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

In July 2008, the Senate Standing Committee on Economics, of which I am a member, undertook an inquiry into the government’s proposal to increase the Medicare levy surcharge thresholds. On completion of the inquiry, the committee recommended that the bill be passed on the basis that it is inequitable that an ever larger number of low-income Australians be forced to pay the surcharge or purchase low-value fund policies. The committee found that there was unlikely to be a major impact on either private health insurance premiums or the public health system. While acknowledging that some Australians would indeed withdraw from private health insurance as a result of the legislation, the committee felt this would not occur in such as way as to cause significant harm to a robust, competitive private industry sector. The bill was then passed by the Senate in October last year with some amendments, resulting in the thresholds being modified to $70,000 for a single and $140,000 for a couple before the surcharge became payable. The thresholds had not been adjusted in over a decade, and the bill returned the proportion of taxpayers impacted to around the eight per cent that it was originally designed to capture.

The coalition were beside themselves when the measure was announced, determined to emphasise the irreversible damage they believed the legislation would cause to the private health insurance industry and the Australian health system generally. They invoked images of millions of Australians flocking from the private system to the public, massive waiting list increases and enormous premium rises leading to the ultimate downward spiral and eventual collapse of the private health sector.

Am I exaggerating? The introduction of the coalition’s dissenting report reads:

Even on the most conservative estimates, health fund membership would plummet and premiums would rise well over the trends of recent years – driving more people out of private health and starting the downward spiral left behind in the 1990s.

In a media release of October 2008, Senator Cormann refers approvingly to industry expert evidence saying that up to a million people would abandon private health insurance. In fact, during the inquiry this notion of a downward spiral was referred to no fewer than 23 times, 17 of these by Senator Cormann and another five in response to his specific questioning—but only once was it introduced by a witness.

So I am very pleased to speak today on the reality of private health insurance premiums and membership, nearly one year after the release of the economics committee report. Despite the doom-and-gloom prophecies of the coalition, in the December quarter of 2008 private health insurance membership grew by 54,000 people, and in the March 2009 quarter it grew by a further 45,000 people. This brought the total proportion of Australians covered by private hospital insurance to 44.6 per cent—in fact, the highest proportion of people covered for hospital treatment since December 2001. Whilst this is a significant but modest growth, in effect, it is worth noting that this was during a time of economic contraction and a shrinking of demand in the economy due to the global recession.

On 2 March this year, in the regular review of health insurance premiums, the minister announced that private health insurance premiums would increase by 6.02 per cent from 1 April 2009. Considering that back in July last year forecasts of five per cent increases without the impact of the threshold increase were estimated, this puts an end to the ridiculous assertions that premiums would skyrocket, forcing droves of Australians out of private health insurance. Indeed, in September last year, the Hon. Joe Hockey predicted that premiums would rise by 12 per cent as a result of the government’s changes to the Medicare levy surcharge. It was a scaremongering figure plucked from thin air that, clearly, has not occurred. Another thrust of the opposition’s unsubstantiated claims was that public hospitals would be subjected to overwhelming increased pressure as a result of the changes. Conveniently, the government’s significant investment in the public hospital system was ignored. The majority committee report noted the government’s investment of $3.2 billion for the National Health and Hospitals Reform Plan, including $600 million to reduce elective surgery waiting lists. The last federal budget also provided $1 billion for immediate funding to relieve pressure on public hospitals.

As of 1 July 2008, all states and territories had received their total allocated funding and had agreed to the number of additional surgeries they would complete. At the Australian Health Ministers Conference on 5 December 2008, state and territory health ministers reported that all jurisdictions had already met or exceeded their targets for 2008. The national target of 25,278 surgeries to be completed in 2008 had already been exceeded by 10,000 patients—the total, as at the end of November 2008, being 35,388 surgeries completed. The Rudd government is delivering on its commitment to reduce waiting lists for elective surgeries and to relieve pressure on public hospitals. There is no evidence that the introduction of the MLS surcharge threshold changes have had a negative impact in this area.

Furthermore, the most recent budget measures deliver on the landmark $64 billion health care agreement with the states and territories to provide record levels of funding for public hospitals. This relieves pressure on emergency departments; provides a massive $1.3 billion health and hospital fund investment in cancer infrastructure, which is a part of a total $2 billion package focused on tackling the wide disparity in cancer treatment outcomes for cancer patients in rural and regional areas; provides a $1.5 billion investment to upgrade hospitals and clinical training infrastructure across Australia; and invests $430 million in state-of-the-art research and clinical training facilities.

