Bill received from the Legislative Assembly, read a first time and ordered to be published on motion by the Hon. Daniel Mookhey, on behalf of the Hon. Courtney Houssos.

The Hon. DANIEL MOOKHEY: According to standing order, I table a statement of public interest.

Statement of public interest tabled.

The Hon. DANIEL MOOKHEY: I move:

That standing orders be suspended to allow the passing of the bill through all its remaining stages during the present or any one sitting of the House.

Motion agreed to.

Second Reading Speech

The Hon. DANIEL MOOKHEY (Treasurer) (20:45): On behalf of the Hon. Courtney Houssos: I move:

That this bill be now read a second time.

The Health Insurance Levies Amendment Bill 2024 provides for an increase in the prescribed rate of the health insurance levy. The purpose is to recover revenue being lost because health insurers are not paying the full single room rate when their members stay in single rooms in public hospitals. Health care can be an emotional issue. Insurance schemes are notoriously complicated and open to interpretation and argument. Let me begin with some facts. The average cost for public health to accommodate a private patient in a single room is $1,075 per day. The current single room rate gazetted for New South Wales public hospitals is $928 per night, which is lower than the cost. The biggest insurers, who cover around 70 per cent of people with private insurance in New South Wales, are only paying the shared room rate of $436 a night, some with an additional nominal amount.

There are 53 private health insurers, including their subsidiaries, operating in New South Wales. Forty‑four of them pay the gazetted single room rate when their members are treated in single rooms. We thank those who are paying their fair share and doing the right thing. For months the Government has been in negotiation with the nine insurers, including the biggest four, who since 2019 have been hiding behind a loophole which makes it hard to enforce anything about the shared room rate of $436. As I pointed out, 44 private health insurers pay $892 for a single room when that is what their members receive. It is a rate that allows us to recoup most of our costs, ensuring that NSW Health can provide quality care across our State.

The nine insurers who do not pay are in breach of an agreement they signed with the Baird Government in 2013, to pay the single room rate. They are draining the New South Wales health system of $140 million per year. This is money that is needed for patient care, but the money instead goes to insurance profits. Despite their previous agreement, the majority of insurers doing the right thing and the damage underpayment does to the very health care their members rely on, those funds have not negotiated in good faith. They are not honouring their agreement, and that is why the Government is introducing this amendment to the health insurance levy to recover an equivalent amount from insurers by the means available to New South Wales.

It is worth revisiting how we got to this point. In 2019, several health insurers unilaterally decided to underpay NSW Health for single rooms their members were given in public hospitals. These health insurers began paying only the shared room rate, sometimes with a small arbitrary amount on top that they determined, but nothing near the gazetted rate they signed up to pay and which NSW Health relies on. NSW Health tried to work with those insurers to restore funding back in 2019, but as we can all remember, the COVID-19 crisis hit in early 2020 and protecting the health of the New South Wales community took absolute priority, as judged by the government of the day. Our public hospitals did us proud during those difficult times that are, thankfully, behind us. We all relied on them, and they did not let us down. This situation cannot continue.

NSW Health has met with health insurers multiple times over the past year, but vague acknowledgements have not led to action. In the last month, mealy-mouthed words have become a public campaign of disinformation. The health funds pre‑empted the move we are making today, and they are running a scare campaign alleging the legislation before us to recover our costs is, in fact, an increase. The underpayments from health insurers costs amount to $140 million per year. The bill looks to recover the underpaid amounts from health insurers through the Health Insurance Levy. The bill gives me, as Treasurer, and the Minister for Finance power to increase the levy prescribed rate from the current $1.77 a week to $3.27 a week, if the negotiations with the health insurers remain unsuccessful. The health funds were able to anticipate this move because it is what another former Treasurer, Mike Baird, did when he was faced with a similar underpayments issue.

In 2013 the Parliament took the same approach to the insurers underpaying for single room accommodation. The House will recall that, under Mike Baird, the Parliament passed the State Revenue and Other Legislation Amendment (Budget Measures) Act 2013 to take the very same steps to recover revenue if insurers did not do the right thing. At the time, health insurers reversed their intended underpayments and the relevant sections of that legislation were never commenced. The funds recovered through the levy would cover the shortfall to New South Wales public hospitals, so that hospital services can be maintained.

I seek leave to have the remainder of the second reading speech incorporated inHansard.

Leave granted.

This bill will ensure that the Government can continue to deliver world-class hospital services to the people of New South Wales and that health insurers maintain their contribution to the cost of private patients treated in public hospitals, as agreed to in 2013.

This bill empowers the Treasurer to increase the levy if negotiations are unsuccessful. We would rather health insurers simply pay the subsidised single room rate, than pay an increased Health Insurance Levy. But we cannot allow New South Wales public hospitals to go underfunded, while insurance profits are propped up.

Let me be crystal clear – all in this House appreciate the need for investment in our public hospitals. Our hospitals are under increasing pressure, and we need every dollar available to invest in essential health workers and the services they deliver.

For five years a small group of private health funds have been short-changing our public hospitals and not paying their bills in full.

Enough is enough. This is unsustainable and having offered insurers a chance to come to the table and resume the longstanding arrangement of paying their bills in full, we are taking the action necessary to recoup this funding.

I urge these funds not to punish policyholders or public hospitals and simply return to longstanding arrangements and pay their hospital bills in full.

The revenue lost from funds not paying their full bills could build a new regional hospital; fund over 1,000 additional nurses or reduce the elective surgery wait list by thousands.

I commend the bill to the House.

