Tuesday, 4 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
This has been a government that has been engaged in a debate with private health cover ever since they came to power. They were quite happy to make promises before an election. Now they have steadily, progressively nickel and dimed the 10.7 million Australians who take control and fund some of their own health cover. The 30 per cent health rebate, the lifetime health cover and the community rating are the three legs upon which private health cover now covers more than half of Australia's population but one side of politics does not have the foresight and the vision to allow the public health system to be sustained.
Many parts of the world have moved on from this puerile and petty debate, this class warfare and this hatred of anyone looking after their own health care. Go through most parts of Europe: they acknowledge that there are two sectors that working together can look after the health of the citizenry. But that is not the case here in Australia. We are engaged in a multi-decade fatwa against private health cover, on the one hand building up 12 new bureaucracies costing a billion dollars over the forward estimates to run and on the other hand ripping money out of the MYEFO retrospectively. What a curious act from a Labor government that since the mid-2000s has engaged in criticising this opposition about ripping money out of health care because they did not increase it as fast as they had in the previous government agreement.
Now the government have the duplicity and the hypocrisy to come in and rip money out of state hospital budgets to the tune of $1.6 billion when that money is already committed and promised. It has already been transferred to state governments. It is already paying the wages of doctors and nurses. Then they tell you in this futile and desperate struggle to come up with a budget surplus—that ephemeral and ultimately futile and impossible budget surplus that they had to rip money out of public hospitals. What foolish and short-sighted conduct these health ministers have engaged in. Let us run it through just one more time. We are not talking about forward estimates. We are talking about money already transferred—ching, ching—already in the bank account, already paying the salaries of nurses and doctors and that money has been removed.
Mr Deputy Speaker, I have made my point. On the one hand, there has been nickel and dining of the 10.7 million Australians. For every $2.60 they put into private health cover to take responsibility for their own health care, the government puts in an additional dollar and says, 'Thank you.'
We are in a nation where if we want to redistribute income, we use a tax system—progressive income and company tax. But when it comes to social services, we deliver to those in need. We deliver health services to the sick, educational services to those who need education and childcare services to those who have children but not to this government. This is about an attack on everyday Australians who pay their way in the tax system and then want to fund their own health care. It is a simple proposal that most nations have moved on with but the fatwa continues on the other side of the chamber.
This is a government that has sought to downgrade the value proposition for caring for your own health care. I can understand there is one story and one narrative in the cities, but let us also remember there are regional Australians who are far away often from healthcare providers and private hospitals. They do not have the same value proposition to keep their private health cover, do they? Instead, we have seen relentless attack that is hitting regional Australians first because they are the ones most likely to drop or downgrade their cover or seek out exclusions so that it remains affordable.
Let us look at the detail of the bill. The one that concerns me greatest is the removal of the 30 per cent rebate from the lifetime health cover component. This is the extra amount one pays for one's private health cover if you do not take it out from the age of 30. That premium is increased by two per cent for every year of life after 30 years of age that you fail to take out private cover—a maximum of a 70 per cent loading—and that can continue for 10 years after you take out the cover.
Let me hypothetically paint a picture for you of a couple that did take it out late in life—five years too late perhaps. They have paid 10 per cent for nine years and now we have the nickel and diming from a government that has never ever trusted someone to fend for themselves and pay for their own private health cover. They are at risk of dropping and downgrading when they are only a few years away from actually having that whole lifetime health cover removed and the premiums becoming more affordable. Let us take another instance: living in a small country town where there are perhaps one or two private providers, no private hospital. So you are paying these large amounts of private health cover but effectively not being able to access as many of the services.
Every time a family makes a tough decision around the kitchen table, the father speaking with the mother about whether to cover the family for another year or so, looking at the increasing private health insurance costs, they are now being slugged by a government that has found every tricky way in the book to make it harder for those families. Those 10.7 million Australians will not forget this. Many of them are low income earners, they are not all the high-flyers. I guess this other side of politics tends to forget that. The first thing that they will do in a conversation across the kitchen table is say, 'How can we keep our private cover to know that we will always have some access to hospital if something calamitous occurs?' The first thing that will drop will be the extras—and that just sounds fine to this government, doesn't it.
