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Fairer Private Health Insurance Incentives Bill 2012, Fairer Private Health Insurance Incentives (Medicare Levy Surcharge) Bill 2012, Fairer Private Health Insurance Incentives (Medicare Levy Surcharge—Fringe Benefits) Bill 2012
- Parl No.
Brown, Sen Carol
McLucas, Sen Jan
Moore, Sen Claire (The ACTING DEPUTY PRESIDENT)
- Question No.
Boyce, Sen Sue
- System Id
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- Start of Business
- Rural and Regional Affairs and Transport Legislation Committee
- Legal and Constitutional Affairs Legislation Committee
- Foreign Affairs, Defence and Trade Joint Committee
- Australian Commission for Law Enforcement Integrity Committee
- Fairer Private Health Insurance Incentives Bill 2012, Fairer Private Health Insurance Incentives (Medicare Levy Surcharge) Bill 2012, Fairer Private Health Insurance Incentives (Medicare Levy Surcharge—Fringe Benefits) Bill 2012
- DISTINGUISHED VISITORS
QUESTIONS WITHOUT NOTICE
- Grants Allocation
(Sherry, Sen Nick, Evans, Sen Christopher)
(Cormann, Sen Mathias, Wong, Sen Penny)
National Disability Insurance Scheme
(Siewert, Sen Rachel, Evans, Sen Christopher)
(Ryan, Sen Scott, Lundy, Sen Kate)
(Marshall, Sen Gavin, Carr, Sen Kim)
(Macdonald, Sen Ian, Ludwig, Sen Joe)
Small Business: Enterprise Connect
(Madigan, Sen John, Lundy, Sen Kate)
Rural and Regional Health Services
(Williams, Sen John, Wong, Sen Penny)
- QUESTIONS WITHOUT NOTICE: TAKE NOTE OF ANSWERS
- Minerals Resource Rent Tax Bill 2011, Minerals Resource Rent Tax (Consequential Amendments and Transitional Provisions) Bill 2011, Minerals Resource Rent Tax (Imposition—General) Bill 2011, Minerals Resource Rent Tax (Imposition—Customs) Bill 2011, Minerals Resource Rent Tax (Imposition—Excise) Bill 2011, Petroleum Resource Rent Tax Assessment Amendment Bill 2011, Petroleum Resource Rent Tax (Imposition—General) Bill 2011, Petroleum Resource Rent Tax (Imposition—Customs) Bill 2011, Petroleum Resource Rent Tax (Imposition—Excise) Bill 2011, Tax Laws Amendment (Stronger, Fairer, Simpler and Other Measures) Bill 2011, Superannuation Guarantee (Administration) Amendment Bill 2011
Thursday, 15 March 2012
Senator BOYCE (Queensland) (12:58): It is interesting that the government seems to think that putting 'fair' in front of a bill title somehow makes it so. We have the Fair Work Act, which in the coalition was referred to as the so-called Fair Work Act because it is only fair in the term of this government.
Senator Carol Brown: Work Choices, no choices.
Senator McLucas: Work Choices, no choices.
Senator BOYCE: There was such a cacophony of comment there. That was a unity ticket, was it, Madam Acting Deputy President?
The ACTING DEPUTY PRESIDENT ( Senator Moore ): Order! I remind senators on my right that shouting across the chamber is not parliamentary.
Senator BOYCE: Nevertheless, no matter how much protesting goes on from the other side, putting 'fair' in front of the title of a bill does not make the bill fair. It has been interesting to watch the development of these so-called 'fairer private health insurance incentives' bills over the three attempts to have them passed, the third of which is now being made by this government. It has ratcheted up from being allegedly good policy in the first place, through a number of iterations, to now, where the situation is the government using the politics of envy as the only reason why this legislation would be a good thing. Of course, they cannot talk about the real reason they need this legislation: they are desperate for cash, having wasted and mismanaged a surplus and having now got themselves in a situation where they have an accumulated budget deficit of $167 billion. What on earth are they going to do about it other than play semantics around the word 'fairer' and rip money in an erratic way out of any cash cow they see lying around? We do not know and, unfortunately, the Australian people do not know, but the Australian people are getting very sick of it.