Second Reading Debate

The Hon. DAMIEN TUDEHOPE (20:50): The Opposition will be opposing the Health Insurance Levies Amendment Bill 2024. The Opposition believes that the Government should be kept to its election promise. The bill does only one thing—it provides for a government that promised not to increase taxes to increase the tax on private health insurance policies by a massive 85 per cent. The Treasurer, in this place, and the health Minister, in the other place, each denied that this tax increase was breaking Labor's promise not to increase taxes. The Treasurer calls it a "cost recovery measure". He went on to explain why he wanted to increase this tax, but to any reasonable person it is and will always be a broken promise by this Government. Perhaps the health Minister can have a stab at explaining when a tax increase is not a tax increase. That is what we are dealing with. This is a tax increase which the Treasurer and the health Minister say is not a tax increase.

Since 2019 the major private health insurance funds have declined to cover the full gazetted fee for a private patient occupying a single room at a New South Wales public hospital, which is currently $928. The Government, desperate for new sources of revenue to offset its out of control budget expenditure blowout, has identified a potential source in private health insurance funds. It wants to either persuade the funds to cover the full gazetted fee or, alternatively, increase the Health Insurance Levy—that is a tax increase. The Government's efforts to persuade the funds to cover the full fee have so far not succeeded. Members should be clear that this bill does nothing to directly address the issue of cover for private patients admitted to a public hospital. The bill would increase the Health Insurance Levy from $1.77 to $3.27—an 85 per cent increase. This equates, in real terms, to a levy of $78 per year for single membership of a fund and $156 per year for a family membership.

This is the second clear breach of Labor's promise not to increase taxes. It has already increased land tax by freezing the land tax threshold, exposing many landholders whose land was previously under the threshold to land tax for the first time and increasing land tax for all those already subject to it. Increased land tax is naturally passed on by landholders to their residential or small business tenants, putting further pressure on renters and small businesses in a cost‑of‑living crisis. Similarly, the health insurance funds are just as likely to pass on the full cost of the levy to their members. Under the risk management rules set by the Australian Prudential Regulatory Authority for health insurance funds to cover all material risks, any increase in the quantum of coverage for a specific service under a policy needs to be prudentially covered by the fund. The usual way to do this is to increase premiums to reflect the additional cost of services covered.

Modelling by the private health insurance funds suggests that about 77,000 members may drop their private health insurance as a direct result of Labor's tax grab. An amount of $156 extra per year for health insurance for a family facing financial hardship in a cost‑of‑living crisis could well be enough to tip the decision towards dropping the policy altogether. That is not in anyone's interest—or in the interest of the public health system. Governments, both State and Federal, have worked on a bipartisan basis over many years to encourage the widespread take‑up of private health insurance to help spread the overall costs of the health system. However, the Minns Labor Government is now not only breaking an election promise not to increase taxes but breaking the bipartisan Federal‑State consensus on encouraging the take‑up of private health insurance. On its very patronising Cost of Living hub website, the Government offers gratuitous advice to those struggling to make ends meet. It includes this extraordinary advice on private health insurance policies: "choose not to have one if you are experiencing financial hardship". Let me repeat that. The Minns Labor Government is actively advising people to choose not to have private health insurance cover.

And this bill, which flagrantly, unashamedly and openly breaks Labor's promise not to increase taxes will force those who, despite the Government's gratuitous advice, are trying to maintain health insurance cover for their family, to drop their policy. This will, of course, add to waiting lists at public hospitals and increase the cost of the public health system. The bill should be opposed primarily on the grounds that it clearly breaks Labor's pre‑election pledge not to increase taxes. Given that pledge, the onus is on the Government to find other ways if it chooses to negotiate a new agreement with the funds about coverage for single rooms. On the Government's own account 44 out of 53 private health insurance funds have been covering, or have now agreed to cover, the full gazetted rate for a single room. This bill would impose the same 85 per cent tax increase on those funds despite those agreements.

The Government has no justifiable excuse for its tax increase on the members of those funds—and yet it persists. The Treasurer has attempted to insist that this legislation merely mirrors the legislation passed in 2013, when Mike Baird was Treasurer, but never proclaimed. I note that the proposed increase in that legislation was 45 per cent whereas the increase under this bill is nearly twice as much at 85 per cent. This is 2024. There is a cost‑of‑living crisis. The Government promised no increase in taxes. It has broken that promise once with land tax and the Opposition opposed that tax grab. This bill would be further breaking the same promise.

I am compelled to reflect on some of the observations made in the other place by the shadow health Minister, Ms Kellie Sloane. In a remarkably erudite contribution, she said in relation to this bill:

It is a false economy by Labor because this decision will ultimately end up pushing policyholders back into the public health system, which is already stretched and has the longest queues in the country. In a cost-of -living crisis, families are holding on to their private health insurances by their fingernails. In the first half of 2024, 216,000 Australians downgraded their cover because they are finding it really hard to pay their bills.

We know that families value the health of their kids and themselves above everything else. This tax will hurt. We cannot forget this Government—indeed, all governments—wants us to have private health insurance because it saves the system money. The private health rebate incentivises us—some would say forces us—to take out private health insurance if we want to get some tax back. In that context, this bill does not make sense.

Who takes out private health insurance? It is not a luxury only for the rich; it is something the majority of people value. In New South Wales 65 per cent of people who have private health coverage earn less than $90,000 a year. Approximately two in five people with private health coverage have an annual taxable income of $50,000 or less.

The shadow Minister goes on:

Treasurer Mookhey pulled out the old, "I am just doing what he did" argument and said he is recycling a tactic used by Mike Baird in 2013. It is desperate to reach back that far for justification and it is actually quite misleading. I will compare the two situations.

Most Australians and people in this city and State are living through the worst cost-of-living crisis that they have experienced in their lifetime. In 2024 it is incredibly out of touch to think that adding $114 to the average person's premium or $156 to private health insurance is sensible. The average house price in Sydney has doubled over the past 10 years to more than $1.6 million for a three‑bedroom house. In 2013 the average 30-year mortgage rate was under 4 per cent. Now, it is closer to 7 per cent. In 2013 Mike Baird proposed an increase from $1.37 to $2, which was a 45 per cent increase.

