Peter Dutton (Dickson, Liberal Party, Shadow Minister for Health and Ageing) Share this | Link to this | Hansard source

Today we are debating a betrayal of the Australian people, a betrayal of the 11 million Australians who pay for private health insurance. Betrayal is becoming a constant of this government and certainly of this Prime Minister because today Labor is breaking yet another promise made to the Australian people—a promise that they put in writing, a promise that Labor was committed to retaining rebates on private health insurance and a promise that is clearly not worth the paper that it is written on. Labor's words are worthless. Here is the commitment in writing that Labor made to the Australian Health Insurance Association, the commitment that they are seeking to break today, and it reads in part as follows. It is a letter by the then Prime Minister. It says:

Both my Shadow Minister for Health, Nicola Roxon, and I have made clear on many occasions this year that Federal Labor is committed to retaining the existing private health insurance rebates, including the 30 per cent general rebate and the 35 and 40 per cent rebates for older Australians.

Federal Labor will also maintain Lifetime Health Cover and the Medicare levy surcharge. Labor will maintain the existing framework for regulating private health insurance, including the process for approval of premium increases. Zero per cent premium adjustment is not Labor policy.

The letter goes on to say:

I understand Nicola Roxon's office has also confirmed with you that Federal Labor has no plans to require private health insurance funds to make equivalent payments to public hospitals for patients who elect to be treated as private patients.

I trust this allays your concerns.

The letter said, quite sincerely:

Federal Labor values its relationship with the private health insurance sector and we look forward to this continuing regardless of the election outcome.

It was signed by the then Prime Minister.

Yes, this is a government that has difficult economic situations, largely of its own making. Yes, this is a government that has wasted billions and billions of Australian taxpayer dollars and, yes, it is seeking to find ways to plug that black hole because we know that the Labor Party simply cannot manage money. Instead of cutting back on some of that largesse, it is attacking millions of Australians who hold private health insurance cover. People who are listening to this debate should know that as a direct result of this broken election promise, of this betrayal by the Labor Party, that right across the country they will be paying more for their private health insurance premiums.

I will provide some statistics to the House so that people can understand how significant a policy private health insurance is in this country and why it is absolutely essential for us as a nation to maintain good balance between investment in the private and public sector. All Australians know—it does not matter which state you come from—public hospitals and the public hospital system, and the delivery of health services in an ageing community, are under pressure.

So why would we as a nation seek to collapse private health insurance in this country, to see those people flee their private health insurance cover and to go on waiting lists, to join those in emergency departments who are waiting hours in the middle of the night? Why would we put extra pressure on a system that already cannot cope with the strain that is under? Why would the Labor Party pursue this policy—because it is bad policy? The simple reason is not for a health outcome but for an economic outcome.

There are approximately 12 million Australians who now have private health insurance—that is, 52.9 per cent of the population. Of those, 10.3 million people—or 45.6 per cent—have hospital treatment cover; 5.6 million people with private health insurance have an annual household income less than $50,000 and 3.4 million have an annual household income of less than $35,000. I will dwell on that statistic for a moment. What the Labor Party wants the Australian public to believe is that private health insurance that covers half the nation is somehow a playground of the rich. But when you look at the statistics it does not bear that out. This is not the only statistic that the Labor Party seeks to misrepresent in this debate.

The figures and the facts bear out that many Australians, particularly older Australians, seek to cover their health needs with private health insurance for peace of mind, particularly those who are frail and ageing who might be on a part-pension or who are self-funded retirees who have worked hard all of their lives. They want to make sure that they cover their insurance risk when it comes to their own health. They should be helped up, not pulled down, as a result of the decision they have made.

Of that 5.6 million people with private health insurance with an income of less than $50,000—that is not a separate income but a household income—those people are also made up of young families who might be entering the workforce at a young age and are encouraged to take up private health insurance; they might be young families who are having a child for the first time, or a second or third child, and decide that they want to have private health insurance coverage. These are people who make a sacrifice to provide for their own future to secure their health and that of their families, yet this Labor government seeks to impose an extra financial burden on them if they keep their private health insurance.

Private hospitals treat 40 per cent of all patients in Australia, so they share the load. There is, as I say, an investment that needs to be made in the public hospital system, and that will continue under this government as it will under an incoming coalition government after the next election, as it did under the Howard and Keating and Hawke governments. It will continue into the future.

It is important to recognise that private hospitals do treat a lot of patients in this country. In 2009-10, private hospitals treated 3½ million patients. They performed the majority of elective surgery in Australia—almost two in three cases are treated in private hospitals. The number of people with private health insurance increased 75 per cent under the previous coalition government, from 6.1 million to over 10.7 million Australians, and that is a very important point to dwell on for a moment. When Labor was last in power in the period from 1983 to 1996, they sought to do then what they are seeking to do now—that is, to trash the private health insurance industry in this country. That was the stated outcome of the Labor Party when they were last in government because they wanted to try to fool the Australian people in to believing, as I say, that private health insurance is only in the domain of those on high incomes.

