Rachel Siewert (WA, Australian Greens) Share this | Hansard source

As I pointed out in my speech on the earlier version of the Tax Laws Amendment (Medicare Levy Surcharge Thresholds) Bill (No. 2) 2008, the Greens believe this is an important bill that introduces measures that directly and indirectly go to the heart of health policy in this country. The Greens support the intention of this bill, in the same way we indicated our support for the previous bill, but note that the debates on its impact have raised critical issues about healthcare provisions in Australia.

The bill itself will address some of the inequities of policies brought about by the Howard government in its ideological efforts to promote and build a private health sector. The stick of the Medicare levy surcharge, introduced by the previous government in 1997 to encourage middle-income earners into purchasing private health insurance, was without indexation and has continued without indexation and is now capturing people on much lower incomes in relative terms. We agree that in the interests of fairness this should be addressed; however, we note that this bill does not go to the extent of reform that the Greens would like to see.

Raising the threshold has resulted in an outcry, largely from the private health insurance sector. They are claiming that the sky will fall in, public hospital waiting lists will grow, private health insurance premiums will rise and the Australian health sector will be in chaos. This bill has focused our attention on the question of private health insurance and the notion of a balanced health system—and, importantly, the need for a strong, viable, properly resourced public health system as the best means to provide health care, which is a key policy concern for the Greens.

Written submissions and presentations to the committee inquiring into the previous bill have restored this debate once again to centre stage and raised important issues that we believe the parliament needs to consider. Firstly, I would like to look at the thresholds. Yes, we agree that the levy surcharge threshold should reflect the increases in average income over the previous 11 years. Individuals and families on lower incomes should be given a choice about whether to purchase private health insurance or opt for the public health system. They should be able to make the choice based on their own budget and life priorities, not forced to make a choice between expensive health insurance and a punitive one per cent levy on their limited income. I note that, generally, where these people on low incomes do choose private health insurance, they do go for the lower end of the private health insurance, which I have been told by many people they do not believe gives them an adequate product. It is fair and equitable to restore the intention of the policy by lifting the threshold on income levels. Of course, the Greens argue that the fairest outcome would be to remove the Medicare levy surcharge altogether so that all Australians had the same choices about private health insurance; however, given the current context, lifting the threshold removes an unfair burden on lower income Australians.

I will make the point here that the Greens were supporting the previous threshold of $100,000 but we indicate our reluctant support for the compromise position that has been reached of $75,000 for singles. It remains at $150,000 for couples. This measure will ensure that 330,000 Australians will have immediate tax relief, and that will have a significant benefit for those individuals and families. Obviously, this does not go as far as we would like, but we have been prepared to reach this compromise position in the interests of seeing these important benefits delivered to many Australians, albeit fewer than the original threshold would have delivered benefits to.

The Greens were concerned that the original bill did not include provisions for indexation of the threshold into the future. People may recall that the Greens tabled amendments to address that lack in the bill. We are pleased that, through negotiations with the government, the government is now including indexation in this version of the bill. We welcome the measures in this bill to index the threshold to the full-time adult average weekly ordinary-time earnings. The arguments against these measures have come predominantly from the private health insurance industry.