Sue Boyce (Queensland, Liberal Party) Share this | Hansard source

We have in front of us right now a great example of fiscal conservatism meeting Labor ideology head on. What a shemozzle! The coalition very successfully reformed the tax laws in 1997 to provide incentive and choice in the health system. And, most importantly, we have made the health system more sustainable and more available to more Australians. As the shadow minister, Mr Hockey, at the time said:

The coalition is an advocate of choice for Australians.

The Rudd Labor government is not. We believe that as many Australians as possible should be able to have a realistic choice about private health insurance to cover them against unforeseen medical needs. As Senator Joyce pointed out, that is one of the great fears of our elderly in particular.

Today we are debating what I think is probably one of the worst pieces of public policy that the Rudd government has managed to produce in its fairly short, nine-month career. There is no other piece of legislation they have so far attempted to introduce that would have a more detrimental effect on our public health service and no other piece of legislation that will be more inequitable in its effect on health services than this government proposal to significantly increase—double—the threshold for the Medicare levy surcharge.

As far as I am concerned, this bill is blindly driven by ideology. Their view of equity is to make everyone less equal, to destroy choice for as many as possible. In 1997, with private health insurance membership sitting at about 35 per cent of the population, the then Howard government made one of its best long-term decisions: to amend the laws to give incentive to middle-class Australians—all of Australia—to make provision for their own hospital cover. The then government brought in a 30 per cent rebate and a Medicare levy surcharge of 1.5 per cent on income for singles who earned more than $50,000 and families who earned more than $100,000, which was designed to give robustness to the system. That meant that for the very first time there was an incentive for many Australian families to take out private health insurance to cover potential hospital expenses. Coupled with the 30 per cent rebate, it put private health insurance within the reach of millions of Australians and their families.

In fact, the most recent figures that we have from the Private Health Insurance Administration Council show that 9.477 million Australians—nearly 45 per cent of the Australian population—are covered by private health insurance. This ensures that they can get access to quality health care when they most need it, at a reduced cost to the Australian taxpayer. I very strongly believe that this was one of the most important achievements of our government in terms of equity. I believe that it is one area of public policy that the Rudd government will most definitely come to regret as time goes on. By raising the thresholds before the surcharge must be paid, the government is opening up the floodgates to many people to leave the private health insurance system, as Senator Joyce pointed out to us.

In my view, there will be three results from this. It will leave many Australians without private health insurance and without hospital cover at all at the time when they most need those health funds. It will add great pressure to the health funds to spread the loss of revenue that they will suffer, and that will increase premiums to remaining policyholders. It will also force hundreds of thousands of people who no longer have private hospital cover back into the public hospitals at greater expense to the federal and state governments, who will have to pick up the cost of those now uninsured Australians. There will be an inevitable decrease in the membership of the health funds. As Senator Joyce pointed out, it is impossible to get to an accurate figure on this. Certainly one of the first things that came to light was that the Treasury modelling underestimated the numbers that would be involved. But we can assume that we are talking about more than three-quarters of a million people—perhaps a million.

Why would ordinary Australians who earn over $50,000 a year and have relatively good health join a fund unless there is an incentive? Why wouldn’t they pull out of the fund and then, at the expense of the Australian taxpayer, use the public health system? The people who will let their policy lapse are the young and healthy. As Senator Joyce pointed out, the Treasurer, Mr Swan, also made that comment as did the Minister for Health and Ageing, Nicola Roxon. Minister Roxon did not think it was a problem if the young and healthy pulled out of private health insurance. But, of course, it leaves the old and the unhealthy as the only ones who are still covered by health insurance with the inevitable premium rises that this will produce. This is just another example of this government’s ‘empathise and ignore’ policy.

We have a report from Minister Roxon entitled The state of our public hospitals, in which she says:

Our commitment now is to work together to reform Australia’s health and hospital system to meet future challenges – such as our ageing population and the rising burden of chronic disease.

There is no way this government can claim they are not aware of the pressures that are going to develop within the health system. It is just that they are going to let ideology overcome any commonsense, any good public policy, in regard to how you deal with that issue.

