Bruce Billson (Dunkley, Liberal Party, Shadow Minister for Small Business, Competition Policy and Consumer Affairs) Share this | Hansard source

The bills that we are discussing tonight we have debated before in this place. I sense a feeling that has been conveyed to me by my local electorate that we thought this was a fight that had been had and won. Despite the repeated assurances by the Labor opposition prior to the 2007 election—that there would be no downgrading of and no tampering with the private health insurance incentive, to the point where the now Prime Minister, the then shadow health minister, bemoaned how tired she was of repeating her reassurances to people—shortly after an election where that kind of assurance supported the formation of the Rudd-Gillard government, something completely opposite was put to this parliament. That something was an attack on the very private health insurance incentives that are so important to so many members of the community that I represent. It was an attack that went completely against the assurances, the election promises and the tiresome reiterations about how this was not going to happen. But it did. I suppose this is a not unfamiliar experience for the electors of Dunkley and for the people of Australia. The good sense of the parliament held the government to its word the last time the government tried on this measure, which was introduced not because it is good health policy but because the government's reckless and insatiable spending had created a budget problem that needed to be addressed. The Labor government thought that people with private health insurance were fair game.

As a shadow minister I travel around Australia. I enjoy talking with the people I meet, as I do with the people in my electorate. It is interesting to hear them wonder, which they do often, and pose the rhetorical question: just whose side is the government on? They look at areas of policy where there seems to be hostility and class warfare now emerging and hear language that is appalling and an affront to fair-minded people. We see it again in relation to private health insurance. The government would have you believe that this is somehow a Robin Hood measure, that taking from the rich who have the gall to take out private health insurance will somehow be helpful for those less fortunate. A number of things are wrong with the proposition the government is asserting as its defence for this measure. The vast majority of Australians who have private health insurance would never be characterised as 'rich'. They certainly do not characterise themselves that way, and certainly from the data that is not an accurate reflection of their circumstances. But this money is not actually going into some other targeted health measure; it is just going in to deal with the cavernous structural deficit that this government has created in its budget. It is simply about improving the accounting of the Commonwealth's books; it is not about improving the health outcomes for Australian citizens.

The Australian public is entitled to wonder why it is back here again when the parliament in good conscience repudiated the government's actions the last time they tried this on. I have even examined the ALP's health policy from the last election. It talked about the pea-and-thimble trick in the way that changes in health were to be funded. It talked about emotional health measures. You might recall announcements prompted by the excellent mental health strategy outlined by the coalition. It also talked about emergency departments. I cannot find a single mention of that measure. I cannot see anywhere where the government has disclosed its intention to change its path from the election assurances that were given in 2007 or from the repudiation that the parliament gave the Rudd-Gillard government as it tried to do something completely the opposite of what it undertook to do. And now the government comes in here and says: 'There was an election in between.' There may have been an election in between, but this was the policy that dared not speak its name.

You are entitled as a member of the public who might not consume as much political discourse as we do in this place to still have ringing in your ears the assurances that were given in 2007, the feeble excuses given for the betrayal of those assurances after the election of the Labor government, the repudiation by the parliament to bring the government back to where it said it was going to be as part of its election commitments and then silence. Not a word. Nothing. No election commitment. No clear articulation of its plan to the Australian public. No sense that it could somehow claim a mandate—because this was not discussed—let alone the broader issue of how the government came to grasp onto power after the election.

The Australian public—particularly as it is reflected in the emails that I am getting from my electorate—is rightly outraged. This is a policy argued with a nonsense at its heart, a fiction that this has something to do with health when it is actually about accounting. And there is no mandate whatsoever to bring about this change. It is a change that will have a profound impact on the electorate that I represent. It will also have a profound and increasing impact over time on the broader health system that Australians can enjoy and look to with comfort and security.

We have a parallel system of health care in our nation—a public system that is funded through concepts of universality, with income related contributions towards Medicare and the like as well as through the budget system, and a private system where citizens choose to put whatever quantum of income that is available to them towards their own health needs. This measure was about saying to those people that had forgone other uses of their income but had chosen to invest in their health care that an incentive was appropriate. The incentive is appropriate because it is a way of saying that your actions in bringing your own private resources to the health system complements, strengthens and buttresses the health system by growing the aggregate amount of resources available to the task of raising healthy Australians. That public policy motive is a good one. A 30 per cent contribution is an encouragement, an incentive, for private citizens to make a much more substantial contribution on their own. What you see then is people able to pursue the health care they need through avenues available to them through a system that has two strong pillars—the public and the private systems.

When you start eroding the health and vitality of the private system, you start impacting on the public system and then you start inflicting a decay and an atrophy in terms of all the resources available for health care generally. When people take out private health insurance they bring more than the incentive to the task of health care. If they decide to discontinue that health cover, there might be a short-term advantage for the Commonwealth but there is a substantial loss of a number of times the value of the incentive to the health resources that are available to meet the Australian public's needs.

