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Transcript of press conference: Ballarat, VIC: 15 January 2017: private health insurance premium increases; Sussan Ley

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SUBJECT: Private health insurance premium increases, Sussan Ley

JOURNALIST: What are your concerns given that we're about to find out just how much our private health insurance premiums are going to rise? How concerning is the rise, do you think it will be a very big spike in prices?

KING: Well of course already under the Abbott and Turnbull years we've seen an 18 per cent increase in private health insurance premiums, and that's averaged out to around $600 annually for increases in private health insurance premiums. We are hearing that because of cost, demand for services from private health insurers has been going down, so let's hope there is less of a rise. But of course it comes off the back of the Government frankly having spent its first two years doing very little. And then this year we're seeing quite a lot of instability, we're seeing a lot of contested space in private health insurance, and I guess we are concerned about what that's going to mean for premium increases this year.

JOURNALIST: And of course no full time Heath Minister at the moment. What kind of impact do you think that'll have in this crucial point when private health insurers are pitching what prices they're looking at?

KING: Well this is a very complex area, and of course in the first two years of the Abbott and Turnbull Government they basically gave a rubber stamp to the increases that the insurers were seeking. They came under a fair bit of pressure about that, and then of course tried to come back with some different decisions. Let's hope whoever the new Minister is, that that decision does take into account that people are seeking value for money, that we are seeing a number of people downgrade their cover. We're seeing people start to leave private health insurance, we're starting to see a decrease in private health insurance rates for the first time because people are concerned about value for money.

I think some of the things the previous Minister was doing were very good in this space and it will be incumbent upon a new Minister to actually get across the detail very quickly and make sure that those private health insurance premiums are as low as they possibly can be. We don't want to see people forced to take decisions about their private health insurance because of cost. Many

of them have already had to do that. And it will be up to the new Minister to actually get across this very quickly.

JOURNALIST: What can the Government do though? I mean getting across it is one thing of course, but how can they actually pressure these private health insurers to be more fair to Australians and give them a better deal?

KING: Well at the end of the day it is up to private health insurers to provide value for money, but there are a number of things the Government has available to it. Obviously it provides the private health insurance rebate for people. It has done some work in the area of prostheses, in making sure that the prices of prostheses actually match what they are, hopefully a bit more reflective of what's in the public system. I think there is some work that the Government needs to do in terms of private hospitals and how they are working with private health insurers. But also the Government needs to see more transparency. Private health insurance is an incredibly complex product, there are thousands of products out there. We're seeing changes in products all the time, we've seen products suddenly downgrading some of their cover. And again that issue around transparency - the Government has done some work in that space, but again it will be up to the new Minister to continue that reform and to make sure that value for money for the products of private health insurers is there for consumers.

JOURNALIST: Catherine are you concerned that people are just exhausted when it comes to increased private health insurance?

KING: Look I have absolutely no doubt. What we've seen time and time again from this Government is that out-of-pocket costs for health care - whether it be to go and see your GP, whether it be for costs of diagnostic imaging or for pathology, and now for private health insurance premiums- all we have seen this Government do is cut its responsibilities and transfer costs on to patients. So I am gravely concerned that we do see private health insurance becoming more and more unaffordable for people and people seeing it as less value for money.

We do have a mixed system. We have a very strong public system, Medicare, universally available to all Australians, and private health insurance is meant to provide other choices for people. And it is concerning if people are leaving private health insurance or finding that the coverage that they have doesn't actually provide them with the care that they need. It's really up to the Government to make sure that the system is working together.

JOURNALIST: What do you make of the prospect of Arthur Sinodinos being the new Health Minister?

KING: Well I think that whoever the new Health Minister is, it'll be the third Health Minister in the Abbott-Turnbull Government. We of course started with Peter Dutton, we've then had Sussan Ley and who knows who the next person will be. They have all been pursuing unfair cuts to health. Continuing on the table is the freezing of the Medicare Benefits Schedule which is seeing doctors staring to charge patients significant amounts of money just to go and see GPs. They've got the co-payment increases to pharmaceutical benefits, making people pay more for medicines. Still on the table are cuts to pathology and diagnostic imaging.

This is a Government whose entire agenda has been about cutting health. I don't think it's going to matter who the new Minister is, they have got a pretty poor agenda in health and each one of them has just been implementing what Malcolm Turnbull has been telling them to do. We saw at the last election Malcolm Turnbull say they have learned their lesson on health. We are now over six months past that election and absolutely nothing has changed. I'd be hopeful that a new Minister can change that but so far I don't hold a lot of hope.

JOURNALIST: Just on the expenses stuff, we're seeing more reports - even though the Prime Minister addressed the media on Friday about this, and about the cleaning up of the system. The

latest one is Mathias Cormann flying to Broome. Do you see anything wrong with those weekend trips to Broome and just how much they cost?

