Fed: Oppn to vote against cuts to private health insurace rebate
By Melissa Jenkins14 May 2009 10:05 PM
Eds: Updates with comments from Chris Bowen and fresh quotes from Nick Xenophon
CANBERRA, May 14 AAP - The Rudd government's assault on middle-class welfare suffered a devastating blow on Thursday, with Opposition Leader Malcolm Turnbull vowing the coalition will vote against cuts to the private health insurance rebate.
This means the government must win the votes of balance-of-power senators to get the measure through parliament.
But it's already clear the path for the government to secure support from Family First and independent senator Nick Xenophon will be arduous.
Mr Turnbull said instead of cutting the 30 per cent private health insurance rebate, the government should boost the tax on tobacco by 12.5 per cent, or three cents per cigarette.
The move would raise the same amount of money - $1.9 billion over four years.
"There's a tough choice for a weak prime minister," the opposition leader said in his budget reply speech on Thursday night.
"Raise $1.9 billion by making health more expensive and putting more pressure on the public hospital system or by adding about three cents more to the price of a cigarette and taking pressure off the public health system."
Assistant Treasurer Chris Bowen said Mr Turnbull couldn't be taken seriously but then left the door open to his suggestion.
And he challenged him to consider supporting the alcopops tax boost if he believed in raising taxes as a health measure.
"If he wants to be taken seriously on that, get behind the government's alcopops measures. Only then can he be taken seriously," Mr Bowen said.
"We certainly think there's a place for a discussion about the role of tax in health measures ... that's why we are open to the idea, if the Henry review recommends it, of changes to the tax regime of cigarettes."
The Australian Greens have always opposed the private health insurance rebate.
But Family First's Steve Fielding and Senator Xenophon have expressed deep concerns about the move.
"The cuts to the private health insurance rebate have left many Australians disillusioned," Senator Fielding told parliament.
"Not only because it exposes the Rudd government's dishonesty, but also because means testing the health rebate is exactly that - mean."
Senator Xenophon urged the government to rethink its proposed changes to the private health insurance rebate.
"My main concern is for those Australians who have no choice but to rely on the public system," he said.
"If the changes to the rebate drive people out of the private system and into the public system an already stretched health system could very well reach breaking point."
Labor's plan would introduce a means test for access to the private health insurance rebate for singles earning more than $74,000 and families with combined incomes of $150,000.
The rebate would be reduced on a sliding scale and cuts out completely once an individual earns more than $120,000 and couples earn more than $240,000.
In a double whammy, the Medicare Levy Surcharge aimed at those people who do not take out private health insurance will climb from one per cent to 1.25 or 1.5 per cent depending on a person's income.
Australian Health Insurance Association chief executive Michael Armitage said the government had betrayed voters' confidence.
"What we are seeing now is that despite all the protestations of the Labor Party about the previous government, we've obviously got core and non-core promises from the Labor Party," Dr Armitage told AAP.
He said it was just the tip of the iceberg, as Labor embarks on a campaign of dismantling government support for the private health system.
The Australian Healthcare and Hospitals Association supports means-testing of the rebate and does not believe there will be a major impact on the public system.
"We would prefer it to be phased out altogether but we see means-testing as, you know, at least a positive step," executive director Prue Power said.
