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Monday, 14 March 2005
Page: 63

Senator HUMPHRIES (4:35 PM) —The underlying, inherent dishonesty in this motion which has been moved today by the Australian Labor Party is the implication that the Australian Labor Party has some kind of answer to this problem. Nobody on this side of the chamber and certainly not the Minister for Health and Ageing or anybody in the private health insurance industry likes to see increases in private health insurance premiums. They are regrettable because they inevitably cause some people to decide not to continue with or not to take up private health insurance. But a fact of life is that the increase in the cost of health in this country and in every other country in the world is greater than the increase which is occurring in the cost of general services or goods that the consumer consumes; that is, medical inflation is significantly higher than general inflation.

Between 2000 and 2004, for example, the cost of medical services and goods in this country rose by 22.8 per cent. That is more than double the rate of inflation for general goods and services consumed by the Australian community. It is that rising cost of health services which has driven the increases in private health insurance premiums. No-one on the other side of the chamber can realistically propose to do anything about that. If they can, we have not heard it in this debate. With those sorts of increases it is necessary for the inputs—the costs that we as a community contribute to the maintenance of our health system—to rise also. Just as private health insurance premiums inevitably have to rise to keep up with that level of medical inflation so too do other costs, such as the amount that the taxpayer contributes to the running of the health system, also need to increase.

The amount that the community has spent on the Pharmaceutical Benefits Scheme has risen enormously in the last few years. In the last nine years, for example, the cost of the PBS has risen from around $2.6 billion to $6.2 billion; that is almost double in real terms. The cost of health care for older Australians has risen commensurately as well. Those opposite are in no position to complain about rises in health insurance premiums unless they can provide an alternative—and they cannot. Labor’s position is extremely unclear. If it has some alternative system of price setting for premiums, first of all, we have not heard what it is and, secondly, it would fly in the face of what happened each and every year when Labor was last in office—that is, average increases in private health insurance premiums were in the order of 10 or 11 per cent; sometimes they were as high as 17 per cent in a single year.

The second point is that we know very clearly the Labor Party do not like the one major policy setting that this government has put in place to make health insurance more affordable for Australians, and that is the 30 per cent private health insurance rebate. We know they intensely dislike that particular policy device; we also know it is only because they are too timorous that they are not prepared to go to the Australian community and say that in as many words and promise to abolish it. We know they are extremely reluctant to keep that measure in place. But the fact is that it makes private health insurance affordable to many millions of Australians—the almost nine million Australians who have private health insurance in this country.

Senator Allison and then Senator Nettle commented on this being a device for subsidising the costs of the rich. Of course, the rich are in a position of being able to contribute to the health care costs they incur, and the government’s Medicare levy is designed to encourage them to do that. But the important point here is that over one million Australians on an income of less than $20,000 have made the decision also to contribute to the cost of their health care by taking out private health insurance cover. The measures we are talking about here—measures we have put in place as a government to make health insurance more affordable—benefit them too; they benefit them directly and, importantly, they ensure that the cost of the health system of this country is shared on an equitable basis. Quite frankly, it is shameful that people like Senator Allison say proudly that they do not have private health cover when I think, to be perfectly honest, that is a responsibility of those on higher incomes. I wonder how many on the Labor benches of this place have private health insurance.

Senator O’Brien —So it’s not freedom of choice.

Senator HUMPHRIES —You do have a choice, Senator. You can make a decision. It is not compulsory.

The ACTING DEPUTY PRESIDENT (Senator Lightfoot)—Senator Humphries, you should ignore the interjections and address your comments through the chair.

Senator HUMPHRIES —I shall attempt to.

The ACTING DEPUTY PRESIDENT —And you should desist from interjecting across the table, Senator Evans.

Senator HUMPHRIES —People have that choice and it is a matter of good policy that people make the decision to take out insurance. If premiums do not rise, the cost will fall back on the general population of Australia. As taxpayers, we will meet more of that cost.

Those opposite, as I have said, would like to see the private health insurance rebate abolished. They will not say so in as many words, but we know that is what they want. What they do not properly advert to when they secretly countenance that policy is that, if it were abolished, not only would you see a drop in private health insurance but you would also see a huge shift in cost from the private hospital system to the public hospital system. The savings made by abolishing the rebate would more than be eaten up by the extra payments that would have to be made to the states and territories to maintain a hospital system that would creak and groan, if not collapse, under those higher costs.

The ACTING DEPUTY PRESIDENT —Order! The time for consideration of the matter of public importance has expired.