Mr NEVILLE (10:07 PM) —I pose a very simple question to the House tonight: what do we want? Do we want to go down the American path where the rich have health care and the poor have none? Do we want to go with the British system where virtually everyone, except the very rich, pays the same and there is no choice; or do we want to maintain the Australian system, the parallel system, that has served this country very well for many years and had its best manifestation in Queensland, I might add, until it was gutted by the Whitlam government? Under this system, people could have a very simple choice of privately insured health care with nearly all full cover and gap cover or they could have a free hospital system. With the Whitlam era, because Queensland had to fall into line with the rest of the states, that excellent system which could have been the model for the whole of Australia was lost.

I was interested to see the Leader of the Opposition in the House tonight. I think he must have been very concerned. It was the greatest bit of huff and bluff I have ever heard in my life. A lot of what he said tonight was palpable nonsense. I can demonstrate it was palpable nonsense, and you do not need to be an economist or a Sherlock Holmes to do so. He seemed to be absolutely obsessed, as were a lot of the opposition speakers tonight, with the fact that those people earning over $50,000 for a single or $100,000 for a couple will receive the $600 private health insurance rebate, or, if you like, they will go from zero to $600. You say, `Dreadful, dreadful. Those people at the top end of the scale are going to get more.' Yet, as I go around my electorate, I get a lot of Labor voters coming to me and saying—

Mr Melham —There's a lot more Labor voters after the last election.

Mr NEVILLE —There were not enough to get me.

Mr Melham —They are going to do you slowly.

Mr DEPUTY SPEAKER (Mr Nehl) —Order! I will do it rapidly, member for Banks, if you do not watch your step.

Mr NEVILLE —A lot of Labor voters came to see me and, in all their naivety, they said to me, `Let's just have tax deductibility.' They said that with all honesty, naivety and sincerity. That means that anything paid on health insurance would become a tax deduction. That is precisely what we have done with this new tax reform scheme. That is precisely what we have done. What we have said is that 81 per cent of the population who earn between $20,000 and $50,000 will receive a 30 per cent rebate, the same as their tax rate. That is tax deductibility. But, better still, those earning less than $20,000 will still get the full rebate. Even pensioners who may not have any income at all other than their pension will still get the 30 per cent rebate. That is an extraordinary thing—that 81 per cent of the population will get tax deductibility or better.

The people you are so obsessed about, those earning over $50,000, will not get tax deductibility. They will get a flat 30 per cent. They will not get 40 per cent if they are between $50,000 and $75,000. They will not get 47c tax deductibility if they are above $75,000. They will be pegged to 30 per cent. So, in that respect, there is a great deal of equity involved. That is the first thing. As for the Labor voters who come to me and ask for tax deductibility, I can tell them in all sincerity that that is virtually what is happening.

The Leader of the Opposition made a big play tonight by saying that for about $700 million we could do everything the states want. I said that was palpable nonsense, and I still say it is palpable nonsense. Let us have a look at the big picture. Let me show the big picture. What does health cost? What is the total cost of health in Australia? It costs the Commonwealth $22 billion a year, or it costs the Commonwealth, the state, local government and the private industry $42 billion altogether.

Let us say we went to a fully socialistic system where that was going to be covered by a user-pays levy. Do you know what it would have to be? Do you know what the Medicare levy would have to be? It would have to be 19 per cent. If people say, `Oh, come on, Neville, you're a bit over the top there, you're taking an extreme case,' I will accept that that is an extreme case. But let us take public health. What would it cost to fully cover public health? It would cost five times the current Medicare levy. It would cost about 7½ per cent. Those are the sorts of odds.

When the Labor Party was in government, and I am sure the Labor Party did this with great sincerity, they said, `Well, we'll have this 1¼ per cent levy because that will say to the public this is a reflection of what your health is costing. You will tend to be a little less profligate if you have to pay for your health.' But you got it wrong. It had the exact reverse effect. It created a false expectation that people were actually paying for their health care when in point of fact they were not paying one-fifth of the cost of the public health system—not one fifth. So is it any wonder that people now have a false expectation?

The weakness in the speech of the Leader of the Opposition is this: he says that for $700 million we can fix all ills in all the states. Let me tell you just how silly that is. We have it on good authority from any number of economists that, for every one percentage point of people who drop out of private health insurance, the cost to the Commonwealth is $83 million. I am sure that is not disputed, even by the opposition. Therefore, if we take eight per cent of people out of private health insurance—and it is quite conceivable if you people are back in power or, alternatively, if you block this in the Senate it is possible that eight per cent of people could fall out over the next couple of years—and times that by $83 million, there is the $700 million that the Leader of the Opposition says we will need to fix all ills.

Mr Jenkins interjecting—

Mr NEVILLE —That was his figure—$700 million. You were saying that it was going to cost us $1.5 billion. The figure, by the way, is nearer to $1.2 billion. But let us even take the very worst case scenario of $1.5 billion. If about 14 per cent or 15 per cent more people drop out of health insurance, that will be gobbled up. And where do you go then? So, if you wanted to take the very worst case scenario, in three or four years time private health insurance drops from 30 per cent to about 15 per cent of health insurance and the $1.5 billion—twice the estimate of the Leader of the Opposition—is gobbled up. We would have only 15 per cent of Australians paying for their health care—we would have eaten up the $1.5 billion and Australia would then be in a worse position than it is today.

Anyone who cannot see that must be either bigoted or a fool because it is quite clear. You do not have to be Sherlock Holmes. Go back to when the Labor Party came to power in 1983. What was it? Sixty-one per cent or 62 per cent of the population had private health insurance, nearly two-thirds of the population. When you left office, it was down to about one-third, about 31 per cent or 32 per cent—perhaps 33 per cent, to be on the generous side. One-third was left.

