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
We all use the health system the most in our lifetime in the last two years of our life. I have never been one who is prepared to say which are the last two years of anybody’s life. About one-half of the cohort of people who are born in a particular year will meet the life expectancy figures, which if I remember correctly are about 83 years for women and about 79 reaching 80 for men. But there are a lot of other people who will pass away in that period—nearly half of them from the cohort.
Private health insurance has always played a very particular and important role in giving adequate health cover to people who want to live a quality life throughout their life. That entails the ability to have choice of doctor and to have ready access to hospitals when they feel the need and when they believe they require that health service. There used to be a long debate about Medicare and whether or not, from our side of the political spectrum, Medicare was the way to go. When I was shadow minister for health prior to the 1996 election I made a very firm commitment on behalf of the opposition, which has remained since then, that we would always support the Medicare system. But we also fiercely said that there was a need for private health insurance and we very fiercely said that the right of people to take out that insurance and to have doctor of choice, and choice of time when they need elective surgery, was a fundamental right of the Australian people. We do not want the United Kingdom system of rationing and dictatorial government saying when you may or may not have medical treatment. We do not want the American system, where the HMOs say when and what sort of care you may have. Here in Australia we have developed something unique.
I also said at the time I was shadow minister for health that it was imperative that we had either a tax deduction or a rebate in place to encourage people with regard to their private health insurance. And it is fair, because everybody pays the Medicare levy—or rather, those over a certain taxable income. But the vast majority of people who pay for their private health insurance also pay a Medicare levy. So they do have right of access to the universal system, but they pay extra because they want that bit more. And that benefits the system as a whole. It relieves the pressure on public hospitals, it makes the private hospital sector viable, and it means that we can have such arrangements as we do for veterans, where veterans are entitled to use the private hospital system, which gives them that special benefit which they deserve.
It also means that doctors are not employees of the state. It means they retain their independent status. That is where we get into trouble with Labor Party governments. Socialism in the area of medicine and many other areas is alive and well in the Labor Party. The Labor Party wants doctors to be subjugated by the state. They want them to be employees of the state, so they can tell them how and where and in which way they will treat patients. But we still have a fiercely independent medical profession, and long may that endure.
In the system that we introduced—which, like Medicare, was universal; it was available to everybody—a flat 30 per cent rebate was chosen, and for a very sensible reason. When we were in government we always strove to see that 80 per cent of taxpayers paid no more than 30c in the dollar top marginal rate. And therefore it was felt that it was fair that 30c in the dollar was a reasonable rebate to be struck. It did not advantage those who were above that 80 per cent of the population, but it was a fair and reasonable figure.
The Labor Party, before they won office, were at great pains to say that they were fiscal conservatives. We have seen that that is not true. But they also said again and again that they would in no way tamper with the rebate, because the rebate matters to people. For instance, in the lead-up to the election on 26 September 2007 Nicola Roxon, the then shadow minister for health, put out a media release:
The Liberals continue to try to scare people into thinking Labor will take away the rebate. This is absolutely untrue.
Really? It was perfectly true. On 20 November 2007, just prior to the election on 24 November, Kevin Rudd, federal Labor leader and member for Griffith wrote to the chief executive of the Australian Health Insurance Association in the following terms:
Thank you for your letter of 29 October 2007 seeking clarification on Federal Labor’s policy regarding private health insurance.
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 35 and 40 per cent rebates for older Australians.
Federal Labor will also maintain lifetime health cover and the Medicare Levy Surcharge. Labor will maintain the existing framework for regulating private health insurance, including the process for approval of premium increases. Zero per cent premium adjustment is not Labor policy.
I understand Nicola Roxon’s office has also confirmed with you that Federal Labor has no plans to require private health insurance funds to make equivalent payments to public hospitals for patients who elect to be treated as private patients.
I trust this allays your concerns. Federal Labor values its relationship with the private health insurance sector and we look forward to this continuing regardless of the election outcome on November 24.
