Andrew Leigh

I spoke today in favour of legislation to means-test the private health insurance rebate.

Fairer Private Health Insurance Incentives Bill 2011
9 Feb 2012

I extend my thanks to you, Deputy Speaker, for taking the chair to permit me to participate in this debate. The Fairer Private Health Insurance Incentives Bill 2011 is about fairness. It is about striking the right balance in how we spend our public dollars. So often in public life we campaign in ‘and’. We speak about all the good things that government can do—and it is true that the potential of government to do good things is great—but ultimately we have to face trade-offs. Governing is really more about questions of 'or' than questions of 'and'. You see that very much with the coalition at the moment, mired in their $70 billion black hole—the equivalent of stopping Medicare for four years or the pension for two years—simply because they have been unable to make the hard choices. But we are making the hard choices, and one of those is to recognise that money that currently goes into subsidising higher income Australians to take up private health insurance could be better spent in the Australian government system, including on important healthcare measures.

Those opposite want you to think that the Government is against private health insurance. Nothing could be further from the truth. It is another part of the opposition's ongoing scare campaign to suggest that the government is against private provision of health, much as the opposition often suggest we are against the private provision of education. It is not true at all. The private health system is an important part of the Australian healthcare system. But with this bill we are recognising that the government need not subsidise the private health care of millionaires. It is not vital to a millionaire that they receive a 30 per cent private health insurance rebate in order for them to take up private health insurance. The first people to take up private health insurance were millionaires. Those millionaires will have that private health insurance when their 30 per cent rebate is not there. That is true even as we move down the income scale. We have strong evidence that the take-up of private health insurance did not increase markedly when the 30 per cent private health insurance rebate was put in. In fact, the policy change that substantially increased the take-up of private health insurance was the Lifetime Health Cover reform. Lifetime Health Cover had a much bigger impact on the take-up of private health insurance than did the 30 per cent rebate.

In putting in place this fair and equitable reform to the health system, Labor are doing as we always do, ensuring that Australia's healthcare system looks after the most disadvantaged in the community. It was us that introduced Medibank under the Whitlam government in 1975 and it was us that rebuilt that system into Medicare under the Hawke government in 1983-84, after the original Medibank had been trashed by the Fraser government. We believe in making sure that all Australians receive high-quality health care. Too often those opposite appear to be taking their cues from their colleagues in the United States, from US Republicans willing to laugh at low-income Americans who do not have health coverage. But that is not the Labor way. We believe that we need to have a healthcare system that recognises that good quality health care is about making sure that that people can participate in society. If you do not have good quality health care, you are unlikely to be able to hold down a job and you are unlikely to be able to participate fully in the social life of the community. So health care is, like education, a critical underpinning of a fair society.

Under this bill, the private health insurance rebate for low- and middle-income earners will remain unchanged. Higher income earners will receive a reduced rebate. As income increases, the private health insurance rebate will progressively fall. This will ensure savings to the government of $2.4 billion over the three years 2012-13 to 2014-15 and it will provide a fairer distribution of the benefits of the healthcare system.

My own electorate of Fraser has incomes above the average for Australia but, even so, the number of people who will not receive the private health insurance rebate is very small. I am informed that the number of singles in my electorate who will no longer receive the private health insurance rebate is 2,220 and the number of couples is 740—a relatively small number in an electorate whose total population is now pushing up towards 200,000.

We do not expect this bill to lead to any substantial change in private health insurance coverage. Modelling from Treasury finds that 99.7 per cent of people will remain in private health insurance, as a result of the fact that we still have incentives such as Lifetime Health Cover and the Medicare levy surcharge. So as a result of this there will be $2.4 billion additional into the budget to be spent on better healthcare initiatives and a minuscule change in private health insurance coverage.

The scare campaign the opposition is running need not be rebutted just by Treasury figures, sound as they are; Professor Elizabeth Savage, a health economist at the University of Technology, Sydney, has done considerable work in this area. Her research shows strong evidence of persistence, so the take-up of private health insurance is likely to endure because those who already have private health insurance will keep it from habit. Professor Savage also finds that means-testing the private health insurance rebate will not increase pressure on the public hospital system—another furphy, another scare campaign, from those opposite.

There are nearly eight million private health insurance policyholders who will not be affected by the changes at all. After these changes, as I have said, 99.7 per cent of people will remain in private health insurance. This allows us to have another $2.4 billion over the next three years. What will that get spent on? You can expect it to be spent on services such as improvements in the hospital system.

