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

I move:

That the Fairer Private Health Insurance Incentives Bill 2012 and two related bills be referred to the Economics Legislation Committee.

I do so because this is the latest betrayal by the Gillard Labor government that really does need to be put under scrutiny. Why? Because this government has absolutely no mandate whatsoever to pass these bills.

The government claims only 27,000 people will drop cover as a result of this measure. Treasury has not done the modelling of the effect of the downgrading of this cover. This is why it needs to be scrutinised. The government's own insurer, Medibank Private, predicted 37,000 of their members alone will drop their cover and 92,500 will downgrade. About 2.4 million people will be directly affected with immediate increases in premiums of 14 per cent, 29 per cent and 43 per cent in the respective income tiers for those under 65.

Deloitte, which is a very respected organisation, has undertaken an analysis which predicts that in the first year 175,000 people would be expected to withdraw from private hospital cover and a further 583,000 people will downgrade. Over five years, 1.6 million people will drop their cover and 4.3 million people will downgrade their cover. Deloitte's analysis also predicts that private health insurance premiums will rise 10 per cent above what they would otherwise be. They also predict that there will be $3.8 billion in additional recurrent costs for the public hospital system. Around 2.8 million people with general treatment cover will withdraw and 5.7 million people will downgrade over five years.

Has Treasury done modelling on the costs and additional burden on the public hospital system, not to mention the effects that this is going to have on waiting lists? No. As we know, a deterioration of the risk pool—that is, healthier, younger people dropping out of private health insurance first—will cause an upward pressure on premiums for all 12 million Australians with private health insurance. What further premium increases will be required as a result of this increased risk? How many people will drop out of private health insurance as a result of these further increases?

When one looks at the people who now rely on private health insurance—the government has been absolutely outrageous in the way that it lied about this measure at the last federal election. For years the Australian Labor Party has been telling us in writing—and it is not worth the paper it is written on—that, 'No, we're not going to touch private health insurance rebates.' They kept telling us that. They lied about this.

Senator Feeney interjecting—

They went to the last federal election and lied about this, Senator Feeney. Of course, now they are perpetrating that by telling us that private health insurance is for the rich. Well, 5.6 million people with private health insurance have an annual household income of less than $50,000. Go and tell those people on less than $50,000 that according to this government they are wealthy, and 3.4 million of those people have an annual household income of less than $35,000. What this government is doing in relation to private health insurance is absolutely outrageous. What is going to happen when all the patients in the private hospital system move over? Therefore, these bills need to be scrutinised by a Senate committee. (Time expired)

David Feeney (Victoria, Australian Labor Party, Parliamentary Secretary for Defence) Share this | Link to this | Hansard source

I rise to oppose the motion seeking to refer the—

John Williams (NSW, National Party) Share this | Link to this | Hansard source

Let the Senate do its job.

Sue Boyce (Queensland, Liberal Party) Share this | Link to this | Hansard source

Order! Senator Williams, please do not make any interjections. Senator Feeney, please ignore the interjections.

David Feeney (Victoria, Australian Labor Party, Parliamentary Secretary for Defence) Share this | Link to this | Hansard source

I do try, Acting Deputy President. There is no justification for these bills to be referred to the committee, despite what Senator Fierravanti-Wells just set out in her speech of confected outrage. These bills have been debated extensively over the past three years with all of the issues comprehensively considered and examined. This motion is nothing more than a cynical attempt by the coalition to prevent these bills passing through this chamber prior to their proposed commencement date. I said in my very first speech to this place:

In health we need to end the scandal of three billion tax dollars a year being handed over to the private insurance industry—a handout that has done nothing to reduce the pressure on our public hospitals. For all this vast subsidy, the proportion of Australians who have private health cover rose during the Howard years only from 34 to 44 per cent. And most of the new purchasers were well-off people who bought a cheap policy to avoid the government’s tax surcharge. That is to say, the private health insurance industry has been grown with conscripts not volunteers.

It is our very firm view that these bills will ensure that low- and middle-income earners will no longer subsidise the private health insurance of high-income earners. Despite the misleading claims that members of the coalition have made throughout this debate and again today, the rebate will remain unchanged for low- and middle-income earners. The private health insurance rebate is the fastest-growing component of health spending and it is unsustainable. Over 10 years its real cost will increase more than 50 per cent.

