Richard Colbeck (Tasmania, Liberal Party, Shadow Parliamentary Secretary for Health) Share this | Link to this | Hansard source

I move:

That the Senate take note of the answers given by the Minister for Human Services (Senator Ludwig) to questions without notice asked today.

Today we have seen what I think could only be described as a reversion to the past by Labor where the decisions that they have been making with respect to health are more about ideology than they are about addressing the real health issues that we have here in this country. They are nothing to do with good policy. In fact, if they had been to do with good policy Labor would have actually used some of the processes that they have put in place to actually implement and study good policy. As Senator Ludwig said, the government has set up the National Health and Hospitals Reform Commission, which at this point in time has only had the opportunity to make one interim statement, just one communique. The major report in respect of state and Commonwealth health funding will be in November this year, with a full report in July next year.

What we are seeing now are decisions that will have a significant impact on the delivery of health services in this country being made completely outside that context, with no consultation with industry and no consultation with its own health and hospitals reform commission. You can only wonder whether this particular body is being relegated by this government to being just another voice, as we have seen so many times before.

With respect to consultation with industry, Dr Michael Armitage has said that the Prime Minister used ‘weasel words’ before the election to give the health insurance industry the clear impression that the surcharge would not be changed. The AMA President, Dr Capolingua, has said that this decision by the government will tell Australians that they should drop their health insurance or not take out policies in the first place.

In the late nineties we saw a significant fall in the number of Australians who had private health insurance and at that point in time we were legitimately concerned about the issues that surrounded that, the sustainability of the health system. There was universal concern, so the then government brought in first the 30 per cent rebate and then lifetime cover. That increased the rate of private health insurance from where it was, at close to 30 per cent, to 44 to 45 per cent—a significant change—and it has remained there ever since. It made a real difference.

This tells younger people that they no longer need to stay within the private health system and it potentially provides the scope for a collapse of the system. What we risk with this decision is a return to the downward spiral that we saw in private health insurance during the 1990s, when Labor were, again, part of the decision-making process and had this philosophical opposition to providing private health insurance. The industry itself projects that 400,000 policies will drop out of the system.

We know that families are under stress. We have seen that all around the country. I have spent the last few weeks on the Senate Select Committee on Housing Affordability in Australia. We know that families are under stress and we know that they are looking for ways to support their budgets, but this is not a way to do that because it is going to have detrimental effects at the end of the road. Also, as I have said before, it is not in concert with the overall health strategy that the government has put in place. Why would you be making these decisions completely outside the Health and Hospitals Reform Commission, when its task is to address the overall delivery of health services across the country? It is just ludicrous. The government has even put back its state and Commonwealth healthcare agreements for the funding of hospitals because it wants to wait to get a report from the Health and Hospitals Reform Commission. That is a sensible decision and it is a decision that the opposition supports. Yet here we have two ad hoc decisions that have been made, supposedly in the interests of health policy, that are completely remote from the process.

The government committed to ending the blame game and has put in place a process to deal with it. Yet what it has done is completely ignore that process. It would be legitimate to expect that, having put that process in place, the government would actually go through the process and take note of its work. We note that the government today refused to say that there was any modelling in respect of either of the two decisions it has made— (Time expired)

Anne McEwen (SA, Australian Labor Party) Share this | Link to this | Hansard source

It is a great privilege to be able to participate in this debate on the day that the Rudd Labor government and Treasurer Wayne Swan will deliver the first budget of the Rudd government. It is a budget that will go a long way to address the reckless spending of the former government, reckless spending that has meant that working Australians and their families are in a situation where they are facing interest rate rises—12 interest rate rises in a row—and an inflation rate of 4.2 per cent, and where the cost of living is outpacing their wage increases. Every senator in this place, I am sure, would have heard from their constituents about how difficult it is, if you are on an average wage, to make ends meet. We are looking forward to the budget tonight. For once, after more than a decade of the now opposition being in government, working Australian families will have a budget that addresses their issues.

