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- Start of Business
QUESTIONS WITHOUT NOTICE
(Mr BRERETON, Mr DOWNER)
(Ms WORTH, Dr WOOLDRIDGE)
(Mr BEAZLEY, Mr PROSSER)
(Mr LIEBERMAN, Mr WILLIAMS)
Social Security Beneficiaries: CPI Calculations
(Mr GARETH EVANS, Mr COSTELLO)
(Mrs STONE, Mr ANDERSON)
(Mr BEAZLEY, Mr HOWARD)
Building Industry: Sick Leave
(Mr McARTHUR, Mr REITH)
(Mr ANDREN, Mrs MOYLAN)
(Mr NEVILLE, Mr WILLIAMS)
Health Fund Premiums
(Mr LEE, Dr WOOLDRIDGE)
Regional Forest Agreements
(Mr CAUSLEY, Mr ANDERSON)
(Mr KERR, Mr HOWARD)
(Mr REID, Mr COSTELLO)
Precision Aerial Delivery System
(Mr TANNER, Mr SHARP)
(Mr TAYLOR, Mr DOWNER)
Precision Aerial Delivery System
(Mr TANNER, Mr SHARP)
Indian Ocean Rim Association for Regional Cooperation
(Mr NUGENT, Mr DOWNER)
Precision Aerial Delivery System
(Mr TANNER, Mr SHARP)
Unemployment: Work for the Dole
(Mr MAREK, Dr KEMP)
- PERSONAL EXPLANATIONS
- QUESTIONS WITHOUT NOTICE: ADDITIONAL RESPONSES
- MINISTERIAL STATEMENTS
- MATTERS OF PUBLIC IMPORTANCE
APPROPRIATION BILL (No. 3) 1996-97
APPROPRIATION BILL (No. 4) 1996-97
APPROPRIATION (PARLIAMENTARY DEPARTMENTS) BILL (No. 2) 1996-97
- MATTERS REFERRED TO MAIN COMMITTEE
PRIVATE HEALTH INSURANCE INCENTIVES BILL 1996
HEALTH LEGISLATION AMENDMENT (PRIVATE HEALTH INSURANCE INCENTIVES) BILL 1996
MEDICARE LEVY AMENDMENT BILL (No. 2) 1996
TAXATION LAWS AMENDMENT (PRIVATE HEALTH INSURANCE INCENTIVES) BILL 1996
- Main Committee
Tuesday, 25 February 1997
Mr TUCKEY(9.41 p.m.) —In opening my remarks, I refer to the remarks of the member for Cunningham (Mr Martin). Of course your baby child got the absolute best care. Medicare is extremely good with dealing with emergencies. But if, by some unfortunate miracle, that child of yours was transported tomorrow to the age of 65 and had cataracts or a degenerative hip: nope, sorry, come back next year. That is the problem. Medicare is very good at looking after young, non-claiming people. That is why they have faith in it. That is the great problem.
I also want to address the circumstances of the great myth that the member for Jagajaga (Ms Macklin) threw in about the US system. We all know what the problem with the US system is. It's called litigation. Unfortunately, it's raising its ugly head here. It is not the specific cost of litigation. There are state authorities now in America who have capped settlements, that have stopped the amount of money that can be granted by way of litigation, and their health administration costs have fallen. Why? Because doctors are no longer forced to take absolutely stupid procedures to defend themselves against a rapacious legal system.
I think it is a great pity that we see this surfacing here in Australia. If a doctor is negligent, let us look at his qualifications and at his licence to practise. But why just have massive settlements, usually for people that are dead or about to die, when they are a direct charge on the rest of the community? The entire community pays.
During the life of Medicare, membership of private health insurance has fallen from over 70 per cent to approximately 33 per cent. The level of health expenditure in the federal budget has risen in nominal terms from $3 billion to $19.4 billion. That $19.4 billion is best compared with a couple of other eggs in the nest—education and defence. Pre Medicare $3 billion was allocated for health, $3½ billion for education and $4 billion for defence. In this current budget $19.4 billion is allocated for health, $11 billion for education and $10 billion for defence.
As I pointed out in this House the other day, one wonders why education finds itself underresourced. The cuckoo has got into the nest and it is that very large chick that is consuming all the resources and other segments of our expenditure, and the services government provides find themselves missing out.