The changes proposed by this government will save $2.4 billion over the next three years and $100 billion over the next 40 years. So one wonders why the coalition are opposed to a measure that ensures that our tax dollars are spent in the most effective way. The real reason the coalition are so opposed to these bills is that they have never met a billionaire they do not want to give a handout to. And we see this riddled throughout their policies.

Senator Nash interjecting—

I see Senator Nash gnashing her teeth as she hears my remarks, but one might very well remark that, given the recent advice and interactions between her Senate leader and a notorious billionaire, one can see my point proven again and again. The continued passage of these bills should not be held up because of the coalition's ideological desire to hand over taxpayers' money to those who are most able to look after themselves.

Scott Ryan (Victoria, Liberal Party, Shadow Parliamentary Secretary for Small Business and Fair Competition) Share this | Link to this | Hansard source

I am quite proud to speak on this motion, because what we just heard from Senator Feeney is a complete misrepresentation of the importance of private health insurance. In fact, one of the reasons we need to have an inquiry into this matter is to dispel those myths—in fact, those quite blatant mistruths—by the government. Let us go back to the history of why this is a rebate and not a tax deduction. Just like Medicare is universal—and Labor made such a point of that—the previous government introduced the private health insurance rebate as a rebate, not a tax deduction. The reason it was introduced as a flat-rate rebate and not a tax deduction was to guarantee that it would be worth more to lower income earners. If it were a tax deduction, like it was previously, it would have been worth more to higher income earners. This rebate guarantees that the millions of people Senator Fierravanti-Wells mentioned—whose household incomes are less than $30,000 and less than $50,000—will be helped to keep their private health insurance.

This is what Labor are all about: they actually wants to punish those who invest in their own health care. It is just like they have always been with education: they do not like people being able to invest in their own health care. The private health insurance rebate ensures and triggers further private investment in health care. It increases the overall pool of money being spent on health in Australia, and we know from the work of the Productivity Commission and the Australian Institute of Health and Welfare that private hospitals treat 40 per cent of all patients in Australia. In 2009 and 2010 private hospitals admitted 3.5 million patients, and they perform most of the elective surgery in Australia. That is what Labor do not like. They want everyone to have to join the queues that they did so much to make longer at the state level over the last decade. The dream of the Labor Party is a national health service—a British-style national health service. The very balance that Neal Blewett designed into the Medicare system, which protected private health insurance and made the rebate that we as citizens get for a medical procedure not dependent upon the venue in which that procedure was performed, is supported by the private health insurance rebate. The rebate guarantees that, regardless of your income, you receive a flat amount to support you investing in your own health care, to support you taking pressure off the public system and to support you freeing up those resources to be used by those who are more needy. As I said, it was all about making it a rebate so that it would be of more value to lower income earners.

What the government does not want people to know is that every one of those households that Senator Fierravanti-Wells talked about—those who are earning less than $30,000 and $50,000—is going to pay more for health insurance because of this bill. We are going to have tens of thousands of people drop out. The government does not want to tell us, because Treasury will not do the modelling and release it, but we have heard from Medibank Private and we know from other players in the sector that this is actually going to mean that the young and the healthy will drop out. It will reduce the quality of the pool of people in private health insurance, and that will mean that the increases in private health insurance costs in coming years will be higher than they otherwise would be. When it comes to the carbon tax, the government does not like to have such comparisons. It likes to pretend that it lives in a world where its assertions are the truth. But they are not, and we know that.

What this Senate needs to do is to ensure that the mistruths—and potentially even the misunderstandings, Senator Feeney—that are put around by the Labor Party and their allies on this, and the dirty deal that was done in the lower house, are exposed so that the people know why they are getting a 10 per cent increase rather than a seven per cent increase in their bill next year. We are talking about the people on below average incomes—the people who save for their own health care because they see it as something that is good for them, good for their families and good for the community. Those people should have the right to know exactly why their premiums are going up faster than they were in previous years. They are going to go up faster because the Labor Party needs to fill various budget black holes that it has created, and it is continuing its 30-year war against the private health industry—the industry that performs the majority of elective surgery in Australia. Why on earth we would want to reduce that, I do not know. It is not like the state hospitals that have been run by the Labor Party for so long are doing such a fantastic job—with the tragedies we heard about in New South Wales and Queensland. It would be a travesty if these bills were not exposed. It is wrong that Labor and its Greens alliance partners are willing to ram this through. We will ensure that all the Australian people know the exact consequences of this legislation.

