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Thursday, 16 October 2008
Page: 6205

Senator CORMANN (1:12 PM) —Just to allay the minister’s concerns: far be it from me to verbal the Minister for Health and Ageing, even though that is something that she herself is quite up to doing when she circulates propaganda sheets which present questions asked at an inquiry as a statement of position. Let me quickly read out to you the direct quote of the answer provided by the Minister for Health and Ageing to a question by Matthew Abraham on 891 ABC yesterday morning. Mr Abraham asked a very incisive question:

And how will you stop them from putting up their rates to compensate for this, because you wouldn’t want them to go broke, would you?

Mrs Roxon said:

Well, no, that’s why I say, you’ve got to balance those things and I don’t want to pretend to the community that, you know, there isn’t an inevitability of some increases…

The reality is this—

Senator Conroy interjecting—

Senator CORMANN —A double negative makes a positive, Minister—I am sure that even you understand that. So the minister is not saying there is not an inevitability of some increases. The reality is this: Professor Deeble said there would be an additional five per cent increase, Access Economics said there would be an additional five per cent increase—under the original measure, I grant you that. But it stands to reason that if you expect that 500,000 people will leave private health insurance as a result of this measure—and the minister says that it is the young and healthy who will leave in the first instance, who will not access treatment to the same extent as the older and sicker and who will walk out with the contributions that they would otherwise have made—of course premiums will have to go up. That is basic logic. I do not think that anybody seriously suggests that premiums will not go up. Everybody accepts that premiums will go up. The minister accepts that premiums will go up as a result of this measure. The question is: by how much? And the real concern is that, during the Senate inquiry, Treasury told us that they had not actually included an assumption about future premium growth as a result of this measure in the forward estimates costing of that $960 million saving—which became $879 million and has now become $740 million.

I ask you the question again, Minister, because this is something that Health and Treasury officials have confirmed in the Senate inquiry. Just tell me if there is a change of position. Health and Treasury officials gave evidence to the inquiry that future premium increases as a result of this measure would be funded out of the contingency reserve. Could you please confirm for me that future health insurance premium increases as a result of this measure would be funded out of the contingency reserve?