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

I rise to speak on the Fairer Private Health Insurance Incentives Bill 2009 [No. 2]. I also am pleased to speak on this issue again as it serves as an opportunity to remind the Australian people of the significant broken promises of the Rudd Labor government. During the election campaign the Prime Minister made a solemn promise to the Australian community that a Labor government would not tamper with the private health insurance rebate. Mr Rudd’s broken promise is represented by this bill before us today. Here it is: Labor’s broken promise on private health insurance.

The private sector is one of the cornerstones of the Australian health system—our system simply could not cope without it. Without it waiting lists and queues at public hospitals would be impossible to deal with; but I see from the Prime Minister’s proposed plan for public hospitals that this is probably what we are going to see. Following the 2009 budget, the Australian Private Hospitals Association said:

The changes to the private health insurance rebate announced in tonight’s budget are a clear breach of election promises made by the Rudd Government. The changes will lead to a system that is confusing, complex and costly for those millions of Australians who take responsibility for their own health care costs.

Labor detests the private health industry and did its best to water it down in the 1980s and 1990s. They wanted everyone to be tied to the public system, tied to the government and controlled by big bureaucracy. Labor does not want to give people choice or the opportunity to take independent responsibility for their healthcare needs. I would be very interested to know the number of Labor senators, MPs and ministers who have private health insurance for themselves and their families. Private hospitals remove an enormous burden from the public system and people who are taking responsibility for their own health care are saving the taxpayer billions of dollars per year. The coalition has always recognised the importance of the private health industry and the benefits it brings to health services. The Howard government introduced the private health insurance rebate to enable and encourage more Australians to take out private health cover, to ease the burden on the public system and to enable Australians to access the choice and greater number of health services which private cover provides.

Private health insurance funds pay for 57 per cent of surgical procedures performed in Australia. This includes 55 per cent of major procedures for malignant breast conditions, 55 per cent of chemotherapy treatment, 63 per cent of major joint replacements and 70 per cent of same-day mental health procedures. According to the Royal Australasian College of Surgeons, which represents Australian surgeons:

Australian surgeons have warned of even longer elective surgery waiting times after the Rudd Government’s Budget included cuts to the rebate paid to many Australians with private health insurance.

The Vice President of the Royal Australasian College of Surgeons, Dr Ian Dickinson said the Budget measure will inevitably drive some Australians out of the private health system, placing even greater strain on Australia’s public hospitals.

Dr Dickinson said:

Notwithstanding the increase in the Medicare levy surcharge, the decision to reduce the rebate paid to many Australians with private health cover will drive at least some of these people back into the public system.  Moreover, the upward pressure this will place on insurance premiums could drive poorer and more vulnerable Australians back into the public system.

Something that really worries me is the problems associated with physiotherapy and all the associated auxiliary benefits that private health covers. For these people not to be in private health insurance, not to be able to be covered—or partially covered—as part of a rebate means that they will be going back to the public system, which will make it even harder to get an appointment in those ancillary areas.

Coming back to the actual policy, the private health insurance rebate is very successful. It has enabled millions of families to take out private cover, for many of whom it was previously financially difficult. There are now over 11.3 million Australians who are covered by private health insurance, and an additional 298,221 Australians joined private health insurance in the year ending June 2009. The rebate system has made private health cover affordable for all Australians. I will remind the Senate of the situation in four Labor electorates in my home state of Western Australia: 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 have private health insurance cover.

Taking the rebate away from one group of people will cause thousands of people to drop out, which will make private health insurance more expensive for the remainder of people who have cover. Private hospitals and health services draw on a finite pool of funds. If members pull out, health insurance premiums will become more expensive for those who remain. This will include millions of lower and middle income earners, retirees and pensioners. Over one million people with private hospital cover live in households with a total annual income of $40,000 or less. More than 1.6 million Australians with private hospital cover are aged between 20 and 35 years. The Australian Health Insurance Association has said:

The Rudd Government’s decision to dismantle the private health insurance rebate will place increased pressure on the public hospital system and force up premiums for those Australians who take responsibility for their own health care by taking out private health cover. Every single one of the more than 11 million Australians with Private Health Insurance—one million of whom live in households with an income of less than $26,000 per annum—will have to pay more for their private health insurance as a direct result of this policy.

And the Australian Medical Association has said:

Changes to the 30% Private Health Insurance Rebate mean many Australian singles and families will pay a lot more for health insurance, and if you don’t keep your private health insurance you’ll be slugged with an increased Medicare Levy surcharge. They get you both ways.

By making private health cover affordable through the rebates, millions more Australians are able to access the benefits of private health services. In fact, since the 30 per cent rebate was introduced in 1999 the total benefits paid by private health funds have increased by 162 per cent. This includes a 413 per cent increase in benefits paid for prostheses, a 389 per cent increase in specialist costs and a 166 per cent increase in total hospital benefits paid. During 2009 the benefits paid by private health funds increased by 11.7 per cent for public hospitals, 10 per cent for acute private hospitals, 12.2 per cent for day hospital facilities, 9.7 per cent for medical benefits, 12.5 per cent for listed prostheses and 10.3 per cent for total hospital benefits.

