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Nicola Roxon defends Medicare levy changes.

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Wednesday 21 May 2008

Nicola Roxon defends Medicare levy changes


TONY EASTLEY: The Federal Health Minister Nicola Roxon has dismissed Access Economics’ report as "confused" and "incomplete". 


The Health Minister has been speaking with AM's Sabra Lane. 


NICOLA ROXON: Well, look the Government absolutely stands by the Treasury modelling that was undertaken for this measure. We obviously will look at any information that Access Economics or others want to provide with us, but we believe that their report is incomplete, failing to take account of a number of issues and also not explaining some of its assumptions. 


SABRA LANE: It is a respected economics forecaster. The Labor Party has even used it in the past. Are you saying it is completely wrong? 


NICOLA ROXON: Look, we are absolutely happy to have a look at the report that Access Economics have prepared, but we stand by the Treasury modelling that has been done and think that a number of the assumptions that Access Economics appear to have made are not explained. 


We are certainly happy to work, I'm sure Treasury will work with Access Economics on those issues, but we believe that our estimates are right. 


SABRA LANE: The report says that your expected first year savings will fall well short of the $232-million predicted? 


NICOLA ROXON: Well, it is a little bit of a confused report. It says that we are underestimating it but on the other hand it also says that there will be a much higher impact than we have estimated. 


I don't think that the AMA can have it both ways. They can't argue that it is young people that will be pulling out of health insurance making it more expensive, and argue that those same people are the ones that will overburden our public hospitals. 


It is a confused argument and we believe that the measure that we are taking is an important one. It is a way to provide relief and it is a way to balance investment in both the public and private health systems in this country. 


SABRA LANE: It says the doubling of the Medicare surcharge threshold is poor policy and it will leave older people paying possibly 10 per cent more for private health cover after their younger counterparts drop out. 


NICOLA ROXON: Look, I don't think it is poor policy to remove a tax trap that was catching many hundreds of thousands of Australians. Particularly, many thousands of Australians who didn't even earn the average wage. 


This was a measure introduced by the previous government, supposedly targeted at wealthy Australians. By failing to adjust the threshold, it has caught a whole lot of other people in its net and we are fixing that trap. 


SABRA LANE: The Australian Medical Association which commissioned this study, the Association's chief, Rosanna Capolingua, fears as a result of your measures, eventually the percentage of Australians holding private health will drop below 40 per cent. That is the figure regarded as essential to ensure a viable health sector. Can you guarantee that won't happen? 


NICOLA ROXON: Look, what we can guarantee is that the Rudd Labor Government will continue to support the private sector by providing the rebates that are generous for many Australians who choose to take out private health insurance, but we are not going to apologise for investing more in our public system as well. 


We believe that a modern Australia needs both a strong public and private health system and we are not ashamed of making sure that we invest in both of them. 


TONY EASTLEY: The Federal Health Minister Nicola Roxon, speaking with Sabra Lane.