Lyn Allison (Victoria, Australian Democrats) Share this | Link to this | Hansard source

I may have missed it in the minister’s remarks before I came in, but it would be useful to know how it is we are faced with 104 amendments to a relatively small bill in such a short time frame. Why were these mistakes made? Was it a typical case of bills being rushed into the parliament without proper consideration and consultation?

Chris Ellison (WA, Liberal Party, Minister for Human Services) Share this | Link to this | Hansard source

They were not mistakes. I made remarks earlier in the opening of the committee stage which outlined that over the summer recess the government had received various comments on the legislation. It proposed a number of amendments which I think went to clarifying the operation of the legislation. There are numerous amendments which are technical in nature. There are also other amendments which have been introduced after further consideration and consultation with the Ministerial Council for Corporations.

It is not abnormal, over a period of time, between the introduction of a bill and the time it gets here, for government amendments to be brought forward. In fact, when we do not, we get criticised for not being responsive; when we do, it is a mistake. Technical aspects have been identified. There is nothing wrong with that. We have to get it right. I have identified those technical aspects. Where they have been more substantial in nature I have outlined the policy consideration behind that. In the supplementary explanatory memorandum, on page 1, there is a description of the groups of amendments. I would draw Senator Allison’s attention to that. That may assist her in sorting out which amendments she may wish to address during the committee stage.

As I said earlier, we are not putting forward government amendments (1) to (104) in a lump sum fashion to the extent that you cannot pick out those you want to debate. I indicated that senators may well want votes to be taken separately on various amendments and we have the committee stage to go through that. It is an orderly process that has ensued since we introduced these bills, and this is a reflection of that process.

Lyn Allison (Victoria, Australian Democrats) Share this | Link to this | Hansard source

In the short time that has been available for us to look through the amendments, we cannot see any major issues with any of them, so we will be supporting them. They do seem to be technical. I am more than happy that they have been moved together, unless others object to that approach. I was not indicating that we would be opposing any or that we even wish to debate any. They seem to us to be straightforward technical mistakes that are being corrected. It is difficult, nonetheless—there are 104 amendments and we only had about 24 hours to look at them.

Judith Troeth (Victoria, Liberal Party) Share this | Link to this | Hansard source

The minister has indicated that the amendments will be taken together unless individual senators choose to debate particular amendments.

Jan McLucas (Queensland, Australian Labor Party, Shadow Minister for Ageing, Disabilities and Carers) Share this | Link to this | Hansard source

I would like to concur with Senator Allison’s comment about the enormity of this package of amendments to what are the largest changes to private health insurance administration in Australia. I acknowledge and accept that there will be times when amendments are required between the introduction of legislation and its final carriage, but we have received 104 amendments that are highly technical in nature, with limited time to pursue them closely and with limited time to be able to consult with the community about their impact. With bills of this nature, because they are so significant, it is important that there is consultation with the community at each step, in this case with the private health insurance industry, the hospital sector, doctors themselves and, hopefully, those health consumers that may be impacted.

The minister has said that this is an orderly process. The minister may not know that on the day of the hearing into this huge change to the way in which we administer private health, we received a very large document which in fact was the delegated legislation. It was ludicrous to think that we might be looking at that legislation whilst we were conducting the inquiry and comprehending what it included, and that was difficult for all members of the committee.

I can indicate that Labor will support all amendments. We do not intend to break them into sections. I concur with what Senator Allison said about moving them en bloc. Hopefully the amendments are going to do what has been indicated. It is unfortunate though that we are hoping that something will happen whilst we are passing amendments to a very large piece of legislation.

Question agreed to.

Lyn Allison (Victoria, Australian Democrats) Share this | Link to this | Hansard source

I move Democrats amendment (1) on sheet 5212:

(1)    Page 4 (after line 10), after clause 3-30, insert:

3-35  Review of operation of Act

        (1)    The Minister must cause an independent review of the operation of this Act to be completed by 1 April 2009.

        (2)    In conducting the review, consideration must be given to:

             (a)    an examination of the extent to which broader health cover has eroded universalism in healthcare and contributed to inequity in access to services between those with private health insurance and those without; and

             (b)    an audit of health insurance products to identify any that provide financial or other incentives that are contrary to the principle of community rating; and

             (c)    an assessment of the adequacy of the standard information statements arrangements in assisting consumers to compare private health insurance products.

        (3)    The person undertaking the review must give the Minster a written report of the review.

        (4)    The Minister must cause a copy of the report of the review to be tabled in both Houses of the Parliament within 15 sitting days of receiving the report.

This amendment would put in place an independent review of the operation of the act, to be completed by 2009—two years time. Again, because of the very significant change that this bill represents, we think that a review is going to be important and that a two-year time frame is appropriate. It is an amendment we have put many times in this place and we would urge the government to accept it.

Jan McLucas (Queensland, Australian Labor Party, Shadow Minister for Ageing, Disabilities and Carers) Share this | Link to this | Hansard source

I need to indicate to Senator Allison that Labor is of a view to support the principle of a review. However, we are concerned that subclause (2) of the Democrats proposed amendment, which essentially sets out part of the terms of reference, does not accommodate the potential that there might be for value to be achieved especially through broader health cover. It is our view that the terms of reference that you have proposed are somewhat charged and indicate a view prior to there being an open analysis of the implementation of this legislation. So, if the Democrats were of a mind to delete the second section, Labor would be able to support the amendment. Reviewing legislation is something we all have to do, but I think to construct the review within a fairly negative construct pre-empts an outcome that may not in fact be there. I just put that on the table for Senator Allison.

Lyn Allison (Victoria, Australian Democrats) Share this | Link to this | Hansard source

In answer to that suggestion, I think this goes to the central point of this legislation: is it going to damage universalism of the public health insurance system? It seems to me important to put that into terms of reference. If that aspect is not there, we will have a review which may be from the perspective of the private health insurance industry, and it may be that they will say: ‘This is fantastic. It’s the government’s objective to increase the scope of private health insurance in this country. We’re achieving that, and everything is wonderful,’ and not look at this central question: does this do damage to a public health insurance system which I think this country can be very proud of? It is there because, for us, this is central to the whole debate. This is what we worry about with this bill.

The risks associated with this bill have got to be written into the terms of reference. Yes, that may sound negative, but I feel quite negative about this bill. I am deeply worried, as are the rest of the Democrats. That part of the amendment was put there rather deliberately because we would not want to see that aspect of it overlooked. We could tweak the terms of reference; I am sure we could expand on them. If the minister is at all inclined to conduct a review, I am sure we could sit down and negotiate what those words ought to be, although it is getting rather late in the debate. If there were agreement to do that, I would be happy to remove the specifics so that we could reach agreement in some other way at some later stage. But if the minister is ready to indicate whether a review is on the government’s horizon or whether they are at all inclined to support this amendment then that might be useful.

Chris Ellison (WA, Liberal Party, Minister for Human Services) Share this | Link to this | Hansard source

This is a fairly standard proposal by the Democrats, although it does have that aspect of the terms of the review which vary from those of the usual review that is proposed when we have a bill before the Senate. The government believes that it has consulted extensively with stakeholders in the area. It continues to do so. This is an area which enjoys a great deal of public scrutiny. This will continue to be an area where the government consults with insurers, healthcare service providers and consumers. To not do so would be at the government’s own peril. So really it is an ongoing work in progress, if you like, in dealing with the health sector.

The numerous amendments which have been commented on have come about as a result of further consultation in that interim period between when the bill was introduced into the House of Representatives and its arrival in the Senate. The government is of the view that this review is not necessary. There is an ongoing review which is in progress by virtue of the scrutiny applied to what is a very important area for all Australians and another review is not required. The government does not agree with the Democrat amendment.

Lyn Allison (Victoria, Australian Democrats) Share this | Link to this | Hansard source

The government says there is ongoing scrutiny and review being carried out, but the point is that it is the parliament that is making this decision today. I think the government needs to be reminded of that. It is not just the government that deals with the Australian public or this sector or anything else; it is the parliament making this decision. We need to be sure that the objectives that the government has set are tested against those objectives but also against the broader objectives of a better health system in this country. I do not think I am overstating this issue. What would be required of this review, of course, would be that it be undertaken independently, that it report to the minister and then, most importantly, that it table the report in both houses of parliament within 15 days of receiving the report.

