Dr REFSHAUGE (Marrickville - Deputy Leader of the Opposition) [3.14]: I move:

That this House notes, as a matter of public importance:

1. Its previously expressed opposition to the privatisation of public hospitals and community health services.

2. Its grave concern at the Government's stated intentions to disregard the previous expression of this House's view regarding the privatisation of public hospitals and community health services.

3. The need to establish a committee to examine the proposed contract between the Government and Health Care of Australia regarding the privatisation of Hastings District Hospital and the associated community health services, before the contract is signed by the Government.

The Government is breathtaking in its audacity and stupidity in disregarding the views of this House; it is breathtaking in its show of disgust for the principles of democracy. What is this Parliament about unless it, as the forum of the elected representatives of the people of New South Wales, can ensure that the will of the people of New South Wales is followed? It is this House and the democracy that it represents that is being examined today and will be examined during the next few weeks, as the Government is hellbent on defying the will of this House - as has been stated previously and as I anticipate will again be stated today - and on taking the horrendous route of privatisating the health care system. One does not have to look very far to see what the Government has done previously; one sees a double standard when it comes to health care and privatisation. The proposal to privatise GIO Australia was not decided by Executive Government; it was brought to this Chamber to be debated so that the elected representatives of New South Wales could deliberate on whether GIO should be privatised and, if so, how. A decision was made by this House. That is how democracy should work. It should not be that this House makes a decision and then Executive Government makes secret deals behind closed doors, particularly where health care is concerned. This is a black day for the Government. If it continues on this route of privatising the health care system against the will of this House and of the people of New South Wales, it will be the beginning of the end of the Government.

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The proposal to privatise the GIO was not the only matter decided by this Chamber. Many other privatisation proposals - for example, the privatisation of the Electricity Commission - concerning the general perception of corporatisation were debated in this Chamber. The views of all sides, of all members and of all people of New South Wales were expressed in this Chamber. From a synthesis of those views, a collective decision was made and implemented. This is not the case with Port Macquarie health services. Why is this so? It is because this Government is not prepared to present the contract to the Chamber and to have it examined. We have seen a little of what this contract is about; a range of matters has been revealed. We have heard from the Government that the bed-day cost at the new privatised Port Macquarie hospital will be $650. We have read in the Port Macquarie News, an august journal, that all of a sudden the bed-day cost will be $660. The cost has increased by $10 in about two weeks. At that rate, by the time this Government is thrown out in three months, the cost will be $1,000 a day. The cost is not just $660; the board of the Hastings District Hospital was told that the bed-day cost will be $890 a day.

Let us have a look at the contract before it is signed and see which of the figures add up, what is included in the $600, $660 or $890. Let us look also at what is included in the so-called availability fee. The people of New South Wales will basically pay a subsidy to have a hospital at Port Macquarie. The Minister for Health Services Management said that might be a few million dollars a year. I have been told that an amount of the order of $4 million a year will go directly from the taxpayers to Health Care of Australia to have that hospital there, when this State could have had its own public hospital. Why is it that those facts have not been brought to the notice of honourable members? Why is it that a contract is to be signed on Friday of this week without any member of this House, except the Minister - and I doubt that he has seen it - having seen what is in that contract? Why is it that the representatives of the people of New South Wales in this democratic Chamber that we so cherish are not being given the chance to see what is in that contract?

Let us consider what happens when one moves down the privatisation route. On the one hand the Greiner-Murray Government is privatising infrastructure, privatising the running of the health care system. On the other hand there is the Hewson proposal to dismantle Medicare. Put those two pincers together and what does one get? One has the people of Australia being crushed towards the horrendous United States style of health care. In the United States at present it costs $800 billion a year to run the health care system, that is, 13 per cent of that country's gross national product. That is the route this Government wants to take. In Australia it costs 8 per cent of the gross domestic product to run the health care system - 8 per cent compared to 13 per cent. That is the route this Government wants to follow, the high-cost route of privatisation. In the United States of America 34 million people do not have health insurance. Under a Hewson-Greiner plan those figures would be mirrored in Australia. It is not surprising that the people of the United States regard health care as the most important issue in this year's presidential election, nor is it surprising that only 10 per cent of the American people believe that their health care system is working; 90 per cent of them cannot say that the American health care system is working. In Australia of the order of 70 per cent or 80 per cent of people believe our health care system is the best system and we should continue with it rather than go down the privatisation route.

