Concetta Fierravanti-Wells (NSW, Liberal Party, Shadow Minister for Ageing) Share this | Link to this | Hansard source

I rise to speak on the Fairer Private Health Insurance Incentives (Medicare Levy Surcharge) Bill 2009 [No. 2] and the Fairer Private Health Insurance Incentives (Medicare Levy Surcharge—Fringe Benefits) Bill 2009 [No. 2]. May I start by saying that, just like with many other things about this government, the Australian public were certainly not told about a hike in the Medicare levy surcharge before the last federal election. These two surcharge bills, together with the Fairer Private Health Insurance Incentives Bill 2009 [No. 2]which, interestingly, will be conditional on the surcharge bills—set up a framework for hitting the Australian public with another big new tax. It is now very clear, as if we did not already know, that this government cannot be trusted because it will say one thing and do another. This government is a fraud, and that is just as evident in health as it is in many other areas.

These bills go against all the commitments that Prime Minister K Rudd and Ms Roxon gave to the Australian people before the election. They lied to the Australian people before the election and they have lied since. Look what they said in 2007. It is important that we take the Senate back to what this government and the now health minister said then. In September 2007 she stated:

On many occasions for many months, Federal Labor has made it crystal clear that we are committed to retaining all of the existing private health insurance rebates, including the 30 per cent general rebate and the 35 and 40 per cent rebates for older Australians. The Liberals continue to try to scare people into thinking Labor will take away the rebates. This is absolutely untrue.

Then in a letter to the Australian Health Insurance Association the Prime Minister stated:

Both my Shadow Minister for Health, Nicola Roxon, and I have made clear on many occasions this year that Federal Labor is committed to retaining the existing private health insurance rebates, including the 30 per cent general rebate and the 35 and 40 per cent rebates for older Australians.

Federal Labor will also maintain Lifetime Health Cover and the Medicare Levy Surcharge.

He went on to state:

Labor will maintain the existing framework for regulating private health insurance, including the process for full approval of premium increases.

This letter is not worth the paper it was written on because it is very clear that the Prime Minister, on 20 November 2007—there he is—was prepared to tell the Australian Health Insurance Association in writing, no less, that he was not going to change the system and here we are for the second time with the Prime Minister pushing for these changes. So not only did they make these hollow promises before the election, but after the election Kevin Rudd and Nicola Roxon confirmed Labor’s position, sometimes in quite spectacular form. In February 2008 in the Australian the Prime Minister said:

The private health insurance rebate remains unchanged and will remain unchanged.

In May 2008, on Macquarie Radio, Nicola Roxon stated:

… we continue to support the 30 per cent, 35 per cent and 40 per cent rebate for those Australians who choose to take out private health insurance.

And then, in October 2008, in a speech to the Australian Health Insurance Association conference, Nicola Roxon stated:

Private health insurance consumers will still be able to claim the 30 to 40 per cent rebate, and the Lifetime Health Cover incentives will remain in place.

In February 2009, in the Age, the Minister for Health and Ageing, Ms Roxon, stated:

The Government is firmly committed to retaining the existing private health insurance rebates.

On Channel 9, with Laurie Oakes—this was later in the piece, when the Prime Minister had finally confessed that he was going to break another election promise—to try and justify the broken promise that these bills represent the Prime Minister drew on what at that time was the unpublished Intergenerational report. He told Laurie Oakes:

What the intergenerational report tomorrow will reveal for the first time is that the cumulative impact of knocking that major reform back is in the order of one hundred billion dollars over the next several decades.

He plucked a figure out of the air of $100 billion. Our Prime Minister is very good at doing that, plucking figures out of the air. As everybody knows, there was no $100 billion in the Intergenerational report. We all looked for this magic figure, and guess what? It was not there. It was nowhere to be found. The Prime Minister was, yet again, caught out lying and then he had to fudge it a bit.

Ursula Stephens (NSW, Australian Labor Party, Parliamentary Secretary for Social Inclusion and the Voluntary Sector) Share this | Link to this | Hansard source

Madam Acting Deputy President, on a point of order. Senator Fierravanti-Wells has twice this morning accused the Prime Minister of lying. It is unparliamentary and I ask her to withdraw.

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

Yes, indeed. Senator Fierravanti-Wells.

Concetta Fierravanti-Wells (NSW, Liberal Party, Shadow Minister for Ageing) Share this | Link to this | Hansard source

I withdraw it now. I will replace it with ‘untruth’. I will replace it with ‘misleading’ or I will replace it with ‘very big porky’ if you like, Senator Stephens, but the fact remains that what he said before the election is very different to what he is now trying to push through this parliament. It does not change it, but it is very clear that the Prime Minister’s position is very different to before. On health and a whole range of other things, his position has changed.

Michael Forshaw (NSW, Australian Labor Party) Share this | Link to this | Hansard source

Senator Forshaw interjecting—

Concetta Fierravanti-Wells (NSW, Liberal Party, Shadow Minister for Ageing) Share this | Link to this | Hansard source

Well, Senator Forshaw, that is all very well. The Prime Minister said and did whatever he had to do to get into power. Now he does not give a damn because he is out there changing his position on just about everything. Health is the most spectacular. At last week’s estimates we were waiting for this grand plan from the Prime Minister, the famous K Rudd plan to fix our hospitals. What did the Secretary of the Department of Health and Ageing tell us? ‘There is no plan.’ They could not even find a back-of-an-envelope scribbling that said, ‘K Rudd’s grand plan for the hospitals.’ Why? Because there is no plan. There never was a plan and there is not one now. That is the truth, Senator Forshaw, and the sooner you get used to hearing that sort of stuff then the better off we will all be as we go towards the election.

We have this mythical $100 billion. When Ms Roxon initially introduced the bills in the earlier part of last year, she told the parliament that they would provide savings of $1.9 billion over four years. This is the figure that has been repeated by the minister and repeated to the parliament and to the media. But, later in the year, the Prime Minister—a serial offender, I must say, in the field of exaggeration—was putting another figure out there. On 10 September, when he was asked about Labor’s changes to private health insurance on the 7.30 Report, he said:

... in the case of that one measure, PHI, that you mentioned, that’s worth some $9 billion in the decade ahead.

We have got $100 billion that was not in the report and we have got the $9 billion that Minister Roxon and the Prime Minister mention. It is $100 billion now and it was $9 billion then. When you change so often you forget which one is the actual, true position.

The Prime Minister was saying that the savings from the rebate means test—this new tax—will be directed at additional investments in health. In August last year Minister Roxon, at a CEDA Health Reform Forum in Sydney, showed that she is on a different page because she told CEDA that the private health changes alone will save enough to fund the commission’s proposed e-health investments. She means the National Health and Hospitals Reform Commission. Three months later, the minister was quoted in the Age as saying:

This measure is part of the government’s reform of the health system, will save about $1.9 billion over the next four years, and allow the government to invest more in better services, new medicines and improved technology ...

