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Tuesday, 14 February 2012
Page: 1230


Mr HUNT (Flinders) (22:51): It gives me great pleasure to oppose the Fairer Private Health Insurance Incentives Bill 2011 and the cognate bills. The reason is not out of some great ideological preference, although there is clear philosophy behind our position on this, but out of a practical concern for the impact on the cost of living for millions of low-income Australian workers and pensioners, and out of a concern for the long-term sustainability of not just our private health system but also our public health system.

Let me start by setting out the framework of the impacts of these bills on the real world. Let me begin not with any presumptions of the opposition or assertions that others might make but with the hard world of Deloitte's Australian Health Insurance Association study, entitled Economic impact assessment of the proposed reforms to private health insurance, dated 28 April 2011. The first and most significant figure is a simple one, taken from page 1 of the executive summary:

Private health insurance premiums will rise 10 per cent above what would otherwise be expected. As premiums rise, private health cover will become less affordable for all consumers, that is, not just those who are in the tiers.

By 'tiers' they mean those to be affected by the phase-out of the 30 per cent rebate. What is fundamental here is that this bill is not simply a change in the rate of rebate for upper income earners, as has been presented by the government. It is a major change in the cost of private health insurance for all Australians, and that means that low-income earners, pensioners and single-parent families will simply have higher costs. The answer is very simple.

Ms Plibersek: Oh, that's just not true, you know that's not true.

Mr HUNT: Let me refer the minister who denies Deloitte's report—

Ms Plibersek: I do.

Mr HUNT: that there will be a 10 per cent increase above what would otherwise be expected. It is fine for the minister to attack other members of parliament, but the minister expressly, clearly and absolutely lives in the fantasy that one of the world's leading accountancy firms is carrying on as if it is a fraud.

Ms Plibersek: It's a fiction. Bought and paid for.

Mr HUNT: I want to repeat what this minister has just said for the record. The Minister for Health, a cabinet minister of Australia, has just said that Deloitte is 'bought and paid for'.

Ms Plibersek: I'll say it again.

Mr HUNT: Deloitte is bought and paid for! She wants to say it again. The firm will have its chance to respond to a casual accusation of professional incompetency, professional negligence and professional malpractice from a cabinet minister of Australia. That is the position that we have reached with this government: where there is disagreement, not from the opposition but from the highest levels of the professional accounting sector not just in Australia but globally, there is not just disagreement but a gross and vile accusation of professional misconduct.

Let us go on, though, to what Deloitte has said:

Significant numbers of consumers will withdraw from their private hospital cover (1.6 million consumers over five years) or downgrade to lower levels of private health cover (4.3 million consumers over five years) following the proposed policy change

Significant numbers of consumers will also withdraw from their general treatment cover (2.8 million consumers over five years) or downgrade to lower levels of private health cover ( 5.7 million consumers over five years) following the proposed policy change

That is the threat to the private health sector. That is the threat to the ability of low-income earners and middle-income earners to maintain their private health coverage. So this is framed as an assault on some unfair entitlement for higher income earners, but its consequence, its outcome and its inevitable conclusion—just as we warned, to dismissal and derision from the government, over the Home Insulation Program—will be damage to the sector on a grand scale: the waste of money, the loss of resources and a retrograde step in terms of public policy.

The second great area which will suffer as a consequence of these changes is the provision not just of private health services but of public health services. Let me turn now specifically to the third key finding of the Deloitte report:

The chain of events triggered by the proposed policy change is expected to place additional burden on the public health system

Deloitte estimates that:

As people withdraw from their private cover they become more reliant on the public healthcare system.

That is an inevitable consequence. It is not the intended consequence, but it is the inevitable consequence. To continue:

Between 2012 and 2016, 845,000 additional separations will need to occur in public hospitals as a consequence of the means testing of the rebate

Between 2012 and 2016, additional separations which occur in the public system as a result of the policy change will cost the Government an additional $3.8 billion in cumulative recurrent costs over the five years.

In other words, it is not just bad for the cost of living and for the private health sector; it is a disastrous result for the public health sector, which will inevitably have to pick up the pieces. That is something about which all Australians should be concerned. Whether you believe in private health or you do not believe that there should be any assistance for that, if the public health system deteriorates then it is bad policy masquerading as some form of phantom, phoney class war activism.

Let me go on a little bit further, because we have terrible public policy consequences in terms of both cost of living for lower income earners and the impact on the private and public hospital systems, but we also have a fundamental breach of faith. Let me go back to the statement of the then shadow health minister, Nicola Roxon, on 26 September 2007:

On many occasions for many months, Federal Labor has made it crystal clear that we are committed to retaining all of the existing Private Health Insurance rebates, including the 30 per cent general rebate and the 35 and 40 per cent rebates for older Australians.

Similarly, on 20 November 2007, on the eve of the election, the then candidate for Prime Minister—once again soon enough, no doubt—said:

… I have made clear on many occasions this year that Federal Labor is committed to retaining the existing private health insurance rebates.

Those statements, which were declared as an article of faith, an article of principle and a belief which could be trusted, were wrong, false and incorrect. As has always occurred, events are used as a pretext to revert to type and to revert to pathology. So these bills are an assault upon the cost of living, they are an assault upon the viability of the private and public health systems and they represent a grand breach of faith.

Debate interrupted.

House adjourned at 23:00