QUESTIONS WITHOUT NOTICE

Mr BUTLER (Hindmarsh—Minister for Disability and the National Disability Insurance Scheme, Minister for Health and Ageing and Deputy Leader of the House) (14:54): At the risk of repetition, let me run through what we've done, why we've done it and what we think the impact of these changes will be. As I've said a number of times at this dispatch box, we have had to make some hard decisions to find the very substantial additional investment that needs to be made in the aged-care system for more beds, for more Support at Home packages and for better care, particularly to change the co-contribution arrangements around showering and hygiene.

That was the subject of a lot of discussion in this place after it was introduced last year. There are not easy decisions that are able to be made in budget, I can tell you right now, to fund the very significant additional investment needed in aged care. What we have proposed is to return the rebate arrangements that pay a taxpayer subsidy for private health insurance membership to the original design, which did not differentiate on the basis of age.

As the member and many others know, John Howard took a decision when the budget was in a very different position. There was not a material increase in demand for aged care at the time. The budget was subject to very big revenue upgrades because of the China boom, and they took a decision to pay a premium to people over the age of 65, even on the same household income as the next-door neighbour in their 40s or 50s who was also taking out private health insurance membership.

I would like to be able to maintain that arrangement, but we have had to make some difficult decisions to find the aged-care investment that is necessary. In this debate, there has, frankly, been a lot of misinformation about what the impact will be. Our modelling indicates that, first of all, the average impact of these changes on a private health insurance member will be in the order of 70c per day.

That will differ depending on the product that a person has, but that's the average. Also, our modelling indicates that there will be around 44,000 people, out of the 11 million or 12 million members of private health insurance, that might choose to withdraw from private health insurance membership. The University of Melbourne independent analysis indicates that that's probably at the high end of estimates.

For those who are more willing to trumpet the analysis of the insurance industry itself, the numbers will be bigger, but I remind the House that, when we introduced means testing of the private health insurance rebate, the industry said that 1.6 million people would leave insurance and that there would be an additional 850 000 people flooding to public hospitals, and—surprise, surprise!—none of it happened.

I think everyone in this House is well used to self-interested modelling that indicates that there will be catastrophic circumstances that hardly ever arise.