The same $1.9 billion over four years has suddenly become this magic pot for different uses. The Prime Minister says one thing and the health minister says another. The Treasurer, when he foreshadowed these bills at the last budget, made it very clear where the savings measures were to go. He said that they were to support the long-term sustainability of the pension system. If you believe the PM, it is health generally; the health minister is on a frolic of her own and saying it is going to be used for e-health; and the Treasurer says it is to be used to fund the pension system changes.

Quite frankly, given the untruths and deceptions, you cannot believe any of them. The Treasurer was questioned by Malcolm Farr at the National Press Club on this and the Treasurer gave this answer:

It is true that the private health insurance means testing that we put in there along with a number of other measures we had in the budget offset the cost of the pension increase right out past the forward estimates and well into the future.

The changes that this government wants to bring about, quite frankly, have absolutely nothing to do with investments in health but they have everything to do with an ideological agenda. The Prime Minister and the health minister have absolutely no hesitation in misleading the Australian public about this whole thing.

This is simply bad policy. Firstly, if these measures are passed, there is no doubt that there would be further pressure on our public hospitals, because, as I mentioned earlier in my speech, there is this grand plan to fix the hospitals. If these bills go through, there will be even more pressure on hospitals, particularly those in New South Wales. Can the hospitals in New South Wales get any worse than they are at the moment? The answer is yes, because if these measures are passed there will be absolutely extraordinary pressure on New South Wales hospitals and all other public hospitals around Australia. Secondly, if these measures are passed, they will increase the cost of private health insurance for millions of Australians, including those on lower incomes. It was very clear from answers given in estimates in June last year that there are 11 million people that have private health insurance, and 9.7 million of these are single people on less than $75,000 a year or couples on less than $150,000 a year. They are the people that do take out health insurance and that this Prime Minister and this health minister want to screw into the ground.

Labor just cannot get it into their heads that this is not about ideology. This is about people insuring themselves because they know how bad the hospitals are. That is why they take out private health insurance. If you force those people out of the private health insurance system, particularly the younger ones, and they leave that pool, of course it makes the insurance more expensive for those who remain. So, by driving people out of health insurance, particularly younger people, you are leaving the burden on older Australians, as well as the millions of people who have private health insurance who are on very low incomes of $26,000 or less, and driving up their premiums. Families who continue to have private health insurance will, under the proposed new tax on private health, face higher premiums. Families will face higher premiums as a result of these changes.

Let us just look at some of those families, because I think it is time for the government to look Australians, particularly Australian families, squarely in the eye and tell them what the repercussions of this new tax on private health insurance will be. For example, let us look at the federal seat of Bennelong. Perhaps Ms McKew might like to go out and tell her electors—

Cory Bernardi (SA, Liberal Party, Shadow Parliamentary Secretary Assisting the Leader of the Opposition) Share this | Link to this | Hansard source

Ms Who?

Mathias Cormann (WA, Liberal Party, Shadow Minister for Employment Participation, Apprenticeships and Training) Share this | Link to this | Hansard source

Ms Who?

Concetta Fierravanti-Wells (NSW, Liberal Party, Shadow Minister for Ageing) Share this | Link to this | Hansard source

That is right. Ms Who? As patron senator of Bennelong I have not actually seen her out and about.

Mathias Cormann (WA, Liberal Party, Shadow Minister for Employment Participation, Apprenticeships and Training) Share this | Link to this | Hansard source

I have not seen her.

Concetta Fierravanti-Wells (NSW, Liberal Party, Shadow Minister for Ageing) Share this | Link to this | Hansard source

You have to make an appointment, Senator Cormann, to see her—by appointment only, between two and four on certain days of the week. But perhaps, on the odd days when her constituents actually get the opportunity to see her, she might like to explain to the 72 per cent of people in the federal seat of Bennelong who had private health insurance as at 1 January 2009 that, with these changes, Labor is going to hit them with higher premiums. Or, if they do not take out private health insurance, they are going to be hit by a higher Medicare levy surcharge. That is what this is about: a very little carrot and a lot of stick—a lot of stick. Bennelong is an electorate where the median individual income is just over $27,000, the median family income is just over $79,000 and the median household income is just over $61,000. These are the sorts of people that Labor is going to really hurt—those 72 per cent in the seat of Bennelong.

Let me look at some other Labor seats. For example, in the federal seat of Banks, as at 1 January, 56 per cent of voters had private health insurance. Go tell them how much extra it is going to cost them to have private health insurance and that, if they opt out of private health insurance, they are going to be hit with a huge increase in their Medicare surcharge. Go and tell the people of Barton, for example. Sixty-one per cent of the people in Barton have private health insurance.

This government is ideologically trying to portray this change as somehow hitting the rich. It is not. It is going to predominantly hit people on low to medium incomes—ordinary Australians who know that if they have to subject themselves to the rigours of the public health system, particularly in places like New South Wales, they are going to be waiting and waiting and waiting. Therefore, many of them make sacrifices to take out private health insurance, many senior Australians in particular because they know that they are going to have to call on the system. But this government is about to slug them with higher premiums or, if they do not take out private health insurance, a higher Medicare surcharge.

Let us look at other seats, such as in the Illawarra, where my electorate office is—working-class Labor areas like Cunningham and Throsby. In the federal seat of Cunningham, 55 per cent of people have private health insurance. In the federal seat of Lowe, it is 72 per cent. Try the federal seat of Macquarie: 41 per cent. In the federal seat of Watson, Minister Burke’s seat, it is 50 per cent; in Werriwa, 41 per cent. These are the ordinary Australians that Labor is prepared now to slug—and slug very, very hard.

Labor will turn around and say, ‘Oh, yes, but it’s only a very small number of people who will actually be affected.’ Last time we had this debate, Senator Ludwig had to come into this chamber to correct the record and tell us that it was over a million people—from memory, 1.7 million people—who would be affected by these changes. Catholic Health Australia have commissioned research by Access Economics which shows that the number of people who will quit private health insurance could be significantly higher—much, much higher.

These bills introduce three new tiers to the health insurance rebates. As a direct result of the changes in these bills, the cost of private health insurance, as I have said, will increase for millions of Australians by between 14 per cent and almost 67 per cent. These are people who earn above $75,000 as a single or $150,000 as a couple. Many thousands of the people in Labor’s heartland that I referred to are going to be affected. What sort of spin or argument is the Prime Minister going to run to fudge his way out of this one? The plain and simple truth is that this is a new tax on private health insurance that millions and millions of Australians are going to have to face.

What does this mean for our health system? It will increase the number of patients, treatments and costs on the public side of the ledger. Of course, this is at a time when the Prime Minister is professing he is going to fix public hospitals. It is very clear that all we have seen is lots of rhetoric and not much action from this government.

