Ms Catherine King (Ballarat, Australian Labor Party, Shadow Minister for Health) Share this | Link to this | Hansard source

I rise to speak against the government's plan to increase the cost of medicines to all Australians that is represented by the National Health Amendment (Pharmaceutical Benefits) Bill 2014. Before the election the Prime Minister promised that he would be a Prime Minister of no surprises, a Prime Minister who would not cut health, a Prime Minister who promised that there would be no new taxes. The Prime Minister did not tell the truth when he said these things. This is a $1.3 billion hit on Australians because of it.

The bill cannot be seen in isolation. It reflects a package of bad health policy contained within the budget and it is a bill that will do a great deal of harm to the health care system in Australia as well as to the health of millions of Australians. Sadly, that is the case with all of the cuts this government is attempting to make as part of its concerted campaign to get rid of Medicare, replacing it with a privatised two-tier American style health care system.

When it comes to health care Australians are being let down by the most uncompassionate government since federation. They have been let down by the most ineffective health minister Australia has ever had. This $1.3 billion increase in the cost of medicine is but one of the changes in the recent budget that the former vice president of the Australian Medical Association, Professor Geoffrey Dobb, described as setting health care in Australia back more than 50 years. There can be no mistaking that the cuts and new taxes in this budget are the biggest assault on Medicare in more than 30 years.

I will now go into some of the bill's details. From 1 January next year the cost of a general prescription was expected to be $37.70, when factoring in the CPI increases that always occur. At the moment it is $36.90. From 1 January 2015 this government wants to increase the cost of general scripts by $5, in addition to taking the rise in the consumer price index. This will bring the cost of a general script to $42.70, which is more than a 15 per cent increase being introduced with no warning from the government and no sound reason as to why this burden should be placed on sick Australians when the money is not even going back into the PBS.

In addition to this the government wants to increase the cost of prescriptions for concessional patients—that is, patients with a Health Care Card, patients who are on a disability pension, carers, and those in the community who have the least capacity to bear this new cost and who often have the highest need to access multiple medicines. At present, concessional patients pay $6, which was expected to rise to $6.10 from 1 January 2015. Instead, the government wants to increase this cost to $6.90. Again, we are talking about people in the system who have the least capacity to pay.

Along with the changes to the PBS safety net these new taxes are expected to raise the government $1.3 billion over the next four years. That is a $1.3 billion revenue-raising measure coming out of the pockets of people managing chronic conditions, dealing with an episodic illness, and trying to prevent poor health by doing things like quitting smoking, for example. These are costs that are particularly callous, when taken with the government's plans to change the PBS safety nets, which will mean medicines are not only more expensive, but the safety nets that are in place to protect vulnerable patients are further and further away, and move further and further away with each year that these measures are in place.

Australians have relied on the PBS in some form since 1948. It is part of the post-war social compact. The scheme began providing a limited number of life-saving and disease-preventing drugs free to the community. The PBS has evolved into a much broader subsidised scheme that reflects the healthcare challenges of the 21st century—challenges such as the rise in chronic disease and the demand for medicines to treat diabetes, reduce the risk of stroke and manage hypertension. The scheme today still provides access to life-saving drugs and to disease-preventing drugs.

I want to address some of the nonsense that I know we are going to hear from the minister in his summing up and that we hear from the Prime Minister in question time—nonsense that they are using to deflect the anger in the community about this measure—and that is to attack Labor and to attack Labor's previous co-payments in PBS. They will have put it into the speaking notes, so you will hear it again and again from the parrots over there, who seem to be struggling a bit to think for themselves or their constituents when it comes to these issues.

In 1990 a $2.50 co-payment was introduced together—and this is an important point—with the pharmaceutical allowance. It was introduced in the context of substantial breakthroughs in new medicines, pressure being placed on the PBS to list these medicines and a desire by the government to allow better access to preventative medicines that, in the longer term, would keep people out of hospital. The revenue raised by the co-payment was designed to go back into the Pharmaceutical Benefits Scheme. What is very important about this is that, when it was originally introduced by a Labor government, the pharmaceutical allowance provided additional assistance to vulnerable Australians to ensure they were not adversely affected by the co-payment. We were mindful of that.

When the pharmaceutical allowance was introduced in 1990 it was $2.50 per week, the equivalent of 52 co-payments per year, which meant that a script per week was covered by the pharmaceutical allowance. Today the pharmaceutical allowance is at $6.20 and applies to eligible income support recipients, including people receiving the sickness allowance, parenting payment for singles under the age pension age, disability support pensioners under 21 with no dependent children; recipients of Abstudy, Newstart allowance, parenting payment partnered, special benefits or widow allowance; or Australians receiving the youth allowance with a temporary illness or medical condition.

It is important to understand that at the time Labor always increased the pharmaceutical allowance in line with increases to the concessional PBS co-payment. This nexus between co-payment increases and the pharmaceutical allowance increases was broken by the Howard government in 1997, when the current Prime Minister was health minister, when the PBS concessional co-payment increased to $3.20 but the pharmaceutical allowance remained at $2.70. That nexus between the co-payment and the pharmaceutical allowance was broken. In 2002 the Howard government again made changes that impacted on disadvantaged, vulnerable patients, tightening the PBS criteria so that a current Medicare card or veterans repatriation card was required to be presented to a dispensing pharmacist in order to obtain the pharmaceutical benefit.

The last time the PBS co-payment was increased in the way we are seeing today was by the Howard government in 2005. In 2005 the Howard government increased the price pensioners pay for medicines from $3.70 to $4.60—a 24 per cent increase. In addition to this, the cost of general scripts rose from $23.10 to $28.60. The pharmaceutical allowance was not increased for concessional patients or people receiving the pharmaceutical allowance at that time.

There is evidence that when these increases were introduced in 2005 pensioners' use of some essential medicines fell by as much as 11 per cent. Reports at the time suggest the biggest drops were in medicines to prevent ulcers, osteoporosis, asthma and dangerous blood clots. Research conducted by the University of Western Australia and presented in 2009 clearly demonstrates that, because of this cost increase by the Howard government, the use of proton pump inhibitors, antipsychotics, statins and antiepileptics all decreased. There is no reason to assume the same will not happen again this time. Pharmacists are already reporting that patients are asking them which of their medicines it will be safe to drop. GPs are expressing concerns that patients, as a result of these changes and the GP tax, will not fill their scripts. Not only are these new costs unprincipled and callous; they will hurt people in a disproportionate way and hurt people who are already struggling to meet their healthcare costs.

