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Thursday, 15 March 2012
Page: 1903


Senator COLBECK (Tasmania) (15:58): I rise to make a contribution on the Fairer Private Health Insurance Incentives Bill 2012 and related bills. It is, I have to say, with a sense of deja vu. In the previous government, as shadow parliamentary secretary for health, I found myself debating exactly this topic only a very short period of time after the government had made a promise to the private health insurance industry that they were not looking to make any changes to this particular matter. In fact, I have kept a letter for posterity. I thought that we might have dealt with this issue. It was defeated a number of times during that period, but of course we know that the Greens and the Labor Party have a fundamental dislike of the private sector, particularly in health, so they would not be able to help themselves. They would have to revisit this again and again and again until they progressively dismantled what is recognised as a quality private health insurance system.

On 20 November 2007, when the then federal Labor leader, the member for Griffith, Kevin Rudd, wrote to Dr Michael Armitage, the chief executive of the Australian Health Insurance Commission, he said to him:

Thankyou for your letter of 29 October 2007 seeking clarification on Federal Labor's policy regarding private health insurance.

Both my Shadow Minister for Health, Nicola Roxon, and I have made clear on many occasions this year that Federal Labor is committed to retaining the existing private health insurance rebates—

you would think that that is a reasonable commitment that would allay the fears of the industry—

including the 30 per cent general rebate and the 35 and 40 per cent rebates for older Australians. Federal Labor will also maintain Lifetime Health Cover and the Medicare Levy Surcharge.

Labor will maintain the existing framework for regulating private health insurance, including the process for approval of premium increases. Zero per cent premium adjustment is not Labor policy … I trust this allays your concerns.

I think it might be safe to say that at that time it did, but it did not take long for the whole circumstance to change and for private health insurance to start to feel the heat of the Labor dislike for that part of the health system. If it were not for perhaps the greatest political lie, 'There will be no carbon tax under the government I lead,' this one would have to be up there.

I note the continued attempts by the Labor Party to continue to diminish the private health insurance system in the country. The absurdity of this is that effectively what they are doing is continuing to take money out of the health system. For every dollar in health rebate that they save, they take $3 out of the health system, because for every dollar that is contributed by the government there is $2 contributed by the private insurer. So they are actually diminishing the pool of funding available to health by $3 for every dollar that they take out, and that just does not make sense.

My colleague Senator Macdonald was just talking about the state of the health system in Queensland. He should consider himself lucky that he is not in Tasmania, where the state government is taking $100 million out of the public health system. It is not taking people out of the back door. It is not taking out bureaucrats but closing down front-line public health services. It has carved back the elective surgery waiting list. In my region they were doing about 12 elective surgeries a week. They have cut that back to one or two. So here you have the federal government pouring money, so they tell us, into the public hospital waiting list process to reduce public hospital waiting lists for elective surgery, and you have the state government ripping it out at the other side.

But think of the impact of that on somebody who is waiting for that elective surgery. Think of an individual who is on the waiting list. When this process started, if they were, say, No. 36 on the list and there were 12 elective surgeries being done a week then they would be three weeks away from their surgery. That is something that you can foresee. That is something that you can understand: 'In three weeks time I might be having my knee surgery,' or something of that nature. 'I've got three weeks to wait before I go into my elective surgery.' But when it goes back to one a week they are suddenly 36 weeks away. The whole dimension changes—the proximity and the expectation. They then have to carry that for that 36 weeks if they retain their position on the list. They might be lucky—they might have an urgent case and they might get lifted a bit—but if the list runs the way that things are going then they are 36 weeks away instead of three weeks away. It changes the whole aspect of the way they are dealing with it. Yet this comes on the back of a promise by the Labor Party that they were not going to mess around with private health insurance rebates. People could feel comfortable! It is almost as though the Labor Party are trying to use the fear of the public hospital system to keep people in the private health system. 'Will I get that place in three weeks time, or 36 weeks time? Do I have to wait that long? Do I have to make that decision to protect the health of my family? So I'll have to stay in.' It just does not stack up.

We have seen a bloating of the public sector in Tasmania. We have gone from something like 16 public servants per 1,000 people to 20, a huge bloating of the public service. We have seen nearly a 20 per cent increase in public servants in the last five years in Tasmania as the Tasmanian government has filled up the back rooms, and that is all occurring at the expense of front-line services. So we are seeing a cutback in services not only in health but also in policing and all the other critical front-line services, including closing down schools. Yet it is on the back of continued promises and assurances that these things would be maintained at a federal level in relation to changes to the private health insurance system. There was a letter from the then aspiring Prime Minister, Mr Rudd, stating, 'Labor will maintain the existing framework for regulating private health insurance,' and saying that they were 'committed to retaining the existing private health insurance rebates'. Now we see them clawing it back and taking with it significant funding out of the health system. The one thing it does do is to continue to confirm that the Australian people cannot trust the Labor Party. I have mentioned one of the greatest political lies of all time—the Prime Minister's assurance that 'There will be no carbon tax under a government I lead'—but this is also a fundamental issue. We all talk to our electorates on a regular basis. We all communicate and source what the key issues are in our electorates, because that is part of our role; we want to maintain contact and we want to understand what the issues are that concern our constituents. And health is always in the top two or three—it is always there—and people should be able to believe the assurances they are given by a leader when they say they will maintain the settings that exist around an issue as important as private health insurance. We do not want to go back to the circumstance of enormous pressure being placed on the public system because of an exodus of people from private health insurance. There is no way known that we want to see that circumstance occur. But people are being forced to exit private health insurance because they cannot afford it, because the government has taken away that bit of support at a time when our state governments are under so much financial pressure that they are cutting back on services. But then you place even more and inordinate pressure on the public health system because you are removing resources from the private health system. It just does not stack up.

