House debates

Thursday, 27 May 2021


Private Health Insurance Amendment (Income Thresholds) Bill 2021; Second Reading

11:33 am

Photo of Mark ButlerMark Butler (Hindmarsh, Australian Labor Party, Deputy Manager of Opposition Business in the House of Representatives) Share this | | Hansard source

I rise to speak on behalf of the opposition in relation to the Private Health Insurance Amendment (Income Thresholds) Bill 2021. I indicate that the opposition will be supporting the passage of this bill, although I also foreshadow that, at the end of my remarks, I'll be moving a second reading amendment.

The bill is relatively modest in its terms but substantial in its impact. It essentially extends the freezing of income thresholds for the different rates of private health insurance rebate and also the incomes at which different Medicare levy surcharge rates cut in. This was a decision in the first Abbott and Hockey budget in 2014 which has operated since that time. At the time that government decided to freeze the Medicare rebates, the MBS rebates, a decision that they maintained until we pressured them to lift those in 2019.

I think it's important that middle-income Australians, particularly, remember this when they listen to the government's rhetoric about them standing up for the financial position of middle-income households in Australia because the freezing since 2014 of these thresholds does have a substantial financial impact on middle-income households. If your income creeps over particular thresholds through the very modest wage rises that people are able to obtain under this government's wage settings then there is a substantial impact on your household budget, irrespective of whether you have chosen to take out private health insurance or not. For example, if the wage of a single person, not a couple-household but a single person, creeps over $90,000, one of the relevant thresholds in this legislation, to, say, $90,100 and they do not have a qualifying private health insurance policy then they will move from not being liable for the Medicare levy surcharge to being liable for a one per cent Medicare levy surcharge—that is, one per cent of taxable income. It not only takes account of their wage or salary but also takes account of reportable fringe benefits. For example, someone with no reportable fringe benefits who has a salary of $90,100, because these income thresholds are being frozen by the Morrison government and not rising as wages are rising, that person will move from having no Medicare levy surcharge liability to having a one per cent liability, which for that person would be as much as $884 per year, or $17 per week. If that person does have a qualifying private health insurance policy then moving their wage or salary to $90,100 will also cause their private health insurance rebate to drop by as much as 8.2 per cent. For a single person on a $2,000 a year private health insurance policy, their rebate, because their wage has moved up, would drop by 8.2 per cent, or about $164 per year.

This position that the government initiated in 2014 and, through this legislation, is proposing to extend for the next couple of years would have a substantial impact on middle-income households. Granted the budget papers indicate that not many people are going to get a wage rise over the coming four years under this government's wage settings, but for those people who, through increments in their agreement or whatever, are able to see their wage or salary rise above that threshold of $90,000, or the other thresholds contained in this legislation, there is a hit to their household budget yet again, as there has been every year since this government came to power, irrespective of whether you do or do not have a qualifying private health insurance policy. This is the same group of middle-income households, in addition to low-income households, who will be hit with a tax hike next year. For someone on $90,100, their tax hike next year will be $1,080—that is, $1,080 in addition to the impact on the household budget through the operation of this legislation. We're not going to get in the way of this government doing this, as we haven't since 2014. This is a substantial fiscal saving for the government, although it's not set out in the explanatory memorandum. If you go to the budget papers, this does return to the budget about $300 million over the course of two years because of an extension for two years. This saving to the budget is essentially money taken off those middle-income households by this government and returned to the budget. As I said, these same households are facing the prospect at the moment of a tax hike from next year of about $1,080 per year.

As I've said in relation to the other very narrow, and in some case modest, pieces of legislation the government has brought forward over the last couple of weeks since the budget was announced, this federal budget had next to nothing. It was incredibly hollow in the general health space. There was essentially nothing there. There were substantial announcements in mental health that people are still going through, particularly in light of more substantial announcements again from the Victorian government following the Victorian royal commission into mental health. There was a substantial amount of money allocated to aged care; although we would say that it misses some of the very important central recommendations of the Royal Commission into Aged Care Quality and Safety, particularly around workforce, around clearing home-care waiting lists and also around transparency and accountability by providers for the money they receive either from taxpayers or from user contributions. But in the area of general health, there was next to nothing in this budget.

There are a couple of issues, though, that were raised from the budget that I do want to address. The first is telehealth. This was one of the very few announcements in the budget that goes to the general health of the population. The member for McMahon, when he was the shadow health minister last year, time and time again urged the government, as Australia locked down in the beginning of the pandemic, to put in place broad telehealth measures to allow patients to consult with their doctors and other treating health practitioners under the MBS scheme, to do so remotely, to do so over the phone where appropriate or over video consultations where appropriate as well. We on this side were glad that the Minister for Health finally agreed to that urging by the member for McMahon and also by health groups, health practitioners and patient groups as well.

The minister, to his credit, said in November that it was his intention to make telehealth broadly a more permanent feature of the Medicare system. Again, that is something we welcomed and hope it is something that unites both sides of the House but, since that announcement six months ago, all we have seen is a six-month by six-month extension of the telehealth measures. They good as far as they go but not a very firm foundation for certainty and for planning either on the part of health practitioners or patients.

Telehealth measures were due to expire in June, so when the minister over the last few weeks—I cannot remember the date exactly—announced another six-month extension to the end of calendar 2021, that was broadly welcomed. It wasn't a permanent extension, which was what the minister foreshadowed in November, which is what people would like, but it was at least an extension that gives us some certainty over the course of this calendar year. But frankly, there was a fly in the ointment. Health practitioners, health groups and patients who welcomed the minister's announcement initially, once they went to finer detail, were quite shocked, because this was detail about which, as I am advised at least, there was no consultation. There was no consultation with doctors' groups, patients groups or other health groups about the decision that the minister made to extend telehealth measures but to discontinue, really, all but two MBS items for phone consultations.

These items have been a very significant part of the telehealth system through the pandemic. For example, there were 2.8 million items for level C phone consults, as I am advised, through this period since the beginning of the telehealth measures in the first half of last year, and 200,000 items for level D consults over the phone since the measures were introduced. The AMA president, Dr Omar Khorshid, said the profession had been blindsided by the decision the minister made to discontinue these phone consultations with no consultation and no notice, pretty much immediately. The AMA president said: 'The permanent future of telehealth must include access for people who are disadvantaged, and that means, at this stage, telephone consults. The beneficiaries of telehealth are patients, not doctors.' He further went on to say, 'We believe that the quality of care provided over telephone consultation is excellent, so long as it's being done appropriately, and is no different to what is provided over video.'

There are obviously circumstances in which a remote or virtual consultation between doctor and patient needs to be by video because there needs to be a level of visual contact and communication between them—to inspect something visually, for example, or a range of other circumstances that are too manifold for me to outline. That ultimately, though, has to be a matter of clinical judgement. We had heard talk in this city that the department or the minister or both were concerned that these phone consult items were being overused or were being misused. We hadn't heard any particular examples of the way in which that was alleged to have happened, but we'd heard that there was concern about the use of these phone consult items. But I've not seen anything specific. If there is misuse of anything in the MBS system, there are strong avenues for the government to take action. But I've heard no specific allegations.

Then we heard that there is a view that phone consult items are generally just not appropriate, that there should always be a visual element to the virtual communication between doctor and patient. That just ignores the fact that there are vast swathes of the population still who are uncomfortable with that type of communication, particularly older Australians. Many older Australians are comfortable with it, but, disproportionately, older Australians—GPs tell me, and I'm sure they tell other members of this House—are not at the moment comfortable with that level of technology. And there are different levels of access to that technology through the country.

Ultimately we should trust the clinical judgement of our medical workforce in this respect. Doctors will take the view that in certain circumstances they need a video consult, but in other circumstances it might be quite sufficient for them to have a conversation over the phone with their patient, particularly where that patient is more comfortable with the telephone or is restricted to the use of telephone rather than video communication. I still do not understand—and the GPs I talk to as I travel around the country do not understand—why the government, with no specific allegations of broad, systemic misuse, with no consultation with representative groups like the AMA, the college and others, have made this decision. It looks brash. It looks knee-jerk. I think it needs to be reconsidered by the government.

The second thing that I think was notable in a very modest offering from the government around broad health policy in the budget was a decision to increase bulk-billing incentives in rural, regional and remote Australia—something we would all support. Labor has always supported the judicious use of incentives through the system to lift bulk-billing rates. We understand, through long experience, that having access to bulk-billing rates and medical workforce is more challenging in rural and regional Australia than in our big cities. We're not pretending things are all hunky-dory in our big cities—there are very significant access issues and bulk-billing issues in our big cities as well, particularly bulk-billing issues as a result of the government's long-term freeze of Medicare rebates over many years. But we know that it's more problematic in rural and regional Australia.

The issue this raises, though, is this ongoing anomaly in the system that flows from the introduction of the Modified Monash Model. As we understand it, these increased bulk-billing incentives apply to Modified Monash Model areas 3 to 7 and not to 1 and 2. On this side of politics, on this side of the House, we have been raising time and time again the issues that some outer suburban areas continue to have with workforce shortage—what we used to call the old districts of workforce shortage, now called DPA. We've been raising that time and time again. Particularly we've also been raising the challenges in access to medical services in some of the regional areas that were reclassified through the introduction of the Modified Monash Model.

