Ian Macdonald (Queensland, Liberal Party, Shadow Parliamentary Secretary for Northern and Remote Australia) Share this | Link to this | Hansard source

In the five minutes I had before question time interrupted this debate, I was expressing some amazement that the great moral challenge of the century, the Carbon Pollution Reduction Scheme Bill 2010, had not been put first on the program today and that we were instead dealing with the Fairer Private Health Insurance Incentives (Medicare Levy Surcharge) Bill 2009 [No. 2], a bill that highlighted a broken promise by Mr Rudd. I quoted from Mr Rudd’s now quite famous letter of 20 November where he gave a rock-solid written guarantee that he would retain the existing private health rebates which this bill is all about knocking off, in direct contravention of Mr Rudd’s rock-solid written guarantee.

I then made the comment that Mr Rudd and his party have been very poor managers of the whole health debate. We know that Mr Rudd said the buck stops with him and promised that, by a date just recently passed, he would have all the hospitals in Australia fixed and that otherwise he would take them over. Of course, it was just another example of Mr Rudd’s good spin before an election that people believed, and, as we have come to expect with Mr Rudd, it did not work.

I also mentioned how Labor’s knocking off $180 million in the last budget from the pathology support through Medicare had impacted upon me personally as someone who has had open-heart surgery and has a plastic valve in his heart to keep him alive. Some might hope that, with these pathology cuts, perhaps I will not be here! To keep myself alive I have to keep my blood thin; to keep my blood thin I have to be permanently on warfarin; and to make sure that it is kept at the same level I am supposed every three or four weeks to go and get a pathology test. I have been doing that now for 13 years. It only takes a second to get out the blood and make sure that it is somewhere between 2.5 and 3.5, and that will keep me alive by keeping the blood flowing through my heart. It is essential that it be done—that is, it is essential from my point of view because I want to stay alive.

Yet I went along to my pathologist the other day and they said, ‘I hate to tell you this, Ian, but this is going to cost you $40.’ I said, ‘It can’t cost me $40; I’ve been doing it for 13 years and it hasn’t cost me a cent.’ They said, ‘Mr Rudd’s knocked so much off this that the pathologists are now not subsidised in the way they used to be, so they are recovering their costs from their patients.’ I tell that story because I am one of those—although we are relatively poorly paid as politicians—who can still afford that. But there are many Australians who simply could not afford the $40. I am not talking about pensioners and people on welfare benefits; I am talking about ordinary Australians in employment. If they have to pay $40 a month just to check to keep themselves alive, it becomes very unfair on those who simply do not have the money to pay for it.

That is the sort of thing that Mr Rudd does. He wants to save $180 million, but he is spending $43 billion. We just wasted $20 million on Senator Conroy’s request for tender in the National Broadband Network. It did not achieve a thing. It was just wasted. Was it $20 million? I think it might even have been more than that.

Stephen Conroy (Victoria, Australian Labor Party, Deputy Leader of the Government in the Senate) Share this | Link to this | Hansard source

Seventeen million.

Ian Macdonald (Queensland, Liberal Party, Shadow Parliamentary Secretary for Northern and Remote Australia) Share this | Link to this | Hansard source

It was $17 million. That is okay! Thanks, Senator Conroy. Only $17 million was absolutely wasted and it did not achieve a thing. If Mr Rudd wants to save some money, he should get rid of Senator Conroy. We could have saved $17 million and we could save ourselves a fair share of the $43 billion that is allegedly going to be spent on this NBN once Senator Conroy sorts out Telstra. Or so he thinks; I know who will end up sorting out whom, because we know that prior to the election Senator Conroy and Telstra were very, very close—almost as if they were holding hands. Remember where you got your $4.7 billion from, Senator Conroy.

Claire Moore (Queensland, Australian Labor Party) Share this | Link to this | Hansard source

Senator Macdonald, I should not have to remind you that you should not address senators across the chamber in that way.

Ian Macdonald (Queensland, Liberal Party, Shadow Parliamentary Secretary for Northern and Remote Australia) Share this | Link to this | Hansard source

I should not, either.

The Acting Deputy President:

I should not have to remind you, Senator Macdonald.

Ian Macdonald (Queensland, Liberal Party, Shadow Parliamentary Secretary for Northern and Remote Australia) Share this | Link to this | Hansard source

No. It is Senator Conroy’s interjecting that is encouraging me to respond, unfortunately. There are so many ways that the pink batts scheme has now become a national scandal. If we wanted to save $180 million from pathology, why didn’t we think of that before we embarked upon the complete waste of money that this batts scheme is going to be? It is not just that that is a complete waste of money; it is the millions and millions of dollars that are going to be needed to put right what Mr Garrett has bungled with that program.

I do digress. We are so passionate about opposing this new tax by Mr Rudd because it will again put increased pressure on public hospitals. Any of us who have had to deal with public hospitals know how difficult it is, currently, to get in. Fortunately, I have private health insurance. I, as all of us do, continue to get complaints from constituents—ordinary people—who have some horrific stories about the queues at hospitals and very ill patients sitting in corridors and, worse still, in ambulances, until a bed is free. It is atrocious. This bill will put more people into that public hospital system and it will cause even greater problems. I know that Mr Rudd and the Labor Party hate private health insurance. It is a great shame. It is a bit of the old class warfare. It is so wrongly directed. We have to encourage people to look after themselves and save a little bit to get private health insurance. We do not need to do what is being proposed here and make it more difficult for people to achieve good health care in Australia.

We oppose this for the right reasons and on sound economic and health principles. We also oppose this because it was a direct promise—a direct, written guarantee—given a few days before the last election to swing votes. How can Mr Rudd, with any credibility, have us in the Senate tonight again debating a bill that is a direct contradiction of his written promise on this issue? I would hope that Labor senators who have an interest in good health care and honesty will cross the floor and join with us in rejecting this bill yet again and give real encouragement to the health system rather than try to demolish it as Mr Rudd appears to be doing.

Mitch Fifield (Victoria, Liberal Party, Shadow Parliamentary Secretary for Disabilities, Carers and the Voluntary Sector) Share this | Link to this | Hansard source

At the outset, I would like to share a story with you, Madam Acting Deputy President Moore. I was talking to a primary school teacher a little while back. She told me about a homework project that she had set her students. The project was for students to go home and ask their parents what two plus two equals. She told me about three students in particular. The first student went home and asked her father, who was an economist, what two plus two equals. He said, ‘Darling, for two plus two the answer is within the range of three to six, with a probability that the answer is four.’ The second student went home and asked her father, who was an accountant, what two plus two equals. The accountant said, ‘Darling, that’s easy. The answer is four.’ The third student went home and asked her father, who was a politician, ‘Dad, what does two plus two equal?’ The politician parent answered, ‘Darling, that depends. What do you want the answer to be?’ That was very much Prime Minister Rudd’s approach at the last election: tell the public what you think they want to hear, tell interest groups what you think they want to hear, tell industry groups what you think they want to hear and, in this case, tell health insurers what you think they want to hear and tell holders of private health insurance what you think they want to hear.

The Fairer Private Health Insurance Incentives (Medicare Levy Surcharge) Bill 2009 [No. 2] before this chamber is the legislative embodiment of a lie. It is the legislative enactment of Labor hypocrisy. Before the last election Peter Garrett, that well-known paragon of public sector virtue and capacity, indicated the government’s approach to election commitments. He indicated what the Labor Party’s approach would be to honouring election commitments. I recall, as all senators would, that radio host Steve Price asked Mr Garrett if Labor’s promises could be believed. Mr Garrett replied, as we would remember: ‘When we get in we’ll just change it all.’ He was right. The coalition at that time elected to believe Mr Garrett rather than Mr Rudd in terms of how Labor would operate in government. That is why we asked the then Labor opposition time and again in this chamber, in the other place, in debates, on radio and on TV: will Labor commit to not altering the private health insurance rebate in any way, shape or form? Every time we posed that question, Labor confirmed that there would be no change to the private health insurance rebate. Labor laughed at the very suggestion—how could we possibly ask that; this was new Labor, economically conservative. Labor were in fact now lovers of private health insurance.

Mr Rudd even sent what you might call a policy love letter to the Australian Health Insurance Association. It was a truly charming letter. It was a declaration of love; it was a declaration that psychologists would call unconditional positive regard; it was a declaration of policy, fidelity and commitment. It was a letter which you would have been absolutely delighted to receive as head of an industry association. I will quote from it. It was directed to Dr Michael Armitage, Chief Executive of the Australian Health Insurance Association. In the letter the current Prime Minister, then Leader of the Opposition, said:

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 the 35 and 40 per cent rebates for older Australians.

That was a lie. Mr Rudd goes on. As if that was not reassurance enough, he says:

Labor will maintain the existing framework for regulating private health insurance …

That was a lie. Mr Rudd goes on, because he appreciated that this was a great concern to the private health insurance industry, a great concern to Australians who hold private health insurance. He knew that this was a matter of serious concern—this was a matter upon which thousands of Australians, if not tens of thousands, if not more, would determine their vote. He says in the letter:

I trust this allays your concerns.

The purpose of this letter was to allay the concerns of the private health insurance industry, to allay the concerns of Australians who held private health insurance and to allay the concerns of Australians for whom this is a very important matter—to allay the concerns of Australians who may well have determined their vote on this issue. Mr Rudd continues in this letter:

Federal Labor values its relationship with the private health insurance sector and we look forward to this continuing regardless of the election outcome on November 24.

We know the election outcome and, sadly, federal Labor did not continue to value that relationship after it took office. The positive relationship is no longer there. Labor did what Mr Garrett predicted. Mr Garrett predicted, ‘Once we get in, we’ll just change it all’—and that is exactly what happened. We know that the government introduced legislation into the parliament to means-test the private health insurance rebate and the parliament rejected that legislation upon its first introduction. It was a broken promise. The parliament was acutely aware of the fact that the government was seeking to break a solemn election promise. The parliament held Labor to its commitment and it quite rightly defeated the bill. On this side of the chamber we did so not just for reasons of keeping faith with the Australian people, which is important—after all, the coalition committed to the Australian people that we would not change the rebate, and we could hardly go back on that; apart from keeping faith with the Australian people there are also extremely good public policy reasons for defeating this legislation and for defending current arrangements.

