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Monday, 13 February 2012
Page: 870


Mrs GASH (Gilmore) (16:10): You have got to hand it to the Labor Party. There seems to be no end to their creativity in spinning a good yarn. This bill seeks to cut $2.8 billion in private health subsidies, inevitably forcing more people onto the already strained public hospital waiting lists. And they title their bill the 'Fairer Private Health Insurance Incentives Bill', surely an oxymoron. Cutting health insurance rebates can only result in forcing more people onto the Medicare levy, resulting in longer hospital queues in Nowra and Milton hospitals. It is the only logical conclusion to draw. Private industry warned against this when Labor first tried to raise the subject under their former leader a couple of years ago. For example, the Royal Australasian College of Surgeons on 12 May 2009 said the budget measure which cut rebates would 'inevitably drive some Australians out of the private health system, placing even greater strain on Australia's public hospitals'. The Australian Medical Association, on the same day, said:

… if you don't keep your private health insurance, you'll be slugged with an increased Medicare Levy surcharge. They get you both ways.

I could not agree more, and this bill confirms exactly what the two major medical associations were warning us about.

This government has never been a fan of private health insurance, despite the success in easing the pressure off the perpetually struggling public hospital system. This bill is just the latest step in Labor's campaign of dogma. Certainly no lessons were learned through its previous experience in 2009 or through industry advice saying, 'Don't do it,' or, most importantly of all, the chaotic health and hospital systems, which we are still experiencing.

When I was reading the explanatory memorandum to the bill, I could not help thinking that the $1.7 billion in cost overruns and waste remediation for the pink batts fiasco could have paid for the subsidy cuts the government is now proposing. When you add the other amounts that have been wasted, there should have been no need to go down this path at all. No wonder Australians, especially in Gilmore, are angry. They cannot see the justification for this to happen. The government has shown no remorse for generating so much waste through its own incompetence, yet it has no hesitation in slugging the taxpayer when it wants. Gilmore has one of the lowest socioeconomic demographics in Australia and I am astounded the government continues to deny the impact this policy will have on the public hospital system in regions like Gilmore. Many families make significant sacrifices so they can take out private health cover, yet here we are again, under this government, penalising those who would benefit most. There is no gain to be had, only pain.

Then, as if to compound this stupidity, the government want to impose another tax by increasing the Medicare levy on some of the soon-to-be-disenfranchised health insurance subscribers. This latest variation will see a three-tier system of subsidies, starting at $80,000-odd per annum for a single subscriber. The first tier get a 10 per cent cut to their subsidy and their Medicare levy will not go up—at least, not yet. The next tier get a 20 per cent cut but their levy goes up. The third tier get no subsidy and their levy goes up even more. Any incentive is deleted.

I note that Treasury estimates that around 25,000 individuals are predicted to opt out, and in some circles that appears to be a conservative guess. In the Senate hearing earlier this year, Medibank Private admitted no research was done as to the likely impact, but they did some internal modelling. That is another way of saying 'an educated guess'. The upshot is that the government does not really know what the impact will be but is keeping its fingers crossed. I have no doubt that this will be just the tip of the iceberg as other cost pressures encouraged by the government start to sink in. With unemployment predicted to rise by another 100,000 in the next 12 months and daily living expenses just going through the roof, it does not take a genius to predict that many households will be cutting a lot of their spending. In fact, they already have, with cost-of-living pressures and, still to come, the carbon tax. This latest venture will only add to that pressure. So, in a way, Labor will get its wish to destroy private health insurance, not through careful planning but through a combination of incompetence, ineptitude and dogma.

But this latest move by the government is hardly a surprise. They were opposed to the scheme when the coalition introduced it and, with the Greens calling the shots, they are determined to remove it completely. I am amused by the inclusion of the word 'fairer' in the title of the bill. This is not a recent innovation, because they tried this on with their Fair Work Act, which is anything but fair. I think that has been demonstrated well and truly. Perhaps they will now turn to their latest slogan: 'a painful adjustment.'

Next, instead of eradicating the subsidy in one fell swoop, as they said they would, this is going to be the death of a thousand cuts. Nobody should be under the illusion that this bill tells us where it will stop; it is just the next step in a series of steps, because the government have not recanted their determination to get rid of this scheme. It might just take a little longer.

I recall a press release issued by the former Minister for Health and Ageing, Ms Roxon, on 26 September 2007, when she was occupying the shadow portfolio. I seek leave to table the press release.

Leave not granted.

Mrs GASH: I am not surprised leave has not been granted, because this press release actually states the truth. The shadow minister was unequivocal in her assurances. In fact, it was a promise. In part, this is what she said:

On many occasions for many months, Federal Labor has made it crystal clear that we are committed to retaining all of the existing Private Health Insurance rebates, including the 30 per cent general rebate and the 35 and 40 per cent rebates for older Australians.

… Labor will also maintain Lifetime Health Cover and the Medicare Levy Surcharge and other components of the existing private health insurance incentive scheme.

It is now abundantly clear that the words were carefully crafted. The shadow minister did not say that they would not change the qualifying criteria, which they are now attempting to do—another broken promise. It seems to me that Labor, to quote Nicola Roxon's own words from the very same press release, will do anything and say anything to get elected. They were not going to cut the private health insurance rebates—at least, that is what they tried to imply. That was before they were elected. Now Labor have been elected, $2.8 billion worth of cuts are going to be made—another lie, another broken promise.