That is until you remember that the local private physiotherapist, the local OT and the local pharmacist in town are in many cases supported by people who pay the extra, who have a much higher Medicare safety net and in many cases will only use those private covers if they are insured. Up to 50 to 60 per cent of the work of the local physiotherapist in town is private. They do an amazing service and they reduce the need for country Australians to travel down to the big cities. Once you erode the value proposition for private health that whole exquisite balance that has been achieved over two decades of hard work by governments prior to this one is eroded. People ultimately lose a general practitioner. Let us not forget that. It is the very presence of a general practitioner in town that supports all of the allied health workers around that GP and that is being undermined. Right across this country, the impact of this legislation is for Australians to say, desperately, in an eye-to-eye conversation: 'How can we keep our cover? We've been in it for this long.' The punishment is significant, the uncertainty is incomprehensible if we do not keep our private cover, and you have a government that is doing everything it can to undermine that.
To put it in the simplest possible terms: what we have is a government that came to power in 2007 but in that time has really fixed no problem in the health system. I can make a list of all the challenges the Australian health system faces and, after all these reforms, we still have them today. And that may well be the long-forgotten epitaph that is written when we consider the health performance of this government. Sure it was good at the back-end financial dealings in restructuring our health system, but it never got to the front line to work out what it takes to keep practitioners and providers supported and to keep Australians with private health cover.
I concede that so far the numbers pulling out have not been as high as they could have been—the reason for that is simple: there are significant penalties to pulling out—but watch for the downgrading. The downgrading of cover is something where we cannot trust the modelling that has being done. We do not accept the modelling that has been put together, and I think that even with these changes they are yet to feel them because $1.2 billion was prepaid and none of these people have faced increases in their premiums yet.
But this is a government that does not see more than five minutes into the political future. It is quite happy to make financial commitments for the year 2017, when it is unlikely any of its members will be around, but it does not govern for today. It does not look after today's families, and it is becoming increasingly obvious that it completely forgot health reform through the GFC period. It did not invest a single cent of the stimulus package in health. And now, with its private health cover, in a futile and late attempt to fund a government surplus—
Thank you. We are moving into the inane here. There is a significant history here of a tax on private health cover, and there is a complete record of commitments that have been made by that side of politics never to touch the private health rebate. Why are we here today if we could believe a single word that came out of the mouths of the leaders of that side of politics? The truth is we cannot. The truth is it has always had a vendetta against people who care for and fund their health cover, and we think that is highly regrettable.
I can appreciate if those over there fundamentally do not like people who want to pay for their own health cover. That is okay; that is something for their caucus and their policy. But there are 10 million Australians quietly taking notes on what is happening tonight, and they will not forget. They will not forget that at every opportunity those opposite took a chance to reduce private health cover and to make it way less affordable. I know that premiums go up every year, and that is simply a reflection of increasing health costs. But you need to be able to look your own government in the eye and say, 'If you won't touch private health cover, give me the confidence that you won't do a double deal on us.' But in fact that is not what has occurred. What has occurred is an attack on a 30 per cent rebate with means-testing. We have now seen an attack on Lifetime Health Cover, all of this in the spurious and ultimately futile attempt to run a budget surplus.
The great question is: now that you have waved the white flag on a budget surplus, why are we persisting with these minute changes to try to save a little bit of money off the people who pay for their own private health cover? I would be happy to contemplate some of these propositions if those opposite were running the public health system better, but the great fear of most Australians now is that is not the case. The COAG Reform Council has clearly said that there have been no improvements in waiting times for operations over the period of this government. And the government will tell you that is because some other party removed some of their funding. Isn't it possible to write up an agreement that locks in those jurisdictions? No, these agreements were not sophisticated enough, and this is a federal government that has basically been seeing additional money being committed with no difference for Australians.
The great concern here when you are taking private health cover is this: I am hoping not to have to leave my footprints in the public system; I hope to fend for myself, pay my own way and be more self-reliant. That is something that needs to be supported. It always will be by this side of politics. There are 10.7 million Australians who look to us to fight for those who fend for themselves. And of course we support a decent public hospital system. Of course we support workers on the front line. But the latest extraordinary proposition is that we have 3,000 people now working in Medicare Locals around the country, of which apparently 80 per cent of them are front line. What is the definition of 'front line'? This is money that is being devoted to Medicare Locals that potentially is meant to be improving primary health care. I would like to see evidence of where the money that is being collected here, in this attempt by the government to steal from the pockets of those who are privately covered, is going to be invested, because there is no cogent and convincing explanation that that money is leading to either better public health or hospitals.
