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Tuesday, 22 February 1977
Page: 261

Mr E G Whitlam (WERRIWA, NEW SOUTH WALES) - I ask the Prime Minister a question about the consumer price index. The right honourable gentleman may remember that last May the honourable member for Prospect asked him whether the introduction of a specific Medibank levy would, under the methods used by the Bureau of Statistics, add over 3 per cent to the consumer price index and that he, himself, replied that 'the honourable member would be well advised to wait a day or two before he comes to firm conclusions'. I ask the right honourable gentleman whether he will now concede, after 9 months, that the question put to him then was in fact modest, the Medibank levy being responsible for more than a 3 per cent increase, namely, a 3.2 per cent increase in the CPI?

Mr MALCOLM FRASER - My advice to the honourable member for Prospect- to wait a day or two before he came to firm conclusions- was right. The Medibank aspect of the CPI is 3.2 per cent. That more properly represents the total cost of Medibank. The subtraction made from the CPI in the honourable gentleman's time was one which still left many hidden aspects, such as subsidies for beds and other matters of that kind, coming out of taxation revenue. The position was therefore hidden. This method at least enables all Australians to understand the cost of health care and how fraudulent the claim is that health care can ever be free.

I emphasise the point that my colleague, the Treasurer, made a moment ago. The increase in the all-groups index, excluding hospital and medical services, in the December quarter that has just passed is 2.8 per cent. On the revised basket which the Statistician on his own initiative and in his own responsibility has drawn up, the rise in the December quarter of 1975, the last quarter for which the honourable member was responsible, was 6.3 per cent. On that basis there has been a very substantial reduction over the course of the year in the underlying rate of inflation. I have not the slightest doubt that the honourable gentleman was seeking to confuse this kind of situation and seeking to suggest that there is something in the Medibank element that continues on and on. It is the element of the CPI, excluding Medibank, which will relate the underlying level of inflation. This element is, at present, less than half the underlying rate when the honourable gentleman left office.

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