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Monday, 13 February 2012
Page: 915

Mrs GRIGGS (Solomon) (19:29): I rise to contribute to the debate on the Fairer Private Health Insurance Incentives Bill 2011. As some of my colleagues have already stated, we are debating a betrayal of the Australian people, a betrayal of 11 million Australians who contribute to private health insurance arrangements. Forty-five per cent of households in my electorate of Solomon have private health insurance arrangements. Over 40,000 people are covered by these arrangements—40,000 Territorians who are being betrayed by the Gillard Labor government. This is the very same government that promised at the last election that there would be no carbon tax under the government the Prime Minister led. We all know where that promise ended.

As has been reported in media outlets by many commentators, Australia's healthcare system—and I refer to the balance in the relationship between public and private providers—is envied by many overseas countries. The Treasurer himself is on record with regular reference to how Australia is the envy of the world. It is apparent that our current healthcare system, if media commentators are to be believed, is in fact envied outside our shores. To refer to a turn of phrase distinctive to our vernacular, if it ain't broke then don't fix it.

Along with nearly 53 per cent of the country or some 12 million other Australians, I pay into private health insurance. My husband and I recognise the importance of having private health insurance. We recognise the importance of choice and we recognise the value of not relying upon and adding to an already overworked and stretched public health system. Further, we recognise that with an ageing population the reliance on health care will increase, as will the pressures on both the public and private providers. Statistics show that in the 2009-10 financial year private hospitals treated some 3.5 million patients across Australia, with those private hospitals responsible for the delivery of 64 per cent of elective surgeries.

Australians in general have an expectation for the delivery of certain services. Health care is one of those areas of expectation. An Ipsos survey this year found 64 per cent of the population believe that the $4.5 billion the government spends on the health rebate is a good use of taxpayer money. At present, 5.6 million Australians who pay private health insurance have an annual household income less than $50,000. Further, 3.4 million Australians with an annual household income of less than $35,000 pay into private health insurance—a further example of the value placed on this commodity by Australian citizens. Astute Australians, mums and dads, singles, the aged—in fact, Australians from all walks of life—all currently pay for private health insurance, yet the current federal Labor government wants to change this. Why? The system is not broke. The Deloitte analysis of the changes proposed by this government, if passed, are expected to see many of those astute Australians I have mentioned who pay into private health insurance funds withdraw from private health or downgrade their current level of cover. The government's own insurer, Medibank Private, predict that potentially 37,000 of their existing members alone will drop their cover and 92,500 will downgrade their cover, yet the Minister for Health has claimed that some 27,000 people across the entire sector could potentially withdraw from private health care—a considerable discrepancy. How can this government get it so wrong so often?

At present the existing private health rebate is 30 per cent with an increase to 35 per cent and 40 per cent rebates for older Australians. Proposed changes will see the introduction of three new income tiers. The first tier will see a reduction of the healthcare rebate from 30 per cent to 20 per cent for singles with an annual income of between $80,000 and $93,000 and families with a combined income of between $160,000 and $186,000. Aged Australians between 65 and 69 years will see their rebate reduced from 35 per cent to 25 per cent and for those aged 70 and over the rebate will fall from 40 per cent to 30 per cent. Without looking beyond the first tier, it is quite evident that this government assumes any single or family whose income exceeds the thresholds to be wealthy. I am reliably informed by my constituents that this is not the case.

Many in remote, regional and rural Australia—who already pay additional costs associated with supply and delivery of goods and services; who already pay dearly for childcare facilities, for basic food commodities for fuel; who go without the advantages associated with pricing competition similar to that within urban environments; and who pay mortgages or who pay rent—are far from rich. These average Australians continue to struggle and should not be considered wealthy. Within my own electorate of Solomon, many of the constituents I have spoken to on this issue are angry. I paraphrase: they are sick to death of being bashed by this Labor government on a daily basis for apparently being wealthy. When I say 'constituents', I refer to people from all walks of life, from small business operators to businesses who employ staff to contractors, from police officers to nurses, to public servants and teachers, all hardworking aspirants of this country. All of them sound the same drum and sing the same song. These proposed changes are not about improving our health services but about the inability of the current government to balance its books. Once again, it is the working backbone of the country who will be hurt—those who already give and continue to give towards every tax and levy imposed by a government in crisis.

