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Wednesday, 15 February 2012
Page: 1350

Ms PLIBERSEK (SydneyMinister for Health) (10:49): It is my great pleasure to sum up the debate on the Fairer Private Health Insurance Incentives Bill and cognate bills. The member for Wentworth is a neighbour of mine and he is someone I like a lot, but I have seldom heard more nonsense from him than I heard today. He was at the despatch box talking about the marvels of self-reliance, yet he cannot explain to me why a waitress living in Darlinghurst should be subsidising the private health insurance of a banker living in Vaucluse or why an apprentice living in Bondi Junction, in his electorate, should be subsidising the private health insurance of a partner in a law firm living at Darling Point. It makes absolutely no sense.

I thank members for their contribution to this debate. We are rightly proud of the health system in Australia. We have a health system that is the envy of the world. Most Australians would say that Medicare, the Pharmaceutical Benefits Scheme and other universal features of our health system serve us much better than the user-pays systems of many other nations where they take your credit card details before they take your pulse. That is not to say it is perfect. We inherited from those opposite a shortage of doctors, nurses and specialists and, thanks to the coalition, in many parts of the country it is hard to see a GP or you need to wait too long in emergency departments or to have elective surgery. That is why the health reforms begun by my predecessor—the Attorney-General when she was the Minister for Health and Ageing—are so important. They set a path into the future when all Australian governments will work together to meet our communities' health needs.

We have a health system that is universal, but with that comes an obligation for Australians to contribute. We have an obligation to care for our own health and we have an obligation to contribute through our taxes. But, like all of our tax and transfer systems, the greatest benefits should go to those in greatest need; the greatest contribution should come from those who are most able to contribute. A further feature of our health system is the necessary and desirable balance of its public and private elements. Our public system gives high-quality and accessible care—security for every Australian that, should the worst happen, they will receive the care they need. Our private systems offer choice and flexibility and provide competition and comparison, contributing to continued improvements. The debate we are having today and over the past few days touches on all of these elements. Our universal system relies on every dollar raised being spent in the most appropriate and effective way. It is about making choices. We are currently establishing more than 20 regional cancer centres across Australia, because we know that the outcomes for people with cancer living in the regions are often much poorer than those in the cities. These centres will be beacons of hope for patients and families fighting this disease. When faced with scarce resources, and the choice of whether to invest in lifesaving services or rebates to couples earning over $258,000 a year, we make the choice for regional patients. Those investments will benefit all Australians, but of course they need to be paid for—and that means every dollar going where it is needed most.

The government took a policy of means testing the private health insurance rebate to the 2010 election because it is the fastest-growing component of health spending—and that is unsustainable; over 10 years its real cost will increase more than 50 per cent per person. It is also unsustainable that this benefit continues to go disproportionately to high-income earners. This is a question of fairness. These reforms have been carefully crafted so as to provide a fairer distribution of benefits. Well over 20 million Australians will be entirely unaffected by this change. Government's support for private health insurance needs to be directed to those hardworking Australians who need the most assistance, not higher income earners.

Currently, approximately 14 per cent of single taxpayers who have incomes above $83,000 a year receive about 28 per cent of the total private health insurance rebate paid to singles. Under these new reforms these single taxpayers will receive about 12 per cent of the total private health insurance rebate paid to singles. Similarly, approximately 12 per cent of taxpaying couples who have incomes above $166,000 currently receive approximately 21 per cent of the total private health insurance rebate paid to couples. Under these new reforms these taxpaying couples will receive about nine per cent of the total private health insurance rebate paid to couples.