It was very interesting to hear today the opposition finally taking some interest in healthcare issues. Of course, healthcare issues are always of interest on budget day. The neglect of health care by the opposition when they were in government has meant that the Rudd government now has an opportunity to deal with healthcare issues. The increase in the income levels for the Medicare surcharge will be a very welcome initiative for working Australian families. As we have heard, from 1 July 2008 the thresholds for the Medicare levy surcharge will increase from $50,000 to $100,000 per annum income for singles and from $100,000 to $150,000 for families.

During question time I heard government senators ask opposition senators many times which one of them was going to stand up and say that somebody who earns $51,000 is a high-income earner. Of course they are not. People on those sorts of incomes are desperate for some kind of income relief, particularly when they are attempting to pay interest rate rises. A constituent who is a single-income earner and is about to come off a three-year fixed term interest rate on her mortgage said to me just yesterday that she expects that the increase for her will be in the order of $100 to $150 a week because of the interest rate rises that have occurred in that period. She is desperate as to how she is going to find that money. I can tell you that working Australians like that woman, my constituent, will welcome this initiative to ensure they have more money in their pockets.

The Rudd government have already made numerous commitments to improving the healthcare situations of Australians. The former government failed to address GP shortages and struck more than $1 billion from the hospital system, so the Rudd government are coming from a long way back to try and address those situations, but address them we will. We have already committed some $600 million to reducing waiting lists and elective surgery lists. We have a range of initiatives to try and improve healthcare services for Australians who desperately need them. We made announcements about GP super clinics that have been very well received in areas that are going to get them. We are going to improve funding to our healthcare workforce to provide training to around 24,000 mental health professionals, and we are going to encourage more mental health nurses to stay in the workforce. We have committed to bowel cancer screening for all over 50 years of age as we know that bowel cancer is one of the biggest killers in Australia. The initiatives that we are taking in the healthcare industry are going to be very welcome. I was also surprised to hear the criticism from opposition senators about the Rudd government’s initiative to try and stop binge drinking amongst young people. What a disgraceful response it was from them to criticise an initiative which is intended to ensure that our young people do not become hospital statistics because they have too ready access— (Time expired)

Mathias Cormann (WA, Liberal Party) Share this | Link to this | Hansard source

Today is the moment of truth. It is the moment of truth for Labor and sadly it is a moment of truth for the Australian people, because today is the day when the Australian people will find out that Peter Garrett was right when he said, ‘Once we get in, we’ll just change it all.’ Before the election Labor was desperate to make sure that private health insurance would not become a political issue. It was the time of the ‘me too’ policy approach. We support all of the positive initiatives of the Howard government. We support the 30 per cent health insurance rebate. We support Lifetime Health Cover. The minister today confirmed that Labor did not tell the Australian people before the election that they would be making those changes which are about to be announced in the budget to increase the threshold of the Medicare levy surcharge.

Earlier this year in Senate additional estimates, I was somewhat suspicious in the light of Peter Garrett’s comments as to what the new government’s approach would be to private health insurance because when we last came into government after an extended period of Labor government the Australian health system was totally out of balance. Private health insurance membership levels were down at 33 per cent of the population and they went down to 30 per cent before we were able to turn the ship around. So I thought I would ask some questions. The Parliamentary Secretary to the Minister for Health and Ageing was representing the minister for health during Senate estimates. I asked her specifically, ‘Would you be concerned if membership levels started to drop as a proportion of the population?’ She said, ‘Of course we would be.’

I followed on and I went through the series of positive policy initiatives of the Howard government which led to bringing the Australian health system back into balance, and I asked her to confirm the government’s ongoing commitment to those measures specifically in relation to the Medicare levy surcharge. I asked:

Senator CORMANNThe Medicare levy surcharge policy will remain in its current form?

Senator McLucasCorrect.

Senator CORMANNThere is no suggestion to increase the thresholds that you are aware of?

Senator McLucas—Not that I am aware of.

That was not a totally clear answer so I went back to it later. I said:

Senator CORMANNI would like on the record, though, to get specific information whether there are no plans to change the Medicare levy surcharge from the current levels.

Senator McLucasWe have answered that question.

Senator CORMANNSo no change?

Senator McLucasThat is correct.

So Senator McLucas, representing the Minister for Health and Ageing in Senate estimates earlier this year was very clear when it came to this point. She gave an indication to the Australian people that there would be no change.