Medicare should be maintained. We should not be fooled by Hewson's proposal. This New South Wales Government should not be given the platform to introduce privatisation that is similar to the American system. We should not allow our public hospitals to be taken out of the hands of the people of New South Wales. It was the
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prestigious Wall Street Journal which said, "The laws of economics have been repealed in the health business". The proposition that market forces should dominate production and distribution of baked beans is beyond argument, but that market forces should dictate health care is a different proposition. For an unfettered market to work, customers would need to have knowledge of the product, the price, the options and the consequences of each option. That is not possible in the health care system. The difference in knowledge and the difference in power relationship between the doctor and the patient ensure that the patient's need to work in an unfettered free market and make it productive does not exist. It is not surprising that at present the Australian Institute of Health is examining the issue of unnecessary surgery, the excessive rates of surgery performed by some doctors on a national scale. When one has regard to the power relationship and the knowledge difference between doctors and patients, it is not surprising that this issue should be examined

Why is it that this Government continues to go down the privatisation route? It is blinded by its ideological blinkers and has decided to get out of running health care. It no longer has any responsibility. The Government used to have the philosophy of letting the managers manage. Now it is moving towards the philosophy of letting the private sector take over. It is surprising to me that any members on the other side of the House want to stay in government, as most of them do not seem to want to leave any role for government. In answer to a question in this House about the financing of public hospitals or new hospital development in New South Wales, and in referring to the option put up by the Opposition and by the honourable member for South Coast that a private company build a public hospital but the public sector run it, the Premier said:

There are only two problems with the proposal, and they are both absolute. First, this sort of arrangement would be totally - 100 per cent - within the Loan Council guidelines.

In other words, it would affect our borrowing limits. This proposal is being put into effect in Victoria at present at two hospitals: St Vincents Hospital and at Werribee. The St Vincents Hospital is to be run in a similar way to that in which the public St Vincents Hospital in New South Wales has been run, within the public health care system - not outside of it but within it. In Werribee the hospital is being constructed by a private company but will be managed by the public sector. That is happening now. That is what the Victorian Government is doing now. The Premier has said that this is within Loan Council guidelines. The Loan Council has not determined that. I understand that in the future the Loan Council may change its guidelines; it strongly wants to do so. But this proposal has not been ruled to be within Loan Council guidelines. It is time the Premier started producing evidence to this House and telling the truth, not trying to hide behind what might happen or even what should happen. This hospital in Port Macquarie should be constructed as a public sector hospital; whether it is built by the public sector or the private sector does not matter. But it should be run by the public sector.

If the honourable member for Oxley wants to sell out his constituents, that is his affair. That should be brought to the attention of the people of New South Wales and their representatives in this place. He should listen to them, because if he fails to do so, he will be thrown out by them. The Premier suggested also that the people of South Australia through their Government would follow the same route as was being taken in regard to Port Macquarie hospital. Certainly the Government of South Australia is examining that option. But it has pointed out clearly that it has made no commitment that that will be the route it will follow. Instead of telling half-truths, it is time the Government told the complete truth. More importantly, it is time the Government showed us the contract before it signs away the money of the people of New South Wales
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for 20 years. There is no doubt that the privatisation route is the wrong way to go. Undoubtedly the people of New South Wales need to control their health care system. In a previous debate on a similar issue the Minister for Health Services Management said that his priorities and objectives were to provide quality, equity and access. There was one thing he missed: accountability. It is not surprising that he missed mentioning accountability when one has regard to the way he has behaved in ramming through this contract without the people of New South Wales having had a chance to look at it.

We all believe in equity - members on this side believe in it, but members opposite only say they believe in it. We believe in quality assurance. We believe also that there should be accountability. That is what this debate is about. There is no doubt that the privatisation route is wrong - ask the people of New South Wales. More importantly the people of New South Wales, through this Parliament, should be given their democratic right to have a look at that contract, to tear it to pieces or endorse it, before it is signed. This contract is for 20 years. If the subsidy the Opposition has worked out is anywhere near accurate - of the order of $12 million to $16 million a year - Port Macquarie hospital could have been built four times over out of the public subsidy that this Minister is imposing on the people of New South Wales.

Mr PHILLIPS (Miranda - Minister for Health Services Management) [3.29]: This debate has sunk to the lowest level of hypocrisy and nonsense that I have heard in this Parliament for years. I shall go through some of the absolute nonsense that the Deputy Leader of the Opposition has raised on this issue. First, he has clouded the Loan Council issue. The Government has pursued this matter through the Commonwealth Treasury for some time and has received a letter from the Commonwealth Treasury that states clearly that the Port Macquarie project is outside the Loan Council's guidelines. Let that issue be clear once and for all. The second nonsense raised by the honourable member related to the bringing of a contract before this House. I have been a member of this Parliament since 1984. I have made quick inquiries about the existence of any precedent for point by point analysis of a commercial contract by a committee of this House before a contract is signed. If the Opposition insists on travelling down that road, everyone's hands will be tied and no one will want to deal with the Government. The government of the day must be accountable. I have no problem with that. The Government has ways of dealing with the question of accountability which it will pursue after the contract is signed, and I will advise the House towards the end of my contribution what the Government is looking to do.

