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Tuesday, 28 May 2002
Page: 2494


Mr STEPHEN SMITH (6:06 PM) —The Taxation Laws Amendment (Medicare Levy and Medicare Levy Surcharge) Bill 2002 amends the Medicare Levy Act 1986 and the A New Tax System (Medicare Levy Surcharge Fringe Benefits) Act 1999 to increase the Medicare levy low income threshold amounts for individuals, married couples, sole parents and pensioners below age pension age. It also increases the phase-in limits as a result of the increased threshold amounts. There are also two minor technical amendments. These measures were announced in the recent budget.

In general terms, the bill amends the Medicare Levy Act 1986 to increase the Medicare levy low income thresholds for individuals, married couples and sole parents. The dependent child-student component of the family threshold will also be increased. These increases are in line with movements in the CPI, which is the tradition in which this bill has been effected for a number of years. The bill also amends the Medicare Levy Act 1986 to increase the Medicare levy low income threshold for pensioners below age pension age so that they do not have a Medicare levy liability where they do not have an income tax liability, and it also amends the Medicare Levy Act to allow a family income threshold to apply to a taxpayer where the taxpayer is entitled to a child-housekeeper rebate or a housekeeper rebate. The bill also amends the A New Tax System (Medicare Levy Surcharge Fringe Benefits) Act 1999 to increase the Medicare levy surcharge low income threshold, again in line with movements in the CPI, which is the annual tradition in this matter. The bill also amends the Income Tax Assessment Act 1936 to make a technical amendment to correct references to the provisions of the Veterans Entitlements Act 1986.

The increased Medicare levy and the Medicare levy surcharge low income thresholds will apply from the 2002-03 year of income and later years of income, the technical amendment to the Medicare levy family income threshold applies to assessments for the 2001-02 year of income and later years of income and the technical amendment of the Income Tax Assessment Act 1936 to the definition of prescribed purposes for the Medicare levy purposes applies to assessments for the 1997-98 year of income and later years of income. As those amendments apply a benefit to the taxpayer rather than a detriment, there is of course no objection to the retrospective nature of the effect of those amendments to those assessments for the years 1997-98 and continuing.

No Medicare levy is payable for low income individuals and families where taxable income does not exceed threshold amounts. For couples and single parents, the family income threshold amount increases by a set amount per child. The Medicare levy shades in at a rate of 20 cents in the dollar where the taxable income or family income exceeds the threshold amounts. The individual threshold amount is proposed to be increased from $13,807 to $14,539; the family income threshold is increased from $23,299 to $24,534; the amount added by each dependent child or student is increased from $2,140 to $2,253; and the threshold amount for pensioners who are under age pension age is increased from $15,970 to $16,570.

A surcharge of one per cent applies on taxable income in certain circumstances where taxpayers do not have private hospital cover. However, a married person is not required to pay the surcharge where the total of their taxable income and reportable fringe benefits does not exceed the individual low income threshold amount. The threshold for the Medicare levy surcharge is proposed to be increased from $13,807 to $14,539. So far as child-housekeeper rebate or housekeeper rebate amendments are concerned, taxpayers are generally denied a child-housekeeper rebate or a housekeeper rebate due to the introduction of the family tax benefit. However, some persons are still entitled to this rebate and in these circumstances a family income threshold can be used when determining their Medicare levy liability.

The opposition has no objection to those amendments; indeed, we support them. These have been done essentially on an annual basis to ensure that low income members of our community are not adversely impacted upon by increases in the CPI, and the threshold and levy arrangements reflect that.

