Carol Brown (Tasmania, Australian Labor Party) Share this | Hansard source

I listened to you in silence, Senator Cormann. The budget has been designed to support jobs and small businesses by investing in the infrastructure we need for tomorrow. As the Treasurer has reiterated on many occasions, this budget was framed in the most challenging economic conditions since the Great Depression. We have seen the global financial crisis contribute to the write-down of government revenues to the tune of $210 billion. This, of course, has had a major impact on the budget, so the Treasurer has made some tough choices. Those tough choices involve significant savings measures which the government knows may not be very popular. But they are the right choices and they will help us to steer the budget back into surplus in the future. The budget will help deliver growth to Australia so that the economy is ready and in a position to capitalise when the global recession turns around and a recovery takes place.

The changes to private health insurance are about a rebalance so that those who have the greater capacity to pay for their own health insurance do so. It is consistent with the government’s commitment to maintaining the balance between public and private health systems that high-income earners will receive less in government payments for their private health insurance but will face an increase in cost should they opt out of their health cover. From 1 July 2010, the government will introduce three new private health insurance tiers so that the higher income earners receive less carrot and more stick to be insured. All income thresholds will continue to remain indexed to wages, keeping these changes fair and sustainable into the future. These changes will affect around 10 per cent of Australian adults. For low- and middle-income earners, the existing 30, 35 and 40 per cent private health insurance rebates will remain in place.

I would like to take a moment to repeat some of the comments made yesterday by the Minister for Health and Ageing, Nicola Roxon. She said:

We are maintaining a very hefty public supplement for those people who take out private health insurance, but what we have done is said that those who are high-income earners should pull their weight a little bit more. So it is basically what it is all about and, as you have heard, the Treasurer and the Prime Minister have been discussing this across the board not just for private health insurance. We think that people who are earning higher incomes should have private health insurance. We do not think the taxpayer should pay even more for their rebate than they pay for lower income earners.

She also went on to discuss the projections. She is on record as saying that the projection for the number of people that will pull out is very small. It is about 25,000 people. When you have nearly 10 million people insured, that is a tiny number—and you have to remember that the industry, when we made the small changes to the surcharge last year, were out speculating that hundreds of thousands, if not millions, of people would pull out of private health insurance. Those opposite were also, of course, a part of that dishonest scare campaign about those changes made last year, saying out there in the community that hundreds of thousands of people would pull out.

What we have seen is that the rebate, as it currently stands, has become unsustainable. Minister Ludwig said today, in his answers to questions from those opposite, that the policy has been changed because the private health rebate was becoming unsustainable in the budget that has taken a $200 billion hit as a result of the biggest global financial crisis since the Great Depression. The government is making important structural reforms in this area to rebalance support for private health insurance and to put expenditure onto a sustainable footing for the future. (Time expired)