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Tuesday, 3 June 2003
Page: 15830


Dr LAWRENCE (8:42 PM) —I believe that all Australians need to understand that the Prime Minister and his government have undertaken a long-term strategy to undermine Medicare. One of the Prime Minister's first acts when he entered this parliament was to vote against Medicare in the joint sitting that followed the double dissolution that was brought on, in part, by the conservatives' refusal to pass the original Medibank legislation. He was Treasurer, of course, when the Fraser government systematically dismantled Medibank and, when challenged about his real intentions before the 1996 election, he denied the obvious and said, implausibly, using a formulation that will now be very familiar to a lot of Australians:

A lot of people will say that the changes Fraser made did not amount to dismantling Medicare.

On the contrary: the majority who voted him out and many expert commentators said that they did believe that Fraser had dismantled Medicare. As a result of his actions and those of Mr Howard, two million Australians who were not classed as poor or disadvantaged were entirely without hospital and medical cover, free access to hospitals was restricted to the disadvantaged and the Commonwealth flat rate medical benefit was set at 30 per cent. The rest, of course, came out of patients' pockets. An Age editorial in 1978 put it bluntly:

Their real purpose appears to be to satisfy the government's ideological preconception, to placate the medical profession and to ease the government's budgetary difficulties. Their main effect will be to shift some of the burden of health-care costs from the public to the private sector, from higher to lower income earners and from those in good health to those who are sick.

Sound familiar? This lot have a lot of form.

The Prime Minister was very careful in the 1996 election, and since, to reassure the Australian public that his intentions were benign; that, like them, he was a fan of Medicare; and that his party had never, ever had any intention of abolishing it. He explained, when pushed by one of the media:

I don't accept for a moment that we went to the last election—

that was in 1993—

as Paul Keating alleges promising to abolish Medicare; that is wrong, we didn't. We didn't promise to abolish Medicare at the last election; we promised to make changes but not to abolish it. But our commitment to keep it is absolute, it is a guarantee, and we are also going to keep community rating, and we are also going to retain bulk billing.

Even then the Prime Minister well knew that one of the reasons they had lost the previous election was their promised assault on Medicare. He was not prepared to concede that an assault had ever been one of his objectives—and would be again, and is now. He had to pretend that they had always supported Medicare and that only nasty people like Paul Keating would dare draw attention to the very explicit and public assault on Medicare which was contained in that document. We are all familiar with the marvellous Fightback. The Prime Minister obviously hoped that the Australian people and the media would not notice that in 1993, while the coalition was going to keep the name `Medicare', he wanted—and still wants—the name but not the key principles. The coalition's policies amounted to a full-frontal attack—a fundamental redesign of the health system, unrecognisable as the universal system that was Medicare. The Prime Minister has, by subterfuge and misrepresentation, achieved much of the Fightback agenda.

It is worth going through Fightback. Medicare for pensioners and cardholders only—still on the agenda. Medicare levy surcharge for high income earners who do not take out private health insurance—effectively done. Bulk-billing abolished except for welfare recipients—done. Refundable tax credits to provide ongoing assistance to income earners below $30,000 who take out private health insurance—done in spades: expanded to include all of those with private health insurance and introduced as the 30 per cent rebate. Gap insurance for medical and hospital bills—almost done. The rebate to be reduced from 85 per cent to 75 per cent of the Medicare schedule fee—effectively achieved by stealth. The government has undermined bulk-billing by GPs by setting the schedule fee at an unrealistically low level. In my own seat, this has caused bulk-billing rates to drop by 13.1 per cent since 2000.

I note in passing that these market-distorting private health insurance measures would not be tolerated in any other industry sector. They prop up what is an expensive and inefficient product with very high administrative costs. In one study, Livingstone and Ford documented the fact that private health insurance administration expenses averaged 11.8 per cent of the contribution income in 2000-01 compared with Medicare's expenses of around three per cent. This means that $240 million of the taxpayer funded $2 billion private health insurance rebate is consumed in administrative expenses. If that same $2 billion had gone into Medicare, the administration would have cost only $60 million. What a loss.

As these authors and many others have demonstrated, this expensive, ideologically driven exercise has taken no pressure at all off the public health system—its ostensible purpose. Demand for public hospital services has continued to rise—by well over 10 per cent in most states, with even higher increases in emergency departments. Greater activity in the private hospital sector is largely due to an increase in elective and less serious surgical procedures as people who were dragooned into getting private health insurance try to get their money's worth.

Stephen Duckett, the former chief executive officer of the Commonwealth health department, now Professor of Health Policy at La Trobe University, has suggested that Howard's legacy—of which I think the Prime Minister would probably be secretly proud—is likely to be the destruction of Medicare. Knowing that the Australian people are still very supportive of Medicare, the Prime Minister has adopted an underhand strategy: walk softly and prosper. He knows that a secure, affordable health system is just as important to the Australian people as protection from terrorist attacks, so he would not dare to reveal his deep antipathy to what he once called `this inappropriate socialist dogma'. That is how he once described it before his conversion.

