Private Health loss of Rebate for some

[Deleted member]

I knew I would finally find the reterence I was seeking for unemployment-
[Roy Morgan Research] Morgan Poll

I

And if you go to the source you can see the historic levels according to Roy morgan and at the bottom of the page comparing how they and the ABS get their numbers.
Our economy really is strong.

But not strong enough to retain manufacturing jobs in oz.

 

[wafliron]

I do not work any overtime solely due to the fact that I only take home 43.5 cents in every dollar I earn (45% marginal tax + 1.5% Medicare + 1% flood levy + 9% super = 56.5% gone).

A quick point of order: the 9% super is not "gone", and I'm sure you know this. Trying to portray it as "gone" is disingenuous (at best).

So you have now met someone who stops working due to the tax rates in Australia. I would rather have the time off than work at such a reduced rate.

I have - and that provides me with an interesting data point - thanks. It still doesn't change my point though - having the "people who won't work more because of the tax rate" column go from 0 to 1 doesn't change the overall ratio very much at all As an aside, it's also nice to see someone choosing family / leisure time over more money - is an unfortunately rare thing!

Out of interest: how much lower would your tax rate on overtime work need to be for you to change your mind?

Fine. Give me a single example of an actual job where employers pay women one thing and men another. My award sure doesn't have a table for women and a table for men.

Of course there is no leglislated example of men earning more than women in our society - apart from anything else, it's illegal. And of course in an enviroment where everyone earns an award rate you're also not going to see a disparity, because the award controls it all. But this doesn't mean it doesn't happen in environment wheres people earn more than award rates.

There is lots of research showing how common it is women to earn less than men for doing exactly the same job. I'm not talking about earning less due to choosing different careers, or earning less than a man the same age because of career-slowdown due to having kids, or whatever: these are women with exactly the same experience doing exactly the same job as a man, and earning less for it.

Actually I definitely don't pay my employees as little as possible, like many employees of good organisations their pay is benchmarked at a percentage significantly higher than the minimum possible, because we want good employees, not cheap ones.

+1. Amazing how many businesses don't get the importance of this.

 

[cove]

Of course the ABS figures are pure BS and you should pay greater attention to the Morgan Poll. ABS gathers its info for free from selected groups and they get what they pay for in my opinion.
I think that the Reserve Bank is fooled by the ABS as well. It will take ABS about 3 months to figure through the layoffs and to start adjusting their numbers downwards.
I feel lucky that I can credit card all the tax changes.

 

[rechoboam]

A quick point of order: the 9% super is not "gone", and I'm sure you know this. Trying to portray it as "gone" is disingenuous (at best).



I have - and that provides me with an interesting data point - thanks. It still doesn't change my point though - having the "people who won't work more because of the tax rate" column go from 0 to 1 doesn't change the overall ratio very much at all As an aside, it's also nice to see someone choosing family / leisure time over more money - is an unfortunately rare thing!

Out of interest: how much lower would your tax rate on overtime work need to be for you to change your mind?



Of course there is no leglislated example of men earning more than women in our society - apart from anything else, it's illegal. And of course in an enviroment where everyone earns an award rate you're also not going to see a disparity, because the award controls it all. But this doesn't mean it doesn't happen in environment wheres people earn more than award rates.

There is lots of research showing how common it is women to earn less than men for doing exactly the same job. I'm not talking about earning less due to choosing different careers, or earning less than a man the same age because of career-slowdown due to having kids, or whatever: these are women with exactly the same experience doing exactly the same job as a man, and earning less for it.



+1. Amazing how many businesses don't get the importance of this.

Re 50% tax I'm another person as I mentioned and it is VERY common in my industry where pay is high per hour but there are no big bonuses or profit sharing. If tax was 25-30pc at most I would change my mind. Especially as there is a limit to what I can charge my clients from a business and moral point of view.

Re pay rates : I don't want a "legislated example". Where is the research...where are the examples? Public company executive pay figures are available.