Let us talk about hypocrisy. Labor was in government when the tunnel was dug. The coalition parties, in opposition at that time, said that the problems associated with the tunnel contract should be discussed. The response of the Labor Government at that time was negative because it knew - and in Opposition it knows now - that a government cannot lay on the table all the details of a contract that is being discussed in an attempt to resolve its pros and cons. If that happened the contract process would fall apart and the parties would get nowhere. I wish to raise another example of hypocrisy. In 1986 Ron Mulock, a member of the previous Labor Government, was described in a newspaper article as the "greatest reformer of the health system" when he signed a contract with St John of God Hospital at Richmond to provide that area with drug and alcohol related services. Did the Labor Government at that time want to bring its contract before the House? After all, it was that Government's contract. The Opposition now says that this Government cannot be trusted to make a contract in respect of Port Macquarie. That is the height of hypocrisy.

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I cite a further example of hypocrisy. The other day at Fairfield Archbishop the Most Reverend Donald Robinson of the Anglican church and I signed a contract for the Government in conjunction with the Anglican church to develop a new hospital for the Home of Peace at Fairfield. On that occasion the honourable member for Smithfield and the honourable member for Cabramatta also attended but I did not hear them say that the contract should be closely examined before being signed. The Opposition is spouting nonsense and hypocrisy. The Deputy Leader of the Opposition attempted to compare the actions of the Government with what happens in the American health system. The honourable member knows that the dramatic difference between the health systems in America and Australia is that this country has universal health care coverage whereas America does not. In the United States 35 million people are not covered by insurance and cannot afford their health care system. Governments in Australia have a responsibility for ensuring that everyone has access to health care services. The New South Wales Government is carrying out that responsibility.

The question has been asked: why travel down the path of privatisation? It is nothing new; it has been done a number of times. Thousands of doctors in the system, such as visiting medical officers, work on contract. Other contracts have been let for food services, linen and medical services, and for a whole range of other services. The Government has to travel the path of privatisation because the Opposition left the present administration with a $2 billion backlog of work to be done in the health system. The Labor Party, when in government, allowed that health system to run down. The previous Government, during its 12 years in office, allocated a low level of capital investment funding to health care. The coalition parties, on attaining office, embarked on a record level of health care investment. Since 1988 the health budget in this State has increased by $1.46 billion, from $3.1 billion to $4.56 billion. All honourable members know that the health care system is under pressure, but who will provide the money to relieve that pressure - the Federal Government? What has the Federal Government done? In 1986 that Government picked up 40 per cent of this State's health budget: today it picks up only 34 per cent. What does that mean in dollar terms? The Federal Government is gypping this State of $250 million per year. The New South Wales Government, with health care a major priority, has consistently increased the health budget: the Federal Government has consistently ripped off the people of New South Wales in the allocation of taxpayers' dollars. The New South Wales Government is all about trying to find other ways of getting money into the health system.

The Deputy Leader of the Opposition is correct in saying that I spoke the other day about access, equity, affordability and quality. The people of Port Macquarie undoubtedly need a new hospital. Our commitments over the next five years have all been made - as long as funding is continued. The Government is building new hospitals: at Liverpool for $400 million; a new children's hospital at Westmead for $300 million; at Nepean for $100 million; another $100 million at St George; and new hospitals and new developments at Lismore and at Tweed Heads. Facilities in all those areas need to be upgraded. The honourable member for South Coast, who represents the Shoalhaven, has written to me saying, "Thanks for stage 1A but we now want the money for stage 1B very quickly". I would like to know from the honourable member where he thinks the Government will get that money. There is no magic pudding, as has been suggested by some members. The people of Port Macquarie would have had to wait years for a new hospital.

The Government has consulted with the people of Port Macquarie, the community hospital board, the medical staff association, the staff, the chamber of commerce and the media. All of those groups in Port Macquarie want to go down this
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path and have said they want their hospital within 18 months. The New South Wales Government has a responsibility to give that option to those people. The Government has guaranteed that public patients will have the same access to that hospital as they have currently to hospitals in that area. The Government also has said that the staff currently in the system will remain as staff in the private hospital. They will be given access to a larger and better hospital that will help overcome the waiting list. On admission, public patients will not know the difference except that they are entering a new high quality hospital, which they do not have at the moment. Are the people of Port Macquarie not entitled to have access to such a hospital? Is not that equity of access? It is fine for people living in the eastern suburbs or Marrickville to have a choice of major State teaching hospitals. But what about the people of Port Macquarie?

