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Monday, 13 February 2012
Page: 894

Mr MATHESON (Macarthur) (18:02): Today marks the third time that this government has tried to launch its disgraceful attack on the forgotten families of Macarthur, families who are already doing it tough in these difficult times. This government is shamefully out of touch with the Australian people and with Australian values. The very existence of this bill represents yet another broken promise from Labor. Labor promised, hand on heart, that it would not touch the private health insurance rebate.

I must be having deja vu, because I can vividly recollect a promise to Andrew Wilkie about poker machine reforms, a promise to the Australian people to return the budget to surplus and a promise that 'there will be no carbon tax under a government I lead,' to borrow a phrase from the Prime Minster. Time after time we have seen repeated betrayals of the people of Australia. This Labor-Greens alliance will say anything to be in government, but, once in government, turn their backs on the people who elected them. They say one thing but do another. This government has a trust and credibility problem with the people of Australia. This bill represents yet another botched and broken election promise that will, without a doubt, result in greater cost of living pressures on families across this nation.

The Fairer Private Health Insurance Incentives Bill 2011, the Fairer Private Health Insurance Incentives (Medicare Levy Surcharge) Bill 2011 and the Fairer Private Health Insurance Incentives (Medicare Levy Surcharge—Fringe Benefits) Bill 2011 are a key part of the Prime Minister's ideological arsenal against the freedom of choice in health care. Private health insurance gives people the choice of treating doctor, the choice of when and where they can access health services, the choice of surgery options and the choice to be treated in a private hospital.

Private health insurance does not take away from the public health system, but instead adds significant value to Australia's total healthcare resources. The private health insurance rebate is a policy that has been staunchly defended by the coalition because it is, simply put, a good policy. The 30 per cent rebate has had a direct result in taking pressure off the public health system, all the while adding value to the health system as a whole. Australia's public health system is highly regarded and does a fantastic job with the resources at its disposal. I am confident that, under the leadership of the Liberal New South Wales government of Premier Barry O'Farrell, the New South Wales public health system will see many positive developments over the coming years. It is not feasible to say that the public health system in Australia could survive without the complementary benefits that the private health system provides.

This bill is a shameless measure shifting cost from the Commonwealth to the states' public systems. When the 30 per cent private health insurance rebate was introduced by the Howard government, the national coverage of private health insurance rose from 34 per cent to 44 per cent. The Howard government had the foresight to also introduce the Medicare levy surcharge for those who should be able to afford private health insurance but for whatever reasons had not taken it up. This measure ensured that those who chose not to contribute to their own health care through the private health care system would still contribute to the public health care system. The test used to determine whether a person would be liable to pay the Medicare levy surcharge would include taxable income, reportable fringe benefits, reportable superannuation contributions and total net investment losses. This government is trying to distort these provisions by seeking to apply the same income tests to determine whether families will also lose their rebate. It is a perversion of what the Medicare levy surcharge sought to achieve. This test will not just be used for people who opt out of eligible private health insurance, but apply to people who are currently paying their premiums and benefiting from the 30 per cent rebate. These people will lose out: some will be pushed into a lesser category of the rebate and some will lose their rebate all together. All Australians will face higher premiums because of this disgraceful government's actions.

The private health insurance rebate gives families in Macarthur the incentive to provide for their own healthcare needs and get a little back from the government for doing so. This support, in the form of a 30 per cent rebate on eligible private health insurance policies, contributes back into the health system many times over through private health insurance premiums. For a couple in their mid-30s with two children, basic hospital and extras cover will cost at least $3,000 a year without the rebate. If people are going to be socially responsible and put their discretionary income towards their own healthcare costs, why should we punish them? Their investment in their health and, in turn, in the private health system, contributes to the resources that are available in both the public and private health systems. If this government decides to take away the incentive for people to purchase private health insurance, we risk losing the entire premium, and in turn create added pressure on the public system. This ideological attack on private health insurance may represent a short-term saving, but the longer-term implications on families are far-reaching.