Bridget McKenzie (Victoria, National Party) Share this | Link to this | Hansard source

I too rise today in support of the motion of the shadow minister for ageing and mental health, Senator Fierravanti-Wells, to refer the Fairer Private Health Insurance Incentives Bill 2012 and two related bills to the Senate Economics Legislation Committee. This legislation will impact on the federal budget and it is only right and proper that the Senate Standing Committees on Economics examine the legislation in light of the changing economic situation—and I mean the actual economic situation, not the changing political imperatives of the Labor government. When this legislation last entered the Senate, it was referred to the Senate community affairs committee, where the coalition recommended that, rather than punish hard-working Australian families, the Minister for Health and Ageing examine other means of obtaining the required fiscal savings. The coalition supported the government's attempt at fiscal responsibility, especially in light of such consistent failure over time on this key indicator of government performance.

The government is once again putting middle Australia in the spotlight and taking aim, as my two coalition colleagues have mentioned. I will not reiterate the statistics. In its majority report the committee at that time was satisfied that the government had set aside adequate funds to inform and instruct the industry and the public on how these means-tested rebates would work. But, clearly, this has not happened. If I walked down the main street of any town in Australia or asked any of the 40 per cent of regional Australians who have private health insurance how this would affect them, they would not be able to tell me. Australians need to understand how this legislation will affect their bottom line from July 2012 and the Senate needs to assure itself about the holistic impact of this legislation on the nation's bottom line.

Senator Fierravanti-Wells's motion seeks the committee to report in June, allowing plenty of time for all stakeholders to participate in a comprehensive examination in the current economic climate. The government has the numbers today to vote to halt the scrutiny, but it also has the numbers in the legislation committee to adopt a report. If it is such a great piece of legislation, Senator Feeney, let us have a look at it. What is there to hide? This is yet another example of the Labor government doing something in haste without fully understanding its impact and without thorough investigation. In fact, this government's entire time in leadership of our nation has been littered with rushed, poorly implemented policy with unintended consequences.

I am confident Australians would like to know why Nicola Roxon, the then Minister for Health and Ageing, said in 2009:

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

She then proceeded four months later to introduce this legislation into the House of Representatives—mixed messages from a mixed up Labor government. The government is planning to means test private health insurance rebates at the same time that it has approved a premium rise. The new federal health minister has approved an average rise in private health insurance premiums of 5.6 per cent effective from 1 April. As a result Australians will be paying more for their health insurance under this government.

Means testing families on $160,000 a year is just that—it is mean. This legislation targets the copper and the teacher, for example, in regional Australia, who contribute their taxes, who pay their Medicare levy and who are going to be slugged again. Describing these families as 'millionaires' shows just how out of touch this government is with the day-to-day struggles of working Australians. Penalising people for taking responsibility for their own health care makes no sense. Many regional communities currently have access to private hospitals and the specialists those hospitals bring to town, essentially acting as a hub for regional healthcare delivery. Typically, private hospitals in regional centres have lower occupancy rates, meaning they operate on wafer-thin margins and any erosion in those rates will be magnified in regional hospitals and likely to force cuts to service or, potentially, to cause some private hospitals to close their doors entirely. Forty per cent of regional people have private health insurance and those patients are using these private services, many no doubt relying on them for repeat admissions over the course of a treatment. For ongoing health conditions. these families can ill afford to lose these benefits.

Let us refer it to our committee for scrutiny. Senators are canny folk and I am confident there would be some great recommendations from the committee on how to assist the minister to find the savings for Mr Swan's surplus without slugging middle Australia. How typical, Labor.

