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Tuesday, 9 December 1986
Page: 3582

Senator BLACK —I direct my question to the Minister representing the Treasurer. I refer to newspaper reports this morning of a speech by the Leader of the Opposition, Mr Howard, to the Committee for the Economic Development of Australia. Mr Howard has identified possible savings in government expenditure in areas such as the abolition of unnecessary statutory authorities, work for the dole, and allowing for the opting out of Medicare. What are the financial implications of these proposals if they are implemented?

Senator WALSH —I have seen reports of the speech. It consists of little more than a rehash of the sort of peripheral comment on policy that the Leader of the Opposition has been making for some time. However, if it is to be taken seriously it would have these financial implications: The Medicare policy-that is, allowing people to opt out of Medicare subject to their taking out voluntary health insurance-means that people who have around average weekly earnings or slightly above average weekly earnings would probably find it cheaper to take out voluntary insurance, leaving all the others in. The effect of that would be to reduce Medicare expenditure by $200m or $300m, or something of that order, and reduce revenue by about $900m. In other words, the effect of that policy would be to add $600m to the deficit which Mr Howard asserts is already too large.

On the compulsory work for the unemployed, one of the more vacuous comments to come from the Leader of the Opposition in the last year was about mid-year when he suggested that the unemployed should be required to undergo two or three days a week compulsory education. If that policy were to be implemented for three days a week, and if all the unemployed were compelled to attend a technical and further education college, which is the cheapest form of tertiary education, for three days a week, it would add $600m to outlays. If the policy of the Leader of the Opposition were to be adopted the Budget deficit would be up by a full $1.2 billion. The notion that large savings can be made on unemployment benefit rests ultimately on the belief that there is widespread cheating, either from claiming multiple entitlements or from claiming entitlements for which the individual is not in fact justified. We do know that cheating takes place. There was a celebrated case in Melbourne where a man was charged and convicted for receiving unemployment benefits under 54 different names. In that case, the total fraud on the Commonwealth was of the order of half a million dollars. The Government has taken action against unemployment benefit fraud through tightening the administration. We expect significant savings from that. However, it should be noted-the Government has always recognised this-that the action we have taken will be less than completely effective; very much less probably than completely effective, and for this reason: The Government does not address the problem of people claiming unemployment benefit in more than one name, or alternatively being employed in one name and claiming unemployment benefit under another name. There can be no wholly effective way of closing off unemployment benefit fraud until such time as we have an effective identification system and a cross linkage of the social security and taxation system. In other words, there can be no way of effectively closing off unemployment benefit fraud until we get the Australia Card.

Opposition senators-Oh!

Senator WALSH —Listen to them all moaning over there. Faced with the choice of taking effective action to close off unemployment benefit fraud-that is, voting for the Australia Card-all these humbugs and hypocrites opposite decide to sabotage it.