The COAG Reform Council report released in June this year found that 8.5 per cent of people given a prescription by their GP delayed or did not fill it due to cost. I note again with some concern that the COAG Reform Council is another victim of this government's cuts, ill-conceived policies and broken promises, and again there is a lack of transparency from this government in being held to account for the impact of the decisions that it is taking. The same COAG Reform Council report also found that up to 13 per cent of people in some parts of the community put off seeing a GP or do not seek medical care due to costs.

As Associate Professor Brian Owler, President of the Australian Medical Association, points out, the government wants to impose new costs at multiple points in the healthcare system, and these are excluded from the Medicare safety net. A patient who is sick and needs tests, repeated GP visits and medication during an episode of illness would face an accumulated financial burden. Overseas experience has shown that this is a significant barrier to care for people in disadvantaged groups. Doctors know that medication noncompliance, including not filling prescriptions, has serious consequences for health care. Research shows that an increase in patient share of medication costs is significantly associated with a decrease in adherence. So it is not merely the Labor Party that is warning of the impact of this callous budget. It is also a warning being sounded by Australia's most senior doctors.

Unlike the government, who has taken these decisions without any consultation with health professionals, Labor does and will listen to the experts. We accept the science. We listen to doctors, nurses, allied health workers, pharmacists, academics and health professionals, and we do take their advice. We take their advice and that is why we will not be supporting these bills.

In his second reading speech, the Minister for Health said that this $1.3 billion hit on sick Australians was necessary to ensure that the PBS grows in a sustainable way. That is simply not true, and the minister knows it. The complete nonsense of the minister's statement is that if the government's actual intention was for the PBS to be growing in a sustainable way and for this measure to be used to assist the PBS then the government would be investing this money directly back into the Pharmaceutical Benefits Scheme. It is not. Instead, the government is putting the money into the Medical Research Future Fund—but the minister refuses to guarantee the government will not shrink from or shirk its responsibilities to continue funding medical research at the same level in future through the NHMRC should it be re-elected.

The fact is that the PBS is growing in a sustainable way. In fact, recent budget updates have shown that the PBS is growing at a slower rate than it was expected to do and that it is sustainable. The government's budget papers show that. It is no accident that this has happened. It has occurred because of measures Labor took in government to make the PBS sustainable, which were measures opposed and campaigned against by those opposite. We did that without punishing patients. The PBS price disclosure reforms, overseen by Labor during two terms in government, have ensured that the PBS is sustainable and have delivered billions of dollars in savings. At the moment, the government spends around $9 billion per year on the Pharmaceutical Benefits Scheme. Accelerated price disclosure, something I know that those opposite campaigned against, has slowed the real rate of PBS growth and put the PBS on a sustainable footing.

In Labor's last budget, these were changes that were expected to deliver more than $1.8 billion in savings. Taking the package announced in 2007 to 2017-18, the savings are closer to $20 billion. These are savings that this government should be using to ensure that the new drugs of the future and life-saving drugs—for example, Kalydeco—are listed as quickly as possible once they have been recommended by the Pharmaceutical Benefits Advisory Committee. But that is not what we are seeing from this government. Consistent with its approach to governing so far, especially when it comes to health, this government is saying to patients, 'You pay more. That's what we want you to do.' This is regardless of their capacity to pay and whether they are a pensioner, a student or someone on a very low income with a number of dependent children. This government simply does not care—it has no compassion. Because it has no compassion, it is saying, 'You pay for these things. You pay for your own health care.' That is what it is doing in these budget measures.

In government, Labor did use the savings delivered through the PBS reforms to ensure that new drugs were listed on the PBS as soon as they were recommended by PBAC. We did so without gutting Medicare and without forcing Australians who could not afford it to pay for more for their medicines. Labor cannot support this inequitable bill, particularly when it is taken with the government's plans to change the PBS safety nets. What this government is trying to do with this bill is consistent with what it is trying to do across the health system. It picks Medicare apart at the seams and seeks to privatise health care in Australia, creating a two-tiered American-style health system and transferring more and more costs directly onto patients.

If this government had any compassion, it would at least consider exempting the most vulnerable Australians from some of its harshest measures, but it will not even consider that. At present, the PBS safety net threshold for general patients is at $1,421. Once the PBS safety net is reached, general patients only pay $6 for each prescription. For concessional patients, the PBS safety net is $360. Concessional patients pay no additional out-of-pocket costs for medicines once the safety net is reached. PBS safety net family arrangements also apply, whereby a family can combine PBS amounts, which can mean that at present families meet the safety net much sooner. For the PBS safety net's purposes, a family comprises a couple legally married and not separated, a couple in a de facto relationship, with or without dependent children, or a single person with dependent children. This bill proposes to increase the PBS safety net by 10 per cent plus annual CPI indexation on 1 January each year from 2015 to 2018. From 1 January 2019, the government states that only CPI indexation will apply. But it is fair to be sceptical of the government's promise here when it has broken every single promise it made when it comes to health care.

In addition to increasing the PBS safety net for general patients, this bill proposes to increase the PBS safety net for concessional patients. The bill proposes to increase the concessional PBS safety net by two prescriptions each year from 1 January 2015 to 2018, making it harder and harder for patients to reach that safety net. That means not only that medicine becomes more expensive for the most vulnerable who are at their most vulnerable—because that is what the safety net is in fact there for, to protect Australians who are in very vulnerable situations, who have expensive medications and who are often on multiple medications—but also that the safety net is going to get further and further away and more difficult for them to ever reach.

This is particularly troubling when taken with the evidence from the COAG Reform Council last month that, as I have said, 8.5 per cent of people given a prescription by their GP delayed or did not fill that script due to cost. It is worth considering the circumstances that a pensioner faces because of this bill, particularly in the context of other cuts within the budget and other taxes and impositions that this government proposes. In addition to paying $6.90 for every script, which is a 15 per cent increase over the current cost, pensioners and other Australians with a health-care card will need to find the money for 62 prescriptions before they reach the safety net. That is $427.80 in any one year and it will continue to go up and up, well beyond the rate of inflation every year. By 2018, pensioners and other Australians with a health-care card will need to fill 68 prescriptions before they reach the safety net. In addition to these changes, the government wants some of the most vulnerable Australians to pay a $7 tax every time they go to the doctor to get the script in the first place.

This measure is not means tested. It applies to every Australian and is only capped at 10 visits for some patients. For a single parent with three children, this new tax would be applied 40 times before the cap is reached. For a pensioner couple, it would be applied 20 times before the cap is reached. That is 20 times per year—not 20 times and then you are done; it is 20 times per year that you have to reach that cap. That will mean that pensioners, who are almost all bulk-billed for every visit at present, will be paying at least $7 for every doctor visit up to 10 visits, plus, by 2018, more than 15 per cent more, increasing each year up to 68 scripts before the safety net is reached.

