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Tuesday, 14 February 2012
Page: 1201


Mr McCORMACK (Riverina) (20:40): Australia has one of the best health systems in the world, largely due to the balance which exists between the public and private health sectors. This Labor government is willing to put our health system at risk—grave risk. As of December 2010 more than half the population had some form of private health cover and during the course of the year to April 2011 private health funds had paid $12.4 billion in benefits towards the health care of 11.7 million Australians who held some form of private health cover. In the next financial year the Labor government proposes that individuals earning $83,000 or more per annum or families earning $166,000 or more will have their rebate for private health insurance decreased. Some people will receive no rebate at all. This is essentially a way of taxing the rich without calling it a tax. It is socialism in its purest form. Although Labor will make out that it is no modern-day Robin Hood taking from the rich to give to the poor, this legislation is going to have significant impacts on everyone, no matter what their financial situation is. Furthermore, it is yet another example of the Prime Minister saying one thing and doing another. Whilst shadow minister for health the now Prime Minister unequivocally promised, 'The private health insurance rebate is here to stay in its current form.' Mind you, the now Prime Minister also stated unequivocally just prior to the 2010 election, not long after her rise to power, 'There will be no carbon tax under the government I lead.'

When these proposed changes were first announced in 2009—

Ms Plibersek: How is it different from the GST?

Mr McCORMACK: I can hear the minister crying out but she should sit there and listen. I have something important to say.

The DEPUTY SPEAKER: The member for Riverina will be heard in silence and he does not get to reflect on the people at the table.

Mr McCORMACK: Yes, Madam Deputy Speaker. When these proposed changes were first announced in 2009 the Australian Treasury projected that following such a policy change 25,000 high-income consumers would withdraw from their private cover. A report by Deloittes estimates that 1.6 million consumers will withdraw from their private hospital cover over five years and 4.3 million consumers over five years will downgrade their level of private hospital cover following a policy change to the private health insurance rebate. The report also estimates that 2.8 million customers over five years will withdraw from their general treatment cover and 5.7 million consumers over five years will downgrade their level of private health cover. That is a total of 4.4 million people withdrawing from their private health insurance and 10 million people lowering their private health insurance level. So whilst Labor may stand here and say that the majority of people holding private health insurance, approximately eight million people, will not be affected, it does not appear that they have considered that their actions will make people think again about holding private health insurance.

These changes also pose a great risk to services in regional and rural communities, communities which are the heart of my electorate of the Riverina. There is already talk of doctors withdrawing services in rural communities and private hospitals and the services they provide will be at risk. In my electorate there are 66,683 people, at latest figures, covered by private health insurance. This means there are 66,683 people in the Riverina who will be affected by a change to the private health insurance rebate. Labor will tell you that this is not the case at all—and I do accept that these people may not have their rebate affected. However, a change to the rebate scheme will affect them nevertheless, as these changes will see an increase of 10 per cent to private health insurance premiums. This is 10 per cent above what would otherwise be expected. At a time when cost of living pressures are already casting a heavy burden on all Australians, the rise in private health insurance premiums is just another con and just another cost placed on people due to careless legislation proposed by this government.

The Prime Minister even acknowledged, whilst the shadow minister for health, that private health insurance rebates are part of the family's budget when she told the Sunday program with Laurie Oakes:

We will leave the 30 per cent private health insurance rebate undisturbed because we understand it's factored into family incomes.

Where is that understanding now? Why does the Labor government believe it is acceptable now, in 2012, to place this additional pressure on family incomes? It would seem to me, and to many others too, that this government has a financial black hole that it needs to fix and that that bill has been introduced not for the good of the health system, mind you, but because Labor believes it will get its budget back into surplus. I will believe that when I see it.

The government has wasted billions of dollars and now it expects Australians with higher premiums on their private health insurance to pay for Labor's waste and Labor's mismanagement. As the member for Maranoa just pointed out, many specialists, including ophthalmologists, come out to rural areas because of private health insurance. Will this happen in the future if, as the member for Maranoa asked, people opt out of their schemes? This is just another nail in the coffin of the already tightened family budget. Families are doing it tough. Nowhere is this more evident than in regional Australia, in the member for Flynn's electorate, in the member for Maranoa's electorate, in the member for Cowper's electorate and certainly in the Riverina where health services are not what they should be and there is so much uncertainty due to volatile markets for farmers and certainly volatility in water availability.

Private hospitals treat 40 per cent of all patients in Australia, and in 2009-10 they treated 3.5 million Australians. Furthermore, it was private hospitals that performed 64 per cent of all elective surgeries—well over half of all elective surgeries performed. In Australia our hospitals are currently operating at high occupancy rates. With changes to the private health insurance rebate ensuring people will withdraw from private hospital insurance, this will increase the demand on already-stretched public hospital services. Any changes to the private health insurance rebates are going to have a significant impact on these figures and the use of private hospitals for treatment and for surgery. This increase will require patients to be prioritised on their level of need, and will ultimately result in longer waiting times and queues for services, particularly elective surgery. To alleviate the long waiting lists which would develop, the government would need to invest in increasing capacity for hospitals.

