Warren Entsch (Leichhardt, Liberal Party) Share this | Hansard source

It is just petty cash. Of course we all remember the school halls fiasco. That is to name just a few of the government's mismanaged projects. If they had been managed appropriately we would not be here today having to deal with government cost-cutting and cost-shifting, which is clearly the intention of this legislation.

The impact of this legislation will not be felt only by those in the higher income brackets, as has been suggested by those on the other side. They are again trying to create a class war. This group will see increases in their premiums of up to 43 per cent, but all Australians with private health insurance will face higher premiums in the future if these changes proceed. Mr Speaker, 2.4 million people will be directly affected by these changes and face immediate increases in premiums of between 14 and 43 per cent in the respective income tiers. A 2012 Ipsos survey found that 64 per cent of the population believe that the $4.5 billion a year that the government spend on the rebate is good use of taxpayers' money.

The changes are certainly going to impose an enormous compliance burden on the industry and on individuals completing their tax returns. Private health insurers will have to make significant changes to their systems to adjust premiums according to incomes. It is not clear how the rebate will be administered under these arrangements, especially where a person is not able to accurately predict their income for the current financial year. Under the current economic climate and under current government policies that is a serious consideration. There is a lot of uncertainty in the workplace and you only have to look at the thousands of jobs that are currently being shed by banks and by industry—the aluminium industry in particular and the car industry et cetera. But those opposite say that this is a necessary adjustment. These people are also going to have to factor in those changes when calculating whether they have an entitlement in relation to this Medicare rebate.

The government's own insurer, Medibank Private, has predicted that 37,000 of their members alone will drop their cover and 92,500 will downgrade. This is considerably more than the 27,000 that the Minister for Health has claimed will drop their cover throughout the entire sector. The Deloitte analysis of the changes indicates that in the first year 175,000 people will be expected to withdraw from private hospital cover and a further 583,000 will downgrade. Over five years, it is expected that 1.6 million will drop off and 4.3 million will downgrade. The government certainly have not disclosed the number of people expected to downgrade, but as premiums increase significantly for those in the income tiers it is reasonable to expect that they will seek cheaper products, which will have a second-round effect for our public hospitals.

Deloitte also predict that private health insurance premiums will rise by 10 per cent above what they otherwise would. Of course, that is going to affect every single individual with private health insurance irrespective of their income stream. The changes will also have an impact across the allied health services, with 2.8 million people with general treatment cover expected to withdraw and 5.7 million people expected to downgrade over the next five years.

The government certainly assume that middle-income earners can afford a rise in private health insurance cover. People in this bracket will be affected as much by the changes as anyone. They certainly do not receive the concessions that low-income earners receive such as subsidised housing. They do not get any concessions in relation to their rates. They do not get any concessions in relation to their power or their transport costs, or their medical or anything else. They do not get any concessions, in many cases, in relation to the costs of their children attending school. All of these are additional cost burdens that these families will have to bear. Add that of course to the very significant increases that we have seen over the last couple of years in the general cost of living.

People who are seen by the other side as being comfortable middle-class income earners are really doing it tough. Imposing this additional cost is going to have a profound impact. This additional cost will certainly hurt them and it will certainly force them to choose between maintaining full private health insurance or taking the risk and going without, putting more pressure on our public system. These changes will undoubtedly force people to drop out of private health insurance cover or choose cheaper cover with more procedures excluded. It will certainly cause upward pressure on insurance premiums. We have seen that already. We already have an inquiry in relation to insurance premiums in my area where premiums have already increased by up to 1,000 per cent and, in doing so, are starting to force people out of their homes. This type of impact is only going to accelerate that scenario.

This will have a devastating impact, particularly on the Cairns Base Hospital, which is already classified as a facility at absolute breaking point by the Australian Medical Association. It has resulted from extremely bad planning by the existing state Labor government, from a lack of support and from a lack of focus on this area. It has also suffered immensely from a lack of support from this federal government.

Cairns Base Hospital is already under immense strain. It can barely cope with the workload it faces currently. The hospital is the referral health centre for the entire electorate of Leichhardt, which has more than 61,000 people at present who have private health cover. There is no secret that the Cairns Base Hospital is struggling financially. Last month the Cairns Physicians Group, a lobby group comprised of public doctors, revealed that the hospital was trying to save $11 million by freezing positions, by not renewing temporary contracts and by finding jobs to make redundant. The Physicians Group and unions say the hospital is lacking either staff or resources in at least 16 departments ranging from vital specialties such as dialysis, neurology and respiratory medicine to allied health services such as speech therapy, occupational health, physiotherapy and rehabilitation. There was even a protest recently because the hospital could not afford to buy pyjamas for patients.

The Far North Queensland health system relies very heavily on patients having private health insurance cover, taking a hell of a lot of pressure off the public hospital as it is able to divert patients to the one private hospital in Cairns. It is certainly not equipped with the resources, the staff or the beds to cope with the current population of public patients, let alone tens of thousands more.

Another challenge at the Cairns Base Hospital is that many of the patients who depend totally on the hospital come from remote communities throughout Cape York and the Torres Strait, a population with very high health needs. To take away the opportunity to provide for those needs by having such a significant additional call on the services of Cairns Base Hospital quite frankly is totally irresponsible and shows that the government have no understanding at all of what they will create by pushing this legislation through.

The coalition believes that all Australians should have access to affordable health care and real choice in managing their health needs. The coalition strongly supports providing all Australians with a choice of taking out affordable private health insurance. Through the rebate we have not picked or chosen people who are prepared to do that. We do not see that middle-income earners are somehow or other deemed to be the wealthy elite, as the Labor Party claim. We also recognise that even middle-income families, given the demands on their income, are entitled to that level of support. We are certainly happy to do that. This is certainly in contrast to the government's apparent mission to force more patients into the public health system, which will only reduce the choice for Australians and add a very significant strain to public hospitals already crippled by an overload of patients and underfunding by this government.

I also very strongly support the amendment that was put up by the Leader of the Opposition earlier. I think that something of this significance needs to be deferred. The amendment put up was that this bill and its related bills not proceed until after the 44th Parliament meets. That is a practical way of dealing with this. The government have made a hell of a lot of mistakes which have cost the Australian taxpayer an absolute fortune. They would be better off focusing on dealing with a lot of those areas and on better policy rather than trying to rip the guts out of something that has been incredibly successful. Unfortunately, they seem to be doing it by conning those on the crossbench who are totally reliant on the government for their political survival. I would certainly urge members on the crossbench to think more about the best interests of the community than their own political survival. (Time expired)

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