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 answer given by the Minister for Human Services (Senator Ludwig) to a question without notice asked by Senator Colbeck today relating to hospital admissions and waiting times.

Senator Ludwig’s answers today effectively bell the cat on promises to the Australian people made by the Rudd government prior to the election where they said they would actually reduce hospital waiting lists. The revelations in the Tasmanian budget papers effectively expose the impact of the ill-considered measure of the Rudd government in changing the Medicare levy thresholds, particularly given the lack of work they did on this measure as part of the overall budget consideration. Mr Rudd has made a big deal about keeping his promises and the people of Tasmania will be very disappointed to find that, rather than a reduction of hospital waiting lists that he promised them, they will in fact see an increase of 627 over 2007-08 levels in the 2008-09 year. That is a seven per cent increase, not the decrease that was promised by the Rudd government. Now the Tasmanian government were well aware of all the measures, the $600 million, that Senator Ludwig told us about when he responded to the questions that we asked during question time. They are aware of all those programs. In fact, they already have some of the money that was allocated under the first $150 million, so the program would have started. But despite that, their budget papers say that they expect to see a seven per cent increase in hospital waiting lists in Tasmania.

We know that other states also have concerns about this measure and the impact that that is going to have on their hospital waiting lists. And we know from our questions at estimates that, when calculations were made about the impact on private health insurance companies, there was no calculation with respect to children; children were not included in the numbers, so the estimates that were provided to us by the government fell short. We know that if you include children that puts the numbers at over 700,000 people. Therefore, the estimates that were ridiculed by the government from the industry and from the medical fraternity are in fact much closer to being about right. Estimates of 700,000 to one million people moving out of private health insurance are obviously going to have an ongoing impact on people who still have private health insurance. Therefore, people will be moving into the public health system and, as the Tasmanian government has admitted, will be placing additional pressure on waiting lists around the country.

We know that the government did not take all of the effects of this into account. We found that out through the estimates process. They are about to embark on new five-year Commonwealth-state funding agreements and yet they did not consult the body that they put together to advise them on health—the National Health and Hospitals Reform Commission—at all on this measure, despite the significant impact that that was going to have on health, going forward. They did ask the Health and Hospitals Reform Commission to advise them on the five-year health funding agreement between the Commonwealth and the states, but they did not mention the fact that they were going to attack a significant chunk of the health system in this country and they have not even costed the potential second-round impacts that might occur. So they have no idea, going into the five-year health funding agreements with the states, what the costs are going to be. They have no way of knowing what claims are going to be made against them by the states to compensate for this or whether those claims are genuine or not. They are just effectively going to have to take the state government’s word for it.

At this point in time, despite the first reports on the reduction of waiting lists being due on 6 May, we still do not know what is happening with those. At estimates a couple of weeks ago we were told that the first quarterly report that was supposed to be provided by the states would be available in the next few weeks, yet we still do not have that information. (Time expired)

Annette Hurley (SA, Australian Labor Party) Share this | Link to this | Hansard source

The election, of course, was a devastating loss for the Liberal Party and I can understand that they have not quite got their balance and bearings today. It will take some time for the party to settle down and get a decent policy position, because we have seen some amazing U-turns and backflips on policy here today—none more than this one here today as outlined by Senator Colbeck. I mean, this sympathy for the states is just extraordinary when before the election, for month after month, we heard attacks on the states; attacks on their health policies and attacks on every policy that they had; attacks about not spending enough; and attacks about their management of the hospital system. And now we have sympathy for the states. Now we have acceptance of their costings; now we have acceptance of their estimates of what is going to happen with their health policies.

The difference is that the Rudd Labor government are actually talking to the states; they are actually discussing funding needs with the states and what they need with their health systems. So it absolutely rings hollow to have this pretend sympathy as to the state system because no sympathy was shown under the Howard government—no sympathy at all. They were squeezed down in their health budgets and their funding; they were squeezed down in every direction so that the Howard government could claim superiority and direct money to programs that they wasted their revenue on.

So we now have this attack on this policy. What is this policy going to do? It is going to remove from lower income earners a tax slug that was put on them in the past. The Liberal opposition is trying to stop the removal of a tax slug on low-income workers on the basis that it subsidises the hospitals. I am sure, if you spoke to anyone who is struggling on $50,000 a year, that they would have absolutely no sympathy for that argument whatsoever—and neither should they. For year after year the Howard government refused to adjust that income level and the result is that people on those low to medium incomes were paying more than they should have into the healthcare system while tax cuts kept being given to higher income earners. The Rudd government are now redressing that system and they are balancing that by discussing with their state counterparts how to make sure that the health system starts to work properly after 12 years of neglect by the Howard government.