This Labor government does not understand that healthcare costs vary from region to region, as do wages, but no consideration has been given to the high cost of living facing Territorians today. Many young families I know will be affected if this legislation is passed, and they are already struggling. Like me, the member for New England believes that this new health tax being imposed by the Gillard Labor government will be very bad for regional hospitals and in fact regional health services. What I do not understand is, if the member for New England believes this legislation will be bad for regional hospitals and regional Australians, why the member for Lyne has not arrived at the same conclusion. Then we have the member for Denison. In his electorate six out of 10 people have private health insurance. Surely, the message to him is quite clear: he must not support this legislation. This legislation will most certainly put pressure on public hospitals. It will absolutely take more money out of people's household budgets. At a time when Australians are already facing extra cost-of-living pressures, Prime Minister Gillard's new health tax is just not sustainable. This government has a history of broken promises. A case in point: in October 2007 the Chief Executive of the Australian Health Insurance Association, the Hon. Dr Michael Armitage, sought clarification from Labor's federal opposition leader in respect to its private health insurance policy. The response to Dr Armitage, signed by the then federal Labor leader, Mr Kevin Rudd, stated:

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 percent general rebate and the 35 to 40 percent rebates for older Australians.

The response further included that Labor would maintain the existing framework for regulating private health insurance. What has happened in the interim? We have a government that finds itself in difficult economic circumstances largely of its own making, a government that started out with money in the bank and an economy strong and vibrant, an economy with stability. Today we see circumstances in which the government has spent billions and billions of taxpayer dollars to the point where we now have the fourth-largest deficit of any Australian government in history.

It is evident from the comments from my constituents that they clearly understand the impetus of why this government now wishes to tinker with the private health system—the envy of many other nations—not for the betterment of the system or as a value-add for the Australian taxpayer but for fiscal reasons. Simply put, the government is desperate to find money to try and fill the black hole which continues to expand. This is bad policy and it is the third time this parliament has considered this legislation. The first was in 2009. It was against a backdrop of commitment by the member for Griffith, the then federal Labor leader, in 2007 when he affirmed:

Federal Labor will maintain the existing framework for regulating private health insurance, including the process of approval of premium increases.

These three bills as introduced failed on that occasion. But here we are in 2012 again debating measures to alter the status quo in terms of private health insurance.

As I indicated earlier, many of my constituents are angry. The impact of the potential changes will impact the back pockets of most Australians with increased private health insurance premiums. The changes will impose an enormous compliance burden on the industry and individuals completing their tax returns. Private health insurers will have to make significant changes to their systems to be able to adjust premiums according to incomes. It is still not clear how the rebate will be administered under the new arrangements, especially where a person is not able to accurately predict their income for the current or the future financial year. Deloitte's analysis of the changes show that in the first year 175,000 people will be expected to withdraw from private hospital cover and a further 583,000 will downgrade. Over five years it is expected that 1.6 million will drop cover and 4.3 million will downgrade. These figures are absolutely alarming.

I would like to go back to the sentiments of my constituents. The following was sent to me by a constituent whose name is Lee. In her own words she said:

… "the harder I work the luckier I get". I want to share my journey in becoming the new "bashed and hated wealthy" My husband and I started our working life as bank teller and a refrigeration mechanic. We built a 3 bedroom 1 bathroom house in—

the suburbs of—

Adelaide, which was all we could afford. We raised 2 boys initially on 1 wage. My husband Chris had to take on additional work on weekends just to pay the mortgage and keep food on the table when interest rates reached 16% in the early 80's

We both worked to provide the boys with private school education. Family holidays were camping trips in an old camper trailer and when the boys left home we moved to the NT—

Northern Territory—

and started our own business

The journey of Lee and Chris is similar to that of many others that have worked hard, raised families, and understood the need to provide for themselves in retirement. In Lee's own words:

… this labor government hates us, it hates the fact we have some degree of financial comfort, it hates the fact we have private health insurance, it hates the fact we were prepared to work hard to provide the best education for our children. We are the people that got the hit from the flood levy, we are the people that are now to be hit by the health rebate means test, and next we will be the same people that will be hit by less money for private schools. We are small business people, we employ others, we pay tax, we look after ourselves in retirement, we are the backbone of this country and NOW UNDER THIS GOVERNMENT WE ARE HATED

How concerning is this sentiment? But this is exactly what this Labor government is doing: it is trying to bring back the class war, turning hardworking people that do have aspirations for a better life against those that do not.

In conclusion, this piece of legislation is absolutely not about a health policy. This is about a government trying to rip money out of people's back pockets as a patch-up for the waste and mismanagement that this government has undertaken over the last four years. This is bad policy and I will be voting against this piece of legislation as this bill is not about 'Fairer Private Health Insurance Incentives'. This is another Labor broken promise. This is another betrayal of the Australian people.