A funny thing happened on the way to the Senate … a Senator purporting to represent Australian families turned into an apologist for big business welfare.
Senator Steve Fielding’s website proclaims that he is “fair dinkum about making life easier for ordinary Australians”. However, so far in the Senate he has been more willing to flex his legislative muscle to assist the big end of town than Mr and Mrs Average.
First it was the luxury car industry who received the benefit of Senator Fielding’s largesse, through his opposition to the Government’s proposed luxury car tax. Eventually he supported the tax on the condition that tourism operators and farmers “doing it very very tough” receive a tax-payer funded rebate of $3,000 on their purchase of cars worth over $57,000.
Now Senator Fielding has turned his attention to assisting the private health insurance industry by refusing to pass legislation raising the income threshold for the 1% additional tax paid by people who do not have private health insurance. This week the legislation will return to the Senate as the Government makes another attempt to deliver on its election promise to raise and index the threshold at which the additional tax kicks in.
This tax penalty is vital for the health insurance industry as it delivers a captive membership base. Regardless how dismal the performance of their health fund is, people won’t leave if they will incur a tax penalty that is often greater than their premiums.
As the thresholds are not indexed, they affect more and more people every year. Introduced as a penalty for “high income earners” the threshold for singles — set at $50 000 — now kicks in at well below average earnings.
Without indexation, the majority of tax payers will eventually be penalised for not taking out private health insurance. This is a major boon for an industry which struggles to attract customers through more conventional strategies, such as providing a service that consumers actually find useful.
However, while private health executives may be delighted by Senator Fielding’s decision — indeed in response to the Senate’s blocking of the bill, health insurer NIB swiftly lifted its profit outlook — their glee comes at the expense of thousands of Australian families who thought they were getting a promised tax cut.
It’s not hard to see why most Australians would prefer a tax cut over a subsidy for private health insurance. After all, with a tax cut families have a choice about where they spend their dollars — on private health insurance, if that is a priority for them, or elsewhere if that is the best option for their family.
Unfortunately, due to Senator Fielding’s decision to block the threshold changes, many individuals and families will be denied this choice.
It’s not clear what has prompted the Family First Senator’s rapid transformation from friend of the battlers to friend of the boardroom.
Perhaps, as someone elected to the Senate on less than 2% of the primary vote, Senator Fielding now feels obliged to use his position to help out other publicly-funded and equally unpopular causes. Or perhaps he has simply been swayed by the lobbyists employed by big business to push their cause in Canberra.
Either way the losers are the ordinary Australian families he claims to represent.