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Tuesday, 14 February 2012
Page: 1187


Mr OAKESHOTT (Lyne) (19:37): From all the noise over this issue, here is the truth, from Australia's largest private hospital operator, based on a report to their institutional investors under their legal obligation to tell the truth to the share market—a quote which reads:

In both the short and the longer term, demand for privately provided health services would continue to grow regardless of the rebate. Hopefully, things will stay as they are, but even if the bill is passed and there is a trickle-down effect, the positive fundamentals driving growth in this business will remain.

As I did in the 42nd parliament, prior to the last election, in a majority parliament where no government was dependent on my vote—so no accusations other than merit could be made—I rise today to be consistent and continue to support the means testing of private health insurance rebates in Australia and encourage all MPs to do the same.

I also rise to encourage the government to make this the first of a series of austerity measures that start to turn unsustainable health economics into the sustainable. If I think of individual private healthcare providers, this is a hard call, but when I think of just how many hard decisions need to be made to make healthcare economics in Australia sustainable then this is a relatively easy one. In reality, this is just one of many decisions that need to be made if we are serious as policy-makers in making healthcare economics sustainable.

This is also a hard call if I think of individuals and the personal anecdotes of those who might be directly affected by this decision. But, if I think of Australia and the long-term best use of taxpayers' money, it is a very easy call. We do not have a money tree to enable welfare to be provided to all. That is the reality. This reality says that, if we leave these measures in place without means testing, the cost to Australian taxpayers of no change jumps from $5 billion to the national budget in 2011 to a $10 billion cost per year in 2019, just seven years away. It would be irresponsible of all MPs in this House to ignore this fact. So, for the first and most compelling reason, I continue to support the means testing of healthcare rebates. It is the current reality of unsustainable health economics in Australia. The reality is that this measure will completely blow the health budget of Australia if not changed some time in the next decade.

I also want to put this first point in some political context. I do not just slide across the line on this issue. Nor has the government secured my vote in some sort of metaphorical headlock. Rather, I support these bills with a strong want—that health ministers today and in the future, of all political colours, state and federal, finally have the backbone to make health economics in Australia sustainable, and that this is the underlying principle of this portfolio work for the next decade. And I call on those same health ministers, state and federal, of all political persuasions, to actually do more—whether it is considering new drugs and how they relate to the growing costs of the PBS scheme; the growing costs of an average length of stay for a public patient; balancing the needs in dental health and mental health; aides and appliances; aged care; and the many preventative health measures so important in our functioning and world-leading health system in Australia.

We need politicians in this country with steel in their spines to make some very challenging calls in the next decade to keep our health system as one of the very best in the world. This decision, therefore, must not be the end of the so-called hard decisions. I invite both major parties and the parliament to make this the first of the hard decisions and I will continue to push for more.

The second reason I support this decision is that I continue to be satisfied that the appropriate safeguards are in place if drop-outs or downgrades are higher than Treasury modelling suggests. All information about entries and exits in private health are publicly available from the Private Health Administration Council, backed up by the Private Health Ombudsman for any complaints from any citizen. Both these bodies provide ongoing public data on what is happening in private health insurance, and I encourage people to use both of these when seeking facts or wanting to follow this issue over the coming years. These are important public protections, and I am personally satisfied that public data will continue to drive policy considerations in a transparent way.

The third reason I continue to support means testing is the reality of the impact of this change versus the rhetoric. I note, and have listened closely, to personal stories from home such as those who have private health insurance and are nervous, those who work in local private health jobs and are nervous, and doctors whose business models are reliant on a base of private insurance and are nervous. I have also listened closely to, and note public demonstrations from, the private health sector—one as late as last Saturday outside my electorate office. And I note and have listened closely to the research undertaken by the private health sector, from good people such as Michael Armitage and Chris Rex, who I again met with as late as Monday. I assure all stakeholders involved, and the constituents of the electorate of Lyne, that concerns raised have been considered deeply. In the end, though, I have done two things with those concerns. Firstly, I have integrity-tested all the claims made and am satisfied that all claims have at the very least been considered in detail by government and that the protections of both the Private Health Administration Council and the Private Health Ombudsman will blow the whistle on any advice that over time from government proves itself to be wrong. The second action taken is to separate political commentary and populist rhetoric from what is being actually said to investors and the share market under legal obligations. The difference in the language on this bill is revealing. While the Chicken Little button has been hit by some in politics and some in the private health sector, with a bit of research on what is being said under legal obligations to the financial markets it is clear that even the greatest critics of this decision do not actually believe their own rhetoric.

By way of example, Ramsay Health Care in Port Macquarie are currently threatening to pull a $20 million expansion of their Lake Road hospital. They are currently threatening staff that jobs will go and they are contacting local clients, saying that this bill will be detrimental to their current service delivery. However, when this is all checked against their legal obligations in reporting to the share market, it is a different message. The ASX statement on 25 August from the same company reports a 23.6 per cent rise in full year core net profit, an after-tax profit of $198.4 million in the past financial year alone. The stock market statement indicates that this result 'was driven mainly by a strong performance across Ramsay's Australian hospitals', which includes Port Macquarie. The most telling statement, from August last year in the Australian Financial Review, is the following statement from the CEO of this same Ramsay Health Care group:

In both the short and longer term, demand for privately provided health services would continue to grow regardless of the rebate—

he said. And I quote his exact words:

'Hopefully things will stay as they are but even if the bill is passed and there is a trickle down effect, the positive fundamentals driving growth in this business will remain,' he said.

Therein lies the truth for this chamber. This quote is both telling and appreciated. It is this CEO's quote more than any other that reaffirms my vote and should calm those in Port Macquarie and throughout Australia who may be wondering what on earth the truth is on this topic.

I will continue to work with Ramsay Health Care to grow their business, grow jobs and expand their facilities both locally on the mid-North Coast and throughout Australia. Supporting this bill, though, as identified by Ramsay Health Care themselves when reporting to the share market, is in no way inconsistent with that common goal.

In conclusion, I once again support this bill, as I did in the last parliament, because health economics in Australia is unsustainable and needs change. The protections in place within the private health sector are strong and have data publicly available for every single Australian citizen to follow the cause and effect of this decision, and the reports to the share market from some of Australia's largest health providers indicate that they themselves think this bill will have minimum impact. This House should pass this bill.

Debate adjourned.