14.2.12 Fairer Private Health Insurance Incentives (Medicare Levy Surcharge) Bill 2011, Fairer Private Health Insurance Incentives (Medicare Levy Surcharge-Fringe Benefits) Bill 2011, Fairer Private Health Insurance Incentives Bill 2011

Mr HAWKE (Mitchell) (13:32): It is a privilege to follow my colleague the member for Hume and his fine remarks in relation to this legislation. I rise today to oppose the Fairer Private Health Insurance Incentives Bill and cognate bills purely on the basis that this government is once again revenue raising at the expense of good public policy. Whenever you see the word 'fairer' in the title of a Labor Party bill, you can bet your bottom dollar that it is anything but fairer for the hardworking people out there who have to generate the resources to build this country. Fairer for whom?

That is the question that should be asked in relation to this legislation. It is certainly not fairer for those hardworking mums and dads who put aside their hardearned money to pay their own capital into the private health system and take out insurance, thereby lifting the burden off the public system. It is Orwellian for us to hear about this fairer system that Labor want to introduce without putting in context the health debate in Australia today, without going back and saying, 'Well, the Labor Party were the ones that brought in so-called universal health care so that extremely rich people would get access to the same public system as anybody else.' It was their idea. It is quite Orwellian for Labor to come in here and tell us that this is all about poor people.

I am sure many members of this House would have had the time last night to witness the Four Corners program and the dynamics in the leadership of this government. Once again the victims of that dynamic, of this leaderless government floating around, are the ordinary, hardworking Australian people. In a desperate attempt to get into surplus this year they have cast around and asked, 'What is it we can axe desperately? What policies can we quickly pull off the shelf so that we can grab together billions of dollars to cover for the waste?' They have just announced billions of dollars to subsidise the car industry. They have just announced billions of dollars to subsidise the aluminium industry. They are spending tens of billions of dollars on a broadband network that will make broadband more expensive in this country, competing with the already existing market. But of course we have to rip $3 billion out of private health to try to rebalance the books after all that expenditure, not realising of course—perhaps actually realising it but not caring—that in doing so we will increase the burden on the public system, the cost to the public health system. We will probably do a lot of damage to the revenues of the government in the future when people are simply unable to afford private health insurance due to the changes proposed by these bills.

We know that in Australia today most Australians do take out private health insurance in addition to their rights under universal health care. They do so so that we can have a system which can fairly treat as many Australians as possible. But many poorer Australians put aside their money—they scrimp, they save, they work hard—so that they can guarantee a standard of care for themselves and their families. We know of course that the Labor Party promised not to do this. This is the third time proposals of this nature have been considered in this chamber since I have been here. It is the third time they have been considered since the election. They have already been rejected twice by the parliament. This is the third time they are seeking to do the same thing to the Australian people. Why has it been rejected twice in the past?

Call me old-fashioned, call me a liberal, but we keep our promises that we make to the electorate. And of course that is a little old-fashioned in terms of politics. I know the new dynamic is beyond 'whatever it takes'. 'Whatever it takes' was what Graham Richardson said. I note that the Parliamentary Secretary for Agriculture, Fisheries and Forestry, who is at the table, agrees.

It is now 'whatever it really truly does take' to get the budget into surplus, which involves breaking your promise to the Australian people that you would not alter the private healthcare rebate for Australians—'We desperately need those billions. The future of the healthcare system? Secondary.'

This is not a crusade about a better health system. This is not a crusade on behalf of poor people. In fact, you know a political party in this country is truly desperate when they reintroduce the notion of class into this country, because we are one of the greatest societies on earth today, having in effect a pretty classless kind of place. We do not have people being treated, upon their birth, in any special way. Yet in the last week, Labor has deliberately sought, through this legislation, to reintroduce the notion of class in Australia today such that poor people—cleaners—are subsidising wealthy people, are subsidising billionaires' health care. Labor is completely in denial of the absolute fact of our healthcare system: universal health care was brought in by a Labor government. Everybody pays a one per cent surcharge under the Medicare levy—in some cases huge amounts of their income. Taxes are paid by the wealthy on a sliding scale, and of course there are people who earn more money and who work very hard for that money. What we see in these changes is that people who are not so well off will be adversely affected. If they decide not to have private health care or decide to scale back their insurance, as is their right, the burden will fall on the public system to the detriment of everybody.