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

I too would like to make a contribution to the debate on the motion moved by Senator Fierravanti-Wells to refer the Fairer Private Health Insurance Incentives Bill 2012 and two related bills to a committee for inquiry. We know that this is one in a long line of stunts by the opposition to delay the proper progress of legislation through the Senate. Indeed, it is just a delaying tactic and fairly repetitive behaviour on the part of the opposition, but it is in line with their opposition for the sake of opposition.

I note that these bills have already been in public debate for approximately three years and it would be safe to say that all of the issues covered by the bills have been well and truly traversed in debates in this chamber and in Senate estimates. Most of the issues raised in these bills have been traversed ad nauseum by those opposite. That is fair enough, but there is no need to refer them again to a future committee. I note also that the bills are already on the Notice Paper for debate in the Senate this week and this is, properly, where we should be heading—that is, to get on with the debate about these important bills. I note also that already nine coalition senators have their names on the speaking list to contribute to the second reading debate on these bills. Obviously they are clearly ready to talk about the bills, but they have to go through this stunt to make us waste more time of the Senate by talking about referring bills to a committee.

The government wants to proceed with these bills because they are good Labor policy. We believe that private health insurance rebates should be means tested to make it fair for all Australians. It is not fair that Australians on lower to middle incomes are subsidising the private health insurance of Australians on very high incomes, like those of us in here. It is not fair that taxpayers on low incomes who may not be able to afford private health insurance themselves should be subsidising the private health insurance of millionaires. There is another very good reason we should be getting on with debating and passing these bills—that is, the budgetary impact of not doing so.

We know that Australia's health budget is one of the burgeoning budget issues we have to deal with. We do have to take decisive action to make sure that we keep that budget under control and that we focus the health budget on where it needs to be—that is, on services for people and medical assistance in hospitals. That is what people really need. We know that these bills, if they are passed, would save the Australian budget $2.4 billion over the next three years and $100 billion over the next 40 years. That is an amount of money that could be well invested in the health system, but the opposition are saying they do not want to proceed with it. I have to ask them: if they are not going to pass these bills, as they are indicating, then where are they going to find the money so Australia's health system can provide the services Australians need?

They have given us no indication of where they would make up that budget shortfall. They never will give us any indication of where they are going to make up that budget shortfall. We are still trying to find out how the opposition are going to fill the black hole—the crater—of the $70 billion that they are going to foist on the Australian public because they have no concrete proposals for dealing with budgetary matters. They just continue to oppose for the sake of opposing.

These reforms build on the Australian Labor government's great record with regard to health and health reform. Of course, it was a Labor government that brought in Medicare—universal health care for all Australians. It is a very proud part of our history. In terms of the more recent Labor governments, we have tried to address the severe funding shortages that occurred throughout the Howard era—the era when Mr Tony Abbott was the Minister for Health and Ageing and ripped a billion dollars out of the health system.

Senator Nash interjecting—

We have attempted to redress that by increasing hospital funding by $20 billion since 2008. We have committed more to cancer services, including 22 regional cancer services, Senator Nash. We have committed more than $2.2 billion to mental health—the largest ever mental health package in Australia. We have provided funding for preventative health and for primary health care. We have increased the numbers of doctors and nurses. We have done practical things for Australians.

John Williams (NSW, National Party) Share this | Link to this | Hansard source

This is about the Senate doing its job as a chamber of review. That is what this is about. Senator Fierravanti-Wells has brought forward the statistics in terms of what is going to happen. You do not have to be a rocket scientist to realise that the more you raise the price of something the fewer customers you will have. That is just a law of economics. As you raise the price what is going to happen is that people will either lower their amount of cover or pull out of private health insurance. And what will happen then? It will mean more stress—more people relying on the public health system that is run by our state governments and is already under enormous stress.

We just found out last week that there will be a $100 million a year cost to the hospitals for increases in electricity prices because of the carbon tax—$100 million a year for our hospitals. What are we going to do now? We are going to remove the incentive for people to take out private health insurance. The government want to take that away. Yet they are trying to hide from it. They will not let a Senate inquiry go ahead; they are opposing that.

Have a look at the statements of Ms Roxon and former Prime Minister and slain political man Kevin Rudd prior to the 2007 election. The statements were: 'We will not change the private health insurance rebate. That is locked in concrete. We are the Labor people and we will not change that.' And what are they trying to do? They are trying to change it.

