Senate defeats Medicare bill

AAP - Family First's Steve Fielding has killed the government's Medicare bill that would have delivered up to $1,200 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.
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.
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.