Pat Farmer (Macarthur, Liberal Party) Share this | Link to this | Hansard source

In 2007 the Pharmaceutical Benefits Scheme underwent the most significant reform since its inception in 1948. These well-thought-out reforms were developed by the then health minister, Tony Abbott, and were designed to redirect the discounts which had been going to the pharmacists from the pharmaceutical manufacturers. The reforms were projected to save more than $580 million over the first four years, growing to $3 billion over the next 10 years. Two years into the reform process, three independent analyses projected that the savings will be in excess of $6 billion over 10 years. The government’s own recent analysis of the conservative parameters also showed that the savings could range from $3 billion to $5.8 billion. The bottom line is that the full impact of the reforms two years into the 10-year process is unknown but is well in excess of anything the government could have imagined.

The Rudd government has negotiated a memorandum of understanding with one sector of a large industry reportedly holding a policy gun to the sector’s head and has made an agreement on policy initiatives with wide-ranging ramifications for the entire industry. The industry sector included in the agreement has negotiated a policy which looks after its interests while having a damaging impact on other sectors not included in the MOU discussions. The MOU and the policy itself are flawed and dangerous. With the export of jobs overseas impacting access to quality, affordable medicines, the procedure undertaken by the government to reach the MOU is unfair, questionable and anything about consultative. In a nutshell, very poor public policy has resulted.

This flawed policy and the procedural fairness of the policy development need to be examined closely and not just passed unchallenged by the Senate. The necessity to balance the government’s budget should be secondary to good public policy. The Senate should refer the legislation to the Senate committee so that this unusual, unfair procedure for public policy development can be scrutinised. This will allow parties not consulted on the MOU to provide input to avoid the unintended major problems that will result as a consequence of lack of consultation with the parties impacted by the MOU. This is just another example of the ineptitude of the Rudd government, its highly irregular approach to public policy development and the disdain with which it holds our leading export industries. It is a desperate attempt to balance a badly managed budget.