Labor is proposing to double that and increase the levy to $3.27. It is not a like-for-like comparison …

Labor Government Ministers have proven time and again that they cannot do deals. They could not do one for GST with their Federal colleagues.

The Treasurer continually bleats in this place, and in some respects has the Opposition's support, although the bleating is of his own making. She goes on:

They could not do one when Albo took away infrastructure funding from this State. There is industrial chaos in this State because they cannot even do deals with their union mates. How can we possibly expect them to do a deal here? Rather than negotiating in good faith, they—

their private health insurance holders—

are taxing the people of New South Wales in a cost-of-living crisis, when people are leaving private health in droves. Currently, Labor's budget has a $140 million unfunded revenue target. That is why we are seeing this tax. Labor needs to find the money, and it is trying to find it from private health. It is counting on private patients funding more of our public health system. That is the reason for this tax.

The Government needs the money. It also needs people to retain their private health insurance, but it is making it more expensive. That is absurd.

I make one observation on the manner in which the Treasurer is conducting the arguments relating to the bill. He has portrayed the private health insurers as being the greedy, big end of town. That is an absurd proposition. He is suggesting that the Opposition, by opposing the bill, are backing in the big end of town. Quite frankly, that is a nonsense argument. The Opposition is backing in the people who earn $90,000 a year or $50,000 and who are struggling to take out private health insurance because that is what they think is best for themselves and their families, notwithstanding that may not be the Treasurer's view.

I can tell the Treasurer that the view of Opposition members is that we will stand up for them every single day of the week. In the Treasurer's inability to negotiate with the health funds, he has demonstrated that he does not have the ability or the capacity to demonstrate why they should be contributing more. Has the Treasurer ever considered that when he talks about the massive profits those funds are earning, a lot of those profits were premiums that were collected during COVID when lots of people were not having elective surgery and were not using private health facilities? There were certainly increases in profit margins by those private health funds during that period.

The Hon. John Ruddick: And returned to the members.

The Hon. DAMIEN TUDEHOPE: I acknowledge that interjection because that is the fallacy that the Treasurer relies upon to say they earned massive profits between 2020 and 2024; therefore, these are the greedy health insurers. If the Treasurer had one iota of integrity, he would acknowledge that fact and put the true facts about health funds on the table, not portray and demonise them in the manner he has done. This is old Labor‑style strategy to achieve political outcomes: Find a demon and demonise them in the media and in political debate without having the integrity to have proper arguments relating to what premiums should cover. I am up for that discussion because lots of us pay very expensive private health insurance premiums. As we get older, as I have found out and which the Treasurer will find out, those premiums increase significantly. People often think, "What am I getting for my dollar?" That is a legitimate argument to have, but the Treasurer should be up‑front.

The ASSISTANT PRESIDENT (The Hon. Peter Primrose): Members will listen to the Hon. Damien Tudehope in silence.

The Hon. DAMIEN TUDEHOPE: The Treasurer should have been up‑front about the analysis and the arguments he has put to the health funds in respect of what their profit position truly is because the health funds who return those profits to their members are not making massive profits of the magnitude he characterises. In one sense, by characterising that he has tried to play a class warfare game, which in many respects does not reflect any benefit to this debate whatsoever. The Opposition will oppose the bill. I repeat that Opposition members are ready to stand up for every private health insurance policyholder who earns $50,000 a year or $90,000 a year, because many of them are struggling with cost-of-living pressures and should not be subjected to this strategy or tactic that the Treasurer wants to put in place to force, as he calls it, private health insurance corporations into a circumstance whereby they negotiate with him.

In summary, this is a tax increase. It is an attack on ordinary taxpayers and an attack on private health insurance policyholders. To characterise it as greedy health insurance companies is a mischaracterisation and a demonisation of an industry that should not be subject to this type of strategy of trying to extract a deal from them. For those reasons, the Opposition will oppose the bill in its current form.

Ms ABIGAIL BOYD (21:08): On behalf of The Greens, I wholeheartedly support the Health Insurance Levies Amendment Bill 2024. This is a really fun debate and it has been very fun to watch the Opposition tie itself in knots to try to support not the entire private health insurance industry, but just the really big ones—the big corporate ones—not the 44 or whatever it is out of the 50‑something that have been paying what they are supposed to be paying. The Opposition only cares about the ones that have been holding out. It has the collective resources to know full well what the bill is trying to do, and that is to stand up to big business. A similar strategy was used so effectively by the then Treasurer, Mike Baird in 2013. Opposition members saw it as a clever way around what would otherwise be hard to enforce, yet now they say that somehow it is not the same clever idea that it was in 2013. Of course it is. The only thing that could be said to be different is that perhaps there was a slightly higher rate, but the Opposition's contribution never explained how that made it a bad idea. By all means, I invite the Opposition to explain how a lower rate would recoup the amount that has been stolen from the public purse by those health insurers.

I absolutely agree with the Leader of the Opposition that we have more expensive premiums, because private health care is an absolute rort. It was an absolutely terrible idea when it was brought in. There were tax incentives to try to incentivise everybody to get onto it. It is based on the idea that the public healthcare system would eventually be replaced by private health care so that we have a two‑tier system—those who can afford private health care and those who cannot.

The idea is that that is completely okay because some people can pay a huge amount so they get on the waiting list more quickly. People who have children have no choice but to spend a ginormous amount of our money on private health care because of the fear of otherwise not being able to get into the public healthcare system. Now that we have got rid of the horrible, miserly Coalition governments at both the Federal and State levels, we are trying to reinstate public services for the public good after the failed experiment of neoliberal capitalism. What we have now—

The Hon. John Ruddick: They were socialist.

