Barnaby Joyce (Queensland, National Party) Share this | Hansard source

The Tax Laws Amendment (Medicare Levy Surcharge Thresholds) Bill 2008 is yet another mechanism in which the Labor Party has got its figures wrong, and the cost to the Australian people will become quite evident if it is to go forward. Insurance starts from a simple premise—that if everybody in the street insures their house and one house burns down then the costs are covered. But if no-one insures their house you either have a total win or a total loss.

This bill is obviously going to push people out of private health insurance. The Treasurer said that that is not a concern because it is only the young and the healthy who will leave. Of course the other side of that argument is that only the old and the infirm will remain behind. As your pool of potential payers to your insurance premium reduces, the cost for those who are left behind has to go up. That is the only way it can work.

If you go through the figures, realising the sorts of people who are going to leave, we are probably looking at in excess of 900,000 people who are now out. That is going to require about another 1,000 beds in the public health system. That is the equivalent of the Royal Children’s Hospital in Victoria or the Brisbane and Women’s Hospital in Queensland.

That would not be a problem if the public health system was screaming along. But the public health system has in many cases come to a screaming halt. It is an absolute basket case. This legislation from the Labor government is going to take people from an asset that is working, the private health system, and move them into an asset that is not. So we will have excess capacity in the private health system and an overburdened public health system.

If the government want to put forward the argument that they think the public health system is working fine, then I welcome the debate on that. We could have a debate on that issue. We could walk up and down the coast of Queensland talking about it. We could go to some interesting towns—Bundaberg would be a good place to go. We could have the debate there; they have some good ideas about the public health system. This is the sort of logic that the Labor Party have.

Let’s look at some of the costings in this bill. If it goes through, the budget papers show that there will be savings from the rebate of $231.6 million in 2008-09 because of the changes to the thresholds. PricewaterhouseCoopers, as an independent auditor, calculated that the number of rebate payments that would be required to achieve that budget estimate is 613,757 rebate payers. That equates to 613,757 financial units, which equates to 908,163 persons, taking into account families and children. That represents 9.7 per cent of the insured population dropping out, which is a very large component. It would make an incredible difference if that portion of your insurance pool all of a sudden removed itself.

In deriving the cost-benefit of the members who potentially will leave private health insurance, they have excluded from the calculations the over-65 private health insurance population—whose claims represent half of all benefit claims. The cost of this cohort of members is around $484 per annum. On this assumption, if we believe the budget papers are correct in asserting $231.6 million in private health insurance rebate outlays, there will be an additional 900,000 people relying on public hospital cover. Let us look at that. That is—what?—Hobart, Canberra and a few other towns thrown in. This is the financial wizardry of the Labor government. Let us go through the costings. The state governments will require an extra $439 million just in 2008-09 to cover the hospital costs of the newly reliant people—that is, 908,000 people by $484. Over four years this would be an extra $1.76 billion, not accounting for health inflation. The Labor government wants to foist that back onto the Australian taxpayer—because that is who will end up paying for it. You go from the people who want to pay it and back to the taxpayers—that is, the people who have to pay it. Then there will be the lag time as they construct the necessary beds. We will have on our hands a complete and utter fiasco. It will be bigger than the public health fiasco we have at the moment.

Let us look at their track record. We are relying on the Labor government—and Labor governments currently administer the state health systems—to oversight this new nirvana of a public health system. I would love to know which state they see as the shining light of the public health system, which model they are going to follow. To their colleagues in which state government are they going to say, ‘Well, yours is the example we want to follow’? Do they want to follow the example of Queensland? Do they want to follow the example of New South Wales? Unfortunately, with increasing regularity there are graphic stories on our televisions at night of ladies having babies in toilets, of people having their child on the road between Rockhampton and Emerald. And there was the Dr Death scandal. The public health system is a sign of absolute incompetence. Why would we take this philosophical approach and put more pressure on a system that is already at breaking point?

The smart money would be on fixing up the system you have and alleviating the pressure on it by encouraging more people into the excess capacity in the private health system. We should do that regardless of philosophies about private or public; we should just work on the philosophy of what is best for the Australian people. What is the appropriate asset to provide the most Australian people with the ability to deal with their health requirements? How do we logically and methodically spread the numbers across the health care assets in our nation? That requires that we do not tear down the impetus for people to enter the private health system and be covered by private health insurance but that we increase the logic for people to be part of that process.

As more people who are ‘young and healthy’—to quote Mr Swan—move out of the private health system, the premiums for those who are left are going to have to go up. They will have to. If the young and healthy are moving out, the old and infirm are obviously staying behind. The old and infirm will make a greater claim than the young and the healthy. Premiums will have to cover that, and to cover that premiums will have to go up. Then we will get to the really cruel part. The cruel part is this. It is those who have a sense of insecurity, more than anything else, who attach themselves to a private health premium. I especially refer to people who in their former lives have been nurses. The thing they want the most is the security that, if they get sick, they will get the best care. They can struggle without a plasma TV. They can live without that. They can be frugal in how they deal with their domestic requirements. But, if you go to the essence of their fear, it is that if they get sick—if something goes wrong—they will not have the capacity, the security blanket, of having appropriate health cover immediately.

