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Tuesday, 4 June 2013
Page: 5160


Ms O'DWYER (Higgins) (20:52): I rise today to speak on the Private Health Insurance Amendment (Lifetime Health Cover Loading and Other Measures) Bill 2012 and the Private Health Insurance Legislation Amendment (Base Premium) Bill 2013 with much sorrow because it is, unfortunately, yet another nail in the coffin of private health insurance in this country. Why have private health insurance? A former very excellent health minister understood the reasons. Dr Michael Wooldridge knew that, by having and encouraging private health insurance, you would encourage people to be more self-reliant, you would allow people to make choices about their health care and their health providers, you would give them flexibility in that choice and, importantly, you would take pressure off the public health system.

This is not something the government have ever understood; in fact, it is certainly not something they have ever been committed to. Despite all of the rhetoric—and let me just give you a bit of a history lesson on that—it is something the government have been philosophically opposed to from day one. The Prime Minister said:

Labor is committed to the maintenance of this rebate—

the private health insurance rebate—

and I have given an iron-clad guarantee of that on a number of occasions.

She also went on to say, when comparing herself to Tony Abbott:

On Thursday, October 13, the Minister for Health, Tony Abbott, asserted in parliament that prior to the last election, I had a secret plan to scrap the private health insurance rebate and he cited Mark Latham’s diaries as proof of this proposition. Yesterday, Matt Price reported this claim by the minister as if it were a fact. The claim by the minister is completely untrue and should not have been reported as if it were true. The truth is that I never had a secret plan to scrap the private health insurance rebate, and contrary to Mr Latham's diaries, do not support such a claim … For all Australians who wanted to have private health insurance, the private health insurance rebate would have remained under a Labor government. I gave an iron-clad guarantee of that during the election. The difference between Tony "rock solid, iron-clad" Abbott and me is that when I make an "iron-clad commitment", I actually intend on keeping it.”

I think we all know from the bills tonight and from what the government has done to private health insurance that this certainly is not true. We know that this government has been intent on pulling apart the private health insurance rebate and making health insurance more expensive for Australians.

The people of Higgins will be hit very hard by this. About 83 per cent of the people in my electorate have private health insurance. This means that more than 80 per cent of my electorate see the value in being self-reliant, taking pressure off the public health system through their taking out of private health insurance. I am constantly canvassing my electorate for their views and opinions. I do this in a number of ways—through mobile office meetings, through community forums and in particular through communitywide surveys. In my two very large communitywide surveys right across the electorate, private health insurance rebates are always at the very top of their concerns.

These changes, though, will affect not just those people with private health insurance but also those people who do not have private health insurance. What the government stubbornly refuses to accept is that, when people abandon the private sector due to increased costs, the burden is shifted to the already stretched public health system, to our already stretched hospitals, which in Victoria have also taken another hit from this government when it ripped out $107 million of hospital funding. In addition to the higher premiums, it actually puts private health out of the reach of the average Australian.

The government have said that this will have no impact whatsoever on the number of people who have private health insurance nor on the public health system, but they cannot say that with any knowledge or understanding, because the real impact of these changes will not be felt for another 12 months. The Private Health Insurance Administration Council has reported that there were $1.2 billion in prepayments in the June quarter so as to take advantage of the 30 per cent rebate. Many policyholders prepaid for 12 months or more, delaying the pain of Labor's cuts. The government should be encouraging people to take out private health insurance, not making it more difficult. They should be striving to encourage more choice, not limiting it.

Make no mistake: the government ripping more than $4 billion out of private health insurance is nothing more than a tax grab to shore up their budget bottom line, and they have done that in the knowledge that they are finally fulfilling their philosophical dream to take apart the private health insurance system. The problem is that this government does not appreciate that 12.5 million Australians have private health insurance. It is not just those people who this government claims are wealthy; it is people on lower incomes as well. There are 5.6 million people with private health insurance who have an annual household income of less than $50,000 and 3.4 million of those people have an annual household income of less than $35,000. The government's increase to the cost of private health insurance will hit those people. They will hurt everyday Australians by raising the cost of living and hitting their hip pocket.

So why is the government introducing these bills? Why is it putting more pressure on our hospital system and why is it encouraging people who do have private health insurance to downgrade their cover? It is doing so because of its philosophical objection, as I have said, but also because of its utter mismanagement of our economy. This is a government that inherited no net debt. We had taken the time to pay off $96 billion of Labor's debt but we did more than that. In delivering surplus after surplus, we put some money aside into the Future Fund—

Ms Plibersek: Mr Deputy Speaker, on a point of order: I am wondering whether the speaker has run out of things to talk about when it comes to private health insurance. Could she return to the legislation?

The DEPUTY SPEAKER ( Mr Lyons ): The member for Higgins has the call.

Ms O'DWYER: Thank you very much, Mr Deputy Speaker. I am simply trying to educate the minister that it is as a result of the fiscal mismanagement of this government that we find ourselves in a position where this bill is being brought before the House. As I was explaining to the minister—and she may learn something if she does listen to this point—the previous coalition government in delivering record surplus after surplus was actually able to put enough money away into a Future Fund to help cover the contingent liabilities of our public servants—$70 billion in net assets. What this government is doing, though, is that it has been accumulating more than $192 billion in deficits and it has promised another two deficits, which will add up to more than $220 billion. But we know we cannot rely on the Treasurer's figures. We know there will probably be bigger blow-outs than that if the Treasurer is still in his job after 14 September. More than that, we have more than $300 billion of gross debt, and counting. It is quite wrong that Australians are having to pay for the government's incompetence. They are having to pay for this government's incompetence through higher costs and through higher costs to their private health insurance rebates.

The government have coupled the bill that will index the private health insurance policy base premium by the lesser of CPI percentage change or the change of the premium charged by a private health insurer with a bill introduced last year—the Private Health Insurance Amendment (Lifetime Health Cover Loading and Other Measures) Bill 2012. There is only one reason why they would do this—that is, to avoid scrutiny and to try to force it through parliament even more quickly. It is because they know that the changes to lifetime health cover in this bill will increase premiums by up to a reported 27.5 per cent on 1 July 2013. I stress again: an increase of up to 27.5 per cent on 1 July 2013. They are reneging on another promise despite their iron-clad guarantee. They are going to increase the cost of living for all Australians and there is no smoke-and-mirrors spin that they can use to disguise that fact.

It is only the coalition that understands the need for a strong and accessible private health system to ensure that the public health system remains viable and sustainable. After all, it was the coalition government's private health insurance reforms in the form of rebates, the Medicare levy surcharge and lifetime health cover that saw the number of people with private health insurance increase 75 per cent from 6.1 million to over 10.7 million, consequently alleviating stress and strain on the public sector, which was then at breaking point.

That is why only the coalition has committed to restoring the private health insurance rebates once we can responsibly do that. It is only the coalition that understands that choice in health care should not just be for the elite, the wealthy, the rich—however it is that the government would like to choose to term the phrase—but instead is accessible to all those who wish to provide options for themselves and for their families. It is only the coalition that will again deliver hope, reward and opportunity for all.