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Wednesday, 3 October 1984
Page: 1082


Senator PETER BAUME(10.40) —Like my colleague, Senator Dame Margaret Guilfoyle, I address my remarks to the Medicare Levy Bill 1984 which is one of the Bills in this package now being considered. The Medicare Levy Bill is part of a package of income tax measures which, taken together, combine to make this Government, the Hawke Labor Government, the highest taxing government in Australia's peace time history. The public should be aware of and remember that- it is the highest taxing government in Australia's peace time history.

The one per cent levy which this Bill imposes upon household incomes allegedly to cover the costs of Medicare provides only part of the revenue required to cover the costs imposed by this system of health insurance. It is true that this levy will cover some of the costs but it will not cover them all. It is a further measure of the deception which this Government so happily practises that it would have us believe that the one per cent levy meets the costs of Medicare, or that the costs of Medicare can in some way be related to or thought to be equivalent to what the levy returns. The fact is-the Government's own Budget Papers demonstrate this-that 1.7 per cent of taxable income is being taken from Australian taxpayers to cover the additional costs of Medicare. One per cent is being taken by way of the levy and another 0.7 per cent is being taken from Consolidated Revenue, from general taxation. So the Australian taxpayer is paying twice-once by way of a levy, which is identified, and a second time out of his or her general taxation, which is not identified as part of the cost of Medicare. It is what one might call the imposition of a secret additional levy of 0.7 per cent of personal income tax.

Of course the whole Medicare exercise has been an example of further tax imposition upon the Australian people, and when one talks about the taxation measures of the Hawke Government, as my colleague Senator Dame Margaret Guilfoyle says, one must look at the taxes in the Medicare area as part of the personal income tax package, as part of the personal income tax burden. The Budget papers show that the additional cost of Medicare is a bit over $2,000m. The official Medicare levy of one per cent is estimated to bring in revenue of just under $1,200m, leaving a shortfall of about $830 which still has to be found from the pockets of taxpayers, still has to be found from revenue and of course has to be found by way of other taxation. It is meaningless for the Minister for Health (Dr Blewett) to claim that the Medicare levy can be maintained at one per cent and that this will go any way towards covering the costs which this system of health insurance imposes. This is as meaningless a claim as any other of the claims made by the Hawke Government in respect of Medicare. In the policy speech of the Prime Minister (Mr Hawke) in 1983, voters were told, quite explicitly:

. . . nine out of ten Australians will pay less for the health needs of themselves and their families.

That is what Mr Hawke promised to the people when he wanted their votes, when he wanted their support. Of course it was never possible. It was never on. It was never an accurate promise and it did not take Mr Hawke long to resile from that commitment. In the letter to all Australians sent out before the introduction of Medicare we had a good example of the mathematical acrobatics that this Government is so fond of practising. We were told in that letter:

Two out of three families will be paying less for the cover that they now enjoy.

However, in the policy speech we were promised that the figure was nine out of ten families, because it was necessary in the policy speech to make the promises extravagant and attractive, whether or not they were truthful. It did not take long for the Government to go from a promise of nine out of 10 families to a promise of two out of three. Of course in practice the Prime Minister has delivered on neither of those promises. Individual families which have decided to maintain their private health insurance-many have found it necessary to do that as they witness the mediocrity and inadequacy of the provision of services under Medicare-are, in the majority of cases, worse off than they were before. It is a simple matter of arithmetic. They are worse off. Yet this Government promises that two out of three would be better off. It is true only if they are prepared to take a lesser standard of service or lesser access to medical and hospital services. These people pay their one per cent levy. On top of that they pay their private health insurance premium. They have lost the tax rebate which they previously enjoyed on basic health insurance contributions. They are prevented by law from insuring to cover the gap between the schedule fee and the Medicare benefit. So in four areas they are paying. Therefore, they have to meet all those costs from their own pocket each time they visit their doctor. There are now restrictions on the number of days one can spend in hospital without incurring very heavy out of pocket expenses. This is a matter of particular concern to the elderly and the chronically ill.

