Fiona Nash (NSW, National Party, Assistant Minister for Health) Share this | Hansard source

I would like to thank all the senators for their contributions to debate on this bill. The purpose of the Private Health Insurance Amendment Bill (No. 1) 2014 is to pause the income tiers for the Australian government rebate on private health insurance and the Medicare levy surcharge at the 2014-15 rates for three years. These amendments will be made to the Private Health Insurance Act 2007. These changes will impact individuals marginally below each income threshold whose income increases and who, as a result, will move into the next income tier sooner. These changes will not affect individuals with an income that remains $90,000 or below or couples and families with an income that remains $180,000 or below. It is estimated that the changes will impact on four per cent of policies.

The pausing of the income tiers is estimated to result in net savings to the government of $599.3 million over the four years from 2014-15. These changes will ensure that, as incomes rise, people contribute more to the costs of their own health care. This will contribute to fiscal consolidation and sustainability of the healthcare system in the future. These savings will be invested by the government in the Medical Research Future Fund, and I can indicate to Senator Xenophon that the government intends to honour all its election commitments.

In summary, this bill will pause the income thresholds for the Australian government rebate on private health insurance and the Medicare levy surcharge at the 2014-15 rates for three years.