Save Search

Note: Where available, the PDF/Word icon below is provided to view the complete and fully formatted document
 Download Current HansardDownload Current Hansard    View Or Save XMLView/Save XML

Previous Fragment    Next Fragment
Thursday, 15 March 2012
Page: 1907


Senator CORMANN (Western Australia) (16:18): This Fairer Private Health Insurance Incentives Bill 2012 and related legislation is Labor's latest attack against millions of Australians who take additional responsibility for their own healthcare needs by taking out private health insurance. Labor is anti private health, Labor has always been anti private health and chances are that Labor will always be anti private health in the future. Being anti private health—and I am sure you will agree with me on this, Mr Acting Deputy President Cameron—is part of Labor's DNA. This Labor government is doing what other Labor governments have done in the past—that is, attack those Australians who take additional responsibility for their own healthcare needs by taking out private health insurance.

Under Medicare, every single Australian is entitled to free access to universal public hospital care. There are more than 10 million Australians who are prepared to put more of their own resources into the health system, and by taking out private health insurance they help to take pressure off our public hospital system, making sure that those Australians who really cannot afford to take out private health insurance have a good opportunity to have timely access to high-quality public hospital care.

The truth is that we need a strong health system, with a strong and well-funded public system as well as a strong and well-supported private system. As we consider our health policy settings in Australia, it is important that we get that policy balance right. When it comes to getting the policy balance right in the health portfolio, Labor has a very bad track record. If you look at the track record of the Hawke and Keating governments, for example, you will see that private health insurance membership collapsed on Labor's last watch in government, and public hospital queues and public hospital waiting lists continued to increase as more and more people joined those queues and waiting lists. Even the then Labor Minister for Health, Graham Richardson, recognised that, after 10 years of Labor Party government policy, after the Hawke and Keating years, Labor had got it wrong and that things could not continue the way they had been. It was Senator Graham Richardson who commissioned a review into private health and came up with a series of recommendations on how the balance in our health system could be restored. But then Senator Richardson was not able to get his proposals past the Keating cabinet. When he put to the Keating cabinet proposals on how the balance in our health system could be restored and how we could make sure that all Australians would have timely and affordable access to high-quality health care by making sure that we had a strong and well-funded public system and a strong and well-supported private health system, the cabinet told him where to go, and those proposals went into the Labor-ACTU bin. It is quite humorous if you think about it in retrospect. After Senator Richardson, who was health minister in the Keating government, took proposals to the cabinet on how the balance in our health system could be restored, the then Prime Minister told him to go and consult with the Labor caucus and the ACTU working party. Of course, they buried what were a number of sensible proposals to restore balance to our health system.

Private health insurance membership collapsed under Labor. It went from about 65 per cent to below 30 per cent before a coalition government was able to turn things around. It was the Howard coalition government that was able to restore the necessary and important balance to our health system. It was the Howard government that introduced a series of policy measures to stop the decline in private health insurance membership, to reverse the trend, and to make sure that more Australians who were in a position to afford it were prepared to put their hands in their pockets and put additional private resources into our health system so that all Australians had a better chance to have timely and affordable access to quality hospital care.

The measures that the Howard government put in place, the very successful policy framework that the Howard government put in place, was made up of three principal pillars. There was the Medicare levy surcharge, whereby those Australians who were judged to be able to afford private health insurance but did not have it would incur a tax penalty. That was the stick and then there was the carrot. The carrot was the tax incentive, the 30 per cent private health insurance rebate, for those Australians who took out health insurance. The third pillar was Lifetime Health Cover, whereby any Australian who did not join private health insurance until after they had reached 30 years of age had to pay a higher premium for every year after the age of 30.

The Howard government's policy framework was highly successful. It restored balance to our health system, it ensured that the dramatic decline—or collapse—in private health insurance membership in Australia was arrested and it made sure that more Australians were prepared to take additional responsibility for their own healthcare needs by taking out private health insurance. Today more than 10 million Australians are covered by private health insurance. Every single Australian who takes out private health helps to take pressure off our public hospitals and helps to make sure that all Australians are able to get timely access to high-quality public hospital care.

Given Labor's track record, the coalition were always very suspicious about what an incoming Labor government would do in relation to private health insurance. We knew that Labor hates private health. We knew that Labor in government would be likely to try and dismantle the successful measures that had been introduced by the Howard government. We suggested that Labor in government would wind back the private health insurance rebate. Guess what? We were accused of lying to the Australian people. We were accused of misleading the Australian people. We were told, 'No, no, no, under no circumstances would Labor do any such thing.' Even after the election, as late as 24 February 2009, the hapless then Minister for Health and Ageing, Nicola Roxon, said:

The Government is firmly committed to retaining the existing private health insurance rebates.

It could not get any clearer than that. The day after that ,on 25 February 2009, the then Prime Minister Kevin Rudd said:

The private health insurance rebate policy remains unchanged and will remain unchanged.

This followed emphatic pre-election promises in the lead-up to the 2007 election, when then Leader of the Opposition Kevin Rudd said:

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, including the 30 per cent general rebate and the 35 and 40 per cent rebates for older Australians.

That sounds pretty clear, but we wanted to make absolutely sure because it is known that the Labor Party is very good at tricky semantics, weasel words and trying to hide between the technical meanings of particular phraseology. We saw it from Senator Wong today in her answers about her involvement in the selection of the chair of the Future Fund. Labor is very good at trying to hide behind technical semantics and tricky language. It says things like, 'This isn't exactly what we meant,' or 'Saying we'd keep the rebate doesn't really mean we wouldn't means test it.' I go to another quote from then shadow minister for health, Nicola Roxon, when she was on Meet the Press on 23 September 2007. That was in the shadow of the 2007 election, about two months before the election. Steve Lewis said to Nicola Roxon:

Let's move to another integral part of the health system, the private health rebate, the 30% rebate. Labor has said "Yes, we will keep it," but you have not said whether you will keep it in total. Can you say now that Labor, if elected, will maintain all of the ancillary measures that encompass the private health rebate?

