FAIRER PRIVATE HEALTH INSURANCE INCENTIVES (MEDICARE LEVY SURCHARGE) BILL 2009 

FAIRER PRIVATE HEALTH INSURANCE INCENTIVES (MEDICARE LEVY SURCHARGE—FRINGE BENEFITS) BILL 2009 

Second Reading

Senator BIRMINGHAM (South Australia) (6.06pm): It is an absolute pleasure to be able to follow Senator McGauran, Senator Cormann and all those from the coalition side who have outlined in such an eloquent and passionate manner the reasons why this government’s approach on this issue is just so flawed. Senator Cormann, who has become the Senate’s pre-eminent advocate for the health industry over a range of issues in this chamber over the last 12 months or so, has pointed out time and time again in various debates on private health insurance that this government is simply out to do this industry in. It is purely an ideological crusade from those on the other side of this chamber who wish to destroy the private health insurance industry.

This is an industry which provides a service that millions of Australians choose to take out. Some 9.7 million Australians at the end of the March quarter of this year had private health insurance. Some of them, I am sure, would be listening right now to the broadcast of the Senate’s proceedings. There are 9.7 million of them out there who dip into their pockets and pay a little bit out of their hard-earned income to provide for private health insurance.

Why is this important? It is important because it injects balance into the health insurance system. It injects alternatives into the health system for Australia. A health system which relies purely on the public sector, which relies purely on public health, Medicare and our public hospitals, is a health system that is a stool trying to stand on just one or two legs. It will not work.

The private health sector—private hospitals and private health insurance—is the important third leg to that stool. It is what will make it stand, make it work and make our health system survive. Instead it is being gutted by policy measure after policy measure of this government.

The government have a track record. They have form, as Senator McGauran alluded. When the Labor Party were last in government, they decimated private health insurance and they are on the way to doing it again this time. When they were last in power, private health insurance participation rates dropped from 67 per cent in 1983 to 33½ per cent in 1996. So, in the 13 years of the Hawke-Keating governments, they almost managed to halve the participation in private health insurance.

If they were to do the same to the nearly 10 million people with private health insurance in Australia today, it would wipe five million people out of the private health insurance industry. Is that the goal of the Minister for Health and Ageing? Is that the goal of the Prime Minister—to take five million Australians out of private health insurance? That sure seems to be the plan they are pursuing. That sure seems to be what they are pushing towards with the types of measures that they have pushed in their last budget and again in this budget.

Senator McGauran did an excellent job, as did Senator Cormann, of outlining how this is a breach of faith with the Australian public. It is another breach of faith, layered upon the many others, where the Rudd government has broken its word, broken its bond and broken its commitment to those Australians who voted for it. They should have every right to feel let down and disappointed by the fact that, time and time again, they have been doublecrossed by a government which gave its word and went on to break it.

Senator McGauran referred to the letter sent and signed by Kevin Rudd, federal Labor leader and member for Griffith, dated 20 November 2007, to the Australian Health Insurance Association. It says:

There it is in black and white—it may have gone to them in colour at the time; I do not know: a demonstration that the now Prime Minister, the then Leader of the Opposition, was willing to say anything and do anything to con his way into the office of Prime Minister.

Senator Cormann —Nobody can trust a word they have to say on this.

Senator BIRMINGHAM —Indeed, Senator Cormann, nobody can trust a word they have to say on this issue because their record, their form, is very clear: broken words and broken promises, time and time again. We indeed have the letter from the Prime Minister to the private health insurance industry association, but he was backed up by the words of the then shadow health minister and now minister, Nicola Roxon. The minister, then shadow minister, at the Australian Health Insurance Association conference on 10 October 2007, made it very clear:

That is what the now minister had to say before the election: ‘We won’t take this support away.’ Well, so much for her word. So much for what she stood up there and told the health insurance industry and ordinary Australians, because ‘take this support away’ is what they are doing. So much for those Australians, many of those nine million Australians who will be affected by this measure if it passes, who, to use the now minister’s words, factored the rebate into their budgets.

This government likes to talk about helping working families. It likes to talk about helping households along the way. It likes to talk about how it is helping people with the pressures in their lives. Well, there is no evidence of that—no evidence of that at all. The government is certainly not helping people with their budgets, because, if people have factored this rebate into their budgets, they are about to get one hell of a shock when this rebate is taken away from them and they find they are going to be paying more.