Ms ABIGAIL BOYD: Absolutely, I'm a socialist.

The Hon. John Ruddick: No, the Liberal Party was.

Ms ABIGAIL BOYD: The Government is trying to keep our nurses, doctors, psychiatrists and everybody else in our public healthcare system and to not go down the route of the United States, where people have to mortgage their homes in order to access a routine operation. The Government is actually trying to re-bolster the public health system. At the same time, people are being forced to pay higher mortgages and are burdened by all of the other cost‑of‑living pressures that can be driven home to big business in so many respects.

One only needs to look at the Coles and Woolworths scandals or the extent of the price gouging that the energy companies have been found guilty of. There is so much price gouging by big corporations, which are taking advantage of the fact that over the past few decades public services have been run down to such an extent that people have no choice but to pay for every single thing. I do not want to live in a society where people do not pay any taxes and it is a free‑for‑all—where people just pay the bare minimum in tax and then have to pay in full for everything else. People who cannot afford it will not get it, whether it is health care or schooling or anything else. Apparently, we want to live in a user‑pays society where we all think of ourselves as individuals—very Thatcher, very Reagan. Here we are back in the '80s, at the birth of neoliberalism, with the idea that we are all disconnected individuals who should be paying our own way. Whatever has happened in our lives and whatever downfalls we may have had, that is our own fault—"I'm sorry, you don't really live in a society. There is no such thing as a society." Thank you to Margaret Thatcher.

Instead of that, now that we have seen how terrible that is, people want to come together as a society and are looking again to governments to provide those very basic essential services. Those policies are the ones getting more support. Whether it is Queensland Labor introducing the lovely Greens policy of free transport—it settled on 50¢ fares, which is great—or whether it is the Victorian Government talking about properly putting in place national energy generation and energy retailers, those sorts of policies are coming back. People want the Government to build massive amounts of housing. They want the Government to start providing essential services because the fact is that the cost‑of‑living crisis we are in right now is a direct result of the failed policies of the conservative side of politics, primarily—but unfortunately egged on by the Labor Party until more recent times—which have led to corporations being able to get away with whatever they want to get away with.

That brings me to the bill. A bunch of private health insurers are putting people into public hospitals, where a public hospital patient would otherwise be. The private patient has hopped up the waiting list, has got their elective surgery and has been fast‑tracked into a public hospital bed. Instead of paying what that bed is worth, the private health insurer has decided to pay only 60 per cent or 75 per cent of what it has been asked to pay. The Opposition suggested that if they were made to pay what they should be paying then somehow that would increase premiums, but that would not be the case for those that are already paying. If companies like Bupa agreed to pay the full price—or not the full price, because the bill offers them a discount, which is very generous—rather than a levy that is more than the cost of the bed, but then told its members that their premiums would go up as a result, my advice to those members is to go to a private health insurer that is already paying the full price.

When the bill goes through, it will have the same effect as it had in 2013. The big private health insurers will work out that they cannot just keep stealing from the people of New South Wales or they will be hit with a big, fat levy. Instead, those insurers will finally pay what they actually owe the State and the public health system. That may result in their premiums going up, but the premiums of companies that have been paying the full price the whole time will not go up. My advice is to shop around and find an insurer that has not been ripping off the public sector and the public hospitals. They will have a more ethical governance structure in place, where they acknowledge their responsibility to pay what they are obliged to pay, and there will not be any premium increases as a result. That is a complete red herring, and it is fascinating to hear the Opposition talk about it.

I love that Private Healthcare Australia, the lobby group for private health insurers, tried to threaten crossbench members with a letter. Next time it might want to give us a little bit more credit because we can see through its BS. I am not allowed to swear onHansard but I am allowed to say BS. It is complete BS. I can probably say "bollocks". The letter told us that the Minns Government will increase the cost of private health insurance, but it completely neglected to mention that, by the way, many private health insurers have been making extra profits. It did not mention that they run their business and make their money not by being frugal, or looking for good ways to be more effective or efficient, or cutting costs internally, or any of those things. They make money by simply choosing, out of thin air, how much they will pay for each public hospital bed that they use.

It boggles my mind that a huge company is allowed to say, "I see what you are offering me for that bed." I cannot remember what the amounts were; I probably have an example. The average cost for public health to accommodate a private patient in a single room is $1,075 per day, but the Government says, "I am not going to charge the whole $1,075"—even though that is what it costs the public health system—"I will give you a 17 per cent discount. Just give us $928." Some of those companies are paying $436 instead of $1,075. There is no discussion or consultation; that is what they have decided they would like to pay.

Private Healthcare Australia has demonstrated in this letter that it will stop at nothing to lie to the people of New South Wales. At no point has that dishonest lobby admitted that what it is doing is stealing. It is selling a product. Let us say, in this particular instance, that it is selling a procedure in a hospital bed in a public hospital. It is saying, "You pay this amount of premium, and we will deliver this back to you at some point. That is what you get." What the lobby is not telling you is that it has stolen what it gets from the public health system because it has paid less than half of it. It then sells you back those stolen goods. It is close to fraud. It is quite extraordinary. That is only eclipsed by the fact that, despite having done the exact same thing in 2013, the Opposition is saying that the Government is breaking a promise that it would not introduce any new taxes. What rubbish! It is extraordinary. Has the Opposition got nothing yet in terms of an agenda that it cannot come up with an intelligent argument against something like this? Instead, there are lies.

The Hon. Damien Tudehope: Don't give them the bed. If you don't like it, tell them they can't come.

