David Coleman (Banks, Liberal Party) Share this | Hansard source

I am pleased to continue my remarks on this important piece of legislation and this important area of public policy. What I want to do in my remarks today is to bust a few myths in relation to health policy and talk about the important changes encompassed in the Private Health Insurance Amendment Bill. I will also talk about the financial situation that the government confronts, not only in health policy but in policy more generally because of the extreme waste of the previous government. Broadly, the government inherited, a fiscal mess—high levels of debt growing very rapidly. It is incumbent upon the government to address that debt and deficit situation, which we are doing, in a sensible and purposeful fashion right across the board in government spending. Indeed, we are returning the budget to near balance within four years and, importantly, investing in areas that require public investment, such as health, in a substantial way. So we want to get the budget back on track, back to a near surplus situation, while at the same time investing in health and other areas.

Let us go to some of the numbers to demonstrate the gravity of the fiscal situation we confront. When Labor came into office there was $50 billion in the bank, no debt at all and no interest payments—because you do not pay interest when you do not have any debt. Over the six sorry years of Labor administration we saw a consistent overspend—deficits of $27 billion, $55 billion, $48 billion, $43 billion and $19 billion, culminating in $50 billion in 2013-14, based on the previous budget. They are very consistent high levels of debt. We will recall that one of the excuses given for this financial mismanagement was that revenue had collapsed—there was this thing called the GFC, which of course was a very convenient excuse for the previous government. It was pretty much trotted out in virtually all situations but it was certainly trotted out as a reason why running these huge deficits on a continuing basis was unavoidable.

The problem with that excuse is that government revenue under Labor actually rose very strongly. In 2008-09, the first full year of the previous government, government receipts were $289 billion; in 2013-14, the last year they were in government, they were $361 billion; and in FY13 they were $348 billion. So over that six-year period government revenue rose by 25 per cent and in fact averaged an increase of 4.5 per cent every year—the compound annual growth rate, as it is called. So government revenue did not go down at all, with the exception of 2009-10 where it did pause momentarily; it went up very substantially. It went up in 2010-11 by six per cent, in 2011-12 by 10 per cent and in 2012-13 by another six per cent. These were very substantial increases.

So there really is no excuse for not being able to make the expenditure match the revenue, but that is of course what happened. As a consequence we have a very big debt that we must address. This government, therefore, has to take a different approach. We cannot sleepwalk into the future, pretend everything is okay and go on running up deficits of tens of billions of dollars every year. We will not do that. So what we have laid out in a methodical and detailed fashion is a plan that gets the budget back on track. The plan means that by 2017-18 there will be a deficit of just $3 billion, so next to nothing in the context of a $460 billion organisation. We have done that by making sensible changes to government expenditure right across the board. Obviously there have been changes in areas such as foreign aid, where we have quarantined some of the larger increases that were planned.

Obviously the principal focus of the discussion today is health. As I said, the government has provided for a situation which gets the budget back under control and gets it back broadly to a surplus while at the same time the government has provided for significant increased investment in health. It is absolutely not the case that government expenditure in health is declining; in fact, it is increasing quite substantially. So the health budget was $64 billion in 2013-14 and will go up to $79 billion in 2017-18. That works out to be an average increase in health expenditure over the next four years of about five per cent. That is a very important point. Health investment is not going down; it is going up and going up at a very solid rate.

There are a number of different areas in which the government invests in health care but the three biggest are Medicare and dental services—they are sometimes treated separately but for the purposes of this it is probably easier to treat them together—assistance to the states for hospitals and the PBS, the Pharmaceutical Benefits Scheme, which provides subsidised drugs to Australians. Let us have a look at what this government is doing in terms of investing in these areas. We should bear in mind that this is in the context of getting the budget back under control. We know that government spending is moderating because we know we are not going to be running massive deficits. We will actually be getting the budget under control but, whilst we are doing that, we will continue to invest very solidly in important health services.

Let us take a look at Medicare services and dental. In 2013-14 total expenditure was just over $19 billion and in 2017-18 the forecast total expenditure is just over $23 billion, so that is growth of about 21 per cent, or annualised close to five per cent. Let me be very clear. Expenditure by this government on Medicare and related dental services is forecast over the next four years to increase by more than 20 per cent. That is not going down by 20 per cent; it is going up by 20 per cent. That is a very important point to note.

Let us look at assistance to the states for hospitals. Mr Deputy Speaker, you may have heard stories of supposed cuts to spending by the Commonwealth on hospitals. That is absolutely false. There is $13.8 billion in FY14 and that is forecast to rise to $18.9 billion in FY18. That is an increase of 37 per cent, or about eight per cent on an annualised basis. So again it is absolutely flat out false to suggest that Commonwealth spending on hospitals is declining. It is not declining; it is increasing substantially. This government is spending significantly more on public hospitals than the previous government ever did. That is an important point: this government is spending considerably more on assistance to public hospitals than the previous government ever did. It is going up very substantially. In fact, by 37 per cent over four years.

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