 

[11sjw]

.... or they worked well combined :!:

The other component forgotten when discussing the uptake of PHI is the implementation of the lifetime surcharge. Probably a part carrot part stick tool really

 

[leemin]

The other component forgotten when discussing the uptake of PHI is the implementation of the lifetime surcharge. Probably a part carrot part stick tool really

More a stick I would say. It's only a carrot insofar as people are trying to dodge the stick before it starts swinging


Sent from my iPhone using Aust Freq Fly app

 

[cove]

There are a couple of things to do with the Medicare levy that we avoid discussing. The rate needed to cover the health expense is in no way covered by a 1.5% tax levy. It was just a thought bubble that made its way into that complicated Income Tax Assessment Act. They never thought about individuals having taxable incomes of millions and so this levy is uncapped.
I regularly meet high income earners who are battling because they have children to educate,a big mortgage or two to pay,some credit card bills to pay and no clear path to ever think themselves as being rich.
The basic idea that rich starts at a figure of $150,000 for a couple any proper analysis and history will show it to be misguided.
i read where folks say I won't work an extra hour or day.....now that is a problem for the whole community.
We need a whole community review of the Ken Henry Tax Review by a joint sitting of Parliament rather than have it gather dust and be forgotten like previous works.
Last night I started paying our quarterly income taxes and company taxes on a favourite credit card as the payments have to be completed by the 28th to avoid getting hit with interest charges. It was the BAS the previous week.

 

[dfcatch]

Medhead - before you refer to those $1 million plus earners now losing out on subsidies...... Please stick to the facts and remember that the loss of rebate now kicks in at less than $100k.

I don't mind your arguments - but not everyone who will miss out is earning $1 million (I wish).

Drron - I agree with your beef about spin - but this is the modern ALP way. I dislike the politics if envy, not because I'm a Liberal voter, but because I don't agree with the economics of it.
I also believe (and this is why I vote Liberal rather than ALP these days), that these sort of socialist wealth redistribution policies reduce the incentive for risk, investment, personal productivity improvements etc, and thus further impede the economy.

To the topic at hand.....

The reason the rebate was introduced in the first place:

1/ was to make private health insurance more affordable.

Why?

2/ Because it meant private health insurance was more accessible (and financially wise) for those who could afford the premiums (now reduced by a 30% subsidy).

3/ It's cheaper for the government to subsidize an individual's insurance, than it is to cover them on Medicare.

To reinforce for those who aren't following....

Every dollar the government spends on the rebate means they save MORE than that dollar in Medicare liability.

4/ This means more money available in Medicare for those who can't afford private cover.

I'm sure we would all agree that Medicare should be adequate for those who need assistance.

5/ The surcharge and lifetime premium are good "stick" incentives to encourage people (who can afford it) into private cover early, and to keep them there.

(thus lowering the burden on the public system).



The rebate IS NOT and never was a free handout to middle class taxpayers.

It is an appropriate and successful carrot to encourage those who can afford private cover to do so, and therefore not be as much a burden on the public system.

Like all good policies you need both a carrot AND a stick which is why the rebate and the surcharges go hand in hand.

Taking away the carrot whilst leaving the stick is bad policy and is nothing but socialist idealism.


For the record Medhead - if the threshold for means testing the rebate was at $1 million, or even $500k then I would probably support it.

But it's not - so I don't.

 

[rechoboam]

There are a couple of things to do with the Medicare levy that we avoid discussing. The rate needed to cover the health expense is in no way covered by a 1.5% tax levy. It was just a thought bubble that made its way into that complicated Income Tax Assessment Act. They never thought about individuals having taxable incomes of millions and so this levy is uncapped.
I regularly meet high income earners who are battling because they have children to educate,a big mortgage or two to pay,some credit card bills to pay and no clear path to ever think themselves as being rich.
The basic idea that rich starts at a figure of $150,000 for a couple any proper analysis and history will show it to be misguided.
i read where folks say I won't work an extra hour or day.....now that is a problem for the whole community.
We need a whole community review of the Ken Henry Tax Review by a joint sitting of Parliament rather than have it gather dust and be forgotten like previous works.
Last night I started paying our quarterly income taxes and company taxes on a favourite credit card as the payments have to be completed by the 28th to avoid getting hit with interest charges. It was the BAS the previious week.