The reason Labor have a 31 per cent primary vote is that people do not trust them. They do not trust them on private health insurance. They do not trust them on carbon tax. They do not trust them on managing our economy. The reason they are doing this is they are stone motherless broke. We now have $231 billion worth of gross debt because they wasted so much money. They handed out $900 to people here, there and everywhere. There was the pink batts. There were the school buildings—including a $600,000 kiosk at Tottenham Central School and a $330,000 eight metre by four metre building at Kingstown Public School. The waste of money is incredible.

What are the government going to do now they have run out of money? They are going to pressure our state health system. This is cost shifting. They are simply removing the cost from the federal budget and placing it onto state budgets, which are already under enormous stress. We have seen what has happened to our state hospital system over the last 15 years with the lack of finance and support. All this is about is shifting the cost from the federal budget to the state budgets. Make no mistake about it: people will leave private health insurance—we already have the models on that—or downgrade the cover they have. Many of these people are simply Aussie battlers. When more drop out, the private health insurance companies are going to have to raise their premiums. That is only common sense. Then those Aussie battlers, who will not be affected by this as far as their rebate goes, will see their premiums going up and they will drop out. There is the problem: more strain on our public health system.

People will be lined up at the emergency department of the hospital on a weekend putting more stress on the hospital system. People will have to wait to have surgery carried out. People will leave the private health system. What will happen then? How will those private hospitals survive? This is a threat to the private hospital system as well. More people will be going to the public health system. And it is a betrayal of the promise by Ms Roxon and Mr Rudd prior to the 2007 election. No-one can deny that. We can bring in the printouts. When we get into debate on this bill we will gladly bring in the printouts from the media coverage where they said, 'We will never reduce that.'

As I said, the reason the Labor Party's primary vote is at 31 per cent is that the people of Australia have lost faith and trust in this government. They cannot trust you.

Fiona Nash (NSW, National Party, Shadow Parliamentary Secretary for Regional Education) Share this | Link to this | Hansard source

The carbon tax.

John Williams (NSW, National Party) Share this | Link to this | Hansard source

Yes, Senator Nash, there is the carbon tax. I will take that interjection. We heard, 'There'll be no carbon tax under a government I lead.' But on 1 July in will come the carbon tax.

Senator Feeney interjecting—

And remember—people like Senator Feeney should remember—that $100 million a year extra cost for electricity in our hospital system throughout Australia. That is $100 million for what? It is for absolutely nothing. That is why we should support this inquiry. At least let the Senate do its job. That is all I ask for—to back Senator Fierravanti-Wells's reference here. Let the Senate do its job. If you vote against this reference you are voting against democracy and the job of this Senate. That is what you will be doing. You want to close it down so that you can rush a bill through for the budget that you have made such a mess of over the last four years.

Eric Abetz (Tasmania, Liberal Party, Shadow Minister for Employment and Workplace Relations) Share this | Link to this | Hansard source

In summing up this debate for the coalition I would remind Senators Feeney and McEwen that somebody once said:

I grow tired of saying this. Labor is committed to the 30 per cent health insurance rebate.

That quote was in my local newspaper, the Hobart Mercury, from a certain person. I will give those on the other side a hint: the person was also the person who promised undying loyalty to Mr Rudd. And just in case they cannot remember or cannot get the hint as to who it is—if they are scratching around in their heads—I will give them another hint. It was also the person who said, 'There will be no carbon tax under a government I lead.' In case they have not got it yet, that was the solemn promise of Ms Gillard on behalf of the Australian Labor Party.

This is another Labor broken promise. We as a coalition want to put this proposed measure to a Senate inquiry to give the Australian Labor Party the opportunity to explain how that which was such good policy before the election is all of a sudden bad policy after the election. They know they have the numbers—or, I should say, the Greens know they have the numbers, because they have a compliant ALP willing to ram this through the place without proper scrutiny. We will be dividing on this, because we believe the Senate should do its duty and explore this matter fully. (Time expired)

The PRESIDENT: The question is that the motion moved by Senator Fierravanti-Wells be agreed to.