On this side of the chamber we believe in a mixed health system and we believe in choice. We believe in a strong public system and we believe in a strong private system. We believe in a strong private system because it frees up capacity in public hospitals and because it takes pressure off public hospitals. We know that if this attempt to break a problem is successful, if this attempt to means-test the rebate is successful, people will give up private health insurance. It stands to follow: if you make private health insurance more expensive, some people will give it up and others who might have taken it up will not. And as the pool of people in private health insurance shrinks, fewer people paying premiums will mean higher premiums, which means more people will give it up, premiums will further increase and so it goes. This means as a matter of inexorable logic that there will be more people in the public health system, more people seeking to avail themselves of limited resources. It is a recipe for damage to both the public and the private health sectors. It is clear that Labor hate private health insurance so much that they are prepared to damage the public hospital system in the ideological crusade against the private health system and against choice.

Those on the other side of the chamber are not so silly as to not know that this is bad policy. Those opposite know this is bad policy. Those opposite also know that this is an attempt to break an election promise. Because of those two reasons, which those opposite are acutely aware of, the government needs a cover. The cover for this legislation is that it is all really a part of budget repair. Labor put the budget into deficit, which is another broken promise, and the solution for that broken promise of putting the budget into deficit is apparently to break another promise.

On this side of the chamber we do not actually believe that it is our responsibility to pay off Labor debt. That is the government’s responsibility. They are the government; they are responsible; they ran up the debt; it is their job to pay it down. It is not our job to find the solutions to the problems that they cause—unless, however, we are elected to government, in which case we will again do what we always do: clean up Labor’s mess. But that is not our job from this side of the chamber. Labor’s mismanagement of the budget is not a reason for the coalition to break a commitment that it gave to the Australian people on private health insurance. Budget repair is a false premise for this legislation.

The other part of Labor’s strategy in relation to this legislation is a threat of thoughts—the same threat that the government tried with the ETS. Labor are dropping hints about a double dissolution election on the private health insurance rebate. If you read the newspapers over the last week or so you would see that there are a number of journalists who have been briefed to write that a double dissolution election on the private health insurance rebate is a possibility and the government is actively thinking about it. The PM has also played a more direct role in relation to putting that furphy out there. The Prime Minister on Sunrise on 19 February, when asked about the private health insurance rebate and the timing of the election, said:

Now, as for election timing, what form an election takes, well let’s wait and see.

Very coy. He continues:

My intention, as I’ve said many, many times is for our Government to serve its full term. But let’s just see how this one unfolds.

I have bated breath, I am shivering in terror at the prospect of a double dissolution election on the private health insurance rebate—a double dissolution election on a broken promise. Bring it on! Make our day! Have a double dissolution election on the basis of the private health insurance rebate means test, a breach of a solemn election promise. If the Prime Minister is trying to spook us into supporting this legislation because he thinks we are scared of an election, he had better think again. We are not scared of an election. We are in opposition. The only way for an opposition to get back into government is through an election. As far as we are concerned, the more elections the better, the sooner the better. Bring it on! We would love to fight an election on the private health insurance rebate.

The timing of the reintroduction of this legislation is curious for another reason. We know for all of last year that the greatest moral challenge facing the world was climate change and the need for an emissions trading scheme. There was not a moment to lose. We could not wait another week; we could not wait another month; we could not wait to vote on the ETS legislation until after Copenhagen, let alone after Christmas—there was not a moment to lose. This parliament had to decide; this parliament had to pass the ETS legislation to save the world. We were told that time and again. There was no rationale as to why we could not wait until after Copenhagen or wait to see what the rest of the world might do. We had to get on with it—we had to pass it—and the very first thing the government was going to do after parliament returned, on the very first day of parliament this year, was reintroduce it. It was going to get it through the House as quickly as possible, without a moment to lose. But then, at the earliest available opportunity, when the Senate resumed, the government forgot about that. Now the most pressing matter facing the nation is a means test of the private health insurance rebate and we, the Australian public and the press gallery are meant to sit back and say, ‘Okay, fine, we recognise it now: the private health insurance rebate, yes—great moral challenge.’

This legislation, to means test for the private health insurance rebate, is a great moral challenge, but it is a great moral challenge for those opposite. The moral challenge is for them to honour their election commitment, solemnly given at the last election. This is perhaps the most breathtaking and cynical hypocrisy I have seen in this place. I have never seen so much hand wringing over any piece of legislation as I have seen over the ETS—never. And it had to be put to this parliament and passed through this parliament as quickly as possible. And what happens? We are not going to debate it this week: not for one day, not for one hour, not even for a minute this week are we going to be substantively debating the ETS legislation. No, we are going to be debating a means test on the private health insurance rebate.

You will forgive us if we get a little confused sometimes on this side of the chamber about what constitutes a real and genuine priority, because this government has had so many No. 1 priorities—everything is a priority; everything is a great moral challenge; everything is a test of our great political morality on this side of the chamber. Nothing is ever just a straightforward policy debate, with the parliament debating the relative merits of a piece of legislation. No. With this government every piece of legislation is a great test of the integrity and morality of this side of the chamber. What rot. What utter, utter bunkum. This government is seeking to break an election commitment that it was asked about time and again at the last election. It was asked: would it guarantee that it would not alter the private health insurance rebate in any way, shape or form? And we were mocked when we asked that.

We know Labor well. We know that you do not listen to what Labor say; you look at what they do. We know Labor will seek to break this election commitment. We on this side of the chamber are going to honour the faith of the Australian people. We undertook to defend private health insurance; we are going to do exactly that. We are going to vote against this legislation. This legislation should be defeated, and it is my hope that it is.

John Williams (NSW, National Party) Share this | Link to this | Hansard source

I want to follow on from my colleague Senator Fifield and talk about the promise both the Prime Minister and the current Minister for Health and Ageing made to Australians prior to the November 2007 election. Once again, we face a broken promise. Let us have a look at the promise that was made to the Australian people. The media release was titled ‘Liberal Scare Campaign on Private Health Insurance Rebates—Federal Labor to Retain Rebates’. It goes on to say:

On many occasions for many months, Federal Labor has made it crystal clear that we are committed to retaining all of the existing Private Health Insurance rebates, including the 30 per cent general rebate and the 35 and 40 per cent rebates for older Australians.

               …            …            …

The Liberals continue to try to scare people into thinking Labor will take away the rebates.

This is absolutely untrue.

That was a quote from Minister Roxon in September 2007, prior to the election. Australians are getting quite familiar with broken promises from this government. We had the promise to put downward pressure on grocery prices, and what did we see? A website called GROCERYchoice, and a waste of $10 million—a total farce. We saw the promise to put downward pressure on fuel prices. We have not seen that either, especially with world oil prices at US$70 a barrel and higher. We have seen a promise to be economic conservatives, and in this current financial year alone I think the federal government will borrow $52 billion. That is not very conservative. We have seen the big promise to fix our hospitals by mid-2009 and, if not, they will take them over and the buck will stop with the government.

All this fairer private health insurance legislation is going to do is to put more pressure on our public hospitals. How many will leave private health insurance because of this legislation? Let me quote some figures. The Australian Health Insurance Association, the industry group representing health insurers, argues that as a result of these changes significant numbers—up to one million—will abandon or downgrade their cover, and this will lead to rises in private health insurance premiums as health insurers seek to recoup higher costs. It is as simple as that. What we are doing is putting a tax on private health insurance. As John Laws often used to say on the radio when I would be out in the sheep yards drenching sheep or in the shearing shed or whatever, the more you tax something the less you have of it—a good saying. Here is a situation where the government is simply going to tax private health insurance more. Forget about the promises to the Australian people prior to the election—they are going to change the rules now. They do not care about what they said to the Australian people prior to the election, like with many issues; they are going to put in this means test and increase the tax on private health insurance.

The Australian Private Hospitals Association argues that Treasury estimates that 99.7 per cent of people will retain their private health insurance as a result of this measure cannot be trusted, due to the complexity of the proposed arrangements. They are saying those figures cannot be trusted. So, the more we tax people for private health insurance, the more that people will leave private health insurance. That will simply put more pressure on an already overloaded public health system. I was talking recently to doctors in Inverell, the magnificent country town I am fortunate enough to live in. We have got doctors running their surgeries there in the local community who are pulling their services out of the local hospital. Why? Because they are simply working too hard. They have every day in their surgery booked up seeing patients, then they get a call to accident-emergency at the hospital, then they cannot service their patients in their surgery. Then they are working late into the nights and on the weekends, so they are withdrawing their services because they are simply being burnt out.

Now we risk seeing so many leaving or downgrading their private health insurance because of this legislation, and that will simply put more pressure on our public health system, our public hospitals, and place more work on these already overloaded, overburdened doctors along with nurses, many of whom have to work double shifts when other nurses call in sick. Budgets are also getting burnt out because there are too many desks and not enough beds, with the level of bureaucracy in the health system in New South Wales. What the government is doing here will add more pressure to those hospitals. This is simple stupidity. It will achieve nothing. The only thing it will do is tell the Australian people that Prime Minister Rudd and Minister Roxon cannot keep their word—they cannot be trusted. They gave a guarantee to the Australian people and now they are going back on their word. That is a simple fact—no argument anywhere; that it is the fact of it. All the quotes are there.

As I have said, this is a tax on health. And, when this tax comes into effect, where is the money going to go? Mr Rudd has said that the money is needed for health reform. But Minister Roxon has said that the money will be used for e-health. Then she said the money would be for new medicines. Then Treasurer Swan put a spanner in the works by saying the money would be used to pay for the increase in the age pension. How confusing is it when we have the Prime Minister, the Treasurer and the health minister all giving a different view on where this money, this saving, is going to go. Then we have the exaggerated spin that the health system is going to cost the country up to $100 billion by the year 2050. It is a wonder they did not do the forward estimates out to perhaps the next century—it might have been $200 billion, and that could be used in the media as political spin. It is simply farcical to say what it is going to cost by 2050. I am sure there will be a lot of changes in budgets and all sorts of things by then, unless the government really believes it will still be in government by 2050. With broken promises like these and many others, it will be lucky to be in government come the year 2011.

