Bernie Ripoll (Oxley, Australian Labor Party) Share this | Hansard source

as a key plank of a commitment that the then Labor government made. It is an example of one of those great legacy policies that have held us in great stead, just as we did with infrastructure and other things that freed up the economy under the Hawke and Keating years, improved productivity and competition and set the scene and the framework for the delivery of uninterrupted growth in this country for nearly 20 years. Those policies provided people with a level of prosperity that they have enjoyed for many, many years. I am always proud to recount those great events. In passing, I note that a number of opposition members have actually accredited that growth to those governments and the policies of the Hawke and Keating years.

When Medicare was first introduced in 1984 the levy was set at just one per cent of taxable income and there was a low-income threshold amount below which no levy was payable at all. In 1995 the Medicare levy was increased to its current level of 1.5 per cent of taxable income. That was to reflect a proper growth mechanism and a proper income stream to ensure that the government could afford to continue this very important scheme.

The Medicare levy surcharge is an additional one per cent surcharge on taxable income imposed on higher income earners who do not have private patient hospital insurance. Again, this is a fair measure both for high-income earners and for those who choose, for whatever reason, not to take out private cover. It is part of a suite of assurances to make certain that the Australian government can provide a long-term sustainable scheme for all Australians. The current taxable income thresholds above which the Medicare levy surcharge is payable are $70,000 for single income earners and $140,000 for couples and families. Again, this is a fair measure, and particularly so in the case of families where one income earner may be earning a substantial amount of income and the second partner may be earning just a very small amount of income. Contained within our scheme is an ability to ensure that only the high-income earner of that family, not the low-income partner in that relationship, actually pays the surcharge.

The Medicare levy and the Medicare levy surcharge only contribute to part of the total cost of Medicare. I am not sure it is always comprehended by everyone in the community or even in this place that it does not cover the costs of providing for the health care of Australians. In 2007-08, Medicare levy revenue was around $8 billion while the cost of Medicare itself for the same period was around $18.9 billion, which, as you can see, means there is a substantial shortfall of over $10 billion. So it is necessary that the government take all measures to ensure the sustainability of this essential scheme. It is essential that the government provides that the scheme can be maintained into the future for all Australians. I think that is something that everyone in this place does support and should support. We will certainly use every avenue and every policy measure open to us to meet our commitments in these areas.

Low-income earners are exempted from paying the Medicare levy and the Medicare levy surcharge. As I have already mentioned, phase-in limits apply equally to both low-income individuals and families. The taxable income levels below which no Medicare levy is payable at all are specified in the act of 1986. These levels are regularly adjusted via legislation in line with movements in the consumer price index—hence the bill we have before us today—and they apply across the board to everybody regardless of their circumstance, be they individuals, couples, families or pensioners above or below the age pension age.

The Medicare Levy Act 1986 also provides for a phasing in or shading out range, wherein the Medicare levy applies but at a reduced rate. This is to reflect a proper mechanism in order to ensure that there is not a drop-off which cuts in and out as an off-the-table type measure. For individuals with taxable incomes above the low-income threshold but below what is known as the phase-in limit, the Medicare levy is payable at a rate of 10 per cent of the amount over the low-income threshold. This is a good measure and a sensible measure to provide some equity for people who always sit just on that threshold level and are penalised more greatly by just tripping over the line and having a net deficit through having that applied to them.

We have done a number of things since coming to government to ensure the sustainability of the Medicare system and the healthcare system in this country. Those areas range far too widely for me to cover exhaustively in the short time I have available, but I will touch on a few. Firstly, regarding preventative health care, there is an organisation in my electorate called Inala Primary Care. I declare some interest in that I am a board member of the organisation. I have spoken about them in the past, but I want to again put on the record the good work that they are doing. It is very important to note that a key area of long-term health is preventative health care. The more that the government invests in organisations, facilities and personnel that provide preventative health care the better off our health system and the health of all Australian citizens will be.

We live in an era when chronic or morbid obesity, cardiovascular diseases, diabetes and a range of other diseases afflict so many in the community that merely treating the symptoms and the final outcomes is just not good enough. It is a huge impost on our health system and the government needs to take a broader role in dealing with these issues. One of the best ways to do that is to invest in preventative health care. That is exactly what Inala Primary Care does in my electorate, and I commend the good work being done there.

As part of a broader suite of measures to modernise the Medicare Benefits Schedule, we need to recognise that there are advances in techniques and technology. That has enabled a number of medical procedures to be performed much more safely, quickly and efficiently today. This is something we should all applaud. It also means that they can be done at a lower cost, which does present some controversy regarding rebates, the Medicare Benefits Schedule and a range of other areas. However, this has not yet been reflected in how Medicare pays for these services. If we are to be realistic about the long-term sustainability of our Medicare system, then we need to apply the proper principles to those rebates and schemes, reflecting modern technology and better practices, experience, safety and efficiencies. I will not go into all of the details around that, but it does involve a reduction in certain rebates for certain procedures. Modernising a system is always difficult. People become comfortable with or reliant on existing systems and procedures, but we all need to change to embrace what in the end will be cost savings to the government. These savings can be reinvested in communities, preventative health care and a range of other areas that currently may not be on the schedules.

On the subject of the schedules of rebates, it is not as if the government does not take this very seriously or give it far-ranging application. There are some 5,800 procedures covered by Medicare, which reflects the complexity of health issues in the community. But we do not need any government to just sit on those and not review them or otherwise encourage change. That is exactly what the government has done. We have taken on a review of medical services listed on the Medicare Benefits Schedule and we have undertaken to evaluate the services under a number of criteria which include scientific evidence, clinical and pricing appropriateness and the extent to which technological advances have delivered efficiencies. That review process will commence on 1 January 2010.

New services are expected to be reviewed three years after being listed. That is a key issue. There are new services continually being added to the list, creating a great service to the community but also a bigger burden to the costs of the Medicare system itself. The evaluation framework will be based on research, data analysis and consultation with stakeholders, and the savings that will be generated will help to address the increasing cost of the Medicare system itself. I do understand there is some criticism from the medical profession and lobby groups, such as the AMA, but we have made sure that they are involved in the process. We have made sure that they are a part of the process itself. To help manage these concerns, we will be inviting them and other consumer organisations to get involved in the design and the implementation of the new evaluation framework. This will be an important part of what Medicare and the rebate system on a number of procedures will actually look like in the future.

The background to this is quite simple. When you have 5,800 medical services currently listed on the MBS at a cost to taxpayers of over $13 billion per annum, you need to look at systems that will provide better efficiency and provide bang for the dollar for people seeking medical help. The average annual growth for the system is five per cent nominally per year. Currently, only one per cent of listed MBS items have been formally assessed for efficiency and cost effectiveness, which is obviously not good enough, and that needs to be addressed as well.

In conclusion, a lot has changed since the introduction of Medicare in 1984, but a lot has changed for the better. There have been some very positive improvements in people’s general health across the community, but we face many more challenges in the future. This bill delivers on ensuring that we do the simple things right, but it is part of a broader suite of bills, philosophies and changes that this government will bring to the parliament to ensure we have a sustainable Medicare system in the future.

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