I want to come to motive. Why would the Opposition come up with something like this? The motive is base and political; absolutely nothing else. It has nothing to do with the interests of the patients at Port Macquarie. The Deputy Leader of the Opposition knows the contract is due for signing within the next few days. How does he know? Because the Government has told everyone the contract will be signed by the middle of April. That is fine. He is implementing delaying tactics: "Let us delay it. Let us cause doubt about it, because we can continue the political pain." I hope that the Independents do not fall for his nonsense. Having spoken about the hypocrisy of those on the other side, I now turn to the Opposition's endeavours to deny the people of this State the opportunity to have an improved health care system. The Government has no intention of selling off the whole health care system; it is talking about privatising probably as few as four or five hospitals out of 250 in the State in the next five, seven or 10 years. With an injection of private money into the health care system the Government will be able to free up more money for the long list of things waiting to be done. That is an honourable intention and will be an honourable achievement. I have spoken about hypocrisy and the opportunities that the Opposition would deny the people of New South Wales. I now refer to precedent. I am staggered that a member with the experience of the honourable member for South Coast is trying to set a precedent of having contracts examined in detail in the Parliament.

The honourable member for South Coast is showing his naivety. He might smile about it, but such a precedent will have serious consequences when dealing with business. Some months ago, when the Government began negotiations with the current contractors for the Port Macquarie hospital, the contractors had particular points of view and the Government had particular points of view, each point requiring thorough negotiation. If those negotiations were required to be conducted in a public arena or before a committee of the Parliament, they would absolutely fail. The Government is quite happy for its approach to be tested after the contract is signed, and to lay the contract on the table so that people can see quite clearly exactly what are the pluses and minuses, because the Government is confident that its approach will withstand that test. I am able to tell this House that the Government has decided that this is an appropriate contract, when entered into, for scrutiny by the Public Accounts Committee of the Parliament - a committee that is already established, with representatives of both sides and the crossbenches, and with a proven track record - to review the public accountability mechanisms introduced into the Port Macquarie contract, including quality assurance mechanisms and equity of access mechanisms. I am happy to discuss with the players in the field the terms of reference, to ensure that the review of that contract by the Public Accounts Committee is worth while, with the committee being required to report by the end of the year.

Mr Hatton: After its signing?

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Mr PHILLIPS: Yes, of course it has to be after. I am doubting the motivation of the honourable member for South Coast. I thought a number of his proposals on parliamentary reform which he put forward in the past made a lot of sense, and I have backed him on many of them. But it is absolute stupidity to create this precedent for the Parliament. It would go too far and have ramifications far wider than Port Macquarie. The Government is prepared to lay all its cards on the table in terms of testing of public accounts. It is of great benefit to the people of New South Wales. I caution the Independents, in particular, not to fall into the trap. The Independents should look at the motivation of the Opposition and where it stands on this issue. Independents should realise they are being dragged across the line, screaming, on this matter.

Mr Hatton: I initiated the debate.

Mr PHILLIPS: Is the honourable member for South Coast admitting that he wants to lead this Parliament to examine every detail of a whole range of contracts before they are signed? [Time expired.]

Dr MACDONALD (Manly) [3.44]: This debate is too important to be left, in a sense, to the politicians. Many furphies have been raised in the debate, such as tunnels and American health systems, but this is an enormously important debate about the future funding of the public hospital sector. It is also about the core services of the public sector. I am saddened that some honourable members, particularly the Minister for Health Services Management, suggest that this is not a matter that requires the scrutiny of the Parliament, that it can be managed by the Executive arm. They are wrong. However, the Minister was right about a number of points he made, for instance, the question of service contracts. But it is shameful to suggest that this is a trivial matter which does not need to be considered by Parliament. It should not be debated in Parliament through a series of matters of public interest. I would argue that had the Minister been serious about the matter being considered by this House he would have proposed something like a health reform bill that would have done away with the furphies and ensured proper debate. The Government could be accused of implementing change by stealth. This proposal is not consistent with remarks made by the Premier on a number of occasions, that he supports the concept of open and democratic government. I appeal to the Minister not to deal with the issue by stealth through the executive arm, but rather through proper debate. It is not a small matter.

