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Tuesday, 14 February 2012
Page: 1089

Mrs PRENTICE (Ryan) (12:31): Once again, here we are debating the introduction of a means test for the private health insurance rebate. Despite going to the 2007 election with a promise not to alter private health insurance policy—that is, not to reduce the rebate—the Labor government, under then Prime Minister Rudd, blatantly backflipped and introduced a bill similar to the ones we are debating today into parliament in 2009. While the member for Griffith has since been relieved of his position as Prime Minister and the member for Gellibrand of the health portfolio, it is now one of the first acts of the new health minister, the member for Sydney, to introduce this appalling legislation to the House of Representatives.

The government failed in its attempt to have this legislation passed in the Senate in May 2009. That was because the legislation was rightfully considered to represent a broken election promise—yet another deception of the Australian people. However, the government was not content with this outcome and attempted once again to pass the bill in November 2009. Members and senators, representing the views of their constituents, voted down this legislation not once but on two separate occasions. So this legislation has been put before parliament on two occasions and defeated on two occasions, yet this Gillard government still sees fit to introduce it a third time. This is indeed a sustained attack on private health insurance.

I wonder what a certain Russell McGregor, a reader of Queensland's Courier Mail, would be thinking today. Does he remember the strident response on 23 September 2004 from then opposition health spokeswoman Gillard to his letter to the editor expressing concern for the future of private health cover? I quote:

Your correspondent Russell McGregor (Letters, Sept 15) should have no concern that Labor will "erode" or abolish the 30 per cent government rebate for private health insurance. Labor is committed to the maintenance of this rebate and I have given an iron-clad guarantee of that on a number of occasions. -Julia Gillard , Opposition health spokeswoman, Canberra

I too can give this House an ironclad guarantee, and that is that this legislation will significantly erode the private health insurance incentives, implemented by the coalition, by reducing the 30 per cent rebate and increasing the Medicare levy surcharge for those without private health insurance in accordance with their income. This is quite literally making it more expensive to have private health insurance while simultaneously making it more expensive to not have private health insurance. Either way, with or without, Australian families will be paying more, yet will have more strain on their cost of living—the stress of their mortgages, electricity prices, the flood tax, reduced discounts for paying university fees upfront and the other huge broken election promise: the carbon tax.

Australians are struggling. This Gillard government may not realise that, but my constituents certainly do. Students, singles, families, pensioners and self-funded retirees—people across the spectrum—are seeing their hard-earned wages meet fewer and fewer of their needs. This Gillard government wonders why retail is struggling, why jobs are being lost, why Australians are angry. It is because they are all feeling the impact of the Labor government's poor and reckless financial management. It is because it is getting more difficult for them to provide for themselves and for their families. And it is because innovation and hard work are punished rather than rewarded under this government. These bills represent yet another step in that direction. They show, yet again, that this Labor government is out of touch. It has introduced 19 new taxes in the last four years and done nothing to relieve the strain on Australians or businesses—this from a government who undertook to introduce no new taxes.

The bills we are debating today make yet another essential cost of living—health care—more expensive. It is not only the direct loss of the rebate for those who remain in private health care but the increased premiums for everyone covered by private health insurance—that is, everyone, both those whom this Labor government thinks are wealthy and those whom it thinks are not wealthy. Deloitte has estimated that premiums will rise 10 per cent above what would have otherwise been expected—hardly an incentive to join private health cover. More than 104,000 Ryan residents are currently covered by private health insurance. These are families who will face higher premiums—more strain on their cost of living—if they make the decision to help ease the burden on the public system. This is just another example of how this Labor government punishes self-sufficiency and innovation in Australia.

This government considers that, possibly, it will not hurt Australians too much—just a couple of dollars more per week. We continue to hear that the carbon tax will raise prices by just a couple of dollars a week and that the flood tax will cost Australians only the price of a cup of coffee. That may be true when looking at the isolated facts. But, coupled with the effects of the 19 new taxes Labor governments have introduced since 2007, it all adds up to a considerable amount. But it is more than that. These simple cups of coffee, these few dollars on the weekly grocery bill or that pair of school shoes have a multiplier effect throughout the entire economy. Just one cup of coffee less for each resident at Chapel Hill who visits Simon's Gourmet Gallery in my electorate of Ryan certainly adds up to a large loss for that business, for its suppliers and for its employees. Those extra few dollars mean that perhaps the Chapel Hill newsagency next door will sell 100 fewer magazines to 100 fewer customers, again having rather a large effect on a small business. This bill today will simply add to these negative effects—again multiplying through the economy.