Everybody involved in private health insurance will be paying more because of this. It is not just those who might lose the rebate; it is every person who takes out private health insurance who, over time, will face the cost pressure of rising premiums.

Senator Cormann —It will also be people in the public system who will pay for this.

Senator BIRMINGHAM —Senator Cormann is indeed right. There are nearly 10 million Australians with private health insurance. Those who keep it will pay more. Some will pay a lot more because they will lose the rebate. Some will play a bit more because the cost pressures will see premiums rise. But the other 10-plus million Australians out there will also suffer longer hospital waiting lists and more crowded wards. They will pay the price of this measure as well.

No Australian will be left unaffected by this change. No Australian with an interest in health care—which, of course is each and every one of us—will be left unaffected by this change. No-one will benefit from it. Everyone will be harmed by it. This is the reality that people need to face up to, and hopefully this Senate chamber will recognise that and will ultimately choose to reject this measure.

I have cited a couple of commitments made by the government, but they were not the only ones. The then shadow minister also made it quite clear on 26 September 2007:

Excuse me, Mr Acting Deputy President, if I need to roll around in the corridor here and have a bit of a belly laugh at present, because the Labor Party say that the Howard government will do anything and say anything to get elected! We have just canvassed the bald-faced untruths that have been told by the Rudd government to get themselves elected.

Senator Cormann —She was still promising in February this year.

Senator BIRMINGHAM —Time and time again they kept saying: ‘Don’t you worry; we’re not going to take these rebates away. Don’t you worry; we know you’ve got them factored into your budget. Don’t you worry, health insurance industry, we know that you are relying on this to survive. Don’t worry out there in the health sector—doctors in private hospitals—we know that you are relying on this to keep your doors open. Don’t worry, state governments, other owners of public hospitals and workers in public hospitals; we know that you want a balanced system and that you want to make sure that the private health industry is there to take some pressure off you. None of you need to worry.’ But, no, they were just saying and doing anything to get elected. That is what Ms Roxon and Mr Rudd were doing when they were talking about health insurance.

Indeed, as Senator Cormann just mentioned, even after the election—in fact right up to 24 February this year—the federal health minister was continuing to say:

Anybody who knows anything about the federal budget development process knows full well—Senator Cormann and others exposed this as true during the Senate estimates process—that by 24 February you would have a lot of these plans in place. You would have been doing a lot of the background work and would know that you are well and truly considering, if not already committed to, changes to measures such as this: changes to the private health insurance rebate.

The government were by no means firmly committed to retaining the existing private health insurance rebates on 24 February 2009. They were not committed to it at all, because they were actually doing the work behind the scenes to change it. So they were misleading the Australian people not only throughout the lead-up to the election but afterwards. They were continuing right up until the budget this year, just hoping that they could scoot this one under the radar and that nobody would notice that they had broken this very significant promise—this very significant trust and bond—that they had tried to establish with the Australian people.

The Prime Minister likes to talk, in his own quirky language, about changes to things and to give assurances that he would not change things. Indeed, in talking about private health insurance he used one of those quirky phrases he is renowned for. He said that they would not change it: ‘Not one jot; not one tittle.’

Senator McGauran —Fair shake of the sauce bottle!

Senator BIRMINGHAM —Fair shake of the sauce bottle indeed, Senator McGauran. Fair shake of the tittle, whatever that may be.

Senator McGauran —What is that?

Senator BIRMINGHAM —What is a tittle? We will leave that for others to look up. Perhaps that can be an adjournment speech for you one night, Senator McGauran: the meaning of the tittle. ‘Not one jot; not one tittle.’ Maybe ‘tittle’ is a word for broken promises. Maybe there was code buried in that statement.

Senator Cormann —Maybe it was Chinese.

Senator BIRMINGHAM —Maybe it was Chinese, Senator Cormann. That is quite possible! Perhaps if we check the Mandarin books we will find that ‘tittle’ means ‘this is a promise that I intend to break later on’.

We have seen broken promises galore in regard to this—broken promises galore, which, as I said before, will hurt every single Australian. How will the broken promises hurt them? They will hurt them in all manner of ways. The Health Insurance Industry Association has made it quite clear in a range of evidence provided to a Senate inquiry into this, and to many Senators as well, that there will be impacts on people.

