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senate vote 2012-03-13#3
Edited by
mackay staff
on
2014-06-10 19:56:11
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Title
Bills — Fairer Private Health Insurance Incentives Bill 2012, Fairer Private Health Insurance Incentives (Medicare Levy Surcharge) Bill 2012, Fairer Private Health Insurance Incentives (Medicare Levy Surcharge — Fringe Benefits) Bill 2012; Reference to Committee- Fairer Private Health Insurance Incentives Bill 2012 and related bills - Reference to Committee - Refer to the Economics Legislation Committee
Description
<p class="speaker">Concetta Fierravanti-Wells</p><p>I move:</p><p class="italic">That the Fairer Private Health Insurance Incentives Bill 2012 and two related bills be referred to the Economics Legislation Committee.</p>- The majority voted against a [http://www.openaustralia.org/senate/?gid=2012-03-13.141.3 motion] introduced by Liberal Senator [http://publicwhip-test.openaustraliafoundation.org.au/mp.php?mpn=Concetta_Fierravanti-Wells&mpc=Senate&house=senate Concetta Fierravanti-Wells], which means that it was unsuccessful.
- The motion was: ''That the Fairer Private Health Insurance Incentives Bill 2012 and two related bills be referred to the [http://www.aph.gov.au/Parliamentary_Business/Committees/Senate/Economics Economics Legislation Committee].''
- Senator Fierravanti-Wells explained that she introduced this motion because "this government has absolutely no mandate whatsoever to pass these bills".[1]
- ''Background to the bills''
- The [http://www.aph.gov.au/Parliamentary_Business/Bills_Legislation/Bills_Search_Results/Result?bId=r4597 Fairer Private Health Insurance Incentives Bill 2012] was introduced along with the [http://www.aph.gov.au/Parliamentary_Business/Bills_Legislation/bd/bd1112a/12bd022 Fairer Private Health Insurance Incentives (Medicare Levy Surcharge) Bill 2012] and the [http://www.aph.gov.au/Parliamentary_Business/Bills_Legislation/Bills_Search_Results/Result?bId=r4598 Fairer Private Health Insurance Incentives (Medicare Levy Surcharge—Fringe Benefits) Bill 2012]. These bills were introduced as a package to reduce the [http://www.privatehealth.gov.au/healthinsurance/incentivessurcharges/insurancerebate.htm private health insurance rebate] and increase the [https://www.ato.gov.au/Individuals/Medicare-levy/Medicare-levy-surcharge/ Medicare levy surcharge] for certain taxpayers. To this end, the bills:
- * create three private health insurance tiers with different levels of private health insurance rebate to reduce the amount of rebate eligible taxpayers with complying private health insurance are entitled to when their income for surcharge purposes is above the relevant Medicare levy surcharge threshold;[2]
- * increase the rate of Medicare levy surcharge for certain taxpayers who do not have complying health insurance and whose income for surcharge purposes is above the relevant Medicare levy surcharge threshold;[3]
- * increase the rate of Medicare levy surcharge for taxpayers who do not have complying health insurance and whose income (including reportable fringe benefits) for surcharge purposes is above the relevant Medicare levy surcharge threshold.[4]
- References
- * [1] Read Senator Fierravanti-Wells' full explanation of the motion and the related debate [http://www.openaustralia.org/senate/?id=2012-03-13.141.2 here].
- * [2] Read more about the Fairer Private Health Insurance Incentives Bill 2012 in its [http://www.aph.gov.au/Parliamentary_Business/Bills_Legislation/bd/bd1112a/12bd020 bills digest].
- * [3] Read more about the Fairer Private Health Insurance Incentives (Medicare Levy Surcharge) Bill 2012 in its [http://www.aph.gov.au/Parliamentary_Business/Bills_Legislation/bd/bd1112a/12bd022 bills digest].
- * [4] Read more about the Fairer Private Health Insurance Incentives (Medicare Levy Surcharge—Fringe Benefits) Bill 2012 in its [http://www.aph.gov.au/Parliamentary_Business/Bills_Legislation/bd/bd1112a/12bd023 bills digest].