I was in the Hunter Valley and on the Central Coast in the past couple of weeks. I spent time with Labor members in those areas, talking to general practitioners at roundtables and one on one about the trouble they are having in filling their practice with GPs. I talked to patients about the trouble they're having getting appointments and, when they do get appointments, getting bulk-billing appointments. We know that the change in status of those areas has been an ongoing problem since that time for the Hunter Valley and for the Central Coast.

Last week I had the absolute pleasure of spending time with my friend and colleague the member for Richmond, who's got a great background in health, as a former aged-care minister, and understands these issues very, very well and deeply understands the circumstances in her electorate. Again, in that beautiful part of northern New South Wales—one of the most beautiful parts of our country—there are exactly the same issues that I encountered in the Central Coast and the Hunter Valley with the application of this modified Monash model. They get no relief from this budget, either.

This was a very modest budget. We've wracked up $1 trillion in debt and the Treasurer spent $100 billion in one night, but for general health there was pretty much nothing—the cupboard was pretty much bare. There's a $300 million saving measure through the health budget contained in this bill. We won't oppose that measure but, in terms of additional services, at a time when demand is skyrocketing, we have an ageing population, an increasing incidence of chronic disease and a more complex level of demand placed on our health system, this government had nothing for the general health system. With those remarks, I move:

That all words after "That" be omitted with a view to substituting the following words:

"whilst not declining to give the bill a second reading, the House urges the Government to better protect Australians’ health during the pandemic and deliver a more sustainable, equitable, and effective health care system."

Photo of Sharon BirdSharon Bird (Cunningham, Australian Labor Party) Share this | | Hansard source

Is the amendment seconded?

Photo of Peta MurphyPeta Murphy (Dunkley, Australian Labor Party) Share this | | Hansard source

I second the amendment and reserve my right to speak.

Photo of Sharon BirdSharon Bird (Cunningham, Australian Labor Party) Share this | | Hansard source

The original question was that this bill be now read a second time. To this, the honourable member for Hindmarsh has moved as an amendment that all words after 'That' be omitted with a view to substituting other words. If it suits the House I will state the question in the form that the words proposed to be omitted stand part of the question. I give the call to the member for Bowman.

11:52 am

Photo of Andrew LamingAndrew Laming (Bowman, Liberal Party) Share this | | Hansard source

I strongly support the Private Health Insurance Amendment (Income Thresholds) Bill 2021 and also deeply appreciate the words of the member for Hindmarsh, who gave a very reasonable overview of the intentions of the legislation and the important roles that PHI rebates and Medicare levy surcharges can play in this space. It's important to note that, while these freezes on indexation have been around since 2014, continuation of that for an additional two years provides certainty for policyholders while a more substantive review is done.

Australia has a unique health system where private health plays a major role. You can travel the world and not find a system like Australia. We need to recognise the work done in the late 1990s by then health minister Michael Wooldridge, the architect of these three pillars that make private health work: community rating, lifetime health cover and these PHI rebates that are now obviously tiered by both age and income. They play such an important role. To have 44 per cent of Australians covered for hospital cover and 54 per cent of Australians covered for general cover, is quite unique around the world—and today is an opportunity to recognise that.

There are great health insurers out there represented by the PHA. They play an incredible role because they note these huge increases in health costs as a result of technology, staffing costs and of course an ageing population. They feel responsible for keeping these costs under control and they're putting forward to government and to oppositions solutions to that problem. That's an important contribution, because there is no easy answer—and I'll talk more about that later.

In short, I want to note that these PHI rebates play a very important role. These aren't transfers to wealthy people; these go to people of all backgrounds. It allows them to have a choice between additional investment in the education of their children or health cover of a private variety, and they can join one of many health insurers. I think that works well. Let's be honest: this is no picnic for health insurers. It's unfair to treat health insurers as if they're having an easy run and gouging patients. Health expenses are growing worldwide. Hospital expenses, in particular, are growing at around eight per cent to 10 per cent a year worldwide. There's no easy way through this. But there is something that's very important to note—and I recognise a colleague across the chamber who, as a medical specialist, will understand this. I won't use the argument that having more people privately insured takes people off public hospital waiting queues, as that's a contentious point. But what is not disputed is that, for every person who elects to cover themselves privately, it's a good legislation to follow. I support it.

11:55 am

Photo of Mike FreelanderMike Freelander (Macarthur, Australian Labor Party) Share this | | Hansard source

I rise today to speak on the Private Health Insurance Amendment (Income Thresholds) Bill 2021. It was only a few weeks ago that I last rose in this House to speak on the last private health insurance amendment. We constantly seem to be coming into this place and discussing health care but tinkering at the edges without really addressing the major problems that are plaguing our healthcare system.

I'm pleased the member for Bowman has made some comments about the importance of private health insurance, and I, indeed, believe in it as well. I think that our system has functioned very well with a balance between private and public health care, and of course I started my private medical practice in the same week that Medicare started in Australia. It really has been a gift to the Australian people from the Australian Labor Party. I'm a great believer in a universal healthcare insurance scheme such as Medicare complemented by a private health insurance scheme, as we have in Australia and have had for many years. I encourage everyone who can afford to pay for their own health care to take out private health insurance.

Unfortunately, this is a government that fails to understand the deep problems that we're having in our healthcare system, and I admit that most people in this place get pretty good health care. We're on high incomes, we can afford to pay for private health insurance, we get very few problems in the way of access to health care in our major cities and, for us, elsewhere, so I think there is a lack of understanding on the other side of the importance of universal equity in health care—and that's not what we're seeing in Australia at the moment. We're seeing huge differences in mortality and morbidity between the inner city, outer metropolitan, rural, regional and isolated areas. We know that people who live in rural and regional areas have life expectancies for males and females at least 10 years less than those that live in the inner cities. We know that people are suffering much more in the way of poorly treated chronic illness in rural and regional areas, and we know some of our Indigenous populations who live in remote areas have health care worse than in many Third World countries, and this is something that this government has failed to address. Some of the state governments also, I must say, have failed to address this issue.

There are major advances in how we manage things like cardiovascular disease and stroke and some of the common surgical problems, such as gall bladder disease et cetera, with laparoscopic surgery. Yet many people in rural and remote areas cannot access these modern treatments, and very little thought has been given to how we can get these modern 21st century treatments to rural and remote areas.

We know that only about 50 per cent of people who have had a cardiac event such as a myocardial infarction, or, in layman's terms, a heart attack, will be able to access regular cardiac rehabilitation post event. That's particularly true for people who live in rural and remote areas but also, I must say, in some of our outer metropolitan areas, because not enough thought has been given to how we can provide equitable care and not enough thought has been given to providing those services in areas where it's most acutely needed. We know people who don't have access to regular cardiac rehabilitation post a myocardial infarction have a much poorer prognosis with higher morbidity such as chronic cardiac failure, which impairs the ability to work, to mobilise and to even care for yourself. We know they have much worse morbidity and, unfortunately, there is much worse mortality for those who have not done regular cardiac rehabilitation. In modern stroke management, the treatment of choice these days for stroke due to blood clot is clot removal on an urgent basis, which can protect the brain from damage. We know that many people in rural and regional areas and even people in outer metropolitan areas cannot access this 21st century treatment, leading to a much worse prognosis of, maybe, hemiplegia and even death. This government has not really addressed those issues.

This bill seeks to keep the same income thresholds for the Medicare surcharge for those who don't take out private health insurance to similar levels in the last four years. That is a reasonable thing to do, but it doesn't address the major issues with people failing to pay for private health insurance, even though they can afford it, and it doesn't address the real issues around our public hospital system with the gradual deterioration of our public hospital outpatient system. I'd like to see this government recognise the importance of a fully supported and fully functional public hospital outpatient system so that everyone who needs it can access outpatient care. At the present time in many of our rural and regional areas, and even in our outer metropolitan areas, people who require specialist review—for example, from neurologists for people with multiple sclerosis or Parkinson's disease or who are post-stroke; or people who have chronic cardiac conditions, congenital heart disease in children or cardiac failure in adults—have to access private treatment through a private doctor's rooms because our public hospital outpatient system is either overloaded or non-existent in many areas. That means that many people can't afford the cost of private review in rooms. For example, to see a cardiologist privately the gap fee can be as high as $250 or $300; it's similar for a neurologist. Many people in our outer metropolitan areas and in rural and regional areas cannot afford that fee, so they often forgo care, and that leads to much worse prognoses and much worse health care. This is something that needs to be addressed urgently so that everyone gets equity of care. It's okay for me. I can afford to pay to see any specialist I need to privately. It's okay for many of the people in this House. But for people who are struggling to put a roof over their heads or who are struggling to put food on the table, this bill will do nothing. It will not provide them with the health care that they need and deserve.

Labor has always stood for equitable health care, and that is something that those on the other side fail to understand. Good health care equals a good economy. We know that from the pandemic. It has taught us that very well. With this pandemic, unfortunately, the poorest, the sickest and the most disadvantaged are the ones who are suffering the most. We must make sure that our healthcare system provides equitable care to all, not just to a select few.

