There are some interesting facts and figures around Steve Fielding voting with the Coalition, as he almost invariably does, to block the Government’s bill to increase the Medicare levy surcharge threshold.

Fielding got 56,376 votes in the 2004 election, or 1.77% of Victorian votes. That’s just under one-sixth of the 330,000 Australians who will miss out on a tax cut because of him. In proportion, about 83,000 Victorians will miss out.

Not that Labor should complain about him — after all, he’s there on its preference flows.

Fielding blocked the Medicare bill because of concerns about the impact of the rise in health insurance premiums on low-income families.

The Department of Health and Ageing estimates that premiums would rise by less than 2.5% as a consequence of any flow-on effect on remaining members. On the average private health insurance policy, that’s just over $20 a year, before the taxpayer-funded rebate. The average tax cut flowing from increasing the surcharge threshold was about $1200. As they say in the classics, do the math.

And it’s not as if too many low income families actually have health insurance. According to the ABS, in 2004-05, more than 70% of people in the lowest income quintile didn’t have health insurance, compared to less than 25% of people in the highest income quintile. So Fielding’s concerns are mainly about middle and higher income earners. Like those rich farmers he negotiated a tax break for on the luxury car tax earlier this week.

The private health insurance industry have done an outstanding job in preventing the reduction in one of its key taxpayer supports. It has produced “independent” reports to show the disastrous impact of the levy, and the media has lapped it up. We tried to ask Steve Fielding how many times he has met with private health insurance industry representatives on this issue, but his office has an answering machine on — too bad for any constituents wanting to contact the Senator — and they had not returned our call by deadline.

The Medicare surcharge and health insurance rebates remain the most outrageous examples of rent-seeking in the Commonwealth sector. In addition to forcing taxpayers to buy products they don’t want, it hands out billions to private companies. Unlike other industries, however, private health insurance is so heavily integrated into a government-dominated sector that it has no choice. It’s the price we pay for having a publicly-funded healthcare system with no price signals.

That’s the paradox at the heart of Labor’s approach to health insurance. The Government may indeed, as the Coalition charges, want to gut the private health sector. Given it is heavily staffed with former Liberals, it wouldn’t be surprising if they did. But the party of Medicare will need the health insurance industry until it realises relying on queuing as the primary means of managing health care demand is an efficient relic of Soviet-era communism. Then again, there’s probably no reason for Labor to think that when it’s unlikely Australians ever will.

As for Steve Fielding, who appears wholly out of his depth, perhaps he should simply join the Coalition and make life easier for everyone, including himself. He might even have a faint chance of getting re-elected in 2010.

Peter Fray

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