Mathias Cormann (WA, Liberal Party, Shadow Parliamentary Secretary for Health Administration) Share this | Hansard source

Just to clarify the coalition’s position: we do not support this legislation because it would have a bad impact on our health system. It would push up health insurance premiums, it would put pressure on public hospitals, it will see up to a million Australians leave private health insurance, it will take billions in funding that would otherwise be available for hospital treatment out of our health system. So we do not support the legislation put forward by the government.

We do not support your amendment either, even though it is a slight improvement. We have made it very clear: we think that the Medicare levy surcharge at its current threshold levels is an important tool to ensure that we maintain the right balance between the private and the public health systems. The other part of our position is that any proposal that the government wants to bring into this chamber to make changes to the Medicare levy surcharge should be accompanied by a proper and thorough assessment—an actuarial analysis, some proper modelling—of the flow-on implications for private health insurance premiums and for public hospitals, the flow-on implications of the number of people expected to leave private health insurance, so that we can all go into this with our eyes wide open. Because right now we cannot.

With all due respect—and I do have a lot of regard for what you are trying to achieve—even if your amendment were to be successful we still would not know what the impact on private health insurance premiums would be, because the government has refused to ask Treasury to conduct proper modelling. I understand what you are trying to achieve. You are trying to get close enough to making a change without actually going over the tipping point. I am not trying to verbal you, but that is what I understand you are saying.

How do we know? Are we going to put a finger in the air and see how the wind is blowing? There have to be some professionals in government, in Treasury or in the Commonwealth Actuary’s office, who are going to do a proper assessment. What does any cost shift from the Commonwealth and the privately insured mean to the public system? What is it going to mean for future increases in private health insurance premiums? The government tell us that under the $75,000 threshold for singles they expect to save $879 million from not having to pay the private health insurance rebate. That $879 million comes straight out of the health system—but it is only 30 per cent of what comes out of the health system. There is another 70 per cent, the contribution of the privately insured, which the health minister and senators this morning just dismissed: ‘Well, they wouldn’t need access to hospital care anyway. They wouldn’t need to go to public hospitals, so what is all the fuss about? Why are you worried about additional demand on public hospitals when the people who are going to leave private health insurance are not the people that access hospitals?’ The reason we are concerned is that they will walk out of that door with $2.9 billion worth of funding that would otherwise be available to fund hospital treatment.

Senator Xenophon made reference before to—I am trying to remember the exact quote—the ‘laudable initiatives’ put forward by the health minister for public hospitals—the $600 million elective surgery reduction package which was a pre-election commitment. Initially when the government were under pressure about the impact on public hospitals of the Medicare levy surcharge change, they scrambled to see whether they could find something they could reannounce. Kevin Rudd was sent down to Victoria to the Labor Party conference in Melbourne to reannounce $150 million for something that had previously been put out as a $600 million elective surgery reduction package.

This is a total fraud; it is all spin. This is another one of those Hollowmen spin packages; $600 million must sound good. There must have been some market research: ‘How much do we have to put into it so that the people will say, “Whew!”?’ That is what they say on the Hollowmen: ‘Has it got the whew factor?’ Six hundred million dollars must have done the trick.

Let’s look at the fine print in the budget papers, Senator Conroy. A $600 million package sounds good. It was previously announced before the Medicare levy surcharge change was mooted, so presumably it was there to address a problem that already existed, to address pressure that was already there. The first $150 million is the only funding that will be available to increase hospital services. Only $150 million out of that $600 million will actually fund additional services. My home state of Western Australia got less than $15 million—a drop in the ocean when you compare it to $2.9 billion taken out of the system as a result of this measure. And that is not based on my figures; that is based on Treasury’s figures that we had to hunt for, figures that they were not prepared to easily release in this explanatory memorandum. The next $150 million is there to provide funding for improvements in infrastructure and systems. That is not funding for services. What is that going to do? And then there is another $300 million that the government has not yet actually committed to.

The government said in the budget: ‘Oh, well. If the states meet performance targets, which have not yet been specified—and they are doing the right thing cutting waiting lists et cetera—then perhaps in the last two years of the budget cycle we might make available another $300 million.’ That is a $600 million package! Out of $600 million that they are pushing out there, only $150 million is actually going to fund additional services.

They have also mentioned an increase in funding of a further $1 billion. Half a billion of that was as a result of a CPI adjustment—which happens as a matter of course. And why did they have to add some more money to it? Because the Rudd government was not prepared to sign the Australian Health Care Agreement—which ran out months ago. This is part of getting a 12-months extension so they can screw over the states through a measure like this, not providing appropriate compensation for the impact of it. It is older Australians who will suffer, because they will be faced with increases in health insurance premiums. They will still struggle to scratch together every dollar they can to afford the health insurance premiums, because they will not want to be forced into those public hospital queues. They will be faced with increases of five to 10 per cent in health insurance premiums on top of what will happen anyway—and at a time when, in the current climate of the global financial crisis, health funds will be under pressure anyway. This is a double-whammy—one on top of the other. It will be older Australians—the most vulnerable in our community—that will suffer because of the impact on premiums for those that want to stay and because of the impact on those that will be forced into public hospital waiting lists.