This bill goes to the heart of Medicare and goes to the heart of an important component of Medicare and, as a consequence, at the conclusion of my remarks I will formally move a second reading amendment, which my colleague will second. To draw the attention of the House to that second reading amendment, the second reading amendment is in the following terms:

That all words after “That” be omitted with a view to substituting the following words:

“the House, recognising that the provisions of this equitable measure will appropriately exempt some individuals, couples and sole parents from the levy and surcharge in line with movements in the consumer price index, supports the bill but:

(1) notes that the Government's overall approach to Medicare has seen the regrettable position where General Practitioner bulk billing usage has declined to only 74%;

(2) notes that the average extra cost to a patient for a non bulk billing GP visit is now $12;

(3) notes that those who can afford private health insurance have been subject recently to substantial increases in premiums, on average $150 extra per year;

(4) notes that pensioners and concession card holders and those families under financial pressures will suffer further as a result of the Government's latest budget measures, in particular the proposed 30% increase in payments for essential medicines; and

(5) calls on the Government to recognise the Australian community's belief in and support of bulk billing and Medicare and to accept that the Government must match that community commitment in its health policies”.

In some important respects there is an irony in the bill before us. The essential irony is this: the bill seeks to implement increases in threshold and levy measures equitably so far as low income persons are concerned, and that is supported. But it is against a backdrop of a range of measures which the government has effected or is proposing to introduce which place enormous financial pressure on the one hand on pensioners and concession cardholders and on the other hand on families under financial pressure. Bulk-billing goes to the heart of Medicare as a universal health care system, and visits to general practitioners go to the heart of primary care for beneficial health outcomes for Australians, and they go to the application of preventive measures so that Australians will not fall even further into our health system. Bulk-billing is an essential part of Medicare.

Last week we saw the annual quarterly production of the Medicare statistics—an invaluable document produced by the Department of Health and Ageing. The statistics go from 1984-85 to the March quarter. I will draw the attention of the House to a couple of extracts from the Medicare bible. On page 18 there is graph No. 5, `Medicare services by broad type of services for the year 2000-01'. It simply makes the point that GP consultations make up 47 per cent of Medicare services by broad type. So almost half of Medicare is essentially consultation with general practitioners.

What we also see in the Medicare statistics published last week in table B7, which is again an invaluable table in this matter, are details of the percentage of services direct billed by quarter and financial year of processing. There are some important adverse and deleterious developments which we are seeing, not based on quarterly figures but on annual figures, over a period of time.

I take the government back to when it was elected to office in March 1996. Looking at table B7—it does not much matter whether you take the 1995-96 financial year—I think you can fairly say that by June 1996 it was unlikely that any of the government's new policies would have had an impact on those statistics. So you can take the 1995-96 year and fairly say that it probably accurately represents the last annual statistic of the previous Labor government. The year 1996-97 is, if you like, the first accurate year of life under this government as we have come to know it.

I draw the House's attention to the fact that in the 1995-96 financial year the percentage of general practitioners' services directly billed or bulk-billed was 80.1 per cent. In the following year, 1996-97—the first full year of the Howard government— the statistic was 80.6 per cent. That makes up, as I have indicated from the graph in table No. 5, about 47 per cent, which is essentially half of the Medicare services. Table B7 also deals with specialist services, obstetrics services, anaesthetist services, pathology services, diagnostic imaging, operations, optometry, and totals them all up.

I will not draw the House's attention to all of them because not all are directly relevant to this debate, but I make the point that, in 1995-96, 32.5 per cent of specialist services were bulk-billed and, in 1996-97, 32.4 per cent. For pathology, the rate was 76.1 per cent in 1995-96 and 77.8 per cent the following year, 1996-97. For diagnostic imaging, it was 61.3 per cent in 1995-96 and 62.7 per cent in 1996-97. For optometry, it was 94.5 per cent in 1995-96 and 96 per cent in 1996-97. When that was averaged out by the department for a total in the financial year 1995-96, 71.1 per cent of Medicare services were direct or bulk-billed. In the following year, 71.8 per cent were direct or bulk-billed.

