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Monday, 14 March 2005
Page: 60


Senator BARNETT (4:22 PM) —It is a pleasure to rise to speak in this debate this afternoon with regard to the importance of the private health insurance rebate and the process that the government has in place to ensure a minimum cost increase. Under Labor the increases for private health insurance were in the order of 10 to 11 per cent on average. Under the Howard stewardship of the Australian government, we now have an independent objective assessment that is put in place to ensure that the premium increase is kept at a minimum.

I wanted to advise the Senate and the members opposite in particular that it is the government through the Private Health Insurance Administration Council and the Department of Health and Ageing that scrutinises those applications for increases that are made, and they are scrutinised very carefully. Just recently the Australian Government Actuary was given advice to provide a second opinion to ensure that the increase is kept at a minimum.

I wanted to make one point about the increase and where the money goes. Do you think it goes into a big black hole, into the pockets of just the private health insurers? Based on the Labor Party senators’ arguments, perhaps you would think so. Let me tell you where the money goes: premiums are rising because the funds are paying out more in benefits to members. The statistics and the evidence has shown that over the years—that is a fact.

What are some of the reasons for increased costs? Obviously we have the rising wages of the relevant people in the public service and the private sector—for example, nurses and the other health professionals. The increase in technology costs—for example, the increased costs in the use of prostheses—are relevant. I have a vested interest in and know a little bit about prostheses, and those costs have increased markedly. That takes care of the ALP argument that there is some way that we are forcing this on families or that this is being done without due concern. It is being done with careful consideration and great cautiousness in the best interests of families.

Senator Allison made a comment earlier to the effect that she does not have private health insurance and that she supports the public hospital system. Goodness me! The whole point is that we want a balance in this country between public and private. We want a balance where we get the mix just about right. If you can afford it then you should have private health insurance. That is why the government has a 30 per cent private health insurance rebate—to encourage people to have private health insurance. That is the whole point. We have the balance right now and it is improving, with 44 per cent of the Australian population, or about nine million Australians, now with private health insurance. If you include ancillary cover then that number gets up towards 50 per cent, or 9.9 million Australians.

We need to try and take the pressure off the public hospital system, and that is what is happening with the investment in private health insurance, which has been accurately reported during the debate at about $2.25 billion a year. Bill Glasson, the President of the AMA, 18 months ago was reported as saying:

The only reason the public hospitals are surviving to any extent that they are at the moment is because of the 30% private health insurance rebate.

That is from a man with a background in health and an interest in health and the consumer, the patient. He is saying that we are getting the balance right. Do know what would happen if we did not have the private health insurance rebate? I can see Senator Nettle getting a little bit irked on the other side, ready to make her contribution, and we look forward to that. But of course the Greens do not support the private health insurance rebate at all; they would prefer to have it abolished. We know that the secret policy of the Labor Party is to remove it altogether. What would happen if that rebate was removed? It would increase for those people who have the private health insurance rebate by 43 per cent. The benefit is about $750 per year for those people with the 30 per cent rebate. It flows through to all those people.

There is a misconception in the community, particularly from the other side. The Labor Party is saying that this is merely a sop for the rich. That is not demonstrated by the facts or the evidence. Let us have a look at the benefits for those in a lower socioeconomic group in Australia. Let us have a look at the one million Australians who are earning $20,000 or less who have the private health insurance rebate. Isn’t that amazing? It is a tremendous credit to those Australians that they believe that there are benefits for them in maintaining and holding on to that rebate. That is fantastic. That kills off the Labor Party’s accusations and allegations that it is only a sop for the rich—that is absolute nonsense.

I am thrilled about, and thankful for, the benefits for older Australians, as are other senators on this side of the chamber. The benefits will flow from 1 April this year. For those aged 65 to 70 the rebate will go from 30 to 35 per cent. Those aged 70 and over will have a 40 per cent rebate. That is fantastic. That shows that we care. It demonstrates that we are looking after older Australians. They deserve it. That was recognised in the report of the Senate Select Committee on Medicare. Senator Knowles, Senator Gary Humphries and I recommended that there be a special increase in the rebate for older Australians. That recommendation has been taken up. It was a policy position at the election on 9 October. And guess what: the Australian people decided. They threw down the mandate to the Howard government and said: ‘Please, Mr Howard and Mr Abbott, maintain and retain with all your might this 30 per cent rebate. Implement this policy to look after older Australians.’ Do you know what? We are delivering these benefits for older Australians and we will not be put off by accusations or allegations from the other side that this is a sop for the rich or just for some others. It is going to benefit older Australians—it will benefit all Australians—because we have got the balance right between the public hospital system and support for the private hospital system. It is a good mix. (Time expired)