Monday, 3 June 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
I rise to speak on the Private Health Insurance Amendment (Lifetime Health Cover Loading and Other Measures) Bill 2012 and the Private Health Insurance Legislation Amendment (Base Premium) Bill 2013. In the late 1990s I was working for a finance company in Townsville and I was a single dad. I had private health insurance for my children. When I remarried and my two daughters were joined by their brother and my son, my teacher wife took 12 months off work to be a stay-at-home mum. We maintained our private health insurance. We were certainly not flush with funds and we certainly did it very tough, yet we made the decision that we wanted choice and certainty in our family's health matters. We needed to ensure that if something happened we would be able to provide. We went without a lot at that time, but we ensured that what was important to us was retained.
The 30 per cent rebate was an essential component of that, although I had to pay a levy for 10 years because I was late getting on. I do not say this to make me sound hard done by, or seeking martyrdom; I am using my personal experience as an example of all the mums and dads out there who want to take responsibility for their own health and that of their families and who are being well and truly belted by this government. Out there, away from the latte-sipping, Vespa-riding, black-skivvy-wearing, inner-city trendies, there lies a nation full of people trying to get ahead and provide for themselves.
This bill seeks to amend the lifetime health cover, or LHC, loading on private health insurance. LHC was introduced by the Howard government as part of reforms that significantly increased private health insurance coverage when it came into effect on 1 July 2000. In fact, this measure helped raise the number of people with private health insurance by 75 per cent, from 6.1 million to more than 10.7 million. Lifetime health cover is a loading on private health insurance payments that is applied at a rate of two per cent for every year that an individual is over 30 when they take out hospital cover. A cap of 70 per cent is applied. It was brought in to get younger people into private health insurance and to maintain their health cover. Currently the government pays the private health insurance rebate on the value of the total premium paid by the policy holder, including the LHC loading component. This new measure, if passed, will take effect in April 2014.
The second component of the bill ceases direct claiming of the private health insurance rebate through the Department of Human Services. This is known as the incentives payment scheme. This will take effect on 1 July 2013. These measures will add $386.3 million to the $2.8 billion taken out of private health by this government from means testing the private health insurance rebate. Put this with the $1.6 billion cut to hospital funding in Labor's MYEFO and you can see just what this government thinks of health.
That this measure was not in the budget last year but was brought in as a knee-jerk reaction to MYEFO tells me everything I need to know about this government. The thing that really gets to me about this is that this is not about health. This is not about equity. This is not about fairness. This is not some altruistic or ideals driven argument. We are debating this bill because the Labor-Greens-Independent government cannot balance its books. This government has lost control of the nation's finances, pure and simple. This government will do anything to anyone to keep power for as long as it can. Just look at from where they have come:
On Thursday, October 13, the Minister for Health, Tony Abbott, asserted in parliament that prior to the last election, I had a secret plan to scrap the private health insurance rebate and he cited Mark Latham's diaries as proof of this proposition. Yesterday Matt Price reported this claim by the minister as if were a fact (The Sketch 14/10). The claim by the minister is completely untrue and should not have been reported as if it were true. The truth is that I never had a secret plan to scrap the private health insurance rebate and, contrary to Mr Latham's diaries, do not support such a claim ... For all Australians who wanted to have private health insurance, the private health insurance rebate would have remained under a Labor Government. I gave an iron-clad guarantee of that during the election. The difference between Tony "rock solid, iron-clad" Abbott and me is that when I make an "iron-clad commitment", I actually intend on keeping it.
Put that with 'There will be no carbon tax under a government I lead' and you get the sincerity of that claim.
What Townsville people are telling me is that they are sick to death of trying to get ahead in this world when, at every turn, this government wants to drag them back down. What is wrong with wanting to do better? What is wrong with wanting to look after yourself and your family? Why is it that, bit by bit, this government sucks that will from hardworking Townsville families? This is another broken promise from this bad government. How can anyone out there take their claims seriously about education and disability, with the bulk of the money coming sometime way out into the future, when they can barely go a week without backflipping and amending and blatantly breaking their collective word.
This government dresses up these things as getting at the 'rich'. There are more than 50,000 people in my electorate alone with private health insurance. There are 3.4 million people in Australia with private health insurance who live on an income of less than $35,000. There are 5.6 million Australians with private health insurance who have household incomes of less than $50,000. Hardly rich!