When you come to this quarter—essentially, the period of life under the Howard government as we have come to know it— the rate of bulk-billing or direct billing by general practitioners has fallen from a high of 80.6 per cent—essentially 80 per cent when the government came to office—to 74.5 per cent. That has shown a decline year in, year out, since 1996-97. So only 74.5 per cent of GP services now are bulk-billed. So far as specialist services are concerned, we have seen a fall from 32.4 per cent to 29.2 per cent. You would not regard that as being historically surprising. In pathology, we have seen an increase from 76.1 per cent or 77.8 per cent in those respective financial years to 84.1 per cent. In diagnostic imaging, it has been relatively stable—61.3 or 62.7, down to 60.4. So far as optometry is concerned, it has gone from 94.5 or 96 per cent to a relatively stable 96 per cent and it all averages out at 70.5. When the government is confronted with these statistics, the Minister for Health and Ageing in the other place says, `Oh no, you have to look at the total amount, not at the GP decline.' When we see increases in optometry and quite substantial increases in pathology it is no wonder that the decline in the average or the total amount is not as stark as the average for GPs. But this is 47 per cent of Medicare services and it is at the heart of primary care or preventative care for Australians.

I drew attention to pathology and diagnostic imaging because, when you go back to the graph in table 5 on page 18, pathology makes up 29 per cent, nearly one-third of Medicare services by type, and diagnostic imaging makes up six per cent. So if pathology makes up one-third, then the increase from 1994-95 from 74 or 76 per cent to 84 per cent gives you the explanation as to why the total, or the average, has only fallen from a 1995-96 figure of 71.1 to a 70.5 figure today, which is the minister's relatively or completely implausible excuse for the situation that we see in the bulk-billing decline by GPs.

That concern is reflected by the second reading amendment. It means that bulk-billing rates for GPs are now the lowest in a decade. When the Prime Minister and the government came to office the rate of bulk-billing for GPs was over 80 per cent. Now it has fallen below 75 per cent. There are about 100 million GP services a year. That means that on John Howard's watch the number of GP services which are bulk-billed have declined by five million a year over that period. The average cost of a visit to a GP who does not bulk-bill is now $12. That can vary. In some instances that have been drawn to my attention, it can go as high as an extra charge of $50, but the average cost, in accordance with the departmental figures, is $12. That means Australian families are paying $60 million extra each year for GP visits than they were paying when the government came to office.


Mr Hockey —Did you introduce it?


Mr STEPHEN SMITH —You do not even know what we are talking about, Minister. I would not interject. I am talking about GP bulk-billing; I am not talking about pharmaceutical benefits. I will happily move on to that. Joe, you have difficulty in getting it right when you know what subject matter you are talking about. When you interject and you do not know the subject matter, you are even worse.


The DEPUTY SPEAKER (Mr Lindsay)—Order! Please address your remarks through the chair.


Mr Hockey —Why shouldn't people pay for it?


The DEPUTY SPEAKER —Order!


Mr Hockey —I am asking him a question and he doesn't want to answer it.


The DEPUTY SPEAKER —Member for Perth, through the chair, please.


Mr STEPHEN SMITH —I am happy to respond, but the impression I have, Mr Deputy Speaker, is that you do not want me to. Australians are paying $60 million more per year for their doctor visits. In terms of the burden that places on Australians under financial pressure, that is on top of the extra $500 million Australians are now paying for increases approved by the government in private health insurance premiums—and that comes to an average of $150 per family per year—and in addition to the extra $300-odd million that the government would want Australian pensioners and concession cardholders to pay on their Pharmaceutical Benefits Scheme copayments if the government's proposals in the budget go through the parliament, which we, of course, will oppose.

It is quite clear, by the range of government proposals—whether it is GPs bulk-billing, the cost of essential medicines or private health insurance premiums—that this government is placing a huge burden on families under financial pressure, those who are the sickest and those who are least able to afford it. There is an element here of `one story before the election and a different story after,' which we have seen so much from this government.



Mr STEPHEN SMITH —The minister interjects about whether people believe what they say. We know precisely what the government and the Prime Minister think about bulk-billing. Whilst they tugged their forelock and said they had a different view in the run-up to the 1996 election, and continue to say that disingenuously now, we know what John Howard and the Liberal Party actually think about bulk-billing. In the run-up to the 1987 election, when John Howard was Leader of the Opposition, he said:

We will end bulk billing, which produces a scandalous waste of money.

