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Tuesday, 14 February 2012
Page: 1207


Mr BANDT (Melbourne) (21:06): When you look around the world you realise that, relatively speaking, Australia is blessed with a good health system. Most Australians know it and they cherish the system that we have got. There is of course plenty of room for improvement and we need to make every dollar spent on health count. That is why it is such a travesty of public policy that tens of billions of dollars have been spent, in the name of health policy, undermining the public system.

When the Howard government introduced the 30 per cent private health insurance rebate in 1999, they claimed it would encourage many Australians to take out private health insurance and thereby relieve pressure on the public system. But if there were ever any doubts about the merits of that policy, the evidence is now conclusive: it has been a massive failure on both counts. Multiple studies have concluded that the rebate did not drive many Australians to join health funds. And, in the wake of the rebate's introduction, utilisation of public hospitals actually increased. In short, it has been a massive and expensive failure and Australia's health system has suffered as a result.

The rebate was never a good policy. It had no backing by solid economic or public health research. It was a subsidy to an industry that came at the expense of the public health system. When the government provides such a massive subsidy for something, it might benefit the customer, but the industry even more so. Private health funds are doing very well thanks to the Howard government's largesse. It simply stands to reason. It is hard to image how a dollar spent in a public hospital, directly paying for an extra nurse or to keep an operating theatre open longer, can be less efficient than somehow relieving pressure by sending the money to a health fund. It was always a vague, hand-wavey argument and, since the rebate was introduced, the evidence has put the lie to it. The rebate may have lead to an increase in the utilisation of private hospitals but there has been no subsequent decrease in the use of the public system.

It is clear: the rebate does not take pressure off the public system—in fact, it makes things worse for the public hospital system. Private hospitals compete with the public system for nurses, doctors and other resources crucial to providing the best care to the taxpaying public. Australia's public hospitals are experts at providing quality emergency care and treating complicated, chronic illnesses. Private hospitals, by and large, do not. This is why the myth of relieving pressure will never be reality. A dollar spent on the rebate will never make the wait in an emergency room a second shorter.

It is true that, as many public health experts have noted, there has been an increase in the coverage of private health insurance since the rebate came along. But it is the introduction of lifetime cover that is widely acknowledged to be the biggest driver behind this change, and the contribution of the rebate has been understood to be minimal at best. This has been known for some time.

On equity grounds, the private health insurance rebate has to be one of the most inequitable expenditures of public money imaginable. Every year $4.5 billion is spent subsidising the healthcare of those most able to pay for it at the expense of those who cannot afford to pay. Low-income earners are paying for the care of others in a system they themselves cannot afford to access. We should be horrified by this. A glaring example is dental care. Millions of Australians cannot afford to see a dentist. Many languish on waiting lists that stretch into years. Most simply put off going until dental problems land them in the emergency room. This is a national crisis and a scandal. The Greens' plan for universal dental care, Denticare, is designed to fix this problem. But it will require a major investment in public funds to fix this inequity. But what do we have now? Every year $400 million of the private health insurance rebate money goes to the care of those with dental coverage on their policies. Imagine what that $400 million could do if it was directly providing services to those who cannot see a dentist at all. Instead, we are left with the absurd situation of taxpayers with no care subsidising that of high-income earners who can afford dental treatment. People with no teeth may be paying for those with a full set to get treatment! Such is the inequity of a two-tier system. I am very pleased that today agreement has been reached to put a down payment towards dental health going into Medicare. That is a very appropriate use of some of the money that is raised from one of the bills in this package of legislation. Going to the dentist should be like going to the doctor in Australia: you should be able to take your Medicare card there and access the same sorts of rebates and services that the GP is able to access when you present with your Medicare card. But to do that, we are going to need a significant injection of funds into the system, and using some of the money that is saved from the rebate would be a great place to start.

I have heard many on the coalition side during this debate talk about the two-tiered system as if it is a good thing. Well, I, and I think many other people, do not want the Australian health system to go down the US road, where you are asked first and foremost if you have private health insurance and, if you do not, you wait and you wait and you hope. This legislation is a first step to righting this inequity. It introduces a means test so the highest-income earners will no longer benefit from government largesse at the expense of those who cannot afford or do not want private insurance. These measures are forecast to save $2.4 billion over the next three years. It is imperative that these funds are reinvested in the public health system. I call on the government to commit these savings to the public health system, in particular the gaping hole of dental care needs to be filled. If these funds were reserved for the first step towards universal dental coverage, it would be a great step forward for the health of all Australians.