Carol Brown (Tasmania, Australian Labor Party) Share this | Hansard source

As I was saying, by initially blocking this bill and continuing to refuse to support it, those opposite have denied and continue to deny thousands of Australians the obvious financial relief that will result from its passage. The Liberal Party should be ashamed. They took advantage of hardworking Australians by effectively allowing the Medicare levy surcharge to become a tax trap and a means of draining more money out of the back pockets of average earners. They should be ashamed that by doing so they forced many working families to take up private health insurance cover that they could little afford, which was mostly packages at the lower end, and took away their ability to choose whether to purchase private health insurance. And they should be ashamed that they did all of this while chronically underfunding the public health system.

Indeed, it would seem that the Liberal Party are still in a state of denial over the corrosive effect that they have had on the health system while in power. The shadow minister for health and ageing in his contribution to this debate proceeded to blame state Labor governments for the demise of the public health system over the past 11 years. He also took the populist line, as those opposite increasingly attempt to do these days, and claimed that the changes contained in this bill are bad for older Australians. We know that the state of the public health system in Australia was a direct result of the Liberal government’s failure to properly fund it.

As I have pointed out in this place before, the reality of the former government’s underfunding of the public health system is no better reflected than in my home state of Tasmania, where the impact of chronic underfunding continues to plague our public health system. According to the health expenditure report produced last year by the Australian Institute of Health and Welfare, the former government’s share of the public hospital bill decreased by more than five per cent in the four years to June 2006. This effectively meant that the former Liberal government was short-changing the Tasmanian public hospital system by $70 million each year. That is $70 million less to spend on extra nurses, on extra beds and on cutting waiting lists. And, in contrast to the shadow minister’s claims, that is $70 million dollars less spent on providing quality health services for older Australians.

For the Liberal Party and those opposite to claim that they oppose the measures contained in this bill on the grounds that they may or may not put further pressure on the public health system borders on the hypocritical. Indeed, one would be inclined to ask whether in fact it reflects just another populist tactic rather than a genuine concern for the future of the public health system. In light of the global economic crisis, such populist tactics are wearing thin and it is about time those opposite reviewed their true function in this place, which is to represent the best interests of the Australian people. If passed, the measures contained in this bill will provide immediate tax relief to around 330,000 Australians. For two average-income earners each earning around $60,000 this will deliver a saving of up to $1,200 in its first year. For many Australian couples and families that $1,200 is the difference between being able to scrape together a deposit for their first home and being able to pay for childcare and education costs. Indeed, in the current economic circumstances such a saving offers significant relief.

However, despite its obvious benefits it appears that those opposite, up until this point, have been ideologically opposed to raising the thresholds from the initial levels they originally set way back in the late nineties. As has been pointed out time and time again—but I will once again reiterate it—when it was first introduced, the stated aim of the Medicare levy was to apply to high-income earners, the people that could afford to purchase private health insurance. Indeed, at the time it was introduced the then Treasurer said that he hoped it was a tax that nobody would ever have to pay. However, despite this, since 1997, the threshold has come to represent a tax on the sly forcing an increasing number of working families—some, I might add, earning below the average full-time wage—to either pay the levy or stretch their budgets to take out private health insurance.

As the Minister for Health and Ageing, Ms Roxon, pointed out in her second reading contribution, in 1997, 167,000 Australians were liable for the surcharge. Then under the inaction of the former government, by 2005-06, this had risen to 465,000 Australians. That is 298,000 more average working Australians and mums and dads that have been forced to pay a levy, which the former Treasurer at the time of its inception claimed he hoped no-one would ever have to pay. The current government, right from the beginning, has labelled itself as economically conservative and, when delivering its first budget in May, focused on measures aimed at making savings where it could build a strong surplus for our nation’s future. Therefore the savings for Australian families contained in this bill, unlike those offered by the previous government, do not simply represent a handout or a cheap political stunt. On the contrary—they represent the actions of a government that genuinely believes in the concept of fairness and giving the Australian people, where possible, their due.

It is about restoring the balance, it is about doing what is right and it is about sticking to the original aim of the levy and not taking advantage of the Australian people by failing to act. As we saw yesterday with the Economic Security Strategy announcement, that is not this government’s way and that is certainly not the Labor way. There is no logical justification for those opposite to not support this bill. Indeed, many of those opposite have in fact previously seemed to support the amended thresholds in this bill. My fellow Tasmanian Senate colleague, Senator Richard Colbeck, stated:

If they are talking about indexation, and that is the intent of the government, then indexation of this measure would have put the threshold at about $75,000 or $76,000.

Further, Senator Cormann said: ‘Would it be more appropriate, instead of doubling it and probably overshooting the mark, to look at what the figure would be if it had been indexed? I am talking about approximately $75,000 per annum.’