Ms ABIGAIL BOYD: I acknowledge that there have been some great interjections. The suggestion is that the public health system should say to the people who have paid for private health insurance and are on waiting lists that they cannot have a public bed. The interesting thing about that is the current, very public stoush between private hospitals and private health insurers because private hospitals are having the same problem. The private health insurers will not pay the private hospitals what they are owed either. There will be no beds for anybody.

The Hon. Damien Tudehope: There's your solution.

Ms ABIGAIL BOYD: I again acknowledge the interjection. The Opposition's solution to the issue is that all of those people who, in a cost-of-living crisis, have been paying huge amounts of premiums should now be denied the very thing that they are paying that insurance for. Wouldn't that be the icing on the cake for those poor people? We are told that those opposite are the ones who care about people, despite them saying, "Don't give them a bed," and to let people suffer from getting nothing in return for the premiums that they have paid. The villains in this story are the private health insurers. It is not hard for one to wrap their head around. Mike Baird understood it because he had a strategic mind. I may not have agreed with him on everything, but he understood that you do not let big business trample over you when you are in government. I would not expect anything less from the Treasurer on this.

My only criticism is that the bill should be much harsher. I understand that there are limits as to how harsh it can be. The Greens will move amendments. I had to restrain myself; I would have loved to have gone much harder. The amendment that I will move is in direct response to the misinformation in Private Healthcare Australia's letter. It will require annual disclosure by those companies of exactly how much they are paying and how much they have not paid so that we never end up in this situation again. To make doubly sure of that, we will not have a regulation that expires after a year. We are going to have this threat hanging over their hands forever. We do not want another situation where massive health insurers are reneging on deals that they have made with government. Having heard what the Opposition has to say tonight, it is clear that those opposite are not up to the task of standing up to big business. We have to have this bill in place. I have thoroughly enjoyed myself. I thank the Treasurer for bringing such a fabulous bill to the House. The Greens love it.

The Hon. CAMERON MURPHY (21:25): I speak in support of the Health Insurance Levies Amendment Bill 2024. It is an important bill. I do not agree with everything that Ms Abigail Boyd said in her speech, but I agree with a lot of it.

Ms Abigail Boyd: You're a socialist.

The Hon. CAMERON MURPHY: I am a proud socialist. I put some facts on the table. The industry would probably not exist without government support. It was the Howard Government forcing everybody, with either subsidies or tax penalties, to take out what in most cases is junk insurance. Nobody gets value for money out of it. Hospital insurance has degraded to the point that it covers virtually nothing. The facts are that there are some 53 health insurers, and all but nine are paying their bill. They are paying the right rate. It just so happens that four of those nine are the big four insurers that make up 74 per cent of the market, being HCF, NIB, Medibank Private and Bupa. The legislation is identical to the legislation introduced by Mike Baird when he was Treasurer. The then government, now in Opposition, did not think it was a tax increase at the time. It was all about ensuring that private health funds paid their fair share. The hypocrisy from the Opposition is staggering. Those opposite are doing nothing more than running a protection racket for the big four private health insurers, who refuse to pay their fair share.

All of the other funds, the mutual funds set up by unions and other community groups, are paying. They are honouring the agreement by and large. They do not have a problem paying their bills, but the Opposition is not saying anything about that. Those opposite are saying that they want a two-tiered system where the not‑for‑profit funds have to pay but the big four should be exempt from paying their fair share. That is what the Opposition is saying in this debate. Since the regime came in under the Howard Government, barely a year has gone by without the private health insurers going cap in hand to the Federal health Minister and saying, "The sky has fallen in. We cannot pay for anything. We want a premium increase." In more years than not, the premium increase that they have sought exceeded the inflation rate. They want massive increases year after year. At the same time that they are doing that, the poor punter out there has had their policy stripped. The insurers have systematically taken out benefits and made it more difficult for people to access.

Over that same period, those funds have made massive profits. Private health insurers have experienced significant growth in their profits since 2019. Australian Prudential Regulation Authority data shows their profits doubled between 2019-20 and 2022-23, with a 185 per cent increase from $723 million to $2.1 billion. That is a massive increase in profit during the same period when they were saying to this State they could not afford to pay what they agreed to pay under the former Government. They have reneged on that. They have not paid it. They are refusing to do what they said they would. The bill will ensure that they honour the agreement they made. There were massive increases not only in profits but also in executive bonuses. Year in, year out, without fail, they pay their executives massive bonuses. That is not about protecting consumers; it is a protection racket for the big four private health insurers and their executive bonuses. That is what the essence of the debate is about.

On one side of the Chamber, the Government, The Greens and other progressive parties are saying, "Pay your fair share." The reason we want the fair share paid is that revenue is important for the State to reinvest in providing nurses and improvements to the public hospital system, so that public and private patients have better facilities. The money ought to go into the health system instead of the yearly bonuses of executives in private health funds. The difference between the Government and the Opposition is the Government is saying, "Pay the money you agreed to pay back to the State so we can reinvest it," while the Opposition is saying, "The sky is going to fall in. They might ask for an increase in premiums. This might affect their ability to operate." They ask for increased premiums every year. They reduce services they provide to members to the point where a lot of it is junk insurance. Nobody would take it out and—let's be honest—those insurers probably would not exist if it was not for the Commonwealth regulatory regime. We need to make sure that they pay their fair share to the State. The bill absolutely does that, and I commend it to the House.

The Hon. CHRIS RATH (21:32): I speak in debate on the Health Insurance Levies Amendment Bill 2024. It is completely delusional to think that, if the Government increases taxes in this way, private health insurers will not pass it on to consumers. Of course they will. If the Government levies any new tax on insurance, of course the private health insurers will pass it on. I worked in the general insurance industry for 6½ years and the taxes are always passed on to policyholders. Whether it be stamp duty, the emergency services levy or GST, they are all passed on. What makes the Treasurer think that, if he increases taxes on private health insurers, it will not be passed on to consumers? He will spend the next few weeks saying this is a tax on the big end of town and on the big private health insurers with super profits. That is nonsense. It is a tax on policyholders. It is a tax on the ordinary, everyday people of New South Wales who will have to pay it.

