Craig Kelly (Hughes, Liberal Party) Share this | Hansard source

I rise tonight to speak on the National Health Amendment (Pharmaceutical Benefits) Bill 2014. It is always a great pleasure to follow the member for Wakefield and the absolute nonsense, rubbish and scaremongering he continues to go on with every time he comes to the dispatch box. The first thing we must correct is the repeated untruth that we hear from members of the opposition about cuts to health and education. The facts are that this financial year, 2014-15, there will be a nine per cent increase in health spending, next financial year there will be another nine per cent increase on top of the previous nine and the following year there will be yet another nine per cent increase. So for three years, back to back, we will have nine per cent, nine per cent, nine per cent: increase, increase, increase. Yet we have members of the opposition somehow concocting in their minds that this is actually cut.

The same applies for education. We hear members of the opposition running around, and especially students who have the great opportunity to go to university in this country, scaremongering that there are so-called cuts to education. Again, nothing could be further from the truth. The facts are that this financial year there is an eight per cent increase in spending on education from this federal government, next year yet another eight per cent increase and the following year yet another eight per cent increase. If members of the opposition, who are running this ridiculous scaremongering campaign about cuts that do not exist, think the nine per cent and eight per cent increases are not enough then it is up to them to articulate very clearly how much higher they think our spending should be above that nine per cent and, most importantly, where the money will come from. They think that money grows on a money tree or there is some money tree out in the parliamentary courtyard. They have to explain to the Australian public where the money will come from. Is there a plan just to continue to borrow and borrow, to steal from our children's future and run up debt? That not only has to be repaid at some time but the interest costs have to be serviced along the way.

To get back to the bill, it addresses a few issues we have with our Pharmaceutical Benefits Scheme. Our Pharmaceutical Benefits Scheme is one of the wonderful things we have in Australia. It is one of the great advantages of being an Australian. People from all around the world seek to come to our shores because of the advantages of our Pharmaceutical Benefits Scheme. The scheme was started back in 1948 to provide free medicines to pensioners, to prevent life-threatening diseases, to reduce illnesses and to reduce pain. We have known for decades it has provided timely, reliable and affordable access to the medicines that all Australians need. Our challenge as a government is how to maintain it going forward so that our children and our grandchildren have the same advantages from the Pharmaceutical Benefits Scheme that we and our parents have enjoyed.

There are three specific problems that we have to deal with. Firstly, there is the cost. Over the past decade government spending on the Pharmaceutical Benefits Scheme has increased 80 per cent. This year, 2014, this federal government will spend $9.2 billion on the Pharmaceutical Benefits Scheme. By 2017-18 that will be $10.3 billion. And the projections are that this will go to $15 billion by 2023-24 and then double in the next 20 years to something like $30 billion. So we have to come with up with how we are going to fund those increases in costs. What is driving that cost increase? Firstly, it is the new drugs that are available. Through the creativity and innovation and the experimentation—the genius—of mankind we have been able to tackle many of the illnesses and diseases that our forefathers have had to put up with for thousands of years. Many of those diseases have been eradicated totally. Today we have the ability to cure those because of the geniuses who work in our medical research field. This government has already committed $436 million to new drugs to be listed on the Pharmaceutical Benefits Scheme. In March 2014 another $550 million worth of new drugs were released on the Pharmaceutical Benefits Scheme. At their July meeting we know the Pharmaceutical Benefits Advisory Committee are considering no less than $3.6 billion worth of new drugs to go on the scheme.

I have had constituents in my office—I am sure many members of parliament have had constituents in their offices as well—pleading with me to get new drugs listed on the Pharmaceutical Benefits Scheme, new drugs that they feel and believe will help save their kids' lives or extend their kids' lives or make their lives better. We owe it to all Australians to try to get those new drugs on that Pharmaceutical Benefits Scheme as quickly and as efficiently as we possibly can. But we know what happened under the previous government, how they held up simply for financial reasons—they had greater spending priorities—many of those new drugs being listed on the scheme. We know that these new drugs are coming onto the scheme down the track. We know there will be new drugs to tackle prostate cancer, to tackle bowel cancer, to deal with blindness and diabetes. We as a government want to make sure that those drugs can be listed on the Pharmaceutical Benefits Scheme.