For those people who are under stress, this will put their premium up. It will put their premium up when they are already under immense stress. This goes especially for pensioners. Pensioners are doing it so tough, and this will put them under stress. They do not have the extra money to spend. These people are at a time in their life—if they are retired and if they are pensioners—when they do not have the capacity to access an increased income stream. If people are already severely financially constrained and you go to one of their greatest security blankets—that is, their private health insurance—and you put it outside their reach, what message are you sending to them? I know that they are the people who are affected by this. I will not quote them, but I can think of people who have been involved in the public health system and it is funny: nurses in the public health system are the ones with private health insurance. They vote with their wallets. They know what is in store for them otherwise.

Why are we doing that? What is the logic of putting extra pressure where pressure already exists? I do not see anything in this that mitigates it. I do not see the Labor Party even addressing the issue. They have not even considered the issue. They have not thought around the issue. This is another one like the luxury car tax of yesterday and today: it is a philosophical issue—when philosophy stands in proxy for good judgement and proper modelling.

The other thing that disturbs me about this bill is the modelling itself. The modelling talks about savings but it does not talk about the extra costs to the Australian taxpayer in having to build an extra 1,000 public beds. Where is that in your modelling? Or do you think some miraculous occurrence will happen and these beds will just appear? Where is that in what you have delivered to us? Everything that the Labor Party has done lately just shows one side of an equation. I do not know whether it is ineptness, laziness or whether they are trying to be mischievous, but it is completely and utterly shoddy.

I am going through these figures that you have put before us: in 2007-08, 2008-09, no cost; in 2009-10, $195 million; in 2010-11, $235 million; in 2011-12, $230 million. The explanatory memorandum then says:

This measure will also result in a decrease in Government expenditure on the private health insurance rebate. As such, the overall financial impact over the forward estimates is a net saving of approximately $299 million.

Compliance cost impact: Negligible.

When do we start taking you guys seriously? When are we actually going to get something delivered to us in the economics committee which is a true indication of what the cost is to the Australian people? This is bad process—this delivery of half the facts, half the issues. This is taking the Australian people for a ride, believing that you can actually bring it into this chamber—into the Senate of the nation—and think you are going to get away with it. We will hold you to account. I hear what Senator Siewert has said, and I concur with some of what she says—we need to get more detail on the table.

I look forward to asking questions in the committee stage—as we did yesterday. Yesterday was amazing. There were times of incredible silence after questions were asked during the committee stage of the luxury car tax bill. I saw Senator Conroy in quiet moments of prayer every time a question was asked of him, as he went diving through papers trying to find the figures to ascertain the financial impact on Treasury. It will be another case of that today. I forewarn you: once we get to the committee stage there will be some questions asked to make up for the completely vacuous state of the information that you have provided the Australian people through your tabling of figures so far.

I am even interested in how we came up with these arbitrary changes to the levy. Where did these magic numbers come from, where the threshold jumped from $50,000 to $100,000 for individuals and from $100,000 to $150,000 for families? There is a $50,000 jump. Why? Why did we pick $50,000? Why not $25,000, why not $10,000? Where did that number come from? Was that just another miraculous pop-up number? The pop-up numbers of the Labor Party—when things fail, you just make them up! I am happy to forewarn you that there will be questions about that.

The argument is so simple it is a no-brainer. The argument is: if we move people out of the private health system, they end up in the public health system and the public health system does not have the capacity to deal with them. Therefore, they will not be treated properly. Therefore, you take people from a position of protection where they are looked after to a position of exposure. That is an irresponsible thing to do, so you don’t do it. The logic is a no-brainer.

But putting that aside, in your desire to prosecute this argument, what is the information that you have delivered to the Australian people? Have you delivered to the Australian people only half the information? It looks awfully like once more you have. It is yet another example of the Labor Party’s complete lack of detail when it comes to anything pertaining to the finances of this nation. Are you endeavouring at a future stage to deliver to us the figures of how much it is going to cost to build ourselves another couple of major hospitals for these new public beds that will be required? To give you an example, there are about 500 beds in Canberra, which covers about 520,000 people. There are about 550 beds in Hobart, which is for 240,000 people, so you are doing all right. This will be like creating public beds for Hobart and Canberra. Where is that in the budget? How are we going to cover that cost? Who is going to table that for us and how quickly can you cover those costs for these people who are going to end up in the public health system—or do you think we can get away with not covering that cost? Are you going to show to us where the excess capacity currently is for these people? One of the things the nation has got to provide them with is appropriate health cover. Are you going to show us how you are going to do that with the capacity you currently have?

These are the questions that have to be answered. If you cannot answer them, the only right thing for the Senate to do is block this legislation so as to, first and foremost, save the government some money, because as we have already noted there is about $1.7 billion that we will be saving if we block this. So we will help you out. Secondly, we do it to make sure that we deliver to the Australian people the appropriate health care consequent to their needs with the most effective use of the public health asset and the private health asset that are currently at our disposal. I would be suggesting that this would have to be voted down. That would be the only appropriate decision that people can make premised on where the state hospital system is, premised that so far with Labor management under the states the whole thing is a complete and utter fiasco. This would just exacerbate the fiasco that your state colleagues are currently managing. You have not provided us with any mechanism, rhyme or reason for the figures we have before us or any path of progression of how we are going to deal with the thousand beds that will be required.