It just astounds me that, having suffered that devastating loss in the election, the Liberal Party have not, it seems, learnt a thing. They are now telling people in that income group that they are going to block a provision by the Rudd government that removes this tax impost on people earning $50,000 a year or more. It is just breathtaking. I have to say that it just shows how little the Liberal opposition have got in putting together their policy. The Leader of the Opposition said at one stage that he believes that people earning over $150,000 are doing it tough. We also have the opposition trenchantly opposing the luxury car tax, and yet it is okay for people on a $50,000 a year income to pay this extra tax impost that gradually crept upon them over the years of the Howard government. I would be very astounded if the opposition again go to an election with that kind of policy. I mean, if they are a good opposition then I think they need to go back to the drawing board, recover from their devastating election loss, look again at their policies and look again at the kind of legislation they are blocking. (Time expired)

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

I also rise to take note of the answer provided by Senator Ludwig. In his answer today, the minister again tried to defend a bad public policy decision by ignoring the facts and totally ignoring the impact on our public hospitals. The challenge for any government is to set up a policy framework that will ensure that all Australians have affordable and timely access to quality hospital care. In Australia, we aim to achieve that through a mixed health system, with a public hospital component and a private hospital component. When we last came into government in 1996, that system was totally out of balance. In 1996, private health insurance membership was in free fall. It bottomed out at 30 per cent before we were able to turn the ship around. How did we turn that ship around? Through a three-pillar policy supporting Australians who were prepared to take additional responsibility for their own healthcare needs by taking out private health insurance. This was done through the 30 per cent rebate, through lifetime health cover and, yes, through the Medicare levy surcharge policy. Those policies were exceptionally successful.

In the 12 months between December 2006 and December 2007, nearly 400,000 additional Australians took additional responsibility for their own healthcare needs by taking out private hospital insurance. By December 2007, 9.4 million Australians had taken out private hospital insurance. Now we have a government that comes up with a Treasury-driven bad public policy which is ill thought out and short-sighted and will have a devastating impact on our public hospitals. What did we find out in the Senate estimates process? Treasury did not understand the difference between what is called in industry jargon ‘single equivalent units’ and ‘persons covered’. ‘Single equivalent units’ are adults. ‘Persons covered’ are adults and their dependent children. That is why the Treasurer was out there for weeks on end trying to tell Australians that only 485,000 people would leave private health insurance as a result of this measure. We have found out since then that it is going to be significantly more; it is going to be well in excess of 700,000 people.

We then tried to assess the impact on public hospitals. If you look at the budget papers, the government expects to save $959.7 million as a result of not having to pay the private health insurance rebate to those Australians who will leave private health insurance as a result of this measure. Yes, there will be a loss in revenue of $660 million, but that means that the government is still $300 million in front. Today the minister said, ‘We’re providing a $600 million package to compensate for this and reduce waiting lists.’ That answer was misleading because, if the minister looks at his own budget papers, there is $300 million, which is made up of a first stage—$150 million to immediately reduce waiting lists—and the second $150 million is funding into infrastructure and not into services. The second stage of $300 million is actually only available if the state governments meet certain performance targets. There is absolutely no way that the states can meet those performance targets, due to the impact of this measure. The states will never be able to get access to their $300 million. Quite frankly, this is just a farce. The Commonwealth is actually in a cost-neutral position on this.

As a result of this measure, $960 million no longer has to be spent by the Commonwealth due to people leaving private health insurance. That is only the 30 per cent private health insurance rebate. The total funding lost to the health system as a result is well in excess of $3 billion. When we asked questions in estimates about whether the Commonwealth had consulted with the states or modelled, costed or in any way assessed the impact of this measure on state public hospitals, the answer was, ‘No, we have not.’ Treasury said, ‘We don’t cost, model or assess second-round effects.’ What a joke! There is a tsunami of additional demand about to hit public hospitals across Australia. We have a Prime Minister who, in the lead-up to the election, was telling Australians that he would end the blame game and would start a new era of cooperative federalism in health. Yet here they are taking $3 billion out of the Australian health system without any meaningful compensation and trying to hide it through smoke and mirrors. It is an absolute disgrace. Quite frankly, there is a very serious need for some additional scrutiny on the impact of this measure. (Time expired)

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

We had a very interesting situation in question time today. On the one hand, we had Senator Boswell, who was very much concerned about the impact on low-income earners—people earning about $50,000 on FBT and salary sacrificing—and then we had Senator Colbeck attacking a measure that seeks to alleviate the tax burden on people earning $50,000.

Senator Colbeck is again playing politics with the Tasmanian health system. Those opposite did it during the election, with the Mersey hospital, and they are doing it again here. I remind the Senate of what actually happened under the previous government in terms of hospital funding to Tasmania. We do not have to go too far; we only have to look at the Australian Institute of Health and Welfare’s Health expenditure Australia 2005-06 report, which was released last year and showed that the Australian government’s share of the public hospital bill declined by more than five per cent in the four years to June 2006, with the load shifting to the state government. That meant that the Howard government short-changed Tasmania by $70 million each and every year. It was funding that would have paid for more nurses and opened more beds to allow for more operations to be performed across Tasmania’s public hospitals. That is the situation. That was the situation under the previous government, and Senator Colbeck well knows that.

