Coalition is being reckless on private health insurance
This week in Parliament will be an important test of the Opposition’s commitment to both health reform and economic responsibility.
Right now we’re looking at making some of the biggest reforms to our health care system since the introduction of Medicare.
We can’t do that unless we make the hard decisions.
Decisions about our priorities and where we can best direct our finite resources.
One of the most important health savings measures will come before the Parliament this week – the proposed means testing of the Private Health Insurance rebate.
Currently many taxpayers subsidise the health insurance of others who are wealthier than they are. This means receptionists are subsidising the private health insurance of Chief Executives, and baristas are subsidising the barristers collecting their daily coffee.
This situation is not fair, and is economically unsustainable when our budget has taken a $200 billion hit from the global financial crisis.
The changes we are proposing will seek to make our system fairer and more sustainable for the future.
A few facts:
- There is no change for singles earning less than $75,000 a year or couples on less than $150,000 a year;
- Singles who earn less than $120,000 per year, or couples on less than $240,000 will still receive some subsidy;
- The carrot and stick approach underpinning Lifetime Health Cover and the Medicare Levy Surcharge will continue, meaning the vast majority of people will retain their private hospital cover – 99.7% of people according to Treasury.
- Despite the Oppositions past predictions of mass exodus from funds after the Medicare levy Surcharge changes last year (which gave many Australians welcome tax relief), more people now have private hospital cover than before the changes.
But here’s one of the most important: This measure will save about $1.9 billion over the next four years, leaving us free to invest more in better services, new medicines and reforming our health system.
And, if we do nothing, taxpayers will have paid out an extra $80 billion in subsidies to higher income earners by 2039-40.
Taking action now is the financially responsible thing to do.
It is financially irresponsible of the Opposition to block this legislation.
The Opposition have said that they will replace this measure with a higher tax on tobacco. It’s not that simple. Treasury analysis shows that over the next 10 years the cigarette tax increase would reap $3.2 billion less than the Government’s proposed PHI savings. This is because PHI savings increase over time, while the savings from the cigarette tax remain at best static as fewer people take up smoking. So the Opposition’s big tobacco solution leaves a big black hole in our budget bottom line.
The previous Government’s failures in health and inaction on reform have left a sad legacy of doctor shortages, nurse shortages and bed shortages.
Reforming the system to deliver the care we need to improve and extend lives, will be expensive and difficult, especially after 12 years of neglect.
Malcolm Turnbull and the Liberals appear to only want a health system for some – where working families subsidise health care costs for millionaires.
The Rudd Government is being both fairer and financially responsible by making the hard decisions to build a better health system for all.
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