In summary, the real problem here is that, when you take away the incentive for people to participate in private health insurance, more are going to drop out. The big problem we have then is that those who stay with private health insurance are going to have to pay more. There will simply be fewer people paying the bills for our private health insurance companies. They have their fixed costs all the time; those who remain with the system will have to pay more. So all you are doing is passing on the cost. The 30 per cent rebate was a fair rebate system put in by the previous government to encourage people to join private health insurance. For every dollar they saved, they actually contributed two dollars or more to the health system. That is what happens with the system as it stands now. But the government wants to change that. Now they are arguing about where the money that they intend to save is going to go. Surely the Senate has an obligation to keep people in this place honest. The Senate’s job is to make sure that the Prime Minister and Health Minister Roxon keep their word. They cannot simply lie to the Australian people before an election and change their minds after the election and go back on their word. Is it any wonder that people become cynical about politicians when you have these core promises and then great backflips when they simply change their minds?

The changes to the private health insurance rebate are the latest phase in Labor’s unrelenting war against private health insurance. Labor hates private health insurance. The coalition introduced an open-ended private health insurance rebate because for every rebated dollar a privately insured person contributes two more dollars to our health system as a whole. We all know the cost of health is huge. No matter where you go in Australia, the biggest issue that people are concerned about is health, whether it be a hospital system, our aged-care facilities or whatever else, even CAP packages for home care facilities. One thing Australians want is a good health system. But this legislation is going to give us a worse health system. It is going to put more of a burden on our hospitals, more of a workload on those people who work in those hospitals and more costs on those hospitals already pleading for money, and encourage more people to leave the private health insurance system. As I said, this was a core promise in the last election along with many other promises that the Rudd government made. Now they wish to change their minds. I, for one, will not be supporting this along with all my colleagues on this side. Why? Because a promise is being broken and that is simply wrong in itself.

If you make a promise to the Australian people, you should keep your word, not just do a backflip on it and say to the people, ‘Well, we don’t care about what we said to you before the election. We are going to now change the rules so that those who earn more will pay more.’ This is the old Labor strategy: penalise success and reward failure. I am sorry, but that does not work well in a free-enterprise system. You do not make the poor rich by making the rich poor. We need to encourage business. We need to make the most effective use of the dollars that the government has to spend. We need to honour our word. We need to encourage people to remain in private health insurance. Otherwise we will simply overload the hospital system.

My colleague Senator Fifield touched on that great moral challenge that faced us, the emissions trading scheme, and how it was so urgent that it be passed last year before Copenhagen, before the rest of the world acted, while Australia was producing 1.4 per cent of the world’s greenhouse gases—and we were going to reduce that by five per cent come the year 2020. Thank goodness the Senate did not pass it. We said at least wait until after Copenhagen. Imagine if we had passed it and locked our nation into that great enormous tax for generations while the rest of the world was doing nothing. Would we have cooled the globe? Would we have reduced the amount of CO2 in the atmosphere? Would we have lowered the sea levels? We would not have done any of that. We would have put a $115 billion tax on industries in our nation that would have been passed on to the average Joe Blow in the street. So the Senate did its job and did it well on the emissions trading scheme.

The spin was put out that we had to act now to save the world. But, as Senator Fifield said, where is it on the agenda today? Where was it three weeks ago, when we had the first week of sitting? It was not back here. It was being stalled and talked about for a few days in the other place. Now it is not here for us to look at. Instead we are here to debate a broken promise. As I said, we cannot support broken promises. We cannot support encouraging people to leave private health insurance or downgrade their private health insurance. We cannot support overloading an already overloaded and stressed hospital system right throughout Australia. Hence we shall be here as one voting this legislation down, as we should. I thank the Senate.

Christopher Back (WA, Liberal Party) Share this | Link to this | Hansard source

The private hospital system in this country treats 40 per cent of all patients, being over three million annually, and performs over 60 per cent of all surgery in Australia each year, on over a million patients. The Productivity Commission looked into public and private health care and found that private hospitals treat patients more cheaply than public hospitals in this country. As we know, we have an ageing population. We have been told, and we do not disagree, that it will more than double the demand in hospital admissions by 2030. Why would the government be wanting to discourage participation in private health cover? The further one examines the question of providing health care in Australia the more obvious it becomes that the cost sharing of this burden is critical if we are to at least maintain, if not improve, health care for Australians.

It is no wonder that the Labor Party, prior to the last election, committed itself to continuing the rebate for private health to Australians. The Prime Minister, who was then the Leader of the Opposition, did this by media release, as has been referred to, by speeches and in writing. Why is Labor going back on an election promise in a climate that would surely be encouraging greater participation, not less, in private health care? If the Productivity Commission is to be believed, then the government should be encouraging the more cost-effective and efficient private hospital and healthcare systems. If the statistics available to me, as I have mentioned, are that 40 per cent of Australians are treated privately and 60 per cent of surgery is done privately, what is this telling us about the desires and actions of the community? Clearly, they want to see a strong health system and they want to see a well-funded and reasonably accessed public health system.

I turn to young people. What is going to be the impact of these legislative changes that are before us, if approved by the Senate, on young people? What is the message that we are sending to younger members of the community at the very time when we should be saying to them, ‘Given your earning capacity, you should be looking to your own resources to provide your medical and hospital cover into the future’? Naturally, from a systemic point of view, this is the very group that we actually do want to be funding private health cover because we know that they will draw less upon it than their parents’ or their grandparents’ generations. This is called, according to the documentation, a fairer health insurance incentive. I do not see the incentive and I do not see where it is fairer.

I turn from younger to older members of our community. We are living longer and we are healthier than our parents’ and grandparents’ generations. Participation in private health cover by older members of the community must be a decided health advantage, from an administrative perspective, and I cannot see the rationale of the government wanting to put this at risk. We must encourage older people in the community to stay in private health insurance for their own good and for that of the overall system.

The Productivity Commission shows that costs for patients in the private hospital system are lower. The system provides safer treatment and costs the taxpayer less money. Figures available to me from Health Expenditure Australia indicate that the government spent $30.8 billion on public hospital services in 2007-08 in this country, and we know the figure grows annually. By contrast, the government spent $1.7 billion on private hospitals through private health insurance. The figures look very attractive to me. If they are accurate, then I am at a loss to understand why the government is hell-bent on forcing private health insurers out of that system, to become more reliant on the public health system.

We are all acutely aware that the health budget is assuming an ever-increasing proportion of our revenue base at the national level and at the level of the states and territories. When I commenced work in the early seventies, there were some 10 people working to support one who was not working. At the moment, that ratio is around four to one, and the Treasurer told us recently it will diminish to fewer than two people working to support each who is not. Given the predominance of health as a cost burden to the economy, surely logic dictates that we must encourage people to take responsibility for their own health needs, to invest in their own private health insurance and to remove themselves from being a burden on the public system. Further pressure on the already overloaded public health system will surely cause it to implode. From the perspective of one who does contribute to the private health system and who has the primary care responsibility for an aged parent, it is blindingly obvious to me that every effort must be made to protect, preserve and encourage participation in private health for as many members of the Australian community as can afford it.

The point should not be lost that it is taxpayers who fund the public health system, through our Medicare levy. As this government went to the last election promising to leave the levy unchanged from that of the Howard government, it is incumbent on this government to go to the people in a general election and seek a mandate to interfere with a process that is delivering a well-balanced, if under funded, mix between private and public service provision in this country. The government has this opportunity during 2010 or 2011—when the next general election is held—to put this question to the people of Australia, rather than waste the Senate’s time in trying to push the legislation through the Senate.

I turn to the administration of rebates. The current rebate—as we all know, because we put in our tax returns—is simple, transparent, easy to understand and easy to audit. I have been informed that, under the new proposals, there will be no fewer than 10 levels of entitlement or surcharge depending on a person’s income and age. How will people work out where they stand in this? It is another huge administrative burden, another cost to government and another cost to the private health funds. If the government proposes that it will enjoy savings as a result of its amendments to the private healthcare rebates, then what costs have been factored in for the administrative burden that it will create? If history is any indicator, I suspect the savings will be minimal and they will be more than taken up in administrative costs for the government and the private sector.

I would like to refer to funding in the health system as a health pool of money—and to the effect. Senator Williams made reference to the 30 per cent rebate. Think of it in these terms: when the government pays 30 per cent rebate to a privately insured person, it pays 30 cents of each dollar into that pool, but, more importantly, the privately insured person pays 70 per cent and 70 cents into that pool. When that person leaves private health insurance, the government gets its 30 cents back, but the pool loses the other 70 cents that the privately insured person was previously willing to contribute. This fact should not be lost. The pool loses more than the government gains. Where the sense is in reducing the rebate and discouraging people is absolutely beyond me. I have not yet seen a cost-benefit analysis that points to this being anything other than another tax on health insurance and a cost burden on—guess who?—middle income earners in this country. But as my colleague Senator Fifield said, this comes as no surprise, as this Labor government’s ill-conceived attack on middle Australia can scarcely be concealed.

The interesting point to be made, whilst the government is attacking middle Australia, is that more than one million households earning less than $26,000 per annum take out private health insurance, on what we would regard as a minimal family income. You might immediately say, ‘Yes, but they will not be impacted by the government’s tax grab.’ Of course, they are. Despite the fact that they are under the threshold, they will be adversely affected, in two ways. The first, is the size of the pool to which I have referred. The pool gets smaller; they are disadvantaged. The second is that they will be heavily impacted, as more people queue at public hospitals and outpatient facilities. So do not think this is only an attack on middle Australia—those who this government seems so keen to pull down. It is an attack across the board.

What does the government itself say will be the impact of attacking private health insurance in this way? The government estimates that tens of thousands of people will drop their cover. It recognises that, as people drop out of private health insurance, then premiums must rise for those who remain. And what happens to the pool? It rapidly becomes a puddle. In my own state of Western Australia, the impact will be greater. Why? Because a higher proportion of people in WA carry private health insurance, so therefore a higher proportion of people will be at risk. But this comes as no surprise. There will be no defence on the other side from Western Australian Labor senators or others, because they too seem to have forgotten the state of Western Australia.

I have spoken about the young and I have spoken about older members of our community. What do young families do? We all know, particularly those of us who have had young families, that people starting families or adding to their families are the very ones who need to be covered by private health insurance. Interest rates are rising and capacity to meet mortgage commitments is being stretched even further. Private health cover is an easy cost to give up. The very people who should not be giving up private health insurance will be those who are forced to do so.

The Prime Minister, having repeatedly told the Australian electorate that he would not alter health insurance rebates, now proposes to do so. This is the person who was going to fix public hospitals around Australia by June last year. As I remember, it was his intention to take over the administration of public hospitals if they were not, to use his expression, fixed. This is another broken promise. All we have seen is a deterioration of the confidence which the Australian community has in the public health system, the Prime Minister and his Minister for Health and Ageing.