There is another issue I will speak about and hold the government to task on. I have long been a supporter of immunisation. Immunisation has dramatically changed our health in the 20th and 21st centuries. The government's response to the immunisation of people for COVID-19 unfortunately leaves a lot to be desired. It's pretty obvious that many on the other side are immunisation deniers and promoters of immunisation hesitancy. The health minister himself has been telling people that if they wanted to wait for a messenger RNA vaccine it was fine. There is a government senator who has been going around telling everyone he was going to wait until there was evidence of the effectiveness of immunisation. There are many on the other side who have failed to promote immunisation the way they should. I hope that the government gets away with this. I hope that what's happening in Victoria at the moment settles down and, fingers crossed, the Victorian contact tracers will be able to get the spread of COVID-19 under control. If they do, it's no thanks to this government. I hope the government escapes. But, if they don't, if the present COVID-19 outbreak spreads, at least part of the reason will be that the immunisation program has been so poor. Every member of this House and every member of the Senate should be out there actively promoting immunisation for COVID-19. We should have trustworthy third parties promoting immunisation.

This is a government, I believe, that does not understand health care. The fact that we did so well initially in the pandemic is down to the health minister's initial response—it's not down to the Prime Minister. Remember: he was off to the footy. At least the health minister was able to make the medical advice reign, and that's why we've done so well up until now. This virus can escape from hotel quarantine. We know that aerosol spread happens. We know you only need a small initial spread for the virus to explode. The newer variants appear to be much more infectious and much more likely to be spread by aerosol. We need to be very careful. We must have purpose-built quarantine and we must have a health system that provides equitable care for all, and that will lead to a strong economy.

We support this bill. It is a reasonable thing to continue. We should all be responsible, if we can afford it, for our own health care. But we must remember that our healthcare system is predicated on the best care we can provide for all, not just a few. This is a government that fails to understand that and is doing nothing at the present time to address the inequities in health care throughout our country.

12:06 pm

Photo of James StevensJames Stevens (Sturt, Liberal Party) Share this | | Hansard source

I rise to speak in favour of the second reading of the Private Health Insurance Amendment (Income Thresholds) Bill 2021. I'll start by making a few comments on the previous contribution, joining with my honourable colleague in encouraging all Australians to get vaccinated against COVID-19. His points about vaccination and what it has done to change modern medicine in the last hundred years or so are very well made, and I'm very supportive of that. Can I just say that I take every opportunity that I get, as I'm sure all members do, when I'm out speaking to people in my community, whether it's at a Rotary or RSL club or a sporting event. As leaders in the community, we all have to do our job by encouraging everyone in our community to get vaccinated. Indeed, we need to encourage them not just to get vaccinated but to participate in spreading the word. If we can get as many adult Australians vaccinated as possible—hopefully the vast majority, as close to 100 per cent as possible—that is the best thing we can do, working together, to address the challenges that we face from COVID-19 but also the opportunities to open up our country, our economy and our society again as soon as possible. The most important thing we can all do, as members of this House, is encourage people to get vaccinated, and I commend anyone that is a part of spreading the word in that regard.

More specifically to the bill, I think it has been made abundantly clear. This is fairly straightforward, dealing with the private health insurance rebate threshold and, equally, the threshold at which the Medicare levy surcharge is applied, effectively freezing them from indexation for another two years. I'll speak initially a bit more broadly. Obviously, the great policy principle in this country is that we support and believe in universal health care for all Australians. I think that's something we're very proud of in this country.

To be honest, although I have a great deal of respect for countries like the United States for a whole range of reasons, I do despair for them that they live in a society where people can't access fair and comprehensive health care without having their own personal insurance. In fact, I was an employer in the United States, in a previous part of my career. It was surprising how, when you were advertising roles in the United States, when it came to remuneration, it was much more important to people to know that they were getting health insurance as part of that job rather than what the actual amount of salary would be. That goes to show that it's such an important thing for someone in the United States. That's something I would never want to see being the case in our country, and I'm very proud that anyone can access our universal healthcare system in Australia and that we provide the highest standard of care to all citizens here, no matter what their economic circumstances might be.

It's equally important, of course, that we encourage those who have the capacity to contribute more for their health care to do so, and of course we do that through the private health insurance system in this country. So what we're debating about, specifically, in this bill are the policy mechanisms we use to encourage people to have private health insurance.

There are reasons to have private health insurance, before you look at the impact on your income from the Medicare levy surcharge, which you pay when your income is over a certain amount if you don't have private health insurance, and also from the rebate. Obviously we provide a very good base standard of health care in this country, which is the highest standard you could possibly ask for. But it is always the case that there is an incentive to have private health insurance for certain additional extra services et cetera that aren't required to give you a fundamental standard of care but which, if you're prepared to pay for them, you might find of value. It's also good that we encourage people, through our income tax system, to have private health insurance when they're on an income where they can afford to do so. This clearly takes an enormous amount of pressure off the public health system—particularly the public hospital system, when it comes to elective surgery in particular. Everyone who holds private health insurance, when they need certain elective procedures, can, through their private health insurance, go to a private hospital rather than going to the public system. That is obviously then one less person putting pressure on the public system. That's going to ensure that we have lower waiting times, and so rapidity of care, but also the outcome where everyone in society gets the same standard of service delivery but where those who can afford to can take the pressure off the public system commensurately.

The obvious effect of putting a freeze in place is that if people's incomes are growing and if we're not commensurately increasing the income threshold then more people will come into the category of either paying the Medicare levy surcharge if their income passes the thresholds of $90,000 or $180,000, and/or of getting the private health insurance rebate. This gives us a two-year period to undertake a broader reassessment of the effectiveness of the current regime, of bringing back indexation, in two years time, and, of course, achieving the policy outcome we want, whereby people who can afford it are encouraged to take out private health insurance, because, clearly, we want as many people as possible to have it. I think there are around 14 million Australians with some form of eligible public health insurance, rebate-style cover, at the moment. We want to incentivise as many people as possible, of those who can afford it, to have that insurance, and this is a mechanism we've had for many, many years—decades, in fact. But the freeze on indexation means that more people will be encouraged to hold private health insurance, through the reality that, if they don't hold it, they'll be required to pay the Medicare levy surcharge if they move into those income brackets of over $90,000 or over $180,000.

I think we've all been able to take a great deal of pride in the Australian health system, and never more so than in the last 14 or 15 months, since the COVID-19 pandemic has put challenges and pressures on us in this country, as it has on every other country in the world. I can't think of a time in my life where it has been so easy to compare the impact of a particular challenge like this health pandemic on this country with the impact on literally every other country on the planet. There is almost nowhere that hasn't had to meet the challenges of COVID-19, from a health point of view and from an economic point of view. In both cases, I would say that Australia is at least equally at the top, in meeting the health challenges and the economic challenges.

It's a great tribute, of course, first and foremost, to the people who work in our health system. Even in my home state of South Australia, and across this country, I think no-one would say they hold anything but a great deal of pride in the quality and calibre and work ethic of our health professionals, in the way in which they have risen to what has been an extraordinary challenge for health systems across the planet.

Most people would expect that the health systems of many Western and European countries would be of a similar gold standard to the Australian health system. Unfortunately we saw, particularly in the early weeks and months, health systems in Italy, the United Kingdom and Spain put under an enormous amount of pressure. They sometimes burst at the seams and were incapable of handling the pressure that was put on them through the way in which COVID-19 burnt through the cohorts of those countries. It put on them a pressure that took them beyond breaking point. We never had that in this country, which was a great relief but also a great credit to our health staff and the staff who worked to keep our borders and quarantine systems secure.

There is criticism, which I find disappointing and unnecessary, of the quarantine system in this country, because I just can't think of anywhere else in the world that has done it anywhere near as good as us. We have natural attributes like, of course, being an island and thus having the ability to close our borders without a land border and the challenges of that, so we've got that luck. We are the Lucky Country, but we also make our own luck. We made some very important decisions early on to close the border of this country and only allow people to return if they were Australian citizens or permanent residents or dependents of those categories and only if they went through a quarantine process, where they quarantined for 14 days, which, pretty early in the piece, became through the hotel quarantine system. This has been a partnership between state, territory and federal governments. The concept that quarantining is a federal responsibility under the Constitution is completely irrelevant to the practical reality of how you should properly undertake quarantining against a health virus in human beings. It's the state and territory jurisdictions that have the health capability and capacity. Even if the Commonwealth was doing it without the states and territories instead of cooperating and working with them, the states and territories would bear the risk and burden of what may put an enormous amount of pressure on their health systems.

All of the reviews and the reports about quarantine that you have access to in the public domain make a few very important points. For those who warrant to talk about remote quarantine camps—and all the things that, bizarrely, the Labor Party used to criticise the coalition for so heavily on another policy topic when it came to managing the flow of people into this country—it is very clear that, when you undertake quarantine, you must have close access to tertiary health services so that, if people in the quarantine system do, in fact, have this COVID-19 virus and they do deteriorate to the extent that they need significant medical attention, they are close to that. That means ventilation and ICU in tertiary hospitals, which are, of course, located in the major population centres in this country—in particular, capital cities. You also want to have your quarantine as close to the international airports as possible where people returning to this country are landing. Every extra complexity you put in place between landing in an aircraft somewhere in this country and being taken into the quarantine system increases the risk.