There is a concept in Australian politics, and in politics more generally, that you should lift everybody up, not push everybody down. Labor, of course, in a desperate attempt to balance the budget, has proposed in these bills the abolition of the 30 per cent private healthcare rebate. It has done that to raise $3.5 billion. What it is really trying to do is restart a series of fake class warfare ideas that somehow poor people are paying for rich people. Why? To mask the fact that it is breaking an election commitment. The abolition of the private healthcare rebate is another election commitment that has been broken. We know that, given that this is the third time the parliament has considered this legislation, the Labor Party is pretty determined to break this commitment to the Australian public. We must now look forward and say that any commitment that the Labor Party makes prior to an election should not be trusted. It is not just the cynical nature of politics to think that. We now have good documentary evidence in relation to the private healthcare rebate —three times it has attempted to break its promise, even though ironclad commitments were given prior to the election—and the carbon tax. It has a regular pattern of breaking promises in relation to its election commitments. I think people have really had enough of that. Anyone who cares to analyse what these changes will do, whether it be private health insurers, Medibank or anyone else, will see that it is an almost complete certainty that premiums will rise in one shape or another for everybody because of these changes. That is a very serious contention. If this were so good for poor people who were subsidising rich people—the words of the Labor Party—then they would somehow be  better off because of these changes. How will people who are on lower incomes and who take out private health insurance be better off? We know that 11 million Australians on all kinds of incomes, some on very low incomes, take up private health insurance. How will they be better off under these changes? How will they be better off if premiums rise? If you have fewer people in any insurance system, if the pool of capital available to insurers is reduced by punitive changes, how will insurers be able to provide that product at the same rate to their customers? Everybody knows the answer. The government knows the answer. The government knows that premiums will rise, but it does not care: it will blame the greedy companies.

The Labor Party has a constant notion that it is the government versus the economic generators. Just as the Treasurer is relentlessly targeting the banks: 'How dare they manage their businesses the way they need to?

How dare they raise or lower interest rates with the demands of the price of capital in the marketplace?', so it will be the health insurers' fault: 'How dare they raise premiums? How dare the health insurers do this?'. That is the line the government will take, there is no doubt about it. But actually, in this case, those increases, or at least significant parts of those increases, will have been generated by these bills, which remove a piece of public policy brought in by the Howard government. As we know, the government's borrowing in the capital markets has put pressure on interest rates for the banks. If the government sucks up all the available capital to borrow, banks have to look further and wider to find the capital at higher and higher rates, so of course there will be pressure on interest rates. By any benchmark that you care to examine this is poor public policy. We have done recent surveys, and they are good quality surveys, of the Australian population that say that 64 per cent of people think that money spent on health rebates is a good use of taxpayer funds. I endorse that sentiment of the Australian community. That is why we argue for such high rates of taxation generally in Australia today. We say we need to pay all this tax so we can have a good quality healthcare system and so that we can look after those people who cannot look after themselves ordinarily. It ought to be one of the first priorities of business for a government to put that money into health care. Why would 64 per cent of Australians support healthcare rebates, even if they were for wealthier people? It is because they know that under that small incentive based policy you provide great benefit for the healthcare system. Not only do you give a rebate, the 30 per cent rebate given by the Australian government, you encourage those people who can afford to put more of their capital into private health insurance to do so. They put more of their capital into the healthcare system and so the total pool of people putting money into healthcare increases. It is better for every stratum of Australian society. That is good public policy. That is why the coalition is so committed to these measures. It is why we introduced them. It is why the coalition is fighting so hard for the private healthcare rebates.

We know that this produces a better healthcare system for every person in this country today. That is an inescapable fact that the government refuses to acknowledge. Instead, it focuses on class warfare, cleaners versus billionaires—its fake construct. If focuses on anything that will disguise the fact that  it is desperate for revenue because it is throwing away billions of dollars of Australian taxpayers' money on every crazy project going around. Industry that cannot compete? Here is $3 billion. Couple of hundred workers in a key seat? Have another billion. The Prime Minister responded to a tweet of mine. She said that Labor is providing $3.5 billion for the aluminium industry. It is vey unusual for the Prime Minister to respond to a backbencher on Twitter, but she did—her team did, I should say: JGteam. As I tweeted back to her, it is not the Labor Party that is providing that $3.5 billion for the aluminium industry; it is the Australian taxpayer. It is not her money and it is not the Labor Party's money. She is taking that money from hardworking Australians—or in this case borrowing at high interest rates money that will have to be repaid by future Australians—and giving it to the aluminium industry. It just so happens that the $3.5 billion that the Labor Party and Julia Gillard have now handed to the aluminium industry on behalf of Australian taxpayers is the same amount of money that the abolition of the private healthcare rebate will recoup in the first year. Once again, every time you hear one of these announcements from the government, you know that there is a significant price to pay in relation to good public policy. Every dollar of funding provided for by the private health insurance rebate is estimated to save $2 in costs paid by private health insurers—that was determined by Econtech in 2004 —and it could be even more. It is a worthwhile public policy goal to have as much money going into health and into education as possible, and it is not unreasonable at a governmental level to put in place incentives in order to encourage people in society to do so. It is a proper function of government to encourage people to put their capital into health and into education. That is what this public policy does. We know private hospitals today treat 40 per cent of all patients in Australia. Private hospitals treated 3.5 million people in 2009-10. They are already doing a significant amount of the work that cannot be done by the public system. So why would we interfere with a system that is making it easier for us to administer public hospitals by getting people who can afford it out of that system? Any measure that would damage that system or encourage people back to the public health system should be opposed.

Most people in my electorate have private health insurance. In fact, over three-quarters of my electorate has private health insurance today. The people who can afford it and the people who cannot afford it view it as a worthwhile use of hard-earned capital. It is appropriate that the government provide incentives, not subsidies, for people to take out private health insurance—and the government knows it. It is desperate for revenue to get into surplus. This is low-hanging fruit for the government to target—the people who put aside their hard-earned money into private health—and that is why I oppose this legislation.