Nick Xenophon (SA, Independent) Share this | Hansard source

It is not going to happen! In relation to the matters raised by Senator Cormann, the policy dilemma for me has always been: what do you do with a surcharge that was put in place for high-income earners back on 1 July 1997 that has not been indexed at all and is catching more and more people in the net? That is a key factor.

I think I have already alluded to the other issues that Senator Cormann has raised. In terms of premium increases, this clearly is a compromise measure with respect to the government’s position, which I believe went too far. It acknowledges the equity issue of those who have been caught by the surcharge—which includes people on below-average weekly earnings, for instance, which I believe is fundamentally unfair. I think the health minister has been very clear that any application for premium increases by private health insurers will be looked at forensically and they will have to make their case. I would like to think that this provides that equilibrium.

In terms of the bigger picture, can I say to Senator Cormann that having a forensic Productivity Commission examination of this for the first time in terms of the comparison between the public and private systems is something that has never been done—the data has not been available. I acknowledge what the health minister has said in relation to moving on this with COAG. It is something that no previous government has actually done and that is long overdue. I believe we will get some answers that we need to move forward with in long-term health policy in this country.

I have said before that I have private health insurance. I would not give it up for quids, even without the rebate. I have been well served by my private health cover, and I intend to keep it. But I think that, if we want some long-term answers about where we get the best benefit for taxpayer dollars in the system, the Productivity Commission inquiry is the way to go forward. The dilemma is: what do you do with the threshold for a surcharge that has been left at an artificial level over so many years and has not been addressed? I do not think we would have this problem if whoever was giving advice to then Treasurer Peter Costello 11 years ago had thought to have it indexed, either to CPI or average weekly earnings. I am sure I have not satisfied Senator Cormann, but I have given it my best shot.