If that is not enough, in a letter to Dr Michael Armitage, the Chief Executive of the Australian Health Insurance Association, the then federal Labor leader, Kevin Rudd, in a letter dated 20 November 2007, wrote:

Both my Shadow Minister for Health, Nicola Roxon, and I have made clear on many occasions this year that Federal Labor is committed to retaining the existing private health insurance rebates, including the 30 per cent general rebate and the 35 and 40 per cent rebates for older Australians.

Federal Labor will also maintain Lifetime Health Cover and the Medicare Levy Surcharge.

Labor will maintain the existing framework for regulating private health insurance, including the process for approval of premium increases.

I remind you, Mr Deputy Speaker, and the House that this statement came from the former Labor leader, Mr Rudd.

By their words, they stand condemned. What utter deceit. The government cannot be trusted to tell the truth and they cannot be trusted to do the right thing. And they certainly cannot be relied upon to get things right. The more the Prime Minister talks about going forward, the more we are slipping backwards.

According to a report in the Australian Financial Review, dated Wednesday, 17 August last year, the Private Health Insurance Administration Council showed that Australia had reached its highest rate of private hospital insurance participation in more than 10 years: in the three months to June 2011, 87,381 people signed up for private health cover. That is what the rebate sought to do when it was introduced. It was an incentive to reduce reliance on the public hospital system by encouraging people to take out private health insurance. It has been an outstanding success, yet this government wants to sabotage that success and trap us in a public hospital system that is groaning under demands that are not being met.

Labor's promise to take over the hospital system has fallen by the wayside and has been diluted to an agreement to share funding—and then only for future growth. How will that work? Another broken promise, but I think it is more a case of Labor confusing their ambitions with their capabilities. This has been the recent pattern of the Prime Minister, making sugary promises on the run and not following through. How many so-called policy announcements have languished after the initial press statement? Making a shallow statement, disguised as a policy announcement is easy. Labor have done it hundreds of times. The challenge for Labor is following through, and that is where they have been found wanting.

Deloitte released a report titled Economic impact assessment of the proposed reforms to private health insurance. I wonder whether the word 'reforms' accurately describes what this government is trying to do, because this proposal is a retrograde step. Deloitte describes the reaction to these proposed changes as significant, not in a good way but with a negative consequence. This is what Deloitte concluded:

In time, it is expected that the cost of servicing increased demand for public hospital services will outweigh the savings to government from the means testing of the rebate.

On this basis, how can anyone in their right mind support this legislation? And that statement comes from an independent and credible body, external to the political process.

I am not surprised that the Independents have indicated their reluctance to support the changes, as has been reported in the Fin Review. At the back of all this, I have to wonder about this strategy to force people back into public hospitals being pursued at the same time as the government is building superclinics to ease the existing strain on public hospitals. Is it in fact a sly ploy to get people into the yet-to-be-constructed superclinics? And what of the government's plan to ease the demand on public hospital waiting lists by utilising private hospitals? How is this going to work?

This legislation has to be viewed in the context of the health reform announcement, made on 2 August last year. Key changes will not be implemented until at least 2014-15, seven years after Labor first promised to fix public hospitals. They also promised that, if needed, they would hold a referendum to take them over. The core promise of Labor's health reforms was that the Commonwealth would become the dominant funder of 60 per cent of hospital costs. That promise has since been scrapped. Its substitute, the supposed increase to 50 per cent growth funding of hospital services will not occur until 2017. That is at least two elections away and with no explanation as to how it is to be funded. A definition of an efficient price of hospital services has yet to be determined, and further negotiations may even be required on the scope of services eligible for Commonwealth funding.

Kevin Rudd said that, on health, the buck would stop with him. Julia Gillard says that the states will be in charge. Julia Gillard has broken Labor's promise on elective surgery guarantees. Patients in category 1 who had waited the clinically recommended time were promised that they would have their surgery in five days. Patients in category 2 would have surgery in 15 days and patients in category 3 would have surgery in 45 days. What are the chances?

The new national elective surgery targets will not be fully implemented until 2016, with reward funding now paid in advance to state governments and no guarantees for patients. The national emergency access target for patients to be admitted or discharged within four hours has been watered down from 95 per cent of emergency department patients to 90 per cent, and will not be fully implemented until 2015. Labor will spend hundreds of millions of dollars this year establishing the National Health Performance Authority, the Independent Hospital Pricing Authority, Medicare Locals and the National Funding Authority. None of this is good news for Gilmore. The superclinic in Shoalhaven, promised by Labor to be up and running by Christmas last year, is not due to commence for perhaps another two years, and even that has a revised forecast that is optimistic. Shoalhaven Hospital is struggling and Milton-Ulladulla Hospital is virtually a second-level operation where some of the services have been cut.

This legislation is a square peg in a round hole. It is a retrograde step. It breaks more promises and it will only compound an already difficult situation. It is not something we need and it is certainly not something we deserve. I cannot for the life of me see any sense in this, and I can see even less in a government that is determined to have its own way despite the cost to the community. I do not support this legislation and I do not trust a government with a proven track record of cunning, deceit and rank stupidity. The Australian people deserve better.