Mr LEE —My question is again to the Prime Minister. Prime Minister, are you aware of the report on the front page of the West Australian this morning entitled `Public hospitals freeze spending'? It says:

Metropolitan public hospitals have been ordered not to hire any more staff or buy new equipment because of the deepening health crisis.

Are you also aware of Liberal Premier Richard Court's claim that your offer will leave his state worse off than the current Medicare agreements? In the light of the continuing crisis in Australia's public hospitals and the failure of the Medicare agreement negotiations so far, will you agree to the Commonwealth participating in good faith in the Senate inquiry into the Medicare agreements, which has been announced today, or are you scared that your claims of a 15 per cent real increase will be exposed as a fraud?

Mr HOWARD (Prime Minister) —As I was saying in answer to the first question from the member for Dobell, the Commonwealth's offer, which involves an extra $2.9 billion over a period of five years, includes $369 million extra for hospital patient and outpatient services; it includes $479 million for mental health and palliative care; it includes $682 million to be passed on to providers to enhance the quality of patient services; it involves $750 million transfer to the Commonwealth of the cost of treating entitled veterans in hospitals.

Even the New South Wales health minister, who turned up at the Premiers Conference utterly ignorant of the arrangement that had been offered by the Commonwealth, was forced to admit in the course of the Premiers Conference that the Commonwealth was effectively making double provision for the veterans. We not only are agreeing to pur chase health services for veterans but also are agreeing to include in the base for the calculation of the five-year agreement the veterans. In other words, there was a double provision in the arrangement that was offered by the Commonwealth in relation to veterans. Mr Refshauge is very busy trying to pass the buck. Whenever there is criticism of his administration of public hospitals in New South Wales, you have this sort of yapping mantra from the New South Wales health minister, Mr Refshauge; if there is ever any criticism of the New South Wales hospital system, he always says, `It is the fault of the federal government.'

I repeat that the Commonwealth's offer involves real growth of 6.9 per cent in 1998-99, and 15.4 per cent over a period of five years. This graph so tellingly illustrates the growth in spending under the earlier Medicare agreement and then it shows the continued further growth under the five-year agreement that has been offered by the federal government.

I would also inform the House that the offer that we have made to the states is an offer that will be fully honoured by the federal government. We will honour in full—without deduction—the offer that we have put on the table for the Australian people. We owe our obligation direct to the Australian people. We do not owe the obligation through the state governments. If we make a commitment to the Australian people—I made that commitment when the Treasurer and I took the offer to the Premiers Conference—we will honour that commitment in full.

For the first time under this arrangement the Commonwealth is sharing with the states a number of risks. In addition to the extra $2.9 billion—that is $2.9 more than was in the forward estimates prepared by the former Labor government—the Commonwealth is taking on some of the financial risks that had previously been shouldered entirely by the states. For every percentage point private health insurance membership falls below 32 per cent, the Commonwealth will indemnify the states by a further $83 million per annum. For every percentage point hospital output costs exceed 0.5 per cent, the Commonwealth will pay an extra $44 million per annum.

As I pointed out yesterday in Melbourne, the states are claiming $1.9 billion per annum on top of all extra funds offered by the Commonwealth. This would pay for an extra 300,000 people to go into hospital every year. However, there are only 120,000 people on waiting lists at any given time. The states, in other words, are making a claim that is very much in the ambit area. The offer we have made is a fair one. It is a decent offer. It is a reasonable offer. In the name of the interests of the Australian people, it ought to be accepted by the state governments, and they ought to abandon their campaign of political point scoring.

Mr Lee —Mr Speaker, I request that the Prime Minister table the document from which he was quoting—

Mr Howard —Absolutely.

Mr Lee —including the graph which shows that hospital funding went backwards this year. It is the first time that we have had you concede that.

Mr SPEAKER —The honourable member will resume his seat. Prime Minister, do you table the document?

Mr Howard —Absolutely, with my compliments.