But what have we heard today? What have we heard widely canvassed in the media? The Medicare levy surcharge threshold is going to double. That is bad public policy, because that is exactly the sort of policy that will lead us to the disastrous circumstance that we found ourselves in in 1996 when the Australian health system was out of balance. Membership levels will go down, and the minister in one of his answers today actually said, ‘Yes, some people will leave’. He did not tell us how many people. What is the definition of ‘some’? How many people will leave? Minister, you have not answered that question today at all. The minister says: ‘Some people will leave. The membership levels will go down and we all agree.’ This will have a further impact in accelerating future increases to health insurance premiums. People will leave private health insurance. This will put pressure on public hospitals, which are already under pressure—public hospitals that are being mismanaged by Labor state governments across Australia, with people not being able to access the services they need.

If you look at what has happened over the last 10 years with significant increases in the membership levels in the private health insurance system, private hospitals around Australia have taken responsibility for a dramatically increased share of healthcare services necessary to service the Australian people. What is going to happen now? Australians will leave private health insurance because Labor went back on its commitment prior to the last election. This is back to the future stuff. As I have said, the Howard government had to restore the balance in the Australian health system when it got into government. Peter Garrett was right, as I said in my introduction: ‘Once we get in, we’ll change it all.’ Tonight, when the Treasurer puts out the budget, we will all be able to see that that is exactly what will be happening from hereon in.

John Hogg (Queensland, Deputy-President) Share this | Link to this | Hansard source

Before I call Senator Brown, I remind senators that if you refer to people in the other place they should be referred to by their correct title.

Carol Brown (Tasmania, Australian Labor Party) Share this | Link to this | Hansard source

I have to say that I am not surprised about the opposition opposing the Medicare levy surcharge initiative because the opposition has shown over a long period of time that they are completely out of touch with the community. The Medicare levy surcharge initiative is a welcome relief to working families. They have been unfairly hit by the surcharge. The surcharge has not been adjusted since it was introduced in 1997, so the announcement by the Treasurer tonight will be a welcome one which will see the Medicare levy surcharge threshold rise from $50,000 to $100,000 for a single person and from $100,000 to $150,000 for families.

Mr Deputy President, there has been no increase in the Medicare levy surcharge threshold since 1 July 1997, resulting in an unfair targeting of many families earning average incomes. The revised thresholds will now ensure that the surcharge is applied to those who are high-income earners. If the Liberal opposition think that a wage of $50,000 for a single person is the wage of a wealthy person then it is no wonder the Australian people have lost faith in them. The whole point of the Medicare levy surcharge was to encourage people who could most afford it to take out private health insurance. However, the previous government, as usual, failed to plan for the long term and it did not provide for indexing the threshold. Now we are seeing hardworking Australians being slugged a surcharge that was meant to target high-income earners.

The Labor government initiative will be a welcome relief for many families. I have to concur with my colleague Senator McEwen’s amazement at the Liberal opposition raising the issue of health, because they have a record they should be ashamed of. We have seen a drastic cutting of the health budget over the 11 years the previous government was in power and a failure to tackle the GP shortage. That is in stark contrast to what the Labor government is doing. Since Kevin Rudd and Labor have come to power, two health ministers conferences have been held in the spirit of cooperation that now exists between Canberra and the state and territory governments. Much has been achieved.

The first conference in February concluded with an agreement on the need for immediate reform of the national health and hospital system and the need for public performance reporting. These sentiments reflect what Kevin Rudd has been saying since prior to the election—that the health and hospital system in this country is not working as it should and that there is a pressing need for reform. This is why the Rudd Labor government has made reforming and improving our nation’s health system a national priority. Our government is committed to building a modern health and hospital system, equipped to meet the health challenges of the future, including an ageing population, the rising burden of chronic disease and the ever-increasing costs associated with medical technologies. That is why, prior to the election, the government announced a comprehensive, long-term plan for health reform in this country, including a $2.5 billion commitment to improving health and hospital systems for all Australians. As is the case with many other public resources, hospitals were constantly underfunded and ignored by the Howard government. Now, as a result of 11 years of neglect, the health and hospital system is in desperate need of a complete overhaul.