And what of a pensioner or young family who ends up in hospital? We know, of course, from a study from the University of Sydney that the people who will be most adversely affected by these changes are young families and those who are over 65. If people do find themselves in hospital they will find fewer beds and fewer services available, because the Prime Minister is cutting—it is in their own budget papers—more than $50 billion out of the public hospital system. That is the equivalent of cutting one in two hospital beds, one in five doctors and one in three nurses. It is the lowest share of Commonwealth funding for hospitals since the Commonwealth started funding hospitals after World War II.

Such is the absolute arrogance of this government and the Prime Minister and the Minister for Health that they are already advertising that this measure is in place. The Department of Human Services website states:

From 1 January 2015 the Pharmaceutical Benefits Scheme (PBS) co-payment and Safety Net threshold amounts will increase …

There is no caveat, no disclosure that there is in fact this thing called a parliament and this other part of the parliament—not a chamber that I am in—called the Senate and that the measure is required to pass through both of these chambers. The government arrogantly has allowed its own departmental website to state that this measure is already done and dusted, when it knows that it has to negotiate this with the crossbenchers, has to negotiate this with other political parties, some of whom have already indicated that they will not support this proposal. What absolute arrogance from this government, blithely out there saying, with no caveat at all, that this measure will be put in place.

It is the same arrogance the government demonstrated—adding unnecessary angst to those already worried about paying for doctor visits—by announcing on the Medicare hotline that the GP tax would be in place from 1 July 2015. Offices across the country were inundated with people who got that message on the Medicare hotline, and it was left to many of us to reassure people that we would be blocking that measure and that the government had no right to put that on the Medicare website without the caveat that in fact the measure was required to be debated by the parliament.

It is worth also taking some time to look at where this money is going. It is not going back into health care. It is an absolute and utter nonsense if the government is trying to argue that it is. The $1.3 billion the government wants to take from some of the sickest and poorest patients in this country is to go towards the Medical Research Future Fund. We support medical research. We did so in government, and many of the new facilities that are right across the country—millions of dollars to actually allow medical research facilities to have the state-of-the-art labs, state-of-the-art conferencing facilities, capacity to work across sectors with universities, with public hospitals and private hospitals, to do research has come about because of substantial investments that Labor made in medical research facilities. I have visited many of them, and they are fantastic facilities. We are seeing for the first time a substantial increase in the collaborative work that is being done across those sectors in research. So, we support medical research. We supported it in government through record levels of investment in medical research infrastructure and medical research funding, and we especially funded the infrastructure that supports medical research.

To be successful, medical research needs the support not just of those within the healthcare research community and within the health research community or the medical research community or clinicians. It also needs the support of mathematicians, administrators and physicists. The government does not support that role and has cut some $420 million from science programs as well as $80 million from Cooperative Research Centres, six of which are in the health area—from autism to hearing to a range of other really important research initiatives in health. That work is really designed around translational research and getting that research directly into clinical care, how patients experience and actually have better health outcomes.

If a standalone medical research fund to support medical research is to be established it needs to be done properly, and it should never be done on the back of sick people. How uncompassionate can you be that you think it is appropriate to pit sectors of the health system against each other, to pit doctors and people who are caring for sick patients against the medical research community in terms of financing medical research? And how on earth can you think it is a compassionate measure to make, that you would actually think you could do it off the back of sick people?

The government keeps saying over and over again that this is really important to finding a cure for Alzheimer's. I have a particular personal interest in that space. The reason people get diagnosed is that they go to a GP. You are putting a barrier in the way of people accessing a GP to get the diagnosis they need to access the care they need. You do not do that in order to fund medical research. It is bad policy, and it is wrong policy. It is completely wrong policy, and the government should step away from it. If it wants to fund medical research properly it should have a conversation with us about how we do that. The significant report that was undertaken had some hints about that. It did not say you do it off the back of sick people. It did not tell you to do it off the back of sick people and people who are trying to access medicines. It is just plain wrong.

I want to talk a little bit more about the safety net and some of the current concerns from consumer groups. In March this year, for example, the Consumer Health Forum released its report into out-of-pocket expenses, Empty pockets. The Consumer Health Forum represents the interests of Australian health consumers. Its report found:

Increased up-front payments would also present an additional access barrier for people who may have adequate incomes but are experiencing cash-flow problems. Given that periods of illness often coincide with reduced earning capacity and other additional expenses, high upfront costs for unexpected illnesses can impact adversely on people, even when rebates are provided at a later stage. This can lead to people delaying or failing to access the care they need, resulting in the development of more serious health problems (which are often more costly overall to the community).

The Consumer Health Forum report survey found:16 per cent of Australians surveyed reported delaying access to treatment due to cost issues; 29 per cent of Australians reported not accessing dental care in the past year due to cost; 20 per cent of Australians with a chronic condition reported not filling a prescription in the past year due to cost issues; 21 per cent of Australians with a chronic condition reported delaying or avoiding seeking medical treatment due to cost issues; 25 per cent of Australians with a chronic condition reported not having a recommended test or follow-up treatment due to cost issues; and overall 36 per cent of Australians with a chronic condition reported experiencing a cost barrier to care in the past year.

Any changes to the PBS have to be done with the interests of protecting vulnerable Australians in mind and this bill simply does not do that, particularly in the context of all the other cuts and new taxes proposed by this government. If the government was serious about making the PBS sustainable, the $1.3 billion the government hopes to take from sick patients through this bill would, of course, be going back into health care, but it is not. And if the government were serious about making the PBS and the health system more sustainable, it would not be making callous and inequitable changes that are going to cost the health system more in the long run. The government has not considered what the implications of people not complying with their medicinal regime will be or what the cost will be when patients end up in hospital because they could not afford to see their GP and could not afford to fill the prescriptions provided by their doctor.

As I have already outlined, Labor did make changes to the PBS in government to ensure its sustainability. These changes were necessary because there is a pipeline of new drugs that will be coming before PBAC, many of which are likely to be recommended by PBAC, and, after that point should they cost the government more than $20 million per year, the government will make a decision about how they are funded. Very important drugs are coming down the pipeline and that it why Labor moved to ensure that the PBS was sustainable.

This bill does increase the cost of medicines for all Australians. It impacts on the most vulnerable in our system and it is part of the government's efforts to dismantle universal health care as we know it. It represents the government's decision to transfer costs onto every Australian for their health care. It represents higher costs of living for every single Australian, whether they are low-income, middle-income or the most vulnerable in our community. Australians are being let down by those opposite when it comes to our healthcare system. Increasing the cost of medicines, while at the same time charging people a $7 dollar tax every time they visit the doctor and slashing funding to our hospital system, is not the way you reform our healthcare system.