I think all of us people living relatively comfortably will always find ways to spend the money and feel poor. You want the "best" school for the kids, work pressures mean pressure to have a reasonably nice car for image, nice house for entertaining clients or the boss etc etc. Justified or unjustified. However if my annual billings were twice as much I would employ my own finance officer and would need two more receptionists. For me the high tax basically impacts my ability to create employment and wealth more than it affects my own quality of life. I mean I would fly first class overseas and would travel more often, but I can definitely live without that. It's not just not income tax per hour worked. I make an extra hundred bucks - I'm left with $50. I invest that...get $3 per year. The government takes half of that too. So I'm left with $1.50. I spend that, and the govt takes ten per cent. I'm down to $1.35. Wealth isn't a function of income, it is a function of income-generating assets. So my real rate of return is 1.35%. What's the point? And that's why we put whatever we save into our own houses, just bidding them up unnecessarily, or negative gearing. Preventing meaningful investment. Or I take the day off and read a book about Stalingrad.

 

[trippin_the_rift]

I think it's worth noting that it's now called Private Health Cover (not Insurance).

Insurance implies the entire cost is covered when a claim is made, whereas in reality it's actually acting like a discount coupon booklet.

 

[simongr]

I think it's worth noting that it's now called Private Health Cover (not Insurance).

I think you will find it is still called insurance.

 

[MEL_Traveller]

...

I regularly meet high income earners who are battling because they have children to educate,a big mortgage or two to pay,some credit card bills to pay and no clear path to ever think themselves as being rich.

...

and perhaps therein lies the problem. those on high incomes who choose to place themselves in that position deserve little sympathy from the worker in the chicken processing plant who are struggling to pay rent (high rents to cover the mortgage on the second home of the high income earner), and to pay credit card bills which are being used to cover the basics such as food, electricity and gas, (not the overseas skiing holiday or private school uniforms like high income earners).

some people can easily live within their means (high income earners), others struggle. Having to cover a second mortgage should be considered a luxury.

 

[MatF]

Medhead - before you refer to those $1 million plus earners now losing out on subsidies...... Please stick to the facts and remember that the loss of rebate now kicks in at less than $100k.

I don't mind your arguments - but not everyone who will miss out is earning $1 million (I wish).

Drron - I agree with your beef about spin - but this is the modern ALP way. I dislike the politics if envy, not because I'm a Liberal voter, but because I don't agree with the economics of it.
I also believe (and this is why I vote Liberal rather than ALP these days), that these sort of socialist wealth redistribution policies reduce the incentive for risk, investment, personal productivity improvements etc, and thus further impede the economy.

To the topic at hand.....

The reason the rebate was introduced in the first place:

1/ was to make private health insurance more affordable.

Why?

2/ Because it meant private health insurance was more accessible (and financially wise) for those who could afford the premiums (now reduced by a 30% subsidy).

3/ It's cheaper for the government to subsidize an individual's insurance, than it is to cover them on Medicare.

To reinforce for those who aren't following....

Every dollar the government spends on the rebate means they save MORE than that dollar in Medicare liability.

4/ This means more money available in Medicare for those who can't afford private cover.

I'm sure we would all agree that Medicare should be adequate for those who need assistance.

5/ The surcharge and lifetime premium are good "stick" incentives to encourage people (who can afford it) into private cover early, and to keep them there.

(thus lowering the burden on the public system).



The rebate IS NOT and never was a free handout to middle class taxpayers.

It is an appropriate and successful carrot to encourage those who can afford private cover to do so, and therefore not be as much a burden on the public system.

Like all good policies you need both a carrot AND a stick which is why the rebate and the surcharges go hand in hand.

Taking away the carrot whilst leaving the stick is bad policy and is nothing but socialist idealism.


For the record Medhead - if the threshold for means testing the rebate was at $1 million, or even $500k then I would probably support it.

But it's not - so I don't.

Exactly.

We'll lose our rebate (the solitary form of direct government assistance my wife and I receive in return for the insane amount of tax we pay), and we'll need to have a serious look at whether we remain in PHI or not. It's not just the loss of the rebate, but the regular increases in premiums are getting fairly crazy, and I expect if people start pulling out over the rebate loss, that situation will only get worse. We'll quite possibly end up back in the public system. Impact on government spending then? Almost certainly negative.

