Peter Andren (Calare, Independent) Share this | Hansard source

In rising to support the Health Legislation Amendment (Pharmacy Location Arrangements) Bill 2006, I want to make a few brief comments about why this legislation is so vital for small towns in the Calare electorate. The bill proposes a number of amendments to the National Health Act relating to the provision of community based pharmacy. The amendments are a result of the fourth community pharmacy agreement between the Commonwealth and the Pharmacy Guild of Australia, an agreement that is due to run until 30 June 2010. This legislation also provides the minister with discretionary power to approve a pharmacist not approved by the Secretary of the Department of Health and Ageing to supply PBS medicines. As the explanatory memorandum says, this power is to enable the minister to address unintended or unforeseen consequences of the application of the pharmacy location rules which, for example, may result in a community being left without reasonable access to the supply of pharmaceutical benefits. Importantly, this ministerial power can be reviewed through application under the Administrative Decisions (Judicial Review) Act.

The matter of pharmacy location has been the subject of widespread debate over many years, with the major supermarket chains applying increasing and constant pressure for relaxation of the pharmacy location rules. No-one living in rural and regional areas will doubt the importance of the pharmacy to the welfare of the community. Let me use as an example the town of Molong in my own electorate. Last weekend one of two local supermarkets devastated by flooding last November reopened. The second supermarket in Molong was so badly damaged and its repair bill so great that it will remain closed. I joined the state minister, Tony Kelly, and about 300 locals for what was a pretty emotional event. Despair, loss, grief and now overwhelming joy to see these businesses being restored came together in one of the most emotional moments that I have experienced in a small community in many a day.

The town’s pharmacy was also severely damaged, as were half the businesses in the main street, Bank Street. Due to the determination of the community and their loyalty to local businesses, the supermarket has reopened bigger and better than ever. The pharmacy is back providing a vital service to back up both local doctors. The newsagency was demolished and is also being rebuilt. Interestingly, as we talk about the need for competition, I would suggest that the fact of the second supermarket not reopening has enabled the existing supermarket to stick its neck out a bit more in the provision of services. It can provide a far greater range of products. It has a marvellous fruit section and a delicatessen—something that had not been seen in Molong for many a year. By dint of the fact, yes, it is probably a monopoly situation now enjoyed by one provider, but because of the critical mass available to shop in the town I would argue that the town will support this supermarket very strongly. A couple of supermarkets always made the situation fairly marginal.

Due to determination, these businesses are back on track. If any of those businesses had permanently hit the wall, the economic fabric of the town would have begun to unravel. By allowing supermarkets in nearby Orange or any other major regional centre to provide pharmacy services—and the newsagencies they would also want to run—the death warrants of towns like Molong would inevitably be sealed.

The purpose of the location rules retained in this legislation is clear. They provide widespread community access to pharmaceutical services and continue the financial viability of existing pharmacies. I would add another far more important reason: the location rules ensure the community fabric of towns like Molong, Canowindra, Blayney and other small towns through the electorate of Calare and right throughout rural Australia remains intact. With community, the financial viability follows. Those who would argue against the location rules are arguing purely on textbook economic grounds that there is insufficient competition in the sector or something along those lines. How would the inevitable concentration of pharmacy services in supermarkets and major shopping centres really help competition? Sure, it might lower prices—although we have seen, with the provision of petrol in supermarkets, most often the price of fuel settles in a cent or two below the community service stations in places like Blayney that absolutely struggle to compete.

Where are the words ‘service’ and ‘community’ in this whole argument? It reminds me of a call I received from a constituent that she wanted to be part of a society first and an economy second. Woolworths and Coles and the major political parties, including The Nationals, who I know can no longer be called major, would do well to hear that call.

The government has extracted a price for continuing the local pharmacies or location provisions. We do not know the exact figure, but the location rules were used as a bargaining chip to wind back the rate of payments to the pharmacy sector. That is probably not unjustified, but the provision of services by community pharmacies are very important, particularly in providing for the needs of their aged customers which, one would argue, a supermarket pharmacy would not have the inclination or the time to provide, whatever it might say prior to gaining the supermarket pharmacy.

The government’s fact sheet shows it has managed to negotiate a saving of $350 million over the life of this agreement, including a reduction in allowable mark-ups on wholesaler costs. However, there has been an increase in pharmacists’ dispensing fees. The bill gives effect to the targeted easing of existing rules—one of the government’s trade-offs in negotiating this agreement. Pharmacies will be allowed to co-locate with after-hours medical centres, relocate into certain types of shopping centres, single pharmacy towns and urban areas with high population growth. According to the explanatory memorandum, this will improve flexibility and increase competition.

However, as communities like Molong will tell governments—if they listen—with most services in rural areas outside the largest centres, there is no truly competitive model. Usually, a town with one or two doctors, one pharmacy, one butcher, one newsagent and two service stations cannot, as I said, sustain significantly greater competition. There is simply not enough critical mass of demand. That is where the competition mantra goes sadly astray at times, whether it applies to delivery of pharmacy or telecommunications services. There is a very thin line between flexibility and viability in country towns, and it takes but one flood down Molong Creek to show just how tenuous that viability is.

I hope this and any future government do not become complete captives to the competition argument in all cases, for that would spell the end of key community businesses, the gradual withering of many towns and an increase in the phenomenon of larger centres like Dubbo and Orange becoming sponges, soaking up the business of smaller surrounding villages and towns. That said, I commend the legislation, with those reservations, to the House.

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