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Monday, 13 February 2012
Page: 814


Mr GEORGANAS (Hindmarsh) (12:05): The Fairer Private Health Insurance Incentives Bill and cognate bills before us today in essence seek to introduce means testing to one element of our welfare system, the private insurance rebate. This change was put to the last parliament by the previous government. It was passed by this House but defeated by the coalition and some of the crossbenchers in the Senate. The Labor government believes in this reform and we intend to prevail with this reform. So here we are again debating the merits of this legislation once again, as we did in the last parliament.

At the heart of the debate is a contest over one very basic idea: that taxpayer funded welfare should be means tested, that welfare should be for those who need it the most rather than everyone who wants it. If we were to agree in this and the other place on this point, the rest would be relatively straightforward. In fact, I think it would be easy. But, unfortunately, we are not in agreement. The schism within this and the other place, the Senate, given the incompatibility of values and principles continues. Today's debate is showing that.

It is pretty ironic that it is those referred to as conservatives that want more welfare doled out to the wealthiest members of the public, irrespective of whether they need it or not. And we know that those of us on this side of the House, sometimes referred to by members opposite as 'socialists' or as espousing socialist policies, are the ones always looking to reduce any waste and unnecessary drains on the public purse through exorbitant welfare outlays. So Labor is the party that believes in giving assistance to people in proportion to their need, and that has always been the case. But this should not be a surprise, of course, given the tradition established by Labor prime ministers Hawke and Keating in the 1980s and 1990s. We Labor members on this side of the House are extremely proud of our record in means-testing welfare and in the efficiencies and level of care we have been able to sustain over the years through using public funds for the maximum public benefit as they are required, not as they are wanted. So those of us in this House note this Labor government's position: giving welfare to those who need it, not everyone who might want it.

A couple months ago, a person sat down—an accountant who himself is married with a couple of teenage kids—and he spoke of means-testing of the family tax benefit and how families over $150,000 cannot access the benefit. As an accountant, he spoke of a client of his in a double-income family who had a child, and the mother stopped paid work for a period. That family, he said, was reduced to living off the income of only the husband, a doctor of some description who only earned $160,000 per year. This is what I was told of that scenario: 'They've only got $160,000 a year to live on. And they can't even get welfare. That's not fair.' That is what he said. It is virtually a direct quote. I know that it is tough and that some people do have huge mortgages. But the members of this single-income family earning something like three times the average wage say they need welfare to get by or to raise their child in a manner they think appropriate. I do not know what the people consider appropriate or what they consider to be the basics which they cannot do without. But it seems that they think the basics cost over $160,000 per year. I find this highly disagreeable. I think most of us would find it highly disagreeable.

We know that, when we had pensioners in my electorate, for example, scraping by on a lot less than what they get now, the government of the day decided to give hefty welfare handouts to people earning 10, 20 or 30 times what pensioners were expected to live on. The private health insurance rebate subsidises the lifestyles of people earning $200,000, $300,000 or $400,000 a year while pensioners, such as people on disability pensions or carers pensions, battle to make ends meet every single day of their life. To me this simply is not fair. This is not the way that I think business should be done and this is not why I came into this House.

The government says that some families and some people, like those earning three, four or five times the average wage, are not in need of assistance, unlike those earning much, much less than that, those families who are earning average wages or a little more, are paying off high mortgages or high rents and are paying money to educate their children et cetera. In the context of the bills before us, the government is saying that single people earning up to $83,000 will continue to receive the support they have and that couples earning up to $166,000 will continue to receive what they have been receiving. But those who are earning more should expect less in handouts. Those who are comparatively better off should be in less need of welfare.

Within this package, singles earning up to $83,000 and families earning up to $166,000 will see no change. Those earning a bit over these amounts are not having their handout taken away, just means-tested. They would still get rebates of 20 per cent for those up to 65 years, 25 per cent for those aged 65 to 69 and 30 per cent for those aged 70 and over. The Medicare levy surcharge for people in this tier who do not hold appropriate private health insurance will remain as it is, unchanged. Those who are even better off—for example, singles earning more than $96,000 a year and couples or families earning more than $192,000—naturally need less assistance than those on much lower incomes. Accordingly, they will receive rebates of 10 per cent for those up to 65 years, 15 per cent for those aged 65 to 69, and 20 per cent for those aged 70 and over. The surcharge for people in this tier will be increased by one quarter of one per cent. Singles earning more than $124,000 a year and couples or families earning more than $248,000 a year will not receive assistance.

Within the context of the state that I come from, South Australia, and using the last ABS figures and statistics for 2006, we are looking at the top 3.6 per cent of wage earners who will not get any of this welfare. I note that that is 3.6 per cent in my home state of South Australia. I cannot imagine why anyone would think that the top 3½ per cent of earners need welfare to get by. I do not believe that a single person, one for instance earning something like $3½ thousand clear per fortnight, would need welfare to survive. I do not believe that a family with an income of some $7,000 per fortnight is so impoverished that they need welfare and a handout from taxpayers. A lot of those taxpayers are earning a hell of a lot less than they are.

The idea that an ordinary member of our community—for instance, a single person earning an average wage of around $1,600 per fortnight—should be paying taxes to subsidise the lifestyle of someone earning double or triple what he or she earns is pretty wrong. It is wrong that people and families earning ordinary, average wages—doing it tough—or perhaps even earning a little bit more than the average wage, paying their mortgages, trying to get their kids through school and paying the bills, have been paying taxes for a long time to subsidise those households that are earning double, triple and quadruple what they earn.

The arguments about the government needing to dole out more and more taxpayers' money to preserve the integrity of the private health insurance industry are a smokescreen for a system of highly regressive wealth redistribution, making low- to ordinary-income earners hand over their hard-earned wages to fund the lifestyles of people who are far better off than themselves.

I do not see this as welfare, and neither do a lot of other people. This really should be stopped. There are better things for which taxpayers' funds could be used. Pensioners are calling out for more assistance. We see them struggling on a regular basis. I have one of the 'oldest' seats in the country, with the highest demographic of people over 65, and I see it every day, at street corner meetings and at forums. Pensioners are doing it tough and are calling out for more assistance. How can we justify giving out handouts to the top three per cent of earners in my state when at the same time we have people—pensioners especially, including people on disability pensions and their carers—who are doing it so tough?

For example, Public Service and Defence superannuants are calling out for better indexation. Again, how can we give welfare to the top three per cent of earners when we have people who do not get that indexation and are feeling the pinch, such as those superannuants of Defence and the Public Service? As I said, the disabled clearly need more help. In our electorates all of us come across parents who have children with disabilities, and we know how tough they are doing it. Certainly they need a lot more help. Sadly, the Liberal and National parties across from us disagree. But I think that it is much better that these people I have spoken about—people on pensions or disability, average income earners and maybe even those with a little bit higher than average incomes—receive the help they require, rather than that top 3.5 per cent of wage earners. As I said, those opposite disagree with that. They think that the top 3.5 per cent of earners should be subsidised by the rest of the people, who are earning far less than they are. I, for one, commend to the House the bills as well as the principles of fairness and prudential public administration on which they are based.