Senate debates

Tuesday, 9 March 2010

Fairer Private Health Insurance Incentives Bill 2009 [No. 2]

Second Reading

5:25 pm

Photo of Steve FieldingSteve Fielding (Victoria, Family First Party) Share this | Hansard source

The Prime Minister, back in 2007, when he was still the Leader of the Opposition, looked the Australian people in the eye and said that a Labor government would not cut the private health insurance rebate. His words could not have been clearer. When he was asked if he planned to cut the health rebate, his answer was, ‘Absolutely not.’ Surely that is about as clear as you can get. But the Prime Minister went one step further than that. He wrote to the Australian Health Insurance Association telling them:

Both my Shadow Minister for Health, Nicola Roxon, and I have made clear on many occasions this year that Federal Labor is committed to retaining the existing private health insurance rebates, including the 30 per cent general rebate and 35 and 40 per cent rebates for older Australians.

That is pretty clear. The bill we are debating today, the Fairer Private Health Insurance Incentives Bill 2009 [No. 2], does the exact opposite of everything the Prime Minister said. In short, the Prime Minister has gone back on his word, and I predict the PM will be duly punished for it at the ballot box.

Clearly, this bill does cut the health insurance rebate and it affects hundreds of thousands of Australians by putting them hundreds of dollars out of pocket. The Prime Minister has broken his promise to the Australian people. Once again, the PM has over-promised and under-delivered on health. The Australian people have the right to feel betrayed because they have been misled. The Australian people have been betrayed by the Rudd government and the Rudd government has started to lose the trust of the Australian people.

In November 2007 the Australian people thought they were voting for Labor to keep the health rebate. Instead, they have had the wool pulled over their eyes. But that is not the only issue in health where the Prime Minister has broken a promise. Before the election in 2007, the Prime Minister promised he would fix the health system and take it over by the middle of last year if it was still in disarray. Yet when the time for action came, he shirked his responsibility, coming up with some half baked hybrid idea.

I cannot see how the government’s health reforms are going to do anything to reduce the ridiculous waiting times for patients. Instead of following through on his promise, the Prime Minister has come up well short and proposed a 60 per cent to 40 per cent funding split with the states. It is time the Labor Party woke up because a 60 per cent to 40 per cent funding split with the states is not a takeover; it is just rearranging the deck chairs. As commentators such as Wolfgang Kasper and Jeremy Sammut pointed out in today’s Financial Review, the government’s health plan:

… does not restore genuine community control over local hospitals. It simply rebrands the state health bureaucracies and adds another layer of bureaucracy.

Tony Harris, a former senior Commonwealth officer and New South Wales Auditor General, called the Rudd government’s health reforms ‘a muddle that will create acrimony with no great benefit’.

There is not a dollar more of funding being put into our hospital system, and the government has not actually addressed the key issue for most people and told us what the new waiting list times are going to be for elective surgery. It is the same old story: overpromising and underdelivering. Now, with the cuts to the health rebate, the government wants to slug Australian families again. In September last year I voted against cutting the health rebate, and my position today is the same. I will not be voting in favour of this bill unless more is done to help families, rather than undermine them. These are the same working families that the PM reminds us of all the time.

Family First believes that we need a strong public health system and a strong private health system. The government is at risk of undermining both the public and the private system by cutting back the health insurance rebate. The decision by the Rudd government to means-test the health rebate, however, is likely to wreck the delicate balance between public and private health care. Under the Rudd government’s proposal, private health insurance will become an expense many families simply cannot afford.

The government has claimed that, even with the increases, more than 99 per cent of people will stay in the private system. These numbers look more like they have been taken from the back of a Weeties packet than born from proper, rigorous analysis. They are based on the false assumption that private health insurance is relatively inelastic and that, therefore, the price of health insurance is not likely to drive consumer behaviour. During the Senate committee inquiry last year, we heard that over 200,000 people are expected to drop out of the private system under the proposed means-testing provisions. We also heard that, as a consequence of the government’s policy, 730,000 Australians are likely to downgrade their private hospital cover and an additional 775,000 Australians will exit their general treatment cover for matters such as dentistry. How will our overburdened public hospitals possibly cope with those Australians who exit the private system? Clearly, this will put more pressure on the Prime Minister’s working families. It is a further example of the Rudd government’s short-sightedness and its inability to implement anything properly. It is willing to save money now even if that means spending more money later on.

In December the Productivity Commission released the report of its inquiry into public and private hospitals. It found that treating a patient in a private hospital costs, on average nationally, $105 less than it does in a public hospital. Now the Rudd government wants to implement a policy that will drive more people to a more expensive system. How does that possibly make good policy sense? It does not. In 2009, national waiting times for elective surgery rose. What do you think is going to happen if more people are forced from the private system into the public system? That is right: the waiting times for elective surgery are going to increase even more. We already have a health system that cannot cope with all of the demands placed on it, and the government is now looking to make things even worse.

Family First are mindful of the current economic situation Australia finds itself in. Accordingly, we do accept the idea that those who can afford it should shoulder some of the burden to make life easier for everyone else. However, the government’s thresholds for means-testing the health rebate that are proposed in this bill are not fair. The thresholds are unfair because they focus too much on household or individual income and do not take into account how many kids there are in the household. As any parent knows only too well, the cost to families can increase significantly depending on the number of children to be cared for. But, clearly, the government do not get this, and it shows they have lost touch with many in middle Australia. Under the government’s proposal, the thresholds will only increase by a very stingy $1,500 per child in a household—and this does not even apply for the first child. What a joke! That means that a couple with three children will be allowed to earn just $3,000 more between the two of them each year before they start to lose part of the 30 per cent government rebate.

Are the Rudd government living in fantasy land? Do Labor really know how much it costs to raise a kid? If the Rudd government did know, they would not be proposing such a stingy amount. Clearly, the Rudd government do not know how much it costs to raise a kid because they have not addressed this issue. There is no way you can add up all the expenses and tell me that it makes sense to increase the thresholds by just $1,500 per child. Having children is one of the biggest joys, but it costs a lot of money and the government need more recognition of that in this bill. There is a huge list of expenses which families with children face every day, and it only grows longer the more children you have. Family First have been pressuring the government to increase the thresholds, but the government have not been willing to budge. Therefore, Family First will be voting against this bill in order to get the government to the negotiating table so that we can get a fairer outcome for Australian families.

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