Scott Morrison (Cook, Liberal Party) Share this | Hansard source

I rise to speak on the Tax Laws Amendment (Medicare Levy Surcharge Thresholds) Bill 2008, introduced into this House only last night by the Assistant Treasurer. At other times, we have made comment about how these bills have been introduced and how quickly they have come before this place for debate. I am puzzled to know what the urgency is in relation to this bill and why it is being debated in this place so quickly. I have made that argument on another occasion, but I refer to it and simply ask these questions: where is the case for the urgency? Who has made the case? Who has run the argument on urgency in relation to this matter? It simply has not been done. The government have loaded up the bill with a political tactic in mind, and that is the nature of politics.

Here we are debating a bill in relation to private health insurance. We are very happy to have a debate on this issue, because for those who sit on this side of the chamber there is a longstanding belief that our health system does not involve just those things covered by the public sector. Our health system comprises health professionals and health institutions that go well beyond the sphere of the public sector. It is the clinicians and those working in the aged-care sector and the not-for-profit sector; it is all of the people who work together to make a viable health system in this country. Frankly, you either believe in that or you do not. You either want to move towards a comprehensive health system which is cradle-to-grave run by the government or you have a system, like we proudly have in this country, which is not the UK system and is not the US system either. Those who rail against private health insurance often make the argument that we do not want a system like the United States. We do not have a system like the United States; we have a uniquely Australian way of dealing with our health system, and it is that uniquely Australian way that the previous government worked hard to restore. Before the previous government came to power, our private health system—and, as a result, our overall health system, at least as it was administered federally—was in a lot of trouble. One of the key measures introduced at that time was to reinvest and provide incentives—carrots and sticks—to ensure that our private health insurance system got back on its feet. And it has got back on its feet. It is moving forward and more and more people have signed up to private health insurance, and that was the objective of that policy. But today we debate a bill which seeks to change all that.

The Medicare levy surcharge was introduced by the Howard government in 1997. It involved an additional one per cent surcharge of a taxpayers’ taxable income imposed upon those earning over a certain income but who did not hold an appropriate level of hospital insurance with a registered health insurance fund. At the time, it applied to individuals earning above $50,000 and couples earning above $100,000.

The amendments announced yesterday—yesterday, I note—involved increasing the thresholds applying to the Medicare levy surcharge from $50,000 to $100,000 for individuals and from $100,000 to $150,000 for couples and families. The explanatory memorandum that was provided with the bill states that the changes will take effect from the commencement of next financial year, the 2008-09 tax assessment period. The financial implications of these changes will be a reduction in revenue, as fewer people will pay the Medicare levy surcharge, and a saving arising from the reduction of government expenditure on the private health insurance rebate. The budget papers indicate that over the forward estimates there will be a net saving of approximately $299 million as a result of this measure. There is a lesson in that statistic. There is $30 billion in new spending from the government in this, the great inflation-fighting budget. They have had to find measures to recover that to keep the budget in surplus, which it has been now for many years as a result of the coalition’s responsible financial management. The government have been able to graft from this proposal $299 million towards the $30 billion in new expenditure in the budget. That is the real motive for this measure, and at the same time they can pursue their ideological tirade against private health insurance in this country—which takes them back many years.

The Medicare levy surcharge was introduced by the former government to provide Australians with choice. It is intriguing to hear those opposite now, as they expound themselves as the new champions of choice. It gave people a choice to opt out of the public system by taking out private health cover or to stay in the public system. The intention was that people who had the capacity to pay for their own health costs would take out private health insurance, through a series of sticks and carrots, as I mentioned earlier. The Medicare levy surcharge was the stick. It was a stick that worked. The number of Australians taking out private health insurance has increased from approximately 30 per cent of the total population before the Medicare surcharge levy was introduced to its current level of 44.4 per cent. The private health insurance rebate and Lifetime Health Cover were the carrots. Under the Howard government private health insurance became more affordable. In 1999 the coalition government introduced the private health insurance rebate. This provided Australians with a 30 per cent reduction in their private health insurance contribution. The rebate makes private health insurance more affordable for Australians by helping to balance Australia’s public and private health systems. We understand the system works as a system. Private health insurance takes the pressure off Medicare for those who need it most.