We have raised a whole lot of questions. We do not know whether premiums are going to rise, for instance. We do not know the scope of this change. This is a major change to our health system. We have no idea whether the government’s claims are accurate. We have no idea whether, as I said, this will damage our public health insurance system or not and, if so, to what extent. We do not know the answers to these questions. It is not an unreasonable request to say, ‘Let’s have a proper, independent, public review that is brought to this place so that we can know if the decision that is made here is the right one.’

I will not deliver this lecture again, but I think, Minister, that it is not acceptable for you to say, ‘Our review is the review that we want to conduct; it will be with lots of people; it will be with the sector; we will talk to doctors and the private health insurance sector.’ That is not a review. That might be a review in your terms, but it is not a proper, independent review and it is not a review that we can trust. It is not a review that we will even see necessarily. A review is necessary on this very major change to our health system and I urge you to reconsider.

As I said, I would be quite happy to drop the terms of reference so that we can find some words that are acceptable to everybody. But to not have a review of such a major change seems to me to be irresponsible. The government deserves to be heavily criticised for not proceeding down this path if it maintains this position.

Question negatived.

I oppose divisions 34 to 40 in the following terms:

Division 34, page 21 (line 2) to Division 40, page 30 (line 9), TO BE OPPOSED.

This is also an amendment that I have moved in the past on private health insurance. It is our view that Lifetime Health Cover and the age loadings have coerced people into being members of private health insurance who would otherwise not be. If we removed that Lifetime Health Cover provision then we would be likely to see changes in those people who are in private health insurance and a major saving on the rebate.

I would have moved a second reading amendment, had I not already done one, that would have seen funding from the private health insurance rebate transferred into a much more sensible arrangement of public dental health programs, as I said in my speech in the second reading debate. The Commonwealth subsidises dental services for the wealthy through the rebate but it pulled back, as we all know, in 1996 from providing any funding for the public dental health services. That has had huge health implications. Waiting lists now are increasing again. You can sit back and say, ‘It’s up to the states,’ but it is primary health care and I would argue that there is a Commonwealth role in making sure that we provide affordable dental health services. However, I was unable to put that second reading amendment. That is the point behind this. It would free up some of that very expensive rebate to be spent on a more equitable approach. It would balance the huge amount which is currently going through that rebate to people who are largely wealthier and can afford private health insurance. I know they are not all wealthy. I understand that some people struggle on quite low incomes to be able to afford private health insurance. I have never understood why myself. It seems to me to be very expensive. I much prefer the public health insurance system.

So that is what this amendment is about. As I said, I have moved an amendment of this sort many times before and I will keep moving them. I also recognise that the government is not interested in this amendment and maybe even Labor is not interested. Nonetheless, I think the reforms that ought to be made to the system are to do with removing that coercive aspect of private health insurance.

Jan McLucas (Queensland, Australian Labor Party, Shadow Minister for Ageing, Disabilities and Carers) Share this | Link to this | Hansard source

Labor cannot support the proposal from the Democrats. We think it is essential for the operation of private health sector in Australia to maintain the incentives that are in place. As a result, we cannot support the amendment.

Chris Ellison (WA, Liberal Party, Minister for Human Services) Share this | Link to this | Hansard source

Likewise, the government opposes this amendment very strongly, because Lifetime Health Cover not only has been a policy of the government’s since July 2000 but also is a plank of private health in this country. You have to provide for protection against people who are hit-and-run in the way they approach private health cover—who, in their younger years, may not be a member of a private health fund but, when they are approaching their older years and might need it, suddenly join. If everybody did that, the premiums for private health cover would just rocket. So we are trying to get younger people to join private health at an earlier stage and that is the principle behind Lifetime Health Cover.

We need people to think in terms of looking after themselves where they are able to. You have the public health system there to look after those very people. But the government’s attitude is: ‘If you can look after yourself more than adequately, why should you be a burden on the taxpayer if you can provide for that self-sufficiency? We encourage you to do it earlier and plan your life accordingly.’ I would even say to young people who think that they don’t need it, ‘You never know what is around the corner.’ Private health cover is something that I would recommend to any young person who is embarking on their working career. This plank of Lifetime Health Cover is essential, and the government is opposed to this amendment.

Claire Moore (Queensland, Australian Labor Party) Share this | Link to this | Hansard source

The question is that divisions 34 to 40 stand as printed.

Question agreed to.

Gary Humphries (ACT, Liberal Party) Share this | Link to this | Hansard source

I oppose clauses 152-1 and 152-20 in the following terms:

(1)      Clause 152-1, page 117 (line 3) to page 118 (line 5), TO BE OPPOSED.

(2)      Clause 152-20, page 119 (lines 21 to 24), TO BE OPPOSED.

I am asking the Senate to omit clauses 152-1 and 152-20 of the bill, and I value the opportunity to explain why. The question of the obligations imposed on directors of health insurance companies was a matter which was touched on in submissions made to the Senate Standing Committee on Community Affairs inquiry into these bills but not a matter that was greatly dwelt on by the committee and, with hindsight, perhaps it should have been.

The legislation imposes on directors of health insurance companies a set of obligations to the policyholders of those companies. And it is, of course, possible that a health insurer may have both policyholders—that is, those people who insure with the company—and shareholders, to whom an entirely different set of obligations are owed under the corporations law. The point was made by members of the industry during the inquiry that some of the compliance elements of the legislation appear to exceed the standards of conduct expected of company directors under the Corporations Law. And the point was made that the government had undertaken to ensure that compliance and corporate governance standards in the new legislation did not exceed those expected in any other sphere of business, and that it may have been the case that the legislation had strayed into new ground. In other words, these obligations with respect to policyholders contained in 152-1 are not a feature of the current law and therefore this puts a new complexion on the legal position of directors of those organisations. The industry made the point, I think quite fairly, that that extra statutory duty imposed on those directors could create confusion and could result in there being, indeed, a conflict between the obligations that a director owed to shareholders and the duty that the director owed to policyholders. This conflict was not resolved—or, indeed, even averted to, particularly—in the legislation.

There are two key points there. One is the question of what decision a director needs to make in the circumstance of a conflict. The other is that, with a great deal of uncertainty in this field, it would be logical that some people of standing, some people with qualifications who were eminently suited to this particular role in the industry, might forgo that obligation because they were unsure as to their personal liability. Indeed, the legislation makes it clear that, for breaches of that obligation in 152-1, the directors of an insurer are personally and severally liable to pay the insurer an amount equal to any loss which results from a breach of those provisions. So the obligations imposed are very severe, and the relationship between those obligations and those under the Corporations Act is not made clear.

I have discussed this matter with the industry in the time since the committee had the chance to look at this issue. I think it would be wise of us not to proceed at this stage with those changes. And I think that there is an opportunity to go back and have further discussions on this area to identify possible ways of identifying appropriately what obligations towards policyholders should attach to directors and perhaps to look at revisiting that issue when there is a suitable examination of the effect of the legislation.

As the minister has made very clear, this is a bold new world with respect to health insurance. There are many things about this which dramatically change the parameters for health insurers and for their directors, and we need to be able to flexibly consider the way in which this legislation impacts on the sector. I think there is an opportunity for us to come back to this issue in the future.

The amendments I am proposing would simply remove the provisions that might contradict the Corporations Law, and will not replace in any way the obligations already on directors under the Corporations Law. If the Senate agrees with that, the directors will not have this dual responsibility to have to try and juggle.

I congratulate the government for having picked up a number of other amendments that were suggested by the Standing Committee on Community Affairs. I am particularly pleased that the statutory rules will be amended to ensure that recommendations on a care plan charter are picked up—that is a very important part of the legislation as far as the committee is concerned—and that there will be better transitional arrangements while these new arrangements are being put in place; in particular, that professional standards and accreditation regimes will continue to apply to providers in this field while new accreditation arrangements are being put in place for a possible commencement date of 1 July 2008. I hope that that date will come forward and that we will not have to wait until 1 July but, whatever period of transition there might be, we have clear arrangements under the amendments the government has picked up to cover that situation. I think that will greatly relieve the minds of many people who work in this sector. I commend the amendments I have suggested to the committee.

