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Monday, 14 March 2005
Page: 58


Senator MARSHALL (4:13 PM) —I support the matter of public importance which has been raised in the Senate today by my colleague Senator McLucas. Before I begin my contribution, let me turn to some of the comments made by Senator Knowles, who seemed to want to argue in this place that the health insurance premium increases that we have just experienced somehow do not put pressure on the family budget. Senator Knowles then quoted some figures from a Western Australian fund in weekly terms as a matter of cents in order to deliberately trivialise the amount of the increase. I want the indulgence of the Senate for a minute to put these increases into perspective.

Let us look at one of the major funds, Medibank Private, and the actual increases in its Smart Choice Hospital and Extras cover. In the ACT there is an increase of $153.75 per year for that cover. In New South Wales it is also $153.75. In Victoria there is an increase of $256.20 per year; in Western Australia it is $167.15; in South Australia it is $131.85; in the Northern Territory it is $102.45; in Tasmania it is $201.65; and in Queensland it is $142. They are significant increases for any household budget to have to find if that household has private health insurance.

Senator Knowles should remember that in 2001 Mr Howard promised that these policies—the Howard government’s policies—would reduce premiums for private health insurance. Yet every year premiums go up. This is simply another broken promise, as Senator Knowles should well know. Let me remind the Senate and Senator Knowles that, in 2001, John Howard’s election policy booklet, called Heading in the right direction, promised that his government’s policies would ‘lead to reduced premiums’. Senator Knowles must have forgotten that the Prime Minister and the Treasurer promised their policies would create downward pressure on premiums and that private health insurance would be ‘more affordable and attractive to consumers’.

Senator Knowles may recall the former health minister Michael Wooldridge saying—and she indicated to the Senate that she had been around a long time and I am sure she does remember this—in July 2000:

We’ve got so many extra people in that’ll keep real downward pressure on premiums. They won’t go up 5 to 8 per cent a year as they did under Labor.

Since the minister made that laughable prediction, premiums have risen by well over 30 per cent. Senator Knowles wants to take no responsibility for the last nine years of this government and wants to hark back to previous governments, but the reality is that premiums have gone up recently by over 30 per cent and they have clearly eaten up the private health insurance rebate. This policy of the coalition costs the Australian taxpayer $2.25 billion a year, and the government want to keep saying that somehow it is working. Clearly it is not working and it is putting more and more pressure on private health insurance.

On the morning of Thursday, 3 March this year, millions of Australians woke up, made their way to their kitchen tables and opened up their morning newspapers to be hit with a barrage of bad news and shocking headlines. On the front page of the Courier-Mail, people read, ‘Double blow for families: interest rate cranked up, health insurance costs soar’. In the Herald Sun, they read, ‘King hit: up—interest rates by $33 a month; up—private health insurance by 8%’ and ‘Private health fund rises hurt: premiums soar out of reach’. That is what is happening in our community today. In the Daily Telegraph they read, ‘Double trouble: families feel pinch as home loan rates, health premiums rise’. If they turned to the editorial, they would have been met with, ‘Unhealthy increase’. In the good old reliable West Australian, forever the apologist for this coalition government, people read, ‘Health cover up but is good value: Abbott’. But in the Australian people read, ‘Families hit by $200 health premium hike’, and in the Age, ‘Double slug as economic boom falters’. The Adelaide Advertiser’s headline read, ‘Double hit: rates, health insurance rise’.

Wednesday, 2 March, was a disastrous day for Australians in private health insurance. On top of the one-quarter of a per cent interest rate rise announced by the Reserve Bank earlier in the day, the Minister for Health and Ageing, Tony Abbott, thought he would hide behind Treasurer Costello’s bad news and secretly announce, only 5½ hours later, his own slugging of Australians—this time through their private health insurance premiums, by an average of eight per cent. Regardless of what Senator Knowles might like us to believe, that is the average across the board—an eight per cent increase.

As Nicola Ballenden, the health spokesperson for the Australian Consumers Association, was noted as saying in the Herald Sun on 3 March:

Clearly, they are hoping that people won’t notice.

Well, I think Australians with private health insurance are certainly going to notice the big hand of Tony Abbott reaching into their wallets for a further eight per cent on top of their premiums—the highest rise since the private health insurance rebate, the $2.25 billion rebate, was introduced.

I think Australians are going to notice that this announcement marks the fourth consecutive rise in health insurance premiums in four years. I think Australians are going to notice that over the past four years—the four years since the Howard Government claimed it had reformed private health insurance to make it more affordable—their premiums have risen by an average of 33 per cent. I think privately insured Australians have noticed the 19.2 per cent increase in the gap expenses they are forking out to doctors. And I think Australians will have worked out that the 30 per cent private health insurance rebate has now been well and truly eaten away by the 33 per cent increase in premium costs over the life of the rebate.

Mr Abbott recently described himself as feeling like a constitutional monarch—that is, powerless when it comes to dealing with the real health issues in our society. Well, Minister, here was a chance for you to get your hands dirty and come up with a real fix for the private health insurance industry. But what happened instead? The minister chose to sit back, tick off on yet another of the private health insurance industry’s requests to increase premiums and demand that people shut up and take it on the chin.

According to the front page story of the Age on 3 March this year:

Health Minister Tony Abbott said he had reluctantly approved rises in health insurance premiums to ensure health funds stayed afloat. “The job of government is sometimes to face up to difficult news. Government’s job is not to pretend that you can have everything for free all the time,” he said.

For free? Try telling Australian families with private health insurance who have been slugged with 33 per cent rises in the cost of their premiums over the past four years that they should shut up, stop expecting everything to come their way for free and start paying. Australians are already paying and they are paying 33 per cent more than they were when the private health insurance rebate was introduced. Try telling that to a family in Victoria with Medibank Private’s Smart Choice Hospital and Extras cover who will be required to fork out an extra $260 this year on top of the $2,180.60 they had to find last year.

Millions of Australian families have been paying through the nose for their private health insurance under the minister’s stewardship for years now and they are getting even less for their money than they used to. Last year, private health insurers received on average a 7.58 per cent increase in premiums; however, private hospitals claim that the deals done with them were at best two per cent better than the old deals and at worst minus 10 per cent worse than the old deals.

There seems to be something patently wrong with the current system when year after year Minister Abbott turns around to people with private health insurance and says, ‘Pay more,’ when private hospitals end up getting squeezed more and when people are offered less when they use their private health insurance. Just last month, the Australian Private Hospitals Association estimated that out-of-pocket costs for patients in private hospitals not approved by Medibank Private will increase by up to $400 a day under their new competitive selection process. Gone from this type of cover is choice of hospital—enter rising costs. Australians in private health insurance are paying more and getting less under this government. (Time expired)