As Stephen Duckett has pointed out, Howard has undertaken an audacious attempt to rewrite history—most recently in his attempts to claim that Medicare was only ever intended as a safety net for the disadvantaged. On the contrary, Medicare was designed as a universal scheme providing access to health care for all Australians. The coalition has consistently resisted the idea that Medicare is a contract with the Australian people designed to ensure that everybody gets quality care regardless of their wealth. It was deliberately designed so that no-one need have private health insurance unless they chose to. It was clearly based on the principle that, through the progressive tax system where the rich pay more—at least, they should—and the Medicare levy, where the rich pay more, we could create a system that all Australians would share in.

Health, after all, despite what we hear from the Prime Minister, the minister and others on that side, is not a commodity. Income should not determine how much and what quality you can obtain. At least that is what we in the Labor Party believe. We know what happens in those areas of health where Medicare does not provide any coverage. Stephen Duckett refers to a Commonwealth funded analysis which shows that large numbers of Australians—about a third of those surveyed—reported that they could not obtain dental care because of the costs, with the highest rates of complaint amongst those on below average income. In sharp contrast, for medical care, where there is universal coverage, few people reported access problems and there were no income related differences. This is as it should be in a wealthy, civilised society. It is what is under attack by the Howard government. For all the oily courting of the battlers' vote, the Prime Minister is doing them in the eye.

This is a government that supports privilege and tries to disguise its true agenda with a veneer of moderation and the rhetoric of choice. It does not necessarily come naturally, it has to be said. The government had to spend over $40,000, people told us in the Senate estimates, to come up with the slogan `A Fairer Medicare'. A lot of us laughed at that. As Alan Ramsey understands, being one of the few journalists who watch the record of MPs and have a grasp of political history, the truth is that Howard would rather have it put down than make it fairer.

We have seen from this government a pattern of wilful deception of the Australian people. The Prime Minister has never changed his long-term goals but has been prepared to adopt that face of moderation for political advantage. The public record is replete with almost visceral antipathy from the Prime Minister toward Medicare—the conviction politician, if you like, on display. For example, he described Medicare as `Medi-mess', plagued by `Medi-queues', as `Labor's millstone' and, further, as an `administrative quagmire', a `financial monster' and a `human nightmare'. He certainly did not mince his words—the prose got a bit purple, though. At the meeting of the Australian Private Hospitals Association congress in 1987 when he said those things, he added:

Medicare, a mandatory national monopoly service, has degenerated into a second rate service and failed the great majority of Australians.

These are Howard's real views about Medicare. At that meeting, he gave them an undertaking that he would break the monopolistic stranglehold. He has been true to his word in that. He claimed that Medicare had failed the great majority of Australians and that he would pull it right apart. He is also keeping that promise.

When I was health minister I warned that this man, if ever PM, would use what one commentator described as the rotting strut strategy to dismantle Medicare. While pledging undying loyalty to Medicare—and simultaneously redefining its key objectives, it has to be said—he was conducting a clandestine campaign, as one commentator put it, pulling away one strut at a time until so many had been removed that the whole structure would be seen by all as not working. The Prime Minister could then step in as he is doing with bulk-billing and declare its imminent collapse and the need for change in his typically sly and underhanded fashion.

People should not have been deceived in the past and they should not be deceived now. Despite being forced when under pressure in 1996 to pledge to keep the system in its entirety, he was still musing in 2001 on the virtues of the old favoured model. He does sometimes let his real attitudes slip into view. In an interview with the Sydney Morning Herald just before the last election—perhaps his guard was down because of all the excitement over the `children overboard' affair—the Prime Minister said that Medicare was `a cardinal mistake'. You cannot get much bigger than that. He thought that private health insurance in the past had worked for 90 per cent of the population and special arrangements could have been made for the poor who could not afford premiums. He said that, instead of finetuning the existing system, we turned the whole thing on its head and we have never been the same since. In the process, he said, we destroyed the honorary system and dismantled a perfectly functioning health system.

He came to his senses after this little bout of mistaken nostalgia through the fifties picket fence and—to make sure no-one started to discern his real intentions, and with more than a tinge of regret—added, `You can't get back to it. You get a new generation with different attitudes and different values.' And it is just as well, most people would say. Millions of Australians are probably very pleased indeed that attitudes and values have changed, because under that honorary system of which he is so fond public patients in public hospitals were nominally treated by honorary doctors at no charge. In return, the doctors were given lucrative medical appointments to the large teaching hospitals and rights to treat their own private patients in the private intermediate wards. In huge public wards of the old teaching hospitals people were packed in side by side with virtually no privacy. At regular intervals and without prior discussion or consent the honorary doctor, often newly qualified or a registrar, would do a round of the ward accompanied by residents, registrars and a dozen or more students, all of whom might examine the patient if considered necessary. I am glad attitudes and values have changed, and I am not a bit nostalgic for a return to that system.

