Senator IAN CAMPBELL (Manager of Government Business in the Senate) (9:46 AM) —I table the explanatory memorandum and move:

I seek leave to have the second reading speech incorporated in Hansard.

Leave granted.

The speech read as follows—

This bill contains two classes of amendments relating to the Health Insurance Commission.

The first class of amendments modernises the financial regime applying to the Health Insurance Commission. The Commission has been operating under a much less flexible investment, budget estimates and borrowing framework than that which applies to other non-GBE Commonwealth authorities. The effect of the amendments will be to apply the general provisions of the Commonwealth Authorities and Companies Act 1997, applying to such authorities in the areas of budget estimates and investment of surplus moneys, to the Commission. In addition, the Commission will be able to borrow money for purposes of its functions, with the written approval of the Finance Minister.

Currently the Commission is unable to borrow moneys at all and has only a limited ability to invest surplus moneys. The Commission will better be able to deliver quality outcomes and substantial savings both to itself and the Commonwealth with the application of a more flexible and modern—but still properly transparent and accountable—financial regime. The amendments will also remove the “hedging” provisions of the Act, reflecting the position that “hedging” is no longer an appropriate feature of the Commission's financial regime, given its current functions.

The other class of amendments concerns the number of Commissioners of the Health Insurance Commission. This proposed amendment relates to legislative changes made at the time of the separation of Medibank Private from the Health Insurance Commission. Under the Health Insurance Commission (Reform and Separation of Functions) Act 1997, the number of Commissioners (in addition to the Chairperson and Managing Director) increased for a five year period from seven to nine, but then was to decrease to five.

The amendment contained in this bill will operate so that the number of these additional Commissioners will be seven, rather than five.

Originally it had been thought that the optimum number of Commissioners (in addition to the Chairperson and Managing Director), beyond the transitional period covering Medibank Private's separation from the Health Insurance Commission, was five. However, it is now clear that the Commission's continued effective functioning (particularly in terms of its committee structures) will require a complement of seven additional Commissioners, looking beyond November 2002.

Ordered that further consideration of the second reading of this bill be adjourned to the first sitting day of the next period of sittings, in accordance with standing order 111.