Jan McLucas (Queensland, Australian Labor Party, Shadow Minister for Ageing, Disabilities and Carers) Share this | Link to this | Hansard source

When you arrive at work, have a look on the fax machine and find another amendment to a piece of legislation and are seeking advice from others on how you might consider this, it means the consultation process is not just truncated but nonexistent. I know that Senator Humphries’s amendments are extremely well intentioned, but it is impossible for any senator in this place to try and get a view from anyone if they find an amendment on their fax at 25 past nine for a bill that is to be dealt with at half past nine.

I agree that this issue was raised, albeit fleetingly, in submissions to the Standing Committee on Community Affairs and that there does seem to be a potential conflict between the Corporations Law and what is proposed in the legislation. However, I think we do have to consider the obligation of directors to policyholders. Obviously directors have responsibility to shareholders under the Corporations Law, but there needs to be some recognition of the responsibility of directors of private health insurance companies to the people who are insuring with them. I will be interested to see what the government intends to do with Senator Humphries’s amendments. Labor is of a mind to support them, but I may reserve that right until I have heard from the Minister for Human Services.

Lyn Allison (Victoria, Australian Democrats) Share this | Link to this | Hansard source

I too will be interested to hear what the Minister for Human Services has to say on this. I have not been able to seek any advice on the implications of this change, so I am looking forward to the minister’s response.

Chris Ellison (WA, Liberal Party, Minister for Human Services) Share this | Link to this | Hansard source

The government agrees to the two amendments moved by Senator Humphries. I think that these are important amendments which ensure that we get it right. Even though we are at the committee stage now, if there is a sensible amendment then it would be foolhardy to ignore it. Senator Humphries has outlined the background to it, and I want to thank him and the Standing Committee on Community Affairs for the work they did. A number of aspects have been taken up from the committee report. This was touched on during the Senate inquiry.

On the issue of the responsibilities of directors of health funds, the government views the responsibility to the corporation as being indirectly to policyholders—the members of the funds. If the corporation is run well then the fund itself will have flow-on benefits to the members of the fund. Quite appropriately, the Corporations Law sets out very clearly the responsibilities of directors, and we believe that the flow-on from that is that where a director dispels their duty accordingly—if it is done properly—the members of the fund will enjoy that. The government agrees with these amendments. It is important that we get them into the bill for the reasons Senator Humphries outlined, and I am grateful to him for bringing these forward.

Jan McLucas (Queensland, Australian Labor Party, Shadow Minister for Ageing, Disabilities and Carers) Share this | Link to this | Hansard source

I do not know that a decision to increase premiums, for example, which might be good in a corporate sense would be necessarily seen as good for policyholders; however, I suppose that is why Senator Humphries has moved the amendment. Was this issue raised with the government during the consultation process and what was the response to the private health insurance sector as a result of those consultations? Essentially what I am asking is why the government did not bring this amendment forward.

Chris Ellison (WA, Liberal Party, Minister for Human Services) Share this | Link to this | Hansard source

There was some discussion about this. The government was of a different view, as I understand it, and now has changed that view. There is nothing untoward about that; it demonstrates an ability to assess the situation and keep it under assessment. I understand that it was raised during the consultation period and thought not necessary, but on review we believe it is and it is agreed.

Lyn Allison (Victoria, Australian Democrats) Share this | Link to this | Hansard source

To be honest, I still do not have a view. It is clear that the government is supporting it and therefore it has the numbers, so I may not even vote on this amendment.

The Temporary Chairman:

The question is that clauses 152-1 and 152-20 stand as printed.

Question negatived.

Jan McLucas (Queensland, Australian Labor Party, Shadow Minister for Ageing, Disabilities and Carers) Share this | Link to this | Hansard source

I move opposition amendment (1) on sheet 5219:

(1)    Clause 172-5, page 136 (lines 7 to 12), omit the clause, substitute:

172-5  Agreements with medical practitioners

Medical purchaser-provider agreements

        (1)    If a private health insurer enters into an agreement with a *medical practitioner for the provision of treatment to persons insured by the insurer, the agreement must not limit the medical practitioner’s professional freedom, within the scope of accepted clinical practice, to identify and provide appropriate treatments.

Practitioner agreements

        (2)    If a hospital or day hospital facility enters into an agreement with a *medical practitioner, under which treatment is provided to persons insured by the insurer, the agreement must not limit the medical practitioner’s professional freedom, within the scope of accepted clinical practice, to identify and provide appropriate treatments”.

Other purchaser-provider agreements

        (3)    If a private health insurer enters into any agreement for the provision of services or goods intended to manage a disease, injury or condition, the agreement must not limit the freedom of medical practitioners and/or other health professionals involved in the provision of the service or good, within the scope of accepted clinical practice, to identify and provide appropriate treatments.

This amendment is to do with doctors’ clinical autonomy. The bill as it stands indicates that there need to be protections for doctors’ clinical autonomy between the private health insurer and the medical profession. Labor are of the view that that does not go far enough and that we also need to protect medical practitioners’ clinical autonomy when agreements are made between the private health insurance sector and hospitals and with other purchasers that may appear. As we know, this legislation encourages innovation and encourages the private health sector to work with the health community broadly to develop packages that hopefully—that is a very strong ‘hopefully’—will deliver better health outcomes for those who are privately insured.

This amendment from the Labor Party simply ensures that doctors’ clinical autonomy will always be paramount in any agreement that is made into the future. It is a sensible amendment that is supported by the medical profession. Doctors’ clinical autonomy is paramount in any relationship between a patient and their doctor. The doctor needs to be making the decision that is best for the patient all the time and to not have to consider the interests of, or advices from, the private health insurance sector. I commend this amendment to the chamber. I think it is quite sensible, and it is certainly supported in the community.

Lyn Allison (Victoria, Australian Democrats) Share this | Link to this | Hansard source

I think this is a very difficult area. I too want to defend the professional freedom of doctors but I also understand that, in order to keep premiums down, private health insurers want to be in a position to be able to negotiate the best price for services. So that is a difficulty. However, having said that, I would not want to see a doctor if I knew that he or she was not able to take action—whatever it is—because some agreement with a private health insurer prevented that. From a consumer’s perspective, I think this is an amendment that should be supported. But the problem with the private health insurance system is that there are effectively very few constraints that can be put on costs. There is always going to be this tension when you have such a system. So I come down on the side of consumers but I also recognise that, if you are a private health insurer, there are reasons why you would want to be able to negotiate away some of those freedoms.

Chris Ellison (WA, Liberal Party, Minister for Human Services) Share this | Link to this | Hansard source

The government’s position is that it supports part of the amendment, if I can put it that way. The opposition amendment is in three parts—the first deals with medical purchaser-provider agreements, the second with hospital purchaser-provider agreements and the third with other purchaser-provider agreements. The government does not agree with the third part of the opposition’s amendment. I therefore ask that the question be put in two parts. The first question should be in relation to subclauses (1) and (2) of the opposition amendment, and the question in relation to subclause (3) should be put separately—that is the one the government has an issue with.

I will outline the reasons for that. Certainly, we believe the wording of subclause (1) can be found in the act already, and it purports to prevent insurers from entering into agreements with hospitals that limit doctors’ clinical freedom. We have no objection to that, though we totally support the proposition that insurers should not restrain the clinical freedom of doctors—and we do not want to support anything that would do that.

Subclause (3) is a little different. We believe subclause (3) is potentially disadvantageous because it could prevent insurers from offering policies that limit the number of dental, physiotherapy or other paraprofessional services to be provided in a year. I think Senator Allison said that, where you have these limitations, it can keep these premiums down—and that is the public policy question we are weighing up in subclause (3). As I say, we are happy to limit insurers from restraining the clinical freedom of doctors, but this is different from limiting their ability to affect such things as ancillaries where part of the policy is that you can get up to six visits a year to a dentist or physiotherapist. We think that, if you open that up so that the insurer cannot limit that, you will see pressure on premiums. Because the risk posed to the insurer would thereby rise, premiums would accordingly rise.

We will be monitoring the situation very closely. The Privacy Health Insurance Administration Council will be doing just that. The Private Health Insurance Ombudsman is another entity that will be monitoring this and the government will be paying close attention to it. On the opposition amendment, we think that the wording in subclause (1) is already in the act but we agree with subclause (2). It prevents insurers from entering agreements with hospitals that limit the clinical freedom of doctors. That is a good principle.