Let me give this government a lesson in pub economics. If you make it tough for people with substantial disposable income, they will eventually drop off because they have options. They can pay for their dental work when they need it. They can pay for their knee operations when they need them. What will eventually happen is that these measures will increase the burden on those people least able to choose other options. If left untended, this will eventually see the collapse of the system. And where to from there? Straight to the public hospital.
Before I get to the stress on public hospitals, I would like to raise a couple of points about private health insurance in the regions. I live in Townsville, a fantastic city of some 190,000 people. We service the greater north and west of our state where some 580,000 people live and work. We are the major centre; all the centres around us, whilst fiercely proud and independent, are towns of fewer than 20,000 people. Towns like Charters Towers, Ayr and Ingham are all great communities, but they are under stress to keep vital services which form the fabric of their community and offer jobs. If there is a significant drop in the numbers of people taking out private health insurance, then that will put stress on the dentist, the optometrist, the physio and all other allied health professionals in these communities and increase the pressure on the hospital system. If they close, it will not only be the loss of the service but of a couple of jobs, and another trip to Townsville for the services. That, my friends, is how a town dies.
Now, this will not happen overnight and certainly, with Noeline Ikin as the next member for Kennedy it will not happen under her watch. But, if this government continues to ignore the regions of North Queensland and regions like North Queensland, then surely they will stand back, with the Greens and Independents, and let this happen. Again, this budget and this bill are not about health. This is about the budget emergency in which the government finds itself. This is about shifting costs. By forcing people out of private health insurance, they are going to raise the level of activity inside the public system.
So the Townsville Hospital will be asked to provide the services for people who can no longer afford private services. How much extra is going to the public hospital system? Absolutely nothing—not one red cent! So elective surgery lists go up and the wait becomes longer. Forget about seeing a public dentist. The health minister saw that off last year when she ripped over a billion dollars out of the health system with the Chronic Disease Dental Scheme. This health minister then pulled $100 million from Queensland Health, after it had been committed. Now she has charge of another attack on health and on choice.
Only a coalition government can live within its means. Only a coalition government can go to this upcoming election with any credibility on health. We will cut the red tape in the sector and we will get more funds to the pointy end—to the patient. Remember them? Remember when we had patients and they were important?
We as a nation and a confederation of states need to look at how we are doing things and how we can get better outcomes. We need to be more focused on allied health and keeping people healthy, not reacting with money for machines that go 'ping'. We need to keep people out of the hospital system. We need better cooperation between public and private hospitals to make better use of the skills and equipment we have in each system. The public system is fantastic at high-end, delicate and technical surgery. It has a great capacity to provide critical services in intensive care and transplant surgery and the like. Townsville's Paediatric Intensive Care Unit is a perfect example of the high-end care which makes the Townsville Hospital such a great facility. And I am proud to say that the Campbell Newman government made that a promise at the last election, then brought it forward and actually introduced it. The previous state Labor government, which made so much of health and lost so much money with the payroll debacle, would not do it.
But there can also be no doubt that the private system can drive our dollar further when it comes to elective surgery and outpatient services such as radiology. If we could get a perfect match of the services and not duplicate them, as happens now, we would go a long way to getting our health system on track.
We must look at ways of getting our students better trained and with more time in clinical areas. Again, Townsville is perfectly placed to offer such a model with James Cook University's School of Medicine and Dentistry and school of allied health. If we could properly integrate the roles of the teachers, mentors and students with a properly funded and allocated regional model, we will end up with a better outcome for all.
We have over $130 billion running through the health system nationally, and the best this government can do to bring some balance is to attack people with private health insurance. Surely, we are better than that? These are the very people who should be supported. Instead, this government walks past and pretends not to notice them.
I oppose this bill and will do everything I can to bring a fair go back to the people of Townsville with private health insurance. I thank the House.
Private health insurance is vital to the efficient functioning of Australia's health system. In my electorate of Tangney, 95.7 per cent of voters are covered by private health insurance. Of these, 87.3 per cent have hospital treatment insurance.
Carbon tax, mining tax and now cuts to the private health insurance rebate: simply put, Labor is mounting massive cost-of-living pressures on all Australians. Private health insurance is not just for the rich but rather for those who want to be assured of access to effective health care when they need it most. There are 5.6 million people with private health insurance, who have an annual household income of less than $50,000, and 3.4 million who have an annual household income of less than $35,000.
