Medicare Bill ...Senator Steve Fielding was concerned low income earners would be slugged with higher premiums.
Fielding joined Coalition to vote down Medicare Bill
Bill would have given up to $1200 of tax relief
Concern low income earners hit with high premiums
FAMILY First`s Steve Fielding tonight killed the Government`s Medicare bill that would have delivered up to $1200 of tax relief to 330,000 people.
Senator Fielding joined the Coalition to vote down the Government`s planned changes to the Medicare levy surcharge (MLS) thresholds, while independent Senator Nick Xenophon and the Australian Greens sided with Labor.
The defeat of the Bill at the second reading meant senators had no chance to move amendments.
Senator Fielding took the same action to kill the Government`s luxury car tax Bill before the Government agreed to concessions. It was finally passed by parliament today.
His key concern in relation to the MLS changes is that low income earners struggling to pay private health insurance, particularly pensioners, would be slugged with higher premiums.
The Government wanted to lift the income levels at which the one per cent MLS kicks in for people who don`t have private health insurance from $50,000 to $100,000 for singles, and $100,000 to $150,000 for couples.
But it gave ground this week with Health Minister Nicola Roxon announcing the singles threshold would be lowered to $75,000 after discussions with senators and the industry.
A Senate inquiry into the Bill earlier this year was told private health cover premiums would jump by about $70 a year if the thresholds were increased to the initial proposed levels.
Senator Fielding wants the Government to provide those low income earners with relief.
"Family First has put forward a number of options to the government to make sure lower income people struggling to keep their health insurance premiums do not lose from the proposed changed to the Medicare levy surcharge thresholds," he said.
"Changes to the ... thresholds would mean there are millions of Australians who will get no tax cut, but will face an increase in their health insurance premiums as a result of the threshold changes."
Treasury projections indicate that even after the lowering of the singles threshold to $75,000, about 583,000 people would dump private health insurance if the bill had succeeded.
Before the vote, Ms Roxon used question time in the lower house to urge the coalition to support the Bill.
"It`s time for the Opposition to stand up and say whether they are for tax relief or not," she said.
Ms Roxon said she had made it clear to the private health funds the altered thresholds were not a green light for them to seek higher premiums.
"We have made very clear that we will take a dim view of private health insurance funds who think that a tax whack for working families is an excuse to try to jack up their premiums," she said.
Opposition health spokesman Peter Dutton said the Government`s Bill was fundamentally flawed from the outset and the revised thresholds did not correct those flaws.
He said had the Bill succeeded it would have sparked a blow-out in public hospital waiting lists and driven up private health insurance premiums.
"The Senate tonight has voted down a bad public policy measure that would have had a disastrous impact on Australia`s health system," Mr Dutton said.
"At no time did the Government conduct a proper assessment of the impact of this measure on our health system."
When the Howard government first introduced the MLS in 1997, 167,000 paid the tax. That number ballooned to 465,000 by 2005-06.
The Government has two options available to it to try and get its Bill through parliament. It can either reintroduce the same Bill into Senate and agree to amendments or reintroduce an already amended Bill into House of Representatives, which would then pass it up to the Senate.
Good on you Steve. Even though I would have benefitted financially from the threshold being increased, as a whole the effects would be negative. Its amazing that Kevin can whinge about this bill being blocked and in the same breath talk about economic responsibility, when giving a large amount of extra cash to the middle class would put upward pressure on inflation, not to mention the detriment to our already stretched health systems.
Posted by: JE of Brisbane 9:08pm today
Euan of Perth - But could you do the same on $30k a year..
Posted by: Lisa of QLD 9:03pm today
Bill of Perth (comment 54), I don't understand your rationale for saying that if 1 million people no longer have private health insurance, that automatically equates to 1 million people suddenly getting sick and using the public heath system?Many people are forced into taking out private health insurance (because of the tax medicare surcharge), that doesn't mean that they want the insurance andit doesn't mean those people will suddenly automatically get sick and start using the public hospital system.1 million extra people hospitalised in one year and all of them because they stopped being forced to take out private insurance?I have been forced to take out private health insurance for the last 5 years and pay high premiums and guess what?I have never used it, not once.It is a ridiculous waste of my money going into some rich CEO's wallet.
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