Rachel Siewert (WA, Australian Greens) Share this | Link to this | Hansard source

Earlier this year in the Senate the Greens successfully moved to split these fairer private health insurance incentives bills so that we could talk about the increase in the Medicare levy surcharge and means testing the rebate separately and allow a separate vote on the bills. This is because we have a different opinion on the bills. We have flagged that we do support means testing for the Medicare rebate—and we will talk about this in more detail when we debate that bill—because we did not support the rebate in the first place. So a move to remove at least some of it and generate more income for the public health system, in our minds, is at least a step in the right direction.

However, the government’s Medicare levy surcharge is a stick to compel people to take out private health insurance, forcing people who are not on high incomes—$75,000 for singles and $150,000 for families—to purchase a market product that is expensive and over which the government has no true and proper legislative control. Health insurance premiums are again about to rise by an estimated six to seven per cent, which is around $195 per family. People often buy the cheapest product available even though it does not service their needs, because they feel compelled to.

The Medicare levy surcharge, we believe, unfairly penalises people who make a conscientious choice about private health insurance. As departmental officials at the recent Senate estimates hearings on 10 February pointed out, people on higher incomes who do not have private health insurance are not influenced by either the rebate or the levy surcharge. Those on high incomes who do not take out private health insurance—estimated at around 130,000—who pay the surcharge were described by officials as ‘unpredictable’. In the past people have described them as not making an economically rational decision. These people have not been included, we were told at estimates, in the Treasury modelling.

These people make a choice not to take out private health insurance for not just economic reasons. In other words, they are not being forced into it by the surcharge. These people take care of their health costs themselves. The Greens believe that this group should not be subject to extra financial penalties for no obvious financial gain to them, as they are unlikely to take out private health insurance and, if they did, they would probably take out basic packages that they would barely use.

The Medicare levy surcharge was introduced by the Howard government following their election in 1996. The Medicare Levy Amendment Act introduced a one per cent Medicare levy surcharge for individuals with a taxable income above $50,000 and for families with a combined taxable income of more than $100,000 who did not have private health insurance cover for themselves and all their dependants.

It is impossible to consider reform of the Australian health care system without considering the role of private health insurance. The government makes a significant contribution to the cost of private health insurance through the 30 per cent private health insurance rebate, or the PHI. It also provides other incentives for people to take out private cover, including Lifetime Health Cover and the Medicare levy surcharge, which is what we are debating now.

The government progressively introduced these policies in the late 1990s in response to dwindling private health insurance membership. The Medicare levy surcharge was introduced in 1997, the Lifetime Health Cover in 1999 and the 30 per cent private health insurance rebate in 2000. These policies increased private health insurance membership from 30 per cent in 1997 to 44 per cent in 2000, although most of this occurred in the six months before June 2000.

The introduction of these measures by the Howard government was accompanied by a concurrent reduction in the level of expenditure provided by the federal government to public hospitals. A fall of about $1 billion each year pushed public hospitals to crisis in most states and territories, amid claims from the federal government that the state and territory governments were misusing the funds and counterclaims by the states and territories that there was underfunding from the Commonwealth—the classic state versus federal debate. The point here is that these policies were introduced in the then government’s philosophical belief that private health insurance would save our hospital system and public health system. The Greens do not share that belief.

While the Private Health Insurance Administration Council collects a large amount of data on the operations of the private health insurance industry, there is little in the way of performance information. This is in contrast with recent efforts to improve accountability and transparency of performance in the public hospital system. If the government is to continue subsidising the private health insurance industry by nearly $4 billion a year, it must take steps to demand more accountability and transparency from the private health insurance funds and private hospitals. Despite the fact that we will be debating means testing the rebate over the coming day, we are currently debating the increase in the Medicare levy surcharge. The fact is, here the government is still supporting the private health insurance industry and will still be channelling millions of taxpayers’ dollars into private health insurance.

The stated intention of the then government’s policies was to increase private health insurance and, supposedly, to take pressure off the public system. We do not believe there is evidence that these policies have done that. We do not believe it has reduced the burden on our public hospitals, and in fact the situation continues to worsen. There is also evidence to suggest that the policy has led to a preference for privately insured patients to use the public system. This is detrimental for the people without private health insurance and does little to take pressure off the public health system, which is what the philosophy of the government of the time was supposed to achieve. The Medicare levy surcharge is, we believe, a clumsy way of taking money from people on high incomes if they do not have private health insurance and it penalises those people that are in fact trying to take care of their health insurance costs themselves and do not believe in private health insurance. There are easier ways, we believe, to fund the public hospital system—that is, get rid of the rebate.

The Medicare levy surcharge is now set at a level where it applies to those who are most likely to have the means to pay their way in a private hospital and pay for ancillary services without the need to depend on insurers. In fact, those people have consciously made that choice. People do not necessarily buy private health insurance because it represents good value for money. Indeed, in most cases we do not believe it does. Many people will avoid declaring their private health insurance on admission to hospital to avoid paying the large gaps and out-of-pocket expenses associated with many private health insurance plans. In fact, when the Senate inquiry looked into the previous bills concerning this matter we took evidence which suggested that those rates were going up. In other words, more people with private health insurance were still using public hospitals. That undermines the previous government’s assertion that private health insurance encourages people out of the public hospital system and takes pressure off the public hospital system.

The surge in membership following the introduction of Lifetime Health Cover shows people buy only if there is a sufficient threat associated with failing to do so, not because it necessarily delivers good health outcomes. Health economist and National Health and Hospitals Reform Commission Commissioner Stephen Duckett, and others, estimated back in 2000 that if all government subsidies to the private health sector were redirected to public hospitals an additional 1.5 million cases could be treated in Australia’s public hospitals.

Why do federal governments believe it is their responsibility to boost private health insurance membership? If the industry was selling something that represented good value, perhaps they would not have had the same level of difficulty in maintaining fund membership. The policy of subsidising private health insurers undermines Medicare and takes funds away from public hospitals. Consumer advocates Choice have said that the antagonistic response of the private health industry to any changes to the status quo shows how dependent they are on government policy to force customers to take up private health insurance, arguing that if the industry provided a product that offers customers value, it would not require a government subsidy. The loss of members from private health insurance may be a loss for private health insurers but is unlikely to have profound impacts on public hospitals as many of those affected are young people who are less likely to need hospital care, and if they do need hospital care they are likely to use a public hospital rather than bear the surcharges and excess payments associated with private health insurance products. Thus the viability of private hospitals is not threatened by the decline in the number of people with private health insurance; it is threatened by the private health insurance companies failing to provide insurance products that people want.

