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Monday, 10 September 2018
Page: 5835


Senator WATT (Queensland) (13:32): I am going to make a short contribution on the Private Health Insurance Legislation Amendment Bill 2018, the A New Tax System (Medicare Levy Surcharge—Fringe Benefits) Amendment (Excess Levels for Private Health Insurance Policies) Bill 2018 and the Medicare Levy Amendment (Excess Levels for Private Health Insurance Policies) Bill 2018 today. Like other Labor senators, I will be supporting these bills, with some reservations. As has been already indicated by Senator Bilyk, we do think this package of measures is a pretty underwhelming response from the government to the very real problems that many Australians are having with the fact that their private health insurance premiums keep increasing well above inflation levels and certainly well above the increases that most Australians are seeing to their wages. This is something a little like the energy crisis, where this government has been in power for five years now and seems utterly incapable of doing anything that is going to put some real handbrakes on the increases that Australians are experiencing to their private health insurance premiums.

Dealing with the bills to begin with, before I outline some other options that the government might wish to undertake on this front, Labor has throughout the process of examining this legislation indicated two concerns in particular. The first is that the bills clarify that insurers will have the power to terminate particular insurance products and transfer policyholders to other, new policies. Of course, that has raised a concern in our minds that, at least in the hands of unscrupulous private health private insurers, there is a risk—given that some Australians might have products that they have signed up to that they have made a judgement they can afford—that those particular policies may be terminated by insurers, and policyholders could be transferred across to other, new policies that may not be as much in their interests, whether it be in terms of the price that they have to pay or the range of coverage that is offered. We have raised that concern. Now that this matter has been explored through a Senate committee, we note the assurances the government has made to parliament that these changes will come with improved protections for policyholders to prevent them being disadvantaged by insurers. We will be paying very close attention to those measures, but we are willing to pass these bills on the basis of the assurances that the government has made.

The second concern that the opposition has had with these bills is that we note that they do allow significantly higher excesses to be charged by insurers to both singles and families. Just as we have a concern around the fact that premiums for private health insurance continue to go up under this government, we are also concerned at any measure which would allow insurers to charge people higher excesses than what they currently pay. This is an issue that has been explored through the Senate inquiry. At this point in time, we are willing to accept the evidence that was provided to that inquiry by the Consumers Health Forum which argues that consumers should be given the option to choose a policy which does involve higher excesses. The concern that we continue to have is that we do seem to be getting into a situation where the government, because it is incapable of doing anything about premium increases, is essentially trading off higher excesses for lower premiums.

This bill will allow policies to go to the market which do allow consumers to choose a higher excess in return for having some level of control about the increases in their premiums. We don't think people should be being forced into that position. We think this government should be able to come up with real policy change that actually does put a handbrake on the increases that most Australians are seeing in their private health insurance premiums. On the basis of the evidence that was received at the Senate inquiry, this is something that we are prepared to support at this point in time; but it is something we will be closely monitoring to ensure that Australians don't end up getting ripped off.

There are other options available to the government to take real action to try to mitigate the increases that many Australians are experiencing in their private health insurance premiums. The most important of those is a policy that our leader, the Leader of the Opposition, announced some time ago but which has yet to be acted upon by this government. We have announced a really bold policy to really tackle head-on this issue of increases in private health insurance premiums. We have announced that, if elected as the government, we will cap private health insurance premium increases at two per cent for two years to bring them much more in line with the inflation rate and much more in line with the wage increases Australians are experiencing under this government. If we get the chance to implement that policy, that will equate to an average of $340 a year in savings for Australians. So Australians, under a Labor policy, will on average save $340 a year in their private health insurance premiums.

Since this government, under Prime Minister Abbott, was elected in 2013—a long time ago, three incarnations ago—private health insurance premiums have increased by around $1,000 on average. While this government continues to take only small steps, as it has done with this legislation, those premiums will continue to rise. We are not prepared see that go on. As the opposition, we are calling on this government to back-in our policy which would see an increase of two per cent over two years and give Australians some real relief on their private health insurance premiums.

What that would mean in my home state of Queensland is that 2.4 million Queenslanders would generate a saving in their private health insurance premiums under a Labor government with that policy. In some of the duty electorates, where I am particularly active, in the electorate of Capricornia in Central Queensland over 86,000 people would benefit from Labor's policy and over 10,000 families would save under Labor's policy to cap private health insurance premiums. In the electorate of Forde, which runs between Logan and the Gold Coast, over 90,000 people would benefit from Labor's policy and over 11,000 families would save money on their private health insurance premiums if Labor's policy were picked up. In fact, across the five federal electorates that cover the Gold Coast, where my electorate office is based, over 430,000 people and over 54,000 families would save money on their private health insurance premiums if this government would adopt Labor's policy and cap private health insurance premium increases at two per cent for two years.

They are real measures that would make a real difference to Australians' cost of living, not the tinkering at the edges that we're seeing in these bills from this government. Having said that, we are willing to accept any measure that the government is prepared to take to try and bring premium increases under control. On that basis, we will support these bills while, at the same time, continuing to call on the government to make real changes and join with Labor in capping price rises for most Australians.