Mr GEORGIOU (5:07 PM) —Mr Deputy Speaker Nehl, I would like to extend to you and, through you, to Mr Speaker my congratulations on your election. The positions of Speaker and Deputy Speaker are of fundamental importance to the standing and operation of this House and I know that you will discharge your high obligations with great distinction.

This is the third time in less than four years that the electors have done me the honour of returning me to the House of Representatives as the member for Kooyong. The people of Kooyong have always been fair minded and forward looking, and I wish to place on record my sincere thanks for their continued support. I reaffirm my commitment to communicating with them, to listening and to giving them service and effective representation in the House.

I would also like to place on record my thanks to my federal electorate chairman, Wolf Garwoli, and to the members of the Liberal Party branch in Kooyong. Their efforts have kept the seat of Kooyong secure for the Liberal Party and their unstinting physical and material support of other seats in Victoria have made a substantial contribution to the Liberal Party at large.

The Governor-General's speech put forward a wide-ranging program for the Howard government in its second term. There are a number of its themes that I wish to touch on in the course of this speech, but first I want to say something about the election. The 1998 federal election was, beyond question, a very tough, hard fought contest. A real tribute is due to the discipline and focus of John Howard and the coalition leadership team and to the hard work of the federal secretariat.

I would also like to recognise the work of the Victorian division of the Liberal Party. Since we took nine seats from Labor in 1990 Labor has, at every election, briefed the press that they would make massive inroads into the number of federal seats held by the Liberal Party in Victoria—and every time Labor has hit the wall. I would like to congratulate the Victorian division for its professionalism and its determination not to be distracted from the task of beating the Labor Party.

We on this side of the House owe a major tribute to the tenacity with which the coalition's marginal seat holders fought to maintain the support of their constituents. It was their efforts at the grassroots which made a vital contribution to preventing a swing to Labor being converted into a change in government. Nonetheless, a number of my colleagues in marginal seats were defeated, despite the strength of their campaign and the contribution their efforts made to the coalition's overall victory. The government has lost some very fine and very talented parliamentarians, who would have continued to make a very substantial contribution to the parliament and to the national interest.

Politics is a hard business. We are all adults, the stakes are high and we do play to win. But I do not believe that the will to win has blinded members on either side of the House to the fact that politics can sometimes be very cruel in terms of its impact on the lives of individual politicians and their loved ones. In this context I want to mention Warwick Smith and Russell Broadbent in particular because, having lost their seats in 1993, they once again left their other lives and successfully stood for parliament in 1996 only to lose again at the 1998 election.

I doubt if there has ever been a golden age in which democratic politicians have been universally held in high regard, but I think it is equally fair to say that today the Australian public views politicians with a heightened sense of cynicism. I think the cynicism might be diminished just a little if there was a wider recognition of the sacrifices that people like Russell and Warwick and their families have made because of their desire to make a contribution through this parliament to creating a better Australia.

I wish to make another observation about the election. It is not one based on partisanship, although I have to say I do derive some partisan enjoyment from it. Having been involved in federal election campaigns since 1975, I have seen strategic mistakes made on both sides of the political hill. Some of these mistakes have been due to pressure, some due to overstretching due to imperative political demands, others caused by simple arithmetic errors or merely indulgently taking one's eye off the ball. In some campaigns I have seen all four of these happen. But I have never witnessed an unforced strategic error of the magnitude of the Labor Party's promise to impose a capital gains tax on quarantined pre-1985 assets. There was no imperative to impose such a tax. The reported revenue that flowed from such a tax did not greatly contribute to Labor's bottom line.

The tax contradicted Paul Keating's commitment that the new capital gains tax he introduced in 1985 would `be prospective in every sense'. To put it crudely, the 1998 proposed tax was retrospective. This tax put off a huge number of voters who for over a decade had premised their actions on Labor's 1985 commitment. Not least, the proposed tax could be attacked utterly without distortion by quoting Labor's own policy. I quote from the policy at page 61:

All pre-CGT assets must be valued as at 1 January 1999. All real gains made from the valuation date will be subject to CGT.

I believe that the Labor Party paid dearly for that. Perhaps the people who were busy rewriting Mark Latham's education policy would have been better off scrutinising Labor's tax policy.

