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Tuesday, 14 February 2012
Page: 1094

Mr ALEXANDER (Bennelong) (12:54): I rise to speak in opposition to these private health insurance bills. This is the third time we have debated this legislation. It was bad legislation the first time, it was bad legislation the second time and—lo and behold!—it is still bad legislation.

For the average Australian concerned about protecting themselves and their family's health, this is most certainly third time unlucky. These changes will directly force people to cancel their private health insurance cover or to select a cheaper level of cover. The government does not deny this. This will place immediate upward pressure on the insurance premiums paid by mums and dads wishing to have some security for their family and will force more people into our already overstretched public hospital system. The government does not deny this. On this Valentine's Day it is clear to see that there is not a lot of love coming from the government benches to those dependent on private health cover.

What we are witnessing here is a simple game of cost-shifting from the federal purse to the states, of passing the buck, of inflaming the blame game that former Prime Minister Rudd promised to end. This government's warped policy focus, regardless of the impact on broader society, is chalking up yet another victim. The government uses fanciful metaphors about the circumstances of the cleaners of this chamber to justify this money grab as a tax only on the rich. However, it is without doubt that the people who vacuum the floors and empty the rubbish bins in this place will be slogged with higher insurance premiums or forced to wait in even longer queues in the public hospital system as a direct result of these changes—not to mention that those who pay the largest portion of tax and contribute to our economy through wealth creation and economic productivity will face premium increases of up to 43 per cent.

This government has put together a consistent record of punishing those in our society who succeed: the carbon tax, the mining tax and now what is effectively a health tax. What this government fails to understand is that an economy is driven by those striving to get ahead. Whilst we must protect those in disadvantaged circumstances, we must also ensure that the road out of disadvantage is not littered with obstacles and punitive measures. The coalition has long supported a policy that all Australians should have access to affordable health care and have real choice in the management of their healthcare needs. This includes the choice for private health insurance, and the Howard government was active in supporting that choice in order to take pressure off the public health system. As a result of that policy, private health insurance coverage increased from 34 per cent in 1996 to over 44 per cent by 2007.

In my electorate of Bennelong there are 101,274 people covered by private health insurance—72.9 per cent of the voters in Bennelong depend on private health insurance. Labor's insistence on ripping away the much-needed security from the mums and dads of Bennelong is just another example of this government's total disconnect from the reality of life in the real world. They will claim that it is only the rich who will pay, yet 2.4 million people will face immediate premiums increases in the order of 14 to 43 per cent. Curiously, the government, despite their protestations of the benefit of this change, have kept hidden their predictions on the number of people expected to downgrade their cover as a result of this change. One does not need to be a brain surgeon to realise that, as products become more expensive, mums and dads will seek out cheaper products that will then leave more of the load to be carried by the public hospital system. Do not just take my word for it: the government owned insurer, Medibank Private, has predicted that, as a result of this legislation, 37,000 of their members will cancel their cover and 92,500 will downgrade their level of cover. Internationally acclaimed auditing firm Deloitte predict that, across the industry, 175,000 people will withdraw from private hospital cover in the first year of this change and a further 583,000 will downgrade. What a beautiful set of numbers—not! Over the next five years they expect that 1.6 million will drop cover and 4.3 million will downgrade. This will put an astonishing level of stress on the public system. But of course the federal government can then just blame the states for that. For those that stick with it, Deloitte predict that premiums will rise by 10 per cent above what they would otherwise be without this flawed legislation.

Private hospitals treat 40 per cent of all patients and perform 64 per cent of elective surgeries in Australia. Independent economics firm Econtech has found that every dollar of funding provided for the private health insurance rebate saves $2 of costs that are then paid by private health insurers. Any argument for this change simply does not stack up.

We all know that this government has little concern about making a promise before an election and doing something else afterwards. So I can only presume that government members are not concerned that the former health minister put out a press release just prior to the 2007 election, stating:

… Federal Labor has made it crystal clear that we are committed to retaining all of the existing Private Health Insurance rebates …

Perhaps members on the other side will share a greater concern about a recent Ipsos survey that found that 64 per cent of Australians believe that the $4.5 billion a year the government spends on the private health insurance rebate is a good use of taxpayers' money.

Or perhaps their collective moral compass will be attuned to the fact that the changes in this bill will impose an enormous compliance burden on the industry and individuals completing their tax returns—that is, our constituents and those who care for the health of our constituents. There are many residents of Bennelong who do not have steady or predictable incomes. It is a great unknown how insurers will administer a system that will adjust premiums according to an individual's income.

Or perhaps members opposite will show concern because Deloitte has estimated that the public hospital system will face additional operating costs totalling $3.8 billion over the next five years, including $1.4 billion in the fifth year alone, as a direct result of this change. So far we have seen no concern from the opposite side about the multifaceted impact this legislation will have on all levels of our society.

In conclusion, I will read a succinct email from Mr Simon Hughes, one of many Bennelong constituents who have written to me recently on this issue. He wrote:

Dear Mr Alexander,

Analysts predict the Federal Government's proposal to means test the Private Health Insurance Rebate will make health insurance more expensive for everyone.

The Private Health Insurance Rebate doesn't just affect patients with private health insurance. By encouraging more Australians to choose private cover, it takes pressure off our overburdened public hospitals.

But as the means test forces Australians out of private insurance, queues for life-saving treatments will get longer and longer.

I call on the Government to retain the rebate in full, in its current form.

Failing that, I intend to reassess my private health insurance needs and costs as a result of this stance by the government in what can only be seen as a slap in the face for ordinary Australians attempting to provide health care for their family and another election promise that has been broken.

Kind regards, Simon Hughes

This is a bad policy. It was the first time, it was the second time and it is again. Labor's attempt to turn this bad policy into a type of class war, an attack on the rich, can be seen as the transparent move that it is—a feeble effort to resolve a budget in crisis.

Yet again, we on this side of politics stand united, voting in the best interests of the Australian constituents we have been sent here to represent and protect. On behalf of the 101,274 people in Bennelong with private health insurance, and all the others reliant on the public system that will also suffer as a result of this legislation, I strongly oppose this bill. I urge all my parliamentary colleagues to stand with me in opposition to this attempt to replace a good, working system that has the support of the wider community with yet another example of ill-conceived, flawed government policy.