In the News
Mr HAWKE (Mitchell) (6:32 PM) —I rise tonight to speak on the Electoral and Referendum Amendment (Close of Rolls and Other Measures) Bill 2010. I want to start by rejecting many of the comments of the member for Reid in his typically bleak fashion. He sought to paint a picture of the electoral roll and the agenda of the coalition in relation to the measures proposed by the government. In that bleak assessment perhaps the main criticism I would have of the member for Reid and his arguments was that he suggested that somehow our opposition to many of these changes, particularly the voter identification and other scheduled changes proposed in the bill, was that we were seeking to disenfranchise people, or not have a group of people vote. Of course, the significant problem with the member for Reid’s contention in this regard and with the Labor Party’s contention in this regard is that the argument that more voters were disenfranchised under the coalition’s changes to voter identification in the seven-day grace period is erroneous. The facts tell a different story.
In 2004, under the previous system where there was a seven-day grace period, there were 169,000 people who missed out on the enrolment deadline. But, of course, in 2007, at the last election under the coalition’s changed three-day grace period, there were only 100,000 people who missed out. These are not estimates from us; these are the AEC’s figures. So this argument that somehow this is an attempt to disenfranchise a body of people is of course erroneous and the member for Reid knows it.
The changes proposed by the government today seek to reinstate the seven-day grace period, and this is an argument that I oppose, because the integrity of the electoral roll is something that is paramount to the functioning of our democracy. It is the member for Reid’s assessment that everything is fine and rosy with the electoral roll—that it is fine to contend in this parliament that there is no need to be rigorous in our ongoing examination of the roll and of the system that we have of voting in Australia and that, somehow, just by encouraging everybody to participate, participate, participate, we have a benevolent democracy where everything will end up just fine. Of course, the reality is very different. That is, we do have to have a strong system in place. We have to have a system of ensuring that the right people are casting votes in the right way and that people do not attempt to manipulate our electoral system. We do have examples of people attempting to manipulate the electoral system in recent history. Perhaps you should not take it from me—I know the member for Reid and I have a history in relation to politics which is different—but noted communist author Frank Hardy wrote a book called The Stolen Election: Australia 1987. Maybe the member for Reid would care to read what he had to say about the 1987 election and the potential for manipulation in that election. Frank Hardy is the famous author of Power without Glory. In that work he suggests that there is a propensity in Australia for people to attempt to manipulate the electoral system at various selections. When you consider many of the results in marginal seats or seats where elections are very tight and come down to a handful of votes one way or another, I think it is proper that the parliament ought to remove any opportunities for fraud and seek to constantly improve the system we have in place to ensure that the opportunity for fraud is minimised.
I will oppose schedule 2 and the amendment relating to the evidence of identity for provisional votes. The previous government, in line with long-standing policy, moved to prevent fraudulent voting and impersonations by requiring that people who claim a provisional vote in an election produce evidence of their true identity and enrolled address either on polling day or in the week following polling day. I think that is a proper mechanism. People who live at a location for 21 days are, by law, required to enrol and, if they do not, they are breaking the law. But, as we know, the reality is that many people in our community choose not to enrol within that 21-day period. It is true that they may not be aware of any changes to boundaries which could affect the electorate in which they now reside. However, people are aware of the fact that they have changed address, so they are making a choice in relation to that—that is, not to re-enrol or not to be on the electoral roll—they simply forget or there are other reasons for them not to re-enrol.
However, effectively the changes that are being proposed in schedule 2 mean that there is no consequence for breaching the Electoral Act. The benefits of correctly enrolling are reduced to nothing and there is no disincentive for any person who fails to correctly enrol. That leads to a situation where the whole basis for the continuous roll update, which was something brought in by the coalition in 1999, is severely undermined.
Any proposal to weaken the rules in relation to the identification requirements for provisional voters should be opposed. It should be opposed because it gives the impression that if you do not obey the law and seek to put yourself on the roll, which all responsible citizens should do, somehow you should be rewarded for not maintaining correct enrolment for a substantial period of time. That is a very important argument. The integrity of the roll does matter. While we have a compulsory voting system we should discourage people from choosing not to be on the electoral roll.
