Senator GIBBS(4.26 p.m.) —I also would like to speak on this matter. It is my view that this government's health insurance policy is in a shambles—an absolute shambles—and it should be no surprise to anybody that it is. Figures show that, during the last quarter, total private health insurance membership fell by 1,000 people a day. People are dropping out because it is far too expensive. They are simply not getting value for money.

Since his intervention, the Prime Minister (Mr Howard) has allowed about 30 health funds to increase their premiums, and those increases have already swallowed up most of the benefit of the tax rebate for families. The latest Weekend Australian states:

Figures released by the Health Department in May showed that between September 1 last year and May 7, premiums for more than 2.7 million fund members rose by an average of 8.4 per cent—but some exceeded 15 per cent.

The item goes on to say:

The Government is bracing for another wave of premium increase applications to offset hefty losses in the three months to June. The first fund to move was MBF, this week lodging an application to increase premiums by up to 15 per cent.

I repeat: premiums are being increased by up to 15 per cent. The $450 rebate is gobbled up before they even get it.

The incentive package rebate scheme, which was launched only two months ago, is in dire trouble. The scheme is costing the taxpayers $1.7 billion—and it is a scheme which benefits only one-third of the population. Nobody would deny a benefit to low income earners. But the reality is that, to implement this scheme, the government slashed federal funding to public hospitals by $800 million and abolished the Commonwealth health program thus saving another $400 million.

The $1.7 billion, which this government has squandered on a failed health insurance initiative, could have been spent directly on patient care. The money could have kept 6,000 public hospital beds in operation for the next four years. It could have been used to reduce hospital waiting lists. Jeff Kennett described this expenditure aptly as `money flushed down the drain'. The Weekend Australian states:

Figures calculated this month by the Government's health insurance watchdog, the Private Health Insurance Administrative Council spell out the full extent of the industry's financial woes, showing the payback rate has risen from 84c to 97.5c in the dollar over the past decade.

The industry is expected to record a loss this financial year of as much as $100 million, compared with an $81 million loss last year and a $62 million profit in 1995.

This week MBF, probably the largest health fund, applied for premium increases of up to 15 per cent from 1 October. This will cost families another $275 a year. To add insult to injury, MBF also wants a $50 a night fee for staying in a private hospital. If this is allowed, people will be forced back to the public health system. This makes a mockery of the government's plan to free up public hospital beds. People are being priced out of existence as far as private health insurance premiums are concerned.

One wonders where it will all end. If you pay private health insurance you are to be penalised by paying $50 a day for a bed. This, of course, is in addition to the other out-of-pocket expenses that private health insurance does not pay for.  If a person does opt to receive treatment in a public hospital rather than in a private hospital, MBF pockets about $200 in subsidy paid for private patients in public hospitals. What a disgraceful joke perpetrated on the Australian people, saying that the rebate they will receive will take pressure—(Time expired)