Unfortunately, we do not believe that subclause (3) is in the same vein as the previous two. We would also point out that we have the care plan charter which was raised during the Senate inquiry. That will have principles which will be applied in relation to this. That will be incorporated in the rules. The Senate committee had something to say about that; the government is cognisant of that. I think that in the rules we can govern those areas where there is concern, but to say in subclause (3) that you cannot limit the insurer would really be opening up a huge potential for an increase in premiums. That is why we cannot support subclause (3). The government’s position is that we agree to subclauses (1) and (2), but not to (3). I would be grateful if we could put those questions separately.

Jan McLucas (Queensland, Australian Labor Party, Shadow Minister for Ageing, Disabilities and Carers) Share this | Link to this | Hansard source

I am happy to do that. I thank the government for their support at least of subclause (2). I still think that, with this brave new world of private health that we are entering and the fact that the legislation is designed to innovate, we have to have protections into the future over arrangements that will be made with those other than hospitals. But I do take the minister’s comment about the ability for insurers to limit access to ancillary types of services. I am pleased to hear that the minister will be watching, because there will be change in the way products are developed and we do need to be watching closely as to how that will play out in the future.

The Temporary Chairman:

The question is that subclauses (1) and (2) of the amendment be agreed to.

Question agreed to.

The Temporary Chairman:

The question is that subclause (3) of this amendment be agreed to.

Question negatived.

Lyn Allison (Victoria, Australian Democrats) Share this | Link to this | Hansard source

by leave—I move Democrat amendments (3), (4), (6) and (7) on sheet 5212 together:

(3)   Clause 253-1, page 211 (line 7), at the end of subclause (1), add “and section 253-2”.

(4)    Page 211 (after line 12), after clause 253-1, insert:

253-2  Procedures for merit selection of appointments under this Act

        (1)    The Minister must by writing determine a code of practice for selecting and appointing a person to a position under section 253-1, 267-5 or 273-1 of this Act that sets out general principles on which the selection is to be made, including but not limited to:

             (a)    merit; and

             (b)    independent scrutiny of appointments; and

             (c)    probity; and

             (d)    openness and transparency.

        (2)    After determining a code of practice under subsection (1), the Minister must publish the code in the Gazette.

        (3)    The Minister must review a code of practice determined under subsection (1) not later than every fifth anniversary after the code has been determined.

        (4)    In reviewing a code of practice, the Minister must invite the public to comment on the code.

        (5)    A code of practice determined under subsection (1) is a disallowable instrument for the purposes of the Legislative Instruments Act 2003.

(6)    Clause 267-5, page 224 (line 11), at the end of subclause (1), add “in accordance with a code of practice determined under section 253-2”.

(7)    Clause 273-1, page 231 (line 5), at the end of subclause (1), add “in accordance with a code of practice determined under section 253-2”.

These are our standing clauses on appointment on merit. In this case they relate to the Private Health Insurance Ombudsman, who is currently appointed by the minister. We would like to see that appointment based on merit, so I move these amendments in the hope that one day they will be supported.

Jan McLucas (Queensland, Australian Labor Party, Shadow Minister for Ageing, Disabilities and Carers) Share this | Link to this | Hansard source

The Labor Party will be supporting these amendments. If the person is not appointed on merit, one would wonder on what basis they are being appointed. I would be interested to hear how the minister will respond to what I think are quite benign amendments.

Chris Ellison (WA, Liberal Party, Minister for Human Services) Share this | Link to this | Hansard source

These are standard Democrat amendments. I have come across them before. I appreciate the intent behind them and I am not dismissing them, but I can say quite clearly and strongly to this committee that the government will be making this appointment on merit. We see that the current processes are working. They are appropriate and we do not see a need to change them. Merit will, of course, be the criterion upon which the appointment will be made.

Lyn Allison (Victoria, Australian Democrats) Share this | Link to this | Hansard source

I think that is acceptable. I would like this minister to explain what it is about these amendments which are so objectionable to the government. If the appointment of people such as the Private Health Insurance Ombudsman is conducted on merit, then why not have it in the act? Can the minister indicate what it is that is wrong with appointment being on the basis of principles of merit, independent scrutiny of appointments, probity, openness and transparency? I would have thought that this point in time would be a good one for the minister to support this. This would demonstrate that the government actually was interested in openness, probity, independent scrutiny and so on. Is it the review of the code of practice, is it that it is inviting public comment, or is it the fact that it would be a disallowable instrument? What exactly is it about these amendments, just for my information, which the government does not think it can live with?

Chris Ellison (WA, Liberal Party, Minister for Human Services) Share this | Link to this | Hansard source

The Ombudsman is a cabinet appointment and there are many appointments by governments of different persuasions in Australia that have been made that way and they are subject to public scrutiny. I would put to the committee that merit, probity and openness and transparency of appointment are in the process already. It is something that governments in Australia have been doing for over 100 years through cabinet. You elect a government with ministers and a cabinet to make decisions. The government believes that you do not need a code of practice for everything you do because otherwise you would be more concerned with drafting a code of practice than with the issue at hand, which is to govern, get on with the business of the day, appoint people who can assist you in doing that and carry out good public policy and decisions which will benefit the community.

It is a fundamental difference of the Democrats. They always want a review of a piece of legislation, they always want a code of practice for everything and they always want everything to be written down and regulated. If we did that across the board in Australia, we would be hide-bound with process and nothing would get done. Australia has functioned as one of the world’s best democracies and best governed countries without exception. It has done that on the basis of principles and conventions which have stood the test of time. The appointments process through cabinet is one of those. I can say that all governments, and I am referring to the opposition when it was in government, have done it that way. You did not see the previous government going through codes of practice for appointments. It is rather interesting to see that there is a bit of a change now. I think the overprescriptive nature of the way the Democrats approach these things, although the intentions behind it are very good, is such that if you had a code for everything and if you had a review of everything you would spend your life drafting codes, reviewing everything and getting nowhere. I think this system has worked very well, and we have addressed this issue with previous legislation which has had statutory appointments contained within it. That is the government’s position.

Lyn Allison (Victoria, Australian Democrats) Share this | Link to this | Hansard source

Using that argument, you would get rid of the Senators’ Interests Committee and the obligation on senators to disclose their interest in this place. I think it is an extraordinary claim to make that all appointments are based on merit. I am sure that when you were in opposition, Senator Ellison, you joined with your party in criticising the Labor Party for its jobs for the boys, its appointment of mates. Likewise, we and Labor have criticised you, and I will not name names but this is a common accusation thrown at governments. I would have thought it was in the interests of the Liberal coalition to support this, because then you would have a defence. You would say: ‘No, it’s not just because this person was a great fundraiser for the Liberal Party. He was appointed’—usually it is a he—‘to the Private Health Insurance Ombudsman role because he fulfilled the requirements of the code which we’d established about selection.’

I am suggesting something which would be good not only for the parliament but also for the people of Australia: to know that people appointed to positions of great responsibility on large salaries are there on merit. You can assure us all you like about cabinet, how serious the deliberation was and how all the appointments were merit based, but we are not going to be convinced unless we can see the evidence of that. That is what this particular amendment is about.

It is terrific that Labor are agreeing to having a code for the appointment of senior positions like this. If they do not move the amendment when and if they are in office after the next election, then it will certainly be one of the first that we will put up to make sure that it is in the statutes. You will then be seen as having been left behind, Senator Ellison, because you resisted this. I understand that you even resisted the senators’ interests code, if we can call it that, whereby senators disclose pecuniary interests, so I think you are being left behind again. This is your chance to gazump the Labor Party; you could even claim that this was your initiative. This is a really good opportunity to demonstrate to the Australian people that you are serious about accountability, because, frankly, the record of the last few weeks has suggested otherwise.

Chris Ellison (WA, Liberal Party, Minister for Human Services) Share this | Link to this | Hansard source

I place on record that the government supports the declaration of senators’ interests—I want to make that absolutely clear—that we participate in the committee and that the Prime Minister has a demand that ministers report to him personally in relation to that. We have just seen how that works, and it has worked effectively. So to say that the government does not support it is quite wrong. It is a question of whether you want to codify something or rely on practice which has been established over a period of time. The government’s view is that practice and precedent have been established, and I will not go over the ground that I have previously outlined, while the Democrats say that you should codify it. We do not agree.