In conclusion, this is a government that tends to mess up everything it tinkers with. It is a government that promises not to do something and then does it. And it is a government that, fundamentally, inherited a series of challenges that all health systems have. In the end we may well see by 14 September, in a retrospective look at what has changed in our health system, plenty of administrative changes, plenty of health reform by press release, but ultimately this health system will carry on. The same challenges it had in 2007 it is still vexed with in 2013. The only difference will be life will be far tougher for those who have attempted to pay their own way and fund their own private health cover.
You're right; I'm not sure whether it is named after you in the chair, but it is a good name. Named after Sir William Lyne.
An opposition member: Are you offended?
I am not offended.
These issues in respect of the balance between public and private health are always some of the more challenging ones when they come before this chamber. Anyone who believes the nostalgia that there is such a thing as universal public healthcare system I hope, with debates such as these, would be left in no doubt that they are exactly that—that is, nostalgia. There has to be a balance between public health care and private health care in Australia. I hope that is a shared commitment from all members in this chamber. It is very much a judgement call of getting the balance right between the two.
The previous speaker, indeed, assisted me when he made the comment that in his view these were somewhat 'minute changes'. It confirmed some concerns about various aspects in both of these bills that I may personally have. I am very aware that there are some in the private health industry and in households who do believe that they are paying too much for their private health cover. I have also been watching very closely the statistics on private health insurance to see whether or not there is continued growth in the industry and to try and get the best read possible as an observer of the industry on what is happening with dropouts, take-ups and movements within membership packages and whether that does sit alongside the public system in making what I would consider Australia to have—that is, the world's best health system. What we are arguing about tonight when it comes to health care is not anything to do with Third World conditions; we are arguing about a level of excellence in health care that, again, I hope everyone in this chamber acknowledges and celebrates as to the level of care that we have got in both public and private health care.
I am also very conscious that Australia's health economics does remain unsustainable and many difficult decisions have to be made by all governments if we are to have a sustainable health system with an ageing population. I understand that next year, 2014, an intergenerational report is due. My view is that that will say what the others have said: we have a huge ageing bubble coming through and public policy on so many fronts is not treating with urgency many of those challenges faced by the ageing bubble that is coming through. At the front end of those challenges is Australia's healthcare system.
I will be supporting both of these bills, as I do think that we need to do more in regard to the sustainability of health economics in Australia. I do so with a continued eye on the figures that come out in regard to membership and profits in the private health sector and the question of whether there is continued growth in issues like infrastructure and services in regional communities that rely on the balance between public and private health care being right.
The final point I want to make is in that regard. We have an excellent expansion going on of the public hospital in one location I represent, Port Macquarie, where a combination of Commonwealth and state work and money—$96 million from the Commonwealth and $14 million from the state—is seeing a significant expansion of Port Macquarie Base Hospital with what is known as the fourth and the fifth wings currently under construction. Next to that, as well, we have some excellent expansion work with the Joint Health Education Facility, which is bringing together a range of education providers. The University of New South Wales is leading on the project. They say that this is a first for regional Australia, bringing together TAFE and several universities—including the University of Newcastle and the University of New South Wales—to deliver a range of health services and courses with the lead being a Bachelor of Medicine from first through to sixth year at the one location. That is an exciting project that is underway, and we continue to see expansion in a range of services within existing infrastructure.
Right next to the hospital, though, is a block of land that in 2002 was sold by the local council to an individual on, effectively, a promise that a 100-bed private hospital would be built next to the public facility in an exercise of getting the balance right and dealing with the growth in regional community. Four years later that was on-sold at a profit of $1 million. That is now being purchased by the majority private health provider within our community. In many people's views, including mine, it is being bought to sit on to prevent any growth in the number of private beds and the actual delivery of the council facility that they sold the land for and rezoned for, which was the promise of a 100-bed private facility. It is disappointing that, through that journey of 11 years, what started as a horse in a paddock next to a hospital is still a horse in a paddock next to a hospital.
