Gary Humphries (ACT, Liberal Party) Share this | Hansard source

Let me say in unambiguous language to the Senate that this debate about the Medicare levy surcharge legislation is not a debate about tax relief. Let me put it in another way. Senator Carol Brown posed the question: do people on $50,000 deserve a tax break? The answer to that question is yes but not through the device the government have introduced of raising the threshold for the Medicare levy surcharge. The reason is that, although it provides some relief to individuals who might be hit by the surcharge at the present time, it has a downstream effect on the integrity of our health system which is absolutely devastating. Whether the number of people affected by this change is 450,000—the government conceded that may well be the number affected and tempted to give their private health insurance away—or the million that the industry estimated might give up private health insurance, whichever figure is correct, you still have a massive effect on Australia’s already strained public hospitals when those people move from private health coverage into the public health system. That is the point that this opposition is making about this legislation. It is not about tax relief.

We are not opposed to the government putting forward tax relief. I put this invitation to the government: bring back your $660 million worth of ‘tax relief’ that you were providing through this Medicare levy surcharge legislation and instead give it directly to people by way of a tax cut. Transfer this same dollar amount into a tax cut and we will put our hands up to support that legislation, without any hesitation. Such a measure would have no effect on public hospital waiting lists, but to support your Medicare levy surcharge legislation in its present form would have a massive downstream effect on the quality of already strained public hospitals in this country.

Senator Cormann posed a very good question: if this legislation is so outstanding, why was it not announced before the last election? Why did you not go out and bang the drum about your relief to people who pay private health insurance? It was because you knew that it was very problematic. This issue needs to be focused on, rather than the question of tax cuts. Even Professor Deeble, who was quoted by Senator Cameron in the course of his remarks, conceded that as a result of these changes premiums would have to rise. He estimated that they would rise by five per cent.

We were talking earlier this week about older Australians and the pressures on older Australians. Older Australians take out private health insurance in very large numbers, and yet those opposite, who have been talking about how they want to relieve the pressure on older Australians—not by way of a $30 a week increase in their pensions, mind you, but they want to do something about the living standards of older Australians—are perfectly happy to sit there and support a measure that puts up pensioners’ premiums for private health insurance by five per cent. That is a very big cost for a person on a limited budget. Many older Australians are actually pensioners. Pensioners do, believe it or not, take out private health insurance. The government are happy, on the admission of their own champion, Professor Deeble, to push those premiums up by an additional five per cent. That is a cost that many of those old people do not feel that they can let go.

The fact is that this is a very dangerous piece of legislation with downstream effects that have a very significant impact. The downstream effect, of course, is to remove a very large amount of money out of Australia’s health system—$3.2 billion is sucked out of the system by virtue of a combination of people withdrawing their private health insurance, and the rebate disappears in that respect and so does the effect of people putting money into private health insurance. If the government are going to put that money back again into the system by way of higher taxes then fine, they should announce they are going to do that, but they are going to have to face the downstream consequences of this decision. (Time expired)

Question agreed to.