Welcome to the Spring 2006 E-News

Dear constituent/supporter

It has been an extraordinary week particularly with the fifth anniversary of September 11, which is a great reminder of how we should value our rights and liberties and the death of two prominent Australians who were great icons to thousands of Australians. On a local note, I was sad to hear of the recent passing of a great local in Harry Dunn OAM from Arcadia Road, Galston who is typical of so many veterans who gave so much to the community over the past sixty years. Harry would always be quick on the phone to keep me informed on all the local issues that he felt were important. It has been a busy few months with parliament sitting, electorate and interstate visits and the day-to-day responsibilities as the Attorney-General. I always value ideas and suggestions from constituents and encourage you to raise matters relating to the Federal government, along with the many representations I make to the relevant ministers in Canberra on a wide and varied basis. We all look forward to Spring Time with the colours, longer days and warmer weather.

Philip Ruddock MP

In this issue:

• Local students attend the 2005 Australian Students’ Prize certificate ceremony

• Veterans’ health care

• Investing in our Schools programme keeping us busy

• Protecting Australian children online – National Child Protection Week

• Supporting Small Business – Pollies for Small Business

• DID YOU KNOW? Workplace Reform – The Facts

• The reason behind the Federal government’s decision to sell Medibank Private

Local students attend the 2005 Australian Students’ Prize certificate ceremony

I was pleased to hold a presentation ceremony for students in the electorate who have been awarded an Australian Students Prize for 2005. The Australian Students Prize is an Australian Government initiative designed to give national recognition to academic excellence and achievement in secondary education, particularly in senior secondary years. Five hundred prizes are available nationally each year.

The Prize comprises a certificate of excellence and a payment of $2000. Local prize winners who attended the ceremony are: Surya Gopalan, James Ruse Agricultural HS; Sarah Judd, Hornsby Girls HS; Shweta Kumar, Baulkham Hills HS; Amelia Thompson, James Ruse Agricultural HS: Mark Watts, Knox Grammar; Yu Lau, James Ruse Agricultural HS; Adrian Ratter, Baulkham Hills HS; Gosford HS; Graham White, James Ruse Agricultural HS.

State and Territory Ministers nominate students for the prize for education to the Australian Government Minister for Education, Science and Training. Each State or Territory Minister, based on information provided by their own State assessment boards, determines selection of students.

Veterans’ health care

I was pleased with the recent $600 million package to bolster veterans’ health care. This will assist many in the electorate where the Government is allocating more than $600 million Australia-wide over the next five years to ensure that Gold and White cardholders continue to enjoy access to free health care.

Over 300,000 veterans and war widows with Gold or White Cards can now confidently access the health care professionals they know and trust, without having to pay anything themselves. The $600 million will provide increased fees for specialists, general practitioners, allied health professionals, dentists, optometrists and pathologies.

This initiative recognises the important role played by these professionals in the health care of our veteran community. Specialists’ fees for treatments provided in-hospital would be aligned with the current fees paid by private health funds. For out of hospital care, specialists will receive a 20 per cent increase in their fees. The Veteran Access Payment for Local Medical Officers will be adjusted to reflect the Medicare Bulk Billing Incentives. Dental fees will be adjusted to better reflect the fees paid by members of the general community.

Fees for allied health consultations will be aligned with the fees paid under the Medical Benefits Schedule arrangements. Pathology and optometry fees will be standardised to 100 per cent of the Medicare Benefits Schedule fees. All provider groups have expressed strong support for the funding initiative, which recognises that veterans, due to their war service, have greater health care needs than the general community.

This package of remuneration is additional to the current funding of $4.6 billion for veterans’ health care. The new fees will be effective from 1 November 2006 except for the Local Medical Office Veteran Access Payment changes, which will commence on 1st May 2007. In all this is very good local news.

Investing in our Schools programme keeping us busy

I have been attending ceremonies in the local area under the Federal government’s $1 billion investing in Our Schools Programme, which is aimed at funding smaller projects that include classroom improvements, library resources, computer facilities, air conditioning and heating, outdoor shade structures, music facilities and instruments, playing fields, play equipment and sporting infrastructure. Schools can apply for $150,000 in the lifetime of this programme. Over 8,300 applications from across Australia were submitted during 2005 and there will be further rounds for each year of the Programme. This funding will boost schools’ needs in my electorate and is a great initiative of the Howard Government. During 2005-2008, the Program will provide an additional $700 million ($1 billion including independent schools) in capital funding to state schools - a promise during the 2004 Federal election campaign.

Protecting Australian children online – National Child Protection Week

This joint initiative to educate children about the dangers lurking online is most important and I welcome it for the residents of the seat of Berowra. Cybersmart Detectives is a joint initiative between the Australian Communications and Media Authority and Australian law enforcement agencies and builds on the Australian Government’s $116.6 million package – Protecting Australian Families Online.

This aims to provide every Australian family with a free Internet filter. The online tool launched nationally uses the Internet to teach young people key Internet safety messages and helps them recognise the danger signs when using online services such as chat rooms. By using this tool, young people learn about the dangers of giving out personal information on the Internet, that they should never meet face-to-face with someone they have met on the Internet without a parent accompanying them and that people in the online environment may not be who they say they are.

Parents must become more involved and more vigilant in supervising their children online so, along with the law enforcement agencies, we can crack down on predators and paedophiles that use increasingly sophisticated means to groom their potential victims. There are simple measures that both parents and children can take to protect themselves online. These include keeping your personal information private, learning how to save a copy of a conversation in a chat room, and blocking people who make you uncomfortable.