If we are about getting the balance right, I would just urge Minister Plibersek at the table to talk to state colleagues and private providers to actually deliver on the aspirations of a community—that is, for a council which rezoned and sold a block of land to deliver a community a 100-bed hospital to ensure that we actually get it and that a private individual does not make a million bucks and the main private healthcare provider in town does not just buy out the facility to control market share. That is not community building in any way and does not assist community growth and health care in any way.
I would hope that that could be explored by the minister and that we can get a resolution to what should be a really good private facility sitting alongside some very exciting public upgrades at the hospital and university and education upgrades in health degrees happening alongside the hospital. That would make it a fantastic all-round reflection of a growing community, dreaming big and doing what it can to meet its large demands as an exciting regional growing community. But, as far as the substance of these two bills goes, they are supported, they are judgement calls and I hope we can get health economics on a more sustainable footing sometime soon.
I rise today 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 with much sorrow because it is, unfortunately, yet another nail in the coffin of private health insurance in this country. Why have private health insurance? A former very excellent health minister understood the reasons. Dr Michael Wooldridge knew that, by having and encouraging private health insurance, you would encourage people to be more self-reliant, you would allow people to make choices about their health care and their health providers, you would give them flexibility in that choice and, importantly, you would take pressure off the public health system.
This is not something the government have ever understood; in fact, it is certainly not something they have ever been committed to. Despite all of the rhetoric—and let me just give you a bit of a history lesson on that—it is something the government have been philosophically opposed to from day one. The Prime Minister said:
Labor is committed to the maintenance of this rebate—
the private health insurance rebate—
and I have given an iron-clad guarantee of that on a number of occasions.
She also went on to say, when comparing herself to Tony Abbott:
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 it were a fact. 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.”
I think we all know from the bills tonight and from what the government has done to private health insurance that this certainly is not true. We know that this government has been intent on pulling apart the private health insurance rebate and making health insurance more expensive for Australians.
The people of Higgins will be hit very hard by this. About 83 per cent of the people in my electorate have private health insurance. This means that more than 80 per cent of my electorate see the value in being self-reliant, taking pressure off the public health system through their taking out of private health insurance. I am constantly canvassing my electorate for their views and opinions. I do this in a number of ways—through mobile office meetings, through community forums and in particular through communitywide surveys. In my two very large communitywide surveys right across the electorate, private health insurance rebates are always at the very top of their concerns.
These changes, though, will affect not just those people with private health insurance but also those people who do not have private health insurance. What the government stubbornly refuses to accept is that, when people abandon the private sector due to increased costs, the burden is shifted to the already stretched public health system, to our already stretched hospitals, which in Victoria have also taken another hit from this government when it ripped out $107 million of hospital funding. In addition to the higher premiums, it actually puts private health out of the reach of the average Australian.
The government have said that this will have no impact whatsoever on the number of people who have private health insurance nor on the public health system, but they cannot say that with any knowledge or understanding, because the real impact of these changes will not be felt for another 12 months. The Private Health Insurance Administration Council has reported that there were $1.2 billion in prepayments in the June quarter so as to take advantage of the 30 per cent rebate. Many policyholders prepaid for 12 months or more, delaying the pain of Labor's cuts. The government should be encouraging people to take out private health insurance, not making it more difficult. They should be striving to encourage more choice, not limiting it.
Make no mistake: the government ripping more than $4 billion out of private health insurance is nothing more than a tax grab to shore up their budget bottom line, and they have done that in the knowledge that they are finally fulfilling their philosophical dream to take apart the private health insurance system. The problem is that this government does not appreciate that 12.5 million Australians have private health insurance. It is not just those people who this government claims are wealthy; it is people on lower incomes as well. 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 of those people have an annual household income of less than $35,000. The government's increase to the cost of private health insurance will hit those people. They will hurt everyday Australians by raising the cost of living and hitting their hip pocket.
