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

I rise to take note of answers given by Senator Ludwig. I would like to bring to the attention of the Senate the decision by the Rudd government to reduce or remove the 30 per cent private health insurance rebate. The idea that singles earning over $74,000 and couples earning over $150,000 will have their 30 per cent rebate reduced or removed is an insult to the Australian people. If you ask any member of the public who is currently earning $74,000 whether they consider themselves to be the wealthy that the Rudd government is targeting, I can assure you that their answer would be a resounding ‘no’. These people are paying mortgages, loans, rates and bills, and they are trying to get ahead in life. Their private health insurance allows them the security of knowing that if they require medical treatment it is available to them. In turn, this frees up the public health system, which is currently struggling to cope with increased waiting lists. Instead, the Rudd government has made the decision to reduce the 30 per cent rebate, which I have no doubt will mean that many people will leave the private health system or drop their ancillary cover. This is a very important issue and I will speak about it later.

In the budget papers, section 2, ‘Department outcomes, program 9.1, key performance indicators’ at page 256 states that the number of people currently covered by private health insurance hospital treatment cover will be maintained at 9.7 million. This target has been set for three years of the budget up until 2012-13. I would ask how a target set at 9.7 million will remain the same for three years. What this means is that the government has decided that the number of people who have private health insurance will not increase; it will remain the same. If these targets forecast by the government are maintained, and private health insurance membership does not increase over 9.7 million, then the proportion of the population insured will decline to 41.7 per cent. Compare this to the current trend in private health insurance membership of the last two years. If this were to continue, the proportion of the population with hospital cover would increase to 50.2 per cent. The difference in the proportion of the population forecast by the government to be covered by hospital insurance against current trends in 2012-13 will be almost 1.8 million people. To put this into perspective, Western Australia has a population of two million and if the whole of Western Australia had to rely on the public health system, there would be a meltdown. The system is not coping at the moment and it certainly could not cope with this extra group of people.

The projected cost of these 1.8 million people—the same amount that would be expended in the private hospital sector if these people were insured—would mean that the public hospital systems would require an additional $4.8 billion over the four-year period from 2009-10 to 2012-13 to cover in-hospital costs. I would like to know where the current government is going to find an extra $4.8 billion. How will Mr Rudd and Mr Swan be able to come up with this extra $4.8 billion to ensure the public health system is able to look after the extra 1.8 million people?

I would now like to speak about the ancillary cover. It is not just our public health system that is at risk; it is also the public dental system. For example, if people were to drop their current ancillary cover, this would mean that their current cover of $3,000 per year would reduce to $2,000 per year, but their health provider would have the same outgoings with a reduced amount of revenue. To cover this, everyone’s premium would have to increase, including for ancillary cover. If the amount for ancillary cover is increased, further people will drop their cover. This would result in a huge drop in the number of people covered. Considering that currently 50 per cent of ancillary cover is dental, if people were to drop their dental cover this would do one thing: it would flood the public dental service, which is already at crisis point.

At present, dental decay is the most common disease in Australia, with 19 million people having existing decayed teeth and 11 million people with newly-decayed teeth each year. If more people were to transfer from the private to the public dental system, we can guess at how these numbers would increase. The drop in dental cover due to the reduction in the rebate currently available to many Australians would drive a stake through the heart of the public dental system. Did Mr Swan or Mr Rudd think about this as they reduced the rebate? I do not think they did. (Time expired)