When we came to government in 1996, it was at a critical point in this debate. People had dropped out of private health insurance and they were continuing to drop out because the Labor Party sought to destroy the product that Australians saw as being valuable to them and their families. So, it is again that we see a Labor government set on a course to try to destroy the private health insurance system in this country. It is interesting to look at the history of private health insurance in this country. On 1 July 1997, the Medicare levy surcharge of one per cent of taxable income was introduced for higher income earners who do not take out private health insurance. In January 1999, we had the introduction of a 30 per cent rebate. The percentage of Australians with private hospital cover increased from 30.6 to 43 over the next 12 months. In July 2000, we had the Lifetime Health Cover initiative and, in April 2005, the higher rebates for older persons. In September 2007, the then Minister for Health and Ageing, Nicola Roxon, issued a press release which 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

This shows that her words were hollow, not just in this regard but also in many other debates about health over the course of the last few years.

Earlier I read out the letter which was issued on 20 November 2007 by the then Leader of the Opposition, Kevin Rudd. This is a person who looked the Australian people in the eye and said to them that these changes we are debating in the parliament today would never see the light of day. Both Nicola Roxon as the shadow health minister and Kevin Rudd as opposition leader made it very clear to the Australian people—whether they believed it or not at the time, I do not know—that these changes were not ever going to beset the Australian public. No wonder the Australian public is furious with the Labor government at the moment. It is because there has been betrayal and lie after betrayal and lie. That has been the modus operandi of this government. On 24 February 2009, Minister Roxon stated:

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

On 12 May 2009, private health insurance changes were announced in the budget. So, somehow, between February 2009, when Nicola Roxon was still stating that the government was strongly committed to the rebates, and the May budget—a matter of only three months—she backflipped on her position.

Not only did they lie to the Australian people during the election campaign; they went on to lie to the Australian people in February 2009, when Nicola Roxon expressly stated these changes would not happen. But then, in the May budget, they did. Later in that month of May, the bills were introduced into the House of Representatives. They went down in the Senate in September. The bills were reintroduced in November 2009 and they again went down in the Senate in March 2010. In July the bills were introduced for a third time.

What will the impact of the changes be? Some 2.4 million people will be directly affected by these changes. Those people will face immediate increases in their premiums of 14 per cent, 29 per cent or 43 per cent, depending on their income tier. Think about that for a moment. Australian families are facing great uncertainty in the workplace. People do not know whether or not their job is secure. People are seeing their overtime cut back. People are seeing cost-of-living pressures increase for their families or for their small businesses. People are facing a time of great uncertainty—when they watch TV at night they see Europe going into meltdown and the United States in great economic difficulties. Yet, at that very time, the government is saying that it is okay for them to introduce legislation which will lead to an effective increase in premiums of anywhere between 14 per cent and 43 per cent for people who have private health insurance cover—half the nation. That comes on top of this government seeking to introduce the world's biggest carbon tax, when no other economy in the world is imposing such a wet blanket on its economy.

The government-owned insurer, Medibank Private, has predicted that 37,000 of its members alone will drop their cover as a result of these changes. In addition—and this is the importance statistic—they predict that 92,500 will downgrade their cover. The minister claimed that across the whole system—not just across the Medibank Private membership but across everyone who holds private health insurance—only 27,000 would drop their coverage. Yet Medibank Private, the government-owned insurer, said that 37,000 of their own membership base—forget about those in BUPA or NIB or the other funds—will drop out of Medibank Private.

So I think the government are left with very little credibility, both because of the fact that they lied to the Australian people on successive occasions in relation to this matter and because their statistics cannot be relied upon at all. It is interesting to look at some independent analysis of the changes—the Deloitte analysis, for argument's sake. They predict that, in the first year, 175,000 people would withdraw from private hospital cover and a further 583,000 people would downgrade their private cover. Over five years, they predict that 1.6 million Australians would drop cover and 4.3 million would downgrade their cover.

This is, I think, at the crux of the difficulty the government are creating. This is a government which take solutions and turn them into problems. Look at the way border protection has been mismanaged over the course of the last four years. Look at the way this government took the bucket of money we left them and spent it, thrusting our economy and the Australian public into enormous debt. Look at the way they have mismanaged policy after policy—this is just the latest example.

