Senator WEST(1.08 p.m.) —It is with a great deal of sadness that I rise today to speak on these four Medicare and health related bills. It is with sadness because this is the first act of emasculation of the health care system as we know it in this country. The government is finally beginning to implement Son of Fightback. This is a great tragedy for those in this country who have health care needs.

The government made much during the election campaign about how wonderful this incentive package would be—people would be able to take out private health insurance—and how they were going to encourage the low income earners to take out private health insurance. That is one of the nastiest things that have been perpetrated on the lower income people in this country that I can think of, because what private health insurance buys you is bills.

Whom have we heard that from in recent times? None other than the Australian Medical Association. They even went as far last week as to urge people to drop their private health insurance. I will not suggest that they might have some personal reasons of their own for that; maybe it is because they do not want the private health insurance company insurers monitoring and lobbying against some of the charging tactics of some of the members of the AMA as well, because they are pretty rampant in disregarding the needs of people with some of their pricing policies too.

Let us look at these private health insurance incentives. The amounts of money that are being offered to people to take out private health insurance go nowhere towards the purchasing of private health insurance. I think it would cover about a quarter—maybe less—of the amount of money that people would have to pay to take out private health insurance. Whilst you are giving people incentives to take out private health insurance, to do so they are having to expend two or three times more than what they are going to get back.

I know the Prime Minister (Mr Howard) in the other place quoted Mr Kennett, the Victorian Premier, as saying late last week that this was a good idea. It is a pity that Mr Howard, in his usual form, was not living in the future—as usual, he was living in the past—because about Thursday of last week, Mr Kennett described the rebates as` money down the drain' and `good money after bad'. Even Mr Kennett is able to see through his Liberal colleagues' shenanigans. Even Mr Kennett is prepared to stand up and say, `This is not a good piece of legislation. This is about wasting taxpayers' money because the amount of money that it is going to cost the government to implement this scheme is more than what they will actually reduce their expenditure by.' It is actually going to cost money to save money. They will save less money than they are actually going to spend to save it.

That sounds to me like more black hole stuff. They are getting pretty good at this black hole. They have been in 12 months and they have managed to black hole something like $4½ billion or $5 billion. That is not bad going. That is a pretty good annual rate. By the end of three years, they will be up to $15 billion, if not more. Pretty shocking!

We have also seen a fast one pulled because this government when in opposition for 13 years had more health policies than some people have had hot dinners. It has even cost shadow ministers their positions and things like that. After they had been in for a while, they thought they knew so little about it that they had better have an inquiry, so they set up the Productivity Commission inquiry.

What about that one? We had the draft report. We were told that there was going to be a report out last Friday. There is every indication that the report has gone to the government. Is it not funny that the government, while we are busy discussing this legislation, while we are debating this critical and crucial legislation about the direction of health in this country, chooses to pass this legislation prior to the public release—

Senator Neal —They have got it.

Senator WEST —They have got it, but I am talking about the public release. They do not want us to know what is in their Productivity Commission report so we can debate this legislation informed. They are expecting us to make decisions in an uninformed manner, which raises two points.

In a legal situation, we are being asked to enter into an agreement when we are not fully informed of all of the facts. Out in the real world, if this were any other thing such as a contract, that would render that particular agreement null and void because it was made without cognisance and understanding of the full facts. But that does not bother this mob. One has to wonder why they have not released it. I will wager they have not released it because it shows that what they are trying to do is not going to address the needs of the community and certainly is not going to address the needs of the budget.

This is sloppy and slapdash work by this particular government. They obviously do not have any understanding—neither do they care; they are just ideologically driven. They will drive this through, come hell or high water. Too bad what we on this side of the parliament might say. They will just ride over us while taking no cognisance of our amendments. Too bad even what the inquiry they have set up might say.

I do not know; maybe the inquiry agrees with everything they are doing. But I would have thought, if that were the case, we would have seen its results being published very quickly. They would have been in here trumpeting those results. They would have had a list of speakers a mile long—all 30-odd of them on the speakers list—to say, `Hey, isn't this great? Our actions are being vindicated; we're being proven right.'

There is one person from their side on the speakers list. They have not released the document publicly. What does that tell you? It tells me, or leads me to think, that it is a bit crook in Rookwood. It smells. I think they are not being totally honest with us. As I say, if everything in that commission report had vindicated their position, their stance, their legislation—or even half done so—what would they have been doing? Every one of them would have been in here with copies of the report; they would have been waving those copies around and literally belting us around the ears with them.

There is silence—silence. They have the bare minimum number of members in the chamber, and there is silence. They are not even raising an interjection, which is most unlike at least one or two of the members opposite.

Senator Ellison interjecting—

Senator WEST —Thank you, Senator Ellison. At least I have drawn one mild protest—and for you, that is very mild. I rest my case on that particular issue because I know these gentlemen and ladies opposite. If they believed that their position had been vindicated by that report, politically it would be naive for them to sit there and say nothing about it. Politically, obviously it is a bit smelly and does not agree with them.

Let us look at some of the other things they have done in health. First of all, their coalition policy A Healthy Future contained the following promise:

The incentives will not be funded from the public hospital system or health grants to the States. Other than the $50 million which will be reallocated from the Better Practice Program, the incentive will be funded entirely from savings outside the Health and Human Services Portfolio.

Go and have a look at what has happened to health in the last 12 months: grants to the states have been slashed by $1.5 billion over three years, which is a cut of about $500 million in state health funding each year, representing approximately one-third of health expenditure; they have made direct funding cuts to public hospitals of more than $300 million over four years; and there have been other massive cuts to health policy totalling more than $3 billion over four years. All this has been for a promise that incentives will not be funded out of the public hospitals system. What they have done? They have taken a machete—you cannot even say a razor blade, as that is too polite—to the health system and the health budget.

