Senator FAULKNER (11:08 AM) —I thought I might begin my contribution on the second reading debate on this legislation by quoting from the 1998 platform of the Australian Labor Party, which says this:

Labor remains resolutely committed to universal access to publicly funded health services through Medicare. Labor will work to ensure that health resources are allocated on the basis of need and people are not excluded from necessary services because of their economic circumstances.

Labor is committed to maintaining the effective integrity of Medicare as a system of universal health insurance that will finance the delivery of high quality, medical and public hospital services to all Australians.

These are the principles that the Labor Party will honour and will uphold, as we deal with this legislation; they will guide the approach of the Labor Party on this matter that is currently being dealt with by the Senate. Our Labor Party platform, in regard to the private sector, also says this:

Labor recognises the role of the private health sector and remains committed to a balanced health system making best use of both public and private sectors.

The private sector must operate under appropriate government regulation. In particular, Labor remains committed to a private health insurance system which does not discriminate on the basis of age, sex or health.

The critical point of this is balance: we want a balanced health system that makes the best use of both the private and the public health sectors. This legislation before the parliament now is unfair: it does not provide balance, and it certainly, I have to say, is not good policy.

We think that the best way to boost hospital funding and reduce hospital waiting times for surgery is to directly fund public hospitals. The public hospital system is our priority because that is where the greatest need exists. We believe that spending money directly on treating patients is the most effective way of reducing waiting lists. We encourage people, of course, who wish to take out private health insurance. But we know that for many people in Australia, people on low incomes particularly, the public health system is the only option they have.

The hundreds of millions of dollars that are being thrown at this rebate in this legislation would go a very long way to improving the public hospital system—and that would be of benefit to all Australians. The rebate being proposed by the government is inherently unfair. It does not provide balance, nor will it achieve its desired objective of increasing the take-up of private health insurance, and therefore reduce pressure on the public health system—and that is very strongly backed up by the National Centre for Epidemiology and Population Health, which I thought put forward some strong and persuasive arguments against the legislation at the Senate committee hearing last Friday. Just look at what it actually said to the Senate committee. It summarised its position as follows:

First, that it will not fix the problem it seeks to fix, it will probably make the problem worse and it is highly unlikely to do anything to improve the quality of health care available to the Australian people;

second, that the huge proposed transfer payment would be more efficiently and equitably used in other ways;

third, that the problem that has led the government to this point should now be the stimulus for real reform of private health insurance, making it supplementary to, not a competitor with, the publicly funded health care system.

There is no evidence that the private health insurance rebate will take the pressure off public hospitals. If you take the example of the government's existing means tested rebate—which, of course, the proposal before us is supposed to replace—you find that it has not increased the number of people taking up private health insurance. The new rebate will benefit primarily people who have existing private health insurance.

The government's estimate for increasing the number of people with private health insurance is a mere 2.7 per cent. That is the government's figure—a mere 2.7 per cent increase; up from 30.3 per cent to 33 per cent. That is a 2.7 per cent increase at the cost of $1½ billion. That is what the government is proposing, and we say that it is simply not good enough. Minister Wooldridge, I noticed, boasted an increase to 40 per cent in his second reading speech in the House of Representatives. A private hospital survey has claimed that the rebate would result in a boost to coverage to 45 per cent. Again, you have to ask this question: where is the evidence to back up those sorts of claims?

I mentioned the evidence of the National Centre for Epidemiology and Population Health given to the Senate committee. I think they presented a very worthwhile and impressive submission to the Senate inquiry. On the question before us, they said:

. . . this is a clumsy and predictably ineffective way to achieve what the government wants to achieve. This approach would lock the government into an inflexible $7 billion spending program which would not produce the desired offsets in the public sector . . . this subsidy is likely to exacerbate the problem for the private funds of adverse selection and differential risk dropouts, without addressing the underlying problem.

We say that the government is throwing good money after bad. It is sticking a whopping $1.5 billion into the private health system—money, of course, that is desperately needed in the public health system in public hospitals; money that could really make a difference in the public health system. It is directing this enormous amount of money exclusively to private health insurance owners, and we say that is patently and transparently unfair. It will benefit most those who need it least. It will benefit most high income households, most of whom already have private health insurance. How obviously unfair.

In May of this year the Australian Bureau of Statistics produced a private health insurance survey which demonstrated a direct correlation between income and private health insurance. It showed that of those earning less than $20,000, 22 per cent have private health insurance; of those earning between $50,000 and $60,000, 60 per cent have private health insurance; and, of those earning over $70,000, 72 per cent have private health insurance. Most low income families in Australia cannot afford private health insurance. They simply cannot afford it, and that is the case with—

Opposition senators interjecting—

Senator FAULKNER —Exactly, Senator West and Senator Denman. They cannot afford it with or without a rebate. That is the truth of this issue. That is why we say the priority here must rest with the public health system—and that is Labor's priority—because it is the system that most Australians rely on. That is the fundamental principle that guides the Labor Party in its approach on this legislation.