The country needs people to make provision for themselves in order to relieve the burden on the public health system. If the young and the healthy let their policies lapse then the health funds will have fewer people amongst which to spread the risk. It is pretty basic economics, as Senator Joyce pointed out to us. The health costs for senior Australians will be borne more and more by the public system and by those senior Australians themselves. Of course the government continues to say, ‘We know it’s tough for senior Australians and we’ll do something about it anytime in the next 12 months or so.’ It is good old empathise and ignore.

There will be an ongoing downward spiral, and the government knows there will be. With fewer and fewer people in the health funds, the state public hospitals will have to find more and more beds for those who do not have private health insurance. The state treasuries know this. It will end up costing hundreds of millions of dollars in extra expenditure, as Senator Joyce explained to us. The equivalent of two major Australian hospitals will be needed straightaway to deal with the extra burden on the public hospital system. The state of our public hospital system in Australia is already at breaking point without the added costs of millions of uninsured Australians needing to use the system.

The Rudd government made a virtue throughout last year of attempting to sound and act like the former Howard government. They tried to make the Australian public think that there was no substantial difference between the coalition and the Labor Party. They kept telling everyone about how fiscally conservative they were. I have some news for the Labor government: fiscal conservatives do not jeopardise the funding of public health for all Australians, fiscal conservatives do not deliberately cause a blow-out in government expenditure by removing incentives from the tax system.

In my state of Queensland, the public hospital system is in a shambles. I was horrified—although, unfortunately, not very surprised—to read in the Sunday Mail a few days ago that the Queensland state government has been fudging the numbers in the public hospital system. There are, according to Queensland Health, 10,234 public hospital beds in Queensland. The only problem with that figure is that 1,370 of those beds—that is, 14 per cent—are not beds at all. It turns out that almost 1,400 ‘things’ that the state government called beds are really chairs, trolleys, cots, stretchers and, in some cases, lounge suites. If the Queensland state government is going to be passing off chairs and lounge suites as beds, the state public hospital system is absolutely in crisis.

We need to do everything we can to relieve the pressure on Australia’s public hospitals, not to make it worse. We need to get as many Australians as possible into health funds. We need to ensure that there is both incentive and affordability about having private health insurance for middle Australia. These are the people who, with incentive and with help, will get into private health funds. As I said, and I think as Senator Joyce has pointed out and as Senator Siewert has alluded to, the state of our public hospitals in Australia is at breaking point. This federal government know it but they do not want to act on that knowledge; they want to continue with their ideological game.

I would like to draw the Senate’s attention to the report—a very lovely glossy report—entitled The state of our public hospitals, published by Minister Roxon in June 2008. As I said, it is a beautiful glossy publication, although the lights are out in half the windows of the public hospital used in the photograph on the cover of this publication. It is a lovely glossy publication, with lots of pictures of happy smiling faces and with lots of happy hospital patients in it. It has lots of charts examining the state of the public hospitals in each state and territory—or what appear to be charts examining the state of the public hospitals. There are lots of ticks and lots of tables. But, when you look at it more closely, all those ticks are not about how good the system is; they are about measuring the system—tick, waiting lists; tick, elective surgery; tick, quality assurance. Yes, the hospitals apparently measured them, so we have lots of nice ticks saying that they are measured, but there is no information in there about what those measurements tell us because the governments would be far too embarrassed for that information to come out. We have to rely on stories in the newspapers.

The Courier-Mail, the major newspaper in Queensland, now has a standard page with the heading ‘The hospitals crisis’. Every day they fill a page with the hospitals crisis in Queensland. It goes on and on. So, whilst we have this beautiful glossy report, it is based on information provided by the state governments. For instance, on page 5 this report tells us that there are 758 public hospitals in Australia with 55,904 available hospital beds. Let us just think about that in terms of the information we have from Queensland. Fourteen per cent of the hospital beds in Queensland are not actually beds. They are chairs, they are lounge suites, they are trolleys and they are stretchers.