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Monday, 1 June 1998
Page: 4306

Mrs WEST (5:06 PM) —It gives me great pleasure to have the opportunity to speak to this private member's motion put forward by the honourable member for Stirling (Mr Eoin Cameron). This motion acknowledges that Australia's health system is reliant on a successful private health insurance industry complementing the public health system. It goes without saying that we do recognise that we need a robust dual system of health in this country to complement what exists at the moment.

When my colleague the honourable member for Bradfield (Dr Nelson) spoke on this motion earlier this year or late last year, he brought to the attention of the House the former Labor government's appalling record on the issue of private health insurance. I need not remind the House of the arrogance of the former Prime Minister, Mr Keating, when he told the Australian people in 1993 that they could rely on Medicare and that they did not need private health insurance. I am sure Mr Keating did not need to take out private health insurance; he could afford to pay.

When Labor came to power in 1983, 64 per cent of the population had private health insurance. By the time they left office in 1996, this had fallen to 34 per cent—34 per cent from 64 per cent. Labor did nothing to halt that decline. In fact, Labor hastened the decline by withdrawing existing subsidies and pushing more costs onto the private health insurance funds. This added $850 million per year to the funds' costs. The Productivity Commission has since estimated this has meant premiums are 30 per cent higher than they would be otherwise. Most of the people who left the funds over this time were the younger, healthier members. The funds today generally have a higher cost membership due to a higher proportion of older, sicker people who claim more money every year than they contribute by way of their premiums—thanks to policies of the former Labor government.

Time and time again, the Labor government discouraged people from taking out private health insurance. In 1992 when Mr Howe was the health minister, he said `Private health insurance makes an insignificant contribut ion'—I will quote that again—`an insignificant contribution to health financing in Australia.' At the time, private health insurance was raising in the vicinity of $3 billion a year; the Medicare levy was raising only $2.5 billion. I would say that is a fairly significant contribution.

The participation rate in private health funds is higher today than it would have been had this government not introduced incentives. The most recent figures show that over a million private health insurance policy holders are now receiving the benefits of the government's incentives scheme. In fact, in May 1998, 1,276,418 people were receiving the direct benefit of the government's incentives. In my electorate of Bowman alone, 14,000 people benefit directly from the government's private health insurance incentives; 14,000 of my constituents currently receive, or are eligible to receive, incentives to take out private health insurance. The number of people participating in the scheme has increased steadily since it began in July last year.

Unlike Labor, we are dedicated to ensuring that the public health sector is complemented by a private health sector that is fair, affordable, customer friendly and good value for money. The private health insurance scheme is the first genuine attempt in decades by a federal government to encourage people back into private health insurance.

But there is always more to be done. We are also considering a wide range of possible options for future reform. At the same time, we are looking to the industry to implement change to maintain value in the services they offer. New legislation will support the private health insurance incentives and will reduce the problem of large and unexpected out-of-pocket costs and foster new competition in the industry. National trials of simplified billing and informed financial consent are encouraging. But there is only so much we can do on our own; we need the support of all players in the health care sector. Private health insurance funds can do their bit by minimising premium increases which may force more Australians to reconsider their membership.

What is the Labor Party's answer to these problems? The Labor Party has no answer other than to scrap the $450 a year private health insurance incentive. The industry is in difficulty today as a direct result of the former Labor government's policy of neglect. Labor's only answer now is to take away from people the incentives we have introduced. (Time expired)