In our country we have a universal health system. That means that, regardless of whether you earn one dollar or a million dollars a year, if you have a heart attack, are involved in a motor vehicle accident, have a crook hip, need oncology treatment or whatever, you can turn up at a public hospital and demand treatment free of charge. That has been an underlying principle supported by both sides of this parliament for a very long period of time—and long may that be the case. A universal systems says to people that, in a country like ours in the 21st century, the best available services will be provided. Yet this government is driving people out of private health insurance. Given that, even if they are on high incomes, people can receive care for free in the public system, why would you seek to drive those 175,000 people out of private hospital cover into the public system—adding extra pressure to that system which already has many people waiting?

It makes no sense. Why would the government not seek, as we did when we were in government, to leverage off people's own private investment so that ultimately it costs the taxpayer less to insure those in private health insurance who otherwise would be receiving so-called free care in the public system—a cost ultimately met by the Australian taxpayer in any case?

The other important statistic in the Deloitte report—it has been borne out in other reports—is that over half a million people will downgrade their insurance. What does that mean? It says to younger people, by way of example, that you do not believe you are going to need cover for cardiology, or you are not going to need cover for a hip replacement, so you seek out those exclusions in your policy and that will make your policy cheaper, particularly in a situation where the government is going to drive up premiums. People will look to cut out of their policy what they think will not be applicable to them. With any insurance cover, trying to pick and choose what event will happen or what event needs to be covered is a very dangerous experiment. People—and Deloitte recognises this but the government by its own admission has not even modelled it—will downgrade their insurance by excluding some coverage so they can afford the increase in premiums that the government is going to impose upon them. Those people will seek out those services in the public hospitals. They will line up with people who have no chance of affording private hospital cover or private health insurance. That will make things more difficult for those who are most in need, who should be accessing services in our public hospitals. That is one of the greatest outrages of the bill before the House. Any rational thinking Australian or contributor to this debate would recognise that this government is on a slippery slope. It is quite easily described as being completely out of control.

If we drive Australians from the private health sector into the public sector a couple of things will happen. The first people to leave private health insurance will be the youngest and those who do not believe they need the cover. This will have an impact on all Australians who hold private health insurance, and indirectly it will impact on every Australian because those who do not have private health insurance will access their health needs through the public system. If you are a 21-year-old and you have pressures at the moment because you have had your overtime cut back at work or you have other cost-of-living pressures, you will start to look to cut back on discretionary spending. You will say you cannot afford your private health insurance—the government has just jacked up the price of it by 14 per cent, or something of that order, so you will downgrade your cover or you will drop your cover altogether. What happens with any insurance pool is that once those who are at the lowest risk leave it will be those who remain—by definition those with higher risk and a greater likelihood of claiming; those people who are more likely to be older Australians or those who suffer from chronic disease or conditions that require constant health care—who are hit with premium increases over the longer term. The fact that this government has not factored any of that into its costings just shows that this is not about good health outcomes; it is about trying to address yet another Labor deficit.

It is important to note that the change will have an impact on access to allied health services, with 2.8 million people with general treatment cover expected to withdraw and 5.7 million expected to downgrade over five years. The government claims that PHI is fast-growing and the 30 per cent rebate is growing at too fast a rate. When we analyse those figures we see that that is another Labor Party lie. Over, say, the last 10 years the proportion of the government spend on health has, in general terms, remained constant. The rebate represents about 3½ per cent of total public and private health care—the same as it did 10 years ago. Private health insurance is not on an unsustainable path.

It is important that those who sit on the crossbenches in this parliament understand this message. For argument's sake, in the seat of Denison 60 per cent of residents are covered by private health insurance. I have found the member for Denison to be a very reasonable person to deal with and I am sure he will recognise that, when 60 per cent of his electorate is covered by private health insurance, by definition it is a very important issue. I know that the member for Denison is thinking very carefully about his position in this debate. I ask him to think even more carefully about those families in his electorate that will face higher premiums if this bill receives safe passage through the parliament. These people in the seat of Denison will drop their private health insurance and they will face higher out-of-pocket expenses; these people in the seat of Denison will ultimately be paying higher premiums for their private health insurance.

The member for Denison is a person of strong and upstanding character and I think he will ultimately stare down this legislation. When he has a look at the independent analysis that has been released only in the last little while, as I understand it, he will see that the Labor Party's claim that this is unsustainable over the course of the next 10 years is a lie. If we can dispel that myth and put to bed this argument that somehow the 30 per cent rebate will go into unsustainable territory over the next 20 or 30 or 40 years—figures projected by Treasury but that frankly cannot be relied upon as they are presented by the government—then I think the member for Denison will re-examine the claims made by the government and he will reassess his position in this debate. I want to thank all those members who have contributed, both publicly and in the chamber, to this debate, because it is a very important debate. It is about the future of the health system in this country. When Kevin Rudd promised that he was going to fix public hospitals—his words, not mine—by mid 2009, that a revolution was going to take place and that the federal government would seek a mandate at the 2010 election to take control of public hospitals if they were not fixed by mid 2009, people actually believed him. People within his own caucus and people within the Australian public believed that Labor was serious when it came to health.