Lyn Allison (Victoria, Australian Democrats) Share this | Link to this | Hansard source

I cannot let that first comment pass. I do not think you can say at all that the system worked effectively. In fact, it is my understanding that it was a fellow Liberal colleague who ratted on a certain senator and brought this to the attention of the media and therefore the Prime Minister had to act, so to say that the senator was answerable to the Prime Minister is a nonsense. The Prime Minister, as he has said, cannot possibly monitor, remind, cajole and chastise senators who pay absolutely no regard to what is a really crucial aspect of what we do. As he cannot do it, I think it is up to the parliament to set up codes of practice for both ministers and senators in this place. The senators’ interests system goes some way towards doing that. I think it could be tightened and strengthened. It is a mechanism which works, but, while you may defend it now, there was a time, I understand, when you did not. I think appointment on merit is in the same category: you will be seen to be just behind the eight ball. It would have been a good chance for you to have won some brownie points with people who are deeply worried about the level of accountability in this place, but again you have chosen not to go down that path.

Question negatived.

Jan McLucas (Queensland, Australian Labor Party, Shadow Minister for Ageing, Disabilities and Carers) Share this | Link to this | Hansard source

I move opposition amendment (2) on sheet 5219:

(2)    Clause 264-5, page 220 (line 3), after paragraph (b), insert:

           (ba)    minimising the level of health insurance premiums;

This amendment goes to one of the principles that the Private Health Insurance Administration Council operates under. During my speech in the second reading debate I raised the issue of premium levels and what Broader Health Cover might in fact do to premium levels in both the short and the long term. You cannot answer that question—we actually do not know—but it seems logical that, at least in the short term, with an increase in the range of services that private health insurance providers will deliver, there could be an increase in premiums. The sector is keen and is of the view that, with some of the proposals contained in Broader Health Cover, there might be a reduction in the long term. How we measure that is a bit beyond me, but that is the discussion about premium levels.

However, in the current National Health Act, section 82BA(2)(c) sets out the objectives of PHIAC. One of those objectives as the act currently stands is to minimise the level of health insurance premiums. Unfortunately, this provision has not been included in the Private Health Insurance Bill 2007, which reduces the number of PHIAC’s objectives from four to three. Some of the media reportage of this issue is that the specific clause about minimising private health insurance premiums has been replaced by a more general clause about protecting the interests of consumers. In fact, this is not true. The general clause about protecting the interests of consumers is in the National Health Act in addition to the specific clause about minimising premiums.

Labor’s amendment would reinsert that specific clause into the relevant section of the act so that PHIAC would have the objective of keeping downward pressure on premiums. The government has said that it is not appropriate because PHIAC does not set premiums and therefore should not be required to minimise them. If this is the case and the government does not have a problem with the substance of the amendment, we again challenge the government to include a clause about the ministerial responsibility for minimising premiums elsewhere in the bill. If the government will not follow that path and will not support our amendment, the Australian public is entitled to conclude that the government is not serious about keeping private health premiums down. Further, we argue that PHIAC does have a role to play in keeping premiums down by virtue of its role in regulating the private health insurance sector. All our amendment does is reflect this role in the legislation.

Lyn Allison (Victoria, Australian Democrats) Share this | Link to this | Hansard source

This amendment is identical to the Democrat amendment except that our amendment places the clause a line further down, so we certainly support this and cannot see any reason why the provision should have been removed from the objectives by this bill. Again, I speak from the perspective of consumers on this issue. I am surprised the government would not want to also emphasise the importance of keeping premiums down. The affordability of premiums is what keeps people in private health insurance, as the government well knows—that is why it provides the rebate. It is a small matter, but I would have thought it was an important one. The government should support it.

Chris Ellison (WA, Liberal Party, Minister for Human Services) Share this | Link to this | Hansard source

By way of history, the object in the act that has been referred to was, I think, inserted in 1989 and related to premiums. I would put it to the committee that the Private Health Insurance Administration Council is a body which is a prudential regulator, not a price control agency. What the Labor amendment is purporting to do by inserting the words ‘minimising the level of health insurance premiums’ is control pricing. It is not the job of the Private Health Insurance Administration Council to control premiums. It has never had any control over premiums; that has been the responsibility of the minister.

The current position is that health funds have to apply directly to the minister to increase their premiums and the minister makes the decision. That is not PHIAC’s role, nor has it been in the past. So we believe this amendment proposes something which is beyond the role of PHIAC. The clause really is an anachronism, if you like, that was inserted in 1989. It has been in the objects and PHIAC has not had any power to deal with premiums. That has not been its role; it is a prudential regulator. For that reason the government opposes the amendment put by the opposition and the similar amendment moved by the Democrats.

Lyn Allison (Victoria, Australian Democrats) Share this | Link to this | Hansard source

On the government’s argument you would also remove the clause that gives PHIAC responsibility for ‘protecting the interests of consumers’. We are not talking here about giving control to the council to set premiums. That is not what this amendment is about at all. If the minister reads the bill, he will see we are talking here about the objectives of the council, not controls or powers, so you would think that everything the council does ought to be considered in the light of the question of minimising premiums. This amendment seems to accord with the government’s approach to private health insurance across the board. It is quite consistent with what is being put forward and does not indicate in any way that the council has control of premiums.

Jan McLucas (Queensland, Australian Labor Party, Shadow Minister for Ageing, Disabilities and Carers) Share this | Link to this | Hansard source

I concur with Senator Allison. We are not suggesting that PHIAC should have the ability to set premiums. It does not have that role at all; it is the regulator. But, if one of PHIAC’s objectives is to minimise premiums, then decisions that it makes as a regulator will have to be made within that prism. We are mindful of the fact that one of its objectives is to keep the level of premiums down. By removing that objective, the regulator can make decisions without being mindful of keeping premiums down. It is an appropriate objective for a regulator to have. Yes, it has been in the act since 1989, which would indicate that the Labor Party was interested in keeping premiums down. I think the message to the community, if the government does not support this amendment, is that the government is big on rhetoric and small on effort to keep premiums at a minimum. It is disappointing that the government is not, from what I have heard, going to accept this fairly straightforward amendment.

Question negatived.

Claire Moore (Queensland, Australian Labor Party) Share this | Link to this | Hansard source

Senator Allison, are you proceeding with your amendment?

Lyn Allison (Victoria, Australian Democrats) Share this | Link to this | Hansard source

No. I withdraw amendment (5) on sheet 5212.

Bill, as amended, agreed to.

PRIVATE HEALTH INSURANCE (TRANSITIONAL PROVISIONS AND CONSEQUENTIAL AMENDMENTS) BILL 2006

Bill—by leave—taken as a whole.

Chris Ellison (WA, Liberal Party, Minister for Human Services) Share this | Link to this | Hansard source

by leave—I move government amendments (1) to (51) on sheet RC310 together:

(1)    Clause 2, page 2 (table item 8), omit “and 2”, substitute “to 9E”.

(2)    Clause 2, page 2 (table items 9, 10 and 11), omit the table items.

(3)    Clause 2, page 2 (at the end of the table), add:

(4)    Clause 10, page 9 (line 5), after “If,”, insert “more than 15 days”.

(5)    Clause 27, page 22 (after line 15), after the definition of old Ombudsman, insert:

Ombudsman conversion time means 1 July 2007 or, if a later day is specified in Private Health Insurance (Transitional) Rules for the purposes of this definition, that later day.

(6)    Page 22 (after line 20), after Subdivision A, insert:

Subdivision AA—Conversion of Ombudsman from CAC to FMA body

27A  Conversion of Ombudsman from CAC to FMA body

        (1)    Section 238-1 and Division 253 of the new Act do not apply until the Ombudsman conversion time.

