Christopher Pyne (Sturt, Liberal Party, Shadow Minister for Education, Apprenticeships and Training) Share this | Link to this | Hansard source

One of the very bad decisions that this government has made—amongst many bad decisions—has been the means-testing of the private health insurance rebate. I remember in 1983, when we lost power under the Fraser government, private health insurance covered about 50 per cent of the Australian population. By the time we regained office 13 years later it was down to 30 per cent of coverage of the Australian population. The Labor Party regarded that as a tremendous success, because it had almost destroyed private health insurance in this country.

I remember Graeme Richardson, as the Minister for Health, saying that if private health insurance got to about 30 per cent it would be unsustainable. After 13 years the Labor government had got private health insurance to the point where it was almost unsustainable. Fortunately the Howard government was elected and we introduced measures to encourage private health insurance, and by the time we left office 11½ years later we had managed to get private health insurance back to around 45 per cent coverage of the Australian population. In some electorates it is even higher than that. In my electorate, about 72 per cent of the population are covered by private health insurance.

One of the decisions the government made in recent times was to introduce a means test for the private health insurance rebate, which means that private health will be put out of reach of many families around Australia. The very absurd part of the government's decision was that, in their own way, they think that by hurting private health insurance they are hurting the well-off and redistributing wealth from the well-off to the less well-off. But by damaging private health insurance, they damage the whole health system. And by damaging private health insurance, they raise premiums for all Australians with private health insurance and that includes many seniors in the Australian population of which a great number are pensioners. In my electorate of Sturt, I have constituents who approach me at the supermarket, at the service station or at the football and tell me that they have hung on to their private health insurance their whole lives. They go without all sorts of necessities of life to hang on to their private health insurance because they know that in their aged years they will rely on private health insurance to be able to access the health system.

There is no doubt there will be an exodus from private health insurance because of the means-testing of the private health insurance rebate. But even on the government's own figures, the private health changes will increase the number of procedures performed in Australian hospitals, in government hospitals, by a staggering 845,000 procedures. The Australian taxpayer will now have to pay the bill for 845,000 procedures that previously were picked up by the health insurance industry, therefore forcing up the cost of the health system for the Australian taxpayer. So the Australian taxpayer gets a double whammy: families are hurt by paying higher premiums, pensioners leave the private health insurance system because they have to pay higher premiums and the taxpayer has to pay a higher health bill because of the number of procedures forced into the public hospital system.

There are some misconceptions about private health insurance in Australia and one of those is that private health only looks after the top end of expenditure in the health system. In fact, the private sector contribution to selected episodes of procedures performed in private hospitals is quite extraordinary. Eighty-one per cent of all mental health treatment on the same day is performed in private hospitals, 78 per cent of other-need procedures are performed in private hospitals, 70 per cent of complex middle-ear infections, 71 per cent of lens procedures, 64 per cent of other major joint replacements and limb reattachments, 60 per cent of cancer therapy including chemotherapy, 55 per cent of major procedures for malignant breast conditions and 57 per cent of hip replacements are conducted in private hospitals. So the private health system makes an extraordinary contribution to surgery that would otherwise be regarded as elective surgery. (Time expired)