Private health insurers are not allowed to absorb the cost because Australian Prudential Regulation Authority will not let them. There are certain capital requirements for private health insurance. To think they will absorb these costs if the Parliament passes the bill is completely ludicrous. It will be entirely passed on to consumers like every single other tax. It is a complete misunderstanding of how the insurance industry or any business works to think that that will not be passed on to consumers. So, what do we know? We know that it will amount to about a $78 increase in premiums for a single person and $156 for a family as a result. It will not reduce the profits of the big private health insurers. It will simply increase premiums to policyholders. That is what we know will happen.

We also know that about 70,000 people will leave the private health insurance market as a result. You tax things you do not want. By increasing the tax on private health insurance, all that will happen is about 70,000 people will leave the market. There will be a substitution effect. People who consume private health insurance will start consuming public health services, putting more strain on the public health system and therefore more strain on the taxpayer of New South Wales, who will have to foot the bill. That is what will happen. It is more than that. It is also, as the shadow Treasurer said, another broken promise. It has become quite farcical that the Treasurer has not even admitted he has broken his pre-election promise. We first saw it with the coal royalties. Maybe with some sort of gymnastics he could say that increasing coal royalties was not a tax. But even by the Treasurer's own very generous definition of what constitutes a tax, this certainly would be an increase in taxes.

He seems to think a fee, a fine, a levy, a charge, a change in thresholds, or a surcharge is not a tax. He can massively increase the amount of revenue the Government receives and it is somehow not a tax. It beggars belief. This is definitely a tax. It is a health tax on hardworking families in New South Wales. It is because the Government has lost control of the budget. Let's call it out for what it is: The Government has lost control of the budget. It needs additional sources of revenue. Members opposite think the tax is a cheap and easy way to get new revenue coming in. They have given all the money that they already have to the union bosses. They need it for their budget bottom line.

If members opposite seriously believe that private health insurers were making super profits, they should pick up the phone to Anthony Albanese. They are the ones who regulate the profits of the private health insurers. We have community pricing for private health insurance in Australia. That means they cannot charge anything they want. They have very regulated premiums, unlike general insurance and many other industries. The private health insurance market in Australia probably has the most regulated prices of any industry. If members opposite were seriously unhappy about the so-called super profits made by the private health insurers, they should pick up the phone to Anthony Albanese and Jim Chalmers, instead of pulling a cheap stunt of increasing taxes when they promised, before the last State election, that they would not. Some points have been rightly made about the fact that so many people have taken out private health insurance. There are various incentives. People want to avoid the Medicare levy surcharge and take up the Medicare rebate and rightly so, because it means that there will be less pressure on the public health system.

If private health insurers were so evil, why have previous Federal Labor governments not dismantled the private system? They have not because dismantling the private health system would mean complete chaos for the public health system in New South Wales and Australia. That is why it has not been done. Regarding the so‑called super profits the Hon. Cameron Murphy said private health insurers supposedly make, the Labor Party did not do anything about that when last it was in government federally, nor is the current Labor Federal Government doing anything about it now. The Labor Party has not stood up to the private health insurers to try to reduce premiums. It supposedly capitulated to their demands of increased premiums.

As I said, the Treasurer will say for the next few weeks that it is a tax on big private health insurers, but we know what it is. It is actually a tax on the people of New South Wales who take out private insurance. As the shadow Treasurer said, they are not rich. They are aspirational. They earn $50,000 or $90,000 a year. They are trying to avoid the surcharge once they get to the $90,000 or $100,000 threshold, so they take out private health insurance. They are trying to reduce the strain on the public health system by having private health insurance, and now they will cop a massive new tax. Already, 216,000 Australians have downgraded their private health cover in the first six months of the year because we are facing a cost-of-living crisis. Who on earth would think that in that cost-of-living crisis it is a good idea to increase premiums through a new tax on private health insurance? Apparently, the Labor Party does; that is its proposal. I will leave it there, except to say that it is a broken promise. It is a health tax. If Government members want to do something about premiums and the super profits of the private health insurers, they should pick up the phone to Canberra instead of pushing up premiums for everyone else.

The Hon. JOHN RUDDICK (21:40): The Libertarian Party opposes the Health Insurance Levies Amendment Bill 2024. The Libertarian Party is the low tax party—period. In our budget submission earlier this year, we outlined an agenda for cutting a range of taxes. We specifically called for the removal of all insurance taxes. Specifically, the Libertarian Party budget submission said, "Insurance is an unambiguous good, and there is a strong case that people are already underinsured. Removing the insurance duty and the health insurance levy will allow people to make the best insurance decision for themselves without being penalised by the Government." We specifically called for the abolition of this tax to let the private health insurance industry flourish but, instead, the Labor Government is hiking that premium. The poor old private health insurance industry is grossly over‑regulated. Insurers cannot lift the price of their services, like any other business. They can only do what the Commonwealth dictates. They are, therefore, against their will, quasi-government institutions.

Switzerland has the world's best healthcare system and the world's best health stats because private health insurance covers everybody. The Government does not run one hospital in Switzerland. Low-income earners are given a voucher to purchase private health insurance. That is the model we should be emulating. The Swiss have 194 insurers in a market smaller than the New South Wales market. We have heard from the two self-declared socialists tonight. They asked who sets the price and talked about price gouging. In Switzerland, consumers set the price for private health insurance through supply and demand. Australia, which is much bigger than Switzerland, only has a handful of serious insurers because it is so regulated. A discussion about health should be about what is best for consumers. What is best for Australians and the people of New South Wales is to have good health.