The Minister has confirmed in this House that he will expend $1.5 billion in capital renewal of hospitals. The debate is about the benefits and the risks of privatisation and about the funding of the public hospital sector. I have spoken to the Minister about joint ventures previously. The structure of the public hospital sector needs review. Corporatisation, efficiencies and microeconomic reform need to be examined. But this model is wrong. It will put a health service in a coastal town, where there is no competition, straight into the privatisation model. Full-blooded privatisation subjecting social values to a balance sheet mentality has grave risks. Privatisation means deregulation, and deregulation disregards the need for protective regulatory functions and puts health consumers at risk. When profit and short-term gains are the motivating force, how are service quality and performance affected? The Minister could argue, but most would agree, that a public sector asset should give a return of about 4 per cent; in the private sector that return is more like 12 per cent. How are those two figures reconciled? The risks are greatest in the area of community health. How can private sector principles be applied to preventative health? The benefits of and return on investment in preventative health do not accrue for 30 or 40 years. That is a contradiction in terms. My criticism is not aimed at the Minister alone. I am confused about where the
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Australian Labor Party stands. Its draft discussion paper supports privatisation. For the Opposition spokesman on health to say that privatisation is all wrong is not consistent with this statement from his party's draft discussion paper:

It requires a recognition of the limitations on the traditional use of the public sector as a means of advancing Labor's goals of equity and quality but it also demands innovative Australian responses to Australian conditions and needs.

There is a signal that the Australian Labor Party is reconsidering its position. The document refers to a cost-benefit analysis. I believe the Labor Party has already signalled its agreement that privatisation is the way to go even in the hospital sector. The other point raised in the MPI concerns the will of the House being defied and the full parliamentary and public scrutiny process not being allowed to take place. [Time expired.]

Mr SMITH (Bega) [3.49]: This debate is a rerun of many other debates we have had about the building of private hospitals and the public hospital system. There is a philosophical difference between the Government and the Opposition. This matter is not about whether a public or private hospital is built at Port Macquarie; it is about whether one is built at all. If a private one is not built, there will not be one. Honourable members should understand that. Labor left a capital works debt of $2 billion, which cannot be made up by public funds. The simple fact is that the health system will run down unless we find other ways to provide the services. Every other government in Australia is going down this track in one form or another. Honourable members opposite are the only ones who do not recognise this. The Independents are being led astray. The Opposition's philosophies in the 1990s are totally wrong.

Mr ACTING-SPEAKER (Mr Chappell): Order! I call the honourable member for Kiama to order.

Mr SMITH: The Federal Government, the Victorian Government, the South Australian Government and the Queensland Government are adopting our approach. New South Wales has a hung Parliament and the Opposition is philosophically opposed to our policies. It is rubbish for the Deputy Leader of the Opposition to say that the Government does not have the right to pursue its approach because a couple of weeks ago the Parliament voted against it. He knows that the Government got more than 52 per cent of the vote. The Independents decide which way a vote will go. If that is democracy, I would hate to see what will occur in future votes. There was no ill feeling in the community about the Federal Government's proposal to sell Qantas Airways Limited. Hospitals are very close to the community and people's welfare is involved. There are already results from this Government's approach. In my electorate a very good nursing home was built by the Jennings company, Edgewood at Batemans Bay. It is extremely popular.

Just because a hospital is built with public money does not mean that it has a monopoly on love and care. Many people within the private sector would love to be running a hospital. They have consideration, love and care for people. It is rubbish to say that only a bureaucrat can look after sick people. It is philosophical blindness for Opposition members to say this. They know that if they got into government they would be going down the same track. If the $2 billion worth of hospitals are not built, people will suffer badly from the lack of facilities. If they are not provided through private finance, New South Wales will be deprived of them. The Government's decision will allow a brand new, modern hospital to be built at Port Macquarie within 18 months - not in five or eight years' time - and cheaper than the public sector could build it. The cost
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will be $50 million instead of $80 million. The money saved may be used in other areas. I need it in my electorate. John Hatton needs it in his electorate at Shoalhaven. Did he state in the local paper that he wanted demountables? Where are we heading? [Time expired.]

Mr HATTON (South Coast) [3.54]: Attempts to trivialise this debate will simply fail. It is about privatisation of not just public hospitals but also community health services and public hospital services. It is about disregarding the previous expression of this House of Parliament. It is about the need to establish a committee to examine the proposed contract. It is about accountability and the right to know. The public has a right to know. Talk about hypocrisy! It was not the member for South Coast who promised hospitals all over the State when Labor was in office. It was not the member for South Coast who complained about not being able to see the harbour tunnel contract and the contract for Darling Harbour; it was the Premier. The Premier and the present Minister for Transport day after day made political capital. I ask that a committee of this Parliament have a look at the contract. Consideration of a $50 million contract for the building of a hospital would be an important matter for a committee. This House used to have a Public Works Committee which automatically would examine capital expenditure.

Mr Phillips: It did not look at contracts.

Mr HATTON: There is no reason why it should not look at contracts. The Minister says with shock and horror that this is commercial in confidence. That is the greatest sleight-of-hand trick that has been used by government to prevent the public from knowing what it has a right to know. The Australian Association of Surgeons provided me with information on 7th April. It stated:

The Association has always expressed concerns about the integration of public and private facilities on the same campus.