KING: Look I think that will be a matter for the Finance Minister to respond to. The issue that this all started from was of course when we called for the then Health Minister to explain a particular trip. You are only entitled to claim for your travel allowance when you are on official business. And we very simply said to the Health Minister - when there was reports in the newspaper that she had claimed travel allowance for official business at the same time as she had purchased a luxury apartment at the Gold Coast - we asked the Minister to explain what official business she was on. When she was unable to do that it was pretty clear she had no other choice but to resign. The issue around family reunion entitlements is a separate one, and again any time that a Minister or MP is claiming travel allowance they need to demonstrate that they're on official business, and again that will be up to Mathias Cormann to show what official business he was on during that period of travel.

JOURNALIST: Do you think it's time that families stop traveling as much with MPs and Senators?

KING: Again that's a broader question. It's been part of the workplace entitlements scheme for a long period of time and originally it was brought in for a couple of reasons. One was that there are times when partners are requested, as part of your official business, to be part of that business. Of course because we do spend long times away from our families, that family reunion was also part of that. We have a pretty high family breakup rate as an occupation, so that was to some extent it was part of that as well. Whether it's timely for that entitlement to go, I think that's a matter for public debate and we're seeing a bit of that at the moment.

JOURNALIST: One of the arguments is that other public servants don't have this sort of option to be able to have taxpayer-funded travel with them to facilitate their families, you can understand that argument?

KING: Look certainly I think there is an argument around family travel and we are seeing that in the public domain at the moment. As I said I think that why this all came to the fore is if you are claiming taxpayer-funded work entitlements, that you have to demonstrate that you're at work and that you are working. So the issue around family reunion, you still have to demonstrate that you are actually at work, and I think that's where some MPs and Ministers are getting unstuck.

JOURNALIST: Do you think this new watchdog will make a difference? Do you think this is the answer that people are looking for?

KING: I think for many MPs it can often be very difficult to get some clear advice from the current Department of Finance around entitlements. So having an independent umpire overseeing what people are claiming, being able to provide advice, I think will be helpful.

I think the real issue is around transparency. What we've seen since 2011 - of course the Labor Government took the decision to publish MPs' use of workplace expenditure. Because of that, we've seen that out in the public domain. That transparency is really - whilst it's exposing some abuse, I think the more that that's out and the light's shone on it, the less likely you are to see those sorts of abuses. Before 2011 reporters and anybody who was wanting to access that information had to use Freedom of Information requests to do so, or try to do different types of research. So we are seeing greater transparency and I think that's really going to be the issue. We all have to stand by what we do, and I think when you have that transparency, and a light shone on it, and questions asked - I think an independent umpire's going to be helpful, but I think that transparency's really going to be the issue.

JOURNALIST: Are you annoyed that yourself, your colleagues and [inaudible] are being judged very harshly by the public when you haven't necessarily broken the rules? You're being judged

by a pub test, but nobody can define what the pub test is, or where the line is. Is it frustrating that your reputation is being [inaudible] when you haven't necessarily broken the rules?

KING: I think part of our democratic tradition is that you have to be accountable for what you do. And so the rules are pretty clear that you need to be on official business when you're claiming entitlements. I think when there's scrutiny, whoever it is, it's important for you to be able to demonstrate that. Now democratic traditions mean that the media, the public should be able to scrutinise the decisions that we make. And sometimes we do make mistakes, we're human beings, we fall short, we're not all perfect - I don't think any of us can claim that. But that's part of our democracy, is that you do have that scrutiny on you and I think we should all expect that.

JOURNALIST: In your opinion what should happen to those who flout or break the rules?

KING: Again I go back to the case that's been in the media the most with the Health Minister. It was very clear. She needed to explain what official business she was on, when she was unable to do that that's really been the issue. She was unable to actually explain what official business she was on. When she failed to do that it was pretty clear she didn't have any choice but to resign.

I was surprised frankly that it did take a week and that the Prime Minister didn't actually stand up and say, 'look there's been a breach of Ministerial Standards, and she needs to step down'. I think at the end of the day it's really up to leaders to say, 'this is the Ministerial Standard, this is the code by which you are expected to conduct yourself', and if it's breached then there's really not a lot of choice about those things.

JOURNALIST: So you don't think there should be a mandated penalty?

KING: I think Nick Xenophon obviously has put a couple of proposals up, he did that prior to the Conde Review which happened after Bronwyn Bishop's issue with entitlements occurred. We support all the recommendations of the Conde Review, and I think there are some penalties in place already - I can't remember if the recommendations are for any further penalties - but obviously we're in discussions with the Government about what their new system might look like and we'll look at whatever new proposals they have.

JOURNALIST: Malcolm Turnbull was at pains yesterday to say that both parties will be looking at this together. Is there anything which you'd like to see added to the watchdog, or is there any idea of how long this might take?

KING: I don't have that, and obviously the Shadow Special Minister of State will be responsible for the detail of actually working through these issues with the Government. But I think that issue is around transparency. Good public policy would indicate the more transparency there is the less likely these things are to occur, and the more likely people are to abide by the rules. I think also providing clarity about what official business actually is, and when it is - there can be a bit of a blurring between public and private in the sorts of work that MPs and Ministers do and I think getting some clarity around that would be helpful.