been a strong supporter of medical research. I have said before that the previous government tried to rip $400 million from medical research in the 2011 budget. What we see in this budget is that federal government spending on health and medical research through the NHMRC is expected to reach a high of $859 million.

This bill will start the first amount of money going into the Medical Research Future Fund, and it will start from January next year. It will be managed by the future fund board, and what it will do is provide significant investment for the important medical research that is going on in Brisbane, in Parkville, in Western Sydney and in places like SAHMRI and Flinders in South Australia. Medical research has a key role in making our health system sustainable in the future. We have seen in recent announcements the government is committed to investing in innovation, infrastructure and programs which have long-term economic benefit.

The initial funding to the Medical Research Future Fund comes from the savings that we have announced in this budget and also $900 million which was left over from the Health and Hospitals Fund. We have got a strong track record in medical research. Under the previous Howard government we had the Wills review and then, through then health minister Michael Wooldridge, we saw an initial doubling of the amount of money we spent on medical research. We saw over time the spending on medical research through the NHMRC going from $131 million in 1995-96 to $715 million in 2010-11.

When we look at what some of the key stakeholders say about this policy, the McKeon review said:

There is a strong case for HMR investment given the high social and economic returns.

Again, from the McKeon review:

Investment in HMR is affordable and should be a priority for Australian Governments, given the size and nature of returns available.

That really does summarise the issues that are involved in this bill. It is a small savings measure but it will involve the first contribution, after the money that was left over from the Health and Hospitals Fund, into the Medical Research Future Fund, which all of the medical research community in Australia are looking forward to.

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

I speak in relation to the Private Health Insurance Amendment Bill (No. 1) 2014. It gives me the opportunity, as other members have, to talk about health generally and also in relation to the budget and private health insurance specifically. This particular bill before the chamber seeks to pause indexation on income thresholds in the Private Health Insurance Act at 2014-15 rates for a period of three years. These income thresholds determine the tiers for the Medicare levy surcharge and the Australian government rebate on private health insurance. Pausing indexation will see some people, whose incomes were marginally below those income thresholds, move ever so slightly up and find themselves likely to be in a higher income tier as their income increases and find themselves caught accordingly. Some who do not have private health insurance may find themselves liable to pay the Medicare levy surcharge.

According to the budget papers this will save the government $599.3 million over the forward estimates. Unless anyone listening thinks, 'Oh, that's a good idea—we will put that towards Medicare or the universality of the health system and make sure that low- and middle-income earners get access to that sort of help immediately to make sure we tackle our chronic disease rates, obesity, stroke and other serious problems confronting the health and welfare of Australians,' it is not going to be the case. In fact, it is not going there. Like an episode of The Hollowmen, it is going towards the medical research fund. Not that medical research is not a good thing, and Labor had an enviable record when in government—and I will talk about what we did in relation to medical research. But this is a disgraceful attitude taken by this government to not reinvest these savings into the health system.

We support and have always supported sensible, fair and equitable health savings. It is important that we have done so. I have only been in this parliament three terms, but I can recall that some of the most ferocious arguments we have had in this place have been in relation to health issues, particularly private health insurance. I remember our decision in 2012 to means-test the private health insurance rebate in this country, a decision which achieved a sensible saving of about $3 billion. It was flatly rejected by the coalition, who would not have a bar of it. I notice in government they are not too keen to reverse that decision. They have put it on the backburner or somewhere in the fridge. But in opposition, they carried and they carried on. They shrieked class warfare. I remember the then health spokesperson, the member for Dickson, going on and on about it. In March 2012, he accused us of class warfare by attempting to means-test the private health insurance rebate. The member for Bowman, a fellow Queenslander, actually described it in the Hansard on 14 February 2012 as 'a direct attack on Australia' and that the Labor Party 'perennially hates people who have private health insurance'. You could not get more shrill than that.

The Liberal Party are never afraid to overegg the scaremongering. They produced a fact sheet, which I thought was quite amusing, during the campaign which was authorised by the Liberal Party federal director Brian Loughnane. It predicted nothing less than the collapse of the health insurance industry should the rebate be means-tested. Their fact sheet warned that in the first year of means-testing 175,000 people would drop their insurance and a further 583,000 would downgrade. And they claimed that over five years 1.6 million would drop their coverage and a further 4.3 million would downgrade their coverage. This particular fact sheet rambled on and on, and proposed that Labor was basically declaring war on the health of the country.