Members should look at Switzerland. If Government members truly cared about health outcomes and not socialist ideology, they would say, "Switzerland is working. Let's copy that." We heard one of The Greens say, "Look at America. They have to mortgage their houses." America has a very heavily regulated health system now, thanks to President Obama. The only country's system that works is Switzerland's. I do not know why the Treasurer does not look at it. He often tells me that he reads about President Milei in Argentina.

The Hon. Daniel Mookhey: I do. I was reading about him today.

The Hon. JOHN RUDDICK: He does, every time I bump into him. I am pleased he has an open mind on it. Why can't the Minns Government cut spending? It has taken some baby steps in winding back free vouchers for this and that, but it is fiddling at the edges.

The Hon. Susan Carter: Shame!

The Hon. JOHN RUDDICK: My dear friend the Hon. Susan Carter says "shame". The Liberal Party disappoints me so much. It is a shame that they cut back vouchers? Oh dear, they are socialists. The raising of this uniquely New South Wales health insurance levy—aka tax—directly impacts the lives of almost five million residents across the premier State—or should I say the "premium State"? This legislation will increase the current health insurance levy, raising the tax from $1.77 per week to $3.27 per week per person. The original tax rate of $1.77 was introduced under the former Government in 2014 via the innocently named Health Services Amendment (Ambulance Fees) Bill 2014. Who could argue with paying more for ambulances? The pitch of that tax was to address the rising cost of ambulance fees. Now the tax is being doubled, but at least the current Government is not dressing up a revenue hike with a fake justification.

The Minns Government estimates this will raise around $229 million annually, with an ambitious target of nearly $1 billion over four years. It will fail to meet its revenue target. It will likely only see about 70 per cent of that expected revenue because—surprise, surprise—there will be a significant decline in private healthcare participation and lowered coverage. It will also flow through to an increased burden on the Commonwealth Government. The private health insurance rebate, funded partly by the Federal Government, will rise by $37 million due to the tax. The Government argues that health funds have super profits that are sufficient to absorb that cost without passing it on to consumers. I do not believe the Treasurer thinks that is true. The Leader of the Opposition, the Hon. Damien Tudehope, was 100 per cent correct. There were larger than usual profits because of the fake pandemic and because people were locked away for no good reason and did not use health services.

The Hon. Anthony D'Adam: It did not happen.

The Hon. JOHN RUDDICK: It was a fake pandemic. It was a bad flu and all the fools opposite fell for it. Those profits are mostly returned to members. I hope the Treasurer will address that in his reply. The new levy will directly increase private health insurance premiums for all New South Wales participants, adding about $78 per individual and $156 per family next year. That is an increase of about 4.1 per cent on top of their existing premiums. People will get their insurance bill and there will be a little line item on it saying "State Government tax". It will all be out in the open. With the cost-of-living crisis, caused by global warming fakery and the COVID pandemic, we have inflation. So households across New South Wales, from Cessnock to Cabramatta, will look at each other across the dinner table and say, "We can't afford it anymore. Let's take a risk with our health and go into the public sector." The Government will not raise the revenue it is claiming to raise.

A significant portion of New South Wales residents, especially younger people and lower income earners, will drop their cover. Modelling provided by the very respected Private Healthcare Australia shows that about 75,000 New South Wales residents will simply opt out of private health insurance. Is the Treasurer proud of that? That careful modelling was sent to Treasury and ignored. I doubt they could have found holes in it. New South Wales has the longest waiting times for elective surgeries in Australia. Under this proposal, public surgery wait times will increase by up to 7 per cent according to the modelling, which sounds right to me. That means more people waiting longer for the care they need and reduced productivity outcomes in the interim. I urge the Government to stop dreaming up new taxes, grow some spine, look at what is happening very successfully in Argentina under President Milei and slash Government spending.

The Hon. SUSAN CARTER (21:48): I contribute to debate on the Health Insurance Levies Amendment Bill 2024. It has been a most instructive debate. Apparently, the reason that this tax or levy—call it what you like—should go ahead is because health insurance is fundamentally bad. According to the Hon. Cameron Murphy, it is okay to tax it, and we should tax it, because it is bad.

Ms Abigail Boyd: It is not a tax.

The Hon. SUSAN CARTER: I acknowledge that interjection. If it hurts like a tax, is going to cost like a tax and is going into the Government's pocket like a tax, what is it other than a tax? One can call it by any name one likes. It can be called a charge, or it can be called a levy. In fact, it is called a levy. Today I had occasion to look at theCambridge Dictionary, which tells us that levy means "to demand an amount of money, such as a tax, from a person or organisation". Whether it is framed as a tax or a levy, it is still money coming out of people's pockets and it is still a broken promise.

The argument is that it is okay to break a promise because it is insurance. How can insurance be fundamentally bad? Ms Abigail Boyd seemed to say that families who paid health insurance were somehow being constrained against their will by evil corporates. The families who are paying health insurance are not high-income earners; they are people who want to make sure they have choices when it comes to health. Why are they a target of this Government? Why are they the focus of the broken promise?

The Minns Labor Government promised no new taxes but, clearly, a year is a long time for Labor promises. We are being presented with new tax after new tax. Land tax is going up. Who does that hurt? It does not hurt landlords; it hurts tenants. In a cost-of-living crisis and a housing supply crisis, Sydney now has the highest rents in the country and a Minns Labor Government land tax hike. Now we are getting an 85 per cent tax increase in the health insurance levy. When was the last time we had an 85 per cent tax increase? Today much has been made of the actions of Mike Baird, and it is fascinating to see that a Liberal Treasurer is apparently the gold standard for this Labor Government. We have a few other Treasurers' suggestions that we would like the Government to take on board. The increase then was not anywhere near the 85 per cent which is now being proposed.