The issues at stake in the 1998 federal election and which will be addressed during the term of the current parliament are many and varied. There are, however, three issues in particular that I want to look at it. The first is tax reform. I do not think there can be any disputing of the fact that the central issue leading up to and throughout the 1998 election campaign was the reform of Australia's tax system. For the first time in modern Australian political history, and I think that is probably being a little historically modest, both domestically and internationally, the government went to the election with a clearly defined and comprehensive plan for redesigning Australia's tax system, the plan which included the GST—and the government won.

What emerged very clearly over the government's first term of office was a real sense that Australians are fed up with the complex, confusing, inefficient, inconsistent and unfair nature of the existing tax system and that they want it fixed. The government had the courage and honesty to put forward a bold plan of tax reform which proposed key reforms. The government proposed reforms to indirect taxes and state finances designed to get rid of the worst of the current indirect taxes levied by both the Commonwealth and the states and to replace them with a simple and transparent goods and services tax, and to address the issue of Commonwealth-state financial relationships.

The government also proposed reforms to income tax and social security systems which were designed to provide across-the-board tax cuts, compensate for the impact of the increase in direct taxes, and achieve a more sensible integration of tax and transfer arrangements. It also proposed reforms to business taxes to improve the certainty, consistency and fairness of business tax arrangements, to address tax avoidance opportunities, and to ensure that tax arrangements more closely match commercial realities. There are also reforms to tax administration to reduce the administrative workload on individuals and companies, and to remove some of the inequities in payment arrangements between different types of taxpayers.

The plan will deliver substantial long-term improvements in the operation of the economy, to the benefit of all Australians. These improvements will be reflected in higher economic growth, a stronger export performance, more jobs and lower unemployment.

On election day, the Australian people, having been subjected to mountains of information from the government and misinformation from the opposition, as well as persuasion and dissuasion on the tax reform plan, re-elected the government—the government which was demonstrably, publicly, unequivocally and totally committed to implementing this plan.

The simple fact is that the Australian people elected the coalition—not Labor or the Democrats—to govern. The government's intentions were clearly put and the government now has an unambiguous responsibility to implement the platform on which it stood, the platform on which it was elected. The Labor Party is trying to prevent a government implementing the mandate on which it was elected.

The Labor Party's position on this is not only opportunistic but it is also hypocritical in the extreme. Whenever the topic of taxes and elections is raised, my mind instantly goes back to the events of 1993. I admit that some bits of 1993 were a touch traumatic—actually, lots of 1993 were a touch traumatic—but it is worth the pain of remembrance because what Labor did then underscores the utter invalidity of Labor's current stance.

In the lead-up to the 1993 election, the Labor Party legislated a raft of personal income tax cuts. Paul Keating promised, in his now famous words, `not to put up tax'. That is now history, because after the election Labor dumped its tax cuts and increased indirect and other taxes in the 1993 budget. The Labor Party then went on a rhetorical binge when the coalition held it to account for breaking its fundamental pre-election commitments after the election.

Today, however, the Labor Party is desperately thrashing around trying to prevent the coalition government from keeping its fundamental election commitments. The only consistency, at least that I can find, throughout this is that Labor is resolutely determined to ensure that the Australian public does not get the tax policy that the party elected to government clearly campaigned on.

In 1993, the Labor government dishonoured the tax promises it made and, in 1998, Labor wants to use its representation in the Senate to prevent the coalition from honouring its tax promises.

Of course the election was about more than just tax. As the Governor-General made clear in his speech, this government will be about more than just tax.

One of the most important challenges facing the government over the next three years will be to put in place measures to ensure high quality health services to all Australians, both now and in the future. This challenge has confronted every incoming Australian government for at least 25 years. It is a challenge which I think this government is well positioned to confront. The government supports absolutely Australia's Medicare system which provides universal access to public hospital facilities and helps to subsidise people's medical costs, both in and out of hospital.

However, the government recognises that Medicare cannot stand alone. It must be supplemented by a strong, viable private health insurance system. I have advocated the significance of private health insurance over many years, and I have consulted widely on it with the constituents of Kooyong. I have received their overwhelming support on this.