Those who are abdicating the private health care that brought that crash in membership are the young and healthy who simply do not need the benefits private health insurance provides while Medicare provides for their emergency type treatment. That is all the young generally require, and I have just made that point to the member for Cunningham. The result, of course, is a massive escalation in premiums to the elderly to the point where many who paid for private health cover all their non-claiming working lives now find they cannot afford to retain their cover when they need it most desperately.
Why do they need it? I was shadow minister for health about 10 years ago and I attended a major conference at the time in Sydney where the keynote speaker was a New Zealand health administrator, Dame Dorothy Fraser, who had been knighted for her services to the public hospital system. One of the remarks she made has stuck in my memory; it is burnt there. She said words to the effect that there were 50,000 New Zealanders on their public hospital waiting lists. Waiting lists, she said, were the means by which they rationed the public hospital system. She went on, having made that admission, to complain about the administration of waiting lists. She saw them as quite appropriate, but she was very critical of the fact that if you knew your way through the system you could get promoted up the waiting list.
I endorse entirely her criticism in that regard. The point has been made by previous speakers about how the previous Prime Minister boasted that he did not have private health insurance. When you are as important as a Prime Minister or, as occurred in his life, a Treasurer, why would you be worried about a waiting list? You do not even have to pick up the phone. You are automatically promoted up that waiting list. If your wife has a problem, such as gallstones, you suddenly find the specialist saying, `Well, Mrs So-and-So, I suggest you attend the So-and-So hospital on a certain date. I'll be operating that day.' Of course, when the booking comes in, the administrators there immediately say: `Oh, it's the Prime Minister's wife' or `It's the Treasurer's wife' or `It's the Minister for Health's children.' They are not going to be told to come back.
We see that sort of elitism in totalitarian and communist countries. I spoke to a member of parliament who once broke his tooth in China and went to Mao Zedong's private dental clinic which, he said, was the best equipped he had ever seen in the world. But, of course, out in the villages they would have knocked the tooth out with a chisel. So there is a difference, and it is a form of elitism that arises out of socialism. But the measures before us tonight are designed to do something to correct the situation of this collapse in private health insurance.
I have got to say that they will probably do little more than stop the collapse. I hope that they achieve that. I am not confident that they will increase the membership, although there is a possibility of that occurring in a very desirable area, that is, the well-off young, who are also addressed by this measure by way of the penalty. Fortunately, the assistance of the rebate might be the reason that some of those people I have already mentioned, the elderly who are finding private health insurance unaffordable, will be able to stay in there and get the benefits of access to a hospital when they need it. That is the most important aspect of private health insurance.
I hope these measures will delay what I have been predicting—and I predicted 10 years ago as shadow minister—will be the total collapse of our private health insurance system if certain measures are not taken to address the fundamental problem that exists in the system we have today.
There is no doubt that the Australian people think that Medicare is good. I must admit that they do not always get asked the right questions in surveys, but from a political viewpoint—and we have made promises accordingly—we are going to continue to support the Medicare concept, notwithstanding that in my view it is fundamentally flawed. The fundamental flaw in what we chose to do in Australia is that we have been trying to run a private health insurance system in parallel with a public health insurance one.
That represents no difficulty at all in insuring someone's house. It can burn down under construction; it can burn down when it is 100 years old. Demand for health services are totally age related. Consequently, people have learnt in the life of Medicare to forum shop. As I have pointed out to the member for Cunningham, you can rely substantially on Medicare while you are young and basically healthy because the types of demands you put on the health system, the types of illnesses that arise, are emergency style affairs—even childbirth. Nobody can say, `Come back next year to have your baby.' So the system accommodates that. I am pleased that it does and I think it does it adequately.
But, because of cost pressures and because of what Dame Dorothy Fraser said about rationing hospital services by use of waiting lists, as soon as we get to that position of so-called elective surgery—you might be blind and you might not be able to see but, of course, you are not going to die—the political process just slows down those sorts of services to save money. To put it simply, to guarantee equity in a market where claims are so predictable, all the money that is available to service that industry must go into one pot, not two as we have now. That means you either have a national health socialised type medical scheme or a total private health insurance one.
