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Wednesday, 14 September 1983
Page: 770


Mr HUNT(4.1) —I do not intend to delay the House because I know that many other speakers wish to address themselves to this legislation. However, as a former Minister for Health, I would like to make some contribution to the debate. During the four years I was Minister for Health I suppose I made more speeches on that subject that most honourable members in the Parliament. I compliment the shadow Minister for Health, the honourable member for Mackellar ( Mr Carlton), who very efficiently put the Opposition's case and its opposition to the four Bills-the Health Legislation Amendment Bill, the Medicare Levy Bill, the Income Tax Laws Amendment (Medicare Levy) Bill and the States (Tax Sharing and Health Grants) Amendment Bill (No. 2)-which are designed to restore Medibank under the new name of Medicare. These Bills will do nothing to improve the quality of health care in this country. Indeed, they guarantee, in my view, that health costs will once again explode as they did under Medibank.

The honourable member for Canberra (Mrs Kelly) dwelt on the problems of medical fraud and overservicing. As a member of the Joint Committee of Public Accounts she is very well equipped to do so. It was a problem that occupied much of my time in the four years that I occupied the position of Minister for Health, as my submission to the Public Accounts Committee attests. I know that the Department of Health came in for a lot of criticism for not being able to come to grips quickly enough with the problems of medical fraud and overservicing. Nevertheless I must say that the Department of Health, during the time that I was Minister, although having problems with staff ceilings, worked extremely hard to come to grips with what is a very difficult problem. It is not until one becomes really involved in this portfolio that one realises the difficulty people have in trying to detect overservicing. Committees were set up in each State. Their terms of reference may not have been adequate, but enormous amounts of time were necessary to go through documents, case histories and so on in order to ascertain whether a doctor had overserviced in respect of a patient.

One of the difficulties, in my view, that Medicare, as a reborn Medibank will face, is that it will undoubtedly encourage the same problems we had when I had charge of the Health portfolio. I know that it is an ideological and philosophical policy of the Australian Labor Party. It is a symbol of its philosophical approach. It is central to its concept of a welfare state, and it is really part of its social contract with the trade union movement. But it is a burdensome philosophical approach to welfare that has catapulted so many Western nations and so many Western economies into economic chaos. In order to make way for the Medicare program the Labor Government has had to tax lump sum superannuation payments and alter pension entitlement arrangements for the aged without giving due consideration to the social consequences of its actions.

Canada is often taken as an example, and I know it was an example followed by the Labor Party and those people who advised it prior to 1972. Let us look at the Canadian situation and the problems it faces today. In 1983-84 the Canadian Federal Government will have expenditures of about $Can90 billion and revenues of $Can59 billion-a deficit of $Can31 billion, or one-third of the Budget. Twenty per cent of the Budget will go to service past debts. The Trudeau Government, with its Medicare program and its social welfare extravagances, has placed the Canadian economy in a perilous situation. The Medicare program in Canada continues on its costly way despite the concern of provincial governments , which are fighting a losing battle to contain costs without recourse to savage user charges and some bureaucratic controls.

I am surprised that the Labor Party should have such a short memory. The economic rationalists of the ALP and those who seek lower taxation and economic recovery should not forget that when the Fraser Government came to office the rise in health costs in Australia had reached the highest rate of acceleration in our history-in fact, to the extent of 36 per cent per annum.


Mr Braithwaite —How much?


Mr HUNT —Thirty-six per cent per annum. In 1975 the Fraser Government inherited a shattered economy and a staggering Budget deficit. In 1976 there was no way that the then Liberal-National Party Government could continue to finance the accelerating cost of health care and restore economic stability to this nation. It was necessary to make substantial changes to the universal health insurance system-Medibank-because of the projected increases in health care costs in the Budget. The changes we made resulted in the reduction of health care costs from 36 per cent per annum to 10 per cent per annum by 1979. National health expenditure had more than doubled in three years from $2,505m in 1972-73 to $5, 660m in 1975-76, which was an increase of 125 per cent. After the changes to Medibank Mark 1 we reduced the rate of acceleration of health costs to 40 per cent over a three-year period. Nonetheless, national health expenditure had reached $8 billion in 1978-79. The taxpayers' share of national health expenditure had increased from $783.2m in 1972-73 to $2,736m in 1975-76, which was an increase of 249 per cent over a three-year period. I put those figures on the record because the Government needs to know where its policies are leading it. In the three years to 1978-79 the taxpayers' share of health expenditure increased by only 6 per cent to $2,901m. This was due largely to accountability both by patients and by providers of health care and to more competition in the market place.

