The Coalition has teamed up with firebrand Tasmanian senator Jacqui Lambie, the Greens, and the crossbench to defeat Labor’s reforms to private health insurance for older Australians, which opponents say would have left them hundreds of dollars more out of pocket.
However, Labor has vowed to fight-on and introduce the reforms on Thursday regardless.
If passed, the Private Health Insurance Amendment (Modernising the Private Health Insurance Rebate) Bill 2026 would have removed the age-based rebate for Australians aged 65 and over.
Instead, the rebate would have been aligned with individual or family incomes.
The Coalition said, in doing so, the Bill would have meant more than three million older Australians would have been slapped with higher private health insurance premiums, adding about $800 for an individual or $1600 for a couple.
In a vote 38 to 23 on Wednesday afternoon, the Bill was instead removed from the notice paper, all but defeating it in its current form.
Opposition health spokesperson Anne Ruston said the Bill could “no longer go forward” and had been relegated to the “dust bin”.
“The Albanese Labor government has declared war on older Australians,” she said.
“Today we pleased that one of those wars that they’ve declared we have been able to really get to the dustbin by removing this terrible bill from the notice paper for.”
Senator Ruston said the reforms would have seen the government “cut the health system in order to pay for the aged care system” having pledged to use the $3bn expected to be raised for more aged care beds.
“I think just reflects the fact of how much this government has lost control of their budget bottom line,” she said.
Senator Lambie told the government to “get more aged care beds”.
“It doesn’t matter what state it is, because our public health system and our hospitals are on their knees, and they’re already picking up those extra aged care beds,” she said.
“Enough is enough. Go find some money … this would have finished off our public hospitals.”
Senator Lambie said older Australians “should have a sherry, because you bloody deserve it”.
However, Health Minister Mark Butler, speaking moments later, said the defeat was “an absolute travesty” and vowed to reintroduce the Bill on Thursday.
“I thought what was a clear understanding across the parliament of the need to fund better aged care services,” he said.
“It is important that the parliament have a proper debate that these really important questions for older Australians are not held hostage to political stunts, but instead that the elected members of the House of Representatives and elected senators take these issues seriously and debate them properly.”
Mr Butler said in discharging the Bill from the notice paper meant there was not “a reasoned debate”.
“We’re going to give the Senate another chance to have a debate,” he said.