Senator KNOWLES (3:10 PM) —I think there are some fundamental questions that need to be asked of the other side of this chamber. The first is: what is the Labor Party planning to do about private health insurance? Is it simply opposing the government's measures with no plan in mind? Is it simply hoping that private health insurance will die? I know the shadow minister for health, Jenny Macklin, has absolutely no plan whatsoever other than a zero private health insurance policy. I think that is very sad because, on top of what the shadow minister has done, there is a scaremongering process being undertaken today by the Labor Party, which is not at all healthy for the future of private health insurance.

There is already talk about the funds increasing their premiums. The fact is that the Labor Party in government for over 13 years did not reject one request for a premium increase made by the funds. The difference is that when we came to government, we set up a formula and a procedure under which the funds had to apply for increases. At the moment, no fund has applied for a future premium increase. No premium adjustments will be considered before 1 May next year. If premium adjustments are necessary to maintain individual fund solvency—which is an equation that happens to be overlooked by the Labor Party—for the first time, they will be announced on a common day with no further increases for 12 months. As I said, the fact still remains that the Labor Party did not reject one request for a premium increase in their entire 13 years in government.

The fact of the matter remains also that funds will in future face a tougher regime for premium applications and the coalition is strengthening the power of the industry regulator and prudential supervisor, PHIAC.

The question still remains—what is the Labor Party policy? Do they simply want to abolish private health insurance? Do they want to make sure that it is tougher for the pensioners and low income earners to pay for their private health insurance? Because that is clearly what is going to be the result if the Labor Party and the minor parties oppose the legislation which will come before the Senate in the near future.

If the Senate rejects the rebate legislation, the funds will have to redraw their business plans and they will virtually have to increase their premiums. That would be as a direct consequence of the Labor Party policy. They do not seem to worry about that. They do not seem to worry that there are many low income earners who take out private health insurance.

Last week, we had the farce of the shadow minister suggesting some weird and wonderful way of calculating what would have to be reimbursed to the states. She made a comment that it was only going to cost the Commonwealth an extra $830 million if there was no rebate available. We currently have just over 30 per cent of people insured and it is a recognised fact, even by the Labor Party, that in five years time there would only be 20 per cent of people insured if there is no rebate. And yet the shadow minister said that it would only cost the Commonwealth government an extra $830 million. Heavens above!: she cannot even do her maths. She does not understand the Commonwealth Medicare agreement with the states. If what she is forecasting were to be the case, the cost to the Commonwealth would be close on $2.5 billion—not $830 million.

Senator Calvert —How much?

Senator KNOWLES —It would be $2.5 billion, Senator Calvert—that is how much it would cost the Commonwealth. They do not understand that there are many low income people out there who desperately want this measure. For them to deny that measure, which the people voted for at the last election, would be, simply, to once again deny them the opportunity to make provision for themselves.

It would be interesting to also ask how many of the higher earners in this place have private health insurance. It was interesting that Senator Lees declared on television yesterday that as a higher income earner she does not bother to take out private health insurance. It would be fascinating to know how many Labor Party senators and members have private health insurance where they bear the brunt of the responsibility themselves and do not share it among the other taxpayers and lower income earners of Australia. (Time expired)