If only the Liberal and National candidates could have seen in May this year what the budget was going to do in relation to health issues, I am sure they would not have peddled that fact sheet around the place too often. We have seen the $7 GP co-payment—and we have seen more than that, by the way. We have seen the Australian Diagnostic Imaging Association point out that we not only have a GP tax; we have a pathology tax, a diagnostic imaging tax, an MRI tax. It is going to cost people an enormous amount, not just the $7 the minister and the Prime Minister keep talking about. According to the Australian Diagnostic Imaging Association, patients will pay $90 up-front for every X-ray, $380 for every CAT scan, up to $160 for every mammogram, $190 for every ultrasound and so on and so forth.

Unless we think that those opposite are really committed to the health and welfare of the country, they have actually made it harder for people to get tested and treated, on this is on top of the cruel cuts in so many areas. Of course, they are trying to make the states and territories pay more and more for the health of Australians, in particular the residents of states and territories, by cost-shifting and by cutting $50 billion from public hospital funding in the years ahead. That is what the budget papers show. I know that they do not want you talking about it, but it is actually in the budget. I wish more and more of those people in the government look at their own budget papers then they would not bemoan the fact that we keep raising the statistics because they are actually in the budget papers.

When we were in government, the then opposition health spokesperson described means-testing of the private health insurance rebate as 'a betrayal of 12 million Australians who could contribute to their own health care'. You do not hear too much about when they are going to bring this back, but they did say before the election on 15 September 2012 that they would bring back non-means-testing arrangements as soon as they could. They gave themselves a fair bit of wriggle room in that promise. They are going to restore the private health insurance rebate, they think, at a cost of billions of dollars to the budget. No-one really believes what they have to say. We see that Medibank Private said in TheSydney Morning Herald on 25 January 2014 that they cannot see that it is going to happen, certainly not in this term or the next terms, that reversal of that decision. Mark Fitzgibbon, the chief executive of NIB, said he 'absolutely' expects the Abbott government to not repeal that reform. These were scare campaigns by the coalition in relation to private health insurance. It was bunkum. It was scaremongering. It was a political scare campaign that they really did not believe in and I do not really believe either.

The insurance industry, as far as I am aware, is not banging down the minister's door to repeal means-testing. The truth is that since Labor introduced means-testing, the number of Australians with some form of health insurance is now higher than ever. Research by the Macquarie Bank shows that Labor's introduction of means-testing of the private health insurance rebate increased the cost of insurance by an average of 43 per cent for the richest 20 per cent of policyholders in the country. We made a sensible, targeted health saving there that saved taxpayers billions of dollars which is in contrast to the attitude taken by the government. They claim that Labor have never supported sensible savings; however, we certainly did when we were in government in relation to that.

Before the election, the coalition said, 'no cuts to education, no cuts to health, no change to pensions, no change to the GST'—that seems to have gone by the wayside—and 'no cuts to the ABC or SBS'. Those words are shaky if not broken—those commitments made by the Prime Minister just before the election. There are cuts of $50 billion from the public health system. In my electorate, the majority of public health services are provided by the West Moreton Health and Hospital Service. The Abbott government's budget cuts would leave my community health service $6.75 billion worse off by 2017-18 than if Labor had been in power. The health service will have to do more with less and that is despite the fact that the demographic predictions in the West Moreton region show that there will be an increase in population of 90 per cent by 2031, despite the serious and systematic health problems identified by West Moreton-Oxley Medicare Local in its most recent comprehensive needs assessment for the region and despite the chaos caused by the Abbott government's abolishment of the Medicare Locals will bring another broken promise. The government does not have the courage to say that these are cuts when in fact they are. Queensland Treasurer Tim Nicholls does not believe that spin. He knows that Queensland hospitals will be hard hit by the Abbott government's cuts. On 15 May 2014, he told Sky News, referring to Queensland:

You would have to wait longer to get treatment at a hospital because we wouldn't be able to have as many doctors or nurses on hand to treat people, so it might mean longer waiting times for treatment when you turn up and present at a public hospital.