I note the member for Reid challenged the coalition, saying that our opposition to the bill is really part of some sort of secret agenda of ours to bring in voluntary voting, which I find a weak argument in relation to this legislation. I can publicly put on the record that I do have a view that voluntary voting is something that we should look at as a nation. We ought to have a free society where people are allowed to choose whether or not they want to vote. Currently in Australia we only compel people to attend a ballot box and mark off their name on election day. There is no such thing as forced voting. You cannot force a person to vote. We simply force attendance at polling booths, and many people register their votes in an informal way or take another way of not voting. We simply force attendance, and some people suggest that is a good thing. I do not violently object to that system; however, if we are continually to push to have a freer society, voluntary voting is a mechanism we should look at. Indeed, looking at the United Kingdom and the United States, there are many good arguments for voluntary voting. However, that is not the agenda of the coalition today and it certainly is not the topic we are presented with in the legislation before us.
Many of the proposals here weaken the integrity of the Electoral Act. The member for Reid said that he was not aware of any examples or any matters which caused him to be concerned about our current electoral system, which I again find to be an unusual contention. The HS Chapman Society was set up in 1996, meets regularly in Sydney and is a society with which I have had something to do. Other members of this place quite regularly have interaction with the HS Chapman Society. That society was purely set up to examine and look at our electoral system. Included in their objectives are:
- To promote public understanding of the … electoral systems
- To monitor the operation of the Australian electoral system and … recommend changes to the law and practice of elections
- To compare the Australian … systems with those of other democratic countries
That is a fine body of objectives for any organisation. It is good to see that we have private citizens taking an interest in the electoral roll and the operation of our electoral system who are prepared to meet in their own time, examine proposals for improvements and make recommendations. Indeed, along the way they have certainly highlighted a number of cases where there have been concerns with the roll. The member for Reid said there have only been 71 instances of people multiple voting or conducting voting fraud. Considering that many of these elections have very close results, I think that is a reason why we should have strong electoral provisions and should constantly look at ways to improve them.
Identification is an important issue. I still find it a very odd situation that if you go to the bank you are required to have 100 points of ID, if you want a passport you have to prove your identity and if you want to hire a video at a video store you have to prove your identity with a licence, but there is no real identification required at a polling booth on election day. However, that is a different matter.
There are some amendments within this legislation that we can support, and the coalition has provided its support for schedules 3, 4 and 5. In relation to the proposed Electoral Act provision that a political party cannot nominate multiple candidates, that is a valid and worthy amendment to the act. It has grown out of recent examples, particularly in the Bradfield by-election, where a political party sought to, I think, deliberately manipulate the electoral process by nominating multiple candidates. The Christian Democratic Party nominated nine candidates for the Bradfield by-election. There has been plenty of speculation about the motives behind that, but it is the case that the AEC records over many elections and many years that the more candidates you have the higher the informal rate. I note from the member for Bradfield’s contribution earlier in this debate that there was an unusually high rate of informal voting in the Bradfield by-election, which should be of great concern to all members in this place. So it is easy for us to support such an amendment. A political party ought not to deliberately seek to manipulate the electoral system in that fashion. Therefore, that is a good amendment.
Schedules 3 and 4 relate to provisional voters and are certainly an improvement in administration for the AEC. Provisional voters certainly caused a lot of difficulty for the AEC and scrutineers alike in terms of the time it took for administrative checking in the weeks following polling day. The proposal to treat them as ordinary voters is a worthy one and something that we support.
The bill before us has some worthy provisions. However, schedules 1 and 2, as they relate to particularly the close of the rolls but also the changes to identification for provisional voters, are changes that I cannot support. The electoral roll is an enormously important mechanism and the administration of it is something that we should constantly be seeking to tighten. The government’s proposals certainly weaken the administration of the roll. As we saw in 2004 and 2007, the coalition’s tightening of the three-day and seven-day periods was not of any impact upon the number of people that missed out on voting; in fact it was reduced. I am happy to support schedules 3, 4 and 5, noting the great concerns that the coalition has with the weakening of the electoral roll.