The Greens have repeatedly expressed our concern about this surcharge and the fact that it is impacting on people that have made a conscious decision not to take out private health insurance. We believe that the money this surcharge would raise should be invested directly back into the public system, and specifically into mental health programs. There is compelling evidence that proper investment in early intervention mental health services can have dramatic health and financial benefits, for example, reducing the estimated $10 billion to $30 billion costs associated with mental ill health in young people. In other words, if we invest early we can (a) provide a much-needed service to young people and (b) we actually save on those longer term health costs. There are many early intervention mental health programs which could benefit from immediate funding, and I suspect that if people knew that the extra money they were being forced to pay through the surcharge was being directly invested in helping to pay for mental health programs they would be more supportive of that particular program. We believe that $145 million that the government say that they are going to raise over four years from the Medicare levy surcharge—and, by the way, we could not get access to the modelling for that—

Concetta Fierravanti-Wells (NSW, Liberal Party, Shadow Minister for Ageing) Share this | Link to this | Hansard source

Surprise, surprise!

Rachel Siewert (WA, Australian Greens) Share this | Link to this | Hansard source

Exactly, surprise, surprise! We have no way of knowing how the $145 million was calculated. Our calculations are unable to come up with the same amount of money. It is also important to point out that those 130,000 people that do not take out private health insurance—those unpredictable 130,000 people who make a conscious decision not to take out private health insurance—were apparently not included, as I said earlier, in the modelling.

However, that rubbery $145 million over four years, we believe, needs to be invested in mental health programs and we are suggesting some very concrete proposals, such as the Communities of Youth. Thirty million dollars per annum should be invested in the program that was proposed by the National Health and Hospitals Reform Commission. We are proposing that further money be invested in Headspace. This is an excellent program that has been running now for some time. It is desperately underfunded and needs to be expanded to the areas that it does not cover at the present time. That service has been highly praised and delivers much-needed services to young people.

The third area we believe needs to be invested in is other early intervention services, again recommended by the National Health and Hospitals Reform Commission. We believe further investment in early psychosis prevention and intervention services would provide an excellent way to help those suffering from mental illness. Also, and importantly, we believe we need to be investing in a suicide hospital discharge and treatment program. This is an area that is underfunded, and that has been highlighted in the media recently. Investing in these programs is a way the government can prove that they are genuine about their desire to increase the surcharge to raise funds. Those funds are supposed to be directed to public health. This is a concrete way those funds can be directed to public health. We believe it is a fair way to ensure that services are genuinely delivered for improving the public health system in an area that is much needed, the area of mental health.

We still have concerns around the increase in the surcharge. We believe that the government has not justified increasing the surcharge—other than to keep people in private health insurance. We do not believe that is an appropriate measure to keep people in private health insurance. We do not believe it is the government’s role to keep people in private health insurance. The government should be investing those resources in places other than private health insurance rebates. It should be directing all of that money to the public health system. We do not believe that the private health insurance sector is delivering good health outcomes for our community. We believe, as I said, that it would be better if the government focused more on the reform of the public health system.

We have a number of problems with the government’s arguments and we are extremely concerned that the modelling around the impact of the measures on the public health sector is not conclusive. In particular, the modelling around the Medicare levy surcharge is incomplete. The government says so itself because it cannot model the people who do not take out private health insurance. We do not believe that the purchase of private health insurance is an objective, rational or measurable act. It is highly subjective, and evidence given to several Senate Community Affairs Committee inquiries by people like Dr Tim Woodruff from the Doctors Reform Society and Ian McAuley from the Centre for Policy Development has shown that cost, as a premium or as a tax incentive or disincentive, is rated lower than perceptions of security and safety. In other words, the basic premise the government is using to do its modelling is flawed. This simply means that the removal of the surcharge would have less of an impact on people’s choices about private health insurance than their age, their general health and their perception of risk and security in general and in relation to their health and wellbeing. In other words, the foundation on which the government is making its decisions is flawed.

The Greens have concerns with the government’s Fairer Private Health Insurance Incentives (Medicare Levy Surcharge) Bill 2009 [No. 2] because it is a ‘stick’ to compel people into taking out private health insurance—forcing people who are not on high incomes into purchasing a market product which is expensive and over which the government has no legislative control. And the Medicare levy surcharge also unfairly penalises people who make a conscientious choice about private health insurance.

However, the Greens do believe that any funds raised from the Medicare levy surcharge should be directed towards mental health programs. We believe it is a worthwhile investment and would deliver real outcomes. We believe they are outcomes that not only are essential to our community but also would be supported by people who are essentially what we call ‘conscientious objectors’ to private health insurance.

According to Dr Lesley Russell from the Menzies Centre for Health Policy, the increase in the Medicare levy surcharge suggests we are moving towards a new policy with regard to the role of the private system in health care. The increased surcharge imposed on high earners seems to indicate that the government expects or at least requires these people to have—if not to use—private health insurance cover. We agree with Dr Russell’s observations that it is a confused approach from a policy perspective. It would appear that the case for budget savings has won out over the drive for better health policy.

This is the bottom line here. In this case we do not believe it is about delivering better health outcomes; it is about trying to appease the private health insurance industry—arguing that means testing the rebate is not going to have such an impact on private health insurers because the government is raising the Medicare levy surcharge, thus forcing people into private health insurance. We believe the government is taking two contrary positions. On the one hand it is means testing the rebate; on the other hand it is saying to insurers, ‘It’s okay. We are going to slug the higher earners who do not have private health insurance and try to force them into taking your product, which we actually do not really like.’ But the government is going to do that to appease the private health insurers, to make them feel better so that they will not oppose the means testing of the rebate. The government has taken two contrary positions. This is confused policymaking. At its heart it is not delivering good health outcomes. That is the concern for the Greens. The government needs to be more upfront about what its position is. It needs to be more upfront about investing the funds from the surcharge into real policy outcomes, and it needs to present its modelling on how it came to its figures for the surcharge. The modelling has not been presented to us. We could not get it through the chamber or through estimates. We do not believe the figures. The government seems to have plucked them out of the air. The modelling does not include the 130,000 people who do not have private health insurance.

I move:

At the end of the motion, add:

and the Senate calls on the Government to invest the full amount raised by the Medicare Levy Surcharge (approximately $145 million over 4 years) into mental health programs:

(a)

Communities of Youth, Mental Health ($30m p.a.) proposed by National Health and Hospitals Reform Commission (NHHRC);

(b)

Headspace (30 new services at $1m p.a. or $30m);

(c)

Early psychosis prevention and intervention services ($26m p.a.); and

(d)

Lifeline suicide hospital discharge and treatment plan ($15.39m as a total package over three years) and a new Lifeline freecall number ($17.5m p.a.).

Cory Bernardi (SA, Liberal Party, Shadow Parliamentary Secretary Assisting the Leader of the Opposition) Share this | Link to this | Hansard source

In reviewing the Fairer Private Health Insurance Incentives (Medicare Levy Surcharge) Bill 2009 [No. 2] and the Fairer Private Health Insurance Incentives (Medicare Levy Surcharge—Fringe Benefits) Bill 2009 [No. 2] put forward by the Rudd Labor government, I realise that the government are confronted with a great moral challenge. You may be excused for thinking I am referring to last year’s great moral challenge of our time—the Carbon Pollution Reduction Scheme, which somehow has been relegated to the backblocks of the legislative agenda for 2010. That is just another example of the failure of this government to implement any substantive policy that is actually in accordance with the best interests of the Australian people.