        (2)    Despite item 53 of Schedule 1 to this Act, during the period starting at the commencement time and ending immediately before the Ombudsman conversion time:

             (a)    the Private Health Insurance Ombudsman established by section 82ZR of the National Health Act 1953 is continued in existence; and

             (b)    staff employed or made available under section 82ZUG of the National Health Act 1953 immediately before the commencement time continue to be employed or made available under that section on the same terms as had effect immediately before the commencement time; and

             (c)    the following provisions of the National Health Act 1953 continue to apply in relation to that Ombudsman and those staff:

                   (i)    section 82ZR;

                  (ii)    section 82ZRAA;

                 (iii)    section 82ZRA;

                 (iv)    section 82ZRB;

                  (v)    Division 5 of Part VIC;

                 (vi)    section 82ZVD;

                (vii)    section 82ZVE (with the reference to section 135A being taken to be a reference to Division 323 of the new Act).

        (3)    During the period starting at the commencement time and ending immediately before the Ombudsman conversion time:

             (a)    a reference in the new Act to the Private Health Insurance Ombudsman (other than a reference in a provision mentioned in subsection (1)) is taken to be a reference to the Private Health Insurance Ombudsman established by section 82ZR of the National Health Act 1953; and

             (b)    a reference in the new Act to an APS employee in, or a person holding or performing the duties of an office in, the Statutory Agency of the Private Health Insurance Ombudsman is taken to be a reference to a member of the staff employed or made available under section 82ZUG of the National Health Act 1953 as continued in force by paragraph (2)(c).

(7)    Clause 28, page 22 (line 24), omit “commencement time”, substitute “Ombudsman conversion time”.

(8)    Clause 28, page 22 (line 25), omit “commencement time”, substitute “Ombudsman conversion time”.

(9)    Clause 29, page 23 (line 3), omit “commencement time”, substitute “Ombudsman conversion time”.

(10)  Clause 29, page 23 (line 4), omit “commencement time”, substitute “Ombudsman conversion time”.

(11)  Clause 32, page 24 (line 14), omit “commencement time”, substitute “Ombudsman conversion time”.

(12)  Clause 32, page 24 (line 15), omit “commencement time”, substitute “Ombudsman conversion time”.

(13)  Clause 33, page 24 (line 19), omit “commencement time”, substitute “Ombudsman conversion time”.

(14)  Clause 33, page 24 (line 23), omit “commencement time”, substitute “Ombudsman conversion time”.

(15)  Clause 33, page 24 (line 24), omit “commencement time”, substitute “Ombudsman conversion time”.

(16)  Clause 34, page 25 (line 8), omit “commencement time”, substitute “Ombudsman conversion time”.

(17)  Clause 34, page 25 (line 10), omit “commencement time”, substitute “Ombudsman conversion time”.

(18)  Clause 34, page 25 (line 15), omit “commencement time”, substitute “Ombudsman conversion time”.

(19)  Clause 34, page 25 (line 25), omit “commencement time”, substitute “Ombudsman conversion time”.

(20)  Clause 34, page 25 (line 28), omit “commencement time”, substitute “Ombudsman conversion time”.

(21)  Clause 34, page 26 (line 21), omit “commencement time”, substitute “Ombudsman conversion time”.

(22)  Clause 35, page 27 (line 4), omit “commencement time”, substitute “Ombudsman conversion time”.

(23)  Clause 35, page 27 (lines 9 to 18), omit subclauses (2) and (3), substitute:

        (2)    A thing done before the commencement time under a provision of Part VIC of the National Health Act 1953 has effect from the commencement time as if it had been done under the corresponding provision of the new Act:

             (a)    during the period starting at the commencement time and ending immediately before the Ombudsman conversion time—by the old Ombudsman; and

             (b)    at or after the Ombudsman conversion time—by the Private Health Insurance Ombudsman.

However, this is not taken to change the time at which the thing was actually done.

        (3)    A complaint that the old Ombudsman had begun to handle before the commencement time may be handled:

             (a)    during the period starting at the commencement time and ending immediately before the Ombudsman conversion time—by the old Ombudsman; and

             (b)    at or after the Ombudsman conversion time—by the Private Health Insurance Ombudsman;

under the new Act as if the complaint had been made under the new Act, even if the ground for making the complaint does not exist under the new Act.

(24)  Clause 36, page 28 (line 12), omit “commencement time”, substitute “Ombudsman conversion time”.

(25)  Clause 36, page 28 (line 15), omit “commencement time”, substitute “Ombudsman conversion time”.

(26)  Clause 36, page 28 (line 18), omit “commencement time”, substitute “Ombudsman conversion time”.

(27)  Clause 36, page 28 (lines 30 and 31), omit “commencement time”, substitute “Ombudsman conversion time”.

(28)  Clause 36, page 29 (line 5), omit “commencement time”, substitute “Ombudsman conversion time”.

(29)  Clause 36, page 29 (line 6), omit “commencement time”, substitute “Ombudsman conversion time”.

(30)  Clause 37, page 29 (line 12), before “The person”, insert “(1)”.

(31)  Clause 37, page 29 (line 14), omit “commencement time”, substitute “Ombudsman conversion time”.

(32)  Clause 37, page 29 (line 18), omit “commencement time”, substitute “Ombudsman conversion time”.

(33)  Clause 37, page 29 (line 20), omit “commencement time”, substitute “Ombudsman conversion time”.

(34)  Clause 37, page 29 (after line 20), at the end of the clause, add:

        (2)    If there is no person holding office as the Private Health Insurance Ombudsman under section 82ZR of the National Health Act 1953 immediately before the Ombudsman conversion time, then the person who is, immediately before that time, acting as the Private Health Insurance Ombudsman under section 82ZUA of the National Health Act 1953 is taken, from the Ombudsman conversion time, to have been appointed to act as the Private Health Insurance Ombudsman under section 253-10 of the new Act:

             (a)    during the vacancy or during the period or periods for which the person was appointed to act under the National Health Act 1953; and

             (b)    on the same terms and conditions as applied to the person immediately before the Ombudsman conversion time.

(35)  Clause 38, page 30 (line 14), omit “commencement time”, substitute “Ombudsman conversion time”.

(36)  Clause 38, page 30 (line 17), omit “commencement time”, substitute “Ombudsman conversion time”.

(37)  Clause 38, page 30 (line 21), omit “commencement time”, substitute “Ombudsman conversion time”.

(38)  Clause 38, page 30 (line 24), omit “commencement time”, substitute “Ombudsman conversion time”.

(39)  Clause 39, page 31 (line 4), omit “commencement time”, substitute “Ombudsman conversion time”.

(40)  Clause 39, page 31 (lines 8 and 9), omit “may be paid out of the Consolidated Revenue Fund, which is appropriated accordingly, for the purposes of the”, substitute “is appropriated out of the Consolidated Revenue Fund for the purpose of the performance of the functions of the”.

(41)  Schedule 1, page 43 (after line 17), after item 52, insert:

52A  Section 7

Repeal the section.

(42)  Schedule 2, page 46 (after line 9), before item 3, insert:

2A  Section 195-1 (at the end of the definition of hospital treatment)

Add “(as in force immediately before the commencement of the Private Health Insurance Act 2007)”.

(43)  Schedule 2, item 4, page 47 (line 7), omit “2004”, substitute “2000”.

(44)  Schedule 2, page 47 (after line 30), after item 8, insert:

Australian Securities and Investments Commission Act 2001

8A  Paragraphs 12BAA(7)(d) and (8)(b)

Omit “subsection 67(4) of the National Health Act 1953”, substitute “Division 121 of the Private Health Insurance Act 2007”.

Corporations Act 2001

8B  Paragraph 765A(1)(c)

Omit “subsection 67(4) of the National Health Act 1953”, substitute “Division 121 of the Private Health Insurance Act 2007”.

(45)  Schedule 2, item 75, page 58 (line 15), omit “2004”, substitute “2000”.

(46)  Schedule 3, item 2, page 63 (lines 13 to 16), omit the item, substitute:

2  Subsection 159J(6) (paragraph (aac) of the definition of separate net income)

Omit “Private Health Insurance Incentives Act 1998”, substitute “Division 26 of the Private Health Insurance Act 2007”.

(47)  Schedule 3, item 3, page 63 (lines 17 to 19), omit the item, substitute:

3  Subsection 170(10AA) (table item 25)

Repeal the table item, substitute:

(48)  Schedule 3, page 64 (after line 25), before item 8, insert:

7A  Section 13-1 (table item headed “private health insurance”)

Omit “61-H”, substitute “61-G”.