Before I finish, I would like to take up the point about tax on alcopops. The Labor government makes no apology for this tax, and the federal opposition should be ashamed of its attacks on this initiative. Binge drinking is a community-wide problem that demands a community-wide response. This government is determined to take a strong, comprehensive approach to tackling binge drinking in our community. We know that young people are particularly at risk and we know that alcopops are used to hook them on drinking when they are young. (Time expired)

John Hogg (Queensland, Deputy-President) Share this | Link to this | Hansard source

I just make the comment, once again, that people should refer to people in the other place by their correct title. It is quite appropriate to mention ‘the Rudd government’ or ‘the former Howard government’, but individuals should be given their correct title, as in ‘the member for’, ‘the Prime Minister’, ‘Mr Peter Garrett’ or whatever. I make that clear.

Judith Adams (WA, Liberal Party) Share this | Link to this | Hansard source

I rise to take note of the motion moved by Senator Colbeck. What is on the agenda? Tonight’s budget will double the income threshold for the Medicare surcharge from $50,000 to $100,000 for singles and from $100,000 to $150,000 for couples. This again proves that Labor is still ideologically uncomfortable with the private sector and has a heavy preference for the public system. What are the consequences for the taxpayers? The Rudd government is trumpeting that it has saved 2.4 million people from paying a Medicare surcharge. In fact, only 465,000 people have paid the surcharge and each one of them could have avoided it by taking out private health insurance.

A large number of sick people are already waiting unacceptable hours in public hospital emergency departments. People, especially our elderly, are waiting months for elective surgery. With the Rudd government changes to Medicare, they will now have to wait even longer. With the ludicrous threshold increases for singles, younger people will avoid taking out private health insurance. After all the work that has been done to encourage them to take out private health insurance, once again, they will abandon it and more pressure will be placed on public hospitals. This will force up premiums for those people who stay in private funds. Older Australians will also be affected due to these changes and possibly will not be able to continue to choose their level of private health cover which, at their age, is very important. For the two million uninsured people, there will be a tax break of up to $20 a week, straight into their pockets, but no further encouragement for them to get private health insurance.

The Australian Health Insurance Association expects that 400,000 young Australians will drop out of private health insurance. In today’s press, doctors and insurers warned that, as a consequence of this government’s changes, public hospital waiting lists will blow out as hundreds and thousands of young Australians ditch their private health insurance. Dr Michael Armitage, Chief Executive of the Australian Health Insurance Association, is convinced:

If people choose not to remain privately insured—and our modelling—

at least the Health Insurance Association could do some modelling but, unfortunately, the Minister representing the Minister for Health and Ageing today could not answer my question concerning the modelling of the Rudd Labor government—

shows that up to 400,000 people will not do so—

that is, continue in private health—

they will rely on the public system, which means the states will need to badger the Federal Government for more revenue.

The consequences for the states are quite amazing. Health ministers from WA, Queensland and Tasmania have already called for compensation from the Commonwealth if these changes are to be introduced. In the West Australian this morning, Dr Rosanna Capolingua, who is the national President of the Australian Medical Association, said:

You’d have to wonder if you’re setting up the states to fail as far as them being able to deliver across the public health care sector.

Professor Geoffrey Dobb, WA President of the Australian Medical Association, said the changes would cause elective surgery waiting lists to blow out and private health cover premiums to skyrocket. Unless the federal government is ready to provide extra funding to support Western Australia’s hospitals, they will be under siege if thousands of patients opt out of the private health system to be treated under the public system. I am a former member of the metropolitan hospital board, and we put into the system the Central Wait List Bureau. It was quite amazing, in the four years that that board existed, just how well we did with trying to get through the waiting lists. But, unfortunately, because of the hidden costs, there is a need for an interim long-term health reform plan to be put in place by the end of this year.

I just do not think this has helped the health system. In my home state of Western Australia it is going to be very difficult, and I am speaking about those rural Western Australians who have taken out private health insurance and are hoping that somehow they will be able to use it. It looks as if most of them will be forced to go back to the public system. (Time expired)

Question agreed to.