We could talk about the whales and how the government is going to sue people and take the Japanese to court. That has been on the backburner for a couple of years but has reappeared now in an election year. We could talk about the government’s environmental promises with a CPRS and other nonsense that it has put forward as the greatest moral challenge of our time. That has gone. We could talk about its fiscal conservatism before it blew $150 billion of taxpayers’ money on nonsense. We could talk about its failed education revolution where it has not introduced a laptop per student as it promised before the last election. Now we are into a new realm of broken promises. In this instance we are talking about the Medicare levy surcharge, another broken promise by the Rudd government, which in spin worthy of a whole troop of whirling dervishes it has called the Fairer Private Health Insurance Incentives Bill—more nonsense because there is nothing fairer about what the government is proposing here. The government is proposing to increase taxes for those people who previously wanted to take care of their own private health insurance needs but who will be forced to drop it because of the consequential action the government is proposing to take in removing the private health insurance rebate. It is more nonsense, more empty rhetoric and more spin from the most loquacious and disingenuous Prime Minister that this country has ever seen.

Let me remind you, Madam Acting Deputy President, of why I can say that this is more empty rhetoric from an empty vessel in the Prime Minister who makes a heck of a lot of noise. He has said repeatedly that the government—federal Labor—will also maintain Lifetime Health Cover and the Medicare levy surcharge. There is your get-out-of-jail-free card for the Prime Minister because the word ‘maintain’, he would maintain, could be interpreted as ‘increase’, because increase tax is what these bills will do. They will increase the taxation burden on ordinary Australians and Australian families. They will increase by 0.25 per cent and 0.5 per cent the Medicare levy surcharge for individuals and couples. They will be increased because the government is pursuing an ideological vendetta against private health insurance. It is just another vendetta that this government pursues in relation to private ownership, private industry and private enterprise, and private thrift—anything that does not place the government at the economic centre of how the country is running and that does not place the government at the centre of family life or the education system. This government is opposed to anything that does not have it at the very core of almost every event in Australia.

Australian families do not want that. Australian families want to be able to take care of themselves. They want to be able to look after their own health needs by taking some responsibility, by having affordable private health insurance. They have private health insurance so that it maintains options for them but also relieves the burden on the public health system. And it is very hard to argue against that. Something along the lines of 56 per cent of operations are now undertaken in the private hospital system. This is the very system that this government wants to undermine. It wants to undermine it by removing the private health insurance rebate, which would make private health insurance more expensive for certain individuals. I am sure any number of those individuals will drop out of private health insurance because they will no longer be able to afford it as their electricity bills go up 16 or so per cent and their gas bills rise and their mortgage costs rise as a result of the spendthrift ways in which this government is throwing cash around.

As the cost of living goes up, people have to make discretionary decisions and private health insurance, as important as it is, is not regarded as important enough by this government, which is making it unaffordable. So there is a stick for this government to beat private health insurance out of people. As people are reliant then on the public health system, as they fall into the Medicare safety net, this government wants to beat them again by increasing the Medicare levy surcharge. For a high-income earner—and a very big question is what is a high-income earner in this day and age—living in Sydney you will need substantially more money to be a high-income earner and to maintain a certain lifestyle than if you live in, say, Hobart or Adelaide. The government is going to beat you with more tax. More tax is some sort of incentive. Apparently the logic is this: ‘We are going to make you drop out of private health insurance and then we are going to tax you more for putting extra pressure on the public health system.’

It strikes me as a duplicitous, irreconcilable objective. The government wants to reduce the pressure on the public health system, yet it wants to provide disincentives for people to maintain private health insurance. The government, of course, knows the consequences of its actions. Basically, it means it will reap more money from the Australian taxpayer. It is going to rip cash out of households that, in many instances, really cannot afford it and is doing so in order to buttress its own coffers—the coffers that have been run down not into just an empty vault but into negative territory. This government has wasted so much money. It has been irresponsible with taxpayers’ money; it has been irresponsible with its ideological agenda that is seeking to pit ordinary Australians who are seeking to take care of their own needs and requirements against their own government. What a shameful thing! I know there are many on the Labor side who share my disdain and contempt for the way Mr Rudd is going about his business.

Mathias Cormann (WA, Liberal Party, Shadow Minister for Employment Participation, Apprenticeships and Training) Share this | Link to this | Hansard source

They do, too.

Cory Bernardi (SA, Liberal Party, Shadow Parliamentary Secretary Assisting the Leader of the Opposition) Share this | Link to this | Hansard source

I know they do, Senator Cormann; they tell us all the time. They provide us with this information. They see the failed policies. They see these extraordinary interventions in the private marketplace with, quite frankly, hideous consequences. We see no-one prepared to take responsibility for the failings, and this is the great shame of this government. They are shameless in distancing themselves from all their policy failures. It is always someone else’s fault—it was the last government’s fault. The last government had the highest level of private health insurance participation. We had shorter waiting lists in our hospitals than there are now. That was another broken promise by Mr Rudd and his government. I wonder if the people of Australia remember that one: ‘We will take over the hospital system in 2009.’ They have not managed to achieve that. In fact they are washing their hands of it and doing the Pontius Pilate in saying: ‘No, it wasn’t us. It was the states. We now have to come to a reasonable agreement with them.’ I am sick of it and my constituents are sick of it. The Australian people are getting very tired of listening to the empty vessels in this government making all sorts of unsubstantiated claims and never bearing account for them.

We are going to hold them to account today by voting against these bills. This government said that they would not be messing with the Medicare levy surcharge. On 20 November 2007 the Prime Minister said:

Federal Labor will also maintain Lifetime Health Cover and the Medicare Levy Surcharge.

He went on:

Both my Shadow Minister for Health, Nicola Roxon, and I have made clear on many occasions this year that Federal Labor is committed to retaining the existing private health insurance rebates, including the 30 per cent general rebate and the 35 and 40 per cent rebates for older Australians.

Clearly that is more nonsense because they have already introduced the bill. It has been rejected and now they are going to reintroduce it to change those rebates.

How can this government hold their head high? This is the great moral dilemma facing this government now. How can they backflip, twist, spin, somersault, pirouette—how do you want to describe it—flip-flop on a core election commitment and then have the audacity and the hide to go on public television and come into this chamber and the other place and say: ‘We are honouring our election commitments’? It is absolute nonsense but they hope that, if they speak for long enough and use enough long words, the public and the commentariat will get confused and will not actually know what they said.

The Australian people and the commentariat, the observers, those who are absolutely interested in politics and those who are just observers of it or even casual acquaintances with what goes on in this place, are waking up to the fact that we have the most dysfunctional government that I can recall in my lifetime. Of course there was one parallel, but I was only a boy, and we thank Sir John Kerr for his contribution to democracy on that occasion because he saved Australia from a terrible fate. We are about to have a very similar fate befall us under this government, which has completely lost control of its financial capacity. It has lost control of taxpayers’ money. It has even lost control of its own programs.