The reason Labor is currently behind in all the polling on the issue of management of health is that people know that while Labor may well start out with good intent it has no capacity to deliver the reform of public hospitals. This Prime Minister has signed up to something because she is desperate—but not for a good health outcome. She put pen to paper on an agreement with the states because she wanted to be able to say to the Australian public: 'I've at least achieved something. I've just got this one agreement, after all these months of being the Prime Minister of this country.'

When you look at the detail, the government has signed up to give the state governments, both Liberal and Labor, a bucketful of money for public hospitals. The states were of course keen to sign up, because they saw a seller in distress. They saw a Prime Minister who was desperate to get an agreement under her belt, so they took her for a ride. The states got the extra money, which is what they wanted, but they signed up essentially to business as usual. So, as happened at a state level when Labor was in control in New South Wales and as is happening in Queensland at the moment—although that is very quickly about to change—the Labor Party at the federal level is seeking to spend more health dollars, not on private health and not even on the public system but on health bureaucrats.

So the one crowning achievement of Labor in health over the course of the last four years has been that it has been able to dramatically increase the number of public servants in the health department but has not been able to improve health outcomes for mums, dads, children, pensioners and older Australians across the country. And that is the threshold question. People need to ask: 'Is it easier to get into a public hospital? Do I have a shorter time to wait with my sick child at three or four o'clock in the morning if I turn up to an emergency department? Is it easier to get in to see my GP than it was before Labor was elected? Is it easier to get hip surgery done for my grandmother or mother, who has been on a waiting list for the last 12 or 18 months? Is it easier today to have any of those services performed than it was four years ago?' And the answer to each of those questions is no.

This government has promised so much—not just in the area of health but across all the public policies it is responsible for—yet it has delivered so little. That is why I am angry, as are tens of thousands of Australians who just cannot afford private health insurance. We do not know what figures to believe for the purposes of this debate. Yesterday the minister was out saying that 100,000 people might drop out, or 85,000, or the figure of 37,000 that they used before. This government has not properly modelled the outcomes or the impacts of this policy. It tries to make us believe, and has said to the crossbenchers in this parliament—I think quite mischievously—that somehow we as a country cannot afford our expenditure on the 30 per cent rebate and that therefore the crossbenchers should vote in favour of this legislation.

This government just does not have the runs on the board to be credible with the Australian public or with the Independents in this place, whom it wants to support this legislation. To members who will be considering their position on this bill in the coming days, I say: please, look at Labor's record when it comes to health. They promised to fix the public health system, and they have failed dismally. They promised to cut waiting lists, and they have failed dismally. They promised to deliver so-called GP superclinics so that we could relieve pressure on emergency departments. They have wasted $650 million on that program, and they cannot point to one hospital where there has been a reduction in waiting times for people who turn up at the emergency department.

This is a government that promises that there will be minimal impact from the changes it is talking about. If there are going to be minimal changes, why is the government saving $2 billion plus with this policy? If people are not going to drop out of private health insurance or are not going to downgrade their cover, where do the savings come from? How is this such a savings measure if it is not going to impact on anybody? And why would we seek to drive out of health insurance those people who can leverage off their own investment into the public sector, where the taxpayer will be picking up every dollar of expenditure regardless of that individual's income?

Look at Labor's record. Look at the fact that in successive elections they promised they would not do what they are seeking to do today. Look at the fact that then Minister Roxon said to this parliament and looked the Australian people in the eye and said that the Labor Party would not introduce these changes, yet today it seeks to do so. I say to the Independents: please look at the independent analysis—particularly the report by Booz & Company, a highly respected firm in this country—which says that the claims of Treasury and the government are spurious at best and that this legislation is going to have a major detrimental impact on the way in which we conduct private health insurance in this country.