I will also inform the Senate exactly what Labor has delivered to Tasmania’s health system. The recent budget delivered significant investments in Tasmania’s health. These investments underpin the recommendations of the clinical services plan and include $15 million towards the establishment of an integrated care centre in Launceston; up to $2.5 million towards the establishment of a GP after-hours clinic in Burnie; up to $5 million towards the establishment of a GP superclinic in Devonport; up to $7.7 million for an additional radiation oncology unit in the north or north-west; $1.25 million for mental health counselling with the Sisters of Charity; $60,000 towards the redevelopment of the Penguin Medical Centre; $3.5 million to support the purchase of a PET scanner at the Royal Hobart Hospital; up to $8 million towards the establishment of a GP superclinic for the eastern shore, with clinics at both Bellerive and Sorell; and $10 million for patient transport services. This is what the Rudd Labor government has delivered to Tasmania, as well as it being part of the $3.2 billion National Health and Hospitals Reform Plan. What we saw from the previous government was a ripping out of $70 million from the Tasmanian health system.

I will just go back to the Medicare levy surcharge. The surcharge was introduced by the Howard government in 1997. The then Minister for Health and Family Services, Dr Wooldridge, in his speech introducing the surcharge, indicated that the surcharge was aimed at high-income earners, the people who could afford to pay for private health insurance. However, under the Howard government, the levy income threshold has remained static over 10 years, while average weekly earnings have increased by nearly 50 per cent. The Howard government’s refusal to increase the levy threshold meant that close to 50 per cent of Australians, many of them only earning the average wage, were being slugged with paying the surcharge despite the fact that this was not who the surcharge was intended to impact on.

In his speech in reply on the budget, Dr Nelson railed against what he labelled as ‘bracket creep’ and ‘tax increases on the sly’. However, such claims are hypocritical when applied in retrospect, considering that the now opposition did nothing—I repeat: nothing—for 10 years and effectively imposed tax increases on the sly on working families in Australia by simply not increasing the Medicare surcharge threshold. (Time expired)

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

Allow me to contaminate some of the arguments put by the Labor members in this place with a few facts. First fact: it is not the case that this adjustment in the Medicare levy surcharge thresholds is to account for inflation since the measures were introduced in 1996. If you had made that adjustment, as you claim you were trying to do, you would have ended up with a singles level threshold of something like $70,000, depending on whether you were adjusting for increases in the price of goods or of wages. So this argument that putting it up to $100,000 for singles and $150,000 for couples is simply about adjusting pursuant to the policy of the previous government is absolute and arrant nonsense.

The second fact is about the argument that this is a tax slug which the government believes should be taken off the shoulders of working Australians. The fact is that there is tax relief and there is tax relief. Not all tax relief is a good thing. You need to consider the downstream effect of any decisions of this kind on the total picture in the area that you are affecting. Take this example. If the government had announced in its budget that it was going to decrease the burden on working families by reducing the excise on tobacco products, what would we say? Of course, there are some families who would pay less for their tobacco products, but what would the effect be on the health of Australians? It would be to cause a deterioration of the health of Australians overall—and so with this measure. We need to pose the question: is this actually in the interests of Australians’ health generally?

Let us look at the effect. We know that this will cause hundreds of thousands of Australians to surrender their private health insurance. We know that means that when those people get sick the chances are that they will move into the public health system to obtain medical treatment. We know that that will increase waiting lists. We know it will increase pressure on public hospital systems in this country, systems which are already seriously burdened by very large numbers on their waiting lists. Take dental care as a particular example. It is sometimes said that people who are younger and fitter are the ones who will give up their private health insurance under these arrangements. But people of any age need dental treatment. They need check-ups. They need fillings. They need the sorts of things that have to happen throughout our lives. What will happen to these people, these 700,000-plus Australians—as Senator Cormann points out—who have given up their private health insurance, when these people need dental care? The chances are that either they will have to bear those very severe costs themselves, and we all know that going to the dentist is no cheap affair—so much for helping working families in Australia—or they will have to join the public dental waiting queues, very long queues that are increasingly under pressure, growing all the time, which are not going to be much relieved by the decisions of this government, to be perfectly frank, and we are going to find more people under pressure because of the state of their dental health.

The fact is that this has not been thought through by the government. They have not taken this step in order to relieve the pressure on working families; they have taken this step because they have an ideological opposition to the entire concept of private health in this country. They want to get people out of private hospital lists, out of private health insurance and into public systems, for reasons which are very hard to determine indeed. If those systems were working well, if they were under less pressure than they are now, you might understand it, but the truth is simply that they are not. That ideological position will cost Australians in terms of their health very dearly in the future.

Let us be clear about this decision. It will increase the cost of private health insurance—no ifs, no buts; it will certainly do that. Medibank Private has already said it is going to lose 10 per cent of its customers. What will it do to its premiums in those circumstances? It will have to put them up—and those opposite claimed they were going to bring premiums down, not put them up. It will force more Australians out of private health insurance and it will force more people into public hospitals and onto waiting lists for public health services.

With this decision, Labor will dishonour spectacularly its election promise to put downward pressure on public hospital waiting lists. There is no other consequence which can be foreseen except that that will occur. That is an absolutely gross dishonesty towards the Australian people. It is time, as Senator Cormann said, that we have more debate about this, that we expose the reasons behind Labor’s decision and that we bring to light the true downstream effects of this decision, because they are extremely damaging to the health of Australians. (Time expired)

Question agreed to.