This government received warning after warning about the failure of its programs and about the dangers of some of its programs and it ignored those warnings. In fact it beggars belief that departments would receive warnings for a minister and not give them to him. They prepare warning after warning, and they get independent warnings about the dangers of some of the programs and the inherent flaws in them, yet they do not bring them to the minister’s attention. There is a grotesque failure of policy process somewhere. Who is going to wear the responsibility for it? According to the Rudd government ministers and to Mr Rudd, who endorses as first-rate the minister who has prevailed over that particular disaster, no-one is going to wear responsibility. It is a shameful day.

These bills exemplify once again the lack of substance, the bluster, the falsehoods, the misleading promises and the empty rhetoric that this government has come to typify. In fact, I think it actually represents a disdain in many ways for the Australian people. When it comes to an election the Australian people render their choices based on what politicians say and on their track record. Unfortunately in Mr Rudd’s case they did not have a great track record to assess. They had his track record in Queensland which was hushed up. I remember when Senator Joyce tried to table some documents regarding Mr Rudd’s contribution in the Heiner affair in Queensland. The Labor Party would not allow us to do that because they did not want Mr Rudd’s track record to come under scrutiny.

The Australian people believed in what Mr Rudd said because he was Kevin and he was from Queensland. We have discovered that Mr Rudd does not have the same integrity as many of my colleagues from Queensland. We have found that Mr Rudd was prepared to do anything and say anything and blame anyone just to get into power. When he got into power he did not know what to do. He honestly has not known what to do, so he has stumbled from one failure to another. He has presided over one policy failure to another, from one broken promise to another broken promise, and the Australian people are getting very tired of it. Some of the programs that, of course, Mr Rudd has implemented—and I have spoken about a couple of them—have been mired in abject failure, yet he then has the hide to try and blame the opposition, or the minor parties or the states. It is always the blame game. He is always going to blame someone else. I seem to recall some more rhetoric in the wind about ‘the buck will stop with me’. It is time to end the blame game, particularly in health.

Not content with failing to implement the programs he said he would, the Prime Minister now wants to implement policies that he said he would not. This is the very crux of this matter. Mr Rudd and his team have an ideological hatred of private health insurance. They want to get people out of private health insurance and onto the teat of government because that means there will be a bigger bureaucracy—bigger government with people reliant on that government. It is the wrong way to go, but that is what this legislation does. This is another stick—a stick which will beat families in this country. It is going to cost them a lot of money every single year, for what purpose? So that this government can continue to spend irresponsibly. Deep in your heart, Madam Acting Deputy President Hurley, you know I am right. You know I am right and the Australian people know I am right. We have never seen such an abject waste of money and such wanton expenditure with so little to show for it. I should now say, Mr Acting Deputy President McGauran, deep in your heart, you too know I am right.

This government is now struggling to make a positive agenda for the Australian people. It is clearly only seeking to prop up its own re-election. How can it do that? The government’s attitude is: ‘Let’s target those people who don’t support our ideology,’ meaning those who do not support big government. ‘Let’s target those people who want to get on with their own lives and want to take responsibility for themselves. Let’s target those people who have built Australia, let’s penalise and punish them. Why do we do it? So that we can take money into our coffers and hand it out to those we deem worthy.’

The Australian people are worthy of a fair go. They are worthy of being given incentives to do the right thing and when we have a hospital system which is so clearly struggling—and it is struggling—why would we be pursuing any sort of measure which will increase demand on the Australian hospital system? Make no mistake: these bills, which we are discussing now, and a bill which will come up later, are absolutely related. These bills are trying to pre-empt the consequences of their own policy, which they are going to introduce later today or perhaps later this week. It is time for this government to come clean with the Australian people. It is better to fess up and say, ‘We really haven’t got a clue what we’re doing. We’ve spent far too much money but now we’re in a big hole and we need to get ourselves out of it. Can you help us?’ Who knows? The coalition might help the government to try to rectify the mess.

The greatest help we could give the Australian people would be to be re-elected later this year because another term of the Rudd government means another three years of waste, of dysfunction, of ego and of hubris unforeseen—you cannot imagine how they strut the corridors of power in this place, strutting around thinking they are the masters of the universe. They are not the masters of the universe. They are servants of the Australian people and they are failing the Australian people at every single turn. It is time to restore some balance and harmony into this place. It is time to restore some balance and harmony among the Australian people so that those who need help will get it, but the government are not intent on helping anyone except themselves.

Mathias Cormann (WA, Liberal Party, Shadow Minister for Employment Participation, Apprenticeships and Training) Share this | Link to this | Hansard source

I have said it before and I say it again: the Rudd Labor government has been an absolute failure in the health portfolio. The Rudd Labor government has been a complete and utter failure in the health portfolio. The Minister for Health and Ageing, Nicola Roxon, is a very lucky lady. There is so much incompetence in the Rudd Labor government right now with Minister Garrett and Minister Conroy and all the incompetence around that she is able to hide under this carpet of incompetence. If it were not for Minister Garrett and Minister Conroy and if it were not for some of the others who are performing disastrously in the administration of public policy, surely Minister Roxon would be under some very serious pressure.

Before the last election, the Rudd Labor government promised the world in health. They promised the world and they have delivered next to nothing. They overpromised; they have underdelivered; it was all talk and no action. Before the last election, we were told that only Labor had a plan to fix public hospitals, yet after the election did we see the implementation of any semblance of a plan? No, we did not. We got a 20-month review and even after that review made recommendations, we now have a review into the review and a series of photo opportunities around Australia for the Minister for Health and Ageing and the Prime Minister. There has been not one decision, just bureaucratic reviews into the never-never. No doubt, just as we now have the promise to take Japan to court in November over whaling, we will get an announcement in the next little while as to what Labor would do should the Australian people be unfortunate enough for Labor to be re-elected to government at the next election.

Mr Acting Deputy President, I put you on notice. You should take a very careful look at what comes out of the Rudd Labor government in the next few months. I would not be surprised if we get another promise and the Australian people are asked to take the government on trust moving forward. Our message to the Australian people is that you cannot trust a single thing that is being said on health by the Rudd Labor government. With federalism on health we were promised that the buck would stop with the Prime Minister, but what have we seen? The states and territories have been giving the Rudd Labor government the run-around. Kevin Rudd is now using the states and territories as an excuse as to why they are not able to follow through on some of the premises they made before the last election.

