TV interview with Minister Butler, Sunrise – 31 July 2026

Media event date: 31 July 2026 Date published: 31 July 2026 Media type: General public NATALIE BARR, HOST: Three states are demanding the Federal Government rethink its private health insurance changes, warning they could drive more Aussies into the public health system. Health ministers in New South Wales, Queensland, and Tassie have raised alarm over a budget policy that would abolish higher private health insurance rebates for over-65s.

The government forecast that only 40,000 older Australians would dump their health cover because of the shift. But polling suggests that figure is understated. Joining us now is the Health Minister Mark Butler here in the studio and Deputy Opposition Leader Jane Hume.

Good morning to both of you. Mark, can you guarantee that this policy won't lead to longer waiting lists in public hospitals? MARK BUTLER, MINISTER FOR HEALTH AND AGEING, MINISTER FOR DISABILITY AND THE NDIS: We've done some modelling through our officials, and it's indicated there'll be a very marginal impact on private health insurance membership, which is growing all the time anyway.

I'm a little surprised, frankly, that the state governments have swallowed the rather self-serving modelling that the insurance industry itself is putting out there, but we're confident that this is the right decision. It's important to remember while we're doing this, we have to find more money for aged care services. Every dollar we save through this measure will be invested in more aged care beds, better care, more aged care home care packages, because we know every single budget, we're having to find more money to care for people who need that care and deserve that care, frankly.

There's no lazy free money lying around. We have to take sometimes quite hard decisions in a budget, and this is a hard decision. Okay, let's look at the numbers.

So just roughly, on a $6000 premium, if you're over 65, you'll lose about $250 a year. If you're over 70, you might lose about $500 a year. They're sort of rough numbers.

If you take that rebate off those people, how do you know that only 40,000 will go off the private health system? What if your Treasury modelling figures are wrong? What if tens of thousands just say, you know what?

I am sick of this, I'm getting out of private health. And then more people go into public hospitals. We've been modelling these things for quite a while.

There have been a range of changes over the years made, and increases happen to private health insurance fees every single year. We have some experience in understanding the behavioural impact of these things. Remember what this will mean now, is two households next to each other, for example, on $50,000, one of them over 65, the other household in their 40s or in their 50s with kids, they'll now both receive the same subsidy from government or from taxpayers to pay for their private health insurance.

About a quarter of their private health bill will be paid for by taxpayers. I think that's a pretty equitable place to be. Two households next to each other getting the same subsidy based on their income rather than a different subsidy based on age.

So it's intergenerational equity for people over 70. They just should have some of this taken off them. We've had to find more money to fund aged care services.

We've put an eye-watering amount of extra money into aged care over the last few years to get it out of the position that the Royal Commission described it, as neglect, and to fund the extra demand that's coming from the ageing of the baby boomer generation. That sometimes involves difficult decisions in a budget. I think this has been a difficult decision.

Of course, I'd prefer not to make it, but I think it takes us back to the old position where people received health insurance subsidies based on their income rather than their age. Jane, what's your call on this? JANE HUME, DEPUTY OPPOSITION LEADER: This is a tricky and sneaky, and dare I say mean-spirited $11 billion tax on older Australians.

Mark, you didn’t announced this before the election, and I think it would have made a serious impact on the way people thought about the Labor Party if you had have done that. Because let's face it, a lot of these older Australians are on fixed incomes and they simply can't absorb the changes, the new imposts that you've made on their private health insurance.

They've done the right thing for years, they've alleviated the pressure on the public system, and now you're going to tax them more. That seems profoundly unfair. When you've got your own Labor health ministers from other states telling you that this is going to affect the public health system, well, that should be a warning bell.

My office has been inundated with emails and letters from older Australians that are telling me that they're either going to have to go back to work or they're going to have to give up on their private health insurance. And what that means for younger Australians is that if they don't have private health insurance, if they have an accident or they get sick and they turn up to an emergency ward, well, they're going to have to take a queue- stand in a queue behind older Australians that have given up on their private health insurance.

They're going to be on waiting lists for critical care behind older Australians that would have otherwise been in the private system. This is a false economy. But moreover, it's another sneaky Labor tax on older Australians.

Okay. Last word, Mark. What if you're on a pension and you’re really on a fixed income there, you still don't get the rebate?

No, you get a rebate. You just get the same rebate. The higher rebate.

The same rebate that the household next door in their 50s with kids will be getting for their private health insurance. If you're a pensioner, taxpayers will still pay about a quarter of your private health insurance membership. But your rebate's cut.

There used to be a premium for a while that Howard introduced. There was a premium that older Australians would get so they'd get a better payment than the household next door to them that happened to be in their 40s and 50s. Because they were on fixed incomes.

We're going back to the position where people that subsidy based on their income, and every dollar we save here is going into the critical aged care services that we need to continue to build for older Australians. Okay, there you have it. It's out.

Tell us what you think on the hotline. Thank you very much both of you. We'll see you next week.

The Hon Mark Butler MP Private health insurance Accessibility We acknowledge the Traditional Owners and Custodians of Country throughout Australia, and their continuing connection to land, sea and community. We pay our respects to them and their cultures, and to Elders both past and present. © Commonwealth of Australia