Thirdly, you need a workforce available to operate the quarantine system as readily available as possible. So, of course, when you're holding people in quarantine in CBD hotels, it is the easiest place in which to get the workforce you need for all the various requirements and responsibilities of undertaking that quarantine. Doing that in the middle of outback Australia and thinking that you could manage all the various risks of not having a workforce, not having tertiary hospital systems nearby and having the long, risky transit from where people arrive in the country to putting them into these sorts of facilities are the sorts of risks that have been ruled out by the experts. I strongly endorse the approach of the Prime Minister when it comes to quarantining returning Australians, which is to work cooperatively with the state and territory jurisdictions, who have certain capabilities and capacities to manage this unique quarantine challenge that we at the Commonwealth level don't have. Equally we provide all the resources that we possibly do have to work collaboratively with them in undertaking this very substantial logistical challenge.

Obviously, any breach from hotel quarantine is extremely concerning and regrettable. But, if you look at the number of people that have come home to this country over the last 14 months and, against that number, the percentage of outbreaks that have occurred, it is an unbelievable statistic, more than 99 per cent. We don't want any outbreak whatsoever. We want this to be completely watertight. We've always learnt about opportunities for improvement from various lessons in that 14-month period. But the broad principle of how it is being undertaken is the right one. Liberal governments and Labor governments at the state level are all in agreement on the way in which we're undertaking the quarantining of people returning to the country while our border is closed, so that we can protect our population from bringing COVID-19 into the country.

With that said, I appreciate the opportunity to make a contribution on this important piece of legislation. As I said, it's fundamental to the principles of our health system, where we have universal health care for all but we want to have an incentive for those that can afford to contribute more for private health insurance to do so, so that we're taking pressure off the system and making it as sustainable as possible. I commend the bill to the House.

12:21 pm

Photo of Peta MurphyPeta Murphy (Dunkley, Australian Labor Party) Share this | | Hansard source

Just over an hour ago people in my community, people in my state, got the news that we've been dreading, that we're going back into a seven-day lockdown. I don't think we need other people to say, 'You're okay, you've got it,' because we know what it's like to go through lockdown. We know how hard it is. We also know why we have to do it. I'm sure that my community—and I wish I could be home with them—at the moment are feeling both the sensation of 'we can do this, we can get through it' and the dread because schools are closed again, workplaces are closed again, we can't have weddings or funerals or see loved ones. All this will be mixed with a feeling of 'but this didn't have to happen'.

It didn't have to happen. As the acting Premier said, when I was watching his press conference this morning, across this country we have a vaccination rollout that is too slow, that is behind where it should have been. Now we see the consequences of that across a state where people are once again having to sacrifice, not only for their own health but for the health of the community and for the ongoing good of the country, let alone the economy that the Morrison government likes to talk about so much. The Prime Minister had two jobs this year: the vaccination rollout and quarantine. But here we are, yet again, talking about a COVID outbreak because it's escaped from hotel quarantine. There were members of the government, including, extraordinarily, members of the Victorian government, who last year appeared to take some delight in attacking the Victorian state government when there were leaks of COVID from hotel quarantine. But now we've seen it happen across the country.

My state is now in lockdown because of a leak from hotel quarantine in South Australia, and yet we still have a Prime Minister who won't take responsibility for a national quarantine strategy and proper fit-for-purpose quarantine facilities. We had members of the government giving speeches just before me about how terrific the hotel quarantine system in Australia is and apparently how outrageous it is for anyone to query why this federal government has not put in place proper quarantine facilities. I realise that the member for Sturt doesn't come from Victoria, so his community aren't locked down, but he certainly comes from the state where the outbreak occurred, which has led to Victoria being locked down.

The Prime Minister needs to stand up and take responsibility for what he's responsible for, and the member opposite can scoff at me giving a speech about my state going into lockdown, but she needs to perhaps think about it before she does that, because these are real people I'm talking about, and if the member across the chamber wants to act like someone who doesn't care about the health of real people, she can think about her own actions.

This vaccine rollout across my state has not made it to all of the aged-care facilities. It has not made it to the disability residential facilities. It has not made it to the GP clinics in my electorate where, today, people are being told that GP clinics do not have federally supplied vaccines to give to members of my community. It is not good enough. It is not good enough to say, 'Oh, but we're doing better than other countries around the world.' We're still not doing enough. The measure shouldn't be: other countries are worse. The measure should be: we are looking after Australian citizens in the best possible way at all times. It's not good enough at the moment.

Aside from the Prime Minister's failure to do the two things he needed to do this year—make sure the vaccination rollout went smoothly and establish quarantine—there has been an extraordinary failure by the government to get a public health message out there that resonates about getting vaccinated. And I say it's extraordinary because if there's one thing that the Prime Minister is good at it is marketing and advertising. We see advertising programs across the world that are resonating with other countries' communities. If Dolly Parton can get out there in America and Elton John can get out there in the UK and the governments can be involved in getting their citizens to get vaccinated, why can't we do that in Australia? Every member of this chamber should be doing everything they can at every moment to encourage people to get vaccinated.

I've been vaccinated and been part of a public health campaign and gone out there and told people to be vaccinated, so no-one on that side of the chamber should be mumbling about involvement in promoting vaccinations. I won't ask anyone to do something I haven't done. I went out there, as part of a vulnerable community, and got vaccinated and said to the Australian people, 'I'm doing it and you should be doing it.' And I'll continue to do that at every opportunity that's given to me, because that's what we need to be doing in this country. If you have concerns about the vaccination, don't go onto the internet, don't go to Facebook, don't go to Twitter. Go to your GP, get the medical advice that you need and get vaccinated. We can see in Victoria why it is so crucial to get that vaccination. Do what you can to get vaccinated as soon as you can. And do what you can to make sure that pressure is continued to be put on the government to get that vaccination rollout where it is needed.

This legislation also talks about private health insurance. I just want to make three points about health in this country, which I've made before, but they continue to be incredibly important and more work needs to be done. The first is the importance of a preventative health strategy in this country. I was at a Cancer Council Biggest Morning Tea event this morning, where we were promoting people over 50 doing the screening test for bowel cancer. That's really important. Something like 103 people die a week in Australia of bowel cancer. We have one of the highest rates of bowel cancer in the world. Part of that is because of the lifestyles that we live in Australia and the food we consume, and the way in which we don't look after our health. Preventative health is really important. We need to continue to fund screening programs. The federal government has put money into screening programs, including, today, to the Cancer Council for bowel screening, and that's to be congratulated. We also need to continue to do more about health education in this country—about healthy eating, healthy living, healthy exercise.

The other general point about our health system is that it's not equitable and it's not universal, as much as we want it to be. We keep talking about our universal public health system. I represent an outer suburban electorate, and we can't get enough bulk billing GPs and we can't retain them. There is a problem with the system and the way it's operating. There is a problem with the incentive for Australian-trained doctors to work in bulk billing clinics in lower socioeconomic areas. We urgently need to look at how we can encourage doctors, Australian-trained doctors and overseas doctors, to work in bulk billing clinics, not just in the regions and remotely but in outer suburban areas, like my electorate, where people rely on bulk billing to get their health care. It's urgent and more work needs to be done.

Health care is a human right. Decent, accessible, affordable health care is a human right. It's something we hold dear in Australia. It's one of the things we value as Australians. But we are not there yet. If the pandemic showed us anything, it showed us the importance of health care to the day-to-day community and to the economy and the role of government in protecting it and supporting it for everyone.

12:31 pm

Photo of Angie BellAngie Bell (Moncrieff, Liberal National Party) Share this | | Hansard source

I will start by saying that I do take offence that the member for Dunkley has said that I scoffed at Australians and health outcomes. I think it's outrageous that the member opposite has said that in the parliament to the Australian people, and I rebuke that and say that I was merely scoffing at her suggestion that it could be the member for Sturt's error or fault in some way that there is now a breakout—

Photo of Peta MurphyPeta Murphy (Dunkley, Australian Labor Party) Share this | | Hansard source

I didn't say that.

Photo of Angie BellAngie Bell (Moncrieff, Liberal National Party) Share this | | Hansard source

in Victoria. I think to suggest that that could be the case is disgraceful. It's another example of those opposite attacking this government instead of attacking the virus. I must say that the suggestion that South Australia, which is my home state too—I was born in South Australia—is at fault in any way for this breakout in Victoria is outrageous, and, again, it's simply political rhetoric.

Ms Murphy interjecting

Photo of Andrew WallaceAndrew Wallace (Fisher, Liberal Party) Share this | | Hansard source


Photo of Angie BellAngie Bell (Moncrieff, Liberal National Party) Share this | | Hansard source

I'm pleased to rise and speak of the Private Health Insurance Amendment (Income Thresholds) Bill 2021. The twin health and economic crisis of this pandemic has underscored how intertwined the different aspects of wellbeing are, and I would like to say to the Australian people that this bill—and I agree with the member for Sturt on this—will take pressure off the public system, which is what those opposite should be positive about, that we will help those who rely on the public system instead of those who can't afford health care or private health care not being able to go to public hospitals. So I think it's really important that this bill does move forward through the parliament. This is nothing new, and, after the pandemic, the reality of the critical interdependence on health and economic wellbeing will remain.

