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Thursday, 16 October 2008
Page: 6203

Senator CORMANN (1:05 PM) —Okay. Before we were interrupted to deal with non-controversial legislation, the minister advised me that the expected saving for the government as a result of not having to pay the private health insurance rebate to people whom the government expects to leave private health insurance is $740,600,000. The expected loss of revenue is $360 million. I want to place on record what this means. The $740.6 million is only the 30 per cent rebate. This means that the government is happy to see $2.5 billion walk out of our health system, because that is exactly the amount of money that those people would otherwise have contributed to private health insurance. They will be taking that money with them.

My very specific question to the minister, which has not been answered yet, is: what increases in private health insurance premiums does the government expect as a result of this revised measure? Yesterday, on ABC radio, the Minister for Health and Ageing told listeners that increases in premiums as a result of this measure were inevitable. So, firstly, please tell me what the government’s expectation is in terms of increases in premiums. Secondly, according to the government’s own figures, $2.5 billion will walk out of the health system as a result of this measure. In light of that fact, what is the government’s intention in terms of compensating the states and territories for this impact?