Why am I dredging up this past debate? The emotive language engaged in by the opposition in relation to the MLS changes is worth reflecting on in view of the government’s recent proposed changes for fairer private health incentives. The opposition’s fear campaign is beginning again, oblivious to the total failure of their previous predictions. Senator Cormann said to the Canberra Times:

This policy measure will create a tsunami of demand for public hospitals.

The Hon. Joe Hockey, again, said:

The decision of the government ... appears to be a calamity for private health insurers in Australia.

He also that it will push the cost of private health insurance ‘through the roof’. With no recourse to industry data or empirical evidence, the opposition are resorting to an exaggerated and unsubstantiated scare campaign to attack the government’s budget announcement to means-test the private health insurance rebate. Senator Cormann’s website currently claims:

Labor hates private health insurance.

                   …                   …                   …

This ... will be a direct hit on the family budget of at least 1.7 million Australians and indirectly will result in higher premiums for all Australians—including those on very low incomes—and put even greater pressure on our public hospitals.

In a radio interview on The World Today, he further claimed:

This is a budget measure which will push up the cost of premiums immediately as a direct result of scrapping the insurance rebate above a certain income level. It will push up the cost of premiums by 66.7 per cent …

Does that sound familiar? Once again, we see the opposition wheeling out a melodramatic scare campaign in the face of a lack of any factual evidence to back up their claims. Where could they get factual evidence? Perhaps they could get it at a committee of inquiry on the bill. But what did Senator Cormann do instead of coming to a committee hearing to listen to experts? He instigated a strike. The Senate Standing Committee on Economics had cancelled two days of hearings that had already been arranged and then put aside two others to deal with the private health insurance bills and two other smaller matters. We had a total of four days of possible hearings. In the end, only one of those days was used for private health insurance bills because the opposition suggested only two witnesses in addition to those suggested by the secretary. Those two witnesses were then put on the hearing program.

But then, when it came to that one day, after complaining that they did not have enough time to consider the bills, the coalition committee members did not turn up to those hearings, which deliberately deprived the committee of a quorum. Pulling that stunt meant that coalition members had expert witnesses waste their time preparing and making arrangements to come to the hearing. Professor Deeble was one of those who were thus inconvenienced. He had previously given important evidence to the earlier hearing and then his invaluable experience with the health system was discarded by coalition members. So arrogant are the coalition, they apparently think it is acceptable to impose on the time and expertise of people who are eminent in their field and then abruptly ignore them.

Fortunately, in the end, Senator Xenophon was able to come along to the afternoon, so it was not a total waste. Now the coalition members have come back to the Senate, where they have the numbers, and have referred it to another committee, the Senate Standing Committee on Community Affairs. I do not think they will get a much better reception of their scaremongering in that committee.

Sadly, it is not just in the policy area of health that we see this tactic being utilised. While the rest of the world is engaged in facing the greatest economic downturn since the Great Depression, the opposition try to dupe Australians to panic about a relatively small and much-needed budget deficit aimed at keeping people in jobs—a manageable deficit. They are seemingly oblivious that, since last year’s budget, taxation receipts have been revised down by about $210 billion over the forward estimates, representing around two-thirds of the write-down in our budget position.

And, whilst the rest of the world steps up action on climate change, the coalition range from those who make radical claims that the CPRS will utterly decimate the Australian economy to those who want to sit on their hands, wait and see what might happen in the rest of the world and just ignore the changes in Australia.

And we saw just yesterday that one of the measures that was introduced to assist Australia’s economy, the Australian Business Investment Partnership Bill, was voted down by the coalition, who would prefer to do nothing and let the markets drive the Australian economy down and force massive unemployment and massive disruption for many decades to come.

Opposition Senators:

Opposition senators interjecting—

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

Order! I must ask coalition senators to restrain their interjections. Senator Hurley has the floor and she is entitled to be heard.

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

It is true that, in our system, a robust and efficient opposition helps to hold the government of the day to account. However, unfortunately, now we are confronted with either baseless fear campaigns or the no-policy approach of ‘Let’s wait and see’. That does not do any credit to the opposition and it does not assist in the proper governance of this country.