Medicare bill likely to pass parliament

The federal government's revised changes to the Medicare levy surcharge are a step closer to becoming law after Family First's Steve Fielding caved in and announced he would back the bill. But the other key balance-of-power senator, Nick Xenophon, said he had yet to hear an argument from the government that would convince him to back its revised thresholds.

Senator Fielding voted with the opposition in the upper house to kill the government's original bill. That bill proposed to boost the income thresholds at which the surcharge kicks in for people without private health insurance from $50,000 to $100,000 for singles and
from $100,000 to $150,000 for couples.

Last month, the government introduced a revised bill lowering the threshold for singles to $75,000. On Monday, Senator Fielding announced that due to the global financial meltdown he would support the passage of the Medicare bill through the upper house, along with
yet to be introduced legislation supporting the government's tax hike on alcopops.

"We've put the national interest first, as well as family first," Senator Fielding told reporters in Canberra.
"At the end of the day, if the economy goes down the gurgler, then families are
going to be severely worse off."
Senator Xenophon said he would move an amendment to vary the thresholds to be at
levels had they been indexed to the consumer price index (CPI) since the tax's
introduction in 1997.
This would put the thresholds at $69,000 for singles and $138,000 for couples and
Senator Xenophon would also move the thresholds be indexed to CPI on an ongoing
basis.
"I believe that this is a sensible and fair compromise getting the balance right
between the public and private systems," he told AAP.
"While some people may receive a tax cut, millions more may be paying increased
premiums as a result of those people dropping out of the system.
"My position on everything is I have to be given a very compelling reason to change
my position on this and I haven't seen any compelling arguments given the balancing
act between the public and private systems that I think we need to maintain."
Senator Xenophon is also pushing for a Productivity Commission inquiry into both the
public and private health systems.
Greens health spokeswoman Rachel Siewert said her party would not support a
threshold any lower than $75,000.
She said she understood the government would agree to an amendment the Greens will
move that mandates an annual independent review for three years of the impact of the
threshold changes on the public hospital system.
Finance Minister Lindsay Tanner congratulated Senator Fielding on his change of
heart, saying the coalition was now out on its own in opposing the tax changes.
"I would urge the opposition to have a think about precisely where it is now
positioned," he told parliament on Monday.
"At this stage, the opposition is being given a lesson in economic responsibility by
the Greens, by Senator Fielding and by Senator Xenophon."
Health Minister Nicola Roxon said if Opposition Leader Malcolm Turnbull was serious
about delivering tax cuts he would direct the coalition to support the bill.
"I call on the leader of the opposition to do more than simply say he believes in
lowering taxes and actually instruct his party to vote for this measure to provide
this relief to 330,000 Australians across the country," she told parliament.
"We put out the challenge: do you want to lower those taxes because here is the
opportunity."
Speaking to the revised bill in parliament on Monday, opposition health spokesman
Peter Dutton said the government's proposed changes would force health insurance
premiums up and hundreds of thousands of people into the already stressed public
system.
"If this is a government that is hell-bent on destroying the private health industry
in this country by forcing hundreds of thousands of procedures onto public hospital
waiting lists, they are going the right way about it," he told parliament.
Debate on the Medicare Levy bill is continuing.