<p>I do so because this is the latest betrayal by the Gillard Labor government that really does need to be put under scrutiny. Why? Because this government has absolutely no mandate whatsoever to pass these bills.</p><p>The government claims only 27,000 people will drop cover as a result of this measure. Treasury has not done the modelling of the effect of the downgrading of this cover. This is why it needs to be scrutinised. The government's own insurer, Medibank Private, predicted 37,000 of their members alone will drop their cover and 92,500 will downgrade. About 2.4 million people will be directly affected with immediate increases in premiums of 14 per cent, 29 per cent and 43 per cent in the respective income tiers for those under 65.</p><p>Deloitte, which is a very respected organisation, has undertaken an analysis which predicts that in the first year 175,000 people would be expected to withdraw from private hospital cover and a further 583,000 people will downgrade. Over five years, 1.6 million people will drop their cover and 4.3 million people will downgrade their cover. Deloitte's analysis also predicts that private health insurance premiums will rise 10 per cent above what they would otherwise be. They also predict that there will be $3.8 billion in additional recurrent costs for the public hospital system. Around 2.8 million people with general treatment cover will withdraw and 5.7 million people will downgrade over five years.</p><p>Has Treasury done modelling on the costs and additional burden on the public hospital system, not to mention the effects that this is going to have on waiting lists? No. As we know, a deterioration of the risk pool—that is, healthier, younger people dropping out of private health insurance first—will cause an upward pressure on premiums for all 12 million Australians with private health insurance. What further premium increases will be required as a result of this increased risk? How many people will drop out of private health insurance as a result of these further increases?</p><p>When one looks at the people who now rely on private health insurance—the government has been absolutely outrageous in the way that it lied about this measure at the last federal election. For years the Australian Labor Party has been telling us in writing—and it is not worth the paper it is written on—that, 'No, we're not going to touch private health insurance rebates.' They kept telling us that. They lied about this.</p><p class="italic">Senator Feeney interjecting—</p><p>They went to the last federal election and lied about this, Senator Feeney. Of course, now they are perpetrating that by telling us that private health insurance is for the rich. Well, 5.6 million people with private health insurance have an annual household income of less than $50,000. Go and tell those people on less than $50,000 that according to this government they are wealthy, and 3.4 million of those people have an annual household income of less than $35,000. What this government is doing in relation to private health insurance is absolutely outrageous. What is going to happen when all the patients in the private hospital system move over? Therefore, these bills need to be scrutinised by a Senate committee. <i>(Time expired)</i></p> <p class="speaker">David Feeney</p><p>I rise to oppose the motion seeking to refer the—</p> <p class="speaker">John Williams</p><p>Let the Senate do its job.</p> <p class="speaker">Sue Boyce</p><p>Order! Senator Williams, please do not make any interjections. Senator Feeney, please ignore the interjections.</p> <p class="speaker">David Feeney</p><p>I do try, Acting Deputy President. There is no justification for these bills to be referred to the committee, despite what Senator Fierravanti-Wells just set out in her speech of confected outrage. These bills have been debated extensively over the past three years with all of the issues comprehensively considered and examined. This motion is nothing more than a cynical attempt by the coalition to prevent these bills passing through this chamber prior to their proposed commencement date. I said in my very first speech to this place:</p><p class="italic">In health we need to end the scandal of three billion tax dollars a year being handed over to the private insurance industry—a handout that has done nothing to reduce the pressure on our public hospitals. For all this vast subsidy, the proportion of Australians who have private health cover rose during the Howard years only from 34 to 44 per cent. And most of the new purchasers were well-off people who bought a cheap policy to avoid the government’s tax surcharge. That is to say, the private health insurance industry has been grown with conscripts not volunteers.</p><p>It is our very firm view that these bills will ensure that low- and middle-income earners will no longer subsidise the private health insurance of high-income earners. Despite the misleading claims that members of the coalition have made throughout this debate and again today, the rebate will remain unchanged for low- and middle-income earners. The private health insurance rebate is the fastest-growing component of health spending and it is unsustainable. Over 10 years its real cost will increase more than 50 per cent.</p><p>The changes proposed by this government will save $2.4 billion over the next three years and $100 billion over the next 40 years. So one wonders why the coalition are opposed to a measure that ensures that our tax dollars are spent in the most effective way. The real reason the coalition are so opposed to these bills is that they have never met a billionaire they do not want to give a handout to. And we see this riddled throughout their policies.