Senator HERRON (Aboriginal and Torres Strait Islander Affairs) (10:06 PM) —I was tempted to have a rhetorical frolic tonight, but I will restrain myself.

Senator Carr interjecting—

Senator HERRON —If you take the opposition's words as those we used when we were in opposition and changed a few figures around, you would end up with the same speech. I invite the opposition to look at the Hansard . I want to make a point about an issue Senator Forshaw and Senator Denman brought up, and it relates to why expenditure under the bill is capped. What happens if the private health insurance participation rate drops?

I can understand that because, when the Labor Party was in power, the Medicare agreement of five years ago said that when it dropped under two per cent the agreement would be renegotiated. What did Labor do? It never, ever did anything. Senator West would recall that. It never, ever did; and I used to ask about that all the time. I kept pillorying the Labor Party and asking why it did not renegotiate when that was in the agreement. I can understand the Labor Party asking this question of itself now.

Senator Forshaw interjecting—

Senator HERRON —We have taken care of it. The amount of appropriation under the bill is set at the level of the offer made to the states at the Premiers Conference. If the private health insurance participation rate drops, if hospital output costs rise, or if the population increases more quickly than projected, the amount of the appropriation would prove to be insufficient by year 5. That is what happened in the past. In that case, the Commonwealth will need to legislate to appropriate more money.

If the states are worried about not being assured of security under this bill, the solution is simple: they should enter into agreements that will determine the amount of money they will receive and set out how this will be varied from year to year to cope with drops in the participation rate, increases in hospital output costs, and increases in population. The simple answer, Senator Forshaw, is for them to enter into negotiations over the agreement and sign it.

Senator Gibbs said—and Senator Denman also mentioned—that we were not in budget deficit. She had better tell Gareth Evans that, because he admitted that there was a $10.5 billion budget deficit. There was a $70 billion deficit in the seven years before. Senator Gibbs has one thing in common with Pauline Hanson, and that is that she would print the money, because that is the only answer. You either increase taxes or print money—and that was what she was saying. She was moaning about how we need more money. Of course we need more money. We have an ageing population and rapidly increasing technology and so it is going to cost more.

Senator Gibbs should acknowledge that the Labor Party, which is now in power in Queensland, should be very grateful that Queensland signed the Medicare agreement and got an extra $100 million which it otherwise would not have got. She should move a vote of thanks to Mike Horan and express her gratitude for the extra $100 million that Queensland got.

Senator Lees raised the question of flexibility. The very point we make in these agreements is that the principles are designed to promote flexibility. Health care is changing. We need to make sure that we are not trapped into in-hospital care, as is the case under the current agreements. I do not think an amendment has been moved. A question came up in relation to those amendments, but I will leave that out. There is nothing else to respond to.

We are back to the old story of the states moaning that they have not got enough money. Senator Gibbs asked if we were going to go back to pre-1983 when two million people did not have private health insurance. Senator Gibbs, 12 million people have not got private health insurance now because of the Labor Party's policy in relation to private health insurance. We would love to go back to pre-1983 when there were only two million people without private health insurance.

Question resolved in the affirmative.

Bill read a second time, and passed through its remaining stages without amendment or debate.