This in no way reflects on the excellence and commitment of those who provide health and hospital services, private and public, in this country. Nobody in this chamber would deny or dispute their professionalism. Like most Australians, I am open in my admiration and appreciation of the doctors, the nurses, those who provide complementary medical services, the other paid providers and the army of volunteers who worked tirelessly in our public and private hospitals to render what must be the world’s best health service.

Anyone who doubts the excellence of our service need go no further than to talk to young doctors, nurses and health providers from the UK system. They say to me: ‘Why is this being done? To work in the Australian public health system compared to that of the UK is like going on a holiday.’ I have been asked why we are attacking private health cover when we have got the balance right in this country. As we know, it will only lead to breaking an already stretched public health system by encouraging those in private health insurance to divest themselves of their cover.

As a person who has served on the boards of both private and public health facilities in two states of Australia, I can assure the chamber and the Prime Minister that any effort to centralise control of the public health system in Canberra will be a total and unmitigated disaster. I recall my experience in a public health facility in Western Australia during the transition from local board membership of public facilities to centralised management in the metropolitan area of Perth. And no—to answer those who ask the question—the board was not dominated by Liberal or coalition parliamentarians. It was dominated by local members of the community with a passion for the provision of health services in that community, a group who absolutely and utterly felt disenfranchised when the decision was made to go across to the metropolitan area.

I can assure you, Madam Acting Deputy President, the experience of those who used that system was that, following its centralisation in the metropolitan area, the quality, efficiency and effectiveness of that service deteriorated rapidly. I can also assure you that central management now not a few kilometres away but rather some thousands of kilometres away from the locations in which the services are rendered will undoubtedly lead to a further deterioration in the quality of those services.

If this proposal has no basis in the provision of high-quality medical and hospital care, if it does not stack up economically, from a cost-benefit point of view, if it is not supported by the medical profession or other health service providers, then I am left pondering: what is this government’s motive to break an election promise and impose added costs on an already stretched system? The answer, I fear, is that it is nothing other than a new tax. And why do we need the new tax? We have heard the variety of answers by an earlier speaker, by the Prime Minister, by his health minister and by his Treasurer. The Treasurer spelt it out during his budget speech and subsequently as being the need to increase the age pension support. But surely it has not been lost on others that the aged are the very group who are going to be further disadvantaged by more pressure on the public health system as those in private health insurance leave it and add to the burden on public health care provision.

Following the budget in 2009, the coalition proposed to this government an increase in the excise on tobacco as an alternative to this flawed tax proposal. The advantages are obvious to anybody: lower tobacco consumption, less pressure on the entire health and hospital system and, obviously, less cost to the taxpayer. But we saw Labor fight and refuse to accept what was an entirely sensible measure.

We have been faced with the national embarrassment of yet another failed government scheme in the last week, being the $2.3 billion roof insulation program. This is yet another example, regrettably, where inexperience, incompetence and arrogance—this time by Minister for the Environment, Heritage and the Arts, Mr Garrett—has further eroded taxpayers’ money and confidence in public administration. We are all lumped into this failing of confidence. It is ironic that the cost to the Australian community of this failed program will probably equal the so-called savings to be made by this government in its changes to the private health insurance rebate.

In conclusion, if this Prime Minister wants to reverse his own strongly stated and frequently repeated election commitment of 2007, then this bill should be withdrawn from this chamber and the Prime Minister should have the intestinal fortitude and the common decency to go back to the people of Australia in an election and allow the community to decide their own position on private health insurance.

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

I will confine my remarks this evening to this particular bill, the Fairer Private Health Insurance Incentives (Medicare Levy Surcharge) Bill 2009 [No. 2]. Then I will have more to say in the context of the Fairer Private Health Insurance Incentives (Medicare Levy Surcharge—Fringe Benefits) Bill 2009 [No. 2]. As I indicated during last year’s debate on the fairer private health insurance incentives package of bills, I do not believe that there is adequate evidence to support changes to the private health insurance rebate nor changes to the Medicare levy surcharge. This package of bills effectively penalises those Australians who choose to have private health insurance, by making it more costly, and then seeks to make them retain their more expensive coverage because, if they cancel their policy, they will be penalised with a higher Medicare levy surcharge. It is almost a case of lose-lose. And it reminds me of that great song by the Clash—I know that Senator Conroy was a fan of the Clash—Should I stay or should I go, which had the following lyrics:

Should I stay or should I go now

If I go there will be trouble

An’ if I stay it will be double

That reminds me of what these bills are about.

The government concedes that Australians will be impacted if the private health insurance rebate is means tested and that many will choose to drop their cover as a result. But it claims the numbers that will be insignificant and says increases to the Medicare levy surcharge will deter this occurrence. Those assertions are worth analysing. Treasury estimates, in fact, that 2.3 million Australians with annual incomes above $75,000 for singles and $150,000 for couples will be impacted by means testing the rebate.

The Australian Health Insurance Association forecasts that up to one million Australians will abandon or downgrade their private health cover. The issue of downgrading health cover is key here. Indeed, what the government is not accounting for in their assessment of the numbers—which they call insignificant—are those who will reduce their level of cover in response to these measures. If this package of bills is passed, many Australians will reduce their private health insurance cover to just the bare minimum so that their premiums stay low but they are not subject to the Medicare levy surcharge. The effect of that will be that you will have people with ancillary cover no longer taking that out. There will be pressure on the public system as a result of that and it will cause an upward pressure on premiums for private health insurance.

The one per cent Medicare levy surcharge was first introduced in 1997 and, in line with other measures, including the private health insurance rebate, was designed to ease the pressure on the public hospital system by encouraging greater uptake of private health insurance by those who could afford to do so, based on their annual incomes. Changes to the Medicare levy surcharge passed in late 2008 saw the first change to the income thresholds in July last year, increasing them for individuals from $70,000 to $73,000 and for families from $140,000 to $146,000, and increased them by $1,500 for the second and each subsequent dependent child. The proposed changes were much more significant, effectively in line with inflation. I acknowledge the negotiations that I had in good faith with the minister to bring the changes to the initially proposed thresholds to a more realistic level. The thresholds were introduced back in 1997, when Peter Costello was Treasurer. Initially, the they were $50,000 and $75,000. Clearly, there needed to be change. I thought that a satisfactory compromise was arrived at to allow for CPI increases. It was agreed that the Productivity Commission should look at the whole issue of the public-private hospital mix. That final report was handed down in December of last year. I propose to go into further detail in the context of the other package of bills relating to this issue. Now is not the appropriate time.

The government seeks to increase the Medicare levy surcharge by 0.25 and 0.5 percentage points based on a three tier system. I do not believe there is adequate evidence to suggest that increasing the Medicare levy surcharge percentage now will encourage more Australians to take up private health insurance cover and I believe that means testing the rebate will only result in those with insurance policies reducing their levels of coverage to just ancillaries cover in many cases.

I admire the intent behind the second reading amendment moved by Senator Siewert on behalf of the Australian Greens, which was that the moneys raised by these changes to the Medicare levy surcharge, if successful, should be invested in mental health programs. But that begs a bigger question about the funding of mental health services in this country. Funding mental health services should be a priority for any government. We as citizens should expect to have a system in place so that if anyone needs assistance with a mental problem they can get the standard of care that is necessary and deserved. My concern is that hypothecating this revenue would be a get-out-of-jail card for the government. Seeking this pool of money absolves them, in a sense. This is money that should come out of consolidated revenue in the context of mental health programs. I agree that mental health is an area which needs more funding and improved services. However, seeking to do that through this mechanism and through what I consider to be a flawed piece of legislation, given the impact that it could have on the mix between the public and private systems, is not the appropriate way to go.

The potential for unintended consequences from these bills is quite significant. Either way, neither these proposed changes to the Medicare levy surcharge nor means testing the private health insurance rebate will effectively assist our heavily pressured public health system. As such, I cannot support this package of bills.

Fiona Nash (NSW, National Party) Share this | Link to this | Hansard source

I rise to make some comments on the changes the government is proposing to the private health insurance rebates. The chamber would be well aware that after the introduction of Medicare in 1984 membership of private health funds fell. By 1998, only 30.4 per cent of the population was covered by private health insurance. We know that, following coalition measures—and very good measures they were—private health insurance climbed up to around 45 per cent of the population or 9.7 million Australians. This was as a result of the recognition by the coalition that there needed to be a greater incentive for people to invest in their own health care where they could. The increases to those rebates certainly provided that incentive for many people across Australia. We saw an increase of around 15 per cent in the number of people taking up private health insurance.

The government now wants to make some significant changes to that private health insurance rebate system, which can only be described as absolute stupidity on the part of the government when we look at the situation we find ourselves in with health. There is absolutely no doubt that health is the key issue—the priority issue—for Australians right across the country, no more so than in regional areas. My very good colleague Senator Joyce travels and knows exactly what I am talking about. In regional areas, the impacts are felt even harder.

What we are seeing from this government with the changes to the rebate is, as I said, incredible stupidity. The changes are going to do two significant things. It is going to increase the pressure on the public health system. How stupid is that? Anybody who is paying any attention at all to the affairs of this nation knows that the public hospital system is under siege in being able to provide the necessary level of care that it needs to give people. I take the opportunity to give enormous amounts of credit to the doctors and nurses who work in that health system. The incredible degradation of the system is by no means the result of the work and care that those health professionals put in but purely a result of state Labor governments.

And what does this government want to do? It wants to change the private health insurance rebate system to put more pressure on hospitals. You do not have to be a rocket scientist to figure out that if you take away the incentive for people to continue with their private health insurance they are going to cease that contribution and look to the public system to support them. It is going to put on the public system a significant amount of pressure that currently does not exist—pressure on a system that is already at breaking point. How stupid is it for the Rudd Labor government to do that? At the same time, by taking people out of the system—out of paying for their private health insurance—the costs are actually going to increase for those remaining members within the private health insurance system. It looks as though the premiums will increase by around 10 per cent, possibly more, by 2010-11.

Where is the sense in making those two incredibly significant changes within the health system? For this Labor government to make a decision that is going to put increased pressure on the public hospital system and increase the premiums for those who want to contribute to private health insurance is beyond belief, but it is just another example of the complete dislocation of this arrogant government from the people out in the streets in this country—the mums, the dads, the working families whom this Prime Minister purportedly represents. They are the ones who are going to be hit by these changes, and they are going to be hit hard. And what for? We know that the existing measures are providing the incentive to ensure that a decent level of health care is provided in this country. We know that that level of incentive encourages so many people to invest in private health insurance, which takes away so much of the pressure that is about to be put on our public hospital system.