We believe competition between the two sectors is a healthy arrangement and most conducive to the preservation of optimal patient services.

After referring to small towns the association went on to state:

Before commenting further, we need to know what arrangements are being made in the contract for the management of both public and private patients.

The association also stated:

It may well be that in small towns, satisfactory arrangements for private management of public sector facilities would be the preferred way to go but precise details of the contractual arrangements should be made available for public scrutiny before approval is given.

In relation to government contracts one has only to look at the "7.30 Report" item on Eastern Creek. People who know anything about water and sewerage contracts would be able to tell us about government contracts; and water and sewerage contacts are much easier to write than health service contracts. We are not talking about $50 million; we are talking about potentially $1.5 billion to $2 billion. Minister Hannaford said that to the three Independents. The Minister for Health Services Management referred to this figure in an interjection. People may say that I voted for privatisation. That was for government owned corporations. In response to a censure motion the Minister for Housing said that the Government would not privatise the Hunter Water Board unless that matter comes before the Parliament. Why does the health issue not come before the
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Parliament? Why do I have to raise it before it is debated? I have a sheaf of more than 100 letters in my folder from people in Port Macquarie who do not want the private hospital. A survey carried out in Port Macquarie said that 75 per cent of people were against the proposal. Specific groups were consulted but there was not a full debate so that the community could express its views on the hospital. There has not been a full parliamentary debate about privatisation.

Many doctors and specialists are concerned about privatisation. There is no reason why a committee of this Parliament should not examine any contract for that hospital. Why should it not be the Public Accounts Committee? What is the point of having a Public Accounts Committee if not to conduct such examinations? What is the point of looking at this after the event? We want to know what is in the contract before it is finalised. Are we to have State pre-schools, transport, community services? What is intended? There should be full debate on this issue of privatisation. There was a full debate on forests. Is someone saying this issue is less important than forests? The fact is that a hospital could be built at Port Macquarie and it could be done within Loan Council guidelines. They can have their hospital at Port Macquarie; they can have their hospital at Shoalhaven; they can lease the premises but they do not have to hand over control. This issue is being used as a Trojan Horse to push privatisation and it has been trivialised. The fact is that there are people throughout New South Wales who - [Time expired.]

Mr JEFFERY (Oxley) [3.59]: If we are to continue to improve health services in New South Wales, we must address some major concerns. The 5th April edition of the Sun-Herald carried an article by Professor John Dwyer who put forward a very compelling case in an item entitled "Why public hospitals need private money". He mentioned the coalition's legacy from the former Labor Government. He said in the article:

In NSW, $2 billion is needed to modernise our hospitals, let alone build new ones to serve our ever increasing population . . .

The first step in our attempts to remedy the situation, namely an invitation to the private sector to help us build and manage some of our public hospitals, is topical and controversial . . .

Port Macquarie Hospital, for example, could benefit from an injection of private sector finance and management skills. No services would disappear and none of the hospital's current clientele would be disfranchised.

We must look at the effect of an ageing population on the health services. By the year 2000 there will be a marked increase in the proportion of the population aged 65 and over. The use of health services by this aged group is four times higher than that of the average person in the population. My electorate of Oxley includes north Port Macquarie. The aged population in that region of the mid North Coast is more than twice the State average, and 40 per cent of that community receives social security benefits. The Port Macquarie community needs a bigger hospital and it needs it now. The only way that will happen is with private sector involvement. The best plan of the Opposition - this mob opposite - is more than five years into the future and is unfunded. Of course, those opposite will never be in office. I recall that 15 years ago the Minister for Health, Mr Stewart, promised a hospital for Port Macquarie. So much for Labor Party promises. They are nothing but lies. The Labor Party has established a de facto branch by setting up the hospital action group. A few well-meaning people have been incited to work for the cause. That hospital action group is a Labor puppet group. It is a group designed to scare pensioners. It is peddling misinformation and lies. One Labor lie is that the people of Port Macquarie will need health insurance in order to get into hospital.
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Rubbish! Lie No. 2 is that jobs will be lost. Rubbish! Lie No. 3 is that people will have to pay up before they are treated. Rubbish! The list goes on and on. The people of Port Macquarie will not be disadvantaged by the privatisation of the hospital. The Government is agreeing to pay for 70 per cent of the beds for public patients. That sort of arrangement hardly represents the dramatic break from the Australian tradition that the Leader of the Opposition would have us believe it is.

Mr Harrison: Yes, but it lies. The Government will break its promise in six months' time. It was promised for Kiama too.

Mr JEFFERY: It is all very well for the honourable member for Kiama. He wants what the honourable member for South Coast wants.

Mr ACTING-SPEAKER (Mr Chappell): Order! I call the honourable member for Kiama to order for the second time.