The member for Dickson, and many of those opposite who have spoken during this debate, have tried to assert that this is somehow a broken promise. This is absolutely, categorically not true—in fact, it is the fulfilment of a promise taken to the 2010 election. Speaker after speaker from the other side has ignored the fact that this was Labor Party policy at the 2010 election. The member for Dickson alleges that these changes will affect those workers and couples who earn less than $50,000 a year—again, categorically untrue and an unfounded scare campaign. He told this parliament, of those who workers and couple who earn less than $50,000 a year, that 'this Labor government seeks to impose an extra financial burden on them if they keep their private health insurance'. This is wrong. Workers earning less than $83,000 per year, and couples and families with an income of $166,000 or less, will see no change in their rebate as a result of these measures. They will retain the current 30 per cent rebate—or higher, if they are older than 65. Only people earning over $129,000 or couples earning over $258,000 will lose the rebate entirely.

Why has it been that the speakers opposite have sought to mislead people, including the most vulnerable Australians, by frightening them? They have claimed that older people will be particularly badly affected by these changes, yet means testing will be applied equally to anyone who can afford to contribute more to their private health insurance regardless of age. Rebates will continue to be higher for older Australians in income ranges that are eligible for a rebate. The vast majority of older Australians will continue to be eligible for a higher rebate.

Further claims that these changes will lead to a huge impact on public hospitals are simply wrong. For example, some in the opposition—in fact, many speakers—have claimed that we will see up to 1.6 million people drop their private health insurance and become a burden on the public hospital system. But at the same time they also claim that it will be young, healthy people who will drop their insurance—you heard the same from the member for Wentworth—and that those young, healthy people will immediately turn up in our public hospitals. Clearly, this does not make sense. Treasury modelling shows that 99.7 per cent of policy-holders will retain their private health insurance—and that is because those higher income earners who receive a lower rebate will at the same time face an increased tax penalty if they do not have private health insurance. The estimated drop-out rate based on the biennial Ipsos syndicated survey, Healthcare and insurance 2009-2011, are 16,000 and 40,000 people—much closer to the Treasury model. And I note that the estimated drop-out rates are in fact lower than the quarterly growth in membership for private health insurance in both September 2011 and December 2011. The government estimates that 8.7 million Australians with private hospital cover will not be affected by these changes.

We have seen these kinds of claims from the opposition in the past. When the government increased the income threshold for the Medicare levy surcharge in 2008, the member for North Sydney declared that hundreds of thousands of people would abandon their private health insurance. What have we actually seen since that time? Over 800,000 have joined private health insurance.

The opposition's position on these bills seems to be disingenuous at best. If the Leader of the Opposition truly believes, as he said at the Press Club recently, that government should only do for people what they cannot do for themselves, how can he sincerely argue that the best and wisest use of the health dollar is to pay for one-third of the health insurance costs for someone on $500,000 or $1 million a year?

The Leader of the Opposition also refuses to say, as does the shadow health minister, whether he would repeal the means test. I read today that the member for Hinkler has called for it to be reinstated. It has been described as an 'article of faith' for the Liberal Party—and article of faith in a belief that the earnings of working Australians should pay for the private health insurance of even the wealthiest Australians. The Leader of the Opposition is now in a very difficult position, torn between this belief and his huge budget black hole—$70 billion and counting—and, should he follow his instincts and seek to repeal this change, that would be another $2½ billion problem over the next three years for his budget black hole. With the cost rising of this subsidy to higher income earners rising to $100 billion by 2050, he would give us a lasting legacy, a legacy of debt for our children and for their children. A universal system relies on the differing contributions of all Australians according to their ability to pay, but it gives the security that each of us, if we get sick or our elderly parents or kids get sick, will get the appropriate care. These changes are true Labor reforms because they are about fairness. This is the third time that we have brought them before this House because we believe that working Australians should have a health system that is fair. The passage of these bills will mean that the taxes of a bank teller will no longer subsidise the private health insurance of the bank executive or the bank CEO. Labor governments have always fought for the rights of working people to have access to high-quality health care, and we will continue that fight because it is right and because it is what Labor governments do. I commend the bills to the House.

The SPEAKER: The question before the chair is that the amendment be agreed to.


The SPEAKER: The question before the chair is that this bill be now read a second time.

Bill read a second time.

Message from the Governor-General recommending appropriation announced.