What is quite extraordinary about this particular issue is that it is yet another example of the Rudd Labor government’s broken promises. It is starting to sound like a broken record, because the hits—those broken promises—just keep on coming. But the Australian people are starting to wise up. They are noticing exactly how many of those promises that the Rudd Labor government made before the last election have been broken, and the list is never ending. There are hundreds of broken promises. Sitting on the side of the chamber; we know that—we live it every day. But it is not just us now; the people of Australia are starting to pay attention and they are noticing Rudd’s broken Labor promises. This one to do with the private health insurance rebates is an absolute corker. I quote Nicola Roxon, who on 26 September issued a press release as the then shadow minister for health. She said:

Federal Labor rejects the Liberal scare campaign around the private health insurance rebates. The Liberal Party scare campaign this morning reared its head in South Australia. On many occasions for many months, Federal Labor has made it crystal clear that we are committed to retaining all of the existing private health insurance rebates, including the 30 per cent general rebate and the 35 and 40 per cent rebates for older Australians.

The Rudd Labor government made it crystal clear that it would not be changing those rebates, yet what do we see now? An extraordinary broken promise by this government. What I find incredibly sad is that the people of Australia believed Kevin Rudd when he said he was going to fix our hospitals. They believed Nicola Roxon when she said that they were committed to retaining the rebates. The Australian people believed the Rudd Labor government when they said those things. And what do we see now? Just a string of broken promises. It is worth bringing to the Senate’s attention the list of the promises that the now government made on private health insurance. Take the one I have just indicated to the chamber. I quote a letter to the Australian Health Insurance Association by the Prime Minister on 20 November 2007:

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.

Hello? Haven’t we got in front of us, right now, the taking away of those rebates? So what are the people of Australia supposed to think? What are they supposed to think when they heard, before the last election, that the government was ‘committed to retaining the existing private health insurance rebates’, and now they want to rip them away? I will tell you what they think: that this government is full of nothing but broken promises and that they cannot be trusted. People are starting to realise what a phoney this Prime Minister is, because this string of broken promises is starting to become endless. In February 2008 in the Australian the Prime Minister said:

The private health insurance rebate remains unchanged and will remain unchanged …

Well, it is starting to look as if it is trying to be mightily changed now.

So do we assume that the Prime Minister just thought, ‘Gee, it might be a good idea to break that promise; let’s give this one a whirl—I’ve got a few others on the go at the moment; I might as well add another one to the list.’ And they use this rubbish about it being to ‘make sure we’ve got the funding to cope with the global financial crisis’ every time there is a broken promise. Every time this government fall off the rails, they try to hide underneath the whole existence of the global financial crisis. It is not on. The Australian people are not buying it; they are not believing it now for one minute—because the government have form when it comes to broken promises.

In May 2008, on Macquarie Radio, health minister Roxon said:

… we continue to support the 30 per cent, 35 per cent and 40 per cent rebate for those Australians who choose to take out private health insurance …

In October 2008, in a speech at the Australian Health Insurance Association conference, Minister Roxon said:

Private health insurance consumers will still be able to claim the 30 to 40 per cent rebate, and the Lifetime Health Cover incentives will remain in place.

On 24 February 2009, in the Age, again, health minister Roxon, said:

The Government is firmly committed to retain the existing private health insurance rebates …

Do you know what this says, Mr Acting Deputy President? This says that this government cannot be trusted, not for one moment. They are a government of spin, and the people of Australia are seeing through it. And what they are seeing is this: if they cannot trust what Labor said before the last election—which now they obviously cannot, with this string of broken promises—how on earth are they going to trust anything the Labor government say running up to the next election? The thing is: they will not. They simply will not trust the government, because they know they have form. There is a string of broken promises.

As my very good colleague said earlier: if the Prime Minister thinks it is all very scary to threaten an election on the private health insurance rebates, bring it on! Bring it on, because I can tell you right now that those people out on the ground across this country have wised up to this Prime Minister and his broken promises. Does he really think we do not want to go out on the streets and ask the Australian people, running up to an election campaign, ‘Do you really trust Labor on health?’ Do you think that? Let’s just cast our minds back to what the Prime Minister, Kevin Rudd, said before the last election—and this is what they will be saying during the campaign. What was it that he said? That’s right, he said: ‘Kevin Rudd will fix our hospitals.’ Isn’t that amazing, Senator Joyce: ‘Kevin Rudd will fix our hospitals’.

Barnaby Joyce (Queensland, National Party, Shadow Minister for Finance and Debt Reduction) Share this | Link to this | Hansard source

Unbelievable.

Fiona Nash (NSW, National Party) Share this | Link to this | Hansard source

Not only that; he said that, if state governments had not improved services by 2009:

A Rudd Labor Government will seek to take financial control of Australia’s 750 public hospitals …

That was to be by mid-2009. What is it now? I think it might be February 2010. He broke his promise to the Australian people; he misled them. He hoodwinked the Australian people into believing that he would actually fix the public hospitals, that he actually cared enough to fix the public hospitals, that he actually wanted to fix the public hospitals. And guess what? He is the Prime Minister, and he can make the decisions—and he can, but he chose not to; he broke his promise to the Australian people. This very issue, health, is the most important issue to people across Australia, and he simply turned his back on the Australian people and said, ‘Too hard; can’t do that one.’ What was it he said? He said something about a compromise with the state governments. So he has gone from being all hairy-chested, beating his chest before the last election campaign saying, ‘I’ll fix the hospitals; the buck will stop with me’—

Barnaby Joyce (Queensland, National Party, Shadow Minister for Finance and Debt Reduction) Share this | Link to this | Hansard source

‘After I cool the planet.’

Fiona Nash (NSW, National Party) Share this | Link to this | Hansard source

Thank you, Senator Joyce. I will take the interjection: after he cools the planet, of course! He is now saying, ‘Oh, there might be a compromise,’ and now he wants a referendum. ‘Gosh, what will I do next, I wonder?’ says the Prime Minister, because he certainly did not do—

Eric Abetz (Tasmania, Liberal Party, Deputy Leader of the Opposition in the Senate) Share this | Link to this | Hansard source

He’ll shake that sauce bottle, I’m sure!

Fiona Nash (NSW, National Party) Share this | Link to this | Hansard source

He will certainly shake that sauce bottle, Senator Abetz—probably in consternation that he does not have a clue about health and does not have a clue how to even think about attempting to fix the problems in health.

The people of Australia have absolutely wised up to this now, because they can remember—they know. So if the Prime Minister wants to have an election on health: bring it on! Bring it on tomorrow; bring it on the day after—we will have it whenever he likes. This is about doing the right thing by the Australian people, and he has not—not for one moment—because he has simply broken the promises he made to the Australian people.

Isn’t it interesting that, with all the huff and bluster and hype that goes on, Justine Elliot, the member for Richmond, has not said boo in the other chamber about health? It is just a phoney government. It is so full of spin; it is quite extraordinary. It says one thing and does another. It is all talk, no action. It is all about words, words, words and spin, spin, spin and, ‘Gee, I wonder if I do something with this hand over here, and then something with this hand over here, they won’t notice that I’ve broken this promise over here, and they won’t notice that I, the Prime Minister, have not done this particular thing—I’ll just try to trick them with a sleight of hand.’ The Australian people are too smart for that. They are much too smart for that, and without doubt they are noticing what an absolutely phoney sham is this government, which has not delivered a single thing for the people of Australia. It is all talk, no action. You cannot trust this government. That is obvious. You cannot trust it to keep its promises. You certainly cannot trust it to manage money. What was all of that about—

Eric Abetz (Tasmania, Liberal Party, Deputy Leader of the Opposition in the Senate) Share this | Link to this | Hansard source

You can’t trust them in your roofs, either.

Fiona Nash (NSW, National Party) Share this | Link to this | Hansard source

You can’t trust them in your roofs, either—thank you, Senator Abetz. What was all that talk before the last election? I remember now—Kevin Rudd was an economic conservative, wasn’t he? How on earth can you trust them when on one hand he says he is an economic conservative and on the other hand he runs up $120 billion worth of debt? It is easy to shout the bar when you are spending somebody else’s money, and that is exactly what this Prime Minister is doing. He cannot be trusted to keep his promises. He cannot be trusted to manage money. It is an absolutely appalling indictment that he is not reeling in shame, having said to the Australian people that he would fix our hospitals and that the buck stopped with him. The buck obviously stopped right next to him and then kept on going; it certainly has not stopped anywhere near him at the moment. He has just flicked it to some kind of compromise and now he needs some kind of referendum to ask the Australian people their opinion, after he promised them that he would fix the hospitals. Goodness knows they need fixing.

In regional Australia, as I said at the outset, it is worse than it is anywhere else. In New South Wales, we had the situation recently where Dubbo hospital had to borrow bandages from the local vet to be able to provide services. We had another situation at a north-western hospital where they had to stop giving their patients meat because the state Labor government had not paid the butcher’s bill. That is just the tip of the iceberg when it comes to the appalling standard of our public hospital system, and it was this Prime Minister, Kevin Rudd, who said he would fix it. You do not have to be a rocket scientist to see that he has not.

If there is one thing that the Prime Minister should probably take on board, it is that when you make a promise you keep it. If you are going to make a promise—especially one as big as fixing the public hospitals—you had better keep it. The people of Australia are going to come after you, Prime Minister, because of this broken promise. Now that they do not trust you on this, they are not going to trust you on anything. You are not fair dinkum; they know that. The Australian people see every broken promise and they know he is not fair dinkum. They know he is phoney. They know he will not keep his word.

Now we have legislation to change the private health insurance rebates. It is so interesting, as my good colleague Senator Fifield said earlier, that one minute it is the ETS: ‘We’ve gotta cool the globe; it’s absolutely, vitally, incredibly important!.’ When we finished last year, the minister, Penny Wong, said: ‘We’re going to bring this back straight away; it’s so important—

Barnaby Joyce (Queensland, National Party, Shadow Minister for Finance and Debt Reduction) Share this | Link to this | Hansard source

The moral issue of our time.