We had the most emphatic promise from the Rudd Labor government that it would maintain the existing private health insurance policy framework. The Rudd Labor government told us and the Australian people that it would retain the existing private health insurance rebates, including the 30 per cent general rebate and the 35 and 45 per cent rebates for older Australians. Kevin Rudd must have thought this was a pretty important promise to make in order to win the election in 2007 because, four days before that election, on 20 November 2007, as the then Leader of the Opposition, he wrote a letter to the Australian Health Insurance Association and gave an absolutely ironclad commitment. He must have thought he needed to do that in order to win some votes. Why else would the Leader of the Opposition bother to write a letter to a gentleman called Dr Michael Armitage, the Chief Executive Officer of the Australian Health Insurance Association? If Kevin Rudd did not think it was important to win some votes and if he did not think the people of Australia thought it was important, why would he have bothered to write the letter four days before the last election? Of course he thought it was going to help him win votes and to conduct what we now know to be an absolute deception.

Nicola Roxon, the shadow minister for health and ageing, not to be outdone, confirmed the opposition’s commitment to the private health insurance rebate and then went a step further. She accused those of us who were questioning the sincerity of Labor’s commitment to the private health insurance rebate of running a scare campaign. She put out a press release in the lead-up to the election, on 26 September 2007, which stated:

... Federal Labor has made it crystal clear that we are committed to retaining all of the existing private health insurance rebates, including the 30 per cent general rebate and the 35 and 40 per cent rebates for older Australians.

                        …                   …                   …

The Liberals continue to try to scare people into thinking Labor will take away the rebates. This is absolutely untrue.’

Then came the clincher:

The Howard government will do anything and say anything to get elected.

We know that it was the Rudd Labor opposition, now the Rudd Labor government, that was prepared to say and do anything in order to get elected. There has very clearly been a fraud committed on the Australian people, the voting public, across Australia.

The deception of Labor has continued in government. After the election of the Rudd Labor government, we thought we had better check that what it said before the election was indeed what was happening after the election. The officials sitting in the advisers’ box would well remember that at estimates after estimates we asked questions of the government, trying to find out whether it was committed to retaining the existing private health insurance rebates. As late as 24 February 2009, the Minister for Health and Ageing, Nicola Roxon, said that the government was ‘firmly committed’ to retaining existing private health insurance rebates. We found out that, while the minister was making that statement on the public record, officers of her department, at her instruction, were working up the proposal that we are debating in this chamber today. This is deception at its worst. The government is taking the Australian people for mugs. This is bad public policy—and I will get to the argument about why it is bad public policy. However, what is really offensive about this legislation is the absolute brazenness of the Rudd Labor government in setting out in a premeditated way to deceive the Australian people.

We are debating this legislation the wrong way around. I understand why the government now wants to deal with the Orwellian named Fairer Private Health Insurance Incentives (Medicare Levy Surcharge) Bill 2009 [No. 2] and the Fairer Private Health Insurance Incentives (Medicare Levy Surcharge—Fringe Benefits) Bill 2009 [No. 2]. These bills are nothing more and nothing less than consequential bills to try to mitigate some of the impacts of what the government’s legislation is really about. What the government really wants to do is reduce or scrap the private health insurance rebate for millions of Australians. What the government really wants to do is run its ideological attack on private health insurance irrespective of the pressure this will put on public hospitals, irrespective of what it will do to our health system, irrespective of what it will mean in terms of fewer people having private health insurance and irrespective of what it will mean for private health insurance premiums moving forward. The objective that the government is pursuing is to reduce or scrap private health insurance rebates.

We are dealing here with an attempt by the government to stop those people who will see significant increases in the cost of their private health insurance as a direct result of this legislation from leaving private health insurance. When we were in government, we introduced a package of carrot-and-stick reforms to support Australians taking additional responsibility for their own healthcare needs by taking out private health insurance. The government wants to reduce the value of the carrot and to increase the cost of the stick. As Senator Fierravanti-Wells said, this legislation is nothing but an additional tax hike—something that the government never said before the last election that they would do.

This legislation comes on top of previous changes made by the government to private health insurance policy arrangements. Mr Acting Deputy President, you would remember that Labor made changes to the Medicare levy surcharge thresholds in its first budget, even though it said before the election and then confirmed after the election that it would not. In its first budget, it went ahead with changes to the Medicare levy surcharge thresholds. The Rudd Labor government’s initial proposals were for a reduction of about $960 million in expenditure on private health insurance rebates on the basis that it and Treasury had expected 644,000 fewer Australians to have private hospital insurance than would have been the case before those changes. I remind the chamber that, a year and a half ago, the government set out with those changes to take $3.2 billion out of the health system. The government aimed to save $960 million in private health insurance rebates because rebates would no longer have to be paid to people who walked out of private health insurance or who did not take it up. There was going to be $3.2 billion less in resources for our health system as a direct result of what the government was doing.

The opposition did not support the decision that was ultimately made by the Senate, but at least the Senate forced the government to water down those changes somewhat. Still, according to the government’s own figures, that initial change was going to result in a $740 million saving over the forward estimates in spending on the private health insurance rebates. So the government already has to spend significantly less on the private health insurance rebate compared to what it promised before the election and compared to what would have been the expected expenditure when it decided on making its commitment to retaining the existing rebates. Furthermore, by saving $740 million on not paying the rebate to those people who will leave private health insurance or those people who will not take it up, the government has already taken $2½ billion out of the health system as a result of about 500,000 fewer people having private health insurance.

We have got to remind ourselves at this point that, while this is going on, the government is doing nothing to fix public hospitals, other than having reviews that go for months and months and pursuing broken promises. The government is spending billions and billions of dollars recklessly, whether it is $2½ billion on pink batts or $14 billion on Julia Gillard memorial halls—you name it. Billions and billions of dollars of reckless spending and who is being asked to pay the price? It is people across Australia who need timely and affordable access to quality hospital care and people across Australia who are making a sacrifice every year by taking out private health insurance, by taking additional responsibility for their own healthcare needs. They are the people that this cold-hearted government wants to pay the price for its reckless spending on ill-fated and dangerous insulation across Australia, for waste and mismanagement as part of the Julia Gillard memorial halls program and for $900 cheques to people overseas, to dead people and to people in jail. That is what this government is all about.

As I have mentioned, the effect of this package of bills very clearly will be that fewer people will have private health insurance. There will be upward pressure on the cost of private health insurance, which again will see more people leave. All of this will put additional pressure on our public hospitals, and of course we go back into this old-fashioned, Labor Party induced vicious circle in our health system. I just remind the chamber, as I have reminded it before, that the Labor Party have got form on this. When the Labor Party get into government, they attack people with private health insurance. In so doing, they put our health system out of balance. The policy challenge for us is to ensure we have got a health policy framework and a health system in which all Australians can have timely and affordable access to quality hospital care, and the best way to achieve it is through a well-balanced, mixed health system with both a strong and well-funded public system and a strong and well-supported private system. When Labor were last in government, they did exactly this sort of stuff. They pulled these sorts of stunts and the proportion of Australians with private health insurance went down from about 63 per cent to about 30 per cent before we were able to turn it around.

