Senator REYNOLDS —I address my question to the Minister representing the Minister for Health and Aged Care. Is the minister aware that private health funds are offering cheap policies, as low as $240 a year for singles, with very high excesses—in many cases, over $500. Isn't it a fact that these policies are simply a means of avoiding the Medicare surcharge? For example, someone on $70,000 who would normally have to pay a surcharge of $700 can buy a $240 policy and get $80 back with the 30 per cent rebate, thereby avoiding having to pay the $700 surcharge. Doesn't this mean they end up $540 ahead, the health fund pockets $240 and the government loses $780? Furthermore, the person continues to use the public health system in order to avoid the $500 excess and so there is no reduction in pressure on the public system. Why does the government continue to approve these policies?

Senator HERRON (Aboriginal and Torres Strait Islander Affairs) —Senator Reynolds would be aware that there is a whole spectrum of private health insurance opportunities available to private health insurance agencies, the primary concern being that they are viable. I know that it is in the interests of Senator Reynolds and her party to destroy the private health industry—but that is not ours.

Senator Chris Evans —It's a rort. They still use the public hospitals.

Senator HERRON —Senator Evans says that they can still use public hospitals. That is what freedom of choice is about, and I would refer that to Senator Evans. If there is anything further to add to that answer, I will be happy to refer it to the minister.

Senator REYNOLDS —Madam President, I ask a supplementary question. Minister, I think I heard you say that you will refer my question to the minister. Would you please refer it and report to the Senate on how the government will monitor the situation in regard to examples such as the one I have given?

Senator HERRON (Aboriginal and Torres Strait Islander Affairs) —Senator Reynolds would be aware also that the Private Health Insurance Association is in frequent contact with the department. All these proposals are considered; they have to comply with the act. That will be the government's attitude towards them. But I certainly will refer any other material to the minister and come back to the Senate.