Mathias Cormann (WA, Liberal Party, Minister for Finance) Share this | Hansard source

I move:

That these bills be now read a second time.

I seek leave to have the second reading speeches incorporated in Hansard.

Leave granted.

The speeches read as follows—

MEDICARE GUARANTEE BILL 2017

The Turnbull Government is guaranteeing Medicare so that all Australians can be assured Medicare is not only here to stay, but will be strengthened into the future.

Australians place great faith in our world class health system. In 2015-16, 89.3 per cent of the population accessed a Medicare service, using over 384 million Medicare services.

The Pharmaceutical Benefits Scheme (PBS) is a key component of Australia's health system that has provided affordable access to necessary and lifesaving medicines for Australians for almost 70 years. Around 208 million services — 91.7 per cent of which were concessional — were provided under the PBS in 2015-16.

The Government is building on our world class system by strengthening Medicare. In this year's Budget, the Government will provide $1 billion to reintroduce indexation for certain items on the Medicare Benefits Schedule (MBS). The Government is investing record funding for our public hospitals and will deliver an additional $2.8 billion in the 2017-18 Budget.

The Government has also committed to an additional $1.2 billion to list new and amended, cost-effective medicines on the PBS, as announced in this year's Budget. This adds to more than 1,400 new or amended listings on the PBS since 2013, compared to just 330 in Labor's last three years in office.

Labor rationed the PBS, they did not list life-saving drugs, when they could have and should have. We do.

The MBS and PBS combined will account for almost 45 per cent of Commonwealth health expenditure in 2017-18.

The Government is guaranteeing Medicare. According to those opposite, the Government was apparently meant to have sold Medicare by now. With this bill the Government is guaranteeing the MBS and PBS so that all Australians can continue to access timely and affordable health care and medicines into the future.

By law, we will establish a Medicare Guarantee Fund to pay for all expenses on the MBS and PBS from 1 July of this year. The fund will secure the long-term future for the Medicare Benefit Schedule and the Pharmaceutical Benefits Scheme.

The Fund will consist of the Medicare Guarantee Fund (Treasury) Special Account and the Medicare Guarantee Fund (Health) Special Account.

Proceeds from the Medicare levy, less the portion set aside for the National Disability Insurance Scheme, will be paid into the fund to meet MBS and PBS costs. Because the Medicare levy does not and has not ever covered to full costs of providing healthcare in Australia, an additional contribution from income tax revenue will be paid into the Fund to meet MBS and PBS costs. The money will be placed in the fund every year – transparently, assuredly, responsibly.

In 2017-18, an estimated $33.8 billion will be credited to the Fund. The Medicare levy will contribute about $12.1 billion. The remainder, an estimated $21.7 billion, will be drawn from personal income tax receipts, equivalent to around 10 per cent of all personal income tax.

The funds credited from the Medicare levy will be equivalent to three-quarters of the revenue raised by the Medicare levy for the next two years. This will shift to become three-fifths of the revenue raised by the Medicare levy from 2019-20 when the Medicare Levy will need to be increased to cover the full costs of the NDIS and fill the funding gap left by those opposite.

The amounts credited to the Medicare Guarantee Fund will be held in the Fund for the sole purpose of meeting the cost of essential health care provided under the MBS and PBS. They will provide transparency about the costs of Medicare and the PBS and a clear guarantee on how we pay for them.

The Fund demonstrates the Government's commitment to Medicare by ring-fencing revenue for the sole purpose of MBS and PBS spending.

Ring-fencing the revenue in the Medicare Guarantee Fund will increase the public visibility of the costs of the MBS and PBS, the quantum of revenue generated by the Medicare levy and the additional revenue necessary to meet these costs.

The Fund does not change the demand-driven nature of MBS and PBS funding. To make sure that there is always sufficient credit in the Fund to meet MBS and PBS costs, the credit to the Fund will be adjusted at every Budget update. This will ensure that it is in line with forecast future growth in MBS and PBS expenditure over the forward estimates.

In the event that the Fund has insufficient contributions to meet estimated MBS and PBS expenses in any year, a special appropriation will meet those expenses. This ensures that MBS and PBS funding is always guaranteed.

Full details of the bill are contained in the Explanatory Memorandum.

MEDICARE GUARANTEE (CONSEQUENTIAL AMENDMENTS) BILL 2017

The Medicare Guarantee (Consequential Amendments) Bill 2017 makes amendments to the Health Insurance Act 1973 and National Health Act 1953 to reflect the proposed operation of the Medicare Guarantee Bill 2017, which secures the ongoing funding of the Medicare Benefits Schedule (MBS) and Pharmaceutical Benefits Scheme (PBS).

The MBS and PBS are currently paid under the Health Insurance Act 1973 and National Health Act 1953 respectively.

These acts meet payment obligations under those schemes by appropriating from the Consolidated Revenue Fund.

The Medicare Guarantee (Consequential Amendments) Bill 2017 makes a number of consequential amendments to the Health Insurance Act 1973 and National Health Act 1953 to replace the current special appropriations under those acts with the Medicare Guarantee Fund.

These changes will increase transparency around the cost of running the MBS and PBS and will guarantee the Government's commitment to fund the affordable health care all Australians rely on.

Full details of the bill are contained in the Explanatory Memorandum.