I say to the Independents: once you have assessed all that data you will be left, as I am, with no other option but to vote this bill down. This government has betrayed the Australian people on many issues. This Prime Minister betrayed Kevin Rudd. This Prime Minister betrayed the Australian public when it came to the carbon tax—she said there would be no carbon tax under her government. This Prime Minister has betrayed the Australian people when she said she would not trash private health insurance, and this bill should be voted down as a result. (Time expired)

Andrew Leigh (Fraser, Australian Labor Party) Share this | Link to this | Hansard source

I extend my thanks to you, Deputy Speaker, for taking the chair to permit me to participate in this debate. The Fairer Private Health Insurance Incentives Bill 2011 is about fairness. It is about striking the right balance in how we spend our public dollars. So often in public life we campaign on and speak about all the good things that government can do—and it is true that the potential of government to do good things is great—but ultimately we have to face trade-offs. Governing is really more about questions of 'or' than questions of 'and'. You see that very much with the coalition at the moment, mired in their $70 billion black hole—the equivalent of stopping Medicare for four years or the pension for two years—simply because they have been unable to make the hard choices. But we are making the hard choices, and one of those is to recognise that money that currently goes into subsidising higher income Australians to take up private health insurance could be better spent in the Australian government system, including on important healthcare measures.

Those opposite want you to think that the government is against private health insurance. Nothing could be further from the truth. It is another part of the opposition's ongoing scare campaign to suggest that the government is against private provision of health, much as the opposition often suggest we are against the private provision of education. It is not true at all. The private health system is an important part of the Australian healthcare system. But with this bill we are recognising that the government need not subsidise the private health care of millionaires. It is not vital to a millionaire that they receive a 30 per cent private health insurance rebate in order for them to take up private health insurance. The first people to take up private health insurance were millionaires. Those millionaires will have that private health insurance when their 30 per cent rebate is not there. That is true even as we move down the income scale. We have strong evidence that the take-up of private health insurance did not increase markedly when the 30 per cent private health insurance rebate was put in. In fact, the policy change that substantially increased the take-up of private health insurance was the Lifetime Health Cover reform. Lifetime Health Cover had a much bigger impact on the take-up of private health insurance than did the 30 per cent rebate.

In putting in place this fair and equitable reform to the health system, Labor are doing as we always do, ensuring that Australia's healthcare system looks after the most disadvantaged in the community. It was us that introduced Medibank under the Whitlam government in 1975 and it was us that rebuilt that system into Medicare under the Hawke government in 1983-84, after the original Medibank had been trashed by the Fraser government. We believe in making sure that all Australians receive high-quality health care. Too often those opposite appear to be taking their cues from their colleagues in the United States, from US Republicans willing to laugh at low-income Americans who do not have health coverage. But that is not the Labor way. We believe that we need to have a healthcare system that recognises that good quality health care is about making sure that that people can participate in society. If you do not have good quality health care, you are unlikely to be able to hold down a job and you are unlikely to be able to participate fully in the social life of the community. So health care is, like education, a critical underpinning of a fair society.

Under this bill, the private health insurance rebate for low- and middle-income earners will remain unchanged. Higher income earners will receive a reduced rebate. As income increases, the private health insurance rebate will progressively fall. This will ensure savings to the government of $2.4 billion over the three years 2012-13 to 2014-15 and it will provide a fairer distribution of the benefits of the healthcare system.

My own electorate of Fraser has above average incomes in Australia but, even so, the number of people who will not receive the private health insurance rebate is very small. I am informed that the number of singles in my electorate who will no longer receive the private health insurance rebate is 2,220 and the number of couples is 740—a relatively small number in an electorate whose total population is now pushing up towards 200,000.

We do not expect this bill to lead to any substantial change in private health insurance coverage. We have modelling from Treasury which finds that 99.7 per cent of people will remain in private health insurance, as a result of the fact that we still have incentives such as Lifetime Health Cover and the Medicare levy surcharge. So as a result of this there will be $2.4 billion additional into the budget to be spent on better healthcare initiatives and a minuscule change in private health insurance coverage.

The scare campaign the opposition is running need not be rebutted just by Treasury figures, sound as they are; Professor Elizabeth Savage, a health economist at the University of Technology, Sydney, has done considerable work in this area. Her research shows strong evidence of habit persistence, so the take-up of private health insurance is likely to endure because those who already have private health insurance will continue down the same road. Professor Savage also finds that means-testing the private health insurance rebate will not increase pressure on the public hospital system—another furphy, another scare campaign, from those opposite.

There are nearly eight million private health insurance policyholders who will not be affected by the changes at all. After these changes, as I have said, 99.7 per cent of people will remain in private health insurance. This allows us to have another $2.4 billion over the next three years. What will that get spent on? You can expect it to be spent on services such as improvements in the hospital system. From 1 January this year, we are ensuring that every state improves the proportion of emergency department patients seen within four hours. Recent academic research published in the Medical Journal of Australia has shown that that will save lives. We are expanding Medicare Locals to integrate the sectors and make sure that patients get holistic care. We are putting in place local hospital networks, making sure that decisions about hospital management are devolved to the local level. Many of these reforms will save lives. Ultimately, that is what great health care does. The opposition would rather have private health insurance rebates for millionaires than have a healthcare system that saves more lives.