From 1 January this year, we are ensuring that every state improves the proportion of emergency department patients seen within four hours. Recent academic research published in the Medical Journal of Australia has shown that that will save lives. We are expanding Medicare Locals to integrate the sectors and make sure that patients get holistic care. We are putting in place local hospital networks, making sure that decisions about hospital management are devolved to the local level. Many of these reforms will save lives. Ultimately, that is what great health care does. The opposition would rather have private health insurance rebates for millionaires than have a healthcare system that saves more lives.

We are delivering mental health reform. We are rolling out additional headspace centres and EPPIC centres. We are also looking at mental health reform across the life cycle. We are committed to putting in place the groundwork for a National Disability Insurance Scheme, a scheme that, when it was first proposed by the Productivity Commission, the opposition said that they supported. But they are now unwilling to support that in the short term. The coalition are walking away from expanding support for people with disabilities, despite the fact that their spokesperson on disability, Senator Fifield, acknowledges that the current system is a patchwork that contains many anomalies for people with disabilities and their carers. The coalition would again prefer to subsidise the private health insurance of millionaires rather than begin putting in place a National Disability Insurance Scheme. Politics is about choices. Ours is national disability insurance ahead of subsidising the private health insurance of millionaires. Theirs puts subsidising the private health insurance of millionaires before better disability care.

We are building a stronger age care sector. We recognise that the age care system is in urgent need of reform and that if we do not do something to improve it the sector will face considerable strain as the baby boomers reach retirement and increasingly look for places in age care homes.

Politics is about values and what you value. What you prioritise in government shows what you value. During the global financial crisis, we chose to save 200,000 jobs and tens of thousands of small businesses. They say that they would not have taken on debt, meaning that they would have cut back on government spending in the face of the global downturn, throwing Australia into deep recession. On taxes, we are delivering pension rises and income tax cuts for working households through our Clean Energy Future package. Under a Tony Abbott government, the only people who would get tax cuts would be big miners and big polluters.

You can see the same in education. We are investing in low-income schools through the low SES national partnership. The Gonski review will ensure a fairer system for providing federal government funding to schools. We recognise that it is important to support need. If there is any rebalancing of schools assistance, they immediately launch a fear campaign. They immediately suggest that what we are doing is creating a schools ‘hit list’. Nothing could be further from the truth.

Since Labor came to office there has been modest growth in the Public Service  - 11,072 additional public servants - a rate of growth slower than the final years of the Howard government. We recognise that a strong Public Service is vital to delivering services such as better health care. But those opposite would make 12,000 public servants redundant, a commitment that the member for North Sydney again made on the Q&A program this week. In that program, the member for North Sydney said that there were 6,500 people working in the Department of Health and Ageing and appeared not to be sure what they did.

I can say two things about that. First of all, there are 5,164 people working in the Department of Health and Ageing, a small increase of about 300 since the Leader of the Opposition was minister for health. As the member for North Sydney could find out if he spoke to, say, the Leader of the Opposition, the Department of Health and Ageing does enormously important work. They are working on things like the private health insurance rebates, preventative health and the Pharmaceutical Benefits Scheme. I commend the work of the department of health officials that has gone into preparing this package of reforms. We on this side recognise that the Department of Health and Ageing does valuable work. Those on that side of the House would be happy to cut the department of health.

I will be interested to hear in subsequent contributions if the member for Dickson supports the views of the member for North Sydney that in fact, were the opposition to be elected government, he should preside as minister for health over a department that employed no-one. Does the member for Dickson believe that the Department of Health and Ageing should be scrapped? If so, what portfolio would he then seek to retain?

The contrast in Australian politics could not be clearer. The opposition is always saying yes to special interests and always saying no to tax reform. The contrast can be seen nowhere more clearly than in the area of dental health. Professor Jeff Richardson, from the Centre for Health Economics at Monash University, has found that 17 per cent of the people in the lowest income group have no teeth compared to 0.3 per cent of high income people. This is from an AM interview on 8 December 2011. Yet those in the lowest income categories are receiving much less assistance to get dental care than those in the highest income categories. Those in the highest income categories have 30 per cent of their dental care bill paid for by the Australian taxpayer through the private health insurance rebate. Labor believes that is the wrong way to balance our health system. We believe that we ought to be spending less on the teeth of millionaires and more on the teeth of the most disadvantaged Australians. I commend the bill to the House.

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