Not only are those opposite making medicines more expensive, they are putting the safety net further out of reach. It is lazy policy. It is just another broken promise from a government who wants to rip Medicare apart at the seams. Labor will not support changes that price Australians out of health care. We will not support this government's unfair slug on sick Australians. We will not support this bill, but we will stand up to the Prime Minister's attack on the most fundamental system we have in this country, and that is the universal system that is Medicare.

Bob Baldwin (Paterson, Liberal Party, Parliamentary Secretary to the Minister for Industry) Share this | Link to this | Hansard source

I rise to speak to the National Health Amendment (Pharmaceutical Benefits) Bill 2014. This government is going to increase modestly the co-payment contributions by people in the Australian public. It is amazing to hear Labor when they want to increase a co-contribution, they call it a co-contribution and say it is for the benefit of the community, but, when anyone else does it, it is a medical tax. Such is their hypocrisy. Be that as it may, and focusing on the key aspects, the government has worked out that these contributions will generate savings of around $1.3 billion over four years. But we still expect the amount of money that the government spends on PBS to grow from $9.2 billion in 2013-14 to $10.2 billion in 2017-18.

Let me be very clear: we are not cutting funding to the PBS. The other thing I need to make clear is the amount of contribution the government makes to individual drugs that are listed for the benefit of Australians. The co-payment for general patients is currently $36.90 and will increase by $5 in addition to the CPI, but on average general patients use two PBS subsidised prescriptions a year—which will result in the average user contributing an additional $10 a year. For those who are on a concessional rate, including veterans and their dependants under the RPBS, the co-payment, which is currently $6, will increase by 80 cents in addition to the CPI. Of the Australian population 8.3 million out of 23 million have a concession card and people with concessional benefits use on average 17 prescriptions a year and under the new arrangements will pay an additional $13.60 per year for their subsidised medicines.

Some of the medicines that we have are massively subsidised by the taxpayer under the PBS, and so they should be. I will come to individual examples shortly. This week is National Diabetes Week, running from 13 to 19 July. It is of particular interest to me and it is something that is very close to me. In my electorate of Paterson there are roughly 3,000 people living with diabetes. In fact, there was a report showed that around 6.2 per cent of the population of Paterson has diabetes. This is well above the average in Australia for diabetes. I need to look at some of the medicines that are provided and supported. Let me give you an example, Deputy Speaker, of some of the insulins: their average cost is around $260 per prescription. They are provided to those on a concession for $6 currently, but it will go to $6.80 and to general patients for $38, which will go to $42.70.

Why diabetes is of particular interest to me is that this year, in January, I lost my brother Bill to diabetes. I watched what type 2 diabetes can do to people. It progressively ate away at his body. First his kidneys went, so then there was dialysis. Next gangrene crept up each leg and they progressively amputated each part of his leg. Finally his eyesight went, then problems with his skin and other conditions kicked in. It was a sad relief when he passed away in January this year—because I do not think he could have taken any more. The only thing he seemed to keep intact, aside from his ginger hair, was his rapier sharp wit. He will be sadly missed. So diabetes is something that resonates very strongly with me and that is why I think it is very important that we do everything we can to work with it.

But one of the biggest problems reported in medical studies is that those with type 2 diabetes refuse to recognise in themselves the signs and symptoms of type 2 diabetes—and ignore it. They ignore it until it is too late. What is even more concerning is that, once diagnosed, people do not follow the diet and exercise regimes that are laid out for them, which sees their quality of life deteriorate further.

A recent report about stroke highlighted that my electorate of Paterson features in the top 10 in Australia in two of the four major stroke risk factor categories. The report says that some 3,569 people are living with the effects of stroke and that around 427 people are added to that each and every year. (Quorum formed) Strokes are a major concern and Paterson is a hot spot. That is only going to be exacerbated by the fact that, as another recent report showed, Paterson has one of the highest rates of increase in its age demographic. These three diseases, or afflictions, are the most critical for us to address—diabetes, stroke and dementia. As I said earlier, these afflictions impose a high cost. In the Port Stephens area of my electorate, the over-65 population is set to almost double in the next 20 years. That will have an impact not only on aged-care services but also on the requirement for pharmaceuticals in the region. So making sure that we have the finances available—the capacity to list more and new drugs—to help people is critical.

I recently saw a list of the top 50 generic drugs on the PBS ranked by cost to government. The most money is spent on cholesterol drugs. We spend $1.2 billion of Commonwealth money in subsidising medicines for cholesterol. We spend nearly $700 million a year as a government on drugs for the treatment of bipolar disorder or schizophrenia. We spend $191 million on antidepressants, $242 million on blood pressure medications, $121 million on bowel cancer drugs and $218 million on diabetes medications. For stroke, it is around $320 million. These are only those drugs that are listed in the top 50 drugs being dispensed. We spend $172 million on drugs for herpes. All of this emphasises how many in the community are reliant on such medications and the extremely high cost to the government of our contribution, through the PBS, to supporting individuals. Two other types of drugs on which we spend a lot are reflux drugs and medications for rheumatoid arthritis, both of which come in at well over $400 million.

People need to understand that the cost of some of these drugs can be up to, say, $2,000. You can pay $3,900 for a leukaemia drug, for which there were 24,572 prescriptions last year. But the cost to the government was $97 million. That is a lot of money, but spending money on treating people is money well spent—nobody begrudges a cent of it. In fact there are many more drugs that could be listed and supplied to people to help give a better quality of life or, in particular, to extend life. Having lost a number of friends and family members to various diseases in the past year or two, I understand the importance of providing these drugs, getting drugs through the TGA in a respectable time and making sure that the drug companies are providing them at an affordable cost to the government, so that they can be supplied to the community.

This week is National Diabetes Week and my take home message is this: observe the signs and symptoms of diabetes. If you are diagnosed with it, take note of the action plans that are laid out for you in relation to personal health care, exercise and diet to mitigate the effect on your body. In relation to stroke, there are so many things that can be done to avoid stroke such as increasing our circulation, and avoiding smoking and excess eating. Both of those things can have an effect on an individual and increase their susceptibility to those two diseases. The other affliction, of course, is dementia—one of the increasingly-diagnosed illnesses in our community—for which, as yet, there is no cure. I am hoping that some of this money that is raised, saved and put away into the medical research fund actually does find the cure for dementia. (Quorum formed)

Stephen Jones (Throsby, Australian Labor Party, Shadow Parliamentary Secretary for Regional Development and Infrastructure) Share this | Link to this | Hansard source

  The National Health Amendment (Pharmaceutical Benefits) Bill 2014 is a part of the government's plan to increase the cost of health services for all Australians. It includes the $7 GP tax; the $55 billion in cuts to hospital funding, which have been roundly condemned by every single premier and chief minister, the AMA and every health association in the country; and a 13 per cent increase in PBS out-of-pocket costs. Labor will not be supporting the bill. Let me explain why. It increases the PBS charges from 1 January 2015—for general patients by $5 to $42.70, and for concessional patients by $0.80 to $6.90. These changes are above and beyond the usual CPI increases and indexation. On top of this, the concessional PBS safety net threshold is increased by two prescriptions per year and the general safety net threshold is increased by 10 per cent each year for four years. The bill raises $1.3 billion over four years and diverts money straight from people's pockets—the pockets of sick people—into the Medical Research Future Fund. We simply cannot support the bill.