Mr JEFFERY: The honourable member for Kiama would have us put in demountable wards at Port Macquarie.

Mr ACTING-SPEAKER: Order! I call the Minister for Health Services Management to order.

Mr JEFFERY: Most of the doctors who treat public patients in New South Wales hospitals are private contractors. As the Minister said, visiting medical officers have been servicing our hospitals for decades. Increasingly the non-medical services of public hospitals, such as cleaning, cooking, laundry and administration, are being put out to tender. What is happening in the Federal arena? In New South Wales 90 per cent of nursing homes are privately owned and operated, and funded in part by the Federal Government. That Government will not be in office for much longer. In New South Wales 17 per cent of hospital beds are private beds. Let us get away from the rubbish. The benefits of the privatisation proposal for the people of Port Macquarie far outweigh any downside. Port Macquarie and the mid North Coast will have a greater range of higher level specialised services. At the moment many of my constituents have to travel to Newcastle or Sydney - and in some instances to Adelaide - in order to obtain specialist services. When the new hospital is built many of those services will be available locally. Surely that must be of benefit to the local community. Completion of the new hospital with upgraded specialist services will occur at least two years earlier than any other alternative arrangements. The waiting list for orthopaedic services -

[Interruption]

What about the people who are now in pain? Does the honourable member for Manly not care about them? Let us give them the services they require. The new hospital will provide 63 additional beds and that will result in reductions in waiting times for surgery for public patients. [Time expired.]

Dr REFSHAUGE (Marrickville - Deputy Leader of the Opposition) [4.4], in reply: I would like to thank all honourable members who have participated in this debate. A number of issues raised in this debate should be highlighted and answered. First, mention was made of the requirement for capital works for health over the next 10 years. The week before last the Minister listed the capital requirements for health over the next decade. He issued a list which showed that about $1.5 billion of works are already in progress and another $1 billion of works are required but not yet started. In
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all the program amounts to $2.5 billion over the next decade. If we cannot find that $2.5 billion over the next decade, we certainly have a major problem. Perhaps the amount will be more than that because there are things I would like to do and I am sure there are things the Minister would like to do that are not included on the list. We need to find $2.5 billion. At the moment the Government is spending of the order of $300 million a year on capital expenditure. Over 10 years that equates to $3 billion. That is already $500 million more than the amount required for the major list of capital works for health over the next decade.

The Opposition believes that more money should be put into health capital works. The Opposition's policy is that the revenue from a casino should go to health capital works. The Opposition expects revenue from the casino to be similar to what the Government expects, that is, of the order of $100 million a year. That is not a bad estimate when one considers that at present revenue of $300 million a year from poker machines is applied directly to health services. Revenue of $100 million a year from the casino over 10 years would put an extra $1 billion into health capital works. If the money allocated to health capital works is maintained at the present rate of $300 million a year, and an extra $1 billion is added over a decade, $1.5 billion more than the Government says is required over the next decade will be available. Why is it that the Government cannot add up the figures? It is because it needs to provide new hospitals within the next few months. It needs to make sure that before it faces an election it does something, because it has promised so much. There is no doubt that in private conversations that I know the Minister for Health and Community Services has had with people in the health industry he has blamed his colleague the former Minister for Health for going about and promising these things.

Mr Phillips: Oh, rubbish. Name the hospital that should not be built.

Dr REFSHAUGE: I am saying they all should be built and it can be done, according to the figures I have just given. However, the Government does not need to take the privatisation route.

Mr SPEAKER: Order! I call the honourable member for Bega to order. I call the honourable member for Murrumbidgee to order. I call the honourable member for Bega to order for the second time.

Dr REFSHAUGE: I am happy for the private sector to build hospitals. That has never concerned me. I am not happy for the private sector to run hospitals because we must have control over how we run the health care system. If we do not have control over the health care system -

[Interruption]

Would the honourable member for Bega like to make a further contribution?

Mr SPEAKER: Order! I call the honourable member for Oxley to order. I call the honourable member for Bega to order for the third time.

Dr REFSHAUGE: I am happy to have the private sector build those hospitals and be involved in a range of health care services. But I am not prepared to hand over responsibility for the planning of health care, control of health costs, quality assurance or accountability to the private sector. The private sector has an important role to play, but that role is not to run public hospitals. There is a massive difference between the public sector running a public hospital and the private sector running a public hospital.
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That is where the Minister is unable to understand the Opposition's point of view. He has tried to understand it, but cannot. I suggest he should have another think about it. The Minister claimed that cleaning and catering services have already been privatised. I remind honourable members about the massive privatisation experiment on cleaning at King George V Hospital. The Opposition brought the sad news to this House that the privatised cleaning service at that hospital resulted in piles of contaminated waste lining the corridors.