In my first speech in this House, back in February 1995, I said that revitalising private health insurance is `not just a matter of need, but also a matter of rationality. If the 700,000 Australians who have let health insurance lapse since 1990 access public hospitals at the rate of Australians overall, the drain on the public purse will be about $495 million per annum. If immediate remedial action is not taken, the outcome is clear. We will have a non-viable private hospital and private health insurance system, with the public system collapsing under the weight of burgeoning waiting lists, and an unacceptable financial drain on government and taxpayers'.

The problems of Australia's private health insurance system stem essentially from the decline in private health insurance coverage from 68 per cent in 1984 to just over 30 per cent of Australia's population today. This decline, caused by a string of Labor actions and inactions, has driven up premiums as the group of net contributors to the funds has diminished. Additional pressures have consequently been placed on the public hospital system as people dropping out of private health insurance have come to rely primarily on the public system.

I am not sufficiently naive to presume that such an established and self-reinforcing cycle will be simple to correct—far from it—but we have to make every endeavour to reverse the cycle. During its first term in office, the coalition government introduced a number of measures designed to address the problem. These developments were positive and they went beyond anything ever contemplated by the Labor Party, but still more needs to be done.

The government's proposal, announced at the time of the tax reform plan, to provide an uncapped, un-means tested rebate of 30 per cent of people's expenditure on private health insurance puts the most important element of an eventual solution in place. The incentive will be a tremendous relief to those Australians who have struggled to maintain their private hospital insurance in an era of rapidly increasing premiums. It will ease some of the pressures placed on the public hospital system by the Labor Party's total neglect of a critical part of Australia's health care infrastructure.

That is one part of the Howard government's strategy for rebuilding Australia's health care systems and equipping them for the needs of the next century. Another is the provision of over $3 billion in additional funding to the states for public hospitals.

The Labor Party, I understand, will oppose the new rebate, as I expect it will oppose most of the initiatives put by the government to the parliament over the next three years. But Labor can put forward no alternative scheme to turn around the decline in the private health insurance sector and thus no viable long-term solution to the problems of financing Australia's health care needs.

The simple fact is that more than 25 per cent of Australia's total health expenditure, in excess of $13 billion, is financed from private sources, either through private health insurance or as direct out-of-pocket expenditure. If private expenditure were to be run into the ground, this 25 per cent would be lost, placing an extra $13 billion or so funding requirement on government.

A universal access, effective and efficient public health system is vital for Australia. For this to be really effective, it must be complemented by a system which actually encourages people who can do so to make an additional contribution to their health care costs. That is the rationale behind the government's efforts to encourage people back into private health insurance. It is something that the Australian health system needs and it is something that the public wants. If the Labor Party tries to prevent it being put into place, Australia's voters will punish Labor. That is a simple statement of fact.

The other important outcome of the election was the defeat of Pauline Hanson's misnamed One Nation Party. Pauline Hanson made bold predictions about significant increases in One Nation's representation in both the House of Representatives and the Senate. The election's outcome has given One Nation one defeated leader, not one seat in the House of Representatives and only one senator. I think this is a testament to the intelligence, openness, tolerance and fair-mindedness of the Australian community.

I do not believe, however, that there can be any room for complacency. The hard fact is that One Nation received 8.5 per cent of the primary vote for the House of Representatives across the country—almost one million primary votes. The hard fact is that One Nation did win 11 seats in the Queensland state election. The hard fact is that in future elections, with or without Pauline, One Nation will have the benefit of the public funding they derived from this election, as well as the experience of having run a national campaign. We cannot assume that the One Nation party is over.

I believe that the Prime Minister was right when he said of those attracted to Mrs Hanson:

A few no doubt are [bigoted, narrow-minded and racist]. Most, however, are not.

In an environment where change is ongoing and often dislocating, it is easy for people to be attracted by simplistic solutions to the problems we face. To address the appeals of Hansonism, we need to hammer away at simplistic proposals that just don't work—at the two per cent Easy Taxes. And we need to constantly hammer away that beneath these simple solutions is the fundamental basis of Hansonism: a hard core of bigotry, racism and intolerance

Debate (on motion by Mr Melham) adjourned.