What is that piece of paper worth? That—rip—absolutely nothing, because it is full of falsities and falsehoods. They went on to continue the falsities. On 25 February 2008, Mr Rudd said:
The private health insurance rebate remains unchanged and will remain unchanged …
On 18 May 2008 Nicola Roxon said:
… we continue to support the 30 per cent, 35 per cent and 40 per cent rebate for those Australians who choose to take out private health insurance.
Nicola Roxon, in a speech to the Australian Health Insurance Association on 8 October 2008, said:
Private health insurance consumers will be able to claim the 30 to 40 per cent rebate and lifetime health cover initiatives will remain in place.
And on 24 February 2009 Ms Roxon said:
The Government is firmly committed to retaining the existing private health insurance rebates.
What is that worth? Ditto—rip—worthless words. Promises broken again and again. What is the point of hearing any utterances from this Labor government as to what they will do once they get into power? Their ideology tells you that they are opposed to private health insurance. Under the previous Labor government, they sent it soaring—it went to coverage of only 20 per cent. In my electorate 74 per cent of voters have private health insurance. Nationally 44 per cent of the population is covered by private health insurance. We built it because we had a series of policies that said we value the contribution of private health insurance, which means we value the contribution to our health system of private hospitals and of doctors who are practising privately, not as government employees. This is what offends Labor.
The bottom line is that this is the thin edge of the wedge. We introduced, through the new tax system, a test that was to be applied for people who were on high incomes and would have to pay a surcharge if they did not take out private health insurance. That was what we called the stick; the carrot was the 30 per cent rebate. That test said that the income used to determine a person’s liability for the surcharge would include taxable income, reportable fringe benefits, reportable superannuation contributions and total net investment losses. But this government has distorted that provision and now extends it to all people who are claiming the private health insurance rebate. Once they have taken out eligible private health insurance they are subject to this test, not because they want to opt out but because we want a punitive test to try and force people who are presently enjoying the 30 per cent rebate into a lesser category of rebate or, alternatively, squeeze them out of the rebate.
In the explanatory memorandum to the Fairer Private Health Insurance Incentives Bill 2009 where it says ‘Singles earning between $75,001 and $90,000 and couples/families earning between $150,001 and $180,000 will receive a 20 per cent private health insurance rebate,’ it should really read, ‘Add back to your taxable income any reportable fringe benefits, whether it is your car or your computer, or if you are a federal government employee your child-care expenses, or if you are an employee of a hospital or a charity the fringe benefits tax component of your salary, and add to that reportable superannuation contributions and total net investment losses,’ which is the first attack we have seen for a long time on negative gearing. When the explanatory memorandum talks about a single person on an income between $75,000 and $90,000, it does not mean taxable income; it really means gross income, with a few exceptions. It is a deceptive way of introducing a new and punitive way of moving people off private health insurance.
We will see more stories coming out of what happens to people in the public sector, which is so run down by state governments. The federal government has said, ‘If the state governments don’t reach a reasonable level, we’ll step in.’ They have stepped in all right. They are claiming savings to their federal budget by transferring costs on to state budgets for which they do not have to take responsibility. So the savings that they claim in the federal budget can become a cost on a state government budget, yet they try to say they will not intervene, for the simple reason that they think they are making progress. Progress? Have you read about the state of hospitals in New South Wales, where the problem of mothers giving birth to babies in toilets is not a singular occurrence but one we see repeated many times? And have you read stories of hospitals that are so understaffed and so lacking in resources, yet there is no intervention by the federal government, who attack the private sector and private health insurance? This is simply a case of a broken promise and it should be trumpeted in the headlines, and yet the funny thing is that it does not seem to happen. There is a fundamental broken promise with regard to improving health care generally and a fundamental broken promise in any word from either the Prime Minister or the health minister.
This is a sorry day indeed. But I was very proud to see that in his reply to the budget the Leader of the Opposition firmly stated that the opposition will be voting against this measure in the Senate. We will be voting against it here in this House, where the government has the numbers so it will no doubt pass. But we will be voting against it firmly and resolutely. And when it goes to the Senate we will be voting similarly. We will not be resiling from that position. This is a core issue for Australia and for people who believe in equity and fairness and choice—in choice of doctor and choice of method of health care. I proudly say I will be one of those voting against this legislation.