People value their health, as they should. Over 10 million Australians have made a choice to sacrifice in order to provide for private health insurance, rather than relying on an overburdened public system. This is a good choice for our nation and for our hospitals. The Howard government recognised that the relief that this individual investment generates was of great benefit and introduced the private health insurance rebate accordingly. The proof is in the pudding, as they say, as private health insurance membership increased from about 30 per cent in the 1990s to 44.7 per cent in 2008. The Howard government took this measure as dwindling private health insurance membership was of real concern after being decimated by 13 years of the Hawke-Keating Labor governments. During that time, private health insurance participation rates dropped from 67 per cent in 1983 to just 33.5 per cent in 1996—13 years of Labor governance halved private health insurance membership. That is why this rebate is important. It improves participation rates, which then have a flow-on effect or multiplier effect, if you will, of relieving the strain on our public system.

The Australian Institute of Health and Welfare has reported that private funding contributes to approximately 57 per cent of all surgery in hospitals—over half. In some areas, such as same-day mental health episodes, private funding covers about 70 per cent. The Wesley Hospital, in my electorate of Ryan, has written to me raising major concerns regarding this proposed legislation, as they perform more than 32,000 procedures annually. They fear the impacts of this legislation not out of greed or a wish to retain business, but out of great concern for their patients, who do not need the direct increased cost that will be added through the reduced rebate. They are also worried about the indirect cost impacts, including increased premiums, as membership decreases and about the additional burden on already strained public hospitals. The Wesley Hospital also has a dedicated breast clinic whose tireless work I have witnessed on numerous occasions. When you consider approximately 55 per cent of all treatment for malignant breast conditions is privately funded, it is obvious why the Wesley Hospital is concerned.

If private funding is already contributing to more than 50 per cent of serious health services and we are all aware that our public system is already under enormous strain, how will this rebate cut assist a system that is already struggling to cope? The reality is that it will not help in any way. Furthermore, would this government have even chosen to go down this path if they had not so totally mismanaged the economy? They certainly were not considering it when they were riding high on a zero net debt legacy left to them by the Howard government. Both former Prime Minister Rudd and his then health minister, Nicola Roxon, repeatedly reassured the Australian people that the private health insurance rebate was not under any threat from them, making statements such as:

Labor understands that people with private health insurance—now around 9 million Australians—have factored the rebate into their budgets and we won't take this support away.

Perhaps this statement explains the government's attitude: they cannot seem to get their own budget right, so they may assume that ordinary Australians treat their money with the same disregard as they do.

It has been estimated by the Gillard government that as a result of this proposal, 27,000 people will drop their private health insurance cover, resulting in only 8½ thousand additional hospital admissions. I doubt that the patients who have been waiting for years for elective surgery will be comforted by the news of an influx of an additional 8½ thousand people into the system. And if they already baulk at that conservative figure, imagine their reaction when they listen to Medibank Private's estimates of 37,000. Taking that to a national level, a Deloitte report commissioned by the AHIA found that up to 175,000 people will drop their membership in the first year alone, with over half a million people downgrading. That is not an outcome I want to see. I do not think it is good for our health system and I do not think it is good for Australians and that is why I oppose this bill.

The Gillard government's Labor colleagues in Queensland have so destroyed the public health system that this could prove to be the final straw. The basket case that is the Queensland public health system is not coping now and an influx of thousands more patients could spell its death knell. This is bad legislation—legislation that totally lacks vision for the bigger picture. In the short term it may save this government some money, funds for which they would not be so desperate if they had not ploughed ahead with such reckless financial management over the past four years. It comes at the cost of great additional strain to the public health system. Australians need to be encouraged to take out private health insurance and relieve the strain on the public system.

Our health system is struggling. Already it is not coping with the demands placed upon it. Yet this government seems to believe that it can support even more people who will drop their private health membership when they can no longer afford it. This does not make sense and it is not fair in any sense of the word. It is ironic that the name of this bill is the Fairer Private Health Insurance Incentives Bill. Abolishing a rebate for higher income earners does not suddenly mean that health insurance is fairer for lower income earners, or indeed that it will become cheaper. As we have seen from numerous reports and heard from many speakers, this 'fairer' private health insurance will actually make it more expensive and make public hospital queues longer. What is fair about that?