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Monday, 13 February 2012
Page: 912


Dr SOUTHCOTT (Boothby) (19:15): The fairer private health insurance legislation represents almost $2.8 billion being ripped out of the pockets of Australians who hold private health insurance. At the last election the Labor Party, in their dishonest ads, talked about the Leader of the Opposition taking $1 billion from health when it was actually a $10 billion increase in public hospital funding, but here we have a clear example of the Labor Party ripping out almost $2.8 billion, with their hands in the pockets of ordinary Australian families and individuals who are having a go, who are covering themselves and covering their families with private health insurance. Is this money going to health? No, it is just an inevitable consequence of the fact that the Labor Party have lost control of spending. They have wasted billions of dollars on pink batts and billions of dollars on school halls, and now, unfortunately, we are seeing broken election promises—a consequence of the fact that, as usual with a Labor government, they have lost control of their spending.

We on this side of the House understand that private health insurance plays a key role in reducing waiting lists and keeping pressure off the already struggling public hospital system. It allows people to have a choice of doctor, a choice of specialist, a choice of surgeon, a choice of anaesthetist and a choice of hospital. The coalition have always recognised this and will continue to fight for the role of private health insurance in our health system.

In a sense this is history repeating itself. When Labor were last in power the level of people covered by private health insurance plummeted from 50 per cent of the population to a low of 30 per cent in the mid-1990s. A number of Labor government decisions made during the second term of the Hawke-Keating government, between 1984 and 1986, had the effect of ripping money away from people who had private health insurance. As a result of those decisions Labor took when last in office we saw premiums rise by almost 40 per cent. The consequence was that people dropped out and as younger, fitter, healthier people dropped out the insured pool become more likely to claim and the premiums rose, in a vicious cycle. That required the introduction of the private health insurance rebate, along with lifetime health cover, in 1999, which arrested and reversed that fall in private health cover. In 2004 we came up with the proposal for increased rebates for people over 65 and people over 70 in recognition of the fact that many people on the age pension or part pensions and self-funded retirees were on fixed incomes and holding private health insurance. We needed to do this to make sure that private health insurance in Australia was on a sustainable footing.

Unfortunately, as I said before, Labor have a track record of dismantling private health. For the current Prime Minister's views on private health insurance there is no better guide than The Latham Diaries. That book shows how ideologically opposed to private health insurance the Prime Minister was when she was the Labor Party spokesperson for health. In fact, as we heard in question time today, the current Prime Minister gave an ironclad guarantee when she was shadow minister for health that the Labor Party would maintain the rebates. Her robust defence seemed to be that 'we did break that promise in 2007 but we took it to the 2010 election so then it was okay'. That ignores that the ironclad guarantee had an expiry date of not much more than 15 months into the Rudd government. I will come to that later.

Private hospitals treat 40 per cent of all patients in Australia—3½ million patients in 2009-10. It covers the majority of elective surgery. Around 12 million Australians hold private health insurance—52.9 per cent of the population—and 45.6 per cent have hospital treatment cover. Of these people, any single earning over $83,000 per annum and any couple earning over $166,000 per annum will see their rebates reduced, with those on higher incomes receiving no rebate at all. These changes will mean a return to the old days of people dropping out of private health insurance left, right and centre. Around 2.4 million people will be directly affected by immediate increases in their premiums of 14 per cent, 29 per cent or 43 per cent, depending on their income tier. Deloitte has predicted that up to 1.6 million Australians will drop their cover over the next five years. They have also forecast that up to 4.3 million Australians will downgrade their cover over the next five years and that premiums will increase 10 per cent above what they otherwise would have. We will see an extra 845,000 Australians admitted to public hospitals and an extra $3.8 billion in additional recurrent costs for the public hospital system. It is worth noting that the government maintains that only 25,000 people will drop their private health insurance under its modelling compared to the 1.6 million modelled by the Deloitte analysis. There is quite a discrepancy there—the Deloitte analysis is 64 times the government's predictions. Medibank Private, the government owned insurer, claims that 37,000 of their members will drop private health insurance. They are about a third of the market in Australia. Just extrapolating the Medibank Private numbers, this measure will see more than 100,000 Australians drop private health insurance. This shows that the government's claim of only 25,000 is not realistic.

It is not just those on higher incomes who are going to be affected—5.6 million Australians with private health cover have annual household incomes of less than $50,000, and of those 3.4 million have annual household incomes of less than $35,000. Despite Labor's rhetoric, private health cover is not just for the rich. It has always been this way. People on age pensions, part pensions and self-funded retirees all maintain private health insurance. People on fixed incomes and those in low income households will be hurt most by this move. It is the part-pension recipients, self-funded retirees and young people who will be hurt the most from this. Young families who have responsibly taken out private health cover will be hurt. These people have all sacrificed to secure their own health and this government want to impose an extra financial burden when cost-of-living pressures are already so high.

These people may not be hit with a reduction in their rebate but they will be hit by premium rises as a secondary consequence of people dropping their private health cover. This is very simply a broken promise by the Labor government. These broken promises are stacking up, day by day. It is a betrayal of the electorate and a betrayal of the 12 million Australians with private health insurance.

Just four days out from the 2007 federal election, Kevin Rudd wrote to Dr Michael Armitage, the chief executive of the Australian Health Insurance Association, and said, '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. Labor will maintain lifetime health cover and the Medicate levy surcharge.' That was clear cut and black and white in writing.

It is clear now that this is just a first step for the Labor government. Labor have delivered four budgets since they were elected in 2007 and in every single budget they have proposed to rip money out of private health insurance or to slug people to take out private health insurance. My prediction is that if Labor have the chance, this will be just the first step. There will be many more bills like this where Labor will continue to undermine private health, to wind back the support for private health and to continue their relentless attack on the private health insurance rebates. In every budget delivered by the Labor Party, they have attacked private health insurance.

This bill has already been rejected by the Senate on two separate occasions, yet the government continue. They just cannot let it go. The Labor Party hate private health care. They pursue this as an ideological argument, without considering or even caring about the consequences. This government cannot manage money. They have wasted billions and billions of taxpayers' money—for example, pink batts; and the school halls, which schools did not want. In health, you need only look to the $650 million GP superclinics program, where there is no proof that a single hospital has seen a reduction in waiting times for patients arriving at the emergency department. Because of this endless waste by this reckless government, they are now looking to dismantle effective measures like the private health insurance rebates to plug the hole in their budget. For those opposite, this is not about the good health of Australians; it is about balancing the bottom line of their budget which they have lost control of.

The effect of this legislation on my electorate of Boothby is going to be very detrimental. There are 96,728 people in Boothby who are covered by private health insurance—72.3 per cent of voters on the roll have private health insurance, 63.3 per cent of voters hold hospital treatment insurance and 71.5 per cent hold general insurance for extras. There are two private hospitals in my electorate which are likely to be affected, Flinders Private Hospital and Griffith private hospital. Glenelg Community Hospital and Ashford Hospital sit outside my electorate, but are frequently used by the residents of Boothby.

Voters in Boothby will take a very dim view of the Labor Party's decision. This is a bad measure for Australia and a bad measure for my electorate. It is such a bad measure that over 2,000 residents in my electorate have petitioned to have the private health insurance rebate retained intact. It is a petition that I will be presenting later this week. The opposition have no choice but to oppose this measure, as we did in 2009 and in 2010.