In question time today, we heard the Deputy Prime Minister say that costs would always be lower under the coalition. Clearly he was not talking about the cost of health services. This bill introduces a 13 per cent increase to the cost of prescriptions on top of the $7 GP tax. This means that a patient is lucky to pay just less than $100 in out-of-pocket expenses for a trip to the doctor that results in two prescriptions and a blood test. Nobody can claim that that is lower than under Labor. The Treasurer famously said the GP tax payment would be about the equivalent of a couple of beers or one-third of a packet of cigarettes. I know the Treasurer has expensive taste but you would struggle even in this town to find a beer that cost you 100 bucks. Clearly, the Treasurer is out of touch and these propositions are out of touch.

For Australians living in the country, in regional areas such as the one I represent, where bulk-billing rates are lower and it already costs more to travel the greater distances to see your doctor, the costs will be even greater. For Australians with private health insurance cover, this measure comes on top of the largest increase to private health insurance premiums that have been approved by a government in living member. One of the health minister's first acts on coming to government was the approval of over a six per cent increase in private health insurance premiums. It is simply not fair and Labor cannot support it.

The government has a package of measures which is deliberately designed to drive up the cost of health care for every day Australians. We saw during the MPI debate today the member for Lyne concede that exact point. The measures are designed to drive up the cost of health services, of visiting a GP, because if you do that you are going to dissuade people from going to the doctor.

The government could do well to remember the lessons of history, because there are very few social programs in this country that enjoy the kind of support that the Pharmaceutical Benefits Scheme enjoys. You might remember, Mr Deputy Speaker, that the Curtin government first attempted to introduce the Pharmaceutical Benefits Scheme in 1944, and the conservatives at that point in time opposed it. In fact, the then Country Party premier of Victoria assisted in taking the bill to the High Court, and the High Court knocked it off. That led the Curtin government to introduce a referendum which would permit the federal passage of the Pharmaceutical Benefits Scheme legislation. The conservatives fought the scheme then and they are fighting it again today, because, frankly, deep down they do not support it. They would do well to remember the fact that there are very few schemes such as the PBS which have been effectively endorsed in a referendum.

When the Prime Minister promised on ABC radio on 5 September, just days from the federal election, that he could assure the listeners to that program that there would be no cuts to health, those listeners could not have imagined what would follow. Not only has the health budget been slashed to the tune of $50 billion; this bill raises an extra $1.3 billion from the pockets of ordinary Australians—on top of other measures such as the GP tax, which raises billions more. It hurts every Australian. It is unfair. It is a breach of trust. We simply cannot support it.

I have said in previous debates on related issues that, on this particular issue, The Nationals are missing in action. When I look at the speakers listed for this debate, an honourable exception is the member for Lyne. He is stepping up to the plate. He will be speaking on this bill. And I am going to be listening very carefully to his contribution.

Michael McCormack (Riverina, National Party, Parliamentary Secretary to the Minister for Finance) Share this | Link to this | Hansard source

It will be a good one.

Stephen Jones (Throsby, Australian Labor Party, Shadow Parliamentary Secretary for Regional Development and Infrastructure) Share this | Link to this | Hansard source

It will be. I hope that, when the member for Lyne makes his contribution, he will move an amendment to this legislation—because he ought to. If he is going to keep faith with the commitments that he and every other National Party member made when they went to the polls in 2013, he should either move an amendment to this legislation or vote against it. The Nationals should either stand here and move an amendment to the legislation to introduce the policy in the national policy platform that they took to the last election or vote against it. When they went to the polls, they led electors to believe that they were actually going to lower the PBS safety net—and that is exactly the opposite of what this legislation does today.

Mr Deputy Speaker Broadbent, I encourage you and other members to refresh yourselves on what they took to the polls in 2013. Go to page 51 of your policy platform, have a look at it and remind yourselves of what you promised to do when you went to the polls in 2013. I ask you to do that before you make any contributions to this debate. I am looking at the member for Lyne, who is courageous enough to contribute to the debate. There are many other National Party members who have not had the courage to come in and contribute to this debate. But I ask the member for Lyne to look at the policy that they took to the last election and either stand here and speak and vote against this legislation or move an amendment to give effect to your policy platform. That would be the honest thing to do; that would be the right thing to do. I am looking forward to listening to the member for Lyne's contribution and his amendment to this legislation so that he can keep faith with the people who voted for him and so that he can keep faith with all of those other National Party members.

I think there are some very good people within the National Party. When I read their policy platform, I thought, 'There's some pretty good stuff in here.'

Michael McCormack (Riverina, National Party, Parliamentary Secretary to the Minister for Finance) Share this | Link to this | Hansard source

You were looking at it for ideas, were you?

Stephen Jones (Throsby, Australian Labor Party, Shadow Parliamentary Secretary for Regional Development and Infrastructure) Share this | Link to this | Hansard source

There is some very good stuff in there which I would be proud to put my name to. In fact, I have put my name to it. The problem with it is that on each and every occasion that the National Party have had to put their policy into action, they have been done over by their coalition partners. The only other explanation for it is that it was a fraud: they actually did not believe in, and had no intention of implementing, the policy prescriptions, the policy promises, in their platform when they went to the election. They have either broken their promise and always intended to, or they have been done over by the Liberals and have been ineffective in their joint party room. So it is no surprise that all of these National Party members have decided not to step up to the plate and speak on behalf of the coalition for this legislation. The reason is that they simply cannot support it. They cannot support it because they campaigned against it in the last election.

In her contribution to this debate, the shadow health minister, the member for Ballarat, spoke with great passion and at great length about the impact of this legislation. She referred to the COAG Reform Council; that is the council the coalition have abolished because they did not like the message that it was delivering. What will be the last report of the COAG Reform Council, which was released in early June this year, found that 8.5 per cent of people in 2012-13 were already delaying or failing to fill a prescription due to its cost. In disadvantaged areas that figure was higher: 12.4 per cent of people in disadvantaged areas are already not filling their prescriptions because they cannot afford to. In Indigenous areas the figure is higher again, at 36.4 per cent. So 36 per cent of Indigenous Australians who have gone to their doctor and had a prescription given to them to deal with their health concerns or problems by a medical practitioner have not taken the next step of filling that prescription, because they cannot afford to. What on earth is going to happen to that group of people if we are ever unfortunate enough to have this legislation pass through this House and the other house? I am confident that it will not pass through this House because I am confident that the National Party MPs are going to stand here and vote in accordance with not only their conscience but their policy. Should that not happen, and we have to rely on members in the other place, I hope they will do the right thing, because it is those groups of people who will suffer.

