Senator GIBBS (9:42 PM) —I rise tonight to speak on the Health Care (Appropriation) Bill 1998 and in support of Medicare—one of the greatest achievements of Labor's time in office and a fundamental right of all Australians which is now increasingly under attack. Promises made by John Howard prior to the last election to maintain Medicare are now being undermined by stealth. Medicare was set up to provide a free, universal health care system for all Australians, and it has proved to be a success story throughout the world in terms of achieving that goal.

Major attacks on the health system to the tune of $3.6 billion in funding cuts should be of great concern to all Australians. We all know that John Howard hates Medicare and what it represents. I notice that the word `Medicare' has been left out of the name of the proposed agreement. Why would that be? Inadequate funding of health and public hospitals strikes right at the heart of the values of Australians and clearly demonstrates what this government stands for and does not stand for.

In the last two budgets $3.6 billion has been cut from health, including $1.4 billion from pharmaceuticals, $1 billion from Medicare, $800 million from public hospitals and $400 million from dental care. These cuts are very short-sighted. Ironically, it is the ordinary battlers in this country, whom John Howard claims to have a mandate to represent, who are most at risk.

The contentious nature of this bill has been more than adequately highlighted in the press. Negotiations have well and truly stalled between the Commonwealth and the states over the proposed replacement for the current Medicare arrangements, yet there has been no increase offered since the premiers walked away from the Premiers Conference. What do we have instead? We have Dr Wooldridge throwing tantrums in the press. I am not surprised that the premiers are so upset. After all, it is incumbent upon the states to provide the hospitals, staff and infrastructure of public hospitals, and they are largely dependent upon the Commonwealth in order to do so.

While John Howard has described the Commonwealth's offer to the states as very generous and an increase of 15 per cent in real terms, this is in fact quite misleading if you take into account the fact that our population is ageing and that people are dropping out of private health insurance in the tens of thousands. The supposed increases represented—or should I say misrepresented—in the government's offer are nothing more than the partial return of funding slashed from the health care budget in the last two years. The states, quite rightly, are concerned about the level of funding to address both required service levels and structural reform.

The antics displayed by the government at the Premiers Conference—where it became blindingly obvious that even their own coalition partners could not support their stand—would be laughable except for the very serious potential consequences should this matter about adequate funding to the states not be resolved. While the Commonwealth argues that the states are being offered an additional $3 billion over five years, this is misleading. Capital funding under the proposed national development fund is only for one-off projects and does not constitute recurrent funding for the treatment of patients.

I hate to think what the impact of a GST would be on health. If a GST is applicable to all of health spending, which is quite likely given the advocacy by the Treasurer (Mr Costello) for the broadest possible GST base, then Australians will have to add a substantial percentage onto basic services which they need. Health should not be treated as a consumer item that people can choose to spend on if they want. It is a basic right. Under a GST, for example, Australians would have to pay an extra $16.20 on an initial specialist consultation charged at the AMA rate of $162 and an extra $3.70 for a GP consultation charged at the AMA rate of $37. A broad based GST would also mean an increase in the price of prescription pharmaceuticals. For example, a drug like Simvastin, which is used for treating high cholesterol and is the second most prescribed drug in the country, would cost an extra $8 on its base price of $80.

I am very concerned about the government's ideological bent—or should I say obsession—that the private sector must, by its very nature, be more efficient than the public sector. All of this talk of providing safety nets only for the most disadvantaged in our society means that over time ordinary Australians will increasingly be unable to utilise basic public sector services for which their taxes pay. This seems to be the aim of the government of the day, and it will create a two-tiered system where wealthier people receive better care than poorer people. Do we really want to go back to the system we had in place prior to 1983 when two million Australians had no private health insurance?

I am very concerned about comments made by the Treasurer in relation to the public hospital system and his view that the system should be there only for those who cannot afford medical care. This is pretty frightening, given the government thinks families earning $24,000 a year are well-off.

These attacks on publicly funded hospitals are just the latest in a long, sad saga promoting the interests of business in the private sector. Who can forget the disgraceful waste of millions and millions of dollars to prop up the private health schemes at the expense of the public system? The level of private health insurance continues to drop—at the expense of the public hospital system, I might say—in spite of the $1.7 billion put into the private health funds via the incentive scheme. It has proved to be a great waste of taxpayers' money. It is absurd that the government has continued to spend so much money on this scheme, while private insurance membership continues to plunge. This $1.7 billion has not taken the pressure off the public health system, and the private health funds are still increasing their premiums. In fact, their premiums have risen more than 30 per cent since this government came into office. This money could have been so much better utilised in the public hospital system.