Today the Prime Minister announced that he will contest the next election. Frankly, it could be the death knell for Medicare unless Australians wake up to his deception and throw him out. We need to judge this Prime Minister and his puppet ministers by their actions and the results of their actions: by their massive cuts to public hospital funding; by the destruction of the Commonwealth health program; by the expensive uncapped rebate and its escalating cost, which does not deliver value for money either to those who take out private health insurance or to the taxpayer; by the penalties for the failure to take out private health insurance that force the young and less well-off to take out such insurance to line the pockets of the already wealthy medical specialists, private hospital owners and corporations; and, of course, by the sharp declines in bulk-billing increasing the cost to families.

Hospital funding has been cut massively under this government. I believe the Howard government have been deliberately underfunding the public hospital system, starting in 1996 with those savage cuts where they stole the funds for the first version of the private health insurance rebate to support the private hospital sector. In the current health care agreements, as I am sure we have heard over and over again, the government have robbed the states of at least $1 billion to pay the doctors and construct this two-tiered bulk-billing system. I believe the Prime Minister's goal in cutting hospital funds has always been to ensure that people who used to rely on Medicare would have to wait longer and longer and eventually opt for the private options for which he has forced many of them to purchase insurance.

In my own state the government increased funding to health by 9.5 per cent this year—that is against the cuts by the Commonwealth. A detailed analysis of the agreements on offer reveals that WA will receive about $100 million less than it would if the existing agreement continued at the current levels of indexation. That is quite a cut. The federal government's own budget papers reveal a $918-million winding back of funding to public hospitals over the forward estimates. And we were told this was a big increase—they must think people are really stupid. The Commonwealth were effectively holding a gun to the head of the states by threatening to withhold $23 million in the 2003-04 year or a total of $400 million over the entire life of the new agreement if Western Australia did not sign up. During the last five-year agreement the state has been exposed to increased costs associated with the decline of GP bulk-billing and the lack of residential aged care services. These problems are certainly not addressed at all in the new offer.

While the Western Australian government pours almost 25 per cent of the entire state budget into health, the Commonwealth is failing to meet its responsibilities to the nation's public hospital system. The Commonwealth already spends about $300 million less on health in WA than if it spent the average rate that applies nationally. I do not know why we are discriminated against but we clearly are. The lack of funding for dementia and aged care places additional pressure on the availability of beds in public hospitals. Even though aged care is a federal responsibility, the Western Australian state government, like many others, funds 118 aged care places, including 20 dementia specific beds at an annual cost of around $8 million. These beds are used by the state to care for people who have been assessed by an aged care assessment team as actually requiring care in an aged care home but for whom there are no places available. These beds have a 100 per cent occupancy rate.

There is now an intolerable pressure on public hospitals everywhere due largely to the failure by the Commonwealth to meet its responsibilities. It has failed to act in a timely fashion to implement comprehensive programs to reduce so-called adverse events in Australian hospitals. Comprehensive surveys conducted in 1995 when I was minister reveal the nature and scale of so-called iatrogenic deaths and injuries in Australian hospitals. Most were the result of human error most likely to occur when staff are subjected to undue pressure, where there is a high turnover of staff, where there are too few experienced staff, where there are poor communications and so on—factors that are most likely to be present in an underfunded system. Recommendations to deal with many of these issues were ready to be acted upon in 1996. The government perversely put the whole process on hold until 1999. It is still reluctant to give the issue the priority it deserves. As a result, the World Health Organisation gave a damning assessment last year of the alarmingly high risks faced by patients in Australian hospitals. Some 17 per cent suffer measurable harm, which is a rate they described as alarmingly high and the highest in the world.

I will conclude by referring to one such case which was brought to my attention recently. A man contacted me about the death of his wife, just after she delivered their sixth child. In order to protect their privacy, I will not mention either their names or the name of the hospital, but I will read from his own account.


The DEPUTY SPEAKER (Hon. I.R. Causley)—Order! It being 9.00 p.m., the debate is interrupted.


Dr LAWRENCE —It is about 30 seconds, Mr Deputy Speaker.


The DEPUTY SPEAKER —The honourable member for Fremantle will be allowed to continue at a later time.


Dr LAWRENCE —I will seek leave to speak for 30 seconds tomorrow morning. I must say, Mr Deputy Speaker, that this is an extraordinarily weird judgment.

Debate interrupted.