We see headlines in the local papers of all of the states about problems in the health system—and everybody keeps blaming the states. I will tell you who is to blame for the problems in the health system: this federal government, because they have taken a machete to everything. This Minister for Health and Family Services (Dr Wooldridge) has tried to defend a lot of these cuts to the public hospital funds on the basis that they are an attack on cost shifting. Why is it then that the state that suffers the biggest cut in funding is New South Wales? Also, why is it that, at estimates when we asked this question, the state that was into cost shifting in the biggest way was Victoria, although it did not suffer the biggest cuts? The government is looking after its mates as well.

This is an appalling situation—just appalling. It ignores a lot of things. It ignores the fact that costs were shifted the other way. It ignores the fact that hospitals have been forced by conservative state governments to accept further cutbacks and to shift costs—and they have done so to protect staff and keep beds open. Further cutting to funding will only make things worse.

I do not know of anybody in this country, particularly any doctor—with the exception of Dr Wooldridge—who thinks public hospitals get too much money. Nobody thinks that. The government also have made cuts to programs that were going to reduce waiting lists in public hospitals. Also, they have made cuts to programs that cover things like palliative care. But they do not seem to care about these things; they do not bother them—not at all. And what are we seeing?

Senator Neal —Cuts to pharmaceutical benefits.

Senator WEST —Cuts to pharmaceutical benefits, as my colleague says. What about the dental health program? Really and truly, this government puts itself up as a caring government. It wants people to feel comfortable. I do not know where people who are sick are going to feel comfortable. If they are to feel comfortable, it certainly will not be with any thanks to this government—and particularly if people do not have significant amounts of private health insurance and significant income levels.

The cuts to public hospitals alone equate to the closing of a thousand beds or turning away 66,000 people waiting for operations. This is a government, as I said, that just does not care about people. It is ideologically driven. It does not mind having two-tier systems, and I will get on to that in a minute. The government is ideologically driven and it just wants to make cuts. As I say, this will do absolutely nothing at all to assist those people who are low income earners to have private health insurance.

We notice that the values of the rebates and benefits, since being announced by this government in the budget, are being eroded because all the health funds are putting up their premiums. The Prime Minister got very worried about that; he actually intervened. He now personally has to approve every health fund increase. Not too many have been refused, I might add.

The government even used the visit of the President of the United States to hide a couple of approvals for increases. Medibank Private and MBF managed to get some pretty large cuts through that week. Recently MBF has been closing branches in rural New South Wales. All I can say is that that is not much good for the provision of private health insurance out there. It is a problem. The government is not addressing it correctly.

I now turn to the Medicare Levy Amendment Bill (No. 2) and the Taxation Laws Amendment (Private Health Insurance Incentives) Bill. Again, here goes another broken promise. We do not know whether or not it was a core promise, but it was a broken promise on the part of the government. They promised that there would be no new taxes or no increase in taxes. Those of you who have been around for a while well recall the questioning of Senator Short when he was the minister and now Senator Kemp as the minister representing the Minister for Finance (Mr Fahey) to try to get them to define what is a tax, what is not a tax, what is a levy and why a levy is not a tax. I do not know why a levy is not a tax. All I know is that if there is a levy on something, you and I and everybody else still have to dig into the hip pocket to pay.

This is the second increase in the Medicare levy. We have no objections to one increase. We support the gun buyback program that this has been used for. It is a real worry. This proposal is a masquerade, a facade and a mirage. It is designed to impose a one per cent Medicare surcharge on individuals with taxable incomes greater than $50,000 or families with combined taxable incomes greater than $100,000 who do not have private patient hospital cover for themselves and all family members.

For the first time we have actually seen the government attacking Defence Force families, because they have refused to exempt Defence Force personnel. You could well have a situation where Defence Force families will be having to pay, when they should have been exempted because the personnel themselves have health cover in their job. If a single person has an income over $50,000, they are up for the levy. A couple with a combined taxable income of over $100,000 are up for it as well. But the government could not care less.

As I said, this is a mirage. We can look at the number of people who will be affected. Figures from the department show that about 110,000 singles and 100,000 couples and families will be affected. Less than one quarter of a million of the population of this country will be affected by this proposal. Most of this group have private health insurance. If they do not, they have made a deliberate choice not to have private health insurance and to privately cover their own costs. So it is a real mirage.

The other crazy thing is that it will be possible to get around this and save yourself some money by taking out the minimum amount of private health insurance that has some hospital cover in it. That will cost you less than the one per cent surcharge. It will do absolutely nothing to increase people's access to hospitals and things like that. This levy is just the thin edge of the wedge. By refusing to index the threshold, more and more people will go into this category and will be forced to pay the penalty levy.

I have a great deal of concern about this because I think this is the first step towards a two-tiered health system—one for the rich and one for the poor. We have already seen that this government is not averse to two-tiered systems. We have seen it this year with the introduction of being able to buy your way into university and being able to buy your way into higher education if you have the wherewithal and the means. Those who do not have the financial means will be penalised. We are also seeing it with nursing homes. They are heading towards creating a two-tiered system.

As I said, these are four pieces of legislation that we should not be debating here today. We should be waiting until we see the results of the report that the government commissioned. Why will you not table this report so we can debate this issue in the full knowledge of what the advice to you people has been? You are too scared because your legislation is crook.