Judith Adams (WA, Liberal Party) Share this | Hansard source

I rise to speak on the Fairer Private Health Insurance Incentives (Medicare Levy Surcharge) Bill 2009 [No. 2] and the Fairer Private Health Insurance Incentives (Medicare Levy Surcharge—Fringe Benefits) Bill 2009 [No. 2]. The introduction of these bills is one of the best examples of the dishonesty of this Labor government and why Australians should not believe anything the Prime Minister or his Minister for Health and Ageing minister says. These bills represent a broken promise.

During 2007 the Prime Minister and his then shadow minister for health and ageing, Nicola Roxon, looked Australians in the eye and said: ‘We will not change the private health insurance rebate. We will not take the private health insurance rebate away.’ They said this on numerous occasions and gave Australians their word in return for votes at the 2007 election. The Prime Minister, then Leader of the Opposition, even wrote to the Australian Health Insurance Association, making it quite clear federal Labor would not tamper with the private health insurance framework and that Labor was committed to retaining the existing private health insurance rebates. Mr Rudd said that federal Labor will also maintain Lifetime Health Cover and the Medicare levy surcharge and that Labor valued their relationship with the private health industry. I wonder if they think that today.

In her speech to the annual Australian Health Insurance Association conference in Melbourne on 10 October 2007, then shadow minister Nicola Roxon said:

This is why we have committed to the current system of private health insurance incentives—including the package of rebates, the Lifetime Health Cover and the surcharge.

Labor understands that people with private health insurance—now around 9 million Australians—have factored the rebate into their budgets and we won’t take this support away.

When the coalition questioned the sincerity of that emphatic pre-election commitment, we were accused of running a dishonest scare campaign. The then shadow minister for health and ageing, Nicola Roxon, said on 26 September 2007:

Federal Labor rejects the Liberal scare campaign around the Private Health Insurance rebates ... The Liberals continue to try to scare people into thinking Labor will take away the rebates. This is absolutely untrue.

Of course, we now know that this is exactly what Labor are proposing for more than two million Australians—to take away their private health rebates. Labor did not keep their word. The Prime Minister’s promises to Australians with private health insurance and reassurances to the private health sector have turned out to be meaningless words. The Prime Minister and his government just cannot be trusted. The Hon. Peter Garrett’s comments during the election campaign now ring true: ‘When we get in, will just change it all.’ As with so many of the Prime Minister’s other broken promises, that is exactly what he has done. He gave Australians his word, asking for their vote in return. Then he got into government and changed it all.

The millions of Australians whose Medicare surcharge levy will increase if these bills are passed should be incensed at the duplicity of this government. All people who have taken responsibility for their health and taken out private health insurance should be extremely annoyed and disappointed that the cost of private health insurance for everyone will go up. If these bills are passed 11 million Australians with private health insurance will have to pay more as a direct result of this policy. One million of these people live in households with an income of less than $26,000 per annum. These are hardworking Australians, retirees and pensioners who make and have made large sacrifices in other areas of their lives in order to take out private health insurance and not have to rely solely on the public health system, which is already under so much strain. With the removal of the private health insurance rebate, premiums will go up. Everyone will have to pay more, including those people on lower incomes, as I have discussed. This will be the outcome of bad policy decisions like this.

As a direct result of these changes the cost of private health cover is going to increase for more than 2.3 million Australians by between 14.3 and 66.7 per cent. How does anyone cope with that? People of all ages with private health insurance in the first income tier will see their rebate reduced by 10 per cent; people of all ages in the second tier by 20 per cent; and people in the third tier will be treated differently, depending on how old they are. The older you are, the steeper the increased cost you will face, as a result of this legislation. This is a poor outcome for the self-funded retirees and pensioners who have taken responsibility for their own health care in their retirement years. It is completely unfair that older Australians are going to suffer financially if these bills are passed. Our population is ageing and, as the baby boomers enter retirement, hospital admissions for patients are expected to more than double by 2030. I ask: how are these people going to manage the increased costs as a result of these proposed increases?

While 2.3 million Australians with private health insurance will see a direct, immediate and automatic increase in the cost of their private cover by up to 66.7 per cent, all of the 11 million privately insured Australians are going to face additional increases in private health insurance premiums because of these proposals. These bills are effectively nothing more than an enormous tax on the healthcare industry—not a tax on emissions trading or the Carbon Pollution Reduction Scheme but a tax now on the healthcare industry and the millions of Australians who have chosen to take responsibility for their health requirements. The coalition supports lower and middle-income earners. By keeping the private health insurance rebate intact, private health insurance will remain affordable for everyone, including the millions of lower and middle-income earners. If the rebate is removed for higher income earners, the cost of premiums for everyone else will go up. The private health sector handles well over half of all Australian hospital procedures and Labor simply fails to accept this fact. Many of these procedures are highly complex and each could be carried out in a public hospital at full public cost. The public health system is already overloaded and would be unable to cope.

