Ian Causley (Page, Deputy-Speaker) Share this | Link to this | Hansard source

The honourable member for Hunter has moved an amendment. Is the amendment seconded?

John Murphy (Lowe, Australian Labor Party, Parliamentary Secretary to the Leader of the Opposition) Share this | Link to this | Hansard source

I second the amendment and reserve my right to speak.

Ian Causley (Page, Deputy-Speaker) Share this | Link to this | Hansard source

The original question was that this bill be now read a second time. To this the honourable member for Hunter has moved as an amendment that all words after ‘That’ be omitted with a view to substituting other words. The question now is that the words proposed to be omitted stand part of the question.

Wilson Tuckey (O'Connor, Liberal Party) Share this | Link to this | Hansard source

I thank the Chief Opposition Whip for his prompt action in rectifying an unfortunate mistake. The Tax Laws Amendment (Medicare Levy and Medicare Levy Surcharge) Bill 2006 is very important legislation inasmuch as it recognises the growth in salaries and, more importantly, increased costs, which I am pleased to say are at a very low level. Traditionally, the Medicare levy of one per cent has not been placed on low-income individuals and low-income families. As a result, the government brings to the House legislation to increase the threshold at which the application of the levy commences.

As the explanatory memorandum explains, the individual threshold amount specified in paragraph (c) of the definition of the ‘threshold amount’ in section 3(1) of the Medicare Levy Act 1986 is to be increased from $15,902 to $16,284. That is a reflection of the inflation effect. In the years prior to 1996, that figure would have been not a few hundred dollars but thousands of dollars, simply because the inflation per annum would have been around eight per cent to 10 per cent, which of course was also reflected in interest rates. The family income threshold is also to be increased from $26,834 to $27,478. The family income threshold is to be increased by a further $2,523, instead of the previous figure of $2,464, for each dependent child or student. They are important measures and they are fair to people. There are other measures of a similar nature which I think the previous speaker also mentioned. The legislation also addresses the issues of health and how Medicare services the community, as mentioned by the previous speaker.

These figures drew the attention of the Minister for Health and Ageing in the Financial Review today. Back in 1988, as shadow minister, I had the responsibility of representing the opposition on health. At that time it was the boast of the Australian health administration—the bureaucracy, if you like—that eight per cent of Australia’s GDP was expended on health. Today, as the minister openly admits, the figure now spent by Australians and their governments on health is 10 per cent of GDP.

I think the Americans were accused then, and still are, of spending about 12 per cent of GDP on health. One of their problems has always been the nature of their litigious society—and the member for Lalor could probably give us a speech on how that works. It is well known in America that, whilst payments of large amounts of money create a problem and are reflected by the insurance premiums of medical practitioners and the charges they levy accordingly, the real cost of that litigation in America is that it causes medical practitioners to order all sorts of additional tests and procedures to ensure that the ambulance chasers, as they are known, can find no gaps in the procedures they followed in assessing or diagnosing someone’s illness. Interestingly, my wife had such an experience in Detroit about a year ago. The way we hear it in this place, the American system is in tatters and very expensive, yet we were in a medical facility where people were coming and going and paying $10 for a diagnosis. It did not seem to be that expensive at all. The doctor diagnosed that my wife had pneumonia and that it was in the bottom half of her left lung, but he still had to send her downstairs for an X-ray to confirm that, and the X-ray confirmed his diagnosis.

These are the sorts of costs that pile up in a system when you have that sort of process hanging over your head. To the credit of state governments and this government, we have put some caps in so that the ambulance chasers have been seriously out of work in this country. There has been a huge drop-off in their occupancy of barristers’ offices and things of that nature. We have not got that problem, but we are catching up to America in terms of the percentage of GDP that we invest in health. The federal health minister, Tony Abbott, not surprisingly, admitted that federal spending on health and ageing has more than doubled during the Howard government’s decade in power, to $48 billion, and is expected to put increasing pressure on future budgets as the population ages and medical technology costs rise.

The other point that the minister made is that long hospital waiting lists and increased patient expenses are unavoidable if the federal government is to keep the lid on the nation’s spiralling health costs. When it comes to public hospitals and public health treatment, the only mechanism of cost control is waiting lists. It is interesting that I heard a very respected New Zealand health administrator, who was in fact a dame, address a conference as the keynote speaker and say exactly that. But she went on to complain about the administration of waiting lists and how, if you had an active MP or if you knew someone who knew someone, you could get promoted up the list. There was a classic case here in Canberra relating to a person with great political connections and no private health insurance getting a place at a hospital, a private room and her doctor of choice. Of course, that all occurred because of that lady’s political connections—in fact, she was married to a Treasurer.

The reality is that it is time we analysed one of the reasons for this situation of rising costs without improving services and continuing waiting lists. Let me point to a very simple example: we tend to fund our public hospitals virtually on a bulk block budget situation, maybe with some movement. But, at the beginning of the financial year, the administrator of a public hospital has a pretty good idea of the extent to which they can spend money, and they are frequently accused in the media and other places if they exceed that amount of money. That process in itself makes a patient a liability. If you have a fixed budget, you do not want too many patients. You have got to be terribly careful about them. You cannot have too many prostheses to remove pain and suffering for people with arthritic hips and things of that nature, because you are going to run out of money. As generous as you would like to be as a health administrator, you are constrained by a budget. On the other hand, if you are running a hospital where your revenues come from the private health insurance system, you get paid fee-for-service and, therefore, you are able to help these people out.

I am getting messages that you, Mr Speaker, need 60 seconds—and you are naturally going to get it—but first I want to make the point that it is important that we look at the way we manage hospital services and know why we have queues. There are queues in public hospital systems all around the world, and they will never go away. There will never be enough money to fix it while we run the systems we do. In this country we run another system in which Medicare—the very organisation that we are discussing today along with the way its levies are raised—competes with private health. It is perceived as a free service. People pay their taxes—the group we are discussing today do not even pay their taxes—and they find themselves thinking they get it for nothing. If you are in the young and healthy sector who would otherwise be contributing to private insurance, you say, ‘No, Medicare will do me.’ So all that revenue that should be there to assist the elderly and those who have genuine needs is not there, and all the private funds get are those in what might be called the high-risk category. I ask leave to continue my remarks at a later date.

Leave granted; debate adjourned.