Station: 2UE , Date: 10/02/2012 , Program: Breakfast, Time: 07:21 AM

Compere: Jason Morrison

Item: Dr Armitage says the figures on which the Government has based its decision to means test the health insurance rebate are flawed.

Interviewees: Tanya Plibersek, Federal Minister for Health (excerpt); Dr Michael Armitage, CEO, Private Health Association

JASON MORRISON:       I’ll say upfront, I’m quite opposed to what is often referred to as middle class welfare, handouts. You don’t need to be handing out money to people who are living – earning reasonably good money.

If the country is going well, if the country is wealthy, governments can help people have more money by taxing them less, by tax cuts, as an incentive rather than just the handout to say, yeah, go for your life.

The entitlements mentality kills this country.

But I do not get the thinking behind this. Yesterday the federal Government – it can spin it as hard as it likes – it put up the price of your private health insurance by its policy which has been put in place, again, to punish people who are successful, people who work hard with the cheapest political card game of them all, the politics of envy.

This is taxing the rich to make sure the poor get looked after. Well, that’s kind of the technique being used here.

The truth of the matter is that there’ll be no improvement at all for people who they’re describing as those in need because what will end up happening is they will be pushed further and further back in the hospital waiting list because people will their health cover. It’s already an expensive impact on people’s lives.

And the announcement yesterday of plans to introduce the means test on the 30 per cent private health insurance rebate will hit a lot of households.

I mean, let’s put it simply. We’ll deal with singles for a moment. Eighty-three thousand dollars a year is what now the Commonwealth Government thinks is where you should no longer be getting any assistance with the tax break for your health cover.

Families: $166,000. That may sound like astronomical numbers but the truth is there are many people who just make ends meet in Sydney, earning that kind of money, with families, with mortgages, and what you’ll see will happen, is people will say something has to give and that may well be private cover and if it’s private cover that means more hit on the public hospital system.

And then Tanya Plibersek, the Health Minister, comes out with the most disgraceful lie. Listen to this.

TANYA PLIBERSEK: These modest changes save $2.4 billion over the next three years. That’s 13,000 extra doctors or 26,500 nurses paid for a whole year.

JASON MORRISON: That’s possibly mathematically correct but will we get those nurses and doctors? No, we won’t. What we’ll get is the money being shoved in the kitty so that politically in an election year they can say we made our surplus. You are being done over for their failings in managing the economy.

Dr Michael Armitage is the chief executive of the Private Health Association. He’s with me this morning. Thanks for your time, good morning to you.

MICHAEL ARMITAGE: Good morning, Jason.

JASON MORRISON: What do you think the result of all this will be?

MICHAEL ARMITAGE: Well, look, I never give up and we understand that two independents in particular are yet still to make up their mind so we are continuing to put the case to them. The case is quite simple, we think.

The Government’s figures, on which they’ve based all of their policy directions, are completely flawed. We’ve proved that with a report done by Booz & Co which was released yesterday so we don’t think the independents should rely on the Government’s figures.

They should then think what will be the effect on my constituents? And the effect will be that everyone of their constituents will suffer. Those who are privately insured will pay more next year and that’s everybody, not only the people in the tiers and that means that their constituents who are on public hospital waiting lists suddenly will compete with all of those people who drop their private health insurance for cover so it means they’ll wait longer.

So really it’s a lose-lose.

JASON MORRISON: And I look at the response to this and the Government’s argument is – you’ve heard Tanya Plibersek saying, oh, we’re going to use this money for improvement to the health system. I mean, I can’t even see that because it seems the projection on all of this is about getting money into the bank so we can make the surplus exist.

Whatever their argument for the whole thing is, I think given that most people entered into this in goodwill with the threat that if they didn’t they would face extra charges, we’re, sort of, now penalising those who jumped in at the first time with a promise that is now not being delivered.

MICHAEL ARMITAGE: Well look, there’s no doubt that what we hear on a regular basis is that people say this is the only thing that the Government gives me.

I mean, the sort of people that are going to pay this is a family where a teacher’s married to a policeman, okay. They will be slugged with extra health insurance.

Now, I know, because they keep telling me all the time. They say, look, we don’t get this advantage, we don’t get that, we don’t draw a pension, we haven’t got social security. The only thing we get from the Government is a little rebate on our private health insurance, which we take so that we don’t burden the public sector, and now they’re going to slug us with that as well.

So people are really angry about this to be frank, and I don’t think it’s a good move politically may I say, but that’s another story.

JASON MORRISON: Yeah, let’s look at the raw numbers: 83,000 for singles, 166,000 for a family. And, I mean, you’re talking to people here in Sydney where sometimes those sort of salaries will sound extravagant, but they’re survival salaries in many places.

You’ve got people who will maybe this year be pushed up over that threshold because their boss is rewarding them. Well done, congratulations, here’s a pay rise. And, by the way, as a result of that pay rise…


JASON MORRISON: …you’re actually going to be worse off.

MICHAEL ARMITAGE:  That’s exactly right. And look, the big problem, Jason, from the – from our perspective and from everyone in Australia’s perspective, for every one of your listeners, the big problem is, the Government has focused on the fact that they’re only going to penalise people above $83,000. And we accept that that is the case in year one.

But what happens in insurance is that the people who are, perhaps, fitter and healthier, who are less likely to need their private health insurance, and they are then faced with the extra costs, they take a gamble, and they say, well, I won’t ri… I won’t keep my insurance. So what happens next year is that the insurers are left with a smaller pool of sicker people, which means – because this is what insurance is all about, the risk is spread between everybody – the premiums have to go up for everybody. Not only the people in the tiers.


MICHAEL ARMITAGE: Now, the other fascinating thing is that the Government’s figures say that 5.6 million people in Australia with private health insurance live in a household with an income of less than 50 grand. And 3.4 million live in a household with an income of less than 35 grand. Now, 50 grand and 35 grand are not wealthy, and that’s five and a half and 3.4 million people who next year will all be affected by the effects of this legislation. So, it’s going to hit everybody.

JASON MORRISON: Yeah, the motivations are extraordinary. I mean, they’re just playing the cheapest political card, the politics of envy, whilst at the same time punishing people who are, indeed, by typical terms, those that we actually need to be encouraging. I mean, families and – I don’t get it.

Thanks for your time this morning.


JASON MORRISON: Michael Armitage from the health insurance industry.

And you might sit there and say, oh well, you know, the rich can afford it. Is someone earning $83,000 a year in Sydney, you tell me, rich? That’s rich in Sydney. A family that brings in $166,000 for two people working, and you heard his example there of a teacher and a police officer, that’s rich.

I think what we have done here is taken away the incentive for good hard-working people to want to achieve, and by doing it use the cheapest political trick in the book.

*          *          End          *          *

Transcript produced by Media Monitors

You must be logged in to post a comment.