The cost of the first proposal can be easily measured by reference to our current budget. If health outlays now stand at around $19.4 billion, in a budget of approximately $120 billion it is reasonable to say that the cost of a total system—that is, a national health system—would be, say, $25 billion or 20 per cent of the budget. As a direct charge, if we just sent every typical family in Australia an account—and this is something that should be remembered about the current $19.4 billion—that would be about $5,000 per typical family. Of course, if we chose to fund it in that fashion, we would have to send every typical family an annual account for $6,000 a year, because that is what it is costing.
The alternative is to revert to a total private health system for health administration and for government to restrict its role to providing adequate, if not generous, subsidies to those whose financial capacity could not guarantee them equal access to high quality health care.
Having considered those matters, I came to that conclusion 10 years ago and wrote a policy for our party that applied those principles. I think it will be illuminating for this House to look at how the costs were worked out. The first thing we did was throw out this stupid premise of community rating—a flat premium charge for all. It is great, it sounds wonderful, and when people have a choice it is nice to say that the young should pay for the elderly, but all the evidence shows that they refuse to do so. They are not paying, so why have a flat rate structure? Why not set a premium that they just might pay and take half? It would surely help.
After a lot of actuarial advice 10 years ago—this is very illuminating as far as I am concerned in terms of the real cost relativities because of age—we struck a premium for those aged between 0 and 18 years of $6.70 per week per child. We then went to the group aged between 18 and 60 and the fee was $9 a week. For people over 60, the premium was $26 a week, actuarially calculated. Most elderly people, even at that time, could not afford that amount, and it would be higher today.
At that time we were sitting on a Medicare cost of $7.2 billion. So we said that we would pay the $6.70 for every kid in the country, irrespective of the wealth of their parents or anything else. We would pay 100 per cent of the cost. We said that we would pay the $26 a week to every aged pensioner. Many of those people just outside the pension system could not afford $26 a week, so we took their numbers and applied a budget figure of $20 a week for all of those people on an average but means tested basis. We then looked at the social security numbers for the unemployed—all those people in that middle age group who did not have an income.
When we added up all that cost, we only got to $4.2 billion. We had put every pensioner in Australia in 100 per cent private health cover—none of this business that was mentioned earlier that if you pay extra you get everything. They got top cover—everything—and they paid nothing; and no queues. We were able to give all those other elderly people help at an average of $20 a week. With the $3 billion odd we had left over we could refund the Medicare levy, which was just over $2 billion at the time, and we had about $800 million left to address some of the poverty traps that might arise in some of those groupings.
We came to the conclusion that the only people who were going to pay were those in employment who were somewhere between the ages of 18 and 60. There were no problems. There was private health cover for all and no 6,000 public servants to administer the scheme. You literally reprogrammed the social security computers.
That did not happen. It never became our official policy because people were scared of it. The national interest was never considered. The rights of Australians to have equal access to the health system and no queues were never considered. It came back to the political consequences of trying to change this popular system, and nobody had the courage to do it. I do not blame them in many ways.
The tragedy of our present political process—I have raised this same issue on taxation here time and time again—is that we both sit on each side of this place and we never want to talk about the national interest. We want to know how we get re-elected and how we defeat the other side. It is the tragedy of democracy. It is a great pity that on some of these great important issues we cannot sit down together and say, `What is the better outcome?'
I want to close because I did promise my whip that I would try to finish a bit ahead of 20 minutes, although nobody else seems to be paying much attention. When I went off with that policy that put all this money into the hands of our established private insurers—the ones who are whingeing and moaning now through Russell Schneider—they sent Russell Schneider into this parliament to kill off the idea. They did not want all that business. They were much more comfortable sitting on the side blaming the government for all their own mistakes. I do not think they have changed very much, but they are now watching their businesses collapse, as I warned them they would. I think that private health insurance is almost irretrievable. It would be a great tragedy for the community if that happens.
These are the issues. As I said, I am not here to criticise the initiatives, because they are initiatives that are going in the right direction. I just have a grave fear that the system has a momentum of its own and we will not be able to afford it and we will all be obliged, either side of politics, to follow the advice of Dame Dorothy Fraser and continue to ration the services available by ever increasing queues. It will be queues for the elderly, not the young and healthy.