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Wednesday, 12 February 2014
Page: 177


Mr LAMING (Bowman) (11:16): I find myself here a very proud Australian. I am very proud that we have such excellent health and education systems in this country—systems to which the rest of the world turns. Part of the benefits of our health system is the option that we provide every Australian to take up private healthcare if they wish. Of course, devising the private health insurance rebate—the 30 per cent rebate that saved private health in this country—was a massive achievement of the Howard government in the late 1990s. Together with community rating and the incentives to take out private health insurance early and to allow for penalties for those who drop their private health insurance and choose to join again for a later date, we can now proudly boast 47 per cent hospital and 55 per cent general private health cover in this country. They are important numbers. Just like we have independent school education in this country, we are the only country in the world where, on average, typically one in two citizens has private health insurance and also accesses for their children independent education. Having those two sectors strong and thriving—and, yes, potentially at times competitors—is possibly the best combination and the best blend of services one could hope for.

This morning I want to focus on health and the importance of this very important bill, the Private Health Insurance Legislation Amendment Bill 2013, which simplifies the operations of private health insurance. What is most important of all is that every family in this country should have the option to pay more for better health services if they so choose. It has been a generational battle with the party on the other side of this chamber to protect the right of Australians to access private health insurance if they choose to do so. Despite the smooth words of the previous speaker, this has at times been a dirty, ugly battle. It has involved Labor Party pre-election promises that private health insurance would not be touched, but, like many of their pre-election promises, that is not actually what transpired.

A private insurance sector, and the private hospital sector that hangs off that, and all of the great Australian health practitioners who work in both the public and the private health space are completely reliant on trusting that a federal government can stick by its words and provide the fundamental conditions where private health can thrive. That was not always the case. We saw the numbers erode under Hawke and Keating. We saw a rearguard rescue effort that saw the number and percentage of Australians with private health insurance recover in the 1990s, and I am pleased to say that those numbers continue to grow—albeit slowly—even to this day.

The great falsehoods that have been promoted by the other side are quite simple. One is that every dollar that is spent on private health insurance is a dollar ripped away from public hospitals. The second one is that every dollar that people spend on private health insurance in some way creates a two-tiered health system. That is right: a two-tiered health system where one group of people can only dream of being on the other tier of healthcare. But, in reality, this is typically said by Labor members of parliament—one of which I can hear bellowing right now—who do not actually talk to the very families who scrimp and save the dollars to be able to afford those rising premiums each year if they do choose to have private health cover. They also want to preserve their right to send their children to an independent school if, for their own reasons, they choose to.

The party on the other side of the chamber has fought against that every step of the way. Running through their veins, running through their entire circulatory system, is a desire to be as tough as they can on people who take up private health or choose to send their children to an independent schools. That is okay; that is banter in this chamber. If it were only that it would be okay, but what has happened is that our entire health and hospital system has been held hostage to a Labor government taking power once every decade and undermining the very principles of private health insurance.

I do not need to list what is already in the Hansard and has been described many times, but it was a Labor government that before the election would promise you everything was okay and the moment they were elected they would nickel and dime the private health insurance system, finding ways to make it even harder for you to meet your premiums. Though they denied it, up would go premiums every year at between six per cent and eight per cent, and the families of Australia paid the price for that insecurity that the Labor government imposed upon Australians.

Let us think of it another way. If you go to a hospital emergency department, it is 100 per cent free. If you go to see your doctor and you discuss the doctor's billing arrangements, you will be bulk-billed 100 per cent free. If you go to child care and you are under a childcare rebate, that will be almost completely free. If you go to university, it will be free.

But, suddenly, when you decide to actually leave the public health system, unburden it, and pay your own way, that mob over there resent that you get a 30 per cent rebate back on those expenses. They resent that. That is ridiculous, isn't it? I think they know deep in their heart it is. If you choose to send your child to an independent school, we happily rebate to every one of those independent schools between 30 per cent and 80 per cent of the cost of the education of your child, who does not go to a state school. And that has been a battle as well. So, in relative terms, the 30 per cent rebate is, I think, utterly defensible.

Let us think of the family right at the margins considering whether or not to take up private healthcare. They will think about whether they can afford the policy with the 30 per cent reduction. Self-evidently, if it was 30 per cent more expensive, thousands and thousands of families would drop out. We know that from research that is publicly available. Having that 30 per cent rebate draws people who would otherwise be in the public hospital system to pay for their insurance every year to use the private system. The other 70 per cent comes from their own pocket and funds the construction of private hospitals that will be there when we retire, that will be there for future generations who choose to use the private system. That 70 per cent of money would never be there were there not a 30 per cent rebate in the first place. This is billions and billions of dollars that pay for those private hospitals that are there at those moments when you have a severe condition, a public hospital will not treat it quickly and you have the option of quickly seeing a private doctor at the private hospital for a consultation and still get most of the cost of that visit back on Medicare. That is right: the private hospital system provides an alternative to public care that actually raises the quality and the expectations of our public system.