The Federal Member for Mitchell, Alex Hawke, has expressed deep concern about the New South Wales Government’s commitment to construct a northwest rail link.
“We have been burned too many times by this New South Wales Labor Government to believe their promises to build a rail link,” Mr Hawke said.
“It seems that every time there is an election coming, the New South Wales Government announces a northwest rail link.
“We have been tempted, teased, and ultimately tormented before each of the last three elections, and we still have nothing to show for it.”
Mr Hawke said the projected finish date for the railway — 2024 — was a great concern and provided far too much opportunity for the New South Wales Government to slip out of their commitment in the future.
“Federal Labor has made it clear to the Hills that they will not be allocating money to New South Wales. This followed New South Wales missing out on the national infrastructure funding due to poor submissions by the State Government. Now the State Government is also set to lose the token $90 million they received for a study into the CBD Metro as well,” Mr Hawke said.
“If they were sincere about providing our local community with the services we deserve, they would adopt the position of Barry O’Farrell and the New South Wales Coalition and make the construction of the North-West Railway a priority.
“But too often it seems that the New South Wales Labor State Government’s priority is to quell negative press coverage. If they think that 2024 is an acceptable timeframe for a northwest rail link they are fooling themselves.
“There is a clear alternative to New South Wales Labor’s failure on this, and it is to elect a New South Wales Government committed to building the northwest rail link,” Mr Hawke said.
In the course of this year we are increasingly learning about waste and cost blow-outs in Federal Government programs across many departments, one notable example being the dodgy installation of batts under the multi-billion dollar Home Insulation Program.
However in the midst of this climate of Government profligacy, it was astonishing to learn that Australian soldiers might have been wearing combat uniforms made from fabric sourced from China in order to save money.
The Disruptive Pattern Camouflage Uniforms – known as DPCU – is a high-tech fabric largely developed in Australia by organisations including the Defence Science and Technology Organisation.
Recently, we learned that a tender to provide 120,000 uniforms over two years would have included an option of fabric being provided from China. For this $13.6 million tender, there would have been a saving of $1.5 million, or about ten percent, to have the material for uniforms sourced from overseas.
It is hardly in our in our national interest to provide this intellectual property to a foreign manufacturer, who also supplies third parties, simply to save money.
The Government has since back-flipped, and the option for the material to come from China will not be exercised, but the tender should not have been accepted in the first place and it should never have been considered.
All Government Departments are expected and should be encouraged to provide taxpayers value for money. However, this is not about Defence legitimately trying to make savings, this is about scrimping on uniforms for our military, the risk to our manufacturing industries, and potentially sending jobs overseas.
At a time when billions are being spent and sometimes wasted on program blow-outs and over-runs, it says much about the Government’s priorities that our nation’s intellectual property, the material used in our soldiers’ uniforms, could have possibly been sourced from China. Any saving would have been a false economy.
I strongly believe our defence industries must not be put under pressure like this to pay back debt for profligate spending. Please feel free to pass on your thoughts to me about this at firstname.lastname@example.org
Mr HAWKE (Mitchell) (8:50 PM) —In a week in which we have seen the government rocked by scandals in the home insulation sector, I rise tonight to speak about another epic tale of government failure that has hit people in my electorate of Mitchell. I refer of course to the green loans scandal that is plaguing this government, which again is affecting real lives and real people in our community, particularly in my electorate.
Kevin Rudd and Peter Garrett went to the last election promising to:
- Offer low-interest loans of up to $10,000 to make at least 200,000 existing homes more energy and water efficient, with subsidised environmental audits and free Green Renovations packs.
It was a worthy objective and of course something which many in our community would laud. In the 2009 budget, however, this was quietly downsized. Their promise went from providing 200,000 green loans to instead providing 75,000 green loans. While this is a massive cut—in fact a 62.5 per cent cut to the number of promised loans—it was, again, a worthy initiative and something which we could all support and laud. However, seven months into this financial year, only 1,008 of the 20,000 loans budgeted for have been provided—let alone the 200,000 that were promised in 2007.