I do not always agree with the Queensland Treasurer but on this occasion I do. So according to the Queensland LNP Treasurer, the Abbott government cuts will mean fewer doctors and nurses in Queensland hospitals and longer waiting times. Sometimes in politics even the LNP get it right. These cuts are on top of the $7 GP tax, the pathology, MRI and diagnostic imaging tax. We have seen a $1.3 billion cut that will push up the costs of many PBS medicines by up to 13 per cent and make unfair changes to the PBS safety net. This is on top of ripping up the National Partnership Agreement on Preventive Health, ripping money away from the states and other providers in an effort to combat obesity, smoking and alcohol abuse. Then there was the $229 million cut from the dental Flexible Grants Program, deferring $391 million including $200 million this financial year alone. These cuts go on and on.

In their most recent report, the Institute of Health and Welfare released a report into health expenditure over the 2012-13 year and the reported health expenditure when Labor was in power was only 1.5 per cent higher than in the previous year. Government funding of health expenditure fell by almost one per cent, the first drop in a decade. The Australian Institute of Health and Welfare is showing quite clearly that the health system is not facing an unsustainability crisis in terms of wasting public expenditure. In light of that report, the President of the Australian Medical Association, Professor Brian Owler, had a blunt opinion of the current government's confected claims of crisis when he said:

The report's findings really make a mockery of the government's claim that the health spending is out of control. These figures actually show that health spending is certainly not out of control and there is absolutely no need for the government to introduce a GP co-payment.

When faced with facts the government rejects them and it did not take long for the health minister to tell the National Press Club that he did not agree with them. He claimed that:

By any objective analysis of the health system, we are tracking on an unsustainable path.

The facts have gone away from their spin and Brian Owler blew the minister out of the water when he said:

We've been fed a false narrative that spending is out of control. Healthcare spending is very much under control.

In this bill the government are seeking to save a truckload of money but are not putting it where it needs to be because they are not listening to the professionals or to the experts. They do not listen to anyone who is an expert in science or climate science or even the AMA, who are saying what we should do and where health is going in this country. At the heart of the health cuts and the legislation before the chamber is ideology because at the root of these health cuts is an attack on the universality of Medicare and an attack on the health system. It is an attempt to introduce a two-tiered system in this country where, if you are sick, the cash in your wallet is far more than your Medicare card, but what else would you expect from the Liberals? They have never really supported Medicare. They used to call it a rort all the time, like superannuation. They went to election after election after Medicare was introduced attempting to unravel universal health care. They are like their Republican colleagues in the United States.

The saving in this bill, $599.3 million, is pausing indexation in relation to income thresholds. The government should be doing the right thing. It should be using it to improve here and now the situation for vulnerable, sick and ill Australians, but of course they are putting it into research. We are not opposed to research. We put in $3.5 billion in health and medical research when were in government, more than $700 million to build and upgrade health and medical research facilities around the country. In 2012 alone we put $850 million in funding into the National Health and Medical Research Council and allocated 1,300 grants. We are in favour of research; we are just not supportive of the government's tone and measures in relation to health.

David Coleman (Banks, Liberal Party) Share this | Link to this | Hansard source

Time is short so in the two minutes I have let us get to the heart of what is happening in health policy. Point one is that Labor trashed the budget. They messed it up completely. There were $50 billion when they came in and there were $200 million more of net debt when they left. It is rising all the time and we are paying $35 million in interest every day. That is unsustainable and we will not continue to let that occur. Secondly, a sensible government has to do is take steps to address that very significant debt situation. That is what we are doing across the board through a range of sensible initiatives to rein in the rampant debt that we face.

Importantly, when we act in a sensible and deliberative fashion in budgetary matters, we are able to invest significantly in health care. In financial year 2013-14, the Commonwealth spent $64 billion on various areas of health policy. Under the budget in 2017-18, so four years later, that total expenditure will be almost $79 billion rising—not going down—from $64 billion-$79 billion, which is an annual growth rate of about five per cent. So it is going up by an average growth rate of about five per cent; it is not going down. It is going up by a sensible and prudent amount in the context of a sensible and prudent budget strategy. Those are the facts of health policy. The amendment we are disgusting tonight and no doubt in the future is a part of various important initiatives that we are taking to address health policy.