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Tuesday, 13 May 2008
Page: 1496

Senator ADAMS (2:35 PM) —My question is to the Minister representing the Minister for Health, Senator Ludwig. In light of the recent statement about changes to the Medicare surcharge policy, can the minister inform the Senate whether any modelling has been undertaken on the impact on the cost for private health insurance policyholders as a result?

Senator LUDWIG (Minister for Human Services) —In terms of the Medicare surcharge threshold, on 10 May 2008 the federal Treasurer, the Hon. Wayne Swan, announced that, as part of the budget, the Commonwealth government will increase the Medicare levy surcharge threshold to $100,000 for individuals and $150,000 for families from 1 July 2008. So that the opposition can fully appreciate what the question is, if you look at the issue of whether or not pressure will be put on public hospitals, it is about giving people choice. When somebody takes out a private health insurance policy just to avoid getting hit with the tax slug, that is not a real choice.

This government has quite clearly kept its promise in respect of the Medicare levy surcharge and it has kept its promise to keep the 30 per cent private health insurance rebate. In the first six months in government, this government announced $1 billion in extra funding for hospitals, beginning to reverse the 11 years of neglect by the Howard government—$600 million to slash elective surgery waiting lists, something that the opposition did not do; and incentives of up to $6,000 to deliver 10,000 nurses into our health and aged-care system, something that the opposition did not do when they were in government. The government also announced the establishment of the National Health and Hospitals Reform Commission, to develop a long-term plan—

Senator Abetz —Mr President, I rise on a point of order. Could I, with respect, suggest to Senator Ludwig that he follow your example in relation to answering questions. Specifically my point of order is: the question was very specific as to whether or not any modelling had been done in relation to the impact on the cost for private health insurance policyholders. Our being told about the number of nurses et cetera is very interesting but completely and utterly unresponsive to the question that was actually asked.

The PRESIDENT —Senator Abetz, as I have said a number of times today, I cannot direct the minister on how to answer a question. As long as he is being relevant—and, in this case, I do believe he is being relevant—

Opposition senators interjecting—

Senator Abetz —On the point of order—

The PRESIDENT —Order! Senator Abetz, I believe the minister is still being relevant. We have allowed a lot of latitude in the past when ministers were answering questions. I will listen carefully to what Senator Ludwig says, but at this stage I believe he is still being relevant.

Senator LUDWIG —Thank you, Mr President. In relation to the Medicare levy surcharge threshold, the government strongly believe that a mixed model of private and public health services is essential. We have also invested in primary care to help take pressure off our public hospital system. We know that there are 500,000 preventable hospital admissions each year, including 50,000 admissions for preventable dental conditions. Unlike the opposition when they were in government, we have said that we will invest in GP super clinics in areas that need them, invest $290 million for a Commonwealth dental health program and invest $360 million for a teen dental plan, and name obesity a national health priority area. What the previous government had to say—

Senator Abetz —Mr President, I rise on a point of order. We have now had nurses canvassed and we have now had obesity canvassed. Is it allowable for the minister to canvass anything that might happen to appear in the health portfolio when a specific question is asked in relation to modelling on the cost of private health insurance? With great respect, Mr President, I believe he has now strayed well and truly out of the province of the question.

Honourable senators interjecting—

The PRESIDENT —Order! It is a rather all-encompassing answer, as was interjected from the government benches. Senator Ludwig, I would remind you of the question relating to modelling and ask you to continue with your answer, unless you have finished.

Senator LUDWIG —In respect of the particular modelling question that was also raised, those costs and savings will of course be in the budget tonight. I am sure the opposition will be keen to be here to look at the budget tonight, to examine those issues in detail and to see for themselves what is there.

Senator ADAMS —Mr President, I ask a supplementary question. When before the election did Labor say that they would force private health insurance policyholders to pay more for private cover? Did Mr Garrett know that Labor would sting private health policyholders even more when, before the election, he said, ‘Once we get in, we’ll just change it all’?

Senator LUDWIG (Minister for Human Services) —It may be worth going back to what Dr Michael Wooldridge, the then health minister, said in his media release on 20 August 1996:

High income earners will be asked to pay a Medicare Levy surcharge if they do not have private health insurance.

For this initiative, high income earners are defined as single people earning more than $50,000 or couples and families earning more than $100,000.

These are the people who can afford to purchase health insurance, and this measure will relieve some of the pressure on the public hospital system.

That is what the then health minister said in 1996. But he did not leave it there. In 1997 he said in a media release:

High income earners who still haven’t joined a fund need to understand that the extra 1 per cent Medicare tax surcharge will start to be levied on their income from the 1st of July. (Time expired)