Mr PYNE —My question is addressed to the Minister for Health and Aged Care. Is the minister aware of commentary about the government's 30 per cent tax rebate for people with private health insurance and the effect it will have on public hospitals? What is the government's position in relation to this rebate?

Dr WOOLDRIDGE (Health and Aged Care) —I thank the honourable member for his question. The opposition have been making some comment—I am aware of this—and I will make several points about this. The first point is that, before the election, the only thing the opposition could say about private health insurance is, `We have no policy on this. We'll put it on the back-burner.' So something that is 30 per cent of the whole health care system was put on the back-burner. They did not have the intellectual capacity to put together a policy. They have dealt themselves out of the debate and they have no right to even comment.

Opposition members —Oh!

Dr WOOLDRIDGE —The fact is that you can believe Graham Richardson: the Labor Party is a bit biased against private health insurance. You could not come up with a credible policy. You are utterly condemned by your ineptitude and you are utterly condemned by your ideology.

The second point is that, if you allow the private health insurance system to slowly wither away, what you will lose is something that has been almost unique to Australia—that is, a system where the public has had choice. We have done this almost better than any other country in the world. If you allow this system to slowly wither away, you invariably end up with a tiny private health sector that is the preserve of the wealthy and the rich and a large public health sector. If you want to know what this looks like, just have a look at the UK. I have worked under the United Kingdom National Health Service. I have sat in a surgical ward at two o'clock in the morning and watched a professor of surgery scream and argue for 45 minutes to get a 13-year-old girl a bed, and I have got to tell you that it is not particularly attractive.

The third point I would make is that the notion of just throwing more money at the public hospital system is inherently flawed. During the 1996 election, the Leader of the Opposition on television complained that, because of the extra money the Commonwealth had put in the system, the states had just pulled their money out. They had done this for a couple of reasons: first, the extra money that had been put in was at the expense of the financial assistance grants—the so-called Medicare guarantee, where they gave with one hand and took with the other; and, second, they could not guarantee that the states would put in an extra effort so, when the Commonwealth put in money, the states took out money and the net effect was no better off.

Up until July this year, I was dealing with the agreement signed by Paul Keating and Kim Beazley in 1993 and all its inherent weaknesses. This government has signed a new agreement that will increase public hospital funding in real terms by 19.2 per cent over five years, an unprecedented level of additional funding. We have done this at the same time as we have tried to actually do something to help the root cause of the problem, not just treat the symptoms.

On the issue of just putting extra money into the public hospitals, I would like to read from the 1991 report Hospital services in Australia under the national health strategy chaired by one J. Macklin. On page 160, the report said:

Expansion of funding to public hospitals would need to consider the potential effects on productivity and waiting lists, not only whether they need extra beds to be opened. The analysis of the relationship between waiting lists and patient throughput in Part 1—

of this report—

suggests an increase in hospital utilisation doesn't necessarily lead to a reduction in waiting lists or waiting times.

She went on:

Increased funding to public hospitals is also likely to lead to change in equilibrium between public hospitals, private hospitals and private health insurance without necessarily achieving the level of impact intended. If increased funding to public hospitals reduces the perceived pressure on public hospitals . . . it is likely private health insurance will drop. This could result in increased demand for public hospitals and reduced revenue from private patients. The result may be a return to the situation that existed prior to the provision of extra resources.

She knew it then but ideology prevents the Labor Party from realising it now.