Stephen Parry (Tasmania, Liberal Party) Share this | Link to this | Hansard source

My question is directed to Senator Ludwig, the Minister representing the Minister for Health and Ageing. Given that half a million people will leave the private health and hospital system as a result of Labor’s ideologically driven changes to the Medicare levy surcharge policy, and that demand will increase in the public health and hospital system, what is the Department of Health and Ageing’s estimation of the added cost to public health?

Joe Ludwig (Queensland, Australian Labor Party, Manager of Government Business in the Senate) Share this | Link to this | Hansard source

In answer to the question, on 10 May the federal Treasurer announced as part of the budget that the Commonwealth would increase the Medicare levy surcharge thresholds to $100,000 for individuals and $150,000 for families from 1 July 2008. It has clearly, as the opposition has noted, attracted a fair amount of interest. It is estimated to result in published savings of around $299 million over the first four years.

This measure is squarely targeted, bringing relief to working families, and it will offer welcome relief for up to two million Australians. That is where this policy is targeted. When the policy was introduced by the former government they said: ‘High-income earners will be asked to pay a Medicare levy surcharge if they do not have private health insurance. These are people who can afford to purchase health insurance.’ What the opposition now apparently support is that $50,000 is a high-income earner. It is clear that the threshold originally targeted by them as high-income—

Stephen Parry (Tasmania, Liberal Party) Share this | Link to this | Hansard source

Mr President, I rise on a point of order under standing order 194 about relevance. The minister has had a fair bit of time to answer this question now and has not said a single thing about the simple question: what is the estimated cost to the health department?

Alan Ferguson (President) Share this | Link to this | Hansard source

Senator Parry, as you are well aware, I cannot direct the minister on how to answer the question, but I can remind him of the question.

Joe Ludwig (Queensland, Australian Labor Party, Manager of Government Business in the Senate) Share this | Link to this | Hansard source

I really challenge the Liberal Party to find someone who is earning $51,000 and who thinks they are, in fact, a high-income earner. In regard to the private health insurance, the equation is simple: if there are private health insurance companies that have good packages to offer then they should offer them in the competitive market. If the opposition are serious about this they should tell me about those people out there who are earning $51,000 and think they are high-income earners. Do you support that proposition? That is what you should make clear. This is about giving people choice; something that the opposition seem to have lost along their way, but it is not surprising given the way Work Choices went.

When somebody takes out a private health insurance policy just to avoid getting hit with a tax slug there is no real choice in that. There are people out there who do pay for a $500 policy, not because they want it but because it means paying less than they would pay in tax. That was the position that the previous government put in respect of the Medicare surcharge levy. Of course there are people who do support the private health insurance rebates—30 per cent, 35 per cent, 40 per cent. As we have always said we would, we have given people incentives to take out private health insurance. We have not hit them with a tax slug that they cannot afford.

The potential impact on public hospitals was considered. The potential impact on private hospitals was considered. According to the 2002-06 data, there were about 4.5 million admissions to public hospitals, 3.8 million public patients, 400,000 private patients and 180,000 other patients such as veterans. Whether those people who choose not to retain or take up private health insurance end up seeking treatment in public hospitals, we do not believe that they will make a significant difference— (Time expired)

Stephen Parry (Tasmania, Liberal Party) Share this | Link to this | Hansard source

Mr President, I ask a supplementary question. The minister struggled to answer the formative question, so he has obviously not realised he has put a burden on states. Will the federal government provide compensation to the states to help them deal with the increased demand in the public hospital system caused by Labor’s ideologically driven private health insurance cuts? This has been requested by state Labor health ministers from Western Australia, Queensland and Tasmania?

Joe Ludwig (Queensland, Australian Labor Party, Manager of Government Business in the Senate) Share this | Link to this | Hansard source

It does seem a bit long-stretched to say that that question relates to the first question but what I can say in response is that the average waiting times for elective surgery in New South Wales dropped significantly over the past three years; from 3.6 months in June 2005 to 2.8 months in March 2008. The New South Wales spokesperson said: ‘The Rudd government has already done more for public hospitals in New South Wales since being elected than the Howard government did in 11 long years.’ It was also said that more people are having their elective surgeries completed within the clinically recommended time frames. The number of patients waiting more than 12 months for elective surgery has plummeted from more than 10,000 to 255 in March this year; This is much more than the Liberals did. (Time expired)