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Monday, 10 September 2018
Page: 24


Senator DI NATALE (VictoriaLeader of the Australian Greens) (12:29): I rise to speak to the Private Health Insurance Legislation Amendment Bill 2018. I flag now that the Australian Greens will move amendments to improve this bill because what we've got before us needs significant improvement. Let's look at what we're doing right now with the private health insurance industry. We are on track to spend $26.5 billion on the private health insurance rebate over the next four years. That's three times more than we are spending on vocational education and TAFE. It's double what we spend on paid parental leave. It is more than we spend on veterans and the families of veterans, the ABC and SBS, renewable energy and natural disaster relief combined. This is a policy that is a complete and utter failure, because nobody can tell you what on earth we get for that $26 billion expenditure.

I've just heard from the Labor Party. I welcome their contribution. But, as always, the Labor Party have said that they don't support the principle of where this bill is going, yet they won't oppose it. They've expressed concerns, but they won't oppose it. It seems that the Labor Party's going to need some health care of their own to have the splinters removed from their backsides, because they continue to walk both sides of the fence. What we have, according to Jenny Macklin, who was then the Labor Party spokesperson on health, is 'the worst example of public policy' she'd ever seen in Australia—Jenny Macklin's words, the Labor member who was spokesperson for health at the time when the private health insurance rebate was introduced. It is the worst case of public policy making that she's seen, and yet here we are with the Labor Party saying they're going to back it.

We don't expect anything else from members of this government. Of course they're going to back a cashed-up corporate interest. They're going to support the private health insurance industry because their mates working in that sector are pleased to be able to offer the sort of largesse to big business that these rebates offer to the big end of town. And they've never supported universal health care. They fought Medicare every step of the way. We don't expect anything from this Liberal coalition government. But it is so disappointing that, with the Labor Party expressing concern about this policy, they have indicated that they ultimately will support these measures and ultimately will do nothing to redirect the private health insurance rebate into public health care where it belongs.

The private health insurance industry right now is dependent on these government subsidies. It relies on the largesse from the public purse to encourage people to buy products they don't want and don't need. We've got a range of sticks. We have the Medicare levy surcharge that says to somebody, 'If you don't take it out, you will receive an additional tax cost.' Well, if we have a progressive income tax system in this country, there is nothing wrong with people on higher incomes paying a higher level of taxation; they shouldn't get a discount for taking out private health insurance. We have lifetime health cover, which penalises people two per cent of the cost of the premium for every year over 30 they're not in private health insurance.

And, of course, we have the private health insurance rebate. The rebate was worth $6.6 billion in 2015-16. There was $1.6 billion in tax-free income for those who got the rebate. There is an estimated $1 billion in exemption of taxpayers from the Medicare levy surcharge, and $2 billion for the estimated cost to taxpayers of the higher costs and unnecessary treatments that are subsidised. So what we have is over $10 billion redirected from the public purse to those people who have private health insurance, who, by and large, are on high incomes—not exclusively, though, but we know that the breakdown of people with private health insurance skews towards people on higher incomes. We have this massive redistribution—$10 billion every year—that could be going into public health care. Yet where is it going? It's going to line the pockets of big insurers who make billions of dollars in profits as a result of these massive subsidies.

Meanwhile, right now in Australia, we have 40 per cent of Australians who earn less than $75,000 a year and can't afford to even go and see a dentist. We have people who don't want to go out at night, who don't want to socialise, because they're ashamed of the way they look, because they can't get access to dental care in this country—they simply can't afford it. Yet here we are, with a multibillion-dollar annual bill, propping up an industry that most consumers actually believe doesn't offer any value to them. We know, from the evidence that we've heard, that they themselves can't say what value the taxpayer is getting for that extraordinary taxpayer subsidy. CHOICE CEO Alan Kirkland said:

It's hard to imagine any other area of public expenditure where you have the same number of Australians contributing from their own pockets, with significant public expenditure and subsidies backing that up, without us having clear data on what we're getting in return.

Australian taxpayers are spending billions of dollars for very little in return. This is money that, if it was invested in the public health system, if it was invested in Medicare-funded dental care, would deliver a huge health dividend for the Australian community.