Fiona Nash (NSW, National Party) Share this | Link to this | Hansard source

it’s the moral issue of our time.’ And now, first thing back, we have private health insurance rebates. What happened to that moral issue of our time? Mind you, there are probably a few different moral issues of our time, depending on what the Prime Minister happens to be talking about—the issue of the day. It is just so phoney and unbelievable.

On this side of the chamber, we know that this government is all talk and no action. But this is not just about this side of the chamber; this is about the Australian people, who are now saying to the Prime Minister, ‘You promised to fix our hospitals; you let us down.’ They believed you before but, Prime Minister, they are saying they are not going to believe you anymore. They are not going to believe your promises because they know that you cannot be trusted.

Eric Abetz (Tasmania, Liberal Party, Deputy Leader of the Opposition in the Senate) Share this | Link to this | Hansard source

It is an absolute delight to follow Senator Nash. What an excellent contribution she has made in highlighting the hypocrisy of the government. Four days before the 2007 election, Mr Rudd said:

More than ever, Australia needs a government that will help the nation fulfil its promise rather than a government which makes promises it cannot fulfil.

Today in this Senate, 813 days after Mr Rudd was sworn in as Prime Minister, we as a Senate are being asked to clear the path for him to break yet another one of his many election promises. I, for one, and the coalition will not be party to allowing the Prime Minister to break yet another one of his election promises.

Wasn’t it galling before the last election to listen to the pomposity, to see the licking of the lips and the flicking of the hair—the caricature that he has now become? It was sincerity writ large! Hand on his heart, he said: ‘I’ve always been an economic conservative. It’s so vital that a government doesn’t break its promises, that a government doesn’t make promises it cannot fulfil.’ This is a promise that Prime Minister Rudd can fulfil; he simply does not want to because he is still engaged in the old concept of class warfare from 50 years ago. That is what this is all about—it is to hit the aspirational classes of Australia. It is to try to cause division within our community.

It also highlights that the Prime Minister is on track to break yet another election promise. Remember his hand-on-heart promise in relation to whales? He was going to take Japan to the International Court of Justice. He sent the Oceanic Viking into the southern seas to gain evidence. Now, all of a sudden, it is: ‘We are going to take Japan to the International Court of Justice in November this year.’ I will make this wager: the federal election will be called before November 2011 and Mr Rudd will seek to escape from that election promise. We then had the fuel tax promise, the GROCERYchoice promise, the GP superclinics promise, the computers in schools promise, and so the list goes on. Broken, broken, broken—every single one of his promises is now simply empty air.

What about the biggest of them all, the ‘greatest moral challenge of our time’? What was that again? That’s right—climate change. He said 22 times before the last federal election that climate change was the ‘greatest moral challenge of our time’. He said it 22 times! It was a lot of hot air, yet again; a lot of blah, blah, blah; a lot of blather; a lot of talk and absolutely no action. Indeed this was ‘the greatest moral challenge of our time’. It was so important that it was going to be a double dissolution issue and was going to be brought back first thing when the parliament resumed this year.

After a couple weeks of sitting and having been through the House, I had a look at today’s order of business in the Senate and was surprised that the government that orders the business in this place thought that the greater moral challenge for this place was not to deal with climate change but to help Prime Minister Rudd break an election promise. This is now Mr Rudd’s version of moral challenges. The great moral challenge for him is no longer climate change but the breaking, yet again, of an election promise. What we have here on the Senate order of business is the private health insurance legislation, then the crimes amendment, then trade practices. You then turn over the page and there are messages from the House of Representatives. Even the International Tax Agreements Amendment Bill is a lot more important all of a sudden than the climate change policies.

If it is the greatest moral challenge of our time, I simply ask Mr Rudd: with all his moralising, why does private health insurance and a breach of an election promise all of a sudden increase in status and stature? The answer is that he knows that the opinion polls have shifted on him on this issue. We now know that the barometer for Mr Rudd, with his great moralising, is not what he believes in but what he thinks the opinion polls are telling him at any given time. That is why this great moralist said during the election campaign that he had always been an economic conservative, yet in his first speech bagged out Margaret Thatcher’s economic policies. Go figure. How do those two match? A classic example was when he first got into parliament: Mr Rudd thought the ticket to ride to make him popular would be to bag out Margaret Thatcher. Then, when economic conservatism had won the day, all of a sudden he had been an economic conservative all his life.

A man who changes his spots so willingly, who switches and changes so unashamedly, is hardly one to try to moralise—yet that he did. Twenty-two times before the last election, the greatest moral challenge of our time was climate change; more recently, it did not even rate a mention in one of his Australia Day speeches. But breaking an election promise on private health insurance is now undoubtedly the great moral challenge of his time. I indicated at the commencement of my remarks that four days before the 2007 election Mr Rudd said:

More than ever, Australia needs a government that will help the nation fulfil its promise rather than a government which makes promises it cannot fulfil.

It just happens that, also four days before the last election, one Mr Rudd, federal Labor leader, wrote to Dr Armitage, Chief Executive of the Australian Health Insurance Association. In his second paragraph, which I quote in full, he said:

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 the 35 and 40 per rebates for older Australians.

Nothing could have been clearer than that. It was a cast-iron guarantee. Indeed, he condemned the Liberal and National parties for running an unprincipled scare campaign on this issue. The Australian people today know that our scare campaign was not a scare campaign but a correct character assessment of the now Prime Minister, the then Leader of the Opposition. We knew that he would not be supporting private health insurance. We knew that he would not be supporting the aspirational classes of Australia. We knew what he was up to. Yet he was able to skate through, make these promises and reassure the Australian people. But now he has to be brought to account, and brought to account he will be by us as an opposition and by the Australian people.

The Australian people are now sick and tired of this legacy of broken promises, of all this talk and of all this moralising. Everything is put in moral terms. If you do not agree with Kevin Rudd on climate change, you are somehow immoral. If you do not support him now on his broken promises, I wonder what his explanation would be. Undoubtedly, he would have some moral construct within which to frame his assertions. But the simple fact is that this is a broken promise pure and simple and nothing that he says will be able to get him out of it.

Let us keep in mind that 11 million Australians have private health insurance and each one of them can expect to pay more for their private health insurance premiums because of what Mr Rudd wants to do. That is particularly bad for low-income families and it is bad for older Australians. It is also very bad for the public hospital system. As you and I know, Mr Acting Deputy President, the more people that get out of private health insurance, the greater the burden on the public hospital system will be, meaning that that system which is supposed to genuinely look after the needy will not be able to look after them as well as they otherwise would be because fewer people will be in private health insurance.

I still recall the days of Mr Paul Keating when he required some hospital treatment and, miraculously, he got in the front of the queue. I understand that it is now occurring in the electorate of Robertson as well—that certain people are assisting people to the front of the queue. That is all very good for some people if they have Labor Party connections in the state of New South Wales, but that should not be the basis upon which our health system operates, and that is what Mr Rudd seeks to engender with these changes.

Senator Xenophon, when this was first discussed—around the time of the budget last year, so it would have been about May 2009—described it as a significant breach of trust by the government which had long promised to retain the rebate. That is what it is. You might say that a coalition that is very supportive of private health insurance might say that a Labor government would behave in this way, but Senator Xenophon is on that page. All the political commentators are recognising that it is a fundamental breach of promise. This is a government that now claims it needs the extra money. I must say, the figures are very rubbery by any analysis. The government says it is a savings measure. This is from a government that has hocked this nation to the tune of $125 billion. I do not accept the government’s figures—let’s get that straight—but, for the sake of the argument, what Labor says it will save on this measure has already been blown, and more, on the pink batts fiasco. So you ask yourself, in setting the priorities for the government: ‘What is more important—keeping an election promise and keeping the health system at least somewhat functional by maintaining support for private health insurance or junking that in favour of this ill-considered pink batt program?’ We now know that Mr Rudd’s priorities are pink batts over private health insurance rebate support. That is his priority. What is more, he deliberately breached an election promise in relation to private health insurance so he could find the moneys for the pink batt program. That is the reality.

If Mr Rudd thinks that somehow the private health insurance issue will give him a better double dissolution trigger than the climate change issue, I say, ‘Bring it on,’ because we will then be fighting a double dissolution on the government saying, ‘We should have a mandate to break our election promises. Sure, we gave you a solemn guarantee that we wouldn’t, but that naughty, naughty Senate, which road-blocked parliamentary democracy, is actually making me keep an election promise. We can’t have that. We’ve got to clean out this Senate and bring in a new Senate that will simply rubber-stamp every broken election promise that I want to force through the Senate.’ I say to Mr Rudd, ‘Bring it on and let’s see what the people of Australia will say,’ because they will not only remember the broken promise on private health insurance but also remember the uber-hyping of climate change—and that is what it was. It was the greatest moral challenge of our time that has now just disappeared from any part of his—what is his term—conversation with the Australian people. It sounds so good, doesn’t it—having a conversation with the Australian people. It was misleading the Australian people that he was engaged in. There was no conversation. It was just a torrent of words with no substance behind them. Today the Australian people are recognising that. It is not only this private health insurance breach; it is a breach on the GP superclinics and it is a breach in relation to public hospitals.

Mark my words: a very bad parliamentary week will be finalised by Mr Rudd throwing in a circuit breaker. You wait: on Thursday or Friday this week, Mr Rudd will hold a press conference and announce that he is going to do something on health—what’s the bet—or something else to try to stop the cycle that it is now enveloping Mr Garrett, himself, Mr Swan, Ms Gillard and Mr Tanner.

Then we have other promises: the whales, Fuelwatch, GROCERYchoice, computers in schools—the list just goes on and on. This is a Prime Minister who is good on the blah, blah, blah—all talk and no action. When he finally does act on something, like in this legislation, it is actually a breach of his solemn election promise, and that is why the Australian people are fast losing faith in Labor and in Mr Rudd in particular. Mr Rudd was the one who made the promise—he signed the letter on 20 November 2007—and Mr Rudd is the man trying to force this through the parliament. Why should we as a Senate allow Labor to breach its election promises? We as a coalition will not. We will expose not only the breach of an election promise but also the deficit of this in public policy terms. This is bad for the public health system and it is bad for individual people’s health, especially those who genuinely rely on the public hospital system.