We are delivering mental health reform. We are rolling out additional headspace centres and EPPIC centres. We are also looking at mental health reform across the life cycle. We are committed to putting in place the groundwork for a national disability insurance scheme, a scheme that, when it was first proposed by the Productivity Commission, the opposition said that they supported. But they are now unwilling to support that in the short term. The coalition are walking away from expanding support for people with disabilities, despite the fact that their spokesperson on disability, Senator Fifield, acknowledges that the current system is a patchwork system that contains many anomalies for people with disabilities and their carers. The coalition would again prefer to subsidise the private health insurance of millionaires rather than begin putting in place a national disability insurance scheme. Politics is about choices. Ours is national disability insurance ahead of subsidising the private health insurance of millionaires. Theirs puts subsidising the private health insurance of millionaires before better disability care.

We are building a stronger age care sector. We recognise that the age care system is in urgent need of reform and that if we do not do something to improve it the sector will face considerable strain as the baby boomers reach retirement and increasingly look for places in age care homes.

Politics is about values and what you value. What you prioritise in government shows what you value. During the global financial crisis, we chose to save 200,000 jobs and tens of thousands of small businesses. They say that they would not have taken on debt, meaning that they would have cut back on government spending in the face of the global downturn, throwing Australia into deep recession. On taxes, we are delivering pension rises and income tax cuts for working households through our Clean Energy Future package. Under a Tony Abbott government, the only people who would get tax cuts would be big miners and big polluters.

You can see the same in education. We are investing in low-income schools through the low SES national partnership. The Gonski review will ensure a fairer system for providing federal government funding to schools. We recognise that it is important to support need. If there is any rebalancing of schools assistance, they immediately launch a fear campaign. They immediately suggest that what we are doing is creating a schools 'hit list'. Nothing could be further from the truth.

Since Labor came to office there has been modest growth in the Public Service in the order of around 11,000 additional public servants, a rate of growth slower than the final years of the Howard government. We recognise that a strong Public Service is vital to delivering services such as better health care. But those opposite would make 12,000 public servants redundant, a commitment that the member for North Sydney again made on the Q&A program this week. In that program, the member for North Sydney said that there were 6,500 people working in the Department of Health and Ageing and appeared not to be sure what they did.

I can say two things about that. First of all, there are about 5,100 people working in the Department of Health and Ageing, a small increase of about 300 since the Leader of the Opposition was minister for health. As the member for North Sydney could find out if he spoke to, say, the Leader of the Opposition, the Department of Health and Ageing does enormously important work. They are working on things like the private health insurance rebates, preventative health and the Pharmaceutical Benefits Scheme. I commend the work of the department of health officials that has gone into preparing this package of reforms. We on this side recognise that the Department of Health and Ageing does valuable work. Those on that side of the House would be happy to cut the department of health.

I will be interested to hear in subsequent contributions if the member for Dickson supports the views of the member for North Sydney that in fact, were the opposition to be elected government, he should preside as minister for health over a department that employed no-one whatsoever. Does the member for Dickson believe that the Department of Health and Ageing should be scrapped? If so, what portfolio would he then seek to retain?

The contrast in Australian politics could not be clearer. The opposition is always saying yes to special interests and always saying no to tax reform. The contrast can be seen nowhere more clearly than in the area of dental health. Professor Jeff Richardson, from the Centre for Health Economics at Monash University, has found that 17 per cent of the people in the lowest income group have no teeth compared to 0.3 per cent of high income people. This is from an AM interview on 8 December 2011. Yet those in the lowest income categories are receiving much less assistance to get dental care than those in the highest income categories. Those in the highest income categories have 30 per cent of their dental care bill paid for by the Australian taxpayer through the private health insurance rebate. Labor believes that is the wrong way to balance our health system. We believe that we ought to be spending less on the teeth of millionaires and more on the teeth of the most disadvantaged Australians. I commend the bill to the House. (Time expired)

Stuart Robert (Fadden, Liberal Party, Shadow Minister for Defence Science, Technology and Personnel) Share this | Link to this | Hansard source

I rise for the third time to speak on this bill and to condemn it in the strongest possible language. This is a bill that is seeking to means test, ostensibly to put out of reach of many families, the rebate relating to private health insurance.

The reason I condemn this bill absolutely is that it is a complete and utter breach of promise and breach of faith. Prior to the 2007 election, when the current government came to power, the then shadow health minister, now Attorney-General, Minister Roxon, on 26 September 2007 said:

Federal Labor has made it crystal clear that we are committed to retaining all the existing Private Health Insurance rebates ...

