Mathias Cormann (WA, Liberal Party, Shadow Assistant Treasurer) Share this | Hansard source

As Senator Fierravanti-Wells has just reminded me, the Senate very sensibly rejected this bad legislation on two occasions. And why did the Senate reject Labor's attempts to make people who take additional responsibility for their own healthcare needs pay for Labor's own reckless and wasteful spending in other areas? Because the Senate knew that this piece of legislation will push up the cost of private health insurance, put it beyond the reach of a number of Australians and see more people leave private health insurance, which will push up the cost of health insurance for everyone, including low- and middle-income earners who are currently making significant sacrifices in order to be able to afford their private health insurance every year—the people who are most likely to leave private health insurance after the cost increases by 42 per cent immediately.

Courtesy of this decision, many Australians will have to pay 42 per cent more for their private health insurance just like that, without even taking any of the flow-on consequences into account. As those Australians who are least likely to need private health insurance in the foreseeable future leave private health insurance, the cost for all of the remaining Australians, including those who are most likely to need private health insurance in the foreseeable future, will go up. This will take us back to the vicious cycle where past Labor administrations have taken us before, where we see the cost of private health insurance go up and people leave, and then the cost goes up more and more people leave. Of course, we end up with a downward spiral of additional pressure on our public hospital system, with more people having to join public hospital queues, when quite frankly what the government should be doing is providing well-targeted incentives to encourage more people to take out private health insurance and put additional resources into the health system.

All of the evidence that has been presented over the last 10 or so years since this very sensible and very successful Howard government policy was put in place has demonstrated that this has been part of a highly successful package of policy initiatives. It was of course the Howard government that reversed the decline in private health insurance when it came into government in 1996. The private health insurance rebate, lifetime health cover and the Medicare levy surcharge were a successful package of initiatives that helped restore the balance in our health system. We need both a strong public system and a strong private system so that all Australians can have timely and affordable access to high quality health care.