Mr SPEAKER: Order! I call the Minister for Health Services Management to order.

Dr REFSHAUGE: It is not surprising that the former Minister cancelled that contract because the required quality could not be provided. I remind honourable members also of the privatisation of laundry services in the Hunter with Brambles as the private contractor. Brambles was paid $500,000 of taxpayers' money for work it did not perform. That is an example of the contracts written by the Government. That amount of $500,000 could have been better used in Marrickville, Port Macquarie, Bega or even Miranda. Instead it was given to a private contractor, for whom the Government wrote a stupid contract. The Government is asking to be trusted. The honourable member for Manly quite rightly suggested that a whole range of options can be looked at, but the Port Macquarie model is the wrong one. Not only will a public hospital be privatised; community health services will be privatised. As previous speakers have clearly shown, there is no way in which the private sector can make a commitment to guarantee the quality of those services.

More importantly, even in that citadel of privatisation, the United States of America, a privatisation such as that at Port Macquarie would not have been allowed. The anti-trust legislation in the kingdom of privatisation would have prevented the same company running the only two hospitals in the Port Macquarie district. But the Government still goes ahead with it. In his contribution the honourable member for Manly asked whether the Labor Party supports privatisation of the public hospital system. I can give a categorical denial: the Opposition does not support the privatisation of the public hospital system, whether it is public hospitals or community health services. The Opposition has no objection to a private developer building a hospital. For the short-term relief of waiting lists, the Opposition does not object to some beds in a private hospital being bought on a short-term contract to do a short-term amount of work.

Mr Phillips: So they can provide short-term quality of care, but not long-term quality of care.

Dr REFSHAUGE: The Opposition believes it can be controlled in the short term. When the Government signs away for 20 years not only a massive subsidy but also the control, guarantee and planning of health services in Port Macquarie -

Mr Phillips: Why would the Government do it if it was not making a gain?

Dr REFSHAUGE: I believe the Minister expects he can do it, and that is the real tragedy. It is a great tragedy that the Minister is so deluded that he believes his own rhetoric. Let me refer to the final point that was so belaboured by the Minister. He said members of Parliament could not be trusted to scrutinise a contract before it is signed. By implication he said 20 members of Cabinet, the Executive and every public servant in the Department of Health and Treasury could look at it, but five elected members of Parliament, five representatives of the people of New South Wales, cannot be trusted. It is not surprising that in his three dicta, the Minister did not talk about accountability. Accountability is what this motion is all about, and that is what honourable members will
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vote on right now.

Question - That the motion be agreed to - put.

The House divided.

Ms Allan
Mr Amery
Mr Anderson
Mr A. S. Aquilina
Mr J. J. Aquilina
Mr Bowman
Mr Clough
Mr Crittenden
Mr Doyle
Mr Face
Mr Gaudry
Mr Gibson
Mrs Grusovin
Mr Harrison
Mr Hatton
Mr Hunter
Mr Iemma

Mr Irwin
Mr Knight
Mr Knowles
Mr Langton
Mrs Lo Po'
Mr McBride
Dr Macdonald
Mr McManus
Mr Markham
Mr Martin
Dr Metherell
Mr Mills
Ms Moore
Mr Moss
Mr J. H. Murray
Mr Nagle
Mr Neilly

Mr Newman
Ms Nori
Mr E. T. Page
Mr Price
Dr Refshauge
Mr Rogan
Mr Scully
Mr Shedden
Mr Sullivan
Mr Thompson
Mr Whelan
Mr Yeadon
Mr Ziolkowski

Tellers,
Mr Davoren
Mr Rumble



Noes, 45

Mr Armstrong
Mr Baird
Mr Blackmore
Mr Causley
Mr Chappell
Mrs Chikarovski
Mr Cochran
Mrs Cohen
Mr Collins
Mr Cruickshank
Mr Downy
Mr Fahey
Mr Fraser
Mr Glachan
Mr Griffiths
Mr Hazzard

Mr Jeffery
Dr Kernohan
Mr Kerr
Mr Longley
Mr Merton
Mr Moore
Mr Morris
Mr W. T. J. Murray
Mr Packard
Mr D. L. Page
Mr Peacocke
Mr Petch
Mr Phillips
Mr Photios
Mr Rixon
Mr Schipp

Mr Schultz
Mr Small
Mr Smiles
Mr Smith
Mr Souris
Mr Tink
Mr Turner
Mr West
Mr Windsor
Mr Yabsley
Mr Zammit


Tellers,
Mr Beck
Mr Hartcher
Pairs

Mr Beckroge
Mr Carr

Mr Greiner
Ms Machin

Question so resolved in the affirmative.

Motion agreed to.