In my home state of Queensland, privatisation of hospitals is currently under way. The previous Borbidge administration was determined to broaden the role of the private sector in hospitals, particularly hospitals in Robina and Noosa. These hospitals were originally to have been public and, while the previous state Minister for Health, Mr Horan, stated that these hospitals would remain free, I do not see how they can, given the constraints imposed by the fact that core health services are to be contracted out to the private sector. I am also concerned that there has been no public debate in Queensland about the shift towards the privatisation of public health services—although with the advent of the new Labor government, maybe that will be different.

Senator Herron —The dawn of a new era.

Senator GIBBS —We can only hope, Minister. I am sure it will be a different experience. The experience arising out of privatisation of hospitals in other states is that this has led to cuts in staffing and reduced accountability. The increasing influence of the Columbia Healthcare Corporation of America should be of concern to Australians. This company has up to $1.8 billion to invest in Australia. According to reports in America, the company is being investigated following allegations of Medicare fraud. Essential but expensive services such as emergency rooms have been closed in some facilities. Staffing cuts have occurred and numerous concerns about patient care have been raised.

The question we should be asking ourselves is: what will be the real effect of profit making operators on the public health system? How will this impact on the principle of free, universal health care cover? How will access to unprofitable and expensive services be guaranteed?

In New South Wales last year an additional $6 million had to be provided to the Port Macquarie Hospital just to enable it to run a comparable service to that provided by public hospitals. Labor does not believe that just because something is done by the private sector it will necessarily be more efficient. The federal budget for 1998 did not include one extra dollar for public hospitals that was not on the table when the agreement was rejected by the Premiers Conference. I have said this before but, because I got such a good response from the public, I will say it again: the federal budget did not create one additional hospital bed or employ one additional nurse.

As a result, more than one million extra patients stand to be left on the public hospital waiting lists. Blow-outs in waiting lists and for dental care have not been addressed either. The government's offer is insufficient to meet the growth in public hospital demand over the next five years. The states estimate that they will treat 20.26 million patients, but the government's offer will cover only 18.83 million patients. Who will fund the other 1.43 million patients?

The way in which the package has been worked out and promoted is quite misleading. The $500 million funding for mental care and palliative care is not new money at all—it is just a continuation of existing services and has been double counted. Funding for veterans affairs has not been included before. This funding is just a transfer of responsibility from the Commonwealth to the states.

The health care agreement principles also introduce a new concept—that of designated health services, which is not well defined. The definition of designated services is so broad as to be virtually meaningless. In addition, I fail to see how the designated health services not provided at a hospital will be funded.

While the Commonwealth alleges that the states are engaging in cost shifting, I would like to ask the government: with the abolition of the Commonwealth dental health program and changes to aged care services, just who is engaging in cost shifting? I trust that this not so very subtle attack on Medicare has not passed unnoticed amongst our constituents. This new approach to funding puts us at risk of losing one of the most cherished institutions of this country and one which gives Australians a real sense of security in an age where job security and their rights in the workplace are increasingly under attack.

What kind of society are we living in if we do not support basic services like health, employment services, education and child care? Is it any wonder that Australians are feeling so vulnerable? I would like to contrast this sad scenario with Labor's achievements in health when in office. Apart from creating a world renowned health care system, incorporating the principles of quality, affordability and equality of access, Labor also introduced programs of a preventive nature to cater for the special needs of women, indigenous Australians and people with disabilities.

Under Labor, two million people who previously had no cover were protected under Medicare. An extra $1.5 billion was allocated to the states to upgrade public hospitals, and about $2 billion a year was allocated to support nursing homes and upgrade care. Contrary to what the government would have the good citizens of Australia believe, there was no budget crisis when Mr Howard came to office. When Labor left office in 1996, Australia's financial position was one of the strongest in the Western world.

Senator Herron —Tell that to Gareth. You might learn something.

Senator GIBBS —You might learn something if you listen, Minister. The economy was experiencing strong levels of growth. Inflation was low and unemployment rates were starting to fall. The OECD economic outlook of the 25-member countries confirms that Australia had the third lowest level of government expenditure, the third lowest level of government debt, the fourth equal lowest budget deficit and the fifth lowest level of taxation. It really comes down to the values and priorities of the government. I strongly urge the government to rethink its short-sighted priorities, which place ideology and the interests of big business and private providers ahead of those of ordinary Australians.