What this bill does is let insurers offer discounts to young people as a way to get more young people to purchase private health insurance. Why do we want to do that? Why is the government aiming to do that? It is very, very clear. The more young people you have with private health insurance the less likely they are to make claims and the better the value of that product. What we're effectively saying to young people in this country is, 'We want you to take out private health insurance, not because it's of value to you'—in fact, quite the opposite—'but because it will subsidise the health care of those people who are much more likely to use that policy.' Yet again we're encouraging young people to do something against their own interests, indeed, to screw them over, as this government is doing, whether it be on health care, housing, climate change or education, rather than investing in the public health care that we know benefits them and everybody else. That's the big problem we have right now. We've got a government desperate to prop up a system that's failing and trying to recruit customers for whom the product has little or no value. The bill also allows insurers to offer higher maximum excesses in exchange for lower premiums. If you take those two things together, what you've effectively got is a product that's targeted at young people but one that they wouldn't buy at a higher price and that they're less likely to use thanks to the higher excess. It works against their interests. Both policy arms of this bill work against the interests of young people.

We know this will take no pressure off the public hospital system. We know that if that money was reinvested into our public health system, we'd get much better bang for our buck. The evidence on that is absolutely clear. If anything, it weakens our public health system. It undermines it. What it says to people is, 'You need private health insurance because our public system will no longer cater for your needs.' We are running down universal health care in this country to satisfy the interests of big corporate lobby groups who are the mates of the coalition government. What it does is legitimises tax minimisation. We're encouraging people to minimise their tax not to improve their health care but to effectively cross-subsidise a product that Australians don't need. Lower premium products simply require a greater share of the cost of the procedure on admission, so you're faced with a bigger up-front cost. You might have a lower premium, but, when you go to have that surgery done, what you're faced with is a much bigger up-front cost. For a lot of people, that cost will be too great, so they won't have that treatment under the private system; they'll simply choose to have it done publicly—again, another huge waste of resources. This does not take pressure off the public health system. Let me say that again. In the words of Jenny Macklin, the former Labor spokesperson on health, this is 'the greatest failure of public policy', and we would have to agree. This is a huge and monumental diversion of public money towards for-profit companies.

One of the other issues with this legislation is the proposed changes to clinical categories. Again, what we're seeing with private health insurance is fewer and fewer people covered for fewer procedures at higher costs. The cost of premiums is going up. The number of things that are covered is going down. No wonder people are deserting their private health insurance coverage. So this is a desperate attempt to try to get people back into private coverage. It is purely ideological; it has nothing to do with the evidence of effectiveness when it comes to the provision of public health care versus that within the private system.

The proposed changes to those clinical categories in recent weeks would restrict a number of things, including access to chronic pain management. In effect, what you're going to see is over 6.5 million consumers, or almost half the people with private health insurance, losing their existing access to private chronic pain management, with the proposal aimed at removing chronic pain as a minimum component across the product class, which has the potential of restricting access for chronic pain patients. Chronic pain is a shocking condition that many people have to endure. It's the most common reason people seek medical help, and one in five Australians are now living with chronic pain, so these changes have the potential to make a huge impact on the care received by many millions of Australians.

As a result of these changes, it is no wonder that Australians are now voting with their wallets. Sixty per cent of those with health insurance say they don't believe it delivers them value for money. No other industry would be sustainable in the face of such poor customer satisfaction. It can be sustained because we punish people who don't have it. We've taken an ideological position that says, 'You must have it. We'll punish you if you don't,' not because it provides benefit to those individuals, not because it provides benefit to the taxpayer, but because we have a government, captured by corporate interests, that is more interested in serving those interests than it is in serving the Australian community.

In the last financial year, Australians paid $4 billion more in private health insurance premiums than they got back in benefits. The industry made a pretax profit of close to $2 billion. That's $2 billion that could be invested in Medicare-funded dental care. The benefit of universal public health care is that it doesn't need to make a profit. As long as it is working efficiently, every cent paid by the taxpayer goes to providing health care for Australians, not to lining the pockets of big multinational corporations with nearly $2 billion in profits subsidised from the taxes paid by ordinary Australians. The government is pushing people to buy a product that they don't want and that it thinks is not worth having, and it is punishing those who don't have it.

