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Home > Ministers > The Hon Tanya Plibersek MP - Minister for Health > Media Hub > Press Conference - Senate Courtyard, Parliament House, Canberra - Private Health Insurance Rebate/Dental Care - 14 February 2012

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PDF printable version of Press conference - Senate Courtyard, Parliament House, Canberra - 14 February 2012 (PDF 31 KB)

14 February 2012

E&OE

Topics – Private Health Insurance Rebate/Dental Care

Tanya Plibersek: Thanks everyone for gathering here today. I'm here to announce two very big wins for fairness. I expect later today that the private health insurance rebate legislation will pass the House of Representatives. This means that Australians on $50,000 a year will no longer be subsidising the private health insurance of people on $250,000 a year. It means that the bank teller will no longer be subsidising the private health insurance of the bank executive or the bank CEO.

This is a very big win for fairness. It means that low-income Australians won't be subsidising the private health insurance rebates of much higher paid Australians, and I'm very pleased that it's likely that this legislation will pass this evening.

The second thing that I wanted to talk about very briefly is that the Coalition continues to advocate that the wealthiest Australians should continue to receive this private health insurance rebate. They're saying that it doesn't matter if you're on $1 million a year or $2 million a year, you should still receive a subsidy for your private health insurance rebate. This doesn't accord with what Tony Abbott said at the Press Club last week - the Government should only do for people what they absolutely can't do for themselves.

And it absolutely makes no sense. If you follow the Coalition's logic, another $100 billion will be spent over the next 40 years subsidising the private health insurance of wealthier Australians. That is money that can be much better spent on a range of other measures.

One of the things that this government has always said we have a commitment to - indeed, I mentioned it not only in my first press conference as Health Minister but throughout my parliamentary career, I have spoken about the need to do better on the dental health of lower-income Australians.

And I'm very happy to say that the $165 million that will be raised by keeping the changes we have proposed to the Medicare Levy Surcharge will go towards improving the health of lower-income Australians; terrific news that we'll see this legislation pass. We'll no longer see poorer Australians subsidising the private health insurance of wealthier Australians, but an additional terrific outcome is that we will see greater, better investment in helping the poorest Australians, the 20 per cent who are currently missing out on dental care, receive better dental care.

Question: Is that the deal you had to cut with the Greens to get this bill through?

Tanya Plibersek: Well, the Greens and the Government have shared for a long time a commitment to improve the dental care of Australians. And indeed, the Dental Council that is currently undertaking work on how we might improve the dental situation in Australia is something that has come about because of the cooperation between the Government and the Greens.
I know many of the crossbenchers, the Independents, also support better quality care for the lowest-income Australians and certainly more targeted care than exists under the current Chronic Disease Dental Scheme.

Question: Will that money be spent under Chronic Dental Disease Scheme?

Tanya Plibersek: The money will be spent once we have received the report from the National Council on Dental Care that has been established and is currently considering how we might improve dental care in Australia. The money will be spent after we have received and examined that report and learnt what we can from the experts making up that council.

We think it's very important that any new measures are means tested and targeted so that we are certain that the benefits are going to the people who need the most care.

Under the Chronic Disease Dental Scheme, we know that there are many high-income Australians who would otherwise be able to afford dental care that have been referred for treatment under this program. We also know that some very expensive work has been done that is not the best use of public funds.

Question: You've got the Greens on board. Does this now mean that you've also got a guarantee from Andrew Wilkie and Rob Oakeshott to support the legislation?

Tanya Plibersek: Well, I'm going to let the other crossbenchers speak for themselves. But what I can say is that I feel confident that this legislation will now pass in an unamended form.

Question: What deal has been offered to Rob Oakeshott?

Tanya Plibersek: There's no deals been offered. I've had discussions with all of the crossbenchers. This is very important public policy. This is $2.4 billion over the next three years that instead of subsidising the private health insurance of people on a quarter of a million dollars a year, half a million dollars a year, $1 million a year, will instead be used on the sort of things that we're talking about today - the health, dental health needs of some of our most disadvantaged Australians, people who are missing out altogether at the moment.

Question: If this leads to an exodus from private health insurance and increase in the pressure on public hospitals, will you give the states extra money for the public hospitals?

Tanya Plibersek: Well, this won't lead to an exodus from private health insurance. You know, last time we made changes to the Medicare Levy Surcharge where we said that poorer Australians shouldn't be punished for having - not having private health insurance and we raised the threshold at which the Medicare Levy Surcharge cut in, Joe Hockey said at that time that a million people would drop out of private health insurance.

You know, the fact is that 800,000 people have joined private health insurance since Joe Hockey made that claim. This is another untruth that the Liberals are peddling about private health insurance. He claimed a million would drop out. In fact, 800,000 people have joined private health insurance.

I can tell you one thing that will make a difference, though. You think about the debt burden that the Liberals are proposing - $100 billion added to the cost of health over the next 40 years for no appreciable change in the health outcomes of Australians.

Question: Does your accord with the Greens include dismantling the chronic dental care scheme?

Tanya Plibersek: Well, I have been clear with the Greens Party and very clear in public, including with all of you, that I believe that the Chronic Disease Dental Scheme is very poorly targeted, that it doesn't achieve good value for money, that I am very concerned about some of the spending patterns that I see in the Chronic Disease Dental Scheme, and I will still seek to close this Chronic Disease Dental Scheme or substantially alter it so that it is means tested, so that it is targeted.

But I'm not going to start talking…….

Tanya Plibersek: But I'm not going to start talking about the details of what any approach on dental will look like until I receive a final report of the expert council that we've set up. I'm not going to make policy on the run.

