Christopher Back (WA, Liberal Party) Share this | Hansard source

Let us go forward. Do not speak about—through you, Madam Acting Deputy President—what people might have been planning to do; listen to the quotes I gave in the last few minutes from Ms Gillard, Ms Roxon and Mr Rudd. What were they planning to do? Heavens above!

We then learn that, under this government, in June 2010, the highly respected Professor John Mendoza resigned as chairman of the National Advisory Council on Mental Health. Why? Because of the lack of action of this government in the area of mental health. So it begs the question: why has Labor changed this policy?

There are several reasons. One is on the corner to my left: because it is driven by the Greens political party who want to see the destruction of private health. Another is: because of the massive budget blowouts of this government, because of the incredibly high levels of debt, because they know they are facing another deficit this year, as they will be next year. Let me just remind you: the last time Labor was in government in the Hawke-Keating era the coalition was left to repay a debt of $96 billion a year, then costing some $6 billion—thousand million—a year in interest alone. We know now that that figure is $230 billion, racing towards $250 billion. And this government continues to borrow $100 million a day, every day of the week—not the working week, the entire week. So if you want to start to try to ramp back, who do you attack? You attack hardworking, middle-class Australians.

But this is bad policy. Why is it bad policy? Let me give you the analogy of a pool—a pool of money—into which the government puts 30c of each dollar, that being the private health rebate. But on the other side of the coin, the person taking out that insurance puts in the other 70c. How smart is it to remove that 30c, or a proportion of it, only to have the private health insurer taking out either their 70c or a significant proportion of it by reducing their level of cover? Where is the validity of such a decision? We all know what happens to the pool of money—the pool dries up—and we know that it drives people back to an already overstretched public health system.

These are the facts. The private hospital system in this country currently treats 40 per cent of all patients, being more than three million a year, and, more importantly, performs over 60 per cent of surgeries. Six out of every 10 surgeries in this country are performed in the private hospital system. The Productivity Commission found that the private hospital network treats patients more cheaply and at least as safely as public hospitals, if not more safely. In 2007-08 the government spent $31 billion on the public health system and, in contrast, only $1.7 billion on private hospitals through the private health levies.

We are all acutely aware that we have a rapidly ageing population in this country. Why would we place at risk the medical and hospital care of an ageing population by removing the 30 per cent rebate? The very group that we will be driving out of private health are the young people of this community—the ones who draw least on the health system, be it private or public.

Let me give you some examples. We have heard from the current Minister for Health, Ms Plibersek, who has decided to demonise high-income earners and even middle-income earners who, she says, should not receive subsidies from the lower income areas of this community to support their private health insurance. The minister should be reminded that, as she well knows, there is already a 1.5 per cent Medicare levy on taxable income to support the public health system. Furthermore, if high-income earners fail to have public health cover they can add a one per cent Medicare levy surcharge to their payments to the community. There is the subsidy from higher income earners. Quick calculations: somebody earning $80,000 a year together with superannuation and fringe benefits who does not take out private health cover will be paying $2,000 per annum towards supporting Medicare. There is the support from higher income earners. Even if that person takes out private health, at 1½ per cent on their $80,000, they will be paying $1,200 in Medicare levy a year. As I was reminded recently, that taxable income includes overtime and zone allowances. What we are really doing is saying, 'The harder you work, the more overtime you work and the more you earn, the more you will be imposed with a levy.' This, apparently, is what this government wants to move towards.

Why is it so dangerous? Why is it such bad policy? As we know, older people in the community have the greatest demand and the greatest draw on the health system, and that is getting even greater. My understanding is that these figures are accurate: people under the age of 19 years would exercise about 15 per cent of the national health budget; from 20 up to 65 it is about a quarter, about 23 per cent; and from 65 onwards, 60 per cent of the nation's health budget is spent on that age demographic. The more we keep young people in private health, where they are not drawing on the need for health and hospital cover, the better it will be for older members of the community. The Labor government might say, 'Yes, but of course the reduction of the rebate is limited and therefore lower income people will be less disadvantaged.' The simple fact of the matter is that, as the pool of private health funding reduces, the inevitable outcome must be that premiums will go up and people will start to take a reduced level of cover, if they take out cover at all. These are the sorts of areas that we need to be addressing and that this legislation will strike right at the heart of.

We hear from Minister Plibersek that this is only a tax on wealthier people. It is an interesting statistic in Australia that one million-plus households earning less than $26,000 per annum take out private health cover. Private health is not something for wealthier Australians—it is across the board. It is something that young families, middle-aged families and families with younger children and teenagers engage in, and it is an area that older Australians value very deeply. Why does this government want to attack the very surcharge levy that it said it would never touch?

I come to the reaction from people in my own community of Western Australia regarding the feedback from the Hospital Benefit Fund, which is a not-for-profit fund. This is not a fund that is trying to extract vast sums of money from its members, it is one that pours its funds straight back into members' conditions. Already, HBF estimates that 25 per cent of its members will see a big hike in their premiums, and this will increase to 43 per cent. That is an increase in premiums for those who will be hardest hit. We know already that the funds are battling to keep their premium increases to a minimum. The Minister for Health, Ms Plibersek, has only recently approved an average increase of 5.06 per cent. Many members are already anxious about the implications of the removal of the rebate of up to 30 per cent.

Another point made to me by this organisation is the sheer complexity of the processes as they are now being presented to the parliament. The legislation, which applies a means test to the rebate and further complicates the Medicare levy surcharge, will only serve to compound this complexity. It will only serve to discourage those who are already planning to come into private health. It may also accelerate the move of those who now believe they cannot afford it or they must reduce their premium levels. These are great concerns.

We have a wonderful health system in this country. We have a combination of public and private health care. There are all sorts of models. Models that would be best in this country have been put to me. These models suggest we move everybody into private health cover and then provide premium relief or payments for those unable to afford those premiums. We must continue to have competition to drive prices down, to keep quality up and, above all, we must do what we can to preserve and protect both the private health and the public health systems. This legislation is simply a grab for money. It is not about health policy. It should not be supported.