In his 8 May 2009 media release, Peter Garrett said that there would be ‘1,000 home sustainability assessors’. On 20 August 2009 the secretary of the environment department also told the Australian Economic Forum that the program would be delivered through ‘training 1,000 home sustainability assessors to undertake 360,000 audits’. I rise tonight to say that, instead of training 1,000 assessors as promised, Peter Garrett and the Rudd government have trained 3,648 assessors without ever announcing their intention to increase this number. What we see here is the reduction from 200,000 loans to 20,000 loans, with only 1,008 loans being delivered; yet, with a promise of only 1,000 assessors, we have 3,648 assessors who have been trained. Little wonder, then, that we have mismanagement and the creation of a crisis which has affected real people hard in my electorate.
People in my electorate have contacted me in recent weeks about this program. I want to relate the stories of some of those who have approached me and what they feel about how this government is handling this program and mismanaging it. A gentleman from Baulkham Hills approached me and said:
After interviewing 5 solar hot water panel company reps (a total of about 6 hours) and spending about a dozen hours reading material on relative panel efficiencies, and having had the mandatory home assessment done in October 2009, I last week submitted my Green Home Loan to Westpac. Today (22 February) I am informed that the Government Home Loan website is down, has been thus for three weeks and so my application cannot proceed at this time.
Take the example of the Baulkham Hills woman who contacted me this week and said:
I have not been able to get through or book any assessments since before Christmas. I have tried many times without success. For example today (2 February) I have tried 5 times.
There was also a retired woman who found that, due to the global financial crisis, her investments were not going well and were unable to provide her with a level of support. She comments about this program:
I am facing financial ruin and saw this program as a way to earn an income and make a contribution to conserving the resources of the planet.
Then there was the Castle Hill homeowner who wanted to take up this program and who said:
We were in the process of having the assessment done to apply for a $10,000 loan to install a 3kw solar energy system. If the Government is serious about encouraging people to switch to greener forms of energy there must be financial incentives to enable this to happen. I feel that stopping the Loans Scheme is a real step backwards along the road to making Australia a more sustainable pace.
I want to record that these people are not rent seekers or disgruntled Liberals; these are real, aspirational people, working to do better for themselves and trying to make a difference to the future of our planet. There are many more examples across Australia.
I want to record that I believe this to have been a good policy idea—good because it was self-funding and good because it enabled people to act on their good instincts and do the right thing by the environment. However, this program has failed because of horrific mismanagement by this minister and the government. The most serious consequence of this mismanagement is that it is a huge step backwards for the idea of self-funding initiatives that give people a hand up and not a handout. We know that governments cannot and will not fund a sustainable future. It must be achieved by citizens taking action, and the failure of this program will make this task all the more difficult.
Mr HAWKE(Mitchell) (11:15 AM) —I rise to speak for a second time on the Fairer Private Health Insurance Incentives (Medicare Levy Surcharge) Bill 2009 [No. 2]and related bills because, of course, this legislation has already been rejected by the Senate. We now see a government desperate to impose this ideological agenda on the Australian people. It is an agenda that they did not apprise the Australian people of prior to the last election. Indeed, all of the statements from the shadow minister for health, now the Minister for Health and Ageing, and the Prime Minister indicated that they would not touch the rebate system. Quotes to that effect are numerous right up until 2009. Even as late as 24 February 2009 we heard:
“The Government is firmly committed to retaining the existing private health insurance rebates,” Ms Roxon told The Age.
That is the minister for health in 2009, telling the Australian people that that government is firmly committed to retaining these rebates.
People are entitled to ask: what is really going on? When the Senate has turned this legislation down, saying it is a breach of election commitments and not an appropriate way to manage the health system, why would the government seek to reintroduce this legislation in the face of such opposition? The answer is their mismanagement of the budget. Of course, now we do not have any money to fund a proper healthcare system. This is not an issue of private health versus public health. This debate is not about that, although some of those opposite are trying to turn it into an ideological debate. This is about how we fund the healthcare system. Funding is certainly one of the issues we have heard a lot about in this debate, and it is something I would like to talk about. How we fund all of the needs of the healthcare system is critical.