The Australian Institute of Health and Welfare reports that private funding contributes to about 57 per cent of all surgery in hospitals. For example, it supports about 55 per cent of procedures for malignant breast conditions, 55 per cent of chemotherapy cancer treatments and 70 per cent of same-day mental health episodes. These are serious conditions. These are serious issues that Australians face. More than half of the treatments in these instances are covered by private health insurers.

When we step beyond this bill, if it is passed, we will see that they are not covered by private health insurance—that Australians will face higher costs to have that health insurance. There will be fewer people in health insurance, therefore there will be more people queuing up in the public system. It will not take much before less than 50 per cent of all surgery in hospitals is covered by private health insurance in some way and before less than 50 per cent of chemotherapy treatments are covered.

Suddenly, this will place enormous extra cost pressures onto the public system. The Health Insurance Industry Association estimates that up to 240,000 Australians with private hospital insurance are likely to exit their cover as a result of the means testing of the 30 per cent rebate. Up to 240,000 Australians! A further 730,000 Australians are likely to downgrade their level of hospital cover, and an additional 775,000 persons will exit their general treatment extras cover as a result of this policy change. Hundreds of thousands—indeed, more than one million Australians—will be reducing their cover in some way, shape or form as a result of this, with all of the flow-on and commensurate impacts that will have for those who are left in the system or for those who never were in the system but were relying on the private health system to make some difference to the public system—to provide those extra legs to the stool.

Many of the nearly 10 million Australians who have private health insurance come from my home state of South Australia. We have one of the older populations in Australia and some of the electorates within South Australia have some of the highest rates of elderly Australians of any of the electorates in Australia. Older people have traditionally clung to their private health insurance through thick and thin. That is why, in fact—contrary to popular belief—so many Australians with private health insurance are on relatively low incomes. Lots of them are retirees and lots of them are pensioners, but they are not game to give up their private health insurance. Who can blame them? State governments everywhere are running the hospitals into the ground.

Let us look at the number of people who would be affected in my home state of South Australia. In the electorate of Wakefield, there are some 44,567 voters with private health insurance, or indeed nearly 63,000 people across the electorate who are covered by that insurance—that is, young people and children who may not be enrolled to vote and others. But what has Mr Champion done to stand up for them? He has done nothing at all. In the electorate of Grey, there are 64,500 people—that is, 47 per cent—covered by private health insurance. I know Mr Ramsey has been fighting hard for those people in his electorate who will be impacted by it.

Senator Cormann —He’s a very good member.

Senator BIRMINGHAM —An excellent new member for Grey, Mr Rowan Ramsey has been doing an outstanding job on this issue and on many others, championing them across his vast and wide electorate. Forty-seven per cent of voters in his electorate will be hit by this slug on their private health insurance. All the rest will be impacted in other ways. Another good member is Mr Patrick Secker. Forty-eight per cent of voters—getting up to 69,828 people across the electorate—in his electorate of Barker are covered with private health insurance. These are massive numbers and these are the seats in South Australia with smaller numbers of people who are covered.

A new member I have not heard standing up for the 67,400 people in his electorate who are covered by private health insurance is Mr Mark Butler in Port Adelaide. I have not heard him out there talking about the impact it will have in his electorate, an electorate that has many social problems and that will be seriously hit with health issues by this. Another new member is Ms Amanda Rishworth. Fifty-five per cent of people in her electorate have coverage—that is, 75,431 people. What has she done? The honourable Kate Ellis, a minister in this government, has 68 per cent of people in her electorate with coverage—that is, 89,020 people living in the federal electorate of Adelaide are covered by private health insurance and will be hit by this government. Indeed, of all Labor members in South Australia, the monte is Mr Steve Georganas in Hindmarsh: 69 per cent of voters in his electorate have private health insurance—68,000 voters and 89,193 people in the electorate of Hindmarsh have private health insurance. Many of them are older people.

Senator Cormann —What is he doing? Nothing.

Senator BIRMINGHAM —You are right, Senator Cormann: he has done nothing to stand up for them. He has done nothing to stand up for them with regard to them keeping their private health insurance. Those voters of Hindmarsh, those older people in Hindmarsh, have every right—as does every other voter across Australia—to private health insurance. They have been let down by this Labor government, who lied their way into office and misled voters that they would keep the private health insurance rebate intact. They have not done so. They are not planning to do so. The only thing standing between them and doing so is this Senate, and I urge the Senate to reject these bills.