Lifetime Health Cover was an incentive introduced in July 2000 to give choice to those who had no choice. It encourages young people to take out private health cover by penalising older people who delay taking out private health cover. It encourages people to get into the system when they are young. A two per cent loading is added to the cost of the private health insurance premium up to a maximum of 70 per cent. The loadings mean that a person who delays joining a fund until the age of 40 has to pay 20 per cent more than someone who joins at the age of 30, ensuring that private health insurance covers both young Australians and the older age groups and keeps health insurance premiums lower than they would be without the younger demographic.

Since the budget was released I have stood in shopping centres, I have stood in the village fairs and I have spoken to people in my electorate. This is the issue they go deepest into. They are very angry about petrol prices and they welcome our announcement that we would reduce those by cutting fuel excise. They talk about many issues, but the one they stand there and talk to me about for at least 15 or 20 minutes is private health insurance. It is particularly older people who are saying this to me, because they have paid their dues in private health insurance. They made their commitments to private health insurance long before any of these measures were introduced. They are saying that they would like to see those incentives for younger people when they go into the workforce. They would like there to be the incentives and the proper mix of measures to encourage them to take up private health insurance, to take on some responsibility for their own health care over the course of their lifetime and at the same time ensure that they are contributing to a system that eases the burden on those who are in their advancing years. Many years ago, those who took up private health insurance did so because their parents did so. I must admit that the day I started working was the day I took out private health insurance. My parents had private health insurance and they taught me that it was your responsibility to do as much as you could to take care of yourself and your family. Private health insurance is a responsibility I was happy to take up and maintain. I maintain it today for my sake and that of my own family.

The effect of these coalition introduced measures combined has resulted in the highest number of Australians taking out private health insurance in the history of our country. More than 44 per cent, as I said previously, of our population, or 9.4 million Australians, have taken out private health insurance as a result of those measures. They have had the effect of providing long-term stabilisation of the private health insurance industry and of taking the pressure off Medicare. More than 55 per cent of all hospital procedures are now done in private hospitals. That is what I would call the system working to provide greater facilities, to provide more opportunities and to deliver a whole package to the Australian public—rather than relying only on one side of that equation, which is the public side. God forbid we would have to rely only on that.

The latest figures provided by the Australian Health Insurance Association indicate that there is strong support for private health insurance in my own electorate of Cook. I mentioned this before. More than 92,000 people—that is, more than 70 per cent of the people who live in the electorate of Cook—have private health insurance. That figure is significantly greater than in electorates in the rest of the country, and I am tremendously proud to be a member of that community. Not all communities can afford that, but the community in my electorate have taken on that responsibility. They are by no means an affluent community. They are hardworking people who have small businesses, work in professions or in the Public Service or are tradespeople. There is in the electorate of Cook the broadest mix you could possibly find. They are hardworking people who have decided to pay their dues into private health insurance.

The more than 90,000 people in my community covered by that system are angry because they are now being told one thing: that as a result of this measure they are going to have to pay more to fulfil that responsibility. Many of them will stay, particularly those for whom it has been a responsibility of their lifetime to do this. But some, particularly those who are younger, will not; they will go. They will choose an easier route and they will choose to have their burden shared by many others rather than making their contribution to ensure that the burden is lighter for all. That is why I am particularly offended by the nature of this bill—it strikes at something we should be encouraging. This notion is alive and well in the community of the Sutherland shire, where people do seek to take responsibility for their own lives and for those around them, and they do whatever they can to do that. Private health insurance has been a principal indicator of their level of commitment to that philosophy and one they live out in all aspects of their life.

The Treasurer said in his budget speech that his government was making the Medicare levy surcharge fairer. I just do not understand how this is achieved by actions that will see a larger number of Australians abandon their private health insurance and move across to the public health system. The results of the Medicare surcharge levy speak for themselves. There has been an increasing number of Australians taking out private health insurance. In fact nearly 9½ million, as we have said, have done so. There has also been a growth in young people taking out private health insurance. During the past 12 months more than 57½ thousand people aged between 25 and 29 have taken out private health insurance. It is the relatively low-claiming 20 to 50 age group that keeps the private health insurance system stable and affordable. This is a policy that is working. We have a policy in our health system that is working, and the first thing the government want to do when they come to power is dismantle it. They may say they want to do this to make it easier on working families, but there are 200 million plus reasons why they are doing this—that is, the revenue they will save and generate from this bill. That is the real incentive. It is not about the health system; it is about trying to raise the money to pay for $30 billion worth of new expenditure in the budget. And that is why we are happy to have this debate. We will have the debate based on the issues of how our health system runs and how we encourage people to take on their responsibilities and live them over all of their lives, as people in my electorate do.

There appears to be some confusion about the number of Australians expected to abandon their private health insurance cover as a consequence of these amendments. There are a lot of disturbing figures in the budget. The fact that 134,000 Australians will be out of work as a result of this budget is probably the most damning. But there is another one which says that there will be 485,000 Australians who will walk away from the private health insurance system. That is the most conservative estimate. The health funds believe this figure could be as much as 750,000. Access Economics has predicted more than 800,000 members of private health funds would need to drop out before the government will meet their savings. So Access Economics is questioning the basis upon which the figures that the government has arrived at in raising their $200 million plus has been calculated. The Australian Medical Association have revised their initial estimate of 600,000 and backed the Access Economic forecast of 800,000. A figure as high as one million has also been reported by some media.

What impact will half a million people or even one million people walking away from private health insurance have on Medicare and the public hospital system? What will be the likely implications of these amendments to the Australian health system? The likely result will be a massive increase of people turning to the public hospital system. And as I said before, God help them when they have to do that. As we know, the public hospital systems run by state Labor governments is an absolute joke—no better illustrated than in my home state of New South Wales. It has got beyond the point of incompetence; it has become endemic. It is a culture of failure in the New South Wales public hospital system. When you have more bureaucrats than beds, when you have a public hospital waiting list system that seems to go higher than petrol prices in this country, this public hospital system is not one that is prepared and able to take on the burden that this bill will ensure will be delivered upon them in spades.

The waiting list for elective surgery in New South Wales is 58,839 people. It is at its highest level in three years. It was 56,200 just six months ago and 55,900 six months before that. I am reminded of the former Premier Bob Carr many times in this place when I look at the Prime Minister, who I believe is the national version of Bob Carr when it comes to political management in this country. If you want to know what this country will look like if we have the same period of government under Labor, just take a look at New South Wales. The same process, the same people calling the shots with Bob Carr all those years ago, are here in Canberra. They are sitting in the rooms with those who make the decisions in this country and they are running the same lines and the same programs. That is what we can expect. Just take a look at New South Wales. That is what you can expect federally by following the same Carr plan. There is a pattern here: public hospital waiting lists in New South Wales are not getting shorter, they are getting longer. Bob Carr promised to halve them, the big quote before he became elected back in 1995—not unlike ‘We will ease the pressure on working families in relation to petrol prices and grocery prices,’ and all of this deceit that the Prime Minister, when he was the Leader of the Opposition, went around the country proclaiming. Bob Carr said, ‘We will cut them by half.’ And were they cut by half? No, of course not. Did the then Premier of New South Wales resign when he did not do that? No. And we see the same obfuscation here from the Prime Minister when it comes to holding him to account for what he led people to believe in this country before the last election.

More than 55 people have joined the waiting list in NSW each week since Reba Meagher became the health minister in New South Wales. How many more will there be as a result of this bill? These amendments will further exacerbate the situation. These disastrous changes being proposed by this government will, based on conservative estimates, result in a further 140,000 public patients in New South Wales alone. The New South Wales public hospital system cannot cope with 140,000 extra patients. It cannot cope with what it has now. It is already overstretched, putting extra pressure on the hardworking doctors and nurses of New South Wales—and right across the country. They are suffering under enough of a burden without having this additional burden imposed on them. If these changes to the Medicare surcharge levy proceed, in all probability it is likely that the health minister can expect a visit from her New South Wales counterpart with a request to negotiate the Australian health care agreement to get extra funding for New South Wales public hospitals—then we will see how the blame game proceeds!

Prior to the election, I did not hear the Prime Minister, when he was Leader of the Opposition, promising to change anything in relation to these measures. He did not let this out of the bag. There are a lot of things he did not let out of the bag prior to the election, and that is the great deceit the Prime Minister has inflicted on the people of this country. Whether it is petrol prices, grocery prices, private health insurance or doing a U-turn on the Northern Territory intervention, none of it was discussed before the election. He comes into this place with a straight face and his forest of spin that sits there on the desk each question time, which has none of the answers that Australians are looking for, and he pretends that he can do no more. The sad truth is that he never intended to do more. He has been found out. I fear the only difference between the current Prime Minister and the former Leader of the Opposition, Mark Latham, is that the Australian people woke up to Mark Latham before the election. They are waking up to this Prime Minister now and they will not be letting him get away with it.

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