What is so disappointing about the pattern emerging from this Government is that it seems to be focused not on addressing the cost-of-living crisis or giving more money to families but on making the people of New South Wales poorer. It is as if the Government is reaching into our back pockets, taking our money, giving half of it back to us and saying, "Look at what we have given you." Consider the much-vaunted wage increases for frontline workers. Increased wages were offered to health workers, but those same workers were then charged more to pay for parking when they got to work. Land taxes were hiked to make it harder for renters to save for a deposit. The Government has also removed the Coalition's stamp duty reforms, which means that a first home buyer purchasing a median-priced property in Sydney will now have to save for both the deposit and stamp duty. So this Government has made buying a home harder for frontline workers by axing our shared equity scheme.

According to its own figures, the BASIX increases introduced by this Government increased the cost of building an average house in Blacktown by $7,152 and increased the cost per apartment in a high-rise in Macquarie Park by $860. How is that helping families cope with getting into a house, paying their rent, paying their mortgage and providing for their health costs? This bill, which will increase the cost of everybody's health insurance, is actually the ultimate irony. Week after week this Government praises itself for its skilful negotiations with the unions and the mutual gains bargaining approach we hear so much about but which has still not borne much fruit, judging by the regular protests outside this building.

Essentially, the issue before us is that the Treasurer wants to significantly increase what private health insurance funds pay for a private patient occupying a single room at a public hospital. There are two ways to go about that: Negotiate with those health insurance funds, or do what we have before us, which is to increase a tax by 85 per cent. Why are we going for the tax increase? What happened to the great negotiation skills that we keep being told this Government possesses? What happened to the great bargaining skills that we are told, week after week, this Government possesses? How exactly is the mutual gains bargaining approach working when it comes to dealing with health insurers? Apparently, not at all. The Minns Government has been totally unable to persuade the funds to cover that increased fee, so it bailed from the negotiations and is now introducing this bill that will have one effect: to cause everyone's health insurance premiums to rise. And what is the collateral effect of hiking up health insurance premiums in a cost-of-living crisis? It will see around 77,000 health fund members drop out of their insurance.

What happens then? What is the beneficial effect of that for the New South Wales community? None, because it means that the people who were contributing to their health costs are then thrown completely onto the public health system. That means longer waiting times in public hospitals for everyone and higher health costs for the public purse because the Government will now be bearing the entire cost of health care rather than part of it being met through private health insurance. The supreme irony is that the Government is increasing the cost of the very health care it is trying to provide.

Lower private health insurance participation shifts demand from the private to the public system. People are then reliant on public hospitals, increasing strain on the public system through longer waiting times and higher public costs and overworking the healthcare workers, who the Government claims to care about. As has been mentioned before, this Government is actively recommending that members drop their private health insurance to save money in a cost-of-living crisis. The only certainties of life under a Labor Government are taxes and more taxes. I am disappointed to see this Government's economic mismanagement continue to harm the people of New South Wales.

Dr AMANDA COHN (21:56): I feel compelled to contribute to this debate, in response to the opponents of the Health Insurance Levies Amendment Bill 2024. Members know that I take my role as The Greens' spokesperson for health, including mental health, really seriously, and that includes holding the Government and Ministers to account. It is a joy on this occasion to agree so wholeheartedly with the Government, because it is doing an excellent job. Tonight we have heard the Liberal Party and The Nationals declaring their priorities in a healthcare crisis. We have a healthcare crisis, and they are interested in protecting the profit margins not of the private health insurance companies generally but just the nine insurers that are refusing to pay their bills—not the other 44 that are. They have declared their true colours tonight in the interjections. The Hon. Damien Tudehope, not in his speech but when interjecting on other members, said that the solution is that public hospitals should refuse beds to people with private health insurance because nine private health insurers will not pay the bills. Those are the true colours of the Liberal Party and The Nationals.

The Hon. Damien Tudehope: Except it was public patients.

Dr AMANDA COHN: I have only got three minutes left; please let me finish. What we have heard tonight is just a regurgitation of the myth that spending public money on private health cover takes pressure off the public system. I have to commend the excellent work of the former leader of The Greens, Senator Richard Di Natale, who really did the work to point out that that is not the case. That is a myth that has been propping up the profits of the private health insurance companies for years. It is inefficient. When we spend public money on the private system, we are propping up unnecessary care, duplication and inefficiency. When I worked in public hospital emergency departments, I lost count of the number of messes from the private system that I had to fix up. The taxpayer should not be propping up the private health insurance industry. If we reinvested that public money in the public system, people could get the care that they need in public hospitals.

People are desperate to hold on to their private health insurance. I recognise that. Families are desperate to hold onto their insurance because the public system is crumbling. Members have said that things would be much better in an even more privatised system. We need only look at the privatised healthcare system in the United States. In 2024, in one of the wealthiest countries in the world, life expectancy is going backwards because of that privatised system. The bill is fantastic. I commend the comments of my excellent colleague Ms Abigail Boyd. I look forward to the Treasurer reinvesting this revenue in health care and, dare I suggest, putting it towards the wages of nurses and midwives.

The Hon. AILEEN MacDONALD (21:59): I oppose the Health Insurance Levies Amendment Bill 2024 because it does exactly the opposite of what Labor promised to do at the most recent election. Before the election, Labor promised no new taxes and no increases to taxes. Since then, the Government has frozen the land tax threshold, resulting in increased land tax. This bill seeks to do the same with private health insurance. It is nothing more than a health tax on the hardworking families of New South Wales. The Labor Government wants to raise the levy applied to private health insurance customers. It may not seem a lot on the surface but it equates to an increase in premiums of $78 per year.

The DEPUTY PRESIDENT (The Hon. Peter Primrose): According to standing order, it being 10.00 p.m. proceedings are interrupted.