In Australia, we have a health system that many around the world are envious of. In the words of John Howard, 'It's half public and half private, just like the school system.' It's half public and half private, which makes it equitable for all Australians to have good health care and good education.

In Moncrieff, dedicated health professionals deliver highly effective care across our public and private hospitals and through many other health services. Globally significant health research is taking place in our universities. Griffith University, my alma mater, in my electorate of Moncrieff, is going forward in leaps and bounds when it comes to medical research. None of this happened by accident. It was not a revolution. It was logical, incremental improvements that delivered most of what we see today, due in part to the work of many governments both on this side and the other side and, more so, due to the many public and private institutions that have been pushing on the flywheel.

The institutional strength of our Australian society should be cause for celebration. I've said before, we have the best health system in the world. Very little of the lucky country's circumstances—in this case, Australia—is down to luck; it's down to hard work. The harder you work, the luckier you get. This institutional strength is one of the great differentiators that our nation must recognise and nourish. Our national institutional strength not only flourishes in the health sector but in most other major endeavours of our society. This gives me great confidence that if we, as a government, pursue good policies and implement them with vigour, we will create conditions for the expertise and toil of our institutions to deliver excellent comes for the Australian people.

The task of reform is never over; there's always more work to be done. Each and every incremental reform is important; therefore, I'm pleased to contribute to this debate on the Private Health Insurance Amendment (Income Thresholds) Bill 2021. The bill amends the Private Health Insurance Act 2007, the PHI act. The changes planned will commence on 1 July this year, which is very shortly, creeping up to the end of the financial year. It's been a very quick year, this year, and here we are almost half way through it—unbelievable.

Private health insurance is a complicated policy area, and the government is taking a considered approach with this bill. It extends the indexation pause on the Medicare levy surcharge and private health insurance rebate income tiers for another two years until 30 June 2023. It ensures the recommencement of annual indexation of the current income thresholds following the end of the planned pause. The pause is important because it rightly provides the stability of incentives that private health insurance consumers and stakeholders deserve, whilst the careful consideration of longer-term settings is undertaken. We must be cognisant that private health insurance policies have significant consequences for the public system. As I said, they relieve the strain on the public health system, on public hospitals, so that all Australians can access good health care. It's equitable. Those who can afford it, buy private health insurance and those who can't go to public hospitals. That's worked in our democracy here in Australia for very, very many decades. A detailed study into the effectiveness of private health insurance settings will be undertaken, of course, during this pause.

To be clear, this bill ensures the security of private health insurance in two main ways. It continues to encourage high-income earners to contribute to their own healthcare costs through private insurance or have a contribution imposed via the Medicare levy surcharge, and it continues to incentivise consumers to purchase and maintain private health insurance cover, which is very important.

An important component of this bill is the indexation arrangements. The private health insurance rebate amounts, income thresholds and the rates for the Medicare levy surcharge are pursuant to the Private Health Insurance Act 2007. The act determines the setting and annual indexation of income thresholds. The Medicare levy surcharge is paid by Australian taxpayers earning more than $90,000 for singles and more than $180,000 for a family, unless they have an appropriate level of private health insurance hospital cover. This bill will deliver a pause for a further two years from 1 July 2021, in a couple of months, allowing for indexation to recommence annually from 1 July 2023.

The Private Health Insurance Act specifies the three private health insurance income thresholds for singles and for families. Annual indexation of those thresholds is deployed in the act by utilising an indexation factor. The bill amends the income thresholds so the current 2021 levels also apply for 2021-22 and 2022-23. I will just outline the three threshold levels. Currently they're at $90,000, $105,000 and $140,000. For families, the three levels are $180,000, $210,000, and $280,000. Additionally, it specifies the indexation factor to apply indexation across the income thresholds each financial year from July 2023. At that time, when indexation resumes, it will be determined by the method under the act, and I'll outline that. The annual indexation is determined by changes in average weekly ordinary-time earnings each financial year from 1 July 2023. Average weekly ordinary time earnings are an Australian Bureau of Statistics, or ABS, measure of earnings by Australians for an ordinary time worked each week. It's publicly reported quarterly by the ABS.

The Medicare levy surcharge rates and the private health insurance rebate rates remain unchanged by this bill. The pause extension means $90,000 remains the base income threshold for singles and $180,000 remains the base rate for a family for two more years, until 30 June 2023. This bill helps to restrain expenditure growth of the private health insurance rebate while a detailed study into the effectiveness of the operation of the tiers and incentives is undertaken. This pause, or freeze, if you like, provides stability whilst careful study of these important incentives is undertaken to ensure those good policy outcomes that Australians deserve.

In the health portfolio more generally, the budget is delivering for Australians. Let me take the time to highlight just a couple of important facts. There is record investment of $121.4 billion in 2021-22, and $503 billion is being invested over the next four years. We've committed over $25 billion towards our COVID-19 health response since the beginning of this pandemic. That $25 billion includes $1.1 billion to extend our COVID-19 health response to support Australians throughout the pandemic and $1.9 billion for the vaccine rollout. The $204.6 million to extend the telehealth arrangements until 31 December this year raises the government's total investment to $3.6 billion.

There is $17.7 billion being invested in aged care—those opposite should be happy with that also—in response to the royal commission on aged-care quality. Our $2.3 billion investment in the National Mental Health and Suicide Prevention Plan is so important for those Australians who need help after they've tried to take their lives. It is very important that they are supported after doing so. That is very important. Medicare funding is $125.7 billion over the forward estimates, up by over $6 billion. The PBS is $43 billion over four years. There is $535.9 million for the National Women's Health Strategy 2020 to 2030. These are all very important strategies and investments in the Australian people—in the health and wellbeing of all Australians. There is $781.1 million to prioritise Aboriginal and Torres Strait Islander health and ageing outcomes. Public hospitals will receive $135.4 billion over five years. There is $6.7 billion over four years for research, and $228.1 million of that will be new grants and the opening of programs in this budget.

With this bill and the other steps we've taken on private health, the government are delivering the lowest premium changes in 20 years. The Morrison government cares about the health of all Australians. We're doing everything we can to support Australians—to support those who need to go to public hospitals through this pause to the private health indexation.

12:43 pm

Photo of Matt ThistlethwaiteMatt Thistlethwaite (Kingsford Smith, Australian Labor Party, Shadow Assistant Minister for the Republic) Share this | | Hansard source

Under the Morrison government, the cost of many household items just keeps going up and up and up, but the one thing that isn't going up is Australian workers' incomes. Private health insurance is another of those costs that families have to bear on an annual basis that just keeps going up and up and up under this government. When you couple that with the cost of child care, which has been going up; the lid having been blown off housing affordability and house prices across the country going up; and the cost of transport, particularly all the toll roads that we have to deal with on a daily basis, going up, it makes household affordability that much more difficult.

This bill amends and implements measures announced in the budget, and what it does is adjust the formula for recommencement of indexation of the current income thresholds following the end of a pause that this bill seeks to extend for another two years. Of course, there's been a pause in the annual indexation of private health insurance income thresholds in the wake of COVID. Although we're pausing the indexation of the income thresholds, it hasn't resulted in private health insurance premiums being paused at all.

The income thresholds are indexed in accordance with the growth of full-time average weekly ordinary time earnings. The Private Health Insurance Act is the main law that sets out the requirements for private health insurance and private health insurers. That act allows for the setting of annual indexing of income thresholds. The income thresholds determine the rebate amounts that may apply for consumers with eligible PHI coverage, the rebate and the Medicare levy surcharge income thresholds and rates.

The effect of this is the continuation of the pause of the annual indexation of income thresholds for another two years and an adjustment of the formula for the recommencement of indexation after that period. The government has announced that the continuation of the pause will provide an opportunity to undertake a detailed study of the settings of the PHI rebate and the Medicare levy surcharge into the future. The reason that's happening is quite simple. It is that Australians are getting rid of their private health insurance. They're moving out of it. It's a trend that's been continuing for some years under this government, who put in place these rebate measures and the Medicare levy surcharge to encourage people into private health insurance. But the one thing they have failed at is stopping the private health insurers increasing their premiums in an unsustainable manner.

The expanded pause of indexation effectively lowers the real income thresholds at which PHI and the Medicare levy surcharge are applied, by not adjusting for increases in average earnings. In this way, it represents a lowering of the PHI rebate support and an increase in the Medicare levy surcharge rates for people who'd otherwise not be pushed into higher income thresholds. With the pause, the rebate income threshold remains at $90,000 for the base single policy and $100,000 for the base family policy. The base income threshold under which a taxpayer is not liable to pay the MLS remains at $90,000 for singles and $180,000 for couples.