Both Ms Gillard and Ms Plibersek have used the example of the poor apprentice subsidising the frontbencher, the millionaire or the billionaire through the Medicare rebate. It is quite true that irrespective of your income you get the same rebate, set at 30 per cent by the Howard-Costello government. It was deliberately set at that so there was no unfair advantage for people on high incomes over those on lower incomes. Of course, what Ms Gillard and Ms Plibersek neglect to mention when they paint their little scenario of the poor apprentice subsidising the rich frontbencher or rich minister is that everyone pays a 1½ per cent Medicare levy which is based on income; so, the more money you have, the more you pay in the levy. If you want the real picture of how health is funded in this country, you need to include both figures. No-one has any objection whatsoever to the Medicare levy being set as a percentage of income, but to try to pretend that that is a completely separate and different issue from the private health insurance rebate in terms of funding health in Australia is ridiculous and arcane.
We then move on to the grand advocates of the politics of envy, Senator Cameron and Senator Thistlethwaite, who would have you believe that only people who are millionaires and billionaires have private health insurance. It would be lovely if there were 11 million-plus millionaires and billionaires in Australia, but there are not. There are 11 million people, however, who have private health insurance, and very few of those are millionaires and billionaires. I am sure that, if the government would like to rejig this legislation so that it only applied to millionaires and billionaires, they would have no disagreement on passing it. But they want to just pretend somehow that it is not everyday Australians who have private health insurance and have it for very good reasons. They often go without in other areas so that they can have private health insurance, and they are prepared to pay the costs involved in having private health insurance. As Senator Edwards pointed out so well, if the number of people with private health insurance drops substantially, the effects on public health and public hospitals are going to be extraordinary. It is going to cost vast amounts more money. It is going to put waiting lists out extraordinarily. It is going to affect all health professionals. It is going to affect the availability of health professionals and the number of people going into professions if there is not sufficient work to make a profit.
As I said, half of Australia's 11 million privately insured people have incomes of less than $50,000. Last time I looked, that did not constitute a millionaire or a billionaire. Of those people, 3½ million have an income of less than $35,000. But the costs will continue to rise for everyone who remains in private health insurance if the government persists with their so-called fairer system.
It seems quite illogical and a little difficult to understand how on earth taking 2½ million people out of the rebate system will assist the development of private health in Australia. I listened with interest to the figures that Senator Edwards gave us on the effects on the public health system that will follow. I do not think the government care about that. I think we have here an ideological issue. Concerns about how the public health system cope are not their problem. They do not want to know how successful or efficient the private health system is; they just want to work out ways to diminish it and get rid of it—and at the same time find themselves a little bit of money to try to fix up the deficit mess they have got themselves in. There was, of course, argument. I was part of the inquiry the first time these bills came before the Senate Community Affairs Legislation Committee, which seems a long time ago now.
The modelling from the government says there will only be 27,000 people dropping their cover as a result of these changes. Some of the academics that the government lined up to follow on from this described private health insurance as 'sticky': people do not want to let go of it. No, people do not want to let go of it, but push them far enough and they will have to let go of it because the costs will rise. So the government say only 27,000 people will drop out, but Treasury, of course, did not do any modelling for them, because they did not want to know what the real answer was. But their own insurer, Medibank Private, has said that 37,000 of their members alone will drop their cover and 92,500 will downgrade. That is what the government's own private health insurance body says. If you look at the Deloitte figures, they say that in the first year you would expect 175,000 people to drop their private hospital cover and 583,000 to downgrade their cover. They say that, over five years, 1.6 million people will drop cover and 4.3 million will downgrade. They say—and this is where, irrespective of whether you earn $35,000 or not—private health insurance premiums will rise 10 per cent above what they would otherwise be. We are looking already, right now, at increases in private health insurance premiums averaging about five per cent, so we are talking about 15 per cent. Deloitte's analysis says there will be $3.8 billion in additional recurrent costs in the public hospital system as a result of these people dropping out of private hospital cover. They say that 2.8 million people with general treatment cover will withdraw and 5.7 million will downgrade over five years. And yet, of course, the grand experiment of this government continues in terms of ideological fixing.