Nicola Roxon answered:

Yes, I can. We've committed to it. We've committed to the 30%. We've committed to the 35% and 40% for older Australians. It's similar to this safety net. We know that many people rely heavily on the assistance that is now provided and would not be able to have private health insurance if that rebate wasn't paid.

I could not have put it better myself. And on she went:

And lifetime health cover and others that go with it, we are committed to those. We understand that Australia now has a mixed health system, both private and public, and we need them both to be strong in order for the community to be able to get the services.

Very clear, very emphatic. Steve Lewis asked a follow-up question:

So you will not wind back that 30% private health rebate, despite the fact that Labor has been ideologically opposed to it in the past?

Ms Roxon's answer was:

No, we won't.

You cannot get a more emphatic promise than that. The only more emphatic promise that I can remember in recent times is the promise by the Prime Minister of Australia, five days before the last election, that 'there will be no carbon tax under a government I lead'—and we know what happened to that. We know that that Prime Minister Gillard before the last election misled the Australian people, the same as Labor has misled the Australian people for years on end about their true intentions in relation to the private health insurance rebate.

The reason the coalition is opposed to this legislation is because we understand that this is bad public policy. Any policy that makes it harder for people to take additional responsibility for their own healthcare needs by taking out private health insurance is bad policy. Any policy that will push up the cost of private health insurance for millions of Australians is bad policy. Any policy that will see more Australians leave private health and join the public hospital system is bad public policy. Any policy that will see Australia re-enter the spiral that we experienced under the last Labor government, when private health insurance membership across Australia collapsed, is bad public policy.

Senator Colbeck in his remarks earlier was quite right: we should be doing more to encourage more Australians to take additional responsibility for their own healthcare needs. We should be doing more to encourage more Australians to take out private health insurance. We should not be making it harder for people to remain in private health. Let me just address here one of the myths being peddled by the Labor Party. The Labor Party wants us to believe that somehow private health is only for the rich. Nothing could be further from the truth. Hundreds of thousands of people earning less than $50,000 per annum have private health insurance. In fact I will just go to the figures: 5.6 million people with private health insurance have an annual household income of less than $50,000 per annum and 3.4 million people have an annual household income of less than $35,000 per annum.

The government will say: 'We aren't targeting those people. Those people won't be punished by having their rebate taken away. They'll still have the rebate.' The problem is that, with millions of Australians having their rebates scrapped altogether or dramatically reduced, health insurance for those that lose the rebate will go up automatically, without anything else, by 43 per cent, and every single one of the lower-risk people who perceives that health insurance has become too expensive for them to continue will put upward pressure on premiums for everyone else including those low- and middle-income Australians who every year struggle with the decision to put their money together to pay for their annual private health insurance.

This of course will hurt all Australians who are in desperate need of timely access to public hospital care, because they will have to now compete with the increasing number of Australians who in the past would have been covered by private health insurance. This is very bad public policy. It is policy that Labor has pursued in the past. The point I would make to the Labor Party is that, if you do not learn from history, you are forced to repeat it. Those are not my words—I have just borrowed them; I do not quite know who first said them—but it is something that the Labor Party should carefully reflect on.

The point is this: our policy objective in the health portfolio should be to come up with a policy framework that ensures all Australians can have timely access to high quality hospital care. In order to achieve that in a way that is affordable for the taxpayer, we have got to make sure that we have got a sensible balance between a strong and well-funded public system and a strong and well-supported private health system. We need to have a policy framework where those Australians who can afford to take out additional responsibility for their own healthcare needs have both the incentive to take it out and the disincentive not to take it out. That is where the Howard government's policy framework on private health insurance was so successful. Clearly, the Labor Party knew in the lead-up to the 2007 election that not only had it been very successful, it was also very popular. Why else would the Labor Party have bent over backwards again and again, making the most emphatic promise possible that they would not touch the private health insurance rebate, that they would retain the existing private health insurance rebate in its current form? Labor well understood that it was a policy that had worked and a policy that was popular with the Australian people.

I say to the Labor Party: stop making Australians who take additional responsibility for their own healthcare needs pay for your waste and mismanagement over the last four years. Australians know that the Labor Party in government always stuffs up our public finances. Australians know that after a period of Labor in government it is always incumbent on the coalition to come back and fix up the mess. But don't make Australians who are putting their own private money into our health system pay for your wasteful spending, for your waste and mismanagement. Just because Labor is not able to balance its books, just because Labor delivers deficit after deficit and has taken our debt position back up to $133 billion, do not pursue policy that will ultimately be counter-productive; do not pursue policy that will ultimately increase the costs of providing affordable health care to all Australians. This is a path that you have gone down before. It has ended in tears before. You should learn the lessons of the past. If I can give the new Minister for Health, Tanya Plibersek, some advice: she should sit down with former senator Graham Richardson, a former Minister for Health, who commissioned a comprehensive review into private health insurance back in 1993 at the end of 10 years of failed Labor Party health policy, and consult with him about the implications and consequences of Labor's failed approach to health policy so she can learn from Labor's mistakes of the past. She should reflect on how successful the Howard government's policy framework in support of those Australians taking out private health insurance has been and reconsider her approach.

My advice to the Senate is that this legislation should be rejected. We should vote against it. It is bad policy. It will see the cost of health insurance go up, it will see more people leave private health insurance and it will put more pressure on our public hospitals. It is not a good policy and the Senate should reject it. (Time expired)