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Tuesday, 14 February 2012
Page: 1192

Mr TONY SMITH (Casey) (19:59): In following the eloquent contribution of the member for Grey on the Fairer Private Health Insurance Incentives Bill 2011, I also support the second reading amendment of the Leader of the Opposition. I also support the contributions of all of those on this side of the House who have spoken on the bill. In a few minutes I will address some of the key concerns but, as the member for Grey pointed out, this side of the House has outlined in great detail the arguments about why this legislation will be so damaging. I want to deal with this debate in a couple of parts. I want to focus on the betrayal and then on the detrimental effect this legislation will have on private health insurance and on the public system—the detrimental effect it will have on health across Australia.

On this side of the House it has been said, quite rightly, that those opposite have always hated private health insurance. It is important to go back, because when the private health insurance rebate was introduced it had an immediate positive effect on private health insurance numbers. Those opposite knew that their deep opposition to it, their deep desire to rescind it, was not sustainable in the public arena. So, not only did those opposite promise before the 2004 and 2007 elections to maintain that policy position, which was introduced by the Howard government, but also they went out of their way, they bent over backwards, to tell the Australian people that the policies would be maintained. They did so in the full knowledge that fessing up before winning government was politically unsustainable and that once in government they would start to move away and perform their act of betrayal on the Australian public.

To comprehend the gravity of this betrayal it is necessary to go back, as previous speakers have done. The Leader of the Opposition pointed out late this afternoon the litany of quotes from previous Labor health spokespeople, including the now Prime Minister, whom he quoted as saying was sick and tired of being asked over and over again for Labor to maintain their commitment. The reason they were asked over and over again was that we knew in our heart of hearts that they had their fingers crossed behind their backs on this policy issue. They knew they would say one thing before the election but in government they would act to betray the promise they made.

Ms Plibersek: Did you miss the 2010 election?

Mr TONY SMITH: If the health minister is so sensitive to interject, that is fine. Let me make the obvious point: not only did those opposite promise they would maintain these rebates but the then leader signed a document pledging that he would keep the private health insurance rebates. It has become a very familiar story. It is not just a promise made by those opposite, it has become very familiar, hasn't it? They will even sign documents they know they are going to betray.

The member for Denison knows this well. He thought, innocently, that not only had the Prime Minister made a personal promise to him but she had signed a document with that in it. But, still, as he discovered at the start of this year, it was not worth the paper it was written on. I will now go to the letter from Kevin Rudd, the member for Griffith and then leader of the Labor Party:

Federal Labor has no plans to require private health insurance funds …

Et cetera. I have here a copy of this letter, which was to Dr Michael Armitage, the chief executive of the Australian Health Insurance Association. Well, that was not true. Labor had plans—secret plans. Members of the public heard that promise. Within a few months Labor were in office and they were restating that promise right up until the beginning of 2009, when they backflipped. As the Leader of the Opposition eloquently pointed out, those opposite did not run around screaming from the rooftops during the last election that this was their solemn policy proposal. Those opposite know that.

Just a few minutes ago we heard the member for Lyne outlining his position on this legislation. He will support the government on this legislation. I would be interested to know whether the member for Lyne, when he was seeking re-election, communicated directly and clearly with his constituents what position he would take on the private health insurance rebate. It may well be that in his re-election material the member for Lyne stated boldly and clearly to his electors that he would be voting this way on this sort of legislation if it arose again. If that is the case, I am sure the member for Lyne will happily produce those very clear, unconfused specific promises he made to those in his electorate with private health insurance.

These changes will be damaging. There are a number of issues related to private health insurance that not only affect private health insurance numbers and premiums but affect the entire system. As previous speakers have outlined, not only will these bills directly affect the premiums of those affected; just as significantly they will have the effect—which independent experts have outlined in the public arena—of people dropping out of private health insurance and reducing their cover. That sets off a downward spiral. As the pool of privately insured people reduces, the premiums for those remaining in that pool rise, kicking off a vicious circle of rising premiums forcing more dropouts, forcing rising premiums. As the Leader of the Opposition pointed out this afternoon, Deloittes have estimated a 10 per cent premium rise.

Those opposite only need to go back and look at the statistics of where they left private health insurance when they were last in government. Today we have a little over 50 per cent coverage of private health insurance. Back in 1996 it had dropped below 35 per cent, to 34 per cent. Even former health minister Graham Richardson, all those years ago, acknowledged that, once the level of private health insurance begins to fall, it has a very damaging effect on the entire public health system. In the remaining minutes, I want to address that point.

As people reduce their cover or pull out of private health insurance, they put more pressure on the public hospitals. That is the point Graham Richardson made many years ago. It is all there in Hansard back in 1996, when a then new health minister, Dr Michael Wooldridge, was tasked with dealing with this issue. To those elderly people who have paid for private health insurance for years and years—decades, in fact—the minister at the table, the Minister for Health, would say that they are unaffected by this if they are below the income thresholds. But what is not understood, or what this government does not care about, is that they are very much affected by the premium rises that result from the shrinkage in the pool of privately insured people. That is the price they pay for this government's failed policy.

The government knew they would do this all along. When they were in opposition, they knew it was unsustainable to be honest with the Australian people. There was always, with a Labor government, going to be this sort of legislation. We warned about it. It is here. As the Leader of the Opposition rightly pointed out this afternoon, we will see the same thing over and over again in areas like education and other areas of policy as long as those opposite remain in government.