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Publication: |
The Advertiser |
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Date: |
8 May 2009 |
PRIVATE health insurance will be more expensive from next week when the Federal Government is expected to unveil a sliding scale means test for the private health insurance rebate.
Middle and high income earners will lose the generous 30 per cent rebate on private health insurance premiums introduced by the Howard Government to encourage the uptake of private hospital cover and to take pressure off the the over-crowded public hospital system.
The introduction of a mean tests, which would represent a broken election promise, comes as the Government looks to claw back billions in so-called middle-class welfare and generous tax concessions for the well off in a "horror" Budget the Government wants to be seen as a Robin Hood-style approach. The Advertiser has reported that superannuation concessions for the rich are also to be scrapped.
It is understood the rebate will be reduced on a sliding scale according to income. Singles earning more than $74,000 per year will begin to feel the pinch with the rebate reducing by a greater amount up to an annual income of $120,000 when it will cut out altogether. For couples, those amounts are likely to be $150,000 and $240,000.
Under the new arrangements, which may not take effect until next year, the wealthiest tax payers will have the rebate taken away completely. Critics of the idea of means testing the private health insurance rebate have argued that removal of the rebate would encourage wealthier people to drop private health cover and to fall back on the public hospital system. But it is understood the Government intends to get around this problem by imposing a cost penalty on wealth taxpayers who refuse to take out private cover.
These people may be required to pay more a 50 per cent higher compulsory Medicare Levy.
The harsh moves underscore the determination of the Government to address a burgeoning black hole in public finances which the Treasurer Wayne Swan this week admitted would exceed $200 billion. Opposition Leader, Malcolm Turnbull has even suggested that Commonwealth public borrowings will exceed $300 billion as the Government seeks to fund vital services, new pensions, and previously legislated tax cuts due to start in July.
Prior to the election, Labor promised not to scrap or change the private health insurance rebate even though many Labor MPs had long regarded the policy as little more than a sop to the rich and a public subsidy for the lucrative private health industry.