Supporting Small Business – Pollies for Small Business

Again small business is most important to the electorate and one of the main objectives of any government is to create the right environment to enhance and provide a strong economy so people will spend money. Again, this year I was pleased to support “Pollies for Small Business” with the support of the State Chamber of Commerce (NSW) in encouraging Members of Parliament to become involved in this scheme. The aim of the program is to give politicians a first hand experience in the life of a small business operator. I visited our well-known McCarroll’s Automotive Group and worked alongside staff members at the Greater Union Cinema Hornsby preparing choc tops for the public. There are 360,000 small businesses in NSW and they employ 1.1 million people. Pollies for Small Business is a great opportunity for this vital sector of the NSW economy to gain direct access to their local MP and to air their concerns. The kinds of issues small business owners raised included safety, employee relations and the red tape and compliance burden. After Pollies for Small Business, our politicians will have a much clearer picture of the day-to-day battles small businesses face.

DID YOU KNOW? Workplace Reform – The Facts HillsSIP helps young people into the workforce MORE JOBS Unemployment rate of a 30-year low (over 1.9 million jobs created since Howard Government came to office in 1996) HIGHER WAGES Wages grown by16.5% since March quarter 1996. Average pay increase 4.1% p.a. FEWER DISPUTES Working days lost per 1000 employees 52.2 in 1996. This figure has fallen to 3.1 days in 2006 HIGHER PAY ON AWAs AWA earnings 13% more on average than certified agreement. 100% more on average than awards.

The reason behind the Federal government’s decision to sell Medibank Private

There is a lot of debate particularly against the Government’s decision to sell Medibank Private. As you are aware, Senator Minchin and the Minister for Health and Ageing, Tony Abbott MP, announced that the Government has decided to sell Medibank Private. The sale was announced in conjunction with a number of reforms to the private health insurance sector that will mean more competition and improved services to patients. In this context, your letter raises concerns in relation to Medibank Private’s ownership, and the reasons why the Government has decided to sell the Company.

Firstly, let me assure you that Medibank Private is owned by Australian taxpayers and is not a mutual organisation owned by its customers. The premiums paid by Medibank Private’s customers buy a contract for the provision of health insurance services– not a stake in the company. Just as purchasing car insurance or content insurance or life insurance does not give customers a stake in the insurance company, purchasing health insurance does not give customers a stake in Medibank Private. This is confirmed by legal advice which the Government has tabled in the Parliament (and which can be found at http://www.financeminister.gov.au/).

The Government set up Medibank Private in 1976 and provided the initial capital. The Government injected an additional $85 million in 2004 and has taken the risk of owning this business for the past 30 years. It is entirely appropriate, therefore, for the benefits of the sale of Medibank Private to Australian taxpayers.

Any sale of Medibank Private will not affect the rights that contributors have under the terms of their existing individual health insurance policies.

The sale will also not affect vulnerable members in any way. Industry regulation, specifically the principle of Community Rating, prevents adverse risk pricing for the sick and elderly. The sale of Medibank Private does not affect the Government’s commitment to Community Rating.

In a competitive private health insurance sector, with 38 competing funds, there is no policy reason for the Government to continue to own a health fund. Competition between funds is the best way of keeping a lid on premiums. Importantly, if a customer of any health fund is unhappy with the fund’s premiums, they are able to move to another fund without any waiting period.

The sale of Medibank Private will not lead to increased insurance premiums.

As the Chief Executive of the health insurer, NIB, has stated, “The pressure on premiums will be reduced if Medibank goes private. We expect much more aggressive competition from a privately owned Medibank.”

The reason for this is that a fully commercial, privately owned Medibank can be more efficient in private ownership, through lower management expenses and through scope for expansion into new business areas. A privately owned Medibank Private could expand into other areas, such as other forms of insurance or other medical products or other financial products – and through this greater scope, be a more efficient operation. In addition, it is through operation that is more efficient that a health fund can further restrain premium growth.

A good example of how the private sector can keep the lid on premium increases is BUPA – which operates the privately owned, for-profit funds Mutual Community in South Australia and HBA in Victoria. While average premiums across the industry have increased by 35% over the past 5 years, BUPA’s premiums have only increased by 25%. So the premiums of this for-profit health insurer are actually getting lower relative to the mutual and government-owned funds.

Therefore, the claim that for-profit funds are more expensive than other funds is wrong.

In order to further protect consumers from inappropriate premium increases, Government is retaining the Ministerial premium approval process, with clear criteria against which applications for increases will be considered.

Selling Medibank Private will allow the Government to remove its conflict of interest in being the industry regulator and the owner of the largest participant in that industry, thereby allowing the Government to focus on its role as regulator.

The Government is yet to make a decision on whether it will sell Medibank Private by public share offer or trade sale. Senator Minchin has stated his personal preference for a share market float. This would give all Australians a chance to own a part of the company, and would consider giving an additional entitlement to the existing members. A public share offer would keep Medibank Private a strong and independent player in the private health insurance industry, while subjecting it to all the commercial disciplines of the stock market. The final decision on the form of sale will follow advice from the sale advisers.

In summary, the Government believes that businesses are best run by business people, not bureaucrats. The sale of companies such as Qantas, the Commonwealth Bank and Telstra is part of the Howard Government’s broader strategy for making the Australian economy stronger and underpinning the prosperity of all Australians.

The sale of Medibank Private will help maintain a viable and competitive private health insurance industry and represents an opportunity to improve competition and help consumers.