Josh Frydenberg (Kooyong, Liberal Party) Share this | Hansard source

I rise to speak on the Fairer Private Health Insurance Incentives Bill 2011, Fairer Private Health Insurance Incentives (Medicare Levy Surcharge) Bill 2011 and Fairer Private Health Insurance Incentives (Medicare Levy Surcharge-Fringe Benefits) Bill 2011 before the House. The government's proposed changes, which will means test the private health insurance rebate, is a retrograde step that is vehemently opposed by the coalition. Means testing the rebate will drive up premiums, force millions of Australians to downgrade their private health care with many abandoning it all together and increase the pressure on an already stretched public health system. What is more, it is a fundamental breach of another Labor promise. From Kevin Rudd to Julia Gillard to Labor's last Minister for Health and Ageing, Nicola Roxon, the government repeatedly stated its commitment to maintaining the private health insurance rebate in its current form. In September 2007, Nicola Roxon 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 … The Liberals continue to try to scare people into thinking Labor will take away the rebates. This is absolutely untrue.

Then again in February 2009, Nicola Roxon said:

… the government is firmly committed to retaining the existing private health insurance rebates.

We now know the truth. Whatever modicum of trust was left after Labor's successive backflips on the carbon tax, offshore processing and mandatory precommitment for pokies, it must surely have evaporated after this latest government reversal. How can Labor honestly be trusted on anything? In contrast, the coalition has been consistent in our commitment to not means testing the private health insurance rebate. It goes right to the heart of an individual's freedom to choose and for what many consider to be an act of personal responsibility. We as Liberals want a robust private system in health just as in education, and we want this private system sitting side by side with a viable and effective public system. This was well put by Margaret Thatcher when she, as Prime Minister, said of private health insurance in the United Kingdom:

I, along with something like 5 million other people, insure to enable me to go to hospital on the day I want, at the time I want, and with a doctor I want. For me, that is absolutely vital … Like most people, I pay my dues to the National Health Service; I do not add to the queue, and if I said "Look, because I cannot come when you want me, I must come when I want to" you would accuse me of jumping the queue. I exercise my right as a free citizen to spend my own money in my own way, so that I can go in on the day, at the time, with the doctor I choose and get out fast."

So that was Margaret Thatcher and this thinking could equally apply to the Liberals' approach to private health insurance in this country. There you have it: the doyenne of British conservatism, whose record in limiting the excesses of the state are revered the world over, explaining why she and five million of her fellow Britons had private health insurance. So wouldn't Margaret Thatcher be surprised to learn that we in Australia, where our public system is even more effective than that of the UK or the United States, have around 12 million Australians with private health insurance—a remarkable 52.9 per cent of the population. In an electorate like mine, Kooyong, the number is even higher, with 74½ per cent of its people having private health insurance. This includes nearly 25,000 people who are single. In my electorate of Kooyong this means that more than 100,000 residents are covered by private health insurance. These changes will take money out of the pockets of people in Balwyn, Hawthorn, Kew, Camberwell, Deepdene and Canterbury. It means less money for them to meet the rising costs of living because this money will have to now go, if they choose, into keeping their private health insurance.

Significantly, as my colleague and friend the member for Dickson and shadow minister for health said in a very valuable contribution in this House last week, a remarkable 5.6 million people with private health insurance have an annual household income of less than $50,000 and 3.4 million Australians with private health insurance have an annual household income of less than $35,000. Never let it be said that this is a rebate for the rich. These are aspirational Australians, some of whom do it very tough but take out private health insurance because they have made a considered choice. This is how they want to spend their money. This is the epitome of personal freedom. So too when it comes to the private health insurers in Australia themselves: a number of them are not-for-profit organisations whose bottom line is not to expand their margins but to achieve more affordable health care that delivers a better service for the consumer.

We in this House should also not forget that private hospitals do much of the heavy lifting in our healthcare system. They look after 40 per cent of all patients in Australia. In 2009-10 this equated to 3½ million patients, and for elective surgery the numbers are even higher with nearly two in every three cases taking place in private hospitals. These are remarkable numbers and reflect the fact that the Australian people have been voting with their feet for private health insurance.

Indeed, it was the Howard government's policies which facilitated this very high take-up that we now enjoy. In 1997 John Howard introduced a one per cent Medicare levy surcharge on taxable income, penalising those income earners who did not take up private health insurance; 1999 saw the introduction of the 30 per cent rebate; the year 2000 saw Lifetime Health cover and from 2005 the more elderly people in our community received greater rebates for taking up private health insurance. At every step of this reform process undertaken by the Howard government you could see the take-up rates dramatically improve. For example, in the 12 months after the introduction of the 30 per cent rebate in January 1999, the percentage of Australians with private hospital health cover jumped from 30.6 per cent to 43 per cent and in the years afterwards it jumped to the level we now enjoy at around 52.9 per cent.

What is so concerning to members on this side of the House is the large number of people that will be negatively and directly impacted by this government's legislation. Around 2.4 million people will see immediate rises in their premiums of 14 per cent, 29 per cent or 43 per cent depending on their income levels. According to the Australian Health Insurance Association, over 800,000 more Australians will be admitted to public hospitals. In their analysis, the top-tier consultancy Deloittes has said that 175,000 Australians will withdraw their private health cover in the first year and 583,000 Australians will downgrade their cover. Over a five-year period those numbers will dramatically rise to 1.6 million people who will withdraw their private cover and 4.3 million people who will downgrade their cover. Even the state-owned Medibank Private has come out publicly and stated that 37,000 of its members will remove their private cover and 92½ thousand of their members will downgrade their cover.

I have no doubt that the government's decision to means-test public health insurance will be deeply unpopular with the Australian people. The public understands that this is not about the future costs of the program. The rebate as a proportion of the total healthcare spend, public and private, has stayed constant at 3½ per cent for the last decade. The public understand that this is not about improving the state of our public healthcare system, for they have heard all that before—the hospital fix that Kevin Rudd promised but which never arrived and the superclinics that were promised but never built. But they do know that this government is under enormous budgetary stress as a result of its own fiscal mismanagement.

This is just a mad dash for cash. They need to scramble for a surplus and in doing so will hit Australian families once again. The problem is that in doing so the consequences of these changes will be profound. Healthy and young people will make up thousands of the thousands of people who give up their private cover, reducing the cross-subsidy that is a hallmark of insurance schemes. Premiums will rise, membership will fall and the overall pressure on our public health system will become even more pronounced.

Be under no illusions. This is bad policy from a bad government and it will come at a bad time for Australian families. This legislation before the House to put a means test on private health insurance in this country must be opposed by all clear-thinking members who are interested not just in the good health of our country's balance sheet but also in the physical health and wellbeing of all Australians.

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