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Thursday, 14 May 1970


Dr GUN (Kingston) - Mr Chairman,shortly I will move circulated amendment (21). Before so doing, I wish to add my protest to those of my colleagues on this side of the Committee regarding the way in which this Bill is being rushed through the Parliament. It seems to me to be quite hypocritical for the Government to say that this Bill must be put through in a very great hurry. We waited around for 4½ months after the last election. The Parliament sat for 1 day only during that time. All that time, we could have been attending to the legislative business of this country. The Parliament was kept in recess except for that 1 day sitting for the whole of those4½ months. I do not think that the Government is really justified in saying that this Bill has to be pushed through in a great hurry.

I also wish to add that all these amendments that the Opposition has put forward to this legislation are not prejudicial in any way to what the Labor Party will do when it forms the government of Australia. All we are trying to do with these amendments is to make a bad Bill not quite so bad. We are trying to get rid of some of the worst features of the legislation. These amendments do not relate in any way to the health programme of the Australian Labor Party.

Mr Chairman,I move:

(21)   In proposed section 76a, sub-section (2.) omit paragraph (h), insert the following paragraphs: "(h) names of all shareholders in the fund and the equity held by each in that fund and the names of all directors of that fund;

(i)   details of how the reserve fund has been invested;

(j)   details of direct or indirect interest in shareholdings held by directors of the fund in organizations in which the fund's reserves have been invested; and

(k)   such other information as the Parliament requires to be included."

The purpose of my amendment is similar to the purpose referred to by the honourable member for Prospect (Dr Klugman) in speaking to the last amendment. It relates to section 76a of the principal Act which provides that the Director-General will furnish the Minister with a report on the operations of registered organisations. It relates to the details that the organisations should disclose to the Minister. The last paragraph in my amendment is (k), which reads: such other information as the Parliament requires to be included.

In other words, I have changed the wording from 'Minister' to 'Parliament' so that members of Parliament who are representing the people can have access to information about the way these funds operate and to the annual financial statements of these voluntary health insurance funds.

The purpose of my amendment relates to experiences I have had in my own State of South Australia which are similar to those mentioned by the honourable member for Prospect. I was concerned about the middle of last year at the way some of the funds were operating, because as honourable members know there was a great deal of publicity about the excessive administration costs of these voluntary health funds and also the excessive amount of reserves that they were accumulating. So I set out to find out from one fund, the fund to which I contribute in Adelaide. I can say the name of it. It is the Mutual Hospital Association Ltd. I would like to make it quite clear that I am not alleging any malpractice or any misappropriation of funds on the part of this particular organisation in South Australia. However, the circumstances are that because of the way in which this Act operates in such a secret manner the opportunity would be there for unscrupulous operators to use funds without any public supervision. So I inquired of the fund whether I would be able to get hold of its annual financial statement and I was rushed in to the secretary who told me no, the financial statement was not available to contributors of the fund. I said: 'Is it made available to anybody?' I was informed: Yes, it is made available to shareholders.'

Not being a shareholder I was not able to get a copy of the statement. So I inquired whether I would be able to buy one or two shares in the fund. I was told this was not possible either, because the shares were not tradeable. I was not able to find out the market value of the shares. I was not allowed to find out who the directors of the fund were. All I know is that the directors are elected by the shareholders and not by the contributors. I was informed that in 1937 before the implementation of the Basle Page scheme for health insurance 300 prominent families in Adelaide set this fund up.


Dr Klugman - In South Australia?


Dr GUN - I was told that 300 families in South Australia had set the fund up and they became the shareholders and acquired some sort of equity in the fund. This ownership and managerial control of this Association has operated in South Australia since 1937.


Dr Klugman - Was the Minister in it?


Dr GUN - I do not know whether the Minister's family is one of the 300 prominent families in South Australia. However, it is a pretty notorious fact that the 300 prominent families in South Australia have a fair bit of hegemony over the affairs of that State. The point that I make is the secrecy surrounding the fund. For all we know each family may have one 20c share in the Association which enables it not just to control the share capital in the Association but also to control the whole of the contributors' funds. This means that they can control what happens to the reserves of each individual organisation. As we know the reserve funds of these voluntary health insurance funds were excessive. I was quite unable to find out who the shareholders were and what their equity was in each fund. I think it is something that we ought to know.

That Association ran a particularly vitriolitic campaign against the Australian Labor Party at the last federal election. It would not reveal the funds to me, but every now and then it leaked to the Press a one line item out of its financial statement. I do not know very much about accountancy but I do know that if you release a smail enough amount of information you can make black appear to be white. This ought to be done in a much more open fashion. I do not suggest, as I said, that the directors of this organisation are making a profit out of it. I realise that it is a non-profit organisation. However, the directors of it have access to the reserves. They can decide where the reserve funds of each health insurance fund can be directed. For instance, supposing I happened to be a director of this Association and I also happened to be a director of some bank or some hire purchase company. I could say: We have a few reserves to spare. My own finance company is not going too well. We will invest some of the reserves of this health insurance fund in my finance company'. I repeat that I am not alleging that this has occurred but we must have public oversight to see that such a thing does not occur. This is a very important reason why we must know what is being done with the public's money.

It is an extraordinary situation that the public is virtually being compelled to belong to these insurance funds, as the honourmember for Prospect pointed out. The Government maintains that this is not compulsory insurance, but if we do not subscribe to these insurance funds we do not get the Commonwealth benefit for which we subscribe taxes. I cannot see any reason why the Government should not accept this amendment. All we ask is that the funds make available the names of the shareholders of each fund; the directors; the equity they hold; where the reserves of each fund are to be invested: and if companies in which reserves are invested have common interlocking directorships with health insurance funds, this should be stated in the annual report which should be given to the Parliament. I cannot see why this Government should not accept this amendment. It does not involve an appropriation of money. It does not involve complicated administration. There is no extra expenditure. It does not involve any tribunals and there would be practically no filling in of forms. I strongly hope that the Government will accept this amendment.







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