They talk about egalitarianism and we talk about the wealthy making a contribution but we know that the wealthy already do make a contribution. Over a certain wage level, we all pay a Medicare levy. The more you earn, the more you pay. So, if you are earning more and paying more tax, you are making a significantly higher contribution. Then of course there is the Medicare surcharge, the additional surcharge of 1.5 per cent. So, to suggest that this is all about egalitarianism—those who can afford to pay paying a bit more—does not stack up when you actually look at the sums, because, if you earn more and pay more tax, that one per cent that you pay as your Medicare levy is more if you earn $100,000 than it is if you earn $30,000. It is simple mathematics. You are making a contribution.

So this tripe that gets run out by the government to suggest that we need to get those who are earning a bit more to make a bigger contribution does not stack up, because they are already doing that. What they are doing by taking out private health insurance is looking after their own families. They are making an investment in the assured health of their own families, but they are also making an investment in assisting the public health system. We know this, because colleagues around the chamber are talking about the stress on their state public health systems. Why would the Tasmanian government be taking $100 million out of the Tasmanian health system if it were not for the budget pressures and having beds put in storage away from the hospitals so the hospitals cannot use them if it were not for these pressures? And here we are debating in this place removing money from the health system. The government wants to save its contribution, the 30 per cent rebate. It wants to save that contribution but does not think about the other $2 it takes out of the health system for every dollar it saves. So they are taking out $3, in effect, for the $1 that gets saved by the removal of their contribution. It just does not stack up, and it penalises people who want to make a contribution themselves to look after their families and make sure they have prompt access to the health insurance system when they need it. They are already making a contribution to the public system through the Medicare levy. They are spared the surcharge if they are taking out private health insurance but they are actually making a contribution, and it just does not stack up after years of building a sound and solid private health insurance system that complements the public system. This is not a position of competition; this is about having a broad based health system that serves our community well.

It is not just highly-paid people who have health insurance; there are a lot of low-paid people who make the investment. They make a value judgment to invest in private health insurance. At least they retain support under this process, but you really have to question how long that will last. We know that, all along, the Labor Party have had in the back of their minds, they have had in the bottom drawer all along, plans to start to chip away at the private health insurance system, despite the assurances of Kevin Rudd before the 2007 election. Kevin Rudd put it in writing to Dr Michael Armitage, chief executive of the Australian Health Insurance Association, that 'Federal Labor is committed to retaining the existing private health insurance rebates'. He made that commitment. Yet in 2008, not long after taking government, we saw the process commence: chip away, chip away, chip away, trying to diminish the availability of the services of private health insurance but forgetting that, as they do that, for every dollar they save they take another two out of the system—the ratio of removal of funding.

Now the Greens say, 'We'll just take it out and put it all into the public health system.' That just does not make sense but then the Greens were never very strong on, or really concerned about, economics. It does not surprise me that the Greens have teamed up with the Labor Party and effectively flipped on this, as they usually do. They will get their bit of publicity. They will go out there and get in front of the cameras and pretend they are holding out for something, but you can guarantee that, at the end of the day, on pretty much everything they will just flip across and go with the Labor Party. It is a real tragedy that we see such pressure placed on our public health system through the attempts to pull down the private health sector and the private health insurance system. Again, I come back to the circumstance at home where, as I said before, you are No. 36 on the list. That list goes from 12 a week to one, and you are more than six months away from your operation. That just throws someone's whole life out of balance if they are trying to access the public health system.

The security that private health insurance provides is something that we ought to be encouraging. We should be encouraging people to take out private health insurance, not putting in artificial barriers or saying, 'If you earn more than $150,000 as a family we're going to start to punish you as a family.' A policeman and a schoolteacher are effectively in that range. They are not considering themselves to be rich or wealthy people. They are probably doing it pretty tough at the moment. They are wondering whether the power bill that the government promised would only go up by 10 per cent due to the GST is going to go up by 10 per cent only—I am hearing figures of 18 per cent from industry as I go around the countryside. Yet here we are with the government prepared to give them another hit, to take more from them and to discourage them from looking after their family and their family's health. It does not stack up.

Why take away all this funding from private health insurance, and therefore the private health sector, at a time when, as Senator Macdonald has just said, the Queensland health industry is in strife? Senator Williams has indicated on a number of occasions how bad things are in New South Wales. They have a new government there that is trying to clean up the mess of years and years of Labor neglect. We have heard some terrible tales of things that have occurred in the New South Wales health system, and the state government is trying to pick it up and bring it back. In Tasmania, $100 million has been taken out of the front line of the health system in a small state. Putting beds in storage so that the hospitals cannot use them just does not stack up. At the same time their federal Labor counterparts are taking money out of the private health system, which has the capacity, if sensibly managed, to take the pressure off the public health system and to allow people to get ready access to the services that they need.

When Kevin Rudd came to power after the 2007 election, one of his mantras was 'Let's use evidence based policy.' That has gone out the window. We are not seeing anything about that. We have gone back to the old Labor prejudices: 'Let's sting a bit from those who have worked hard to earn a bit more. Let's take a bit off those.' It is the old yarn: you can only take so much off the wealthy until they do not have any more, and then who are you going to get it from to give to the others? They talk about equity, they talk about all those values they say they have, but there is a whole heap of prejudice that sits behind that, one of which is their prejudice against the private health insurance system.

When you look at the fundamentals of what is being done here, as I have said a number of times, it really just does not stack up. They are taking away the capacity of people to look after their own families, to give them access to health services as they feel they need it, and they are thrusting them towards a state-level health system that is under real stress and having funding removed. As I have said, this does not make sense. It should not be supported. (Time expired)