These waiting lists are already under undue strain in my home state of New South Wales, where, after 16 years of a Labor government who just let them grow, the Nationals-Liberal coalition government under Barry O'Farrell and Andrew Stoner are working hard to reduce them. But adding an influx of people to the system will only place further burdens on that system. And I know that the health minister, Jillian Skinner, in New South Wales is doing her utmost to ensure that long public waiting queues at hospitals are minimised.

Wagga Wagga cardiologist Dr Gerard Carroll has stated that the public health system is already 'bulging at the seams', and if patients from the private sector opt out to the public sector the imbalance will mean there are fewer opportunities for public patients seeking elective surgery. Often these public patients are in chronic pain and need elective surgery to help them. If this goes through, they will not be able to access that in the time frame that they so desperately need. The Deloitte report expects that the cost of servicing this increased demand for public hospital services will outweigh the savings to the government from the means testing of the rebate. As demand for public health care grows, the government will eventually need to make investments in increasing public sector capacity by increasing the number of new beds, operating theatres, labour and funding. Every dollar of funding provided for the private health system rebates saves two dollars of costs which are then paid by private health insurers.

Once Labor gets these changes through, then we can rest assured that the next changes will undoubtedly be to remove funding for private schools, on the same premise as this legislation—that 'the rich can afford to pay for it'. We heard the member for Corangamite this afternoon talk about these 'rich' and call them 'privileged'. Well, that is disgraceful. They are not privileged; they are just working families—hardworking Australian families. Private schools depend on fundraising by parents and friends associations, and a large number of wealthier families are opting to send their children to public schools due to, in some cases, a wide range of subjects and programs offered. As with private health insurance, private education is not just entered into by rich people. Hardworking Australian families often go without to ensure their child can access the best education they can afford. If the government opts to remove funding for private schools, then there is the likelihood that some will be left with no option but to shut their doors, leaving students to find education elsewhere and teachers without jobs.

It is important that Australia maintains our world-class health system, and that we ensure there is access to the health system for everyone. The current public and private partnership we have works extremely well, and helps to ensure Australians have access to the services they need, to the services they deserve. We need to guarantee Australians that they will continue to have access to health services without undue waiting times and undue private health insurance premiums. We need to be encouraging more people to take up private health insurance, not hitting them over the head with a sledgehammer for doing it and introducing legislation such as this that will only discourage people from going into private health.

The government and the Greens have labelled a deal over private health insurance as a 'win for fairness'. The health minister has reportedly already secured Greens support for the government's health legislation. The legislation allows means testing of the private health insurance rebate and an increase in the Medicare levy surcharge.

It means—

the health minister said—

that low income Australians won't be subsidising the private health insurance rebates of much higher paid Australians …

I hope I quoted you correctly there, Minister.

Ms Plibersek: You did. Well done.

Mr McCORMACK: Thank you. Labor has been trying to means test the public health insurance rebate for nearly three years. It represents a $2.4 billion boon to the budget. And here is the rub: a $2.4 billion boost to the budget bottom line. This is a win-win for Labor. Firstly, it gets to whack the aspirational, the successful, the so-called privileged, as the member for Corangamite called the middle class in his matter of public importance dissertation today. I am not sure how rusted on hardworking, blue-collar Labor families with two incomes just to pay the bills, with a mortgage, perhaps with three kids and rising power costs would react to being called privileged. But Labor has turned its back on these people. They are now the forgotten families. They are families who are tired of the party which actually once had a vision but which now does backroom, dodgy deals with the minority Greens and Independents just to stay in office, just to stay in power. There is nothing this government will not do or say or will not be to stay in office.

The other reason Labor is so keen to push this bill through is that it adds $2.4 billion to the Treasury coffers. For a government which is borrowing $100 million a day, which has a $38 billion deficit and a $200 billion debt, an extra $2.4 billion will be a welcome respite. In essence, the name of this bill is a misnomer—the Fairer Private Health Insurance Incentives Bill 2011. This is not fairness; this is class warfare by any other name. If and when this gets through, private schools will be the next to face the Labor budget blowtorch. And all for what? To hit and hurt aspirational working Australian families and taxpayers.

The amendment put forward by the Leader of the Opposition is commendable and appropriate:

That all words after 'That' be omitted with a view to substituting the following words:

'this bill, and the related bills, not be proceeded with until after the Parliament has met in the 44th Parliament.'

In other words, we should put this off until after the next election, which cannot come soon enough. It is not just this side of the House saying this but people out in voter land, the Australian public. It is certainly people with private health insurance, those so-called aspirational families. That more than anything would be delivering fairness.