Sunday, May 11, 2008

Medicare levy overhaul long overdue: Roxon

Federal Health Minister Nicola Roxon says changes to the Medicare levy threshold are long overdue.

In Tuesday's Budget, the Government will increase the threshold at which taxpayers are financially penalised for not having private health insurance.

Under the current system, middle-income earners pay an average levy of $600 if they are not privately insured and the changes will see the threshold increased to $100,000 for singles and $150,000 for couples.

Ms Roxon says the threshold has not been adjusted to keep pace with wages since it was set in 1997.

"At that time when the threshold was $50,000 a year, average wages were well under that at around $34,000 a year," she said.

"Now you can be earning less than the average wage and still be hit by the Howard government's threshold. We don't think that's fair."

She says people will now have extra money to allocate to other spending.

"It means that several hundreds of thousands of people will be able to make a choice what they do with their family budget," she said.

"Whether they have private health insurance, or whether they put the money into something else and will not get hit with this extra tax."

But a major private health fund says the Federal Government should consider means testing Medicare.

Federal Opposition Leader Brendan Nelson says the proposed changes could lead to a cost blowout in the public health sector.

Dr Nelson says Prime Minister Kevin Rudd needs to explain why the changes are needed.

"Go to all of our public hospitals throughout Australia, look the doctors and the nurses in the eye, and you tell them why fewer people in private health insurance and more people relying on public hospitals is going to help them," he said.

"In other words, the State Government and the Commonwealth Government is going to have to get the cheque book out on behalf of the taxpayer and put more money into our public hospitals just to tread water."

NIB spokesman Mark Fitzgibbon says if the Government wants to ensure a more equitable system, it should consider refusing to insure wealthy people.

"What governments should be looking to do is go further with private health insurance and start to examine how they can support people in their saving ambitions to fund their lifetime health costs," he said.

"An obvious step to start with is to stop giving free health care to richer people."


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