(49)  Schedule 3, item 8, page 64 (lines 26 to 28), omit the item, substitute:

8  Section 52-125

Omit “Chapter 2 of the Private Health Insurance Incentives Act 1998”, substitute “Division 26 of the Private Health Insurance Act 2007”.

(50)  Schedule 3, item 9, page 64 (lines 29 to 31), omit the item, substitute:

9  Subdivision 61-H of Division 61

Repeal the Subdivision, substitute:

Subdivision 61-GPrivate health insurance offset complementary to Part 2-2 of the Private Health Insurance Act 2007

Guide to Subdivision 61-G

61-200  What this Subdivision is about

You can choose to claim a tax offset for a premium, or an amount in respect of a premium, paid under a private health insurance policy instead of having the premium reduced under Division 23 of the Private Health Insurance Act 2007 or receiving a payment under Division 26 of that Act.

Table of sections

Operative provisions

61-205   Entitlement to the private health insurance tax offset

61-210   Amount of the private health insurance tax offset

61-215   Tax offset after a person 65 years or over ceases to be covered by policy

61-220   How to work out the incentive amount

Operative provisions

61-205  Entitlement to the private health insurance tax offset

        (1)    If you are an individual (other than an individual in the capacity of an employer), you are entitled to a ^*tax offset for the 2007-08 income year or a later income year if:

             (a)    a premium, or an amount in respect of a premium, was paid by you, or by your employer as a ^*fringe benefit for you, under a complying private health insurance policy (within the meaning of the Private Health Insurance Act 2007), on or after 1 July 2007; and

             (b)    the premium, or amount in respect of a premium, was paid during the income year; and

             (c)    each person insured under the complying health insurance policy during the period covered by the premium or amount is, for the whole of the time that he or she is insured under the policy during that period, an eligible person within the meaning of section 3 of the Health Insurance Act 1973, or treated as such because of section 6, 6A or 7 of that Act.

        (2)    You are also entitled to the ^*tax offset if:

             (a)    you are a trustee who is liable to be assessed under section 98 of the Income Tax Assessment Act 1936 in respect of a share of the net income of a trust estate; and

             (b)    the beneficiary who is presently entitled to the share of the income of the trust estate would be entitled to the tax offset because of subsection (1).

        (3)    However, you are not entitled to the ^*tax offset in respect of the payment of any premium, or any amount in respect of a premium, if:

             (a)    you have received an amount under Division 26 of the Private Health Insurance Act 2007 in relation to the payment; or

             (b)    the premium, or the amount in respect of a premium, was less than it would otherwise have been because of the operation of Division 23 of that Act.

Note:   In certain circumstances you can get a refund of the tax offset under Division 67.

61-210  Amount of the private health insurance tax offset

        (1)    The amount of the ^*tax offset for an income year is the sum of:

             (a)    30% of the amount of the premium, or of the amount in respect of a premium, paid by you, or by your employer as a ^*fringe benefit for you, under the policy in respect of days in the income year on which no person covered by the policy was aged 65 years or over; and

             (b)    35% of the amount of the premium, or of the amount in respect of a premium, paid by you, or by your employer as a fringe benefit for you, under the policy in respect of days in the income year on which:

                   (i)    at least one person covered by the policy was aged 65 years or over; and

                  (ii)    no person covered by the policy was aged 70 years or over; and

             (c)    40% of the amount of the premium, or of the amount in respect of a premium, paid by you, or by your employer as a fringe benefit for you, under the policy in respect of days in the income year on which at least one person covered by the policy was aged 70 years or over.

        (2)    However, if, before 1 January 1999, a person was registered, or eligible to be registered, under the Private Health Insurance Incentives Act 1997 in respect of the policy for the income year, the amount of the ^*tax offset for the income year is the greater of:

             (a)    the amount worked out under subsection (1); and

             (b)    the ^*incentive amount for the policy for the income year.

        (3)    If, because of the operation of Division 23 of the Private Health Insurance Act 2007, an amount paid by you, or by your employer as a ^*fringe benefit for you, under a policy was less than the amount that would otherwise have been payable, the ^*tax offset in respect of the amount paid is reduced by the amount of the difference.

61-215  Tax offset after a person 65 years or over ceases to be covered by policy

        (1)    If:

             (a)    at any time, the amount of a ^*tax offset in respect of premiums payable under an insurance policy (the original policy) was 35% or 40% of the premiums payable under the policy because a person aged 65 years or over (the entitling person) was insured under the original policy; and

             (b)    at that time, another person (other than a dependent child) was insured under the original policy; and

             (c)    the entitling person subsequently ceases to be insured under the policy;

subsections 61-210(1) and (2) apply in relation to a complying health insurance policy (whether or not the original policy) under which the other person is insured (other than for the purposes of working out the ^*incentive amount) as if:

             (d)    the entitling person were also insured under that policy; and

             (e)    the entitling person were the same age as the age at which he or she ceased to be insured under the original policy.

        (2)    Subsection (1) ceases to apply if a person (other than a dependent child) who was not insured under the original policy at the time the entitling person ceased to be insured under it becomes insured under the complying health insurance policy.

        (3)    Subsection (1) does not apply if its application would result in the amount of the ^*tax offset under subsection 61-210(1) or (2) being less than it would otherwise have been.

        (4)    Paragraph (1)(a) applies in relation to an amount of a ^*tax offset that is 35% or 40% of the premiums payable under an insurance policy whether the tax offset was available under this Subdivision or Subdivision 61-H as in force before 1 July 2007.

        (5)    In this section:

complying health insurance policy has the same meaning as in the Private Health Insurance Act 2007.

dependent child:

             (a)    has the meaning given in the Private Health Insurance Act 2007; and

             (b)    in paragraph (1)(b), in relation to a time before 1 July 2007, includes a dependent child within the meaning of the Private Health Insurance Incentives Act 1998.

61-220  How to work out the incentive amount

• (1)The incentive amount for a complying private health insurance policy (within the meaning of the Private Health Insurance Act 2007) for an income year is the amount worked out under this table:

• (2)If the amount of the premium, or the amount in respect of a premium, paid by you, or by your employer as a *fringe benefit for you, under the policy is for part only of the income year, the incentive amount is worked out using this formula:

9A  Application of item 9

The repeal of Subdivision 61-H of the Income Tax Assessment Act 1997 and the substitution of Subdivision 61-G by this Schedule apply in relation to the 2007-2008 income year and later income years.

9B  Subsection 67-25(2)

Repeal the subsection (including the note), substitute:

Private health insurance

        (2)    Private health insurance tax offsets under Subdivision 61-G, except those arising under subsection 61-205(2), are subject to the refundable tax offset rules.

Note:   Subsection 61-205(2) deals with tax offsets for trustees who are assessed and liable to pay tax under section 98 of the Income Tax Assessment Act 1936.

9C  Subsection 995-1(1) (definition of incentive amount)

Omit “section 61-345”, substitute “section 61-220”.

Private Health Insurance Act 2007

9D  Section 20-1 (note)

Omit “Subdivision 61-H”, substitute “Subdivision 61-G”.

9E  Subsection 26-1(4)

Omit “Subdivision 61-H”, substitute “Subdivision 61-G”.

(51)  Schedule 3, page 66 (after line 8), at the end of the Schedule, add:

Taxation Administration Act 1953

17  Section 45-340 of Schedule 1 (method statement, step 1, paragraph (a))

Omit “Subdivision 61-H”, substitute “Subdivision 61-G”.

18  Section 45-375 of Schedule 1 (method statement, step 1, paragraph (a))

Omit “Subdivision 61-H”, substitute “Subdivision 61-G”.

These government amendments are moved on the same basis that we moved the amendments to the last bill. Government amendments (1) to (3) deal with the commencement of the bill. The amendments change commencement provisions consequential on other amendments. Government amendment (4) deals with the transition of existing health insurance arrangements. The bill as introduced provided that products were taken to comply with the new act until 1 July 2008 unless the benefits or premiums changed in the interim. As most products will have a premium increase in the weeks following 1 April, the provision would have required all products to be fully compliant within several weeks of the act coming into force. This amendment provides that products only have to be compliant with the new act if they have a premium change after 15 April 2007.