The health system will suffer as well. When you go to your doctor and then fill a prescription for a health problem, it is the medications you take that stop a chronic condition becoming an acute condition and an acute condition requiring you to present yourself to a hospital. We all know that hospital is the most expensive place for a health condition to be dealt with.

The health minister has claimed that the PBS costs are spiralling out of control. We know that that is not true. We have seen, and I spoke on this earlier, significant savings that the government is now enjoying due to reforms that were put in place by the previous Labor government. I have in mind the accelerated price disclosure as just one example. It is a measure that Medicines Australia and others within the medicines alliance have pointed to and said, 'This is the single measure that is generating the largest amount of savings in the coalition's budget.' I would expect members on the other side of the House to pay tribute to the Labor government for assisting them on this issue, but in not one contribution from government members has it been mentioned.

If this measure is designed to make a co-contribution to the cost of the PBS, why is the government siphoning off the money and sending it to the Medical Research Future Fund? If the money was not going to the medical research fund and was going to help fulfil the cost of the PBS you might say, 'We disagree with it. We think the cost burden is going to be felt hardest by the people who can least afford it, but we can understand the logic.' But that is not what is happening. If the purpose of this is to send a price signal, you have to ask yourself whether those on the other side truly believe that GPs around the country are writing off scripts on a whim without any concern for the clinical needs of their patients. I for one do not believe that the vast majority of our GPs are that negligent.

Labor cannot support this bill. We see this as yet another attack by the coalition parties against the excellent universal health system in this country. I look forward to listening to the contributions of National Party members. I hope they do the right thing by the people of Australia.

David Gillespie (Lyne, National Party) Share this | Link to this | Hansard source

I rise to speak on the National Health Amendment (Pharmaceutical Benefits) Bill 2014. I listened with some withheld mirth to the baits put out by the previous speaker. I look back and wonder why the other side objects to this increase in the PBS co-payment. I do not quite understand it, because my understanding is that they introduced the co-payment system. They even introduced the co-payment for pensioners, in 1991. Earlier than that, in 1985, they had doubled it from $5 to $10. Those opposite say it is a problem for us to put $5 onto the co-payment, but they increased it by 100 per cent. We are taking it from $36.10 to $41.10.

What has happened since the coalition came to power is that 181 medicines have been listed on the PBS. The PBAC recommended in March this year another $550 million worth of co-payments. New listings that have not yet been considered amount to $3.6 billion. Everyone wants their medication and the latest cutting-edge drugs and they expect to government—hey presto!—to provide them. But when you are in government and making responsible decisions you have to juggle things. That is exactly what this bill is doing. Every time a prescription is written there is a 60 per cent chance that the government on behalf of taxpayers will be paying for a large component of it. The average cost of a script is $43.50. That does not sound much, but in 2013-14 it will amount to $9.2 billion.People have become very blase about billions of dollars being mentioned in a budget, but $9.2 billion is a huge amount of money when you consider, 10 years earlier, it was 80 per cent less than that. With $3.6 billion in new drugs waiting to go through the PBAC, with $550 million worth approved just in March this year and with the 181 new listings on the PBS, you can understand why the system is under pressure. When you are a responsible government, you have to put initiatives in place to juggle those responsibilities. For consumers, once the cost gets above $41.50 some of these subsidies can be low for a $50 or $60 drug, but some of them are $8,000 per script.

It is because of amazing new drugs that our quality of life and our longevity have increased. It is not just procedures and operations and better diagnoses; there are better drugs, amazing drugs and drugs that extend life and improve the quality of life. You only have to look at drugs that everyone wants and takes for granted that, in Australia, are reasonably accessible to everyone through the PBS. These changes are designed to defend it so that you can get your heart drugs, blood pressure drugs, drugs for diabetes and cancer, particularly breast cancer and prostate cancer, and even drugs for hepatitis C that were not even available when I qualified as a specialist and are now mainstream. They cost thousands of dollars. Hepatitis C treatment 18 months ago cost $17½ thousand, yet the payment by concession card holders was only $6 a script. That is an amazing system, and these changes are aimed at defending that system and making it sustainable.

To put things in perspective, a concession card holder at the moment pays $6 for a PBS script. We are raising that by 80c. That is a very moderate increase and we will apply CPI. The average concession card holder receives 17 scripts a year. That is a sum total increase of $13.70. That is reasonable. For general patients—those who are not on concession—the $5 increase is, again, quite reasonable, as opposed to what the ALP did in 1985. They increased it 100 per cent, from $5 to $10. For a general patient, some of the common drugs do not even cost that much, so the PBS does not even require a co-payment; you are just paying the cost of the drugs.

For those who do have a lot of medications, it can be a challenge, but we have this thing called the safety net, which, again, we are keeping to a sustainable level. If you are a concession card holder, over four years you will be paying for two more scripts per year. That is a very gradual increase. It means that the safety net benefit will rise from the mid-$300s to $421.60. If you are a general card holder, that means you may pay $1,421. After that your costs, which co-contribute to the PBS system, will revert to $6 a script. That is quite reasonable. There are plenty of people who can afford that marginal increase when you consider what is coming down the pipeline. Drugs are being listed all the time which, when they first come out, are ridiculously expensive. We, as a responsible government, as I said, are putting in place measures that will make the whole system sustainable.

We could complain every time costs go up. As I have spoken about before, the government is not a magic pudding. We could cut everything. In fact, when we came into government and became responsible for how the Treasury is managed, there was almost $50 billion in deficit that the ALP, the Greens and the Independents created. If you keep having perpetual deficits like the countries of Europe and some countries in Asia, fine, we can go along and keep borrowing money and paying for everything, but then we will end up in the same situation as them, with huge debt that is perpetually being serviced by interest payments. At various times in recent world history, this has almost led to the collapse of the financial system. I do not want to go there. No Australian wants to go there. Australians want a safe, sound, secure financial system, and part of that is having a government that is not burdened with excessive debt.

These changes are moderate. They represent an increase, but we have a wonderful PBS system and this bill will help keep it sustainable. I do not think these changes are excessive. They are not cruel. An 80c increase per script for those who are challenged by their financial situation is a reasonable balance. We are not asking for anything outrageous. I commend good, common-sense measures to the House and support this bill.