</p><p class="italic">Senator Nash interjecting—</p><p>I see Senator Nash gnashing her teeth as she hears my remarks, but one might very well remark that, given the recent advice and interactions between her Senate leader and a notorious billionaire, one can see my point proven again and again. The continued passage of these bills should not be held up because of the coalition's ideological desire to hand over taxpayers' money to those who are most able to look after themselves.</p> <p class="speaker">Scott Ryan</p><p>I am quite proud to speak on this motion, because what we just heard from Senator Feeney is a complete misrepresentation of the importance of private health insurance. In fact, one of the reasons we need to have an inquiry into this matter is to dispel those myths—in fact, those quite blatant mistruths—by the government. Let us go back to the history of why this is a rebate and not a tax deduction. Just like Medicare is universal—and Labor made such a point of that—the previous government introduced the private health insurance rebate as a rebate, not a tax deduction. The reason it was introduced as a flat-rate rebate and not a tax deduction was to guarantee that it would be worth more to lower income earners. If it were a tax deduction, like it was previously, it would have been worth more to higher income earners. This rebate guarantees that the millions of people Senator Fierravanti-Wells mentioned—whose household incomes are less than $30,000 and less than $50,000—will be helped to keep their private health insurance.</p><p>This is what Labor are all about: they actually wants to punish those who invest in their own health care. It is just like they have always been with education: they do not like people being able to invest in their own health care. The private health insurance rebate ensures and triggers further private investment in health care. It increases the overall pool of money being spent on health in Australia, and we know from the work of the Productivity Commission and the Australian Institute of Health and Welfare that private hospitals treat 40 per cent of all patients in Australia. In 2009 and 2010 private hospitals admitted 3.5 million patients, and they perform most of the elective surgery in Australia. That is what Labor do not like. They want everyone to have to join the queues that they did so much to make longer at the state level over the last decade. The dream of the Labor Party is a national health service—a British-style national health service. The very balance that Neal Blewett designed into the Medicare system, which protected private health insurance and made the rebate that we as citizens get for a medical procedure not dependent upon the venue in which that procedure was performed, is supported by the private health insurance rebate. The rebate guarantees that, regardless of your income, you receive a flat amount to support you investing in your own health care, to support you taking pressure off the public system and to support you freeing up those resources to be used by those who are more needy. As I said, it was all about making it a rebate so that it would be of more value to lower income earners.</p><p>What the government does not want people to know is that every one of those households that Senator Fierravanti-Wells talked about—those who are earning less than $30,000 and $50,000—is going to pay more for health insurance because of this bill. We are going to have tens of thousands of people drop out. The government does not want to tell us, because Treasury will not do the modelling and release it, but we have heard from Medibank Private and we know from other players in the sector that this is actually going to mean that the young and the healthy will drop out. It will reduce the quality of the pool of people in private health insurance, and that will mean that the increases in private health insurance costs in coming years will be higher than they otherwise would be. When it comes to the carbon tax, the government does not like to have such comparisons. It likes to pretend that it lives in a world where its assertions are the truth. But they are not, and we know that.</p><p>What this Senate needs to do is to ensure that the mistruths—and potentially even the misunderstandings, Senator Feeney—that are put around by the Labor Party and their allies on this, and the dirty deal that was done in the lower house, are exposed so that the people know why they are getting a 10 per cent increase rather than a seven per cent increase in their bill next year. We are talking about the people on below average incomes—the people who save for their own health care because they see it as something that is good for them, good for their families and good for the community. Those people should have the right to know exactly why their premiums are going up faster than they were in previous years. They are going to go up faster because the Labor Party needs to fill various budget black holes that it has created, and it is continuing its 30-year war against the private health industry—the industry that performs the majority of elective surgery in Australia. Why on earth we would want to reduce that, I do not know. It is not like the state hospitals that have been run by the Labor Party for so long are doing such a fantastic job—with the tragedies we heard about in New South Wales and Queensland. It would be a travesty if these bills were not exposed. It is wrong that Labor and its Greens alliance partners are willing to ram this through. We will ensure that all the Australian people know the exact consequences of this legislation.</p> <p class='motion-notice motion-notice-truncated'>Long debate text truncated.</p>
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