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Thursday, 25 September 2008
Page: 5672


Senator ADAMS (3:14 PM) —I also rise to take note of the answer given by Senator Ludwig on the Medicare levy surcharge this afternoon. Earlier today the Minister for Health and Ageing, Nicola Roxon, presented a redrawn Tax Laws Amendment (Medicare Levy Surcharge Thresholds) Bill (No. 2) 2008 into the House of Representatives. With this move, Ms Roxon has admitted once more that her legislation is full of flaws. Whilst I welcome the fact that the minister has given this legislation another thought, I believe she has still not thought it through fully. Today Ms Roxon suggested the provision of a singles threshold of $75,000 and to index the threshold to wages growth. As the couples threshold would remain unchanged at $150,000, Ms Roxon believes her new measure would be the magic trick she needed to make sure that small income earners would not be forced to pay the bill of this piecemeal legislation.

Ms Roxon has got it wrong again. Neither Ms Roxon nor Mr Swan did proper modelling on the effects of this bill. Ms Roxon clearly does not understand the impact this legislation will have on the public health system, nor does she understand the effects this legislation will have on families and older Australians, who will have to suffer from massive hikes in private health insurance premiums. Ms Roxon said today, ‘Unfortunately we will not be providing tax relief to as many people as we would have liked.’ This bill is not able to deliver tax cuts. Changes to the Medicare levy surcharge are not really a tax cut, as Labor wants us all to believe. It is a measure that will raise revenue and increase prices. It will push up private health insurance premiums, drive hundreds of thousands of people out of private health and add even more pressure to public hospital queues and waiting lists. If Labor were truly interested in delivering tax cuts, they would put their rhetoric aside and deliver this through the tax system. The government still has not answered how it plans to prevent premiums going through the roof for low-income earners and pensioners. More than 200,000 pensioners over the age of 65 live on less than $20,000. For them it does not matter if the old or the newly drawn up bill comes into effect. Pensioners will lose out again, not being able to afford private cover.

The public hearings of the Senate Standing Committee on Economics inquiry into Tax Laws Amendment (Medicare Levy Surcharge Thresholds) Bill 2008 have shown this very clearly. Coalition senators heard clear evidence that working families, low and fixed income earners, the elderly and people living in rural and regional Australia would be hit hardest, with the Rudd government even saying that it would be primarily younger people dropping their cover in large numbers. Is this what we want? This means that good risk members will abandon private cover, leaving behind bad risk members—primarily older Australians—with the result that their premiums will have to go up. If premiums are too high, people will drop their cover, including many members with poorer health. Is this really what the government wants: to overrun our emergency departments and our waiting lists? Does the government really want to hurt pensioners again? Was it not enough denying single pensioners an increase of $30 a week, as they did just this week? Does government really want to drive them into a situation where they will not be able to have the choice to have surgery, such as hip and knee replacements, when they need to without having to wait for extended periods? Clearly, the minister has not thought this legislation fully through.

Have a look at the example of the effects this legislation would have on the public health system. At the hearing of the economics committee in Perth, the Acting Director General of the Western Australian Department of Health, Robyn Lawrence, stated that the proposed changes to Medicare are likely to cost the state an additional $53.6 million a year, increasing demand on the public health system and affecting its ability to perform elective surgery. Dr Lawrence predicted that an extra 268 public beds would be needed by 2017 and an estimated 50,000 Western Australians may drop out of private health insurance.

However, Dr Lawrence admitted after questioning from the Liberal committee members that the Labor government would save $959.7 million through not having to pay the 30 per cent private health insurance rebate. Such savings are likely to put higher pressure on tight health budgets. As a result, the industry is already exploring ways to cut their spending on other portfolios. (Time expired)