Jill Hall (Shortland, Australian Labor Party) Share this | Link to this | Hansard source

I always love following a member from the other side in debate. The member for Lyne is a former gastroenterologist to whom I am sure 80c is not much or to whom $5 is nothing—but it just shows me how out of touch members on the other side of this House are. Sure, it is nothing to a gastroenterologist. Sure, it is nothing to a member of parliament. We can afford those increases, but, if you are a pensioner who takes 17 different types of medication—and, believe me, that is not unusual—80c is a significant amount. It is all very well to say, 'It's only 80c. It's only $5. The GP tax is only $7. Changing the way pensions are indexed shouldn't matter too much.' This shows just how out of touch the members on the other side of this House are and how they do not understand how pensioners and how families fight each and every day to balance their budget and make their income stretch to cover medications, visits to the doctor, putting food on the table and sending their children to school. Members on the other side of this parliament make a hoo-ha about the schoolkids bonus, saying it is absolutely useless. They say that people squander the money. People in my electorate use it to buy shoes for their children and to buy books and all of the things that students need. To the people of my electorate, these are not small amounts of money; these are amounts of money that make it possible for families to survive.

The pharmaceutical benefits scheme co-payment will increase the price of prescription medication by $5 for general patients—up to $42.70 for a script—and from 80c to $6.90 for concessional patients. There are only five electorates in Australia that have more people over the age of 65 than the Shortland electorate. Coming from an electorate that has one of the oldest populations in this country, I understand how hard it is for pensioners. Each and every day, they come and tell me how difficult it is. This is, purely and simply, a cost-cutting measure. It is expected to raise $1.3 billion over the next four years. This is a minuscule amount in comparison to the damage that it is going to cause to the people that have to buy medicine.

In early June, the COAG Reform Council found that 8.5 per cent of people in 2012-13 delayed or did not fill their prescriptions due to costs. In disadvantaged areas, this was 12.4 per cent. I know from the people who visit me in my office that this is the case. I have had families come to me who have two or three children. When two of their children get an infection, they have to share the medication because they cannot afford to buy two lots of antibiotics or whatever the medication is. That is very bad health practice. It is not in the interests of the person that is sharing that medication, and it is not in the interests of the long-term health and wellbeing of our society.

The last time a Liberal government increased a tax on medicines was in 2005. I was a member of this House at that time, and I know how hard it was for pensioners in particular and for families when that increase came into being. The rate of prescriptions being filled fell by 11 per cent. You can look at that as being a cost-saving measure, but I look at it as being a measure that can lead to an increase in health costs. If a person does not take their blood pressure medicine, they can end up having a stroke or a heart attack. If a person does not take an antibiotic for an infection, they can end up in hospital. That is an even greater cost to the health system. Sometimes, measures that are put in to cut costs are counterproductive. This legislation is driven by an ideological campaign to get rid of universal health care, to create a two-tiered health system and to create a system of user pays. This government and those on the other side of the House have never been comfortable with Medicare and bulk-billing—because we have our GP tax that they are pushing as well—or with any form of what they would call socialised medicine, with socialised medicine being a system where the people who are on lower incomes and have less disposable income are assisted. The Pharmaceutical Benefits Scheme has been one of the most widely applauded schemes throughout the world. This is undermining the operation of that scheme.

This government, under Tony Abbott's leadership, will unfairly slug sick Australians. Before the election he said there would be no cuts to health or education, and yet there is an $8 billion cut to health and education in this budget. These price increases come off the back of that $8 billion cut. This says to me and to people throughout Australia that the Abbott government doesn't care, the Abbott government breaks its promises and the Abbott government is not committed to Medicare and ensuring universal health care; it is not committed to ensuring that Medicare survives. The PBS system works very differently to the Medicare system. It does not operate on a levy. When a drug company is seeking to have a drug listed, it must go to the PBAC, which determines whether that drug is going to be cost effective and whether it is going to offer something new. Once it goes through that process, it then jumps a couple of other hurdles and goes to the minister and then cabinet. Once the cabinet meets and decides it is a medication that is going to deliver benefits to our community it is listed.

The PBS has been operating in Australia since 1948. It has delivered timely access to medicines to Australians. It makes sure that medicines meet the appropriate standards and ensures the quality of that medication. The PBAC may and does reject applications that come before it. It considers all the issues that are going to ensure that the PBS is viable and can operate long term.

The previous government introduced a number of changes to ensure the long-term viability of the PBS. This government now is keeping those in place but at the same time is attacking the affordability of the scheme. This has been criticised on a number of levels. Even the government's own Commission of Audit recommended that the price of medication be increased only for general patients by $5. It did not recommend that pensioners and those people with concession cards pay extra for their medication.

There has been a wide range of interest groups that have been highly critical of this increase. The Pharmaceutical Guild of Australia has criticised the increase in the cost of medicines for consumers and has argued that it will particularly affect the elderly and those on social security. A lot of the people who I represent in this parliament struggle each and every day to survive. A lot of these people's lives have been made a lot harder by this government's cruel budget of cuts and hurts. This is another aspect of it.

Medicines Australia acknowledged that the co-payment increase may lead to adverse health outcomes due to patients not filling their scripts. That goes without saying. It has been shown that this is what happens when prices go up. Back in 2005, 11 per cent of prescriptions were not filled. The Consumer Health Forum has expressed great concern over growing out-of-pocket expenses that Australians pay for health care and strongly opposes the increase to the co-payment safety net.

It once again goes without saying that this government is about changing our health system. This government is about creating a user pays system. This government is about making medicine less affordable. It will deliver poor health outcomes on all levels. People will not go to the doctor. People will not have their prescriptions filled. People will get sicker and they will die younger. I do not think that that is something that we in this parliament want to see happen. Michael Moore, the CEO of the Public Health Association of Australia, has stated that the measures are inequitable and will affect society's most vulnerable.

The underlying issue is that co-payments are already fairly high—$6 is a significant amount of money to pay. Yes, there is a safety net. But, before that safety net kicks in, people have to spend a significant amount of money. These increases are indexed to CPI. These increases will continue to rise. The fact that we already have statistics showing that a fairly high number of people defer filling their scripts because of the cost really should warn the government that this is not the way to go.

The government is always attacking and blaming the opposition for the fact that the sun may not come out and it may rain one day. But its manufactured budget crisis that is not supported anywhere other than on the government benches of this parliament is not a reason to hit pensioners and families in the way that it has. After all, we must remember that Australia has a AAA rating from all rating agencies. It has the 13th lowest debt level in the world. I just see this as the government trying to abrogate its responsibilities and work towards directing its budget cuts at those people who can least afford it. That is what this budget does. The biggest impact of its cuts and cost increases fall on those who can least afford them—pensioners, people who are sick and families.