Despite these changes, as I said, what we haven't seen from the insurers is a pause in the premiums. Last month average private health insurance premiums increased by 2.74 per cent, or an average of $126, for Australian families. Those opposite might not think that that's a big amount, but for a family with a couple of kids, who have just got back to a normal work pattern in the wake of COVID but are struggling to make ends meet, struggling with the exploding cost of housing throughout the country, struggling with the cost of child care, which keeps going up and up under this government, struggling with the cost of electricity, which is of course always going up, it means that there's a hell of a lot of pressure on the household budget.

This government doesn't seem to understand just how much pressure there is on household budgets in Australia at the moment. And yet there is no increase in real incomes at all under this government. In fact, they're set to fall. It is admitted in the government's own budget papers that there will be a $150 million budget deficit and $1 trillion worth of debt. What do we get for it? Not much for the average Australian household. A lot more pain—that's what you've got coming, because real incomes won't be increasing, but the costs of everyday items such as your private health insurance will be increasing.

Some funds' premiums will be rising by as much as 10 per cent over the next 12 months. That increase is more than three times as large as the CPI and twice as large as average wage increases. We know from the ACCC's review of the sector that insurers have paid out $500 million less in benefits due to COVID-19, because most of the private hospitals and indeed the public hospitals shut down for that period, when the nation was in lockdown. And there have been the ongoing shutdowns in certain states, associated with outbreaks. So those surgeries and those medical procedures didn't occur. Do you think that the private health insurers passed on those cost savings to consumers? No, they didn't. Did the government do anything to force them to pass on those cost savings? No, they didn't. Even though the Private Health Insurance Act gives the health minister the power to reject premium increases that 'would be contrary to the public interest' he's refused to do so; he's allowed them to keep increasing their prices.

During a global pandemic, and when Australian families are trying to recover from the first recession they've experienced in three decades—and the worst recession since the Great Depression—they're being forced to deal with cost pressures that keep going up and up and up and adding to pressure on household budgets, including insurance premium hikes for private health insurance. The cost of private health insurance cover under the coalition, since they came to office, has gone up 36 per cent. If you want the reason people are leaving private health insurance, that's it. It's there for you in black and white, and it's the fifth year in a row that the number of Australians covered by private health insurance has fallen, and it's fallen under a Liberal government that likes to pride itself on supporting the private sector and encouraging people into private health insurance. It was the Howard government that put these measures in place that we're debating today. Yet they've failed, and the proof is in the 36 per cent increase in premiums over the course of this government, and that it is the fifth year in a row that the number of people who have cover through private health insurance has fallen.

What's the result of this? The result is it puts more pressure on the public health system. People are saying: 'I can't afford private health insurance anymore. My wages aren't going up. Everything else is going up. We simply can't do it with the mortgage repayments we have, with the cost of child care, with the tolls that we have to pay to get around the city. We just can't do it. We're getting rid of our private health insurance, and we'll fall back on the public system. Although there's a Medicare levy surcharge, we'll have to deal with it.' And that's what they're doing. But all that means is there's more pressure on the public health system. What's the result? Elective surgery waiting lists go up. Times go up. People have to live with pain for a longer period of time. It means that there's pressure on the budgets in the public hospital system. My wife is a nurse. She works in a major public hospital in Sydney, and she tells me, quite regularly, about the staff leaving the hospital who aren't replaced. There's more and more pressure on nurses and health professionals in the public healthcare system, because the budgets are set. They're not going up. In fact, state governments are asking administrators of public hospitals to do more to find cost savings, yet more and more people are coming into the system because they've been pushed out of the private health insurance system because it's unaffordable.

So the Prime Minister and members opposite really need to explain to the Australian people why, during a global pandemic, they're allowing private health insurance companies to push up premiums by 2.74 per cent, on average, for families over the course of this year. How is that fair? Wages aren't going up; wages aren't going to go up by that much. Incomes aren't going to go up by that much. How are families meant to bear that cost? It's not an insignificant cost, either. For a family with a few kids, you're looking at at least a couple of hundred bucks a month for your private health insurance. And you might be working in a sector that's been shut down because of COVID, like the aviation sector. Anyone who works at the Kingsford-Smith Airport in the community that I represent has had their hours cut. All of the ancillary businesses that work around that and that support the industry are struggling. That applies to anyone who works in travel or tourism throughout the country. How are they meant to bear the cost of losing their work and keep their private health insurance, when the premium goes up by 2.74 per cent? They can't. And that's how they end up moving into the public system and putting more and more and more pressure on our public healthcare system.

Yesterday, we debated a bill, the effect of which was changing the taper rates for the Medicare levy kicking in and the income levels that it kicks in at. The effect of that was to take $50 million in Medicare receipts out of the system. How are you going to replace $50 million, which funds GP rebates, funds our public hospital system? How do you replace that money? There was nothing in the budget to replace that lost revenue from the changes to the income thresholds for the Medicare levy and that would have gone into supporting the public hospital system. These are the failings of the government when it comes to the budget. The failings may not be apparent right now, but I tell you what: they're going to show up in years to come. They're going to show up in enormous pressure on the health budget. They're going to show up in more and more people leaving private health insurance, putting more pressure on the hospital system and the GP network.

You can bet your life that eventually the response of this government will be the same as its response in 2014, and that is to cut services. They'll look at things like bringing back the Medicare tax that they tried to implement when Joe Hockey was the Treasurer and the cuts that they made to a number of programs throughout the country that were deeply unpopular. That will be the effect, and that is why it's important that this government, and particularly the health minister, must use the discretion that he has under the Private Health Insurance Act to make the private health insurers explain or, where they can't explain, stop these unreasonable increases in private health insurance that the average Australian family and worker simply cannot bear.

12:56 pm

Photo of Fiona MartinFiona Martin (Reid, Liberal Party) Share this | | Hansard source

I rise to speak on the Private Health Insurance Amendment (Income Thresholds) Bill 2021. This past year has reinforced how incredibly important our healthcare system is and the importance of our health and medical workforce. When I was practising as a psychologist, I saw firsthand the quality and the standard of our country's healthcare system. While it is not always perfect, the fact is that no matter who you are or what you do for work, every Australian has access to help. In Australia, we are so fortunate to have universal health care in the form of Medicare, a program that protects all Australians in a way that makes us the envy of the world. Even highly developed countries like the United States do not offer the generous and worthy support offered here. However, despite the generosity of Medicare, it is still incumbent upon us to incentivise higher income earners to financially contribute toward their own healthcare cost or to pay the Medicare levy surcharge. By doing this, Australians are not only taking control of their own health care but easing the burden on taxpayers and supporting those in our society who are most in need of Medicare's coverage.

It is for this reason the government is amending the Private Health Insurance Act 2007. The Private Health Insurance Amendment (Income Thresholds) Bill 2021 extends the indexation pause on the Medicare levy surcharge and private health insurance rebate income tiers for another two years, until 30 June 2023. It ensures the recommencement of annual indexation at the current income thresholds following the end of the pause. How does the indexation work? The Private Health Insurance Act describes indexation of private health insurance income thresholds as being calculated using an indexation factor. It also lays out the three private health insurance income thresholds for individuals or singles and families. The bill amends the income thresholds to the current 2020-21 levels to apply right up until 2022-23. It specifies the formula for applying indexation across the income thresholds each financial year from 1 July 2023. The pause provides stability for consumers and stakeholders regarding the operation of these important private health insurance incentives. As COVID outbreaks still occur around the country and the world continues to grapple with the virus, we cannot become complacent. Health care and proper coverage for all Australians is extremely important. By continuing to incentivise consumers to purchase and maintain private health insurance cover we ease the burden on Medicare and continue to protect Australians.

The Private Health Insurance Act 2007 makes provision for the setting and annual indexing of private health insurance income thresholds. Legislated private health insurance income thresholds are used to determine government funded private health rebate amounts that may be available to consumers with eligible private health insurance cover and to determine Medicare levy surcharge income thresholds and rates. The Medicare levy is an additional contribution you pay on your taxable income unless you qualify for a reduction or exemption. The Medicare levy funds some of the cost of Australia's very generous public healthcare system. The Medicare levy surcharge is levied on Australian taxpayers who don't have an appropriate level of private health insurance hospital cover and who earn above the taxable income threshold, which, as it stands at the moment, is $90,000 for a single or individual and $180,000 for a family. The amendments will pause the legislated indexing of private health insurance income thresholds for a further two years from 1 July 2021, allowing for annual indexation to recommence from 1 July 2023.

The Private Health Insurance Act provides for the annual indexation to be determined by changes in average weekly ordinary time earnings each financial year from 1 July 2023. Average weekly ordinary time earnings is an Australian Bureau of Statistics measure of earnings by Australians from ordinary time worked each week. It is reported publicly by the ABS quarterly. The bill amends the indexation factor's financial year references to reflect current income thresholds for indexing from 1 July 2023. These changes do not alter the Medicare levy surcharge rates or private health insurance rebates. The extension of the pause means that $90,000 remains the base income threshold for a single and $180,000 remains the base for a family for two more years until 30 June 2023. Pausing indexation of the income thresholds helps to restrain the growth of private health insurance rebate expenditure while a detailed study into the effectiveness of the operation of the tiers and incentives is undertaken. It would be counterintuitive to attempt to change the income thresholds whilst investigating whether the tiers are even effective.

