Nick Xenophon (SA, Independent) Share this | Hansard source

I need to pull up Senator Conroy for misleading the house a bit earlier. He said that the Liberals were the last men standing on this, but the last time I checked there were a number of very capable female senators for the Liberal Party, so I think he needs to be taken to task for misleading the house in relation to that. To put this in perspective, the amendments were moved by my colleague Senator Siewert jointly with me. They relate to what I see as a healthy compromise to what the government put up. I have always been concerned about maintaining an equilibrium between the private and public systems. Senator Cormann is quite passionate in his defence of the status quo—and I respect his position—but I think it is important that we put a few things in perspective. Firstly, this is not the only measure that keeps people in the private health system. Lifetime cover, community rating and the 30 per cent rebate are all factors to be considered. The fact that there has been such a pressure on the health system is also due to the ageing population and to illnesses which are preventable. For example, we can do more to reduce our smoking rates and the level of emphysema and lung cancer.

There are things that we can do to have a healthier community and that will make a difference to our hospital waiting lists. A range of other measures need to be taken into account in the context of how our health system works. That is why I believe that this is a sensible, healthy compromise in terms of not ensuring a tipping point by having so many people leave the system and of ensuring the viability of private health insurance in keeping a downward pressure on premiums as much as possible by not having so many people exiting. But there is also the fundamental equity issue. When this surcharge was introduced in 1997 the then Treasurer, Peter Costello, made it very clear that it was intended as an incentive for higher income earners to take up private health insurance. Right now it is $8,000 below average weekly earnings. I was convinced, as a result of what was put in the chamber yesterday by Senator Siewert and from discussions with Treasury officials last night, that average weekly earnings, on the basis of all the evidence available, would be a more appropriate index in the context of this measure, because it is a threshold based on income. So, on balance, that seems to be a more sensible approach.

I want to briefly refer to the issue of a Productivity Commission inquiry, and I would like to acknowledge that the opposition was quite supportive of the motion that I had put up, which has been postponed. It seems to me that it would be much more preferable for an inquiry, pursuant to the legislation that sets up the Productivity Commission, to be coming from the Treasurer. That is how it works in the legislation. I think there are some procedural and other difficulties in it being a motion from a senator, even though that would be a second-best alternative option. I believe that, if we have this Productivity Commission inquiry, it should be broad in its terms of reference and there should be a robust inquiry that looks at, for the first time, the comparison in outcomes in the costs of the public and private systems. It should look at infection rates in the two systems and at the whole issue of fully informed financial consent in both the public and private systems, because these are things that will make a real difference to some good, long-term public policy outcomes.

I note Senator Cormann’s interest in getting a good, long-term public policy outcome on health policy in this country. I believe that the Productivity Commission inquiry into this will make a very real and positive difference that will be good for our health system in the medium to longer term. That, to me, is a very key part of what is before us today. Whilst it is not directly before us, in terms of the issue that will be voted on, it is part of the undertaking of the government, and I accept that we have some broad terms of agreement based on the motion that I have introduced. Senator Siewert is looking at the terms of reference to make sure that it is as comprehensive as possible, and that is welcome.

Notwithstanding my admonishment of him a couple of minutes ago, can Senator Conroy confirm that the Productivity Commission will also be providing advice to the government on the most appropriate indexation factor for the Medicare levy surcharge threshold, so that the concern that Senator Cormann has had in relation to this will be one of the issues that will be looked at by the Productivity Commission in making its recommendations and reporting on this very important matter? Having said that, I look forward to this matter being dealt with. I believe that this is a sensible compromise, balancing the equity issue of those who were slugged with this surcharge—given the lack of indexation for 11 years—with ensuring that there is an appropriate balance between the public and private systems.