Further, public hospitals in the last decade or so have woken up to something very interesting. If a public hospital can increase the quality of its service, people with private cover will say, 'I'm happy to stay at this hospital tonight,' and all of the money is paid by the private health insurer direct to the public system. This has become a massive earner for our public hospital system. If you travel to Brisbane, with the big, fancy, shiny Princess Alexandra Hospital, with the lovely wide corridors and the impressive meal service—I am very proud of my local public hospital—many private patients say, 'I'll stay here, thanks.' When I talk to the private hospitals, with their pokey 1950s corridors and their ageing infrastructure, many of them say, 'We envy the impressive public hospital infrastructure, which has been funded mostly by state governments that are now drawing a lot of custom away from us.' What I am describing is genuine competitive tension that is constructive, that delivers better services for Australians and gives them two options, and you cannot ask for more than that. You know that you are better off with two choices than one. In a country where your only hospital is full, refuses to see you or refuses to change your hip, it is awfully nice to have another option in your back pocket. The coalition fought for that second option against incredible resistance from the other side. We are the architects of it, we designed it, we supported it and that is why today we stand here simplifying the legislation that was dreamt up at five minutes to midnight in the previous Labor government's term. Yes, they found another way to nickel-and-dime Australian families: this time it was to not index the rebate each year. As hospital costs went up, they said, 'No', we will only raise it by the lesser of the commercial premium or CPI.' Everyone knows CPI is only going to be two or three per cent so there would be a six per cent gap that was never to be rebated by the government from the moment they dreamt up this idea.

Today we go partially to redressing that injustice by removing that complex indexation measure that has an acronym so unctuous and so complex it cannot even be pronounced, so I am glad to see the end of it in legislation. Instead we will use a very simple indexation measure which the sector itself supports. We have moved from an era where a Labor government did not listen to the private sector to an era now where it has a say in decision-making like everyone else. Do not forget that this is not about wealthy insurers; this is not just about big, fancy, shiny hospitals; this is about everyday average Australians being able to afford private health if that is where they choose to invest their money. The only thing this chamber has to do is to make sure it remains as affordable as possible for those average Australians. Keep in mind—the numbers do not lie—that 10 per cent of all people with private health insurance have incomes less than $25,000 a year. There are some people with low incomes that choose above all else to be privately insured. They may forsake independent education to do that. They could forsake living in a larger home to do that but they retain the option if they think health care is more important to them than anything else to get the best care in the world—and that is fair enough for me. From where I see it, every Australian deserves that choice.

Historically this has been an unseemly battle between two political parties over something where there should be no argument. There should be no argument over giving Australians this choice and the ability to access private health care as a completely viable alternative to our fine public health system. We are a nation with strong welfare, pensions and safety nets around MBS and PBS to ensure that nobody misses out on the highest-quality public hospital care. So why should there not be another option for people who choose to invest in it?

As I said earlier—and it is rarely vocalised in the media—for every person availing themselves of the 30 per cent rebate who otherwise would not take out insurance, that person is reaching into their pocket and adding 70 per cent of that rebate, thousands of dollars a year, into Australia's health system for the future. As we all know and those in the camber would be aware, it is all fine when you turn 60, suddenly start getting a sore hip and realise that you cannot get into the public system to then seek out private cover. But we have not made it possible for everyday Australian families to access private health insurance, to pay into the system early and so there will be nothing there when they really need it.

The private health insurance system is utterly vital because it funds the infrastructure. It means the hospitals are there 20 years ahead of when we need them. Isn't that a revolutionary notion? In an age where government operates in debt and does not build roads for today let alone yesterday, we have one sector in this country building the infrastructure even before we need it so there will be beds there when we need them, and that is the great and unsung benefit of private health insurance.

This is only a start. Today's legislation, I concede, is a small modification to make it simpler to operate, to remove the complexity which we all here have begun to associate with legislation produced by the previous administration. It is welcomed by the sector. What was dreamt up here was not dreamt up by the health department. I need Australians to know that the nickel-and-diming of Australians over their private health insurance was all done by Labor's Treasury department. These were Treasury motions to save money. It was never the health department saying, 'We can make the system work better by reform.' If you go through the last six years of Labor health reform, it was exclusively driven from Treasury, from a Treasury desperate to minimise the damage being done by an overinflated stimulus during the GFC. The debt that we now carry—$123 billion net debt—was, I suppose, as little as Treasury could manage given the context of the Labor leadership at the time.

Now we have a small chance to redress it. Now we have a small chance to look Australians in the eye and say to them, 'We are a friend of people who take out private health insurance, just as we are of every Australian who accesses the public hospital system, the GP bulk-billing system and our wonderful PBS.' These are the four strong pillars of the Australian health system. It is my regret, when I look back at the last 10 years in this place, that, as far as our opposition here is concerned, Australia's health system only has three pillars. There is a very significant problem with that. We have never been able to talk with the other side of politics about genuine, smart and clever reforms, because, the moment you do, there is an instant debasing debate about whether a dollar is being spent in the private sector that should have been spent in the public.

This debate is over, for any unbiased observer. You can go to Joondalup hospital and see the most efficient emergency department in this country, and it is a private emergency department. I am not for one minute saying that that is the only way to go, but if there is one thing you remember from this contribution today it should be that we must keep both sectors strong, well resourced and well supported and never should anyone who is a private health insurer, anyone who is running a private hospital or anyone who accesses private hospitals feel less of an Australian because of a Labor government that is continuing to nickel-and-dime them as they seek out the best health care they can.