You know I wouldn't even mind if our schools, roads, public hospitals and other infrastructure were up to scratch, but it really annoys me to pay so much tax and get seemingly little for it. As others have said, if we stay in PHI, I effectively see this as an additional tax burden - which is why we may well not.

 

[simongr]

the regular increases in premiums are getting fairly crazy

The increases are barely keeping pace with the cost of paying the benefits.

 

[dfcatch]

and perhaps therein lies the problem. those on high incomes who choose to place themselves in that position deserve little sympathy from the worker in the chicken processing plant who are struggling to pay rent (high rents to cover the mortgage on the second home of the high income earner), and to pay credit card bills which are being used to cover the basics such as food, electricity and gas, (not the overseas skiing holiday or private school uniforms like high income earners).

some people can easily live within their means (high income earners), others struggle. Having to cover a second mortgage should be considered a luxury.

You're right.

Which is why such people should earn less (and therefore pay less tax).

That will solve the problem.

Of course then they wouldn't be generating the additional investment in that 2nd property which in turns feeds the economy and makes the world go round, which in turn, again, means less tax revenue (and therefore less $$$ to spend on welfare, disability support, aboriginal rights, infrastructure - oh and public health).

Should well off people pay more tax than those on struggle street as you mention - absolutely - and they do, both in nominal and percentage terms.

There are of course the obscenely rich who pay no tax, but these reforms aren't targeted at those.

 

[rechoboam]

Exactly.

We'll lose our rebate (the solitary form of direct government assistance my wife and I receive in return for the insane amount of tax we pay), and we'll need to have a serious look at whether we remain in PHI or not. It's not just the loss of the rebate, but the regular increases in premiums are getting fairly crazy, and I expect if people start pulling out over the rebate loss, that situation will only get worse. We'll quite possibly end up back in the public system. Impact on government spending then? Almost certainly negative.

You know I wouldn't even mind if our schools, roads, public hospitals and other infrastructure were up to scratch, but it really annoys me to pay so much tax and get seemingly little for it. As others have said, if we stay in PHI, I effectively see this as an additional tax burden - which is why we may well not.

Sorry to say you won't end up "in" the public system, you will end up waiting for the public system. Currently an eighteen-month waiting list for tonsils or adenoids - not for surgery, that's just to see a specialist and get a booking for surgery.

edit: "For the record Medhead - if the threshold for means testing the rebate was at $1 million, or even $500k then I would probably support it"

Further to that the current tax brackets may have made sense thirty years ago but bracket creep means they are hopelessly irrelevant. In the US (yes I know, state taxes as well) fed income tax kicks in at over $350,000 and is 35%. Now that is serious income.

 

[simongr]

For the record Medhead - if the threshold for means testing the rebate was at $1 million, or even $500k then I would probably support it.

But it's not - so I don't.

I am not sure I would - again I reiterate - I am looking at this as it relates to the total tax burden that we suffer - I don't think that the government should be increasing that burden.

There was a point earlier on about how this could fund better services (incl. dental) - sadly as the govt is using this to put the budget back into service there wont be any additional services. In addition there will be a higher burden on the Public system. I will also be advocating that people do NOT use their PHI when checking into public hospitals as you don't get any/much additional benefit and this is putting a burden on your PHI provider - all because the public system is under funded.

 

[Princess Fiona]

I will also be advocating that people do NOT use their PHI when checking into public hospitals as you don't get any/much additional benefit and this is putting a burden on your PHI provider - all because the public system is under funded.

You have a point there. Guaranteed Daily Telegraph and maybe a single room if they're not all taken by the MRSA (Golden Staph) patients

 

[dfcatch]

You have a point there. Guaranteed Daily Telegraph and maybe a single room if they're not all taken by the MRSA (Golden Staph) patients

And your choice of doctor

As much as I like my friends who are recently graduated doctors....... I would rather not be randomly assigned a med student who wishes to practice sticking their finger up my bum

 

[MEL_Traveller]

And your choice of doctor

As much as I like my friends who are recently graduated doctors....... I would rather not be randomly assigned a med student who wishes to practice sticking their finger up my bum

yup.the benefits of private health insurance

I cannot understand how those with high incomes ($250k joint) say they are going to opt out of private now the rebate is gone.

all very nice to have your kids privately educated.... shame if the public system misses that critical diagnosis...