Government amendments (5) to (39) deal with the postponement of the conversion of the ombudsman from a CAC to an FMA body. These amendments allow the office of the Private Health Insurance Ombudsman to change from a CAC Act body to an FMA Act body from 1 July this year rather than 1 April. The office is facing a large workload in establishing the new website to allow consumers to compare products, as well as converting to FMA status. The impact on the office has been exacerbated by the unfortunate death of the ombudsman following a brief illness earlier this year. For those reasons, the government is seeking these amendments.

Amendment (41) repeals section 7 of the National Health Act following the inc

Jan McLucas (Queensland, Australian Labor Party, Shadow Minister for Ageing, Disabilities and Carers) Share this | Link to this | Hansard source

There are 51 government amendments to this bill and there were 104 to the previous bill. They are of a technical nature, but the opportunity to confirm that they are agreed to more broadly is limited when you have only a couple of days to deal with them. However, our analysis is that they should be supported. Some of the amendments correct errors and some are consequential on changes to the substantive legislation. I indicate that Labor will support them.

Question agreed to.

I move opposition amendment (1) on sheet 5218:

(1)    Clause 14, page 10 (lines 23 to 25), omit the clause, substitute:

14 Quality assurance requirements

                 The quality assurance requirements in Division 81 of the new Act commence on 1 April 2007 and apply to any insurance policy already in existence.

This amendment goes to the issue of the quality assurance that new products will require. The bill recognises that there will be, over time, the development of new products that will require a quality assurance regime. Unfortunately, the government has not recognised that we do require quality assurance systems to protect consumers in effect from the day of operation. The Labor Party amendment requires that quality assurance requirements in division 81 of the act commence on 1 April 2007. People will say, ‘Goodness, that’s only a couple of weeks away.’ My answer to that is that the government should have thought of that before we embarked down this road. Consumer protection and quality assurance should be fundamental to our health system.

We know, and the government have known, that we have to have a quality assurance system in place. However, they are comfortable it would seem, to trundle along, roll out new products, allow new treatment systems to develop and have a quality assurance system on 1 July 2008. That is not consumer protection in our view and that is why we are moving this amendment, which would require quality assurance systems to be in place on 1 April 2007. If the government has a view that that date needs to be put out for, say, a month then I would be interested in hearing it and we would be happy to accommodate that sort of amendment. But to exist in an environment for over 12 months without a quality assurance system is not reasonable.

The Senate committee recommended that to demonstrate a commitment to quality improvement and to guarantee patient safety, existing quality assurance, professional standards and accreditation regimes should continue to apply to broader health cover services until alternative accreditation or equivalent arrangements have been put in place under this legislation. I think the government can read that as code for the committee expressing their concern about what seems to be an extraordinary oversight in the development of this legislation. As I said, we would be happy to accommodate perhaps a slightly later start-up time for a quality assurance regime, but leaving it until 1 July 2008 simply indicates that the government did not think this one through before developing this package of legislation.

Lyn Allison (Victoria, Australian Democrats) Share this | Link to this | Hansard source

I indicate that the Democrats will support this amendment.

Chris Ellison (WA, Liberal Party, Minister for Human Services) Share this | Link to this | Hansard source

We know that the issue was discussed at length by the Senate committee, which recommended existing accreditation arrangements continue until 1 July 2008. The government will be including such a provision in its rules. But to require that all services be accredited or even certified as the first step in an accreditation process by 1 April or 1 July this year would reduce the availability of services and, we believe, potentially lead to a massive logjam at the doors of accreditation agencies.

The government announced on 26 April last year that it would be requiring all insurer services to be accredited by 1 July 2008. We made that announcement last year. The government set this date having regard to the capacity of accreditation agencies and the need for services to organise themselves to apply for and secure accreditation. It is unreasonable to shorten the time frame by 15 months at this late stage in the process. We believe that calls for accreditation from 1 April or 1 July this year imply that patients will be put at risk if this does not happen. We do not accept that. We say that such an argument is incorrect and misleading. There has never been a requirement for insurer services to be accredited in the past and the government is unaware of particular problems arising from the absence of such a requirement.

The government believes, however, that it is important that all health services should be seen to be of a high standard judged against objective criteria, and is acting to ensure that this happens in a measured and considered way. This is a transitional arrangement. We do not think that there will be any harm caused by that July 2008 date. It is something that we have announced and stood by, and we think that if you truncate that you could have a logjam at the doors of accreditation agencies and, in fact, a loss of service to the consumer. That is the government’s reasoning in relation to this. We believe that it is appropriate to have that July 2008 date for those reasons.

Question negatived.

Bill, as amended, agreed to.

PRIVATE HEALTH INSURANCE (PROSTHESES APPLICATION AND LISTING FEES) BILL 2006

PRIVATE HEALTH INSURANCE (COLLAPSED ORGANIZATION LEVY) AMENDMENT BILL 2006

PRIVATE HEALTH INSURANCE COMPLAINTS LEVY AMENDMENT BILL 2006

PRIVATE HEALTH INSURANCE (COUNCIL ADMINISTRATION LEVY) AMENDMENT BILL 2006

PRIVATE HEALTH INSURANCE (REINSURANCE TRUST FUND LEVY) AMENDMENT BILL 2006

Bills—by leave—taken together and as a whole.

by leave—In respect of the Private Health Insurance (Reinsurance Trust Fund Levy) Amendment Bill 2006, I move:

That the House of Representatives be requested to make the following amendments:

(1)    Schedule 1, item 17, page 5 (table item 1), omit “by the Council by legislative instrument”, substitute “in writing by the Council”.

(2)    Schedule 1, item 17, page 5 (table item 2), omit “by the Minister by legislative instrument”, substitute “in writing by the Minister”.

(3)    Schedule 1, page 5 (after line 26), after item 18, insert:

18A At the end of section 7

Add:

(4)     An instrument made under paragraph (a) of item 1 or 2 of the table in subsection (1) is not a legislative instrument.

Statement pursuant to the order of the Senate of 26 June 2000

Amendment (1) and (2)

The effect of these amendments is that a rate of levy that is set using a subordinate instrument will be set by an administrative instrument rather than a legislative instrument. The amendments are covered by section 53 because they amend the Private Health Insurance (Reinsurance Trust Fund Levy) Amendment Bill 2006. The Bill was treated as a proposed law imposing taxation, on the basis that it repeals and substitutes the imposition provision of the principal Act, the Private Health Insurance (Reinsurance Trust Fund Levy) Act 2003.

Consequential amendments

Amendment (3) is consequential on the amendments mentioned above.

Statement by the Clerk of the Senate pursuant to the order of the Senate of 26 June 2000

Amendments (1), (2) and (3)

As this is a bill imposing taxation within the meaning of section 53 of the Constitution, any Senate amendment to the bill must be moved as a request. This is in accordance with the precedents of the Senate.

These three requests remove the requirement for determinations of the rate of risk equalisation levy to be set by legislative instruments and simply require the rates to be determined in writing. This is because the rules made under section 318, clause 30 of the new act, will set out the method of working out the levy. Setting the rate of the levy is thus an administrative decision to give effect to an outcome worked out under the rules and should not be subject to disallowance.

Question agreed to.

Private Health Insurance (Prostheses Application and Listing Fees) Bill 2006, Private Health Insurance (Collapsed Organization Levy) Amendment Bill 2006, Private Health Insurance Complaints Levy Amendment Bill 2006 and Private Health Insurance (Council Administration Levy) Amendment Bill 2006 agreed to and Private Health Insurance (Reinsurance Trust Fund Levy) Amendment Bill 2006 agreed to, subject to requests.

Private Health Insurance Bill 2006 and Private Health Insurance (Transitional Provisions and Consequential Amendments) Bill 2006 reported with amendments; Private Health Insurance (Prostheses Application and Listing Fees) Bill 2006, Private Health Insurance (Collapsed Organization Levy) Amendment Bill 2006, Private Health Insurance Complaints Levy Amendment Bill 2006 and Private Health Insurance (Council Administration Levy) Amendment Bill 2006 reported without amendments or requests; Private Health Insurance (Reinsurance Trust Fund Levy) Amendment Bill 2006 reported with requests; report adopted.