Mr Hollis —Why?

Mr NEVILLE —Why? Because you cut subsidies, you cut out the intermediate wards in hospitals and you cut out bed subsidies. Is it any wonder that the cost of health insurance went up? So in your 13 years of power we went from having two-thirds of the population privately insured to one-third of the population. Who did you think was going to pay for the other third? Was it going to be the 1¼ per cent or the 1½ per cent levy, because that is raising only 20 per cent of it? The funding from taxation, the funding to revenue, was barely six per cent to cover the 33 per cent that went to the public system. Little wonder that Australia was getting further and further behind.

You have shown a very poor perception of the needs of elderly people. The former shadow minister, who is now the opposition health spokesman, Jenny Macklin, pilloried us in the previous parliament about nursing homes.

Mr Melham —Hear, hear!

Mr NEVILLE —Well, she did. It was quite unjustified, but she did it anyhow. You have this confected concern about the aged. I spend a lot of time in nursing homes. I spend a lot of time with the elderly; I go to a lot of respite centres. I have got very close to elderly people—self-funded retirees and all those groups. The one thing even people in nursing homes, who really do not need private health insurance anymore except in the really extreme cases when they might have to go to hospital for a broken hip or some sort of unusual operation, really want is the comfort, the assurance and the security of private health insurance.

Self-funded retirees—the people looking after themselves, the people who are not going to be a burden on the social security system—say, `At least let us look after our own health. At least give us the ability to look after our own health.' Would you, if you were in power, give them that? No, you would deprive them of it. I see some of these people paying anywhere from $1,500 to $2,100 a year and you would deprive them of that 30 per cent? You will really vote that down in the Senate? God help you if you do.

Mr DEPUTY SPEAKER —Order! The chair would be grateful if the honourable member for Hinkler would address his remarks to the chair and not address the opposition directly.

Mr NEVILLE —I apologise, Mr Deputy Speaker. I am very passionate about aged people. Those who do not take proper care of their concerns earn my ire, so if I have strayed please forgive me.

Mr Melham interjecting—

Mr DEPUTY SPEAKER —I do not need the help of the member for Banks either.

Mr NEVILLE —I have also lived in a provincial city and I have seen how Labor really performs when it is given the reins of power. I spent 15 years on a hospital board under both coalition and Labor administrations. I remember when I was leaving that hospital board after some years we developed a plan in Bundaberg for a four-storey ward block, which was going to contain a laundry, which was desperately needed in the hospital, operating theatres, a central sterilising unit and several wards.

The block was on the drawing boards and approved at the time when Labor came to power in 1989. When they went out of power in 1995, 6½ years later, not a thing had been done. It had been shelved. Every time the Labor health minister came to Bundaberg and there was some outcry or upset in the community about the fact that this hospital had not been commenced, he would placate the community by offering yet a bigger hospital. So it grew from under $10 million to $18.1 million to $25 million to $30 million, but the hospital was never built. In 6½ years nothing happened. As soon as the National-Liberal Party coalition got back in, the hospital got under way. The sad thing is that a Labor minister will have to open it. It is tragic.

Those sorts of things went begging in provincial cities, because Labor had the same sort of socialist ideology that you have been preaching here tonight—the ideology of envy. You are so obsessed with stopping people at the top end of the scale regardless of what benefit that might have to people at the bottom end of the earning scale. You are so obsessed with wanting to get to that group up there that you cannot see the public benefit down the other end.

They had exactly the same problem. So they set up across Queensland these marvellous regional health centres based on New South Wales. It was going to be the great be-all and end-all of health care in Queensland. It was going to reduce the size of the health bureaucracy in Brisbane. What did we get? I think it got up to 400 people in these regional centres, but with no reduction in the number of people in Brisbane. So we were then loaded up with these regional health centres and a big burgeoning bureaucracy in Brisbane when all the time that money was desperately needed in the hospitals.

I remember saying one night to a friend of mine, `How are things at your hospital?' She was a senior sister at the hospital. She said, `Things are very good for me. They've really pumped some money into upper middle management.' I said, `That's good.' She said, `Yes, it's good for me. We had one director of nursing and two assistants and now we have one director of nursing and three deputy deputy directors. Then we have various supervisors.' I said, `Come on, how many people have we got in the wards? How many people do we have beside the beds of the sick people?' She said, `Oh, there's been no increase there.' That was the sort of pattern. They were so obsessed with this mantra of regional health care that they could not see the basic needs of people in beds in hospitals.

I suggest to you, Mr Deputy Speaker, that the opposition has missed the point again. Rather than see some people who earn more than $50,000 get the $600 rebate, they would rather penalise the whole system. I repeat that the Leader of the Opposition said tonight in his speech that $700 million would fix up the ills of all the public health systems in the states. I repeat what I said earlier: for every one per cent drop in private health insurance, the public purse suffers to the extent of $83 million. Multiply $83 million by eight and you get roughly $700 million. So as soon as private health insurance cover drops another eight per cent, the proposition of the Leader of the Opposition, put to this House an hour or two ago tonight, becomes totally negated.

We are proposing to return Australia to a parallel system of health care, where people who can afford it or people who want to make the effort to afford it can be subsidised into looking after their own health care. It defies reason that the opposition cannot see how every person who looks after their own health care makes the queue for surgery in a public hospital or for a bed in a public hospital that much shorter. It defies description.

I will sum up tonight by saying that I support the government's legislation totally. I think it will be a good thing for the private health system. I think it will be a good thing for Australians who wish to be independent in their health care. Above all, I think it will relieve the strain on the public health system.

Debate (on motion by Mr Jenkins) adjourned.