Someone's winning out of this deal, but let me tell you it's not Australians. That's why you see the rapid rise of these junk policies that people will never use and that exist simply so people can try to reduce their tax burden. That's why people take them out. People are taking out junk policies because they know that they're better off if they have a policy they won't use. They'll pay less in tax than they pay in dishing out for that policy. That is a waste. That is inefficiency. It is money that should be invested in public health care that, instead, is going to line the pockets of these corporations.

The number of policies containing exclusions has risen fivefold in the last 10 years. Meanwhile, the share of policies without exclusions has fallen by 20 per cent. We're seeing a product deliver less and less value for Australians. Exclusionary products undermine the principle of community rating. Community rating means that people are treated equally and everybody gets access to the same level of health care. That, of course, is at the centre of the private health insurance model. The principle of community rating is that premiums are not to be determined discriminately as a function of your age, your health or your occupation. It's that everybody contributes to the risk pool and those who need treatment are able to access it when they need it. This policy proposal undermines that principle.

With exclusionary products, you also undermine the principle of community rating by working backwards. If you're young and healthy, you're unlikely to need cardiac surgery and you're unlikely to need a hip replacement. You can opt to avoid a product that offers those things. But if you're older or if you're living with other chronic conditions, you might not have the luxury of that choice. You bear the risk that comes with it, so your premiums are higher. That's not how community rating works. Indeed, it undermines the very model of the way we deliver health care in this country.

People are being coerced into buying a product that's worth less and less with every year that passes. Premiums have risen three times faster than inflation since John Howard introduced the private health insurance subsidy in 1999. We need to ask ourselves why. Australians have already shown that their preference is for universal health care. They like Medicare. They like our public hospitals. They value them, and they want us to invest in them. But the more money we push into the private sector, the more pressure we put on Medicare. That's because every cent that's spent that goes to the profits of private corporations and every cent that goes to the administrative overheads or the advertising budgets of the private health insurance industry is a cent that's not invested in Medicare funded dental care, our hospitals or our general practices. Of course, we know it's not an accident. The chief executive of nib made it clear that this is the goal: to bring us back to the days before Gough Whitlam introduced Medicare. This is a problem if you care about funding a quality system that's fair, that's efficient and that delivers good value for money.

All you need to do is have a look at the health care provided in the US to see where a two-tiered, highly privatised model—where there is one level of health care for people who have private health insurance and another level of health care for those people who use the public system—to see what sort of health care that delivers. They spend nearly double what we spend here in Australia as a proportion of their GDP. We spend roughly 10 per cent. They're spending upwards of 17 per cent of their GDP on health care. They get a worse product. The biggest cause of personal bankruptcy in the United States right now is people not being able to pay their medical bills. That is the model that the Liberal coalition government want to take us towards. It's a privatised, two-tiered model where Medicare is seen as some safety net for people who can't afford it and where we drive people to expensive, inefficient private health insurance that drives up the profits of corporations but doesn't deliver for people when they need it.

Giving any player the market power to restrain costs is dangerous when the market player has a profit motive. That's why it's so important that we have Medicare and our public hospital system and that we have universal health care as the centrepiece of health provision in this country. The motive of introducing Medicare was not to drive a profit for a corporation; it was to provide quality health care for all Australians when they need it, regardless of how young or old they are, regardless of where they live, regardless of whether they're a regional Australian or somebody living in a capital city, regardless of whether they're somebody who comes from overseas or whether they're born in Australia and regardless of whether they're Indigenous or non-Indigenous. Health care in Australia, funded through Medicare, is something that is designed to deliver for everyone.

We're chipping away at it every year, at a huge cost to the budget and at a huge cost to the health care of Australians. We don't have to accept it. If we made a decision right now to invest more in our public health system, what we would find is that every Australian, right now, could afford to go to the dentist just in the same way as they go to the doctor. Medicare funded dental care is something that the Greens want to see introduced into Australia. We could do it by scrapping the unfair, inefficient private health insurance rebate, by redirecting that money into our health system and by making sure that every cent that's invested in health care is invested not to drive a profit for a corporation but, indeed, to provide health care for every single person in this country. That's why the private health insurance rebate needs to be redirected into our public health system.