Joe Ludwig (Queensland, Australian Labor Party, Manager of Government Business in the Senate) Share this | Hansard source

I thank Senator Cormann, who I understand has an interest in this area. These reforms will provide a fairer distribution of benefits, bringing government support for private health insurance in line with the principle underpinning the Australian tax transfer—that is, the largest benefits are provided to those on lower incomes. Spending on the current rebate is growing quickly and is expected to double as a proportion of health expenditure by 2046-47. This is clearly unsustainable, as I think Senator Cormann has recognised.

Currently, approximately 14 per cent of single taxpayers who have incomes above $74,000 receive about 28 per cent of the total rebate paid to singles. Under the new reforms these single taxpayers will receive about 12 per cent of the PHI rebate paid to singles. Similarly, about 12 per cent of couple taxpayers who have incomes above $150,000 currently receive approximately 21 per cent of the total rebate paid to couples. Under the new reforms these couple taxpayers will receive about nine per cent of the total rebate paid to couple members. So 99.7 per cent of people will keep their rebate, and it is estimated that approximately 25,000 are likely to not participate. Of course, singles and couples earning less than $75,000 and $150,000 respectively will not be affected by the changes at all. (Time expired)