The changes to Lifetime Health Cover increase premiums for those affected by up to a reported 27.5 per cent on 1 July 2013. This will hit lower income Australians hard. Lower income Australians will be forced to choose if they can afford private health insurance. They may decide to wait and only take out hospital insurance when they need it and have time to prepare. But what if they need it for an emergency and have no time to wait? It makes basic economic sense that the government provides a rebate incentive to promote to all Australians access to private health care as a preventative measure, just in case they need it.
Abolishing the Lifetime Health Cover rebate may appear to save money initially, but it will not save money in the long term. Instead it will cost government. People will be deterred from taking out cover and as a result be more reliant on government assistance for their health care. Removing rebates will place more pressure on public hospitals, which are already struggling with $1.6 billion slashed from hospital funding in Labor's Mid-Year Economic and Fiscal Outlook. Public hospital beds have already been closed. In operating theatres, delays to elective surgery are already occurring. We cannot afford for more people to flood the public health system.
How did we get to this day—a bill that makes doing the right thing, acting responsibly and buying private health insurance more expensive? There is only one answer. That is Labor mismanagement and a litany of waste and debt. Because of that debt, we now have a budget emergency. We need to stand up for Australians facing rising costs of living. We do not like the changes to private health insurance. We definitely do not like them. What we have got to do is carefully weigh up the real state of the budget, and then we will be in a position to say when we might be able reverse these changes, but we are not making a commitment on time, because our budgetary position is in crisis because of the mistakes and mismanagement of this government, which everyone is having to pay for. It is well documented by economists and commentators more eminent and learned than me that this bill will hit low-income Australians hardest. They will be disproportionately affected.
So let us all just stop for but five seconds to consider what is really in discussion here, and that is the cost of having a minimum of certainty. Labor is making it more difficult for people to opt in to private health insurance. How can this be in the national interest? To me, this clandestine bill has a face, and her name is Jane. Jane is a constituent of mine. She likes to bake on a Sunday morning, go to church and volunteer as a lollipop lady at the local school. Jane is aged and, as of last month, alone. Jane came to Australia from England with her husband, on a 410 retirement visa. In the years since they have been here, they have been hit hard by the difficult exchange rate and the never-ending cost-of-living increases. But they had about enough to make ends meet. Jane's husband died, and his pension stopped. She now has to find new cover and a new provider. She is not entitled to Medicare, nor does she want it. She is a woman of the war. She is a survivor. But even survivors break down. That is what happened in my office just the other week. Jane fell apart when retelling how she might not be long for this earth as she does not have the money anymore and she cannot afford the health insurance. Having health insurance is a requirement of her visa. Where is the foresight or provision for people like Jane?
This is unquestionably an attack on private health insurance. This is undoubtedly an attack on the aged—an increase to premiums by an average of 10 per cent and in some cases by up to 27 per cent. This Labor government seems completely unwilling and unable to see the huge pressures on many millions of Australians. The pressures of increasing prices and rising unemployment are having a significant deleterious impact. And the government is making things more difficult, not easier. When people do the right thing and show personal initiative and responsibility, they should be rewarded not punished. Where is the incentive? Labor, typically, seek to reward indolence and irresponsibility. They seek to grow the handout culture. Liberals are not about handouts. Australians do not want handouts. They want the government to get their hands off their wallets. And maybe a hand up would be nice. But mainly just get your hands off—hands off our money. Stop spending recklessly. Start planning and start living within our means. That is the only way we can fix this budget emergency.
So it is time to back in government a party that is mature, responsible and will reward the responsible—hope, reward and opportunity. The currency of politics is trust and hope. With Labor, the Australian people have no trust and certainly no hope. How can they, when the Prime Minister serially misleads and has a spending addiction? The government of Australia is undermining faith in the institution of private health insurance. It is structurally undermining the institution, one could speculate, so as to grow the inefficient public system—a system that, by the way, is woefully ill prepared to deal with the expected increase in volume directly due to this bill.
However, there is hope. The coalition gets it, in terms of understanding the very real cost-of-living pressures that ordinary Australians are feeling. These families need to know that the coalition will work tirelessly to fix the Labor mess and end the budget emergency. When the budgetary emergency has ended, the coalition can then roll back the myopic and miserly measures being proposed here in this private health insurance amendment bill. Make no mistake, the rebate is a part of the DNA of the coalition. He who has health has hope. And he who has hope has everything. The coalition will return hope, reward and opportunity if elected on 14 September. Know the day and know the hour when hope rises again—a new morning for all Australians.