Let us look at what happened to doctors' fees during Labor's regime in the 3 1/ 2 years from 1972 to 1976. Doctors' fees increased for medical benefit purposes in those three years by 93.5 per cent. Over the next four years our Government had slowed the increase in doctors' fees to 31 per cent. However, the most remarkable consequence of Labor's Medibank was the increase in medical services by 13.1 per cent from 1973-74 to 1974-75 and by 28.5 per cent from 1974-75 to 1975-76. The changes to the Medibank scheme in 1976 resulted in a reduction in medical services of 4.8 per cent in 1975-76 and an increase of only 5.2 per cent between 1976-77 and 1977-78. The Medibank scheme was fraught with all the ingredients of undisciplined encouragements to abuse and overuse. It was described rightly as a pipeline to the mint for some unscrupulous doctors and paramedical practitioners.


Mr Hand —It helped the sick, didn't it?


Mr HUNT —It helped the unscrupulous providers of medical care more than it provided for anyone. The Labor scheme did nothing to encourage hospital managers to contain costs.

I will refer briefly to the very important point that the honourable member for Prospect (Dr Klugman) made about health maintenance organisations. If we really want to contain health costs, I think we need to investigate and encourage the formation of such organisations in this country. Probably one of the best programs in the health area that Labor introduced was the community health program designed by Dr Sax. Of course, that program has now been handed back to the States and, as one would expect, the resources and the program have been gobbled up by the hospital systems. We are back to where we were before, with the resources going to the job security of people in the treatment of illness rather than giving due consideration to preventive health care. If the Minister wishes to make an impact on the total problem of health delivery in this country he needs to encourage the community health program and the philosophy that lay behind that program.

I am concerned that Medicare offers the same deficiencies as the Medibank program did. It does nothing-this is the concern of the honourable member for Mackellar-to improve the quality of health care delivery. In its first full year , which let us face it will be its lowest cost year, it will add $1.7 billion to the tax bill and it will add 2,500 extra staff in the public sector, resulting in the loss of about 5,000 people in the private health insurance area. The one per cent levy is only a token levy. It will go nowhere near paying the $8,000m health costs borne by the taxpayers through either the Commonwealth or the State governments. The Goverment will undoubtedly increase the levy year after year to help offset the costs of this system and also no doubt will use it at times to help offset Budget deficits. Medicare will encourage too many people to drop private health insurance believing that it will provide comprehensive cover. In fact it will cover only 85 per cent of doctors' fees with no choice of doctors in hospitals. It will not provide health cover in the private hospital system. At least one-third of the existing insured people will pay more under Medicare than under the existing system.


Mr Braithwaite —How many?


Mr HUNT —One-third. Indeed, all taxpayers will pay not only the one percent levy but also additional taxation over and above the levy for this ideological extravagance. It will threaten the private hospitals of Australia, which provide about one-third of the available beds in this community. I think that in itself is a very serious prospect of disruption in the delivery of health services. It will reduce the competitive position of private hospitals and threaten to destroy any sense of responsibility in the health delivery system. Bulk billing of medical bills will be extended to all patients instead of being confined to disadvantaged patients. Free public hospital beds will be available to all patients, regardless of means. Medicare is a recipe for irresponsible abuse of the health care system.

The existing system, though not perfect, provides universal health delivery to all Australians. It provides for the disadvantaged. It provides wide consumer choice and doctor of choice. It provides some discipline in the use of medical services through user payments. It promotes private medical practice in private hospitals. It provides opportunities for market forces to work. As I said earlier, I believe we will see a return to the explosion in health costs once again in this country. As time goes on we will see the Government desperately imposing all sorts of bureaucratic controls upon the system and the users of health services in a vain endeavour to reduce the ever-mounting costs of health care. Unless a significant percentage of the population insures for choice of doctor, private hospitals and other ancillary services, we will witness public hospital bed rationing, service rationing and the collapse of private hospitals and private medical practice within a relatively short time. I firmly believe the Labor Government will rue the day it resolved to relive its Medibank ideological dream.

Three of Labor's socio-economic measures taken together will cause the Hawke Government enormous problems. The first is Medicare, the second is its attack on lump sum superannuation and the third is its badly thought through imposition of an incomes test on pensioners over 70 years of age and the introduction of an assets means test on pensioners. All will have a confusing and disturbing effect on not only the economy but also the social structure of the community. I do not believe for one moment that either the Minister or the Government can prevent an explosion in health costs in spite of all the technology and all the computers under Medicare without imposing the most draconian and socially unacceptable bureaucratic controls and intrusions into the lives of the average Australian. It will ensure that the Hawke Labor Government remains as it began-a high tax government with no hope and no intention of relieving the taxation on the six million Australians that the Prime Minister promised to relieve. I find it incredible that the Hawke Labor Government has learnt nothing from the failures of the Whitlam Labor Government in its health policy.