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Monday, 13 February 2012
Page: 877


Mrs MARKUS (Macquarie) (16:39): I rise to speak on the Fairer Private Health Insurance Incentives Bill 2011 and the two cognate bills that are before the House. This is not the first time that these bills have been seen in this place. The same set of bills has been defeated by the Senate on two separate occasions, but this Labor government is now at it again for a third time. This of course is no surprise: if we have learnt one thing about the Labor government it is that it will never let a little thing like a mandate, or the will of the people, get in the way of it fulfilling its own agenda.

These bills aim to reduce the incentives for Australians to take up private health insurance by slashing the 30 per cent rebate and increasing the Medicare levy surcharge for those without insurance, according to income thresholds. Those earning over $80,001 will have to either receive a reduced rate of 20 per cent or pay a one per cent Medicare levy surcharge. People earning over $93,001 will either receive a rebate of just 10 per cent or pay a 1.25 per cent surcharge, whilst those who earn over $124,001 will no longer receive any private health insurance rebate and will face a Medicare levy surcharge of 1.5 per cent.

This government has selective amnesia when it comes to this issue. In 2007, then Leader of the Opposition Rudd gave assurances to the Chief Executive Officer of the Australian Health Insurance Association, the Hon. Michael Armitage, that federal Labor would not make any changes to the private health insurance rebate.

A young professional in the seat of Macquarie earning $95,000 per year with a $1,500 per annum health insurance policy will see his rebate slashed from 30 per cent to 10 per cent or in real dollar terms from about $450 to $150. That equates to this person being $300 a year worse off. If they do not have private health insurance, their Medicare levy surcharge will rise from $950 to $1,187.50 and they will be $237.50 a year worse off. Put simply, they are damned if they do and damned if they don't. This is another example of Labor trying to hurt everyday Australians—young families, senior citizens and small business owners who are already struggling to make ends meet as the cost of electricity and other vital items continues to rise. If passed, these bills will add to the ever-increasing cost-of-living burden being felt by people across the electorate of Macquarie.

When in government the coalition implemented incentives which saw a 10 per cent increase in the number of Australians who use private health insurance. Thanks to these incentives we now see around 45 per cent of Australians using one form or another of private health cover. Increased patronage of private health insurance is a vital part of ensuring greater access to health services for everyone.

Public hospitals all over the nation struggle to keep up with the demand. This is not a reflection on the hardworking doctors and nurses who work in public hospitals and are valued members of our community but a reflection on the demand that is currently placed on our health system. Private health insurance assists public hospitals by giving those who can afford it the opportunity to receive private care, which assists by easing pressure on hospital waiting lists. Reducing the rebate will increase the cost burden of private health insurance on mums, dads and self-funded retirees who are already struggling with price hikes. This will leave many with no choice but to drop their private health insurance altogether, whilst forcing others to downgrade to cheaper policies. This was highlighted by a telephone survey conducted by ANOP Research. They found that, if this bill was passed, 11 per cent of those surveyed would drop their hospital cover and a further 24 per cent would downgrade it. This would not only provide them with less cover but in turn place a great deal of pressure on our public hospitals and other health services.

The government's own figures show that around 27,000 people would be forced to drop their private health cover. This would result in an extra 8,500 public hospital admissions, as those previously covered by private health insurance returned to the public hospital system. These figures tell us that the Labor government fails to understand the impact that this bill will have on these 27,000 individuals across the nation—families, students and self-funded retirees who through no fault of their own will be worse off. During Senate estimates hearings, the leading insurer Medibank Private said that according to its own internal modelling about 37,000 of its members would be expected to drop their cover with an additional 92,000 expected to downgrade their policies if this bill were to pass. Medibank's figures suggest that under this bill 10,000 more Australians will be forced to drop private health insurance than the government has suggested. However, Medibank is talking about only their customer base, whilst the government is talking about the entire nation.

To see how the government's national figures stack up, look at the Deloitte report entitled Economic impact assessment of the proposed reforms to private health insurance, commissioned by the Australian Health Insurance Association. This report estimates that, over the first year, 175,000 people will drop their private health insurance and 538,000 people will have to downgrade their policies. We have the government saying 27,000 and a report by Deloitte claiming 175,000. So who can we trust? Who is more believable? The government that brought us the pink batts disaster, the 'building the entertainment revolution' through the set-top box scheme, the ludicrous cash-for-clunkers idea and, for an encore, wants to bring in a carbon tax? Or a company like Deloitte which, since its foundation in 1845 has been regarded as one of the world's largest companies when it comes to professional services?

The Deloitte report also found that this bill, which has been rejected twice by the Senate over five years, will cause the number of those dropping their cover to increase to 1.6 million consumers, while a further 4.3 million will downgrade their policies. Additionally, 2.8 million Australians would drop their general cover, which includes ancillary services such as dental. It found that because of this severe impact on the health insurance market, private health insurance premiums would rise significantly. The rise would be a staggering 10 per cent more than would otherwise be expected, making private health insurance even more unaffordable for those struggling against surging cost-of-living pressures. The report went on to show that this would have a significant impact on the public health system, with public hospitals having to treat a significantly higher number of patients as people withdrew from private health cover.

We need to be very clear about this. What the Labor government is proposing here is bad health policy. This government has a long record of failing to understand what the public wants, and this policy shows that nothing has changed. The impact that this proposal will have on the residents of Macquarie is significant. An average family in which the father works as an accountant and the mother as a schoolteacher, earning wages above the threshold, with a basic private health package costing $2,500 a year, will see their rebate reduced from 30 per cent to 20 per cent, costing them an extra $250 a year. This is at a time when cost-of-living pressures are high and many among us are calling out for greater access to health services.

By bringing the Fairer Private Health Insurance Incentives Bill and the two related bills back before the parliament, this Labor government is once again showing that it is not listening to what Australians are saying. In both May and November of 2009 the parliament clearly told Labor that we did not want it destroying our health system. We must now again say that in 2012 nothing has changed. This bill needs to be opposed. The last thing we need is more hurt from this Labor government.