The next problem we have is the ageing of our population. One of the great spin-offs that we have had of all these new drugs, and medical research creativity, has been the increase in life expectancy in this country. For those who value life and think life is the most precious thing, our forefathers have granted kids today longevity of an extra one-quarter of a century. But we know that as you get older the spending that is required with your age becomes greater. The Productivity Commission's report into revenue and expenses found that, for the Pharmaceutical Benefits Scheme, by the time people aged 45 to 50 years get up to 60 to 74 years, then the amount the government will have to subsidise them through the Pharmaceutical Benefits Scheme will double. Health costs will double from 45 to 65 years of age. For someone aged 85, government spending on their health is three times greater than for someone aged 60. These are the challenges that we have; how are we going to finance this?

If we go back six years, when we had a $20 billion surplus and we had $50 billion in the national bank account, we could have drawn on those funds to help finance this. But that was six years ago, before this nation handed Julia Gillard and Kevin Rudd the national credit card and made them signatories to that national credit card. We saw deficit after deficit after deficit, borrowed money after borrowed money, waste after waste. And do you know what? If you are wasting money and you are spending it recklessly, it is one thing if you are doing it with money you have in your pocket, but it is another thing if you do it with borrowed money. And that is what we saw over six years with the previous Labor government. We saw them waste and recklessly spend money that they borrowed. So now we not only have the obligation to someday pay that back, but we also have the ongoing obligation to pay the interest. For this financial year that interest bill means we have to find $12 billion, and we have to send 70 per cent of that overseas just to pay the interest on the debt. That is $1 billion every single month. That is more than we spend on the entire Pharmaceutical Benefits Scheme. The interest payment on the debt is more than the Pharmaceutical Benefits Scheme spending. The cost we will spend on the Pharmaceutical Benefits Scheme this year is $9.3 billion; our cost to service the debt that these guys ran up is $12 billion this year. These are the problems that we have to deal with.

How are we going to do this? We know what Labor and the Greens would do: they would continue to run up the bill on the national credit card, creating more debt, effectively stealing from our children and passing the bill onto the next generation. And why that is so unfair is that today many of the drugs that we enjoy have a low cost because they are generic, because the patents have expired. Previous generations of Australians and governments paid the high costs for those drugs, which offset the development; now the patents have expired they go back to being generic and they have a very low cost, so we have enjoyed the benefits. Going forward we simply cannot continue to borrow money against our children and run that debt up to pay for the Pharmaceutical Benefits Scheme.

What is this government actually doing with this scheme? We are making some minor changes and some minor cost increases. The concessional co-payments—these are co-payments that we hear Labor complaining about, saying how terrible they are, when they forget that they were the ones who introduced the co-payments back in 1991—will rise by 80c from $6.10 to $6.90. The general co-payment on the PBS will rise by $5 from $36 to $41.90. No-one likes to pay a little bit more, but we owe it to future generations of Australians to make these small payments to ensure that the Pharmaceutical Benefits Scheme stays sustainable. We owe it to our children to make sure they have access to new drugs that are created by the medical profession. We cannot delay access to these new drugs. We want to see new drugs listed on the Pharmaceutical Benefits Scheme as soon as we possibly can. If we do not come up with a few more dollars in the Pharmaceutical Benefits Scheme, the alternative is to hold back on the release of new drugs. Life-saving drugs that could otherwise benefit Australians and drugs that could assist with pain and remarkably improve health and quality of life would be held up. We would not be able to give those drugs to people and, if we did that, we would be dammed. I hope members of the opposition support this bill because they know deep down in their hearts that we cannot keep borrowing money to pay for this. They know that the Pharmaceutical Benefits Scheme has to be sustainable for the benefit of our children and our grandchildren. Therefore, I am very pleased to commend this bill to the House, and I hope that when a division is called we have support from the members of the opposition.

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