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Thursday, 10 December 1998
Page: 1751

Senator CHRIS EVANS (9:22 PM) —I will start by congratulating Senator Harradine. I thought his second reading contribution was cogent, reasoned and convincing. I am sure anyone listening would have been convinced—if they had not been convinced when they heard the debate earlier—to vote down the bill. Unfortunately, he then reached a different conclusion to the one the whole logic and force of his argument had taken him to. I do not quite understand why, but I accept that he did.

What we have here is, it seems, a result of some discussions between the government and Senator Harradine this afternoon. The parliamentary secretary has indicated that the government is responding to what I think he described as `Senator Harradine's initiatives'. I suppose that goes to confirm the letter that I was given recently which purports to be from the Prime Minister to Senator Harradine confirming arrangements that they have reached between them regarding health insurance. I want to ask a couple of questions about those matters shortly.

This amendment is a very meagre step in the right direction. And, given all the criticisms that Senator Harradine and others made which highlighted that the bill did not tackle the real issues of private health insurance, this amendment did not tackle the funding of health care in this country. This amendment is a very unsatisfactory sole sign of moving to deal with one of those problems. What we are doing here is providing a $1.7 billion blank cheque and saying, `In addition to that, we might have this small amendment moved, and carried by the government, that would provide some signal that there would be some serious attempt to deal with the problem of the gap.'

I agree with Senator Harradine that the gap is one of the major issues. I think all minor party and Labor senators have stressed that this does nothing for that major issue, that we are throwing good money after bad without any of the reciprocal obligation that the government demands of social security recipients or unemployed persons in this country. In return for $300 a week of pension, all sorts of reciprocal and mutual obligations are demanded. But in return for $1.7 billion we demand nothing. We say, `Take the money and we will have a look at some of the other problems down the track.'

Quite frankly, if Dr Wooldridge was in business, he would go broke very quickly. You never give them the money before you get the service. You certainly do not give them the money before you get some sort of sign of their commitment to provide some service in return. What we have done is provided an underwriting of 30 per cent of whatever the private health insurance funds choose to charge over the next however many years. They can increase premiums, knowing that we will always pay 30 per cent of the bill. I think that is an outrage in terms of public policy. While this amendment has some worthy objectives, it takes us no real way towards meeting our obligation to deal with the real problems or ensuring that we get a proper response from the health insurance industry.

Senator Harradine referred to the problem of modelling and costing that we found with the government's proposals, and I think he indicated that he had similar difficulties in costing this proposal. I think it is important that he or the parliamentary secretary provide some explanation, because the evidence given to the Senate committee of inquiry into this matter indicated that the cost of providing gap insurance would actually increase premiums by some 7½ per cent. I am not sure what the government and Senator Harradine are saying about this measure but, on the evidence of the private hospital industry, gap insurance would increase the total cost of premiums by 7½ per cent. Is that right? Is that the estimate of the cost of this measure—an increase in premiums of 7½ per cent? Is that the government's estimate as well?

And, will we be subsidising 30 per cent of that increase in cost? Is there any limit on the charges that can be applied to gap insurance? Surely it is going to be quite an expensive product, by anybody's reckoning. I would be interested to know what sort of restrictions or flexibility apply in that regard. Will any measures be taken to cap the cost of gap fees? I understood that Mr Chalmers of the private industry stated in his evidence at the committee hearing that there are no mechanisms by which gaps can be quantified or capped. It is unclear to me how this measure is to work, how it is to be funded, or what the government estimates the cost of the measure to be. Obviously, some answers to those questions would assist the committee greatly.