It is simply quite fraudulent of this Government to claim that Medicare is cheaper, it is simpler and it is fairer. It is not cheaper, it is not simpler and it is not fairer. How can it be cheaper when the levy raises only part of the costs? I suppose one could set the levy at a tenth of what it is now and claim from that that it is cheaper. The only point is that one would still have to make the difference up from Consolidated Revenue. The estimated total cost of the health systems in Australia to State and Federal governments is somewhere between $9,000m and $10,000m. Of this the Commonwealth will provide about $5, 500m from taxpayers' funds this financial year. I just give ball park figures to set the scene. The Medicare levy of one per cent pays for only about one-eighth of total government expenditures on health, both State and Federal, and about one-fifth of the Federal expenditures on health. To try to equate the level of the levy with the costs of medical services is an exercise in futility. The balance of the cost is paid by taxpayers. It is just not made explicit to them. Unless it is brought to people's attention they may not realise that not only are they paying the one per cent levy but also part of the tax which they pay each week, as pay as you earn taxpayers, is going to make up what the levy does not cover.

The Government would have us believe that the levy covers all health costs. It does not. Mr Hawke and Dr Blewett claim that Medicare is simpler. This claim also sits strangely with the facts. Two-stop shopping is required if one wants private cover to be maintained. That is not simpler; that is more complex. Medicare offices are not widely distributed. One could even say that they are few and far between, particularly in non-metropolitan Australia. That does not make it simpler. Medicare confiscates one's doctor's bills. That does not make it simpler. The Government would claim that Medicare is fairer. Let us consider a few facts. The chronically ill cannot take out gap insurance. Is that fairer? Is that fairer for the chronically ill? Let us consider the fact that the hospital reinsurance subsidy has suffered a cut in real terms of about 6 per cent. As a result health funds have been forced to limit hospital cover of contributors to a set number of days each year. Is that fairer?

Not only is Medicare grossly unfair to those using the system; it is unfair to those responsible for health care delivery. To appreciate this one has only to refer to the unprecedented strike action by members of the medical profession over conditions which were being imposed upon them quite unfairly by the Hawke Government and through the State governments and the confrontation which took place in my State of New South Wales and which led to the Wran Government retreating in the face of what was justified and united opposition from doctors. These conditions would have been totally unsatisfactory for any member of a trade union. This Government, which is thought to represent people who work, seems to have a set against the medical profession. I have heard honourable senators opposite frequently propose that doctors should settle for the 85 per cent rebate and consider themselves well off by so doing. I have yet to hear them asking members of the Amalgamated Metal Workers and Shipwrights Union to take a 15 per cent cut in their gross income.


Senator Dame Margaret Guilfoyle —Or the BLF.


Senator PETER BAUME —Or, as my colleague Senator Dame Margaret Guilfoyle says, the Builders Labourers Federation. This Government is selective in those it asks to bear the burden. Because of its own ideological hangups it has decided to have a go at the doctors through Medicare. I must say that the confrontation in New South Wales had the Labor governments retreating, and in full flight. It was not a bad thing to see. What has been so outstanding since the Australian Labor Party came to office has been the way in which it has sought to denigrate the medical profession at every opportunity. By extending the system of bulk billing the Government is also asking the profession to settle for the rebate and to take an effective pay cut of 15 per cent.

The Medicare Levy Bill is only one of this package of Bills, but it is a Bill which makes quite clear that the Hawke Labor Government is a high taxing government. It is a high taxing government in the area of income tax. It is a high taxing government because of its failure to deal with fiscal drag and because of what it has done in the Medicare area. Although, as my colleague Senator Dame Margaret Guilfoyle said, we will not be opposing the Bills, we draw these matters to the attention of the public as we believe the Government has many things to answer for and many things which should be brought to the judgment of the people.