Great News for Tony Abbott: Doesn’t understand his own ideology when it comes to private health

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Labor is currently passing historic reforms to health laws in Australia that will means-test benefits for people with private health insurance.

This is a great improvement as it does away with the Howard-era regressive system of poor people subsidising wealth people’s private health insurance, and introduces a progressive system that excludes high-income earners from receiving tax-payer funds.

I think the Health Minister’s statement is pretty clear:

Health Minister Tanya Plibersek said the private health insurance rebate should be means-tested to bring about fairness for taxpayers.

“It is not fair for low and middle income earning Australians to be subsidising the health insurance of households with incomes of more than $250,000 a year,” she said.

Ms Plibersek said, contrary to Mr Dutton’s claims, the Government first announced its policy to introduce a means-test of the private health insurance rebate in the 2009-10 Budget and took the policy to the 2010 election.

“Nearly eight million private health insurance policy holders won’t be affected by the changes at all.”

Treasury modelling says that 99.7% of policy holders will keep their cover if the government is successful with its plans to means-test the rebate.

Individuals earning $83,000 or less, or families earning $166,000 or less, would not be affected at all in the next financial year.

The Good News for Tony Abbott is that he is all over the place on this issue — like most others — because he is caught between wanting to protect the entrenched, privileged interests of the wealthy elite that makes up the core of Liberal Party support, and between his fetishised obsession with small government.

At the end of January at his press club speech, Tony Abbott quoted Lincoln: “government should do for people what they can’t do for themselves and no more”.

Today, Abbott said: “that is why we exist as a political movement, to give more support and encouragement to people who want to get ahead”.

Similarly, Tony Abbott and the Liberal Party oppose subsidies being given to the manufacturing industry, to protect jobs and ensure that Australia has a manufacturing future, with a policy that would cut the $500 million Automotive Transformation Scheme.

How can small government rhetoric that supports an unfettered free-market without government interference match up with a strong desire to hand out as much tax-payers’ money to wealthy plutocrats?

It comes down to partisanship and class allegiance. Tony Abbott sees as his sacred mission to defend the interests of the most wealthy people in Australia. This is why he opposes the carbon price and opposes the mining tax — because it is in the economic interest of Australia’s wealthy elite, and has the added benefit of opposing Labor’s reforms as well. This is why he opposes the car support schemes — because it would help save working-class manufacturing jobs, rather than rich people, and has the added benefit of allowing him to bash unions and bash Labor.

And this is why he opposes means-testing private health insurance.

Because he and the Liberals have a long-standing desire to abolish Medicare and privatise Australia’s health care system. Howard spent 10 years slowly privatising our health system by diverting billions of dollars away from public hospitals to the private providers (who in turn, converted that money into billions in private profit — effectively legalised theft from Australian tax payers by the private health insurers and hospitals).

And because means-testing the private health rebate would reduce the amount of money in the pocket of a few wealthy families with an income of a quarter of a million dollars a year, who are currently given a hand-out by people who earn a pittance in comparison.

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5 Responses to “Great News for Tony Abbott: Doesn’t understand his own ideology when it comes to private health”

  1. SO I agree with this, yeah yeah. But still, is it not still absurd to give the full subsidy to people on $83,000 a year? That’s hardly doing it tough.

    A decent result would be if the income levels just don’t change for a couple of decades, let slow wage inflation destroy what’s left of the upper-middle class aspect.

    • I agree, that people on $80k aren’t doing it tough. Ideally, all the money going from tax payers to private health should go to the public health system.

  2. Depends on the income elasticity of demand for private health. One would assume the treasury boffins have calculated that a sufficient number of people on around $80k wouldn’t take up private health cover if they weren’t subsidised such that the cost to the public purse would be greater. If they are ‘doing it tough’ why would you want the entire cost of their healthcare subsidised through the public system?

    • Hi Sean, I’m not sure of the demand elasticity, but the public statements made by many private health insurers to the stock exchange and investors is that they anticipate continuing growth in customers and profts despite the means-test. This indicates (to me) that the policy is a good one.

      • Agreed I think it is a good policy. Removing it entirely, as has been suggested above, would not be good policy. Call me naive but I think the $80k threshold would be based on Treasury advice rather than political considerations. Especially as you point out even the rent seekers are staying mum.

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