Labor today will tell you: ‘It has not happened. You said all these terrible things would happen last time.’ Never mind that it was Treasury estimates which predicted that 644,000 fewer people would be in private health insurance as a result of these changes. Never mind that these changes do not happen within 24 hours of legislation having being passed through this chamber, as much as Labor might like it to be otherwise. When we got into government in 1996, it took two or three years before our changes started to take effect too. What I am concerned about is that, if this Senate were to allow the Rudd Labor government to continue with these sorts of terrible broken promises, which will make it harder for Australians to afford private health insurance, then we will see very, very bad consequences for our health system moving forward—maybe not immediately, within 24 hours of passing the change, but over time, because that is what happens with social policy changes.

Of course, we did propose a better alternative to this. We proposed to increase the excise on tobacco by 12½ per cent, which would have raised about $2.2 billion over the forward estimates, according to Treasury evidence at estimates, which is about $300 million more than the $1.9 billion the government is trying to save through this measure over the forward estimates. This happens to be consistent with one of the recommendations from the National Preventative Health Taskforce—another one of those reviews that the government has left in a cupboard somewhere, which it received at the end of June last year and which nothing has happened with since. It is one of those many reviews that the Rudd government is so good at instigating but without taking any action as a consequence. Has the government taken on board that very constructive suggestion that we have made? Of course not—silence.

This is not about saving $1.9 billion. If it were about saving money, the government would not have been out there wasting billions and billions of dollars on dangerous home insulation programs; they would not have wasted billions and billions of dollars on Julia Gillard memorial halls to replace school buildings that were perfectly functioning and perfectly okay. This is about an ideological war which the Labor Party has been pursuing for decades against people with private health insurance. It is about an ideological war against those Australians who take additional responsibility for their own healthcare needs. It is about wanting to put the health system out of balance. It is about destroying private health insurance; that is what this is all about. That is why the Rudd Labor government never even entertained the alternative that we put forward.

Here we are, with the first piece of legislation to come back after the House of Representatives passed legislation relating to the greatest moral challenge of our time, the flawed ETS, and we are dealing with this broken promise instead of dealing with the emissions trading scheme. Where is the emissions trading scheme on the list? It is way down, and I suspect that the Labor Party, in its caucus, is getting increasing uncomfortable about the lack of popularity and the fact that people across Australia are starting to understand what a dog of a scheme the ETS is, that great big new tax which Labor wants to impose on everyone.

Why are we dealing with this now, even though the government already knows that it does not have the support of the Senate for it? The reason we are dealing with it is politics as the government just wants to collect another double dissolution trigger. This is not about health, this is not about doing the right thing by our health system and this is not about making sure the people across Australia can have timely and affordable access to quality hospital care. This is about the Rudd Labor government’s political strategy. It is about covering up that it is all talk and no action; it is about running away because it wants to try to get away from the impact of the emissions trading scheme. I am sure that right now behind the scenes in the Prime Minister’s office there are people—the hollowmen of the Prime Minister’s office—plotting and scheming how they can get their heads out of the noose as far as the emissions trading scheme is concerned.

We are dealing with a blatant broken promise. We are dealing with a bad, bad, bad public policy measure which will be bad for our health system. We are dealing with something that the Rudd Labor government promised emphatically before the last election it would not do. At the same time, the government has done absolutely nothing to deal with the many challenges of our health system. I say it again—and I conclude on this point: before the last election the government promised the world in health. Only Labor, according to the Prime Minister, had a plan to fix public hospitals. Prime Minister, where is your plan? When are you going to start implementing it? When are you going to start making decisions that will actually improve things in our public hospitals rather than pursuing this blatant, offensive, broken promise which will make things worse in our health system, not better? We are all waiting to see it. When you finally get around to making a decision about the review you had better make sure that there is some tangible action—some real decisions—rather than yet another bureaucratic process on the never-never. The people of Australia were promised that there would be some tangible improvements to our health system. So far, all they have had will make things worse. It is time that we got some real action rather than talk in the health portfolio.

Ian Macdonald (Queensland, Liberal Party, Shadow Parliamentary Secretary for Northern and Remote Australia) Share this | Link to this | Hansard source

I am pleased to join my colleagues in this debate on the Fairer Private Health Insurance Incentives (Medicare Levy Surcharge) Bill 2009 [No. 2] and the Fairer Private Health Insurance Incentives (Medicare Levy Surcharge—Fringe Benefits) Bill 2009 [No. 2] to strenuously oppose this latest cash grab by the Rudd government. The Prime Minister, Mr Rudd, in a letter he wrote on 20 November 2007, just a few days before the last election, said to Dr Michael Armitage, the CEO of the Australian Health Insurance Association:

Both my Shadow Minister for Health, Nicola Roxon, and I have made clear on many occasions this year that Federal Labor is committed to retaining the existing private health insurance rebates, including the 30 per cent general rebate and the 35 and 40 per cent rebates for older Australians.

That seemed to me to be a rock-solid guarantee, in writing, that Mr Rudd would not be doing what he is doing in this bill. I ask Senator Sherry, representing the government in this debate, what it is that allows Mr Rudd to make a rock-solid written promise like that and break it with impunity.

On the first day back in this sitting of parliament we are debating a broken promise, a broken commitment, by Mr Rudd. Instead, one would have thought we should have been debating the greatest moral challenge of our time. Mr Acting Deputy President, you will remember that Mr Rudd called his Carbon Pollution Reduction Scheme the greatest moral challenge of all time. Yet, if it is such a challenge, why are we not debating that this week? Why are we instead debating a broken commitment, a commitment made in writing by the Prime Minister just before the last election? I note in passing that the list of speakers is pretty short when it comes to the participation of Labor senators in this debate. I can well understand their reluctance and reticence to get involved in this debate. Which Labor senator would want to promote a bill that is a direct breaking of a written promise by their leader just a couple of days before the last federal election? I can well understand why Labor senators are running for cover in this debate. It seems incredible and improbable to me that, instead of debating the greatest moral challenge of our time, the Carbon Pollution Reduction Scheme, we are here today debating the breaking of a direct written commitment by Mr Rudd just before the last election.

Labor’s manifest inadequacies in health administration are many and varied. Wherever you look around the public policy area you can see Labor has failed in health as it has failed in economic management. During this debate I want to mention to senators an experience I have personally had in the way the Labor government has messed up pathology tests. You will recall that in the last budget the government took $180 million off pathology tests. Senators may know that in 1996 I had open-heart surgery and had my aortic valve replaced with a plastic one. To keep my heart operating and to keep me alive, I have to keep my blood thin, which means I take Warfarin every day. To make sure the Warfarin is properly adjusted, I have regular pathology tests. For the last 13 years I have had a pathology test every three or four weeks at no charge. Now under the Rudd Labor government it is going to cost me $40 a time to stay alive. That is not too bad for me—perhaps I can afford it—but there are many of my constituents who simply cannot afford the $40 a time under Labor.

Debate interrupted.