House debates

Monday, 27 May 2013


Private Health Insurance Amendment (Lifetime Health Cover Loading and Other Measures) Bill 2012, Private Health Insurance Legislation Amendment (Base Premium) Bill 2013; Second Reading

7:39 pm

Photo of Wyatt RoyWyatt Roy (Longman, Liberal Party) Share this | Hansard source

I rise tonight to speak to the Private Health Insurance Amendment (Lifetime Health Cover Loading and Other Measures) Bill. Can I begin by saying what a privilege it is to follow the member for Hasluck, a member of this House who has a great depth of knowledge in this particularly important area of public policy.

This bill is twofold: it seeks to restrict the private health insurance rebate from being payable on the component of private health insurance premiums with a Lifetime Health Cover loading; and it stops direct claiming of the private health insurance rebate through the Department of Human Services, known as the incentive payments scheme, and makes minor amendments to the Income Tax Assessment Act and the Taxation Administration Act to reflect this change.

The government says most people claim rebates through tax offsets and eliminating the incentive payments scheme would reduce the administrative burden on insurers, the Department of Human Services and the tax office. This Labor government had repeatedly promised that there would be no change to the private health insurance rebate. It maintained this charade right up until the 2009 budget, when it announced that means-testing would be retrofitted to the rebate. The change to means-testing, effective from 1 July last year, was a means in itself to prop up the government's sagging bottom line. The move has resulted in savings of $2.8 billion. Likewise, these new changes are nothing but a cash grab aimed at clawing back more than $380 million over four years to help fill the unfillable—a black hole of government debt, which has now eclipsed $250 billion.

Lifetime Health Cover was introduced by the Howard government on 1 July 2000 as part of reforms that significantly increased private health insurance coverage. It is a loading on private health insurance premiums calculated at a rate of two per cent for every year that a person is over the age of 30 when they take out health cover. The cap is 70 per cent. It was devised to encourage people to take out private health insurance sooner rather than later and to maintain their coverage. Currently, the private health insurance rebate is paid on the value of the policyholder's total premium—including the Lifetime Health Cover loading. If this bill were to be legislated without amendment, 1.1 million Australians would face an immediate hike in private health insurance premiums. And because means-testing has already reduced, and in many cases removed, the rebate for higher income earners, it is lower income earners who will disproportionately bear the weight of the increase.

Half of the 11 million Australians with private health insurance have incomes less than $50,000; three million of them have annual household incomes under $35,000. So the circle is complete. This Labor government, after launching attack after attack on private health insurance, has now taken the war to the people who arguably have most to lose. They are the more modest income earners to whom Labor has traditionally spruiked its working-class narrative. Labor cannot count on these Aussie battlers anymore. That is because the Aussie battlers cannot count on Labor.

As coalition members, we strive to help everyone to help themselves. We call it a hand up, not a handout. The private health insurance rebate is such an incentive. In the community I represent there are a lot of vulnerable people—not particularly well-off—who rely on insuring privately for their health, wellbeing and peace of mind. They include the chronically ill and families who have children with a disability. But private health insurance not only assures them of the best possible healthcare; it acts as a circuit-breaker for the heavily strained public health system. Reducing public hospital pressure is vital if we are truly in the business of delivering optimum care.

Last year, a leading doctor from my region hit the headlines for all the wrong reasons. He warned locals that ballooning waiting times at Caboolture Hospital had become critical. More than half of all Caboolture emergency department patients were waiting 52 minutes or more just to be seen. This followed a 2010 AMA report that revealed the hospital was running, on average, at more than 100 per cent occupancy. Eighty-five per cent is considered a safe occupancy rate.

According to the Department of Health and Ageing, 600 beds and 52 emergency bays will be required to service the rapidly-expanding community by 2026. That is basically a tripling of current resources. In this context, Labor's axe-wielding on affordable private health insurance is not only reckless but also dangerous. It is tragically probable that the outcome of policies which force people to drop out of private health care and push them up against the doors of overflowing public hospitals will end in needless loss of life.