As a government, we encourage those who can access private health insurance to do so. These amendments do just that. They continue to incentivise higher income earners to contribute financially towards their own health costs or pay the Medicare levy. Australians look out for each other, and paying the Medicare levy is just one way we as a proud nation can put our hand around those who need it. Those who currently have private health insurance should not worry. These amendments will not affect you negatively. The bill means that for the next two financial years the private health insurance rebate income thresholds remain unchanged, at $90,000 for a single and $180,000 for a family. These will remain as they are until 30 June 2023.

1:03 pm

Photo of Milton DickMilton Dick (Oxley, Australian Labor Party) Share this | | Hansard source

I rise to join my colleagues to support the Private Health Insurance Amendment (Income Thresholds) Bill 2021. I'll give some remarks about the bill—it is a fairly non-controversial bill—but I will add remarks that follow on from those of a number of speakers and rebut some of the nonsense that we've heard from members of the government about Australia's health system. I will follow on from the comments of the member for Kingsford Smith regarding affordability and the collapse of health insurance in this country—as with everything it does, this government says, 'Nothing to see here. It's all great,' whether it be vaccinations, quarantine or, now, private health insurance.

The bill continues the pause of the annual indexation of income thresholds for another two years and adjusts the formula for the recommencement of indexation. The government has announced that the continuation of the pause will provide an opportunity to undertake a detailed study of settings for the PHI rebate and the MLS. Obviously this is good news for consumers. We don't want health premiums to go through the roof. But I was reading a report released last week regarding health insurance in Australia, and it says 'Australia's private health insurance industry in a death spiral'. That is what is being reported of our health system. Our private health insurance industry is seen to be in a death spiral. That is because this government, after a long eight years, has put health insurance in this country in the 'too hard' basket. The private health industry is on its knees. We know we have an ageing population, which is increasing the use of healthcare services. There are rising healthcare costs that drive up premiums and make health insurance less affordable and less attractive, particularly to young and healthy people.

A report by the Grattan Institute has indicated some serious issues regarding private health insurance in this country. It is clear to say that unless the government takes action—unless the government steps up to the plate instead of pretending and being in denial about what is happening—the industry will collapse. The industry is in a death spiral. We know numbers are on the way down. We know that private health insurance isn't increasing. It's not even flatlining; it's decreasing. The COVID crisis, which we've come through over the last 12 months, has clearly shown that our health sector is under increasing pressures. So I don't want any lectures from the government today, saying: 'Everything's fine. We've got nothing to see here,' when it's not. Obviously we are a constructive opposition, and when we see consumer relief and consumer support we will support that policy. But let's be clear: we have a health system in this country that has been brought to its knees as a result of the pandemic.

I want to use my time today to acknowledge and give thanks to all of the health professionals that have worked so hard during the last 12 months and beyond to ensure that our Australian community have remained safe during the health pandemic and that they have got the access to health services that they need. But it has not been plain sailing, it has not been easy, and we are not through this is as of yet. I'm glad the shadow health minister has moved a second reading amendment regarding the health system, particularly during the COVID crisis.

This government has had some responsibilities. Their key responsibilities for this year have been the vaccination rollout and quarantine. I've been listening to the member for Sturt and others. They have said, 'We've got one of the best quarantine systems in the world.' I've got to be honest with you: Are they in some alternative universe? Have they seen what's happened in Victoria? For the Prime Minister to get up and say: 'We're all in this together. We're all working together. The states and I are all together,'—what utter nonsense. We all sat here when he was campaigning against the Queensland government, when he was campaigning against the McGowan government and when he was campaigning against the Andrews government. Minister after minister were trawling up and down Queensland, bagging out the state Premier and all carrying on. What happened to, 'We've got to live with the virus'? We've all got to live with the virus now because of our vaccination rates being so low. We do want confidence. We do want people taking their vaccinations. We do want people turning up. The health minister says, 'It's not a race,' when everyone else in Australia believes it is.

Then we have this utter nonsense this week from a Queensland LNP senator, who I've never heard of, Senator Gerard Rennick. Mr Rennick—I'm quoting a article here—said:

… he was in no rush himself to get the Covid-19 jab, despite the Federal Government urging Australians not to wait to get vaccinated.

Almost one-third of adult Australians say they are unlikely to be vaccinated against Covid-19, according to a poll in the Nine newspapers last week, prompting calls for a national campaign to get people vaccinated.

A national vaccination campaign is something that I have called on the government to deliver. Virtually every other country in the world has done that. Where are the billboards? Where is the advertising campaign? We know the government doesn't mind a bit of advertising, but where is it when it comes to getting people vaccinated? It doesn't exist. If any member of the government can provide information to me right now, I will yield my time to them. I will happily sit down if the data and that information can be provided. It doesn't exist.

Then you get people like Senator Gerard Rennick saying: 'I'm going to sit back and watch and see how it goes. That's my view. I'm the 31 per cent.' He's as proud as punch, boasting about the fact that he's not going to take the vaccination. 'I will wait and see.' This is a member of the Australian parliament. This is a member of the government. Has anyone taken him aside and said: 'You know what, mate? We've really got to make sure that the rates are through the roof. It's probably best you don't say that, even if you don't want the vaccination'—for whatever kooky and whack-job reason these people don't want it. Maybe he's got preselectors inside the Queensland LNP who are antivaxxers; I don't know. But maybe he should get on board with the rest of Australia and make sure this country gets vaccinated. It is not good enough. It is unacceptable that members of the government are boasting about the fact that they're going to wait: 'I'm going to sit back and watch and see how it goes. That's my view.' Well, I say that is a terrible view and that senator should be hauled into the health minister's office or the Prime Minister's office. He should be read the riot act and start doing his civic duty to encourage Australians to get vaccinated.

We know we've had 17 outbreaks in hotel quarantine in the last six months. The government has shown such complacency with the shockingly slow pace of the vaccine rollout, and we're now seeing hesitancy towards the vaccines as a result. The Prime Minister says it's not a race, but it is a race. It's a race to beat this virus, particularly to beat the mutations of this virus. We're already seeing outbreaks in a range of countries, like South Korea, Japan and, importantly, Taiwan, which performed just as well as Australia did in suppressing the virus. Last week the government received 1.4 million vaccine doses. Think about this: 1.4 million vaccine doses arrived, but only just over 500,000 were administered. There's no public health campaign to get more people vaccinated sooner. Others around the world are using celebrities and sporting stars—you name it—to get those jabs in arms.

This leads me to follow on from what the member for Sturt was talking about: quarantine. He's another person apparently living in an alternative universe, thinking we have this amazing quarantine system. The facts are these. The Prime Minister, coming to my home state of Queensland, wasn't happy with the Toowoomba quarantine suggestion put on the table. It was a sensible suggestion by the Queensland government—in a city, close to Brisbane, with an airport, which the Prime Minister flew into, and with health facilities. He ruled that out. There's been no explanation as to why that is not an acceptable place, despite the Prime Minister trying to say that Toowoomba was a desert of some sort. Anyone who's been to Toowoomba, with its Carnival of Flowers, knows that it's not a desert. I'll give you that tip!

There are serious issues with quarantine, which is a constitutional responsibility of the Commonwealth government. If Toowoomba isn't a suitable solution for the Prime Minister, what is? What is the quarantine plan? Speak to most Victorians today—they don't think we have the best quarantine system in the world, though we have the best workers in the quarantine system. Every person in Victoria is now going into lockdown for the next seven days, which is the last thing business, industry and families wanted, and they've got the government coming in here—and they'll do it again today—saying, 'We've got it all covered. There's absolutely nothing to worry about. There's totally nothing to do here.' Then you get fools like Senator Gerard Rennick—I'll withdraw that. You get members of the government basically telling people not to get vaccinated. I know that Senator Rennick has some pretty out-there views—I know that he's on the extremes there—but, when you start telling constituents and the broader Australian public that we should be waiting, or that he will be waiting back and taking his time, it's not acceptable.

We know that, as of this week, the United States has delivered 219 million COVID vaccinations, the UK 60 million and Canada more than 20 million. But here in Australia we are languishing at just three million vaccinations, and only around two per cent of Australians have now been fully vaccinated—two per cent. So 98 per cent have not been done and two per cent have. That is not acceptable, when we've been hearing all the promises from this government: four million people done by May; every disability worker, every aged-care facility, all disability homes vaccinated by Easter; we were at the front of the queue; we were leading the way. We are so far back in the queue that it is not funny! And then you get members of the Morrison government basically saying: 'Don't get the vaccine if you don't feel like it. I'm going to sit back. I haven't had the flu jab. Why should I have this?'

Talk about utter chaos! We're going to close the borders forever. For people who were banging on about state borders being open all the time, they've got a funny way of showing it, now that we're locking every single border and we're never opening them again! It's fortress Australia. It was not the Prime Minister's fault when he said that to the media—the media put the wrong spin on it! We're hearing different responses from the health minister and from the Treasurer about when we'll get vaccinated. Those in this government are all over the shop when it comes to vaccination. Less gab, more jab—that's what we say on this side of the chamber. It's time that the government took their responsibilities seriously. They had two jobs this year: vaccinations—jabs in arms—and quarantine. They've failed on both fronts.