In Australia the biggest component of federal government expenditure is welfare. It is more than double the expenditure on health in Australia. That is important to note, because we have a strong and thorough welfare system that spends in the order of $110 billion a year, more than double the healthcare budget, and that is not counting state budgets and all of the money spent by state governments. Yet every government in this country, whether state or federal, knows that we are facing a funding crisis in relation to health. How do we meet future challenges? How do we fund those challenges? The answer is not going to be found in government expenditure alone. No government can afford to increase expenditure to fund healthcare challenges completely. We need a private healthcare system. It is not a luxury or something that we can take for granted. We need to ensure that it is a strong and vital system. The legislation that is before us today is going to undermine that system.
There is a public healthcare system available to those who cannot afford private health care and a private system for people to fund by putting their own capital into private health cover so that they can make a contribution to their own health care, thereby lifting the burden off the taxpayer and enabling money to be spent where it is needed. That is why I say there is an ideological component in the legislation before us. Certainly the ‘fairer’ in the title of the legislation is a misnomer. There is nothing fairer about changing these rebates, putting more pressure on the public system and ensuring that there is a worse healthcare outcome for all. It is commonly the rhetoric of socialist governments to say things are fairer when they are bringing everybody down. Simply put, this is something that will drag everybody down.
Coming from an electorate that has the highest proportion of families in this country, I reject the contention that people on $75,000 a year are wealthy. I reject the contention that couples on $150,000 are wealthy. I come from an electorate with a high average income, the second highest average income in Australia. However, most of that income is spent on mortgages. My electorate also has the highest proportion of mortgages of any electorate in the Commonwealth. It is one of the fastest-growing areas in Sydney. I know that all of that disposable income is spent on simply affording the family home in Sydney. I know that people on $75,000 pay a higher marginal tax rate and that people on $150,000 pay one of the highest tax rates. You cannot simply say that people on $75,000 or $150,000 with two, three or four kids are wealthy, so they can afford not to have these rebates. That is not a proposition that I accept. It is about the signals that you send to people out there in the community as a government. What is the signal from this legislation? The signal is: we do not want you to take up private health care. The indirect signal you will send is: the government does not prioritise private health as something that is valued. It is only a 30 to 35 per cent rebate. It is something that says to people: if you are prepared to put your capital into your own health care, the government will make a contribution as well.
The member for Bonner spoke about a fear campaign, and there is a fear campaign being run by the Prime Minister of this country in relation to this matter. With Laurie Oakes on Sunday we saw that fear campaign dramatically exposed to the Australian people. The Prime Minister claimed on national television that, if this measure was not passed by the parliament, there would be a cost to the Australian taxpayer of $100 billion. He claimed that that was in the Intergenerational report and that the Intergenerational report backed up his claim that, if we did not do this, private health in Australia would cost the taxpayer $100 billion. Clearly that was a complete and utter misrepresentation. The Prime Minister said:
What the Intergenerational report tomorrow will reveal for the first time is that the cumulative impact of knocking that major reform back is in the order of one hundred billion dollars over the next several decades.
Of course, when industry went to research this claim it found it is not in the Intergenerational report. Indeed, industry rejects completely that this is the case. Why would a Prime Minister make a claim of $100 billion? There is a real contention about this quote, because $100 billion is what we already spend on welfare. We spend less than half of that on the health budget—$50 billion goes into health. Is health worth $100 billion over several decades? Most people in this chamber and most people in the Australian public would say, ‘Absolutely it is.’ If we are providing a rebate which means the government pays one small component and other people put a larger component of their capital into their own health care then that is a great system because the government has the smallest share of the payout in that case.
If you remove that incentive, we have heard many arguments from those opposite that there will only be a few people who leave the system. I can say anecdotally, even from speaking to people in my own age category—and I am one of the youngest people here—that people do not just say that they will leave the system. Speaking to people who have private health cover I hear that they will reduce their level of cover. That is an issue that has not been addressed by those opposite. Reducing the level of cover and putting a burden back to the public system is not going to be a good outcome either. Even if it is a small amount—10,000, 15,000 or 20,000, whatever we want to argue about the figures, it could be more and it could be less—that will place an extra burden on the public system.