In Western Australia, my home state, people with private health insurance acknowledge the important role private health plays in our health system and the impact these measures will ultimately have on our hospitals: longer queues and longer waiting times. The flow-on effect of these measures will cause everyone with or without private health insurance to be affected. In Western Australia, this includes 56 per cent of the electors of Hasluck, 67 per cent of the electors of Brand, 74 per cent of the electors of Fremantle and 64 per cent of the electors of Perth—all of which are Labor held seats. I wonder how these people who voted for the Rudd Labor government feel about what has happened with the broken promise. The 7.4 million Australians who now have private hospital insurance and incomes below the ‘rebate reduction’ thresholds will be confronted by increased premiums which will arise to cover the cost flowing from people who downgrade their cover or leave private health altogether. Those people who do not have private health cover will now be competing for access to public hospital care with an increasing number of those no longer covered by the private system, as a result of these proposals. The government itself has already admitted that thousands of Australians will be dropping out of private health insurance. This will put more pressure on the public health system.

As far back as 2004, it was stated that each dollar spent on private health insurance rebates saved $2 of federal and state outlays. In the past, by providing incentives to people through the private health insurance rebate system, we have attracted revenue into the system to fund billions and billions of dollars in private hospital care which the public system could not have managed. The private hospital system treats over three million patients per year, representing 40 per cent of all patients. Private hospitals perform 60 per cent of all surgery, which amounts to over one million patients. The Productivity Commission has also found that private hospitals treat patients more cheaply than public hospitals.

These figures demonstrate just how important the private sector is to our health system. It has developed into an efficient cornerstone of the system and employs hundreds of thousands of Australians. We need to be doing what we can to encourage people into private health insurance and once they are there to keep them there. These measures do nothing to fix the health system—another of those great prime ministerial pledges but failed actions. They are an ideological, good old fashioned Labor attack on private health. It is an attack on people who choose to take responsibility for themselves. But Labor wants big government and big bureaucracy and for the Australian population to be chained to a public system.

How can this government be trusted to improve the public system? They have not delivered on their promise to fix public hospitals. All we are hearing at the moment is that Mr Rudd is going to fix our public hospitals. I do wish him joy to come to Western Australia to try to fix the public hospitals. I am a strong supporter of hospital boards and I do hope that eventually we can have hospital boards with skilled community members controlling the health dollars. I have been a board member of the Princess Margaret-King Edward board, which is a women’s and children’s hospital board, and also a member of the Metropolitan Health Service Board, which very successfully ran health in Western Australia—we had four years before the Gallop Labor government came and removed the board. And every one of those years we balanced the budget. It was due to the very diligent, independent board members and an excellent chair that we were able to achieve that result. Since then that budget has never been balanced, so boards certainly play a part and I support the coalition’s move to go back to having hospital boards with community input. It is terribly important.

As far as the Rudd government’s $2 billion pink batt program is concerned, how can it be trusted to manage $31 billion spent on our public hospitals? It is a really frightening scenario. All it is doing is forcing responsible people out of the private system and onto the public hospital waiting lists. With this legislation, in one hit the Labor government is taking away a carrot and replacing it with a big stick through increases to the Medicare surcharge levy. Australians in higher income brackets will either have higher private health premiums or be punished if they do not take it up. This is fundamentally just another tax and attack on the millions of Australians who have worked hard and strived to get ahead to increase their earnings and improve their livelihoods. Labor hates this. They want people shackled to government and bureaucracy so that they can take away incentives and take to using a big stick in the form of a new tax on hardworking, aspirational Australians.

It will also be an attack on Australians living in rural and regional areas. Many families in the farming and mining sectors will be hit. I am sure my colleague Senator Joyce would agree entirely. Having been a farmer for a long long time, I know that private health insurance was one of the most important aspects of our family budget. We just had to have it, living in a rural area with health services centred on the metropolitan area. If something went wrong we really needed that private health insurance. It was an insurance that was paid before anything else, but the problem was that we could not always use private health insurance in our rural area, so, unless someone really needed it, it was looked upon as a cost we did not need to bear. But, for our children, it was terribly important that, as a family, we were all insured just in case something went wrong. So private health insurance is very important to rural people. What really upsets me is that while it is not uncommon for a farming couple to draw an income of higher than $150,000 they also have a much higher cost of living. These extra living costs have to be deducted, and now they will be penalised even further by the Rudd government’s legislation. They already have to contend with a less adequate health system in country areas and now they will be hit with either higher health insurance premiums or a higher Medicare levy.

The Prime Minister made a promise—a hollow promise—to fix the health system. He has failed to do that. And now he is embarking on ripping the heart out of a cornerstone of the Australian health system, through a massive backflip on a solemn promise he and his then shadow minister made to the Australian people. The coalition will not support this bill because we believe in enabling hardworking Australians to take care of their individual responsibilities where they are able and choose to do so. We encourage them to do so. That is why we created an incentive to do so. Private health gives people choice and better health services. The purported savings and extra dollars that the government claims these measures will create for the public health system will be nowhere near the savings that the private health system already delivers to public hospitals through a spread of resources, which means shorter queues and waiting times.

If the Labor government is so intent on finding savings for the health system, perhaps it should pay a little more attention to its other programs and improve its management skills. The billion dollar blowouts and wasteful spending in other areas make these new tax measures pale into insignificance, yet leave retirees and hardworking Australians having to dig deeper into their own pockets. If the Labor government wants to cry a savings argument, then please give us some better explanation for the mismanagement and rorting of other multibillion dollar programs, such as pink batts, Julia Gillard memorial halls and squandering money on Labor mates in the over-inflated broadband project. The Labor government should be condemned for reintroducing these bills. They are not the least bit fair and take yet another swipe at hardworking aspirational Australians who have taken on the responsibility of looking after their own wellbeing and not relying on governments and the public purse. This is an attack on every Australian’s future health.