Then you get low vaccination rates and then you get members of the government saying: 'Well, I'm going to wait and see. I might sit this one out.' Well, it is not acceptable. This is a race. We have to get this right. Our economy relies on us making sure that we, as a society, are at the head of the pack, not last in the queue—which is where this government is taking us.

So, while this bill today is important, and whilst we are supporting the government, it is an opportunity for me to speak on behalf of my constituents in the south-west of Brisbane. I've visited an aged-care facility and I've spoken to those frontline workers, and they all say the same thing: they are desperately worried about how this government is handling the vaccination rollout, and they are, more importantly, fearful that there is no plan to deal with quarantine.

1:18 pm

Photo of Tim WilsonTim Wilson (Goldstein, Liberal Party) Share this | | Hansard source

It's a privilege to be able to speak on this important legislation, the Private Health Insurance Amendment (Income Thresholds) Bill 2021, around the indexation of thresholds for private health insurance. I say that because of course private health insurance is an integral part of our health system.

Members on the other side of the chamber have always had a crusade. They've wanted to destroy private health insurance because it gives everything they don't want Australians to have: empowerment—freedom to make choices and to determine their own destiny as to their own health care. What the Labor Party has always wanted for Australians is a sense of conformity, where they go into a system and are dictated to and have choice removed. Of course, in the end, we know what happens with that: you get conformity through poverty and through their concept of equality, which only amounts to poor standards and outcomes.

Private health insurance is actually about freeing up capital. It's about encouraging people to be able to make choices about their health care and to make informed decisions. And, of course, if they don't like the state system that is imposed upon them then they have an alternative.

There's a long history of this in this country. Australians forget that private health and mutualism were at the heart of our health system for most of modern Australia. People got together—they collaborated through mutuals or insurance pools—to provide assistance to each other and to manage out risk. That system of course delivered quality health care based on choice and ensured that Australians understood the importance of health care but also that health care costs. Of course, as soon as you push that cost further away, the obligations and the sense of responsibility people have to it diminishes.

That's very different to the situation in the Goldstein electorate. In fact, the Goldstein electorate has more private health insurance policies than it does enrolled voters. That has a lot of to do with the fact that we have a lot of international visitors or permanent residents who live in the electorate for professional reasons and the like. We are very proud of our commitment to private health insurance. We have exceptional private hospitals and exceptional standards of quality of care, because Goldstein residents understand that, if you want health care that reflects all stages of life—without a race to the bottom, as the Labor Party would have—a private health system not only allows them to have it but also frees up resources in the public system to improve outcomes for the rest of the community.

Of course, there is no time more critical to talk about the necessity of quality health care than right now. I say to all my fellow Victorians how distressing it is that we've witnessed another lockdown in the great state of Victoria. We of course had a number last year, particularly the very long one which led to people being locked down in their homes for many months—and the human toll that took both in terms of physical health and mental health—and people not being able to live out their lives as usual. Through the great endeavours and effort of Victorians over a prolonged period of time, we got to a situation where we were able to eradicate COVID-19. Despite the constant celebrations of members opposite that they somehow claim this is a victory for the Victorian government, it was not; it was a victory for the people of Victoria and their sacrifice—not just to protect themselves and their families, though they did, not just to protect their communities, though they did, and not just to protect their fellow citizens in the state of the Victoria, though they did, but also to protect the entire Australian community so that they didn't have to go through similar measures. And we continue to be in a situation where Australia largely has been COVID free throughout most of this pandemic.

The 25 cases and the multiple exposure sites in Victoria now bring back, I suspect, for many people a form of PTSD, back to that lockdown period, and a fear about where we are heading and the measures that will be taken. That's justified, because people went through an arduous and difficult time last year. If it's repeated, even if its for a short period, as we had in March, it again raises questions about the measures that are being taken by the state government, their efficacy for things like hotel quarantine and whether it's viable et cetera.

But I see what the members of opposition have been complaining about in this discussion around health, which is that they think that the current outbreak in Victoria is somehow the consequence of the Commonwealth. I'm not disputing that acting state Premier Merlino wants to attack the federal government to avoid responsibility, and I understand that the opposition want to focus their energies on the Commonwealth and somehow blame us for what is happening in Victoria—and, of course, they're free to engage in their shrill and hysterical commentary as they see fit. But the reality is, as the member for Oxley mentioned, that three million doses of the vaccine have been spread out in the community.

Of course, we want more Australians to get vaccinated. Make no mistake: whether in Victoria or any other state in the Commonwealth, you have a responsibility not just to yourself but also to your fellow citizens to get vaccinated because, if you do not, we risk losing every single gain we have had and put your family members and friends at risk. Yesterday we had more than 104,000 doses administered. There was always going to a build-up to mass vaccination. Now we're very clearly, at 100,000 a day, driving an agenda for vaccinations across the community.

But that doesn't mean that there aren't problems. I just got an SMS from a constituent talking about the fact that there are people being turned away from vaccination hubs in Sandown in Victoria. You just need to read the press to and see how a sick Melbourne boy was turned away, I understand, seven times from testing yesterday at a state government testing facility. In fact, there were reports yesterday that many people got turned away at 4.30 in the afternoon—so still within the working day. People finished work, they took their responsibility seriously and they went off to get tested at the Royal Exhibition Building in Melbourne and they got turned away because they found the testing centre was closed—the one run by the Victorian state government. This is farcical that that scenario has presented itself. Is it really too much to expect that testing centres are available and open to the community, understanding simple things like their need to go to work? People will be working increasingly from home over the coming week as we go into a seven-day lockdown, so that flexibility will be freed up. But surely someone in the Victorian Department of Health could have said, in the lead-up to yesterday afternoon, why don't we keep the mass testing and vaccination centres that are available open because we've just announced a number of cases, and Victorians might need to either get vaccinated or tested to fulfil their responsibility? It defies belief. But somehow, according to members of the opposition, that is the Commonwealth's fault.

One of our biggest challenges, one of our biggest tasks, and it doesn't matter who we are, whatever side of the chamber we sit on or within the rest of the community, is to take responsibility for encouraging people to get vaccinated. Deputy Speaker Gillespie, you would have seen the data from research that came out only the other day on the reasons for hesitancy among the community. We as the Liberal government are not in favour of forcing things into people's bodies and compelling people to do things against their will; certainly I'm not, as the member for Goldstein, as members well know. It's simple to go and look at why are Australians hesitant about the vaccine? Fifty per cent of people are afraid of the side effects and there was concern that emerged out of the AstraZeneca vaccine earlier the year. But we also need to be realists that the risks of COVID-19, the spread and the health consequences that could come directly from that far outweigh any risk that Australians may experience from the potential side effects—which, by the way, are treatable—from taking a particular vaccine and particularly the AstraZeneca vaccine. The federal government has gone on to order substantial amounts of the Pfizer vaccine and the Moderna vaccine booster so those who need additional assistance can get it and to make sure that people across different age and risk profiles can get a vaccine that's appropriate for them. But our responsibility is not, as the members of the opposition want to do, to constantly deride, attack, undermine, ridicule, and as the Prime Minister accurately reported yesterday, not focus on fighting the virus but focus on fighting the government, who are trying to get Australians vaccinated. It is actually to focus on: what do we need to do to get Australians vaccinated? That's where this government is and remains, while the opposition's position is to focus on trying to attack the government and fight the government.

In the end, we're in one of these kind of 'team Australia' moments and certainly in a 'team Victoria' moment, where we need to rally together and work together in the hope that we can eliminate this, not just for the impact and success of the great state of Victoria but, frankly, for the rest of the nation, because, if there is mass exposure in Victoria, it will necessarily follow through to the rest of the country. But instead, what we're hearing from the opposition is simply a partisan Labor moment, where they're interested in arguing for themselves. That's incredibly dispiriting and disappointing because the people of Victoria, frankly, deserve better than that, and the people of Australia deserve better than that.

What we need is a health system that makes sure it can protect and support people at times of risk and need. We have complications at the state level. As I said, you have people being turned away from vaccination and testing centres in the state of Victoria despite their desperate efforts to do the right thing. We have Australians who are hesitant about the vaccine and the risks they feel to their health, and our job as leaders is surely to reassure them and to encourage them to take that responsibility. My hope is that Labor members might for once transcend their desperate attempt at partisan rhetoric and focus on the mutual good of the Commonwealth and actually improve the health and welfare of the Australian community.

We know, of course, that has been something that has deprived them to date. We now face a choice and a moment, and we are at a critical moment not just for Victoria but for the Commonwealth: if we want to keep Australia COVID-free and reduce our exposure to the risks of the virus and the risks of transmission, members of the opposition will stand and support the government in its measures to do everything it can to get Australians vaccinated, and every alternative is merely partisan rhetoric and interest paraded as public interest.

Photo of David GillespieDavid Gillespie (Lyne, National Party) Share this | | Hansard source

The debate is interrupted in accordance with standing order 43. The debate may be resumed at a later hour.