But I do not want to suggest for one minute that the unfairness stops there. Pressure on public hospitals will not be relieved by extending the rebate to all ancillary services. There is no justification at all for doing that. Take the example of what I think is the great injustice on dental health. While abolishing the Commonwealth dental health scheme, which was, as I recall, worth $100 million—a scheme that provided dental health care and treatment to pensioners and low income people—those with private insurance are going to get a 30 per cent rebate on their dental premiums. That is the government's approach. Nearly $200 million of the rebate will go to subsidising private dental treatment. On the other hand, the low income people in our community wait at least a couple of years for treatment.

We now have, as I say, this open-and-shut case of the unfairness of the legislation that is now before the parliament, but we also have the spectacle of the government trying to turn debate on this legislation into just another typically tawdry Liberal Party political stunt. As far as the government is concerned: forget about the health system and the health issues—the debate really is not about that. There is an election on the horizon in the state of New South Wales. That is an election, of course, that the coalition obviously desperately wants to win. So the debate no longer is about the policy issues, and I am sure that in particular my colleague from New South Wales, Senator West, has noted this. The debate is not about the policy but it is about the politics—the politics of the New South Wales election in March of next year.

I just want to mention this as I conclude my remarks on this bill. John Howard is now less focused on the January 1999 start-up date for this rebate than he is focused upon realising political advantage in forcing the Senate to reject an unaltered or unamended and unnegotiated piece of legislation which the vast majority of commentators and experts agree is bad policy. Mr Howard, the Prime Minister, is perfectly happy to risk his January 1999 start-up—risk it all—for a bit of politics to play in the New South Wales election in March of next year. Of course, he has his pollsters like the discredited Mark Textor. They have, apparently, predicted significant political advantage to the New South Wales Liberal Party in forcing the Senate into some game of brinkmanship on this legislation. We are told that it would suit the New South Wales Liberal Party if the Senate does not pass the legislation in time for a January 1999 start-up so they can reintroduce this legislation in three months time.

Senator West —Anything to take the focus away from their leadership problems.

Senator FAULKNER —That's true, Senator West. But also, of course, three months time is right on the eve of the New South Wales election. I am glad you raised the issue, Senator West, of the Liberal Party leadership in New South Wales because you have a situation, which has been demonstrated so clearly during the debate on this legislation, where the Prime Minister is far more interested in matters relating to the internal dynamics of the New South Wales Liberal Party than he is in what ought to be his responsibility—the health of Australian families. What he is on about is the health of his stumbling protege in New South Wales, Ms Kerry Chikarovski, and Mr Howard's and Ms Chikarovski's cronies in the New South Wales Liberal Party.

I draw the Senate's attention to last week's article in the Bulletin by Mr Laurie Oakes, who reported that before John Howard committed his government to the 30 per cent rebate on private health insurance premiums he had the concept market tested. The results, as reported in the Bulletin, were unequivocal in regard to its popularity. According to—and I use this term advisedly—the `researcher', the only proposal he had ever found to be more popular was the reintroduction of the death penalty.

This policy, this legislation, that we are debating has been poll driven from its conception. I put all my money on who did the research. You can bet your life it was Mark Textor, that grubby, unprincipled push pollster for the Liberal Party. No doubt as has been reported, his most recent polling is inextricably linked to both Ms Chikarovski's leadership coup and the politics of the 30 per cent tax bribe for upper income earners. I assume polling was uppermost in Dr Wooldridge's mind when he threatened on the weekend to bring the legislation back to the Senate for a vote a week before the New South Wales election if it did not pass unamended this week.

I will be very interested in the Liberals' approach during the committee stage of this debate. I will be very interested to see whether Dr Wooldridge will be delivering on that threat that he made on the weekend or whether it was just a bit of breastbeating and empty rhetoric, as we have come to expect from people like Dr Wooldridge, or whether the Liberals will contemplate no amendment at all to this legislation—whether they happen to consider that that's in their political interest. Don't think for one minute that threats and brinkmanship are going to work with us. They are not. They are not going to work with the Labor Party; they never have. We are going to stand by our principles.

Senator West —Our policy.

Senator FAULKNER —What we are going to do is stand by our policy and stand by the public health system in this country. We are not ashamed of that. We are opposing this legislation in the name of fairness and balance. That is what drives the Labor Party's approach on this. We are opposing it because we want to ensure the health of our public hospital system, we want to ensure the health of all Australians and we want to ensure that low income people in our community are not disadvantaged. I commend the approach of the opposition. (Time expired)