But this Labor government's plundering of health support in our community does not stop there. In last year's Mid-Year Economic and Fiscal Outlook, the federal Treasurer, Wayne Swan, stripped $342 million from health funding to Queensland—his home state. When this onslaught began, with the then Rudd government's means-testing decision, a staggering 1.7 million Australians, by Labor's own admission, faced reduced private health insurance rebates and therefore higher net premiums. That is around 10 per cent of the adult population. With the means tests becoming effective last July, the true picture is worse. About 2.4 million people are directly hit. They must absorb immediate increases in their premiums of up to 14 per cent, 29 per cent, or 43 per cent depending on their income. In the electorate of Longman, almost 50,000 residents covered by private health insurance have been impacted directly. That is more than 40 per cent of the community.

With no let-up in Labor's demolition of private health insurance, the pain will only mount for those who maintain the ability or strength to find the money for their premiums. It is estimated that the loss of younger health insurance members due to prohibitive costs will increase all premiums by 10 per cent. Surely it is a fundamental right of all Australians to expect that they will receive first-class health care. The coalition believes this is best achieved by providing choice, with affordable access to quality providers. Health is not an ideological playground nor should it be a forum for social engineering, but that is exactly what we have seen from this approach from Labor. Labor is philosophically opposed to the notion of choice and, further, is fiscally hamstrung by the reality of budget deficit after deficit and its failure to deliver a much-mooted surplus—of course, another torn-up contract with the Australian people.

Labor's dismantling of private health insurance will add even more cost-of-living pressures to families and shift a more onerous burden to public hospitals as people downgrade their cover. This federal Labor government has proved to be an abject failure in delivering on health. It has added layers of bureaucracy which have resulted in a detachment from patient care. Labor's administration has been underscored by broken promises on the private health insurance rebate, hospital funding and extending the Medicare safety net. And the tentacles of this deception reach back a very long way.

On 23 September 2004, the Prime Minister, when then the shadow minister for health, wrote in a letter to the editor of TheCourier-Mail that there should be no concern that Labor would—and I quote—'erode or abolish the 30 per cent government rebate for private health insurance.' They were the Prime Minister's words. The Prime Minister, then the shadow minister, went on to say:

Labor is committed to the maintenance of this rebate and I have given an iron-clad guarantee of that on a number of occasions.

On 25 February 2008, former Labor Prime Minister Rudd stated at a press conference:

The Private Health Insurance Rebate policy remains unchanged and will remain unchanged.

And on 24 February 2009 it was reported in TheAge that the member for Gellibrand and then Minister for Health, Nicola Roxon, said:

The Government is firmly committed to retaining the existing private health insurance rebates.

Another broken promise.

For the coalition, the private health insurance rebate is an article of absolute faith. In government, we will restore it as soon as budgetary circumstances allow. By repealing the carbon tax and reinstating health insurance rebates the coalition can, and will, alleviate cost-of-living pressures and help return family budgets to good health. After all, the previous coalition government created the private health insurance incentives that were snapped up by Australians. The introduction of rebates, the Medicare levy surcharge and Lifetime Health Cover saw the number of people with private health insurance leap 75 per cent—from 6.1 million to more than 10.7 million—and, for everyone else, access to the public system was obviously enhanced.

The coalition will restore stability and confidence in vital programs such as the Pharmaceutical Benefits Scheme, which has been afflicted by chaotic policy changes under Labor. We will regenerate general practice. A coalition government will reprioritise funding from bureaucracies to ensure that clinicians, local boards and, above all, patient care are at the core of our health system.

Households are now paying too heavy a price for Labor's waste, incompetence and failure to control the budget. When you have got major issues of ramping at public hospitals, bed block and ambulance bypass you have got to make sure that you are doing everything in your power to reduce the pressure. There are a lot of people living on the margins—people who the Labor Party say are well-off. These are by no means wealthy individuals. They rely on private health insurance for reasons of preference, security and responsibility. Instead of attacking those who look after themselves, we should be championing them.


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