We have not even yet spoken about the broken promises aspect of this legislation. On a quick count, there are at least seven examples of Ms Roxon, as Minister for Health and Ageing, Ms Gillard before that and then-Prime Minister Kevin Rudd promising absolutely that there would be no change to private health insurance rebates. Ms Gillard, as the shadow minister for health in September 2004, said, 'I grow tired of saying this: Labor is committed to the 30 per cent private health insurance rebate.' It is funny that she has somehow not quite managed to do that. In October 2005 she said: 'The truth is that I never had a secret plan to scrap the private health insurance rebate. For all Australians who wanted to have private health insurance, the private health insurance rebate would have remained under a Labor government. I gave an ironclad guarantee.' It goes on, of course, right up until 2009—almost on the eve of the introduction of this legislation, when the then health minister, Ms Nicola Roxon, said, 'The government is firmly committed to retaining the existing private health insurance rebates.'
Not long after the election of the Rudd government, I had a phone call from a woman who had been solemnly promised by the Labor policy secretariat that there would be no changes to the baby bonus. And yet, less than nine months—and the number is, of course, relevant—after that, the baby bonus was cut for couples over a certain income. Again we had the fallacy that somehow people with annual incomes over $50,000 are rich.
The other question that arose during the inquiry into this legislation was: if this legislation were to pass, how would health insurance companies know whether you were entitled to a rebate or not? How is that to be done? Is every Australian supposed to ring their insurer and say: 'My income for the year will be X amount. So tell me: do I get the rebate or do I not get the rebate?' Are we actually suggesting that, without any sort of coverage in the legislation—there certainly were not any answers available at the inquiry—I have to give my income to a health insurer? Is that what we are suggesting would happen? There was a vague suggestion during the inquiry that perhaps it could be done in blocks: 'Do you earn between $50,000 and $6,000' or whatever. I am sorry, but why should any Australian have to give that figure to a health insurer? It is a matter of privacy and there are no restrictions or regulations around how that would happen. Yet again we have this government getting yet more data collected up on people all over the country, for no good reason except to satisfy their own ideological whims.
I have mentioned already how the costs of private health insurance will rise because there will be fewer people, there will be fewer healthier people, in private health insurance. It would seem axiomatic, but apparently it is not, to this government. We have also recently had reports from Sinclair Knight Merz on the cost of the carbon tax for hospitals in Australia. They say that the carbon tax will add $100 million a year to health sector energy bills. In some areas the health sector is a very high user of energy. Other than that, it uses energy at similar rates to the commercial sector, with lights needing to run 24 hours a day in most parts of hospitals. You have the idea that key hospitals will have an extra $1 million-plus put onto their energy costs. So hospital costs will go up, and ambulance costs and cemetery costs are also going to rise as a result of the carbon tax, and this will come out across the board. The head of Ramsay Health Care, which is Australia's largest private hospital provider, said that they can see no way out of this except to pass on these cost increases. They expect that there will be a 16 per cent increase in their energy costs by 2013—and that is 66 private hospitals. There is no reason to think that this would not apply to the majority of hospitals, be they public or private, across Australia. Perhaps instead of stopping the poor apprentice from having to subsidise the wealthy frontbencher, this will end up being the poor apprentice subsidising the government's carbon tax, irrespective of whether they use public or private hospitals.
We are looking at a tsunami of cost increases. If public and private hospital costs are to rise and if people outside the mining industry are already suffering from a very depressed job market and depressed growth market, then, surely, what we need here is incentive for people to stay in private health, not sticks to drive them out and especially not sticks disguised as fairer ways of doing anything. There is absolutely nothing fair about this legislation except that it very fairly reflects this government's attempts to use the politics of envy to bludgeon their way through with ideology that is designed to stop incentive amongst individuals in Australia and designed to attack the private sector in every industry. I am happy to join the coalition in opposing these bills.