So why is the government introducing these bills? Why is it putting more pressure on our hospital system and why is it encouraging people who do have private health insurance to downgrade their cover? It is doing so because of its philosophical objection, as I have said, but also because of its utter mismanagement of our economy. This is a government that inherited no net debt. We had taken the time to pay off $96 billion of Labor's debt but we did more than that. In delivering surplus after surplus, we put some money aside into the Future Fund—
Mr Deputy Speaker, on a point of order: I am wondering whether the speaker has run out of things to talk about when it comes to private health insurance. Could she return to the legislation?
Thank you very much, Mr Deputy Speaker. I am simply trying to educate the minister that it is as a result of the fiscal mismanagement of this government that we find ourselves in a position where this bill is being brought before the House. As I was explaining to the minister—and she may learn something if she does listen to this point—the previous coalition government in delivering record surplus after surplus was actually able to put enough money away into a Future Fund to help cover the contingent liabilities of our public servants—$70 billion in net assets. What this government is doing, though, is that it has been accumulating more than $192 billion in deficits and it has promised another two deficits, which will add up to more than $220 billion. But we know we cannot rely on the Treasurer's figures. We know there will probably be bigger blow-outs than that if the Treasurer is still in his job after 14 September. More than that, we have more than $300 billion of gross debt, and counting. It is quite wrong that Australians are having to pay for the government's incompetence. They are having to pay for this government's incompetence through higher costs and through higher costs to their private health insurance rebates.
The government have coupled the bill that will index the private health insurance policy base premium by the lesser of CPI percentage change or the change of the premium charged by a private health insurer with a bill introduced last year—the Private Health Insurance Amendment (Lifetime Health Cover Loading and Other Measures) Bill 2012. There is only one reason why they would do this—that is, to avoid scrutiny and to try to force it through parliament even more quickly. It is because they know that the changes to lifetime health cover in this bill will increase premiums by up to a reported 27.5 per cent on 1 July 2013. I stress again: an increase of up to 27.5 per cent on 1 July 2013. They are reneging on another promise despite their iron-clad guarantee. They are going to increase the cost of living for all Australians and there is no smoke-and-mirrors spin that they can use to disguise that fact.
It is only the coalition that understands the need for a strong and accessible private health system to ensure that the public health system remains viable and sustainable. After all, it was the coalition government's private health insurance reforms in the form of rebates, the Medicare levy surcharge and lifetime health cover that saw the number of people with private health insurance increase 75 per cent from 6.1 million to over 10.7 million, consequently alleviating stress and strain on the public sector, which was then at breaking point.
That is why only the coalition has committed to restoring the private health insurance rebates once we can responsibly do that. It is only the coalition that understands that choice in health care should not just be for the elite, the wealthy, the rich—however it is that the government would like to choose to term the phrase—but instead is accessible to all those who wish to provide options for themselves and for their families. It is only the coalition that will again deliver hope, reward and opportunity for all.
I rise to sum up 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. It has been extraordinary listening to the contributions of those opposite. If you listened to the contributions, you would not know that they are actually supporting one of these pieces of legislation. The extraordinary comments of the previous member missed the point entirely.
I thank the members of the opposition and, indeed, the members of the crossbenches who will be supporting the Private Health Insurance Legislation Amendment (Base Premium) Bill 2013. It is very important legislation. It makes our continued contribution to private health insurance affordable into the future and it also allows us to pay for some very important commitments we have made in dental care to pay for kids' dental needs—our Grow Up Smiling program with $1,000 worth of dental care for every child and the family tax benefit A for 3.4 million children, who will find it as easy to see a dentist as it is now to see a doctor—and DisabilityCare Australia, another huge change and as big a change as the introduction of Medicare was.
I am also very pleased that members who are supporting the Private Health Insurance Amendment (Lifetime Health Cover Loading and Other Measures) Bill 2012 understand that if you back these important spends in disability and dental then you have to back the saves. What we have opposite are members who have had five different positions in a month on private health insurance. They have backed one save; they have not backed the other save, for no apparent active logical consistency other than that one shadow minister had to win one fight and the other one had to win the other fight so that they could sit in the same shadow cabinet room together. If you back the spends, you have to back the saves. I commend these bills to the House.
(In division)The member for Denison! Could he report to the tellers, as he moved after I said, 'Lock the doors.' Could the member for Denison report to the tellers—that is all I am asking—to clarify where he is voting.
Bill read a second time.