Private health is good for Australia and keeps our health system, despite misgivings, amongst the best in the world. Without private health it would go backwards very quickly and simply would not cope. The current rebate system gives everybody an incentive to be part of the private system and is fair and transparent. What might potentially have been a complex policy is easy to understand and manage. The Australian Private Hospitals Association has said:

The current system of rebates is simple, transparent and easy to understand. The new proposals introduce 10 different levels of entitlement or surcharge depending on income level and age. It will be difficult for people to work out their entitlement and will create a huge administrative burden both on Government and health funds.

But I suppose that is Labor at its best: take assistance away from hardworking, aspirational Australians and bring in a complex, unfair system that needs a big bureaucracy to manage it.

As I have previously noted, many people and families in rural and regional areas will be particularly hit by this legislation. Private health insurance is extremely important for many families living long distances from cities and full health services. It is quite common for couples working in the mining industry to be earning in excess of $150,000 per year. Under the legislation, these people will lose their rebate, and that is really not fair. They are doing their best, working in difficult conditions, to make a go of their livelihood, to be able to afford land or houses and to give their families a much better start than they would have without this opportunity. Private health insurance is a priority for a lot of families living in the remote centres of the resources sector. Many families in northern and central western Australia will be particularly hit.

I have also previously mentioned the importance of private health cover to farming families. Many farming couples draw an income of over $150,000 to compensate for the increased distance and expenses of living in rural areas. They perhaps have to pay boarding fees, higher grocery bills for transport and extra power bills, and they often have big problems with telecommunications in order to meet their financial commitments. Farms can also be particularly dangerous places, especially for children, and private health insurance is considered essential by most farming families. This legislation will hit farmers hard and it is not fair that they should not be entitled to the rebate by virtue of distance and the increased living expenses that come with living in rural areas. As with all other Australians who are earning over $75,000 as a single or $150,000 as a couple, farmers and the resource sector families are going to be hit hundreds of dollars per year because Labor has broken a core promise.

Labor assured the Australian community that it would not tamper with the private health framework and take away the private insurance rebate from families, but that is exactly what it is now trying to do. How can Australians trust this Labor government when it breaks such a black-and-white core promise as that? Prime Minister Rudd and the Minister for Health and Ageing, Ms Roxon, looked the Australian people squarely in the eye during the election campaign and said, ‘We will not take away the private health insurance rebate.’ We are dealing now with the moral issue of a significant broken promise.

It is almost laughable that the Prime Minister proclaimed that the ‘greatest moral issue of our time’ was to pass his government’s job-destroying, flawed and increasingly despised emissions trading scheme. All of a sudden it is no longer the greatest moral issue of our time. It has been outdone by the government trying to legislate a broken promise instead. The Prime Minister must be taking Australians for granted if he thinks they cannot see through all this spin, without any substance to back it up. He is trying to suffocate his no longer popular ETS through means of other pieces of bad legislation such as this.

In support of thousands of hardworking, aspirational Australian families who are going to be hit hard by this broken promise, I, along with my coalition colleagues, will not be supporting this bill. It is an attack on the private health system whose benefits far outweigh the numbers the government proposes will be saved by this bad policy. Labor has always detested private health and did its best to destroy it in the 1980s. It still does not like it and this is why we are here now debating its broken promise. What is breathtaking, however, is the Prime Minister’s acknowledgement of falling back on the private health sector in his recent address to the National Press Club. The Prime Minister said:

The new National Health and Hospital Network aims to deliver a set of national standards, including access to elective surgery. This means both would get their operations done within a similar timeframe. If one of them can’t get it at their local hospital then the Local Hospital Network will find that person a bed at another hospital within the Network—or with a private hospital if one can’t easily be found.

This is just another con. I am sure there will be many cases when a local public hospital bed cannot be easily found, but I suggest Mr Rudd speaks with the private health sector before he refers people to private hospitals as the answer. St John of God Hospital in Subiaco and St John of God Hospital in Murdoch in Western Australia stated in the West Australian two days ago that they have no spare capacity to take on public patients. Bethesda Private Hospital in Perth has some spare capacity but would have trouble finding surgeons and anaesthetists to do the work.

If private hospitals do take on public patients on behalf of the government, the Australian Medical Association in Western Australia has warned that more people could cancel their private health insurance and go onto the queue to be treated in the public system. The Rudd government’s tampering with the private health system and removing the insurance rebate will result in millions of people having to dig deeper into their own pockets in order to maintain responsibility and choice for their healthcare needs. Thousands of people will choose to drop out of the private health system, which will result in longer surgery waiting times and longer queues at hospitals, causing a greater strain on an already overburdened public health system.

Labor’s locked-in-the-past, ideological class warfare attitude does nothing for the good of hardworking Australian families or the future prospects of our health system. People in rural and regional areas are livid at what the government is doing because this broken promise is going to significantly force up costs and take away choice for many of them. The Rudd Labor government stands condemned for yet another broken promise it has made to the Australian people. To conclude, the coalition senators’ dissenting report on this bill states that this measure is bad public policy.

Debate interrupted.