This bill amends the Private Health Insurance Act 2007 to pause the income thresholds that determine the tiers for the Medicare levy surcharge and the rebate on private health insurance at 2014-15 rates for three years.
Nothing is more important to most people than high quality health care. In the spirit of that, Labor will support the savings measure in this amendment, but it is worth pointing out a few things in this debate and getting them on the record in this place. I want to canvass a few ideas about the history of the Private Health Insurance Act, like many that have spoken before me, and what this bill, when matched with this government's budget, says about this government's understanding of health care, its attitude to health care, its priorities when it comes to health care and some issues around where the savings will be spent.
There is some irony in the histories that we have heard from the member for Wakefield. The Medicare levy surcharge, of course, the private health insurance rebate and the Lifetime Health Cover measures were introduced by the Howard government in the mid 1990s. It was purported that they were introduced to stem the decline in private health insurance membership. I well remember that legislation being brought into the House, because I have vivid memories of the scare campaign that was run through the television screens around Australia. I remember watching those advertisements in my lounge room. The punitive nature of the advertising campaign was scaring me at the time—I was a single mother with three small children and was working part-time as a teacher to balance the budget and pay off a mortgage. My children were not spoilt, because they could not afford to be spoilt. I remember having nightmares—nightmares—about whether or not I could afford private health insurance. It was a moment I well remember.
These measures were put in place to encourage the take-up of private health insurance, with the argument that it would reduce pressure on the public health system. When the previous Labor government made changes to the threshold to this act and introduced means testing, we saw another scare campaign. This time the then opposition opposed the measure on the grounds that people would drop private health care cover. This, of course, did not eventuate. Indeed, the current level of private cover is the highest we have seen.
Contrary to that scare campaign, health-insurance is healthy and growing. That is one of the ironies in why we stand here to support this bill and we will not go into the scare campaign on it. Another irony is that this government is now doing exactly what it said would lead to people pulling out of private health insurance. Let's face it: this is a small save when compared to other cuts to health in the budget.
But the sweetest irony in the area of health is a little more complex. We hear the minister saying how important the sustainability of health care is to him and to the country. He does this while he introduces the GP tax, claiming it to be modest, yet in many households around the country it will not be modest. The introduction of that tax will also raise out-of-pocket expenses and front-up expenses on diagnostics, increase in the cost of medicines, change to the PBS safety net, cut various preventative health programs and—I think this is the most ironic, of course, because we are talking about savings measures to make health care less expensive for the government—cut preventative health measures, particularly when we have the challenges like obesity and diabetes. Cuts to dental programs have been canvassed—certainly by the member for Wakefield. We have the closing of the Medicare locals. They will all be closed, then reopened and rebadged to the cost of, according to reports, $200 million.
The worst, though, is the dismantling of bulk-billing incentives and $50 billion cuts to hospitals. And what is the justification used for these cuts? It was a budget emergency. Health spending was out of control. So we had a lot of fearmongering around health spending being out of control and health overtaking everything else in the budget, but of course that has been summarily dismissed of late with the Australian institute of health and welfare last month reporting that growth in health spending was actually at its lowest level in decades. In fact, the Australian Medical Association president associate Prof Brian Owler—and I note today in question time that the Prime Minister said he had a lot of expect respect for the AMA—said: 'The figures in the Australian Institute of Health and Welfare's report really make a mockery of the government's claim that health care spending is out of control.' Prof Owler went on. He said, 'These figures actually show that health care spending is certainly not out of control, and there is absolutely no need for them to introduce a GP co-payment.' So the premise for the savings across the health budget are being challenged. The facts are that health spending by the federal government fell in 2012-13 2.4 per cent in real terms. State health spending fell by 1.5 per cent. All of this is backed up against the fact that private spending on health for Mr and Mrs Average went up by 6.9 per cent with an increase in private health insurance.
Ross Gittins last week wrote something interesting as well. He said:
Actually, the real fall in federal spending seems to be largely the product of savings measures taken by the previous government, particularly its tightening of rules for the private health insurance rebate - which the Coalition fought so hard to stop happening.
So the last government, the Labor government, made real savings, opposed by those opposite—in fact demonised by those opposite—with stories of the sky falling in and people dropping out of private health insurance. We find that now not be the case and that the savings were made by the previous government.
So Labor will support these savings measures as we introduced the means test to bring a savings measure into the health budget. But there is a danger here—perhaps an unforeseen one: perhaps with this government's apparent loathing for modelling we have not seen any of the risk in this assessed, because perhaps the measure introduced by Labor that the then opposition thought would bring down the sky and instead saw the highest rates of private health insurance ever might have a negative impact this time.
As I alluded to earlier, I well remember the scare campaign to get Australians to take out private health insurance. I well remember it because I was not in a position to take up that option. I well remember the sleepless nights I had and the fear I lived with because I could not make that choice. I am concerned that, when combined with the other cuts to families in this budget, other families may now find themselves in that space. Perhaps when it is combined with the 6.9 per cent rise in premiums that the minister has approved since coming to office it will in fact have that effect. We will see in time.
Labor support sensible health savings and support savings going back into the system for further improvements, like preventative health measures—something it seems this government has little regard for—but we do question the savings being directed to the Medical Research Future Fund. We do this on a few grounds, but mostly because of the lack of detail around this fund. There has been no information about its establishment. The federal and state health departments have not been involved. The Chief Scientist has not been consulted. There was no dialogue with the health and medical research sector before it was introduced on budget night. So we have some concerns about making savings supposedly for a budget emergency but then, rather than using them to cover some of the cuts that are carried through in the budget, putting them into a research fund that has very little detail around it. It all reaffirms for me that those opposite know the price of everything but very little about the value.
Labor has a record of heavily investing in health and medical research—a total of $3.5 billion since 2008. This funding supported 8,500 researchers working to improve Australia's health at over 80 institutions, including hospitals, medical research institutes and universities. Through its Health and Hospitals Fund Labor also invested $700 million to build and upgrade medical research facilities across the nation. Labor also knows the value of embedding health and medical research into all aspects of the health system—not separate, not sitting outside, but built in—because health services conducting research deliver better health outcomes for patients.
The cuts this government are making in health are all based on ideology. They seem keen to dismantle Medicare and create—and they do not like to hear this but this is what it will in fact be—a two-tier American-style health system where one tier can pay and have access to the benefits of medical research. Their access to health provision is determined by their wallet. Labor believes there should be universal access to high-quality health care. Medicare was established to do that. It is a legacy of the vision of former Prime Minister Gough Whitlam. When we do the history lessons again we will see it was dismantled by Prime Minister Fraser and then reintroduced by Prime Minister Hawke.
Labor will continue to stand up for Medicare and for universal health care. Although I support this savings measure, I do have some concerns about what the combined impacts of those things might be. I think it is worth me standing here as the member for Lalor and raising those issues because there will be many families in my electorate who will be having to make clear decisions about whether they will be able to continue to afford private health cover, given some of the other measures contained in the budget, if and when they get through. So Labor will support the savings measure but would prefer to see the savings redirected to the health sector to minimise the impact of the other cuts across the health sector that were contained in the budget.