In fact, I think there were four times—three by Minister Roxon, once by then Prime Minister Kevin Rudd—where the federal Labor made it abundantly clear, a promise: 'Federal Labor has made it crystal clear' were the words the minister used—'crystal clear', written in blood, so to speak: they were committed to retaining all the existing private health insurance rebates. And here we are, for the third time in four years, because this government, in an absolute and utter, complete—but not unprecedented—breach of faith and complete break of a promise, has now decided that 'crystal clear' actually means 'muddy and opaque'.

It is no wonder that they are breaking another promise to the Australian people. It was a mere six days before an election when the Prime Minister, to win the election, said that 'there will be no carbon tax under a government I lead'. Treasurer Swan, at a subsequent interview, made it perfectly clear that this 'overblown rhetoric of the Liberal Party' that somehow Labor would introduce a carbon tax was completely false, and a few weeks later, in a move of utter duplicity, that was rolled back.

So it is not unprecedented that such a promise would be broken. But how can the federal health minister walk into this chamber, the House of Representatives of the nation, where 150 men and women gather from all four corners of our land, after she has made a comment that 'Federal Labor has made it crystal clear that we are committed to retaining all the existing Private Health Insurance rebates'. What she meant to say was, 'We are going to make it crystal clear we have absolutely and utterly no commitment to our promises; we will not retain any of the key elements and articles of faith that we say. When they say 'all the existing' they mean 'partial', 'some' or perhaps even 'none', and 'We have absolutely no concern for the private health insurance of ordinary Australians'.

These cuts underline the completely and utterly botched attempts at health reform. We all remember Prime Minister Rudd putting out that wonderful colour brochure before the 2007 election, with a picture of the Prime Minister saying, 'The buck stops with me on health! I'll fix health. If this is not fixed within 18 months I'll go for a referendum on taking over full control of health'. Another broken promise from the government. Where is the referendum? Where is the 'I'll fix health'? Has the buck left the building? Who is taking responsibility?

This was followed up, of course, with the great commitment on sorting out health, taking 30 per cent of the GST from the states, putting in three new bureaucracies—where has all that gone? This government's attempt at health reform has been botched, has been bungled and has been duplicitous from the very beginning. This government never had any intention of fulfilling any of their promises in health. I have listened to the debate this morning and all I have heard are Labor members of parliament rattle off a whole range of ancillary decisions that have been made in health, somehow to pretend that they are committed to having a sound vision and a long-term plan for where they are going when, in reality, this is simply the politics of division, of some farcical class warfare that we have to take away the private health insurance rebate and nationalise and socialise health in terms of one size fits all.

But be under no doubt: these changes, apart from being duplicitous in the extreme, will force people to drop private health insurance cover or to choose cheaper cover. They will put enormous upwards pressure on insurance premiums and will force more people into overstretched public hospital systems, systems like those in the Gold Coast Hospital, from where I come, where 46 per cent of people who go into Emergency hit access block, right now—that is a statement of fact. That means they will spend eight hours waiting, or on a trolley, before going into a hospital bed. And it is this system, broken by Labor state administrations, that this government wants to force more Australians onto. And for what sound reason, may I ask? Because somehow, those people who have taken out private health insurance are, what, wealthy beyond measure? Are they not deserving of any assistance in any way, shape or form? You want to force decent, hardworking Australians who take out private health insurance, in many ways because they have little faith in the current administrations Labor have presided over and pushed them onto a hospital system at a state level that is struggling. It is a blatant cost-shifting measure from the Commonwealth to the states' public systems.

This measure will not just be felt by those on supposedly higher incomes. It will not just be felt by those who incur an up-to 43 per cent increase in their premiums. It will be felt by everyone who will incur those cost increases. It will be felt by all Australians with private health insurance, who face higher premiums into the future.

We believe everyone should have access to affordable healthcare. We believe everyone should have access to choice in healthcare. We are strongly support providing all Australians with that choice through affordable private health insurance if they wish to take it out. As a result of the introduction of the private health insurance rebate under the previous coalition government, the Medicare levy surcharge and lifetime health cover, private health insurance coverage increased from 34 per cent in 1996 to 44 per cent in 2007—a 33 per cent increase, a staggering increase in Australians who elected for choice. Every dollar of funding provided for the private health insurance rebate saves $2 of costs that are then paid by private health insurers—so says Econtech Pty Ltd, Harper Associates and Hagan. Private hospitals right now treat 40 per cent of all patients in Australia—40 per cent. In 2009-10 private hospitals treated 3.5 million patients. Private hospitals performed the majority of elective surgery in Australia—64 per cent—and 10.2 million people, or about 45 per cent, have private health insurance. It is interesting when you look at how private health insurance works. In preparation for this debate, I had discussions with the CEO of the Sisters of Charity hospital in Brisbane and the CEO of the UnitingCare hospital system. It is interesting that, for every seven clinicians—doctors or nurses—they have, there are three nonclinicians, administrative staff. And then we have Queensland Health, for 18 years presided over by the Labor government. Queensland Health has 64,000 employees. Why? Because in the enterprise bargain with the union the first line says, 'You cannot reduce below 64,000.' The union is not interested in reform or productivity; it is interested in union jobs. For every three clinicians, there are seven nonclinicians.