In brief, what we have is a litany of broken promises and now a request for us to somehow clear the path for him to break this promise as well. We as a coalition will not stand for it. We believe what we had in place was good, sound public policy—and that is why Mr Rudd embraced it at the last election. He knew how popular it was. He knew that it was good policy. But he now thinks that he can do a backflip. He has something else coming. I simply say to him: if he wants a double dissolution on a broken election promise, bring it on and bring it on with climate change—that which was his greatest moral challenge at the time, which is now fallen down the order of the parliamentary timetable. I simply say, your great moral challenges, if they are such, are not determined by the opinion poll of the day; they are actually cast in moral terms. But that is what exposes the nonsense of the Prime Minister: everything is cast in moral terms until the opinion polls change on him and then all of a sudden it is no longer such a burning moral issue. That is where, if I might conclude, he is so different to the person that he claims was a mentor—namely, Dietrich Bonhoeffer. That was a man who knew what the moral challenges of his time were and was willing to face the consequences. Mr Rudd has no idea about standing by genuine convictions. We as an opposition will be opposing this legislation.

Judith Adams (WA, Liberal Party) Share this | Link to this | Hansard source

I rise to speak on the Fairer Private Health Insurance Incentives (Medicare Levy Surcharge) Bill 2009 [No. 2] and the Fairer Private Health Insurance Incentives (Medicare Levy Surcharge—Fringe Benefits) Bill 2009 [No. 2]. The introduction of these bills is one of the best examples of the dishonesty of this Labor government and why Australians should not believe anything the Prime Minister or his Minister for Health and Ageing minister says. These bills represent a broken promise.

During 2007 the Prime Minister and his then shadow minister for health and ageing, Nicola Roxon, looked Australians in the eye and said: ‘We will not change the private health insurance rebate. We will not take the private health insurance rebate away.’ They said this on numerous occasions and gave Australians their word in return for votes at the 2007 election. The Prime Minister, then Leader of the Opposition, even wrote to the Australian Health Insurance Association, making it quite clear federal Labor would not tamper with the private health insurance framework and that Labor was committed to retaining the existing private health insurance rebates. Mr Rudd said that federal Labor will also maintain Lifetime Health Cover and the Medicare levy surcharge and that Labor valued their relationship with the private health industry. I wonder if they think that today.

In her speech to the annual Australian Health Insurance Association conference in Melbourne on 10 October 2007, then shadow minister Nicola Roxon said:

This is why we have committed to the current system of private health insurance incentives—including the package of rebates, the Lifetime Health Cover and the surcharge.

Labor understands that people with private health insurance—now around 9 million Australians—have factored the rebate into their budgets and we won’t take this support away.

When the coalition questioned the sincerity of that emphatic pre-election commitment, we were accused of running a dishonest scare campaign. The then shadow minister for health and ageing, Nicola Roxon, said on 26 September 2007:

Federal Labor rejects the Liberal scare campaign around the Private Health Insurance rebates ... The Liberals continue to try to scare people into thinking Labor will take away the rebates. This is absolutely untrue.

Of course, we now know that this is exactly what Labor are proposing for more than two million Australians—to take away their private health rebates. Labor did not keep their word. The Prime Minister’s promises to Australians with private health insurance and reassurances to the private health sector have turned out to be meaningless words. The Prime Minister and his government just cannot be trusted. The Hon. Peter Garrett’s comments during the election campaign now ring true: ‘When we get in, will just change it all.’ As with so many of the Prime Minister’s other broken promises, that is exactly what he has done. He gave Australians his word, asking for their vote in return. Then he got into government and changed it all.

The millions of Australians whose Medicare surcharge levy will increase if these bills are passed should be incensed at the duplicity of this government. All people who have taken responsibility for their health and taken out private health insurance should be extremely annoyed and disappointed that the cost of private health insurance for everyone will go up. If these bills are passed 11 million Australians with private health insurance will have to pay more as a direct result of this policy. One million of these people live in households with an income of less than $26,000 per annum. These are hardworking Australians, retirees and pensioners who make and have made large sacrifices in other areas of their lives in order to take out private health insurance and not have to rely solely on the public health system, which is already under so much strain. With the removal of the private health insurance rebate, premiums will go up. Everyone will have to pay more, including those people on lower incomes, as I have discussed. This will be the outcome of bad policy decisions like this.

As a direct result of these changes the cost of private health cover is going to increase for more than 2.3 million Australians by between 14.3 and 66.7 per cent. How does anyone cope with that? People of all ages with private health insurance in the first income tier will see their rebate reduced by 10 per cent; people of all ages in the second tier by 20 per cent; and people in the third tier will be treated differently, depending on how old they are. The older you are, the steeper the increased cost you will face, as a result of this legislation. This is a poor outcome for the self-funded retirees and pensioners who have taken responsibility for their own health care in their retirement years. It is completely unfair that older Australians are going to suffer financially if these bills are passed. Our population is ageing and, as the baby boomers enter retirement, hospital admissions for patients are expected to more than double by 2030. I ask: how are these people going to manage the increased costs as a result of these proposed increases?

While 2.3 million Australians with private health insurance will see a direct, immediate and automatic increase in the cost of their private cover by up to 66.7 per cent, all of the 11 million privately insured Australians are going to face additional increases in private health insurance premiums because of these proposals. These bills are effectively nothing more than an enormous tax on the healthcare industry—not a tax on emissions trading or the Carbon Pollution Reduction Scheme but a tax now on the healthcare industry and the millions of Australians who have chosen to take responsibility for their health requirements. The coalition supports lower and middle-income earners. By keeping the private health insurance rebate intact, private health insurance will remain affordable for everyone, including the millions of lower and middle-income earners. If the rebate is removed for higher income earners, the cost of premiums for everyone else will go up. The private health sector handles well over half of all Australian hospital procedures and Labor simply fails to accept this fact. Many of these procedures are highly complex and each could be carried out in a public hospital at full public cost. The public health system is already overloaded and would be unable to cope.

In Western Australia, my home state, people with private health insurance acknowledge the important role private health plays in our health system and the impact these measures will ultimately have on our hospitals: longer queues and longer waiting times. The flow-on effect of these measures will cause everyone with or without private health insurance to be affected. In Western Australia, this includes 56 per cent of the electors of Hasluck, 67 per cent of the electors of Brand, 74 per cent of the electors of Fremantle and 64 per cent of the electors of Perth—all of which are Labor held seats. I wonder how these people who voted for the Rudd Labor government feel about what has happened with the broken promise. The 7.4 million Australians who now have private hospital insurance and incomes below the ‘rebate reduction’ thresholds will be confronted by increased premiums which will arise to cover the cost flowing from people who downgrade their cover or leave private health altogether. Those people who do not have private health cover will now be competing for access to public hospital care with an increasing number of those no longer covered by the private system, as a result of these proposals. The government itself has already admitted that thousands of Australians will be dropping out of private health insurance. This will put more pressure on the public health system.

As far back as 2004, it was stated that each dollar spent on private health insurance rebates saved $2 of federal and state outlays. In the past, by providing incentives to people through the private health insurance rebate system, we have attracted revenue into the system to fund billions and billions of dollars in private hospital care which the public system could not have managed. The private hospital system treats over three million patients per year, representing 40 per cent of all patients. Private hospitals perform 60 per cent of all surgery, which amounts to over one million patients. The Productivity Commission has also found that private hospitals treat patients more cheaply than public hospitals.

These figures demonstrate just how important the private sector is to our health system. It has developed into an efficient cornerstone of the system and employs hundreds of thousands of Australians. We need to be doing what we can to encourage people into private health insurance and once they are there to keep them there. These measures do nothing to fix the health system—another of those great prime ministerial pledges but failed actions. They are an ideological, good old fashioned Labor attack on private health. It is an attack on people who choose to take responsibility for themselves. But Labor wants big government and big bureaucracy and for the Australian population to be chained to a public system.

How can this government be trusted to improve the public system? They have not delivered on their promise to fix public hospitals. All we are hearing at the moment is that Mr Rudd is going to fix our public hospitals. I do wish him joy to come to Western Australia to try to fix the public hospitals. I am a strong supporter of hospital boards and I do hope that eventually we can have hospital boards with skilled community members controlling the health dollars. I have been a board member of the Princess Margaret-King Edward board, which is a women’s and children’s hospital board, and also a member of the Metropolitan Health Service Board, which very successfully ran health in Western Australia—we had four years before the Gallop Labor government came and removed the board. And every one of those years we balanced the budget. It was due to the very diligent, independent board members and an excellent chair that we were able to achieve that result. Since then that budget has never been balanced, so boards certainly play a part and I support the coalition’s move to go back to having hospital boards with community input. It is terribly important.

As far as the Rudd government’s $2 billion pink batt program is concerned, how can it be trusted to manage $31 billion spent on our public hospitals? It is a really frightening scenario. All it is doing is forcing responsible people out of the private system and onto the public hospital waiting lists. With this legislation, in one hit the Labor government is taking away a carrot and replacing it with a big stick through increases to the Medicare surcharge levy. Australians in higher income brackets will either have higher private health premiums or be punished if they do not take it up. This is fundamentally just another tax and attack on the millions of Australians who have worked hard and strived to get ahead to increase their earnings and improve their livelihoods. Labor hates this. They want people shackled to government and bureaucracy so that they can take away incentives and take to using a big stick in the form of a new tax on hardworking, aspirational Australians.

It will also be an attack on Australians living in rural and regional areas. Many families in the farming and mining sectors will be hit. I am sure my colleague Senator Joyce would agree entirely. Having been a farmer for a long long time, I know that private health insurance was one of the most important aspects of our family budget. We just had to have it, living in a rural area with health services centred on the metropolitan area. If something went wrong we really needed that private health insurance. It was an insurance that was paid before anything else, but the problem was that we could not always use private health insurance in our rural area, so, unless someone really needed it, it was looked upon as a cost we did not need to bear. But, for our children, it was terribly important that, as a family, we were all insured just in case something went wrong. So private health insurance is very important to rural people. What really upsets me is that while it is not uncommon for a farming couple to draw an income of higher than $150,000 they also have a much higher cost of living. These extra living costs have to be deducted, and now they will be penalised even further by the Rudd government’s legislation. They already have to contend with a less adequate health system in country areas and now they will be hit with either higher health insurance premiums or a higher Medicare levy.

The Prime Minister made a promise—a hollow promise—to fix the health system. He has failed to do that. And now he is embarking on ripping the heart out of a cornerstone of the Australian health system, through a massive backflip on a solemn promise he and his then shadow minister made to the Australian people. The coalition will not support this bill because we believe in enabling hardworking Australians to take care of their individual responsibilities where they are able and choose to do so. We encourage them to do so. That is why we created an incentive to do so. Private health gives people choice and better health services. The purported savings and extra dollars that the government claims these measures will create for the public health system will be nowhere near the savings that the private health system already delivers to public hospitals through a spread of resources, which means shorter queues and waiting times.

