Senator GIBBS —My question is directed to the Minister representing the Minister for Health and Family Services. What is your response to reports in the weekend press that by mid- to late-1998 the value of the government's health insurance incentive scheme will have been fully wiped out?

Senator HERRON —I think this is an entirely hypocritical question coming from the opposition. After 13 years where they deliberately set out to try to destroy the private health system, they are now crying crocodile tears.   The sheer hypocrisy of this sort of attitude by the opposition astounds me. The previous Labor administration oversaw a fall in the drop-out rate in private health insurance from 64 per cent—it was before you came in, Senator Gibbs, so we can't blame you personally for it—to 30 per cent, so I cannot believe that, now, because we are trying to prop it up and trying to assist people to stay in private health insurance, you come up with these hypothetical questions as to where it will be.

We saw the shadow minister in the other place last week attacking us and basing it on the figures that ended on 30 June—before these changes were introduced by the government. It will be some time, Senator Gibbs, before we will know the outcome. But, I can assure you, things would be a lot worse if those changes were not introduced, if we did not bring those in as a result of our policy, because at least we are attempting to prop up private health insurance. Nobody knows—we cannot forecast—what the value will be. We do not know; and we will not be hypocritical about that. We will wait to see what those change produce and then we will assure you that it would have been a lot worse had something like that not been done, because it was in free fall under the Labor Party.

Senator Sherry —It's still in free fall!

Senator HERRON —It was in free fall. It would have been a lot worse if we had done nothing.

Senator Sherry —How much worse?

Senator HERRON —Your government—when you were in government—deliberately set out to destroy the private health system. We are at least attempting to do something, Senator Gibbs.

Senator GIBBS —Madam President, I ask a supplementary question. My question might be hypocrisy and you say that you are trying to prop up the private health insurance scheme but why is it that, despite the Prime Minister's personal involvement in this policy area, Australians are paying ever-increasing private health insurance premiums and the companies themselves are facing serious solvency problems?

Senator HERRON —I welcome the supplementary question because the reality is that these changes were brought in by the opposition when they were in government. No matter what they say about anything that we bring in—

Senator Forshaw —What changes?

Senator HERRON —The changes that caused the demise of the private health system, including the taking away of the bed day subsidy. Before you came here, Senator Forshaw, the bed day subsidy existed—it was taken away by the Labor government—so that people who went into private hospitals had a bed day subsidy. My memory is longer than yours, Senator Forshaw, and I can assure you that those changes that were brought in by the Labor Party spelt the doom of the private health care system as it now exists. Hypocritical is the word, Senator Gibbs, and you were quite correct in admitting that hypocrisy when you asked your supplementary question.(Time expired)