I rise to speak on the Private Health Insurance Legislation Amendment (Base Premium) Bill 2013. This bill gives effect to changes to private health insurance that were announced in Mid-Year Economic and Fiscal Outlook 2012-13. Furthermore, a bill removing the rebate from lifetime health cover loadings was introduced in the last sitting week of last year but has not been brought on for debate. This current bill was only introduced in the last sitting week. It is being rushed through the parliament without giving the opposition time to consider it properly through normal processes.
But we know that this is partly to cover, quite obviously, for the government's woeful—that is being polite—and totally inept economic management, which has seen them turn $70 billion in assets and a $20 billion surplus into rolling deficits and debt now pushing through the government's own $300 billion debt ceiling. I hate to repeat myself, but there is nothing else you can do in this situation: due to Labor's economic incompetence, there is now a budget emergency which they are trying to plug with a raid on private insurance. The effect of the current bill is that the government's contribution to an individual's private health insurance rebate would be indexed annually by the lesser of the consumer price index—CPI—or the actual increase in the premium charged by insurers. This will not only force up the cost of private health insurance further but add significantly to the complexity of the product, and it will be administratively difficult for any future government to implement.
The effect of this change will not be felt by individuals or the health system for some time, as it will not commence until April 2014. However, the effect of the government's cut from means-testing changes has yet to be felt, with over $1.2 billion in premium prepayments in June 2012 as people sought to avoid the financial consequences for one financial year or more. The lifetime health cover changes have not passed the parliament and will also have a detrimental effect on coverage if passed.
The cumulative effect of these measures is likely to have a significant impact on private health insurance coverage and increase demand for public hospital services in the years ahead, which will require a response from any future government. It is common sense. It is just like public schooling and private schooling. Private schooling and private health take out the cost to government of looking after education and health. The more you hurt the private sector, the more you force people to depend upon the public, the greater the cost to the taxpayer and the more inefficient the service is. It is just a rolling stone. However, we all know that the Labor Party hate private health and private education and will do anything they can to see the back end of both. Whether it affects the nation's prosperity or the efficiency of the system does not seem to be something that affects them. The lifetime health cover changes have not passed the parliament and, as I said, will also have a detrimental effect on coverage if passed.
This bill adds immense complexity to the private health insurance system. It is the third savings measure to private health insurance introduced by the Labor government and will again force up the costs of premiums. The Prime Minister and other members over many years have ruled out any changes to the private health rebates. In a letter to the Australian Health Insurance Association in November 2007, the member for Griffith said:
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.
Through means-testing changes and announcements since then, Labor has repeatedly broken its promise on private health insurance.
I spoke in 2012 about the devastating effect the government's change to means-testing would have on my electorate of Calare, and here I am again speaking on the government's continued meddling with private health. We all value our health—those in the bush especially, as we do not have the same access to health care as our city counterparts. We have to look after ourselves because, should we get sick, there are a number of hurdles to overcome even before we get to a hospital. When I was president of a rural representative organisation, New South Wales Farmers, we made the decision that we had to go after health, because what was the point of having a successful farm or a successful situation in regional Australia if your health were not good?
There are so many instances from 2005 right up to 2009 when this government—including when it was in opposition—repeatedly made pledges that it would not do the sort of thing we are faced with today. But the daddy of them all is one that the current Prime Minister made in a letter to the editor of The Weekend Australian on 15 October 2005, where she gave the current Leader of the Opposition a big serve about changing his mind on something. In response to claims by the then minister that she wanted to knock off the private health insurance rebate, she said:
The truth is that I never had a secret plan to scrap the private health insurance rebate …
She is having a go at her previous leader Mr Latham here. She says:
For all Australians who wanted to have private health insurance, the private health insurance rebate would have remained under a Labor government. I gave an iron-clad guarantee of that during the election.
The difference between Tony "rock solid, iron-clad" Abbott and me is that when I make an "iron-clad commitment", I actually intend on keeping it.
Given that we all remember 'no carbon tax under a government I lead', possibly we should not be surprised that once again the 'rock solid, ironclad guarantee' of the current Prime Minister is worthless and that she is doing her level best to destroy private insurance.