Then there are the people who will reduce their level of cover or will not be attracted to take up private health insurance. How will that be a better outcome for the health system in Australia? That is what this government has failed to demonstrate. I want to record here that private health insurance is not just for the rich. There are over one million people with private health and hospital cover who live in households with a total annual income of less than $26,000—over one million of these households have some form of private hospital cover. They are saying there is a value in putting their hard earned capital of $26,000 or less into the private health system. Why would they make that assessment? It is because there is great value in putting aside your capital to look after your own health and it is a value judgment they have made. It is because the government has a system which rewards them for doing so and it is a good system. Why then should a person on $75,000 not be entitled to a reward? They work just as hard; they do earn more money and they get taxed more as well. They have as many taxes, charges and imposts as anybody else. It is as vital to those people as it is to people on $26,000 that there is an incentive to take up private health because we still operate under that mentality that we have a universal healthcare system—that is still one of the prime directives in public health in Australia—and so anybody is entitled to put the whole burden of health care onto the public system. I say that we should retain the incentives because those incentives are working and doing a good job for us in keeping our system sustainable—and we do have a major funding challenge.
I think where this debate turns to an ideological issue has cost us enormously. Taking my own electorate again, a brand new private hospital, the Hills Private Hospital, has opened. It has an emergency ward; it is a fantastic thing. It cost in the order of $200 million. Speaking to the managing director, who has worked in public and private health in Australia, in New Zealand and in the UK, it could not have been done in the public system for less than double that amount. He is very clear about that. We want private capital in health, we want private capital in research, we want private capital in health insurance and we want them to build hospitals. It is a good thing; it is not something that we should be threatening or rejecting. It is a complementary and positive thing to the public healthcare system and it is something that we must be very focused on continuing to encourage.
When I spoke to the people running the Hills Private Hospital about getting someone to open it, they told me that they have opened three private hospitals in western Sydney, under the New South Wales Labor government, in areas where, for the New South Wales Labor government—let us be very clear—it will be a long time coming before they can build a hospital. Even though in the north-west of Sydney we have had a massive growth in population, a huge expansion in the number of families and in the demand for services, and a scaling back in hospitals like Blacktown, Blue Mountains, Hawkesbury of all kinds of units and services, there is no plan to build a major hospital in the north-west of Sydney. If the private sector did not deliver this hospital, there would be no new hospital in north-west Sydney even though it is one of the major growth corridors in our largest city in the country.
So we can talk about records all we like. We can talk about the Labor record at state government level or we can talk about the Howard government record at federal level, but the reality is all governments are increasing funding to health, they are increasing it substantially and it is not enough to meet the expectations and the demands. That is the reality of this debate. So why would we take a measure in this chamber today to reduce the incentives for people to put their own capital into their own health cover? It is an absolute and utter wrong signal to the market. I always enjoy getting lectured by Labor members such as the member for Bonner about the market because they have a lot to say about the market these days—everybody is a free market person today, as was once famously said. The reality is that signal to the market at this time that we are reducing incentives to take up private health insurance from whatever categories of income and age group is the wrong signal at the wrong time. It will mean that fewer people will put less capital into their own health which is exactly what we do not want at a time when we are facing funding crises, shortfalls and challenges across the entire health system and nobody has the answer to that.
Kevin Rudd came forward and said: ‘I do have an answer to that. If by the first six months of my government we have not solved the problems in health, the federal government will intervene and take over the healthcare system and, of course, take over hospitals.’ We have seen a complete and utter backtrack on that position and we still have no answer or no plans from Kevin Rudd—yet another broken election promise and commitment. We all wait with breathless anticipation to see how he is going to solve the issues of public health that he committed to solve prior to the last election.
In summarising, I have spoken on this prior to this and I think that some of those comments that I made including that three-quarters of my own electorate is covered by private health insurance are really important arguments. I do not see that it is a difficulty to me; I do not see that as a problem. I think that it is a good and important fact that we encourage as many people to take out their own health insurance and we encourage as many people as possible to look after their own health because that allows us to do more in our public system. We should not mistake the signals in these bills. The fact that this government has not worked with the industry and peak body associations to even amend or look at another option in relation to this means that it is ideological and hard headed about undermining the private health insurance system.
