Senator CHRIS EVANS (Leader of the Opposition in the Senate) (6:36 PM) —I thank the minister for her answer. I think she is making a real problem for herself in this approach. One of the things that strikes me is whether, when you are doing the maths to balance it out, you are also going to take into account local government concessions on rates and things like that. It seems to me that you have embarked on a policy course that leads you into contradictions and complications, and it is going to be very hard to resolve. You mention, for instance, car registrations. My father is a self-funded retiree but does not own a car. How do you work it out for those who do own a car and those who do not, or for those who live in local government authorities that offer rate reductions for people with health care cards or on other bases? It seems to me that the sort of approach you, as a Commonwealth government, are tying to take to balance out concessions that are offered—

Senator Patterson —Tell the states to give them concessions. Then they'll be even.

Senator CHRIS EVANS —The point I am making is that there are also concessions at the local government level which you have not yet attempted to address, and I am sure you are not going to. All I am suggesting is that, as a policy path, this is fraught, and this is one of my concerns about the approach. The other thing I would like to say is that I am interested in the comment about how expensive the Democrat propositions are, and I think that is probably right. But I am also keen to know how you will pay for yours because, as I understand it, this was to be paid for by the PBS generic drug propositions—which I have not found on my bills list—which were to apply from 1 January. I would be interested to hear the minister explain how the government would fund the cost of these measures, because that is not clear to me. I know what was said during the election campaign but, if the legislation is passed, the costs will apply from 1 January.

In a general sense in response to the Democrat amendments, Labor will not support them. We accept that these measures are largely implementing the government's election promises. We do not support the policy framework that underpins those. We think there are some real difficulties and contradictions with them but, if you like, this is the government delivering on what it said it would deliver, and we are prepared to let it do that. We think the Democrat amendments would add to the adhocery and add to the cost and, quite frankly, would be rejected by the government. So we can have a futile debate now, send the legislation back to the House of Representatives and deal with it in a week's time when we will fold the tent or you will fold the tent, Senator Greig. I think we have to have a realistic appreciation of where we are at in the parliamentary cycle. Our bottom line is that we will not stop the government implementing the promises it made to self-funded retirees and pensioners about these things. We think the policy basis is confused and fraught and that it will lead the government down the wrong path. We do not think it addresses a whole range of inequities in the system but we will not be supporting the Democrat amendments in that regard. We will support the passage of the bill.