Judith Troeth (Victoria, Liberal Party) Share this | Hansard source

I too would like to make some comments in the debate 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] about the management by this government of what is a $100 billion a year system—big business in anyone’s terms. The coalition government had a good track record of managing that $100 billion a year system, but in a few short years Labor has shown that it cannot do it. The Labor government has been an abject failure on health. Prime Minster Kevin Rudd promised big and delivered little. Of the billions of dollars splashed around in stimulus packages, not one cent went to health. The private health insurance rebate changes are a tax on health—a tax that Kevin Rudd promised he would not impose. In opposition, the now Prime Minister and the Minister for Health and Ageing, Nicola Roxon, both stated before the election that they would not alter the health insurance rebates. They even put it in writing. In a press release dated 20 September 2007, the current health minister—and I know my colleague Senator Humphries quoted this yesterday but it will not do any harm to quote it again today—said:

On many occasions for many months, Federal Labor has made it crystal clear that we are committed to retaining all of the existing Private Health Insurance rebates, including the 30 per cent general rebate and the 35 and 40 per cent rebates for older Australians. The Liberals continue to try to scare people into thinking Labor will take away the rebates. This is absolutely untrue.

The Prime Minister put the same commitment in writing to the Chief Executive of the Australian Health Insurance Association in November 2007 prior to his election as Prime Minister.

The coalition rejected Labor’s attack on private health, and it was defeated in the Senate. This new tax has been rejected by the parliament, but Labor is determined to impose it. The health rebates were one of three pillars introduced by the Howard government to strengthen private health. These measures saw membership of private health funds rise from 34 per cent under the Keating government to 44 per cent today. I am very proud to say that the coalition has always believed in a balance between public and private health. After all, a strong and affordable private health sector alleviates pressure on state public hospital systems.

The fact is that all Australians will pay a price if this new tax is imposed. On the government’s own estimates, tens of thousands of people will drop their insurance coverage. It would force people to rely on our already stressed public health system. Queues at emergency departments and waiting lists for surgery would grow longer. It would affect not only the public hospitals but also, as people drop out of insurance, those who continue to keep their private health insurance who would see their premiums rise. Higher premiums would continue to make it harder for many to keep their insurance and possibly deter young people from taking out a private health insurance policy for the first time. Public hospitals are already stressed and strained and broken. Remember that the Prime Minister promised to fix them by mid-2009, but he is yet to produce a plan to fix hospitals, a plan that he said he had before the last election.

The Labor government says it needs this tax because of the global financial crisis, but its attack on private health started in its first budget before the global financial crisis. The Labor government misleads people about the need to tax private health insurance. Kevin Rudd says the money is needed for health reform, and he told Australians that the recent Intergenerational report would show that the tax would deliver $100 billion over decades to come. But there was no mention of the $100 billion in the Intergenerational report. Ms Roxon, the health minister, said the money from this new tax would be used to fund e-health. Then she said it would be used for new medicines and improved technology. That just proves that Labor is willing to say anything to support this tax increase.

The fact is that in regional, rural and remote Australia e-health could be used to great benefit. With only a small number of medium-sized regional towns, doctors in outlying areas, particularly in Western Australia and the Northern Territory, could use e-health to have faster diagnoses, faster treatment and faster recovery times for the many patients that they have to treat. But, at present, if there are no advances in e-health—and advances are technically possible in this day and age—many patients must make the very long round-trip to regional hospitals to get a diagnosis, go home and then come back to be treated and, hopefully, get well in the long term. It is estimated that the measures that Labor is putting forward in the Senate today will save $1.9 billion over the forward estimates. Anyone would have to say that that is a drop in the bucket compared to the cash splashes Labor has thrown around without one cent going to health.

For instance, the wasted funding of the failed Home Insulation Scheme has cost more than this will save. The coalition suggested increased excise on tobacco as an alternative, but Labor refused to consider this. Let’s face it: Prime Minister Rudd and Health Minister Roxon are ideologically determined to hit those Australians who pay to look after their health needs. The changes to the private health insurance rebate are just the latest phase in Labor’s unrelenting war against private health insurance—Labor hates private health insurance. When in government the coalition introduced an open-ended private health insurance rebate because, for every rebated dollar, a privately insured person contributes two more to our health system as a whole. We believe in the right of all Australians to take charge of their own healthcare needs and plan for the future. We have always worked hard to deliver incentives to promote the uptake of private health insurance and take the pressure off Medicare.

People will now drop out of health insurance because they cannot afford the much higher premiums. With interest rates no doubt on the rise, people will be thinking, ‘What do we pay for this month? Do we pay the mortgage’—which is more or less obligatory—‘do we pay school fees and provide for our children; do we buy food to put on the table; or do we go on with private health insurance?’ It will be very tempting for them to scrap the latter option. That will restart the catastrophic premium membership death spiral of the 1980s and 1990s, when Labor almost wiped out private health. It took a herculean effort on behalf of the coalition to reinstate that when we came to government.

Under this scheme, the private insurance rebate will decrease on a sliding scale for singles earning over $75,000 and couples on $150,000 per annum. The 30 per cent rebate remains for people with an income up to $75,000 a year for singles and up to $150,000 for couples. The rebate will decrease to 20 per cent for people on incomes of $75,000 to $90,000 for singles and $150,000 to $180,000 for couples. It will decrease further to 10 per cent for people on incomes of $90,000 to $120,000 for singles and $180,000 to $240,000 for couples. Payments cut out completely at that upper level of $120,000 for singles and $240,000 for couples. The Medicare levy surcharge will increase to 1.25 per cent for people on incomes of $90,000 to $120,000 for singles and $180,000 to $240,000 for couples. The Medicare levy surcharge will rise to 1.5 per cent for people at a higher income level. It is currently one per cent for people earning over $70,000 for singles and $140,000 for couples.

Over 9.5 million Australians are covered by private health insurance for hospital cover—that is 45 per cent of the population—and over 11 million people have some form of private health cover; 1.3 million people insured are over 65 years of age, which is 50.3 per cent of all Australians in this age group.

Members of health funds contributed $10.6 billion to the Australian healthcare system in 2008, an increase of 10 per cent on the previous year. Fifty six per cent of all the surgical procedures are performed in private hospitals. Most of these are covered by private health insurance. And almost 15 per cent of public hospital admissions are privately insured patients. It is estimated that premiums will increase at rates of around 10 per cent, or possibly more, per year from 2010 to 2011, rather than the five to six per cent as now. Inevitably, there will be demands from the states for additional public hospital funding from the Commonwealth over the next Australian healthcare agreements to compensate them for extra pressure on their public hospitals.

If this measure goes through, we are talking about increased financial pressure on the federal government, increased financial pressure on the state governments and increased financial pressure on families and individuals as they start to make what could be catastrophic choices for them between paying for health as they would like to and choosing other forms of expenditure. I urge the Senate to defeat this measure.