There are plenty of third-party bodies—the Australian Health Insurance Association, the Australian Medical Association, the Australian Private Hospitals Association, the Royal Australasian College of Surgeons, the National Association of Specialist Obstetricians and Gynaecologists—who all say that this will put greater pressure on every person who is privately insured and will also put greater pressure on the public system. That is something that we should take from these bodies with great concern. Why add extra pressure to every person in private health? Why add extra pressure to people in the public system? If there is a budgetary crisis in the Rudd government, health ought to be sectioned off from that crisis. If we have gone from a state where we had zero net government debt and a $10 billion surplus to having a $50 billion deficit or more and a problem with the budget, it ought not to be health that is used to solve that crisis. I make that position very clear.
The Prime Minister in trying to allege that there would be a $100 billion cost, which is completely fictitious and not backed up by the Intergenerational report, indicates that he is thinking about how to solve his budgetary crisis—the debt that we have gone into. Health is not the area that we should be looking at. There is no way any federal government, whether it be this government or a future government, can decide to fund every health need and challenge that we are going to face. We are going to need to have a strong private health system as well as a well-funded public system.
Therefore this kind of measure is a retrograde measure. It will mean that fewer people are taking up private health. It means that Australians will pay more for their health care. Even if you argue that it is only 10,000 or 15,000 people, when they leave the private health insurance system—those who understand all about insurance systems know, and all of our free-market economists on the Labor back bench will particularly note this—that you then have less money in the pool to pay all the claims. Therefore the insurance premiums have to rise. There is no doubt about that. There is no argument about that. I know that with all the lectures we are getting from the Labor backbench on the market that that will resonate very strongly with them.
The key points about this legislation are that the government is refusing to budge because it has an ideological obsession with private health, but this should not be turned into a debate about the public system versus the private system. That debate ought to be trash-canned straightaway. The reality of modern Australia is that we have a strong public health system and that we have a strong private health system. Governments provide incentives for people to put their own capital into private health and we need them to do so. We need people to put as much of their own capital into private health as we can encourage them to. We know that even people on household incomes of $26,000 or less—one million of them in this country—made the judgment that they are going to put something aside because of the incentives we as governments have put in place. Why then is that not good enough for people on incomes of $75,000 and over or on $150,000 and over? We want them to put as much of their capital aside as we can encourage them to. You must have incentives for that to happen. You must have incentives under a universal healthcare system.
This is a good system. It is a working system. It is the same as saying, ‘The Rudd government inherited zero net government debt and a $10 billion surplus so we can go on a spending spree.’ Now we know that we are all going to pay the price for profligate spending, for $900 cash bonuses, $22 billion in cash handed out to people. There will be an enormous price to pay. If that is why we are seeing these bills reintroduced again after being refused by the Senate then, certainly, that is a failing of this government.
I also want to say that the government have broken their election commitment. I want to remind everybody about that one more time, because we are going to hear a bit about this. They promised they would not touch the rebate system. They had to promise that prior to the election because all Australians know that the private health insurance rebate system works. It works because the government provided it as an incentive and people take up that incentive. There are 11.1 million Australians who have a form of private health insurance. We have a working system and we need more capital generated into the private system to relieve the public system so that it can be funded adequately for governments to meet the challenges.
Together, as a complementary model, we can achieve a level of quality funding for health in Australia, but it must be together. This ideological division of public versus private will not be useful. It will mean a lot of pain for people in private health. It will add pressure to the public health system. Coming from an electorate with a large proportion of families and people on private health, I can speak with authority and say that people will leave the private system and return to public health, and people will seek to reduce their level of cover. Both of those things are unnecessary. We do not need to take this step. If we do not take this step we can continue to work on how we fund these challenges and how we make sure more people are putting as much of their daily budgets as possible into their health care. That is the way that we will have a chance of funding this system. The reality is that no government in this country can meet the challenges purely through government funding alone.