This government has shown through this cruel budget that it does not believe in giving Australians a fair go. It does not believe in equity. It does not believe in a society where all people have equal opportunities. I think it should really stand condemned for this— (Time expired)

Andrew Laming (Bowman, Liberal Party) Share this | Link to this | Hansard source

I rise in support of this National Health Amendment (Pharmaceutical Benefits) Bill. We have just heard from the 'member for denial', unable to admit that we have a financial challenge in this country. It is as if members on the government side wake up in the morning and dream of ways to make it tougher for people to access health care. Nothing could be further from the truth. We have inherited a budget bottom line that is in dire need of answers. Even in opposition that side of politics is showing that it cannot contribute to the national conversation about how we restore the budget bottom line and get ourselves back to balanced budgets.

With this National Health Amendment (Pharmaceutical Benefits) Bill there is a one-time increase on 1 January 2015 to the pharmaceutical co-payment for concession and non-concession holders. It is not the first time it has been done. The actual notion of a co-payment was introduced by, yes, the party that you hear railing against us today. The notion that pensioners should pay a co-payment was introduced by the party over there that is railing against these changes today. As recently as 2004, the member for Shortland was in this chamber supporting an increase to the co-payment. She was here, supporting that increase, when it suited her. The member for Shortland—short on detail, short on a clear understanding of how the PBAC even works, and short even on an understanding of how cabinet processes work in approving drugs—is no person to convince the Australian public that these changes are not absolutely vital.

We only have to go back to 2011—there are very short memories in the chamber sometimes—when the Labor Party had their shot at making the PBAC sustainable. The PBS system, approaching $9 billion a year at the time, needed some answers for sustainability. So it is worth turning to the language of the then Labor health minister, when they were coming up with their own solutions. They said, 'In the next 12 months we will work on a long-term plan to keep costs down.'

So let's do a little bit of comparing and contrasting. What we are talking about today is just slightly increasing the co-payment—less than $1 for those with concession cards, which is about 40 to 50 per cent of Australians. Let's see how Labor responded to a similar challenge. Labor's idea was not to listen to the experts of the PBAC by taking their recommendations and blindly and non-politically introducing newly listed drugs, once they were approved as being safe, of high quality and cost effective. No, Labor decided to reinvent that process. The first thing the Labor government did was to grind back the approval of new listings. I concede there were already some falls in listings in 2006 and 2007, but what the Labor Party was really good at in government, and I am sure they are so very proud of it, was reducing the number of drugs listed. They ground them down and made the approval processes longer and longer and more convoluted to do everything they could to stop the drug being listed and having a financial impact on their bottom line. There will be thousands of Australians, no, millions, who will have been affected by that short-sighted conduct. They will never have a voice in this chamber.

When that did not work, they came up with a new idea—it was called deferral. That is when the expert body, the PBAC, fully evaluated products—considering safety, quality, efficacy and cost effectiveness and struck a price with the pricing authority—and then the Labor government said, 'No, we refuse the recommendation of the expert body.' They politicised the process for the first time, and bad luck to you if you had a child who is failing to thrive, or if you are suffering from HIV, TB, lung disease, renal failure, diabetes, schizophrenia or depression. 'Bad luck. We are not delivering this drug to you for no other reason than that we have decided in cabinet that we are just not going to sign it off.' That is what the PBAC process descended to under Keven Rudd, and then Julia Gillard—to tell those patients that there is no other reason except that these humble seven drugs were not life-saving. Rub that in the face of a person suffering from a life-long condition, where this global breakthrough is now deemed by the experts to be cost effective. Never in history has that been done before.

I will concede that there had been delays to listings, particularly under ATAGI. We had a large run of fascinating absolutely transformative vaccines in the early 2000s and there were delays to listing these vaccines, but they sat on the cabinet table until they were passed, and passed they were. But that is not how the Labor Party operated. They told the drug companies to go jump and they told the patients they could wait. To top it all off, like topping on dessert, the insult to them was that they said, 'That is not a refusal. We have not refused your drug. We have just deferred it and we are not going to tell you when we are going to approve it.' A deferral without a date is a downright rejection—I do not care what the Labor Party wants to call it.

We have moved on from that. Under the coalition government we already have approved 131 listings in the short time we have been in power. Why? Because money does not get in the way of an expert's recommendation, unlike with the Labor Party. They never had the courage or the heart to come in here and talk to patients suffering from those conditions. No, they just said, 'It was a deferral. You can wait and we will not tell you how long.' That is the epitome of heartlessness and lack of consideration.

Isn't it ironic that we are debating the amendment to the co-payment for the PBS on the day when Labor walked in to a brick wall by moving this afternoon their MPI on health. There we had the doctors versus the autocrats. We had the coalition speakers, who know how the health system works, up against a mob who have done nothing more than lead union rallies at the instruction of the nurses union. And didn't they walk into a brick wall when they faced the health minister, who told them in no uncertain terms that this was a put-up MPI to serve their union mates?

Today what we are debating, obviously, is sustainability. I can remember that five years ago we were all fearful of a massive increase in the PBS—life-saving drugs were coming through and at the turn of the century we had what we call the blockbuster drugs. No sooner had they arrived, nor come off patent, but we were being hit by the companion diagnostics and the designer drugs. The PBS trajectory was diabolical. It was a single intervention by then health minister Tony Abbott—simple price disclosure—that resulted in the change in trajectory that has brought some semblance of normality back to the increase in the PBS budget. Without going into great detail, price disclosure is simply the requirement that pharmacies disclose the prices at which they are receiving the drugs from the wholesaler, so that the government knows that they are genuinely reimbursing the pharmacist for the cost of that drug and not for a fake cost that is listed by somebody else. Instead of significant transfers over and above the cost a pharmacist was paying, we are now asymptotically moving back to the real cost of that drug to the pharmacist, and reimbursing it accordingly.

But tonight I need to concede, including to pharmacists in my electorate, that that has to have an effect on the bottom line. We may well have tamed the PBS budget, but we know that with these changes many community pharmacists are doing it really hard. Because of the way price disclosure is cyclical, these prices are closely and more closely approximating the real price on every 18-month cycle. So there still are significant challenges ahead for pharmacists in our communities, who understandably were relying on those terms-of-trade transfers. That was built into their bottom line. That is how they were running their budget and employing their staff. So I have great concern for our pharmacists. I accept that there will be a period of great transition, but ultimately I guess our responsibility to the taxpayer is to pay the price that is listed when it is handed to the pharmacist. In return, the reimbursement needs to match that amount.

We also need to remember—it is often forgotten—that the $5 increase to the co-payment, which is currently sitting at $36.90, only applies if you are buying a drug that costs more than that amount. I am lucky and