The immediate financial impacts of this bill will not just be felt by the 2.4 million people on higher incomes who will face immediate increases of their premiums of 14 per cent, 29 per cent and 43 per cent. All Australians with private health insurance will face higher premiums in the future if these changes proceed. Deloitte have predicted that private health insurance premiums will rise 10 per cent above what they would otherwise be. In addition, Deloitte's analysis of the proposed changes shows that in the first year 175,000 people would be expected to drop their private hospital cover, and a further 583,000 are expected to downgrade their cover. Over five years, Deloitte's modelling forecasts that 1.6 million people will drop their cover and 4.3 million will downgrade. This is in stark contrast to the minister's figures of only 27,000 to drop their cover. Indeed, the government owned insurer, Medibank Private, has predicted that 37,000 of its members alone will drop their cover and 92,500 will downgrade.

How did the minister get it so wrong? This is yet another example of the government's botched attempts at health reform and lack of thorough planning in policy making. It is a case of this Prime Minister and Labor yet again meddling with a good policy that works, a policy that delivers and a policy that has provided quality health care to Australian families. This bill is already bearing the hallmarks of the Malaysia solution all over again. With each person either dropping or downgrading their cover, there is a flow-on effect of a net reduction of resources within the private healthcare system. Each policy downgrade will place greater pressure on the public health system, all the while punishing those who continue in the private health system.

The government has not even bothered to disclose the numbers of people expected to downgrade their private health insurance coverage. It is reasonable to expect that many people will seek a cheaper product with fewer procedures covered, which will have second-round effect for public hospitals. This represents $3.8 billion in additional recurrent costs for the public sector. In Macarthur 63,828 people are covered by some form of private health insurance, representing 47.8 per cent of voters. Suffice to say, this legislation will affect close to half of my electorate.

At the 2007 election the government promised, hand on heart, that they would not touch the private health insurance rebate. However, soon after elected, they tried to push through this legislation, not once but twice. The Senate soundly rejected it. Now the Prime Minister is relying on her good graces with the Greens to push this bill through and once again betray the trust of families in Macarthur and Australia-wide. I guess it must get easier the more you do it. The government have no foot to stand on when they say they will deliver on a promise. Just look at their track record. They have bungled every program and policy that they have laid their hands on. Now this government is attempting to undermine both the public and private health systems simultaneously. This legislation is nothing more than a noxious housewarming gift for a newly elected NSW government with the monumental task of fixing up more than 15 years of total and utter neglect of the public health system under Labor.

Allied health services are also expected to bear the brunt of this government's attack on private health insurance. It is expected that 2.8 million people with general treatment cover are going to withdraw and 5.7 million to downgrade over five years. This means fewer people accessing allied health services, which means less income and fewer jobs. Families in Macarthur are already financially stretched to the limit. Many pensioners are at the point where they have had to give up their private health insurance after the recent rise in premiums—and at a time of life where they cannot afford to lose it. The government's proposed changes are just going to make a bad situation worse.

The coalition has strongly supported giving Australians the choice of affordable private health insurance. The 30 per cent rebate on private health insurance premiums is a proven policy that we have seen works. Families in Macarthur are going to be negatively impacted by this legislation, and many will have no option but to forgo private health insurance and rely on the already stretched public system. This is a bad policy that will do nothing but harm both our public and private health systems and I would urge members of the House to keep faith with their electorates and reject it. So I say this to members opposite: stand up for affordable and accessible private health cover. Stand up for your community, your seniors and your youth. Stand up for a fair go for Aussie families. Stick to the ironclad guarantee that the Prime Minister previously made to the Australian public: 'Under no circumstances will we touch the private health insurance rebate.' As late as August 2010 the Prime Minister also stated, 'Medicare rebates are safe under Labor.' How safe? These bills change all that. No wonder there is a trust and credibility problem with this government.