Question: Won't that mean you're means testing access to Medicare?

Tanya Plibersek: It'll mean that we're means testing access to dental care. Dental care has never been part of Medicare. We know at the moment that most people spend - most people pay about 60 per cent of the cost of their dental care. The costs of providing for their own health care in other parts of the budget are much lower, so it is very important that we make sure that the lowest income people can afford to see a dentist.

We know about 20 per cent of Australians are saying that they've got poor health, dental health, and we do want to see an improvement in the services that are available to that group of people.

But that won't be in an open-slather way.

Adding dental to Medicare in the way that some people have suggested including in the past the Greens have suggested would be a cost of about five or $6 billion a year, and we are certainly not in the position to add five or $6 billion a year to the health budget, and in fact we wouldn't even have the dental work force to meet that need should we make that change overnight.

Question: Minister, you said you expect the cigarette...

Question: Is there any reason for - is there any health reason for removing the duty-free exemption on cigarettes?

Tanya Plibersek: Well we haven't discussed that. Obviously the Government is keen to see smoking rates decrease in Australia, we've set a target of a 10 per cent smoking rate in Australia. We're a long way to achieving that target because of the excellent work of my predecessor, Nicola Roxon, and the world-leading measures that we've taken including graphic health warnings and plain packaging on cigarettes and the changes we've made at point of sale.

The education campaigns that we're running at the moment - all of you would have seen the every cigarette you don't smoke does you good advertising campaign. I think it also really hit a nerve with the public. We've increased access to nicotine replacement therapy through the Pharmaceutical Benefits Scheme.

These are a comprehensive suite of measures.

Question: Given that funds don't collect, sort of, the income details of their members, how are you a… how are they actually going to be able to work out what re… what premium they should be charging members given that they won't be able to know what, how much of the feedback they should be taking on board.

Tanya Plibersek: Well the trouble is that premiums actually don't reflect the income of members.

You can be a bank teller on $50,000 a year, and a bank executive on $500,000 a year, and a bank CEO on $5 million a year and still be offered the same insurance product and receive the same subsidy from the taxpayers.

Premiums aren't related to income, and in fact if you shop around - if you look at the different health funds you'll find that you can get very similar coverage, or indeed the same coverage for quite different prices depending on which fund you're signing up with.

So in fact premiums don't reflect income.

What happens however with the private health insurance rebate are that people can either estimate their income at the beginning of the year and see a reduction in the premiums that they're paying throughout the year or if they're unable to estimate their income at the beginning of the year - if they prefer it - they can claim the rebate at the end of the year when they're putting in their tax return.

And that situation will continue unchanged.

Question: Minister, you say you expect the changes to go through tonight. Does that mean you've got the numbers to gag debate, because there's still 30 Coalition MPs on the speaking list.

Tanya Plibersek: Well that's why I haven't been very definite about tonight, because there are a number of speakers still, but I believe this measure will pass, I hope it will pass tonight because the sooner we make this change the better.

It is absolutely wrong and unfair that ordinary working people are subsidising the private health insurance of people on a quarter of a million dollars, half a million dollars, a million dollars a year.

And it is absolutely typical of the Liberals to continue to defend that.

Question: Minister, what…

Question: [Indistinct] Minister, aside from $165 million in dental care [indistinct] the Greens there, are there any other changes you've made to the legislation at all. Do we know that Andrew Wilkie and Rob Oakeshott [indistinct].

Tanya Plibersek: We've made no other changes to the legislation except for the start date. The legislation obviously included originally a start date of 1 January. I think we've missed that 1 January start date. So we're looking at a start date of the middle of this year.

Question: [Indistinct] the Greens wanted $1 billion in this budget for universal dental care. Do you think the government's gone out of this in the deal with the Greens rather cheaply this time?

Tanya Plibersek: Well we don't have a final position on any dental package going into the budget. We still have a lot of policy work to do. We - as I have said we need to receive that final report from the dental council before we make any policy decisions about what we're going to do with dental care in this country.

Question: Minister, you've got some data on a number of…

Tanya Plibersek: I am actually starting to run out of time so we might just do couple of last questions.

Question: Right. You've got some data on a number of people who would opt out of health insurance. Does the government have any breakdown on the people who might reduce their cover, reduce their extras, and what that would have - what impact that would have?

Tanya Plibersek: We believe that about 27,000 people out of around 10 million policy holders might drop their private health insurance should this package go through. What we know is that every single quarter tens of thousands of new people take out private health insurance, and in fact the numbers of people in private health insurance are the highest they've been for three decades.

The profits of the industry are the strongest they've ever been this quarter.

There is no justification at all for saying that people will drop out of private health insurance now that the Medicare levy surcharge changes we'll definitely be part of this package.

Question: Mi…

Tanya Plibersek: There's also no justification for private health insurers saying that they will raise their premiums if - as we expect - there continues to be strong growth in the numbers of people who are privately insured. Now when you look at the figures for the most recent quarters figures for growth in private health insurance, you will see, first of all, that the numbers are stronger than ever when it - you talk about people who are insured. You'll see also that their profits are stronger than ever.

Question: What - when the rebate starts to run out when the means test kicks in, you've made a differentiation between singles and couples, what differentiation have you made in there for couples with no children and couples with children whose costs, healthcare costs are higher?

Tanya Plibersek: Okay. So couples and couples with one child are treated the same, and then after the first child, for each additional child, the threshold is increased by $1500. Okay…

For more information, please contact the Minister’s Office on 02 6277 7220