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Friday, 1 May 1987
Page: 2193

Senator COLEMAN —I have a two-part question that I direct to the Minister for Finance. Initially, I refer to Mr Ian McLachlan's statement yesterday that the whole focus of the National Farmers Federation's spending cut proposals of-I think from memory-something of the order of $11 billion was to provide government payments and services only to those who needed them and to move away from what can only be called middle class welfare. I ask the Minister whether that statement is consistent with other statements and actions by the National Farmers Federation which have implications for Commonwealth expenditures. In that same Press release there is a proposal that what is described as a `rationalisation of health expenditure' would save $5.8 billion. Could the Minister advise the Senate of the implications of cuts of that magnitude?

Senator WALSH —Regarding the first part of the question, the National Farmers Federation mounted a savage campaign ostensibly against the imposition of an assets test for pension entitlement. Of course, it was a campaign against the Labor Government launched by Ian McLachlan, sustained by Ian McLachlan, in the political interests of Ian McLachlan, grossly abusing the trust placed in him by members of the National Farmers Federation. He continues to do this and continues to misuse the National Farmers Federation to pursue his personal political ambitions. I find it incongruous to say the least that the same McLachlan who led a vicious campaign against the imposition of an assets test for pension entitlement-in other words, a measure aimed at removing a degree of middle class welfare-should now appear as the apostle, indeed the Messiah, of the removal of middle class welfare from the system, In other words, McLachlan has done a 180-degree turn on this issue as he has on so many issues. The only consistent thing about McLachlan is that he consistently opposes this Government; he has no consistency on policies.

Regarding the health part of the question, the payments on the health function by the Commonwealth Government in the present financial year-and it is not just the Department of Health on the health function-are of the order of $8.9 billion from which according to McLachlan $5.8 billion can be readily cut. That would leave a residue of $3.1 billion. On these items alone payments to the States for hospital treatment of pensioners is $1.26 billion; for nursing homes it is of the order of $1.2 billion; payments for pensioner and veterans' pharmaceuticals is $560m; and for veterans' hospitals it is $350m. That adds up to $3.37 billion, which is more than the residual $3.1 billion which McLachlan's cuts to the health function would leave. In other words, even after he has abolished Medicare, the identified health fund grants to the States and all of the community care services programs which are going to come as repayments to the States, McLachlan's proposal would cut back on the health services delivered to pensioners and old diggers. That is what McLachlan's proposals entail.

The final contradiction, the final irony, the final piece of humbug from this fellow who has abused his position as President of the National Farmers Federation to maintain a consistent political campaign against this Government is that if he were to abolish Medicare as a result of his $5.8 billion cuts from the health function-the figure would vary a bit; for example, if nursing home funding were completely abolished it would have less effect on the consumer price index than the abolition of Medicare-the consumer price index would be boosted by that McLachlan policy by anything up to 6 per cent. And this comes from the same fellow who is simultaneously mounting a campaign to remove from Commonwealth revenue $5.6 billion by abolishing the excise on refined petroleum products for a CPI effect, he says, of 5.7 per cent but an actual first round CPI effect of 2 per cent. So for a deficit neutral final Budget outcome McLachlan is advocating on the one hand a policy which would add up to 6 per cent to the consumer price index and on the other an offset policy which would take 2 per cent off it in the first instance and perhaps something between 3 per cent and 4 per cent in the nth instance.