If the Labor government is so intent on finding savings for the health system, perhaps it should pay a little more attention to its other programs and improve its management skills. The billion dollar blowouts and wasteful spending in other areas make these new tax measures pale into insignificance, yet leave retirees and hardworking Australians having to dig deeper into their own pockets. If the Labor government wants to cry a savings argument, then please give us some better explanation for the mismanagement and rorting of other multibillion dollar programs, such as pink batts, Julia Gillard memorial halls and squandering money on Labor mates in the over-inflated broadband project. The Labor government should be condemned for reintroducing these bills. They are not the least bit fair and take yet another swipe at hardworking aspirational Australians who have taken on the responsibility of looking after their own wellbeing and not relying on governments and the public purse. This is an attack on every Australian’s future health.

Alan Eggleston (WA, Liberal Party) Share this | Link to this | Hansard source

When I spoke on 15 September 2008 on the fairer health insurance legislation I mentioned that Australia was said to have the best worst health system in the world. I was quoting Jim Hoggett, from the IPA Review. Everybody in the world thinks their health system is the worst in the world because everybody has a story about someone’s grandmother who did not get treated quickly in a casualty department or a child who was not seen immediately by a doctor or something like that. In reality, when you look around the world, the Australian health system really is very good.

If we look at the two extremes, we see that the United Kingdom—which has a national health service, a socialist health service—has its problems. There are long waiting lists, overcrowded hospitals and the buildings are old. The services are often very good, but the people work under very difficult circumstances. A key problem with national health services is that governments never spend enough money on health. For some reason they are prepared to provide some facilities but are not really prepared to put in the kind of money that is necessary to make those services very good. In the United States they have a private health system, and if you do not have private health coverage in the United States, if you turn up to the hospital gasping for air with a pain in your chest and you do not have your Blue Cross card, then you will be told to go somewhere else. It is a very tough system.

In Australia, no matter who you are and no matter what your income level is, no matter what is wrong with you, whether you need a toenail removed or a heart transplant, you can get it done in either the private system or the public system, and no Australian is disadvantaged because of health matters. That is why Australia has the best worst health system in the world. What are the twin pillars of our health system? The first of the twin pillars is something called community rating, which is a system under which our private health insurance system works so that the people who draw on the private health insurance system, the elderly and the people who have illnesses that require hospitalisation towards the end of their lives, are cross-subsidised by younger people who join private health funds and do not necessarily need to call on the services very often, except for sports injuries and car accidents and having babies and looking after children. This system of community rating which we have in Australia is very good and works very well.

The other important feature of the Australian health system is the duality of the balance between the private and public health services. I quote what the Australian Medical Association put to the Senate inquiry that was done in 2008 on that matter. The AMA said:

Australia’s health system is a delicate balance between the public and private sectors. The effectiveness and efficiency of the public system relies on a strong private sector. A high rate of private health insurance membership is a key part of the private sector.

In Australia we have this duality whereby people who can afford it get treated quickly in private hospitals, which do most of the acute surgery in this country, while the public hospital system looks after people on lower incomes, and provides them with very good service, and with more chronic sorts of problems. You have to look into the reasons why this health insurance rebate was introduced. It was introduced because in the 1990s the level of membership of private health insurance funds had dropped dramatically and the balance between the private sector and the public sector was tipping so that more and more pressure was placed on the public sector. The public sector could not cope and there were long waiting lists to get into hospital and long waiting lists for surgery and people were left in the corridors of the public hospitals while nearby there would be a private hospital which was empty and full of good facilities but had no patients. For that reason the Howard government decided to introduce this rebate on private health insurance premiums to encourage people to get back into private health insurance. That, with the Medicare rebate and lifetime cover, had a very good effect and the level of private health insurance has risen, going up into the 40 per cent range, so that now we again have a balanced system which is working very well.

I personally find it very difficult to understand why the Rudd government is bringing this legislation back. It certainly cannot be on the grounds that reducing the number of people holding private health insurance is good public policy—because that will be the certain outcome of this legislation were it ever to be passed. That in turn would mean more pressure would be put on the public hospitals and again we would have a situation whereby people would have to wait a long time to get seen by a doctor, a long time to have surgery and a long time to be treated.

I think it is very important to remember that we did conduct a Senate inquiry into this matter a couple of years ago. It is interesting to look at some of the findings of the Senate inquiry. First of all, one of the principal findings was that there would be a very severe impact on low- and fixed-income earners. This was because of the overcrowding of public hospitals which would result from the drop in the numbers of people able to attend private hospitals as they dropped their private health insurance. There would be adverse impacts on regional health services, which both Senators Nash and Adams have referred to. There would be massive increases in costs for the public hospital system as the system sought to make up for the deficit of a lost private sector hospital system with their patients coming into the public sector.

Most importantly, there would be an end to community rating as a consequence of younger people dropping their private health insurance. As I said, community rating is a uniquely Australian system under which younger people are encouraged to take health insurance. They do not often claim against the insurance and they in turn subsidise the older people who do claim on health insurance as they have more illnesses towards the end of their lives. Incidentally, this system of community rating includes the fact that no-one is penalised for an adverse medical history. Say you were a diabetic and you had a past history of heart disease and a family history of cancer of the bowel. If you were to try to get health insurance in the United States, they would laugh at you and tell you that you were a bad risk and you were not entitled to health insurance. In Australia there is no penalty on premium for an adverse medical history. That is an integral part of community rating. Everybody pays the same premium regardless of their medical history and that is an element of our uniquely Australian system which does not apply anywhere else in the world. Health insurance providers in other parts of the world find that quite extraordinary, but nevertheless it is our system and it has worked very well in this country.

Given all these bad effects and these adverse outcomes that are likely to follow from the passage of this legislation were it to be passed, one wonders why the government is putting this measure up again. It was thrown out in 2008 for very good reasons because it was bad public policy. Clearly, the reason why the government is putting up this legislation again is a mixture of ideology and, I suppose one has to say, the poor financial management of the Rudd government. The ideological position of most people on the left of politics in Australia is that health services should be only provided by the public sector and that private medicine is bad and it is only for the rich. In fact, when you look at the demographics of the people who have private health insurance in Australia, you see that is far from the truth. It would seem that, because of this 1930s socialist ideology, the extremely successful and efficient Australian health system is to be sacrificed to satisfy those on the left of the Labor Party. I think that is a pretty weak reason for destroying an excellent system.

The other reason, we are told, is finance—that ending this system will provide money to the government and help balance the budget. But in fact the amount of money provided is going to be quite small. It is a net $300 million. That is not a lot of money when you start talking in government terms, so you have to ask whether giving the government an extra $300 million for the budget is really going to be worth all the problems that it will cause when in fact they will have to spend many thousands of billions of dollars, if this goes through, on upgrading the public hospital system. So, as far as I can see, there is no net gain to the government from this measure financially but there is a huge net loss because nobody seems to have thought about the fact that if the private health sector is not providing services the public health sector will have to be upgraded at enormous cost.

We are told that this legislation is going to be a double dissolution trigger. As other people have said, this is not a subject on which the government would get much joy if they were to go to an election and ask the Australian people to return them to government. It is very easy to remind people that their child, their grandmother or their wife would go on a three-month waiting list for something that they could have treated in a private hospital the next day. I do not think that would win any votes for the Labor government.

All Australians have the certainty of knowing that they will always have access to good health care while the current system is maintained. I do not believe the Rudd government should be permitted to destroy our unique health system and the fine service it provides to the Australian people. For that reason, I will be voting against this legislation, as will the coalition. I hope that will be the last we hear of the very bad public policy proposal that this legislation embodies.

Julian McGauran (Victoria, National Party) Share this | Link to this | Hansard source

We are debating the Fairer Private Health Insurance Incentives (Medicare Levy Surcharge) Bill 2009 [No. 2] and Fairer Private Health Insurance Incentives (Medicare Levy Surcharge—Fringe Benefits) Bill 2009. The Fairer Private Health Insurance Incentives Bill 2009 will follow this debate which, as we all know, deals with the 30 per cent rebate question. The intent of the bills we are debating this evening is to increase the Medicare levy surcharge to 1.5 per cent for single people on incomes of $90,000 to $120,000 and for couples on incomes of $180,000 to $240,000. We reject the intent of these bills, as we have done previously.

The first thing I would like to note is the utter disconnection from debate, the abandonment of legislative debate, of the other side in this chamber. Not one government member is on the speaking list for these most important bills, which we are told will be an election issue.

Brett Mason (Queensland, Liberal Party, Shadow Parliamentary Secretary for Education and School Curriculum Standards) Share this | Link to this | Hansard source

The greatest moral issue of our time!

Julian McGauran (Victoria, National Party) Share this | Link to this | Hansard source

Not quite, but we will get to that, Senator Mason. We are told this is a possible double dissolution trigger. Where is the passion for the debate on the bills then? Not one government speaker is on the speakers list.

Kerry O'Brien (Tasmania, Australian Labor Party) Share this | Link to this | Hansard source

We are giving you more time.

Julian McGauran (Victoria, National Party) Share this | Link to this | Hansard source

He is giving us more time. There is a pathetic excuse from the Government Whip. Many of them are cowards on the other side. Either they are not up to the debate—I see Senator Bishop is here; he is up for the debate—or they are being told by the Prime Minister’s office not to jump up and speak. This is the pattern on the other side. Only three of them spoke on the emissions trading scheme debate, one of the great moral issues of our day. This is the pattern. They have utterly abandoned the legislative process. They are so cowered by the Prime Minister’s office—through the whip, I should add, who threw his little comment in before that they are giving us more time to speak. This is the chamber of debate.

Kim Carr (Victoria, Australian Labor Party, Minister for Innovation, Industry, Science and Research) Share this | Link to this | Hansard source

So you can filibuster! You know what you are filibustering for!

Julian McGauran (Victoria, National Party) Share this | Link to this | Hansard source

We have the great left-wing ideologue in here, the man with a bit of influence in cabinet. I see his fingerprints all over this in fact. The point is that they are the silent senators. Here is one coming in for the adjournment debate. They will get up on the adjournment debate—not a problem. The President evens walks in on the adjournment debate. But where are they to speak on this so-called trigger for an election? It does not exist.

Debate interrupted.