He was being interviewed by John Laws, and he said:

We will be proposing changes to Medicare that amount to its defacto dismantling.

John Laws asked:

So you'll pull it apart?

And John Howard responded:

Yes, we'll pull it right apart.

To get yourself elected in 1996, you said you would not make any changes. What have you been doing for a six-year period? You have been doing what John Howard said you would do: de facto dismantling. Your inaction on the medical benefits scheme and the relative value study has seen a deliberate policy approach to ensure that more and more doctors are forced to charge a copayment and not engage in bulk-billing. This has been John Howard's approach from day one. You could not do it through the front door because you knew the backlash in the community would be substantial, so you spent a six- or seven-year period doing it through the back door. I do not need to go through the litany of other quotations in that respect.


Mr Hockey —How are you going to pay for it?


Mr STEPHEN SMITH —One thing you might want to do, Minister, is have a look at the relative value study, which you have put in the dust cupboard and not looked at. That might actually be a sensible way of proceeding in this area, rather than sitting on your hands, doing nothing and deliberately running bulk-billing and Medicare down, which is your strategy.


Mr Hockey —Bulk-billing is in place. You know that.


Mr STEPHEN SMITH —Bulk-billing is in place. It has fallen every year since you have been in office. It has fallen from a high of 80.6 per cent in the former Labor government's time to 74.5 per cent on this occasion.


Mr Hockey —So people are choosing to pay. It isn't a bad thing if people choose to pay.


Mr STEPHEN SMITH —People are not choosing to pay; people are being forced to pay. What do we find? We find plummeting rates so far as bulk-billing is concerned; we find a $500 million increase in the cost of private health insurance premiums to Australians—on average $150 per family—and we find the government introducing a 30 per cent copayment increase so that one million pensioners and concession cardholders will pay the maximum extra $52 per year for their essential medicines and 300,000 Australians in families will pay the maximum of $190 extra per year.

Across the board, we find increasing copayments for pharmaceuticals, increasing payments for visits to doctors for primary care and preventative medicine, increasing costs of essential medicines and increasing costs of private health insurance—not to mention the way in which this government, over a six-year period, has ripped between $600 million and $700 million out of the state public hospital system. There is a nice irony about the equitable nature of this proposal in the bill and the great inequity which we see across the board now so far as the government's approach to health policy is concerned. I move:

That all words after “That” be omitted with a view to substituting the following words:

“the House, recognising that the provisions of this equitable measure will appropriately exempt some individuals, couples and sole parents from the levy and surcharge in line with movements in the consumer price index, supports the bill but:

(1) notes that the Government's overall approach to Medicare has seen the regrettable position where General Practitioner bulk billing usage has declined to only 74%;

(2) notes that the average extra cost to a patient for a non bulk billing GP visit is now $12;

(3) notes that those who can afford private health insurance have been subject recently to substantial increases in premiums, on average $150 extra per year;

(4) notes that pensioners and concession card holders and those families under financial pressures will suffer further as a result of the Government's latest budget measures, in particular the proposed 30% increase in payments for essential medicines; and

(5) calls on the Government to recognise the Australian community's belief in and support of bulk billing and Medicare and to accept that the Government must match that community commitment in its health policies”.

That does not mention the adverse implications that will come with the cost to the Australian taxpayer and the Australian community as a result of the government's mismanagement of medical indemnity insurance and public liability insurance—matters, Minister, in respect of which you do not come to either argument with clean hands. On medical indemnity insurance, we find a government asleep at the wheel and subsequently mismanaging a crisis.

The opposition support the bill, but we place very strongly on record the concerns that we have about the government's deliberate attempt to reduce the capacity of Medicare to be a universal health system and to reduce the capacity of bulk-billing to continue to play a very important part in our national health care system.


The DEPUTY SPEAKER (Mr Lindsay)—Is the amendment seconded?


Mr Sidebottom —I second the amendment and reserve my right to speak.

Sitting suspended from 6.29 p.m. to 8.00 p.m.