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Monday, 13 February 2012
Page: 907


Ms GAMBARO (Brisbane) (18:55): I rise to oppose the deceptively entitled Fairer Private Health Insurance Incentives Bill 2011 and two cognate bills. I describe these bills in this way particularly because the content of this legislation is anything but fair. It does not matter how much the government tries to dress these bills up; it will not change the fact that it proposes a severe impact on families, the private health industry and public health services in Brisbane and across the nation.

In Australia we face many policy challenges in the area of health. As the population and the average life span continues to grow, the demand on our health system will increase quite dramatically. The percentage of health spending in state government budgets increases every single year, yet they seem to make very little progress when the waiting lists grow longer and longer. That is why it is important to ensure that as many people as possible have the capacity to purchase private health insurance to alleviate the pressure on our public health system.

The Howard government recognised this. According to the Private Health Insurance Administration Council 2009-10 annual report to the government, in the 15 years between 1984 and 1998 the percentage of Australians with private health cover had halved to just a little over 30 per cent of the population. To fix this decline in membership, the then government—which I was proud to be a part of—introduced a number of initiatives: in 1997 the one per cent Medicare levy surcharge for high-income earners who had not taken out private health insurance and the 30 per cent premium tax rebate for taxpayers who had taken out some form of private health insurance. These policy measures worked. The take-up of private health insurance has taken off since then—so much so that last year $12.4 billion in benefits was paid to some of the 11.7 million Australians who now hold some form of private health insurance cover. This is approximately 52 per cent of the Australian population. This is also reflected in my electorate of Brisbane where 89,920 persons are covered by some form of private health insurance, and 66,676 of these are voters. This equates to 72.1 per cent of the voting population, which is 20 per cent above the national average.

This Labor government wants to undo this great work through the suite of bills we have here before us tonight. It is the third time they have come before this chamber. They were rejected twice by the Senate in the last parliament, and yet here we go again. These bills create a three-tier system in the private health insurance rebate, slashing the rebate and increasing the Medicare levy surcharge for Australian taxpayers within certain income categories. The rhetoric coming out of the Labor Party is that somehow this is rectifying a situation where the rich are being subsidised for their private health insurance by those on lower incomes. Yet, under tier 1, the rebate is slashed by 10 per cent for singles earning over $80,000 and couples earning over $160,000 per year. Let us be clear about this: we are talking here about a teacher married to a policeman. These are the hardworking forgotten Australians aspiring to success. Since the announcement of these measures there has been a litany of evidence produced showing the absolutely disastrous impact that they would have on the public hospital system and the private health insurance industry. These changes will do one thing and one thing only: they will force people to drop their private health cover or choose cheaper cover with more procedures excluded, thus creating upward pressure on premiums and forcing more people into an overcrowded, overstretched public health service system. Every dollar of funding provided for the private health insurance rebate actually saves $2 of costs that are then paid by the private health insurers. Private hospitals in this country treat 40 per cent of all patients in Australia and in 2009-10 they treated 3.5 million patients. They performed some 64 per cent of elective surgery in Australia.

Treasury projected that following these changes only 25,000 high-income consumers would withdraw their cover across the whole sector. This was then clearly proven to be inaccurate when the government-owned insurer Medibank Private came out and said 37,000 of its members alone would drop their cover and some 92,500 members would downgrade—an enormous number of people. A report into these measures by the highly regarded consultancy firm Deloitte for the Australian Health Insurance Association produces some very, very telling findings. Their analysis relies on the results of a survey by ANOP Research Services of 2,000 holders of private health cover on their intentions and the effect of a slashing of the rebates.

I note that the former Minister for Health and Ageing, Ms Roxon, in her second reading speech took aim at the ANOP survey, saying it was wildly inaccurate, but she cannot ignore the fact that she was the health minister then. It was a very simple survey asking people what their intentions were and the importance of the rebate to them. It was really interesting to note that one of the people who designed and interpreted the survey was none other than Mr Rod Cameron, who for many years was an ALP pollster and numbers man. So his expertise and his wonderful work was good enough for the Labor Party to use and to rely on over many years, yet as soon as he produces something that they do not like they do not want to hear about it—they attack the work that he produces.

I will not go through the entirety of the Deloitte assessment. However, I do want to quote a brief passage from the executive summary, which summarises the findings. It states:

Significant numbers of consumers will withdraw from their private hospital cover (1.6 million consumers over five years) or downgrade to lower levels of private health cover (4.3 million consumers over five years) following the proposed policy change.

The Deloitte assessment has some very significant figures here. It also says:

Significant numbers of consumers will also withdraw from their general treatment cover (2.8 million consumers over five years) or downgrade to lower levels of private health cover (5.7 million consumers over five years) following the proposed policy change.

The interesting fact that it also mentions is that private health insurance premiums will rise 10 per cent above what would otherwise be expected. So we have a situation whereby premiums will rise and private health cover will become less affordable for consumers—and that is not just those in those tiers. As people withdraw from private health insurance, the burden on publicly provided health services will continue to rise and rise. These findings indicate that the cost of treating consumers in the public hospital system is going to rise substantially above what is currently anticipated by the government. Deloitte estimates that the additional operating costs accumulated over five years will be $3.8 billion—$1.4 billion in the fifth year alone.

These findings are a damning indictment on the measures included in these bills. All because of what? The inability of the ALP to manage Australia's finances responsibly—that is what this is all about. So what do they do? Since the election of the Rudd government in 2007, the billions of dollars of waste and government expenditure have been absolutely scandalous. We know the stories of the pink batt waste, the $900 cheques being paid to deceased persons and the school halls program, just to name a few. The Labor Party is desperate to find a way to deliver the budget surplus and turn around a $37 billion budget deficit. These proposals are nothing more than a lazy financial quick fix and are not based on any sound policy whatsoever.

Whenever the Labor Party finds itself in a mess, they revert to class warfare. We saw it in question time last week when the Prime Minister was asked about private health insurance. They are interested only in creating a class warfare situation and this is, of course, absolute nonsense. The only contribution the Labor Party has to make in this country is to play the politics of envy. In this case, this supposed attack on 'the rich' will end up hurting the low- and middle-income families in my electorate the most.

I will always stand up in this place for the constituents of the electorate of Brisbane. On behalf of the 89,920 people in my electorate who have private health insurance cover, I will oppose these bills.