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Thursday, 9 December 1971
Page: 4602

Mr Whitlam asked the Minister representing the Minister for Health, upon notice:

(1)   What have been the aggregate reserves of the hospital benefits organisations in 1970-71.

(2)   What percentage of contributions did the increase in reserves represent.

Dr Forbes - The Minister for Health has provided the following answer to the honourable member's question:

(1)   The aggregate reserves of the hospital benefits organisations as at 30th June 1971 totalled $103,389,877.

(2)   The amount by which they increased during 1970-71 was equivalent to 13.8 per cent of the total amount of contributions received by hospital benefits organisations during that year. (Note: the above figures are subject to confirmation.)

The above reserves are 'free* reserves, i.e., they exclude amounts set aside in respect of unpresented claims and contributions paid in advance.

The Government has adopted a policy under which larger organisations 'free' reserves will generally be limited to the equivalent of 3 months' contribution income. In the case of smaller organisations, more flexibility is being allowed and their 'free' reserves may be permitted to exceed that level in appropriate circumstances.

This policy was implemented in conjunction with the increases in hospital charges in each State during 1971. The contribution rates set when these increases occurred were designed to reduce or, if necessary, increase each organisation's 'free' reserve level to an amount equivalent to 3 months' contribution income in the case of the larger funds and equivalent to 6 months' contribution income in the case of the smaller organisations. These reductions or increases are expected to occur gradually.

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