Rich “subsidised” on private health insurance:Labor

People who can’t afford private health insurance are being forced to subsidise it for “millionaires,” according to a Federal minister.

The Federal Finance Minister, Lindsay Tanner made the charge in parliament.

He did so shortly before his colleague, Health Minister Nicola Roxon announced that private health fund premiums would rise by an average of 5.78 per cent from April 1.

Mr Tanner said the “subsidy”  is the result of the opposition’s decision to block changes the government is trying to make to the private health insurance rebate in the Senate.

Mr Tanner said the Opposition is now facing a big test, on two fronts.

These were fairness and fiscal responsibility.

“Are you going to support the government or will you continue to subsidise private health insurance for millionaires?” Mr Tanner asked.

The Treasurer, Wayne Swan, announced in his budget speech last May, that the government would cut the private health insurance rebate for people on higher incomes.

Mr Swan also said that the Medicare Levy surcharge would also be increased for higher income earners.

However the Opposition, with the support of the Greens and other Senators, is blocking these moves in the Senate.

Mr Tanner said the Coalition’s obstinance would cost the government almost $10 billion over the next 10 years.

This would damage its efforts to get the Federal budget back into surplus.

He said the government had been forced to make tough decisions in its last budget.

One of these had been to apply a means test to the private health insurance rebate.

Mr Tanner said he would pay more, himself, under the government’s proposals.

“But I am afraid, Mr Speaker, that I don’t see the logic of why ordinary working people – on fifty grand – sixty grand a year – should have their taxes pay subsidies to my private health insurance, when many of those same working people can’t afford private health insurance for themselves,” he added.

“What the opposition is doing is protecting subsidies for higher income earners; doing great damage damage to the government’s budget settings; at the same time as claiming that they would be more fiscally responsible and that they would have lower deficits than the government.”

Mr Tanner said, too, that the Opposition’s Finance spokesman, Senator Barnaby Joyce, had initially supported the government’s position, but had later retreated.

“I am worried that he has been got at or something,” Mr Tanner said.

“I would like to see him step back up to the plate on this issue.”