So private hospitals and private health are doing the bulk of elective surgery and treating 40 per cent of all patients. In the private hospitals that I have spoken to in Queensland, there are seven clinicians for three nonclinicians. In the public system, there are three clinicians for every seven nonclinicians. It does not take a rocket scientist to work out what the problem is in our public health system presided over by Labor administrations. The waste is beyond measure. And this government wants to force more and more people into that untenable, poorly managed system.

The impact will be significant. Two and half million people will be directly impacted by these changes and will face immediate increases in premiums of 14 per cent, 29 per cent and 43 per cent in the respective income tiers. So 2.4 million people will be impacted. It is not as if the cost-of-living increases are not already striking Australian families. Electricity prices, since this government came to power, have increased by 51 per cent, gas prices by over 20 per cent, food prices by over 20 per cent and rents by the same types of quantums. Wherever this government has gone, so too has the cost of living. Now this government wants to do it to 2.4 million Australians and put enormous pressure on the existing public hospital system because, in its class struggle view, these Australians are wealthy and do not deserve assistance from the Commonwealth.

The government owned insurer, Medibank Private—the government's own insurer—has predicted that 37,000 of its members alone will drop their cover and 92½ thousand will downgrade. This is considerably more than the 27,000 the minister has claimed, so I am not too sure where the minister is getting her advice from—perhaps from her press secretary; we know how well Labor press secretaries are doing of late! Deloitte analysis of the changes showed that in the first year 175,000 people are expected to withdraw from private hospital cover and a further 583,000 to downgrade. Over five years, it is expected that 1.6 million will drop cover and 4.3 million will downgrade. The government has not disclosed the numbers of people expected to downgrade but, as premiums increase significantly for those in the income tiers, it is reasonable to expect they will seek cheaper products, which will have a whole range of second-round effects on public hospitals.

Deloitte continues to predict that private health insurance premiums will rise 10 per cent above what they would otherwise be, in the initial phases. There will be $3.8 billion in additional recurrent costs for the public sector. Where will the public sector get that from? Look at Queensland, my home state. The Labor government have been there for over 18 years. The credit rating of the government has been downgraded. Why? Because their public debt on their balance sheet is now $40 billion, with a further $43 billion on the balance sheets of the government owned entities. In the last 18 years the Labor government have gone from a zero debt position to $87 billion in net debt at a state government level, a level of debt that is almost unable to be paid back when you look at the structure of the government's fiscal position. Indeed, Defence, including Veterans' Affairs, spends as much money in terms of budget allocation as the government in Queensland do—to give you an idea of where they are going.

Then again, we should not wonder at that, considering the fiscal position four years ago of the Commonwealth. Public net debt was zero, with $60 billion in the Future Fund and $40 billion either in the bank or in the surplus. Now, in a staggering turnaround, we are at $133-odd billion in net debt—a staggering turnaround in public finances.

These changes will have a huge impact across the nation. But, more importantly, the changes are symptomatic of the Labor government's view of where things are going. This is just one more in the tragic litany of broken promises. I remind all Australians of what this government said prior to the 2007 election, what it said publicly, what it put in writing in its media releases and what the Prime Minister to be and the health minister to be said. They could not have been clearer, just as the Prime Minister could not have been clearer when she said, 'There will be no carbon tax under a government I lead,' and three weeks later she broke that promise. Prior to that election, the Prime Minister to be and the Minister for Health and Ageing to be said, 'Federal Labor have made it crystal clear that we are committed to retaining all the existing private health insurance rebates.' They had no intention of keeping that promise. They had no intention of keeping it at all—

Mr Mitchell interjecting—

and every government member on that side of the House who sits there like the lobotomised member for McEwen and argues against it simply agrees with the government on that on that point—

Steve Georganas (Hindmarsh, Australian Labor Party) Share this | Link to this | Hansard source

Order! The—

Stuart Robert (Fadden, Liberal Party, Shadow Minister for Defence Science, Technology and Personnel) Share this | Link to this | Hansard source

I withdraw, Mr Deputy Speaker. The government knew it then; it knows it now. At some stage the duplicity has to stop. At some stage this government has to actually start keeping its word. Wouldn't that be a novel approach for the government to have. The coalition will vote against this en masse and will strenuously reject it here and in the Senate.

Debate adjourned.