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Monday, 13 February 2012
Page: 826


Ms HALL (ShortlandGovernment Whip) (12:55): It will be no surprise to this parliament that I will portray a very different picture than the picture that was previously portrayed by the member for Mayo. I do not portray it from any class war point of view but from the point of view that funding health is about funding health, not funding insurance. I have great pleasure in rising to speak on the Fairer Private Health Insurance Incentives Bill 2011 and associated legislation that we have before us today. It is very important legislation because the introduction of means-testing does provide a saving, and that saving will go directly towards delivering health services to all Australians. The proposed measures that are being introduced in this legislation are means-testing of the private insurance rebate and also increasing the Medicare surcharge levy, which I did not hear the member for Mayo speak about. That is the incentive part of encouraging people on higher incomes to retain their private health insurance.

It is a whole package of legislation that we are debating here today. Yes, it has been introduced to the parliament before. It has passed through the House on a number of occasions but it has not passed through the Senate. I am a strong supporter of this legislation because I believe that, as I started my contribution to this debate by saying, when dollars are allocated for health they should go into health, not into insurance. The means-testing will make the rebate fairer. Approximately 14 per cent of single taxpayers have incomes over $83,000. I do not think that they are wealthy people but I think that they are more able to contribute to their private health insurance than the pensioners in my electorate who struggle each day to be able to pay for their private health insurance. I think that they can afford to pay a little bit more for their private health insurance than a pensioner who is on under $700 a fortnight or a pensioner couple who receive in the vicinity of $520 each a fortnight. For them, finding up to $300 a month to pay for their health insurance is a lot more difficult than it is for a single person in receipt of an income of about $83,000 a year. I have to say that any increase in health insurance does impact on all those people who scrimp and save to be able to pay their insurance, as opposed to somebody who has a lot more disposable income. When you have disposable income you can make a decision as to how you want to spend that income, but if you are on a fixed income and a lower income it is harder.

The other aspect of this legislation that I alluded to at the beginning of my contribution is the Medicare levy. Somebody on a higher income, a single person who receives $83,000 to $96,000, will have to pay a Medicare levy of one per cent if they withdraw from private health insurance. The incentive to retain their private health insurance is that they do not have to pay the levy, so it will cost them if they withdraw from private health insurance. Similarly, about 12 per cent of couples—taxpayers—have incomes above $160,000 and they currently receive approximately 21 per cent of the private health insurance rebate. I do not think that is fair. I think that that private health insurance rebate should be directed to those people with the greatest need. This is not class welfare; this is about ensuring that people who can afford to pay do pay and that those who need the rebate actually receive it. That is very fair and very straightforward. It is not about ensuring that those at the top end have their private health insurance contributions covered by a rebate.

I will give a snapshot of my electorate of Shortland. In Shortland, 49 per cent of the residents have private health insurance. I am one of those. I am also one of those that the rebate will impact on. I think that is fair. I think it is fair that I should have to pay a little bit more because I know that, of the 49 per cent of people in the Shortland electorate who have private health insurance, a very high proportion of those people are pensioners. Shortland is the 11th oldest electorate within this parliament, which means that a very high proportion of people living there are pensioners. I know that when I have a young person who comes to see me who is on a higher income and a pensioner, it is invariably the pensioner who has the private health insurance. This legislation will not impact on those pensioners in any shape or form.

I also decided to have a look at the income composition of the Shortland electorate. The proportion of families in the Shortland electorate who are earning under $650 per week is 29.2 per cent. That is an incredibly large percentage of people on a very low income. Of those, I know that there are a large percentage who do have private health insurance. The median income in the Shortland electorate is $1,046, which would put the median annual income of people in the Shortland electorate well below that $83,000.

I also know that there are a number of people in the Shortland electorate who need medical services and they have to wait to be able to get those medical services. It will benefit them a lot more if the money is spent directly on health rather than on subsidising my private health insurance. To me, there is no question about the best way to spend your health dollars.

It is interesting to note that the 2010 Intergenerational report said that the private health insurance rebate is the fastest growing component of the Australian government's health expenditure and will increase by over 50 per cent in real terms for the period 2012-13 to 2022-23. That is not how we should be spending our health dollars. We should be spending our health dollars on delivering to those Australians who need a bed in a hospital, who need an operation or who need to be able to see a doctor when they are sick. That money should not be spent delivering money to private health insurance.

The Gillard government, and the Rudd government before it, has sought to rebalance its policies in the area of private health insurance. That is what this legislation is about—rebalancing. It is about trying to ensure that Australians maintain their private health insurance whilst at the same time taking the subsidy away from those people who earn more than the pensioners I referred to or more than the people on $83,000 a year. Those people, I think, can make a little bit more of a contribution to their own health insurance. I know members on the other side of the House are always very supportive of user-pays systems, so I think that those people who can afford to pay, can pay a little bit more for their contribution.

The rebate will remain unchanged for low- and middle-income earners. The pensioners in the Shortland electorate will not have to pay any more for their private health insurance. Those who have no private health insurance will be able to access services in their public hospitals a lot quicker because the money saved from putting money into insurance rebates—the fastest-growing component of the Australian government's investment in health—will go to the delivery of direct health services. That is very, very important. The changes in the Medicare surcharge levy are, once again, an incentive to ensure that people on higher incomes, not necessarily on super-high incomes, who can afford to make a contribution will have that incentive to retain their private health insurance. There is also another incentive for people to retain private health insurance, and that is the fact that we have Lifetime Health Cover, which has not been talked about very much in this debate. Lifetime Health Cover means that if you take out private health insurance by the age of 30 you pay less than if you take it out over the age of 30. For every year after that there is a two per cent increase in the cost of your private health insurance and after you join there is a 10-year moratorium on it. So if you take out private health insurance at the age of 40 you will be paying 10 per cent more than somebody who takes it out at the age of 30. This is about rebalancing, as I mentioned a moment ago, and encouraging younger people to take out private health insurance earlier, particularly younger people with greater disposable incomes.

These reforms will provide a fairer distribution of benefits, ensuring that all those people who need assistance with their health insurance rebate obtain it and that those who can afford to contribute do so. This will result in savings of $2.4 billion for the government over three years, and $2.4 billion invested in health will make a real difference to health services on the ground. I know, coming from my electorate, that there are many people who would be advantaged by having greater access to services. It is all about greater access, more money put into primary health care and a better balance of the health system. I do not think there has ever been a government that has put more into rebalancing the health system in a number of ways than the Gillard and Rudd governments.

The previous coalition government brought The Blame Game report to the House Standing Committee on Health and Ageing. That identified a number of problems. There were problems related to insurance. They did nothing. The Gillard government and the Rudd government have acted to put money directly into health and to resolve the problems in the health system that the previous Howard government refused to address. This is good legislation and it should be supported by all the members of this parliament.