House debates

Tuesday, 2 June 2009

Fairer Private Health Insurance Incentives Bill 2009; Fairer Private Health Insurance Incentives (Medicare Levy Surcharge) Bill 2009; Fairer Private Health Insurance Incentives (Medicare Levy Surcharge — Fringe Benefits) Bill 2009

Second Reading

7:16 pm

Photo of Andrew SouthcottAndrew Southcott (Boothby, Liberal Party, Shadow Minister for Employment Participation, Training and Sport) Share this | Hansard source

I would like to start speaking on the Fairer Private Health Insurance Incentives Bill 2009 and related bills by reflecting on the landscape of the Australian health system. There are a number of established parts of the landscape: Medicare, bulk-billing and community rating for private health insurance. We on this side of the House—the Liberal and National parties—accept, recognise and will go into fight for the role of private health insurance in our health system. We believe that private health insurance plays a very important role in taking pressure off the public hospitals. Australia’s health system is not like the one in the United Kingdom, with the majority of health being delivered through the National Health Service, and it is not like the fragmented health system of the United States, which is expensive and has much poorer health outcomes. Our health system has delivered one of the healthiest populations around the world. Australia has one of the longest life expectancies of any developed country, of any country. Private health insurance plays a very important role in taking pressure off the public hospital system.

Many of us who have watched the Labor Party, who have watched parliament and who have private health insurance in our heart of hearts always knew that this day would come. There was a reason why Labor were continually peppered with questions about what they would do with the private health insurance rebate. The only surprise here is that it took them 18 months to break that promise. The promise was explicitly given and brazenly broken. The Prime Minister, in an interview with Leon Byner in August 2007, was asked if he was:

… going to take off the rebate for private health funds … that’s the 30 per cent we’re talking about?

The Prime Minister responded:

Absolutely not.

In a letter to the Australian Health Insurance Association only four days before the election the Prime Minister again said:

Both my Shadow Minister for Health, Nicola Roxon, and I have made clear on many occasions this year that Federal Labor is committed to retaining the existing private health insurance rebates, including the 30 per cent general rebate and the 35 and 40 per cent rebates for older Australians.

Again, the then shadow minister for health, the member for Gellibrand, in September 2007, in a media release said:

On many occasions for many months, Federal Labor has made it crystal clear that we are committed to retaining all of the existing Private Health Insurance rebates, including the 30 per cent general rebate and the 35 and 40 per cent rebates for older Australians.

           …         …         …

The Liberals continue to try to scare people into thinking Labor will take away the rebates.

This is absolutely untrue.

It is with regret that we have been proven right on this. You have to look at the previous Labor government. It took a number of decisions between 1984 and 1986 which in toto increased the cost of premiums by something like 40 per cent. That began the downward slide of the level of private health insurance cover. It was the 30 per cent rebate and Lifetime Health Cover that got private health insurance back to a sustainable position. One problem with this measure is this. Winding back the support for private health insurance has a direct impact on 1.7 million Australians. To the extent to which young, fit and healthy people drop out of private health insurance, we will see a premium rise for the 11.1 million Australians who hold private health insurance.

In my own electorate of Boothby, private health insurance is incredibly important. There are 68,587 adults who hold private health insurance—that is, 71 per cent of the adult population hold private health insurance. Sixty-three per cent of adults hold hospital insurance and 69 per cent of adults hold general treatment insurance. In the electorate of Boothby, there are many excellent private hospitals: Flinders Private Hospital, Blackwood and District Community Hospital and Griffith private hospital. Not in my electorate but in the electorate of the member for Adelaide is Ashford Hospital, which started life as a community hospital established by the cities of Mitcham, Marion, Unley and West Torrens—that is, it was established by councils in the southern and western suburbs of Adelaide. Also, people use their private health insurance for visits to specialists and for inpatient visits to public hospitals, to either Flinders Medical Centre or Royal Adelaide Hospital. So it does pay a very important role in our public system.

The argument that has been put up by the government is that this is a savings measure. It is cited not only as a savings measure but also as a growth savings measure. That means that over time more and more people will be paying much higher premiums and will be chucked off the level of rebates that they currently have. Their big killer point against our very responsible alternative of increasing tobacco excise by one-eighth or 12 ½ per cent—the equivalent of 3c per cigarette—is to say, ‘Over 10 years our winding back of the private health rebates will save a lot more.’ That is code for more and more people getting a reduced private health insurance rebate as time goes on.

In conclusion, this should come as no surprise to people who have followed the Labor Party and its positions on private health insurance. The surprise really is that it happened so quickly. We are 18 months from the last election. The previous Labor government waited until its second term to break a lot of its promises and really wind back the support for private health insurance. The question now is: why would you believe anything that the Labor Party says on the issue of private health insurance? On the subject of private health insurance, the Prime Minister and the Minister for Health and Ageing simply cannot be believed. They cannot be believed because they gave explicit promises before the election and they broke those promises after the election.

Voters in my electorate of Boothby, where this will affect 71 per cent of adults, would take a very dim view of the Labor Party’s actions here. Something like one million Australians, many of them elderly, on incomes below $26,000 hold private health insurance. While they will not have their rebates pulled back by this measure, they will be hit by any premium rises as a secondary consequence of people who may drop out as private health insurance premiums increase. This is a very bad measure for my electorate of Boothby. I have no choice, and the opposition has no choice, but to oppose this measure, as has been indicated by the Leader of the Opposition and the shadow minister for health.


No comments