One of the shiftiest and most deceitful cost transfers from the Commonwealth to the states that we will see is when those people join the hospital queues and the waiting lists as they seek access through the public hospital system. This is a system that is under stress. It is a system that attracts a lot of debate and discussion. It is a system that I would have thought all state governments, regardless of their political flavour, would be pointing out to the Commonwealth as under pressure at this present time. It is a matter of public concern that waiting lists are certainly not decreasing in most areas and in some areas are increasing. Notwithstanding the amount of resources that state governments might put additionally into that task, the Commonwealth is just making an already difficult task much harder.

When you hear the Labor Party and its members in this government talk about how this legislation is only going to hit a few rich people and how certain types of people that they are categorising as 'lower income' will now not be helping to pay for the private health insurance of those that they characterise as somehow 'rich', we need to peel back that argument because it is a hollow, shallow argument that actually undermines people's understanding of the way that the health system operates. Private hospitals treat 40 per cent of all the patients in Australia. If that capacity were not there, the demand would be shifted to the public hospital system. As I touched on earlier, the incentive is but part of a boost to the resources available to the health system where the lion's share, the heavy lift, of those additional resources is made by private citizens who choose to put a share of their own income into their private health needs. In 2009-10 private hospitals treated 3½ million patients. Private hospitals carry out the majority of elective surgery, 64 per cent, in this country; 12 million or more, or 52.9 per cent of Australians, have private health insurance; 10.3 million, or 45.6 per cent of Australians, have hospital treatment cover. In my own electorate the picture is quite similar: 52.9 per cent—right on the national average—of people in the Dunkley community have private health insurance. Those 70,000 people draw some security from that and, at a time when people's financial security is being challenged by cost-of-living pressures and serious concerns about the direction in which this government is taking the economy and the nation, they do not need to feel a greater degree of uncertainty about their health and wellness. That security about their health and about their access to hospital care and health care being there when they need it should not be eroded. But that is what will happen as a consequence of these bills being passed. If you take out higher income people who choose to put a portion of their income into their private health needs, you start diminishing the insurance pool. The insurance pool will lose some of those who might choose to self-insure or those who might take their chances or some who feel they are of robust good health and might not need the help. Those are the very people that give insurance its appeal. They bulk up the insurance pool. Through their contributions they offset the costs of those that may be facing a higher risk of a need for treatment and a higher risk of claims and, as a consequence, they help keep down the cost of that insurance.

If you build in a disincentive, which is what will happen with the removal of the 30 per cent rebate, people will leave. They will leave their cover. The government has tried to put forward this nonsensical fictitious argument that only 30,000 people will quit private health insurance. How remarkable that the government's own private health insurer, Medibank Private, has predicted 37,000 people will quit. That is, one private insurer is forecasting a greater drop-off rate from one insurance fund—a government owned insurer—than the government says will occur in the entire sector. This shows that we need to be very careful about these modelling conclusions that the government tries to throw around as evidence of the wisdom of its decision making.

A Deloitte analysis predicts that 175,000 people will withdraw from hospital cover and a further 583,000 will downgrade their cover in the first year. It expects that over the next five years 1.6 million people will drop their cover and 4.3 million will downgrade. That is an enormous reduction in the insurance pool and can but only push the cost of health insurance up even further. This will create greater problems for the public hospital system as demand is displaced out of the private system into the public system—and there is not a dime of the money the government claims it will save from this measure going in to address that transfer of demand from the private system to the public system.

Also of concern is the absolutely inaccurate characterisation of the people that have private health insurance. You will see that half of those 11 million Australians with private health insurance have incomes of less than $50,000. Three million have annual household incomes of under $35,000. If you were concerned about your health status and wanting the emotional security of knowing you had options and choices about the treatment you would receive, you would be more likely to stay. A higher risk—you would be likely to stay; a lower risk—likely to leave. The damage to the insurance pool will be quite remarkable. There will be damage to the health profession. In my own community, many highly skilled and highly regarded, medical professionals deploy their time both in private practice and in public practice. They do not want to be wage and salary earners in the public hospital system. That is not what got them into medicine. But they are happy to make their contribution because they can underwrite their investment in their own skills and their own career through private practice. You start eating away at that and you start changing the personnel profile and the willingness of people to contribute at all.

Let us not underestimate the importance of privately insured patients in the public hospital system. Last time I spoke on this measure I pointed out that in 2006 the Peninsula Health Care Network, best known as the Frankston Hospital and other points of service, pulled in just under $7 million in income from patient and resident fees. That has nearly doubled since 2006 to the point where it is an important input to the vitality of that hospital. The staff are having a red-hot go under increasing demands. They do not need to have that additional revenue stream drained away by this poorly conceived measure or to have greater demands placed on their services as people are displaced from the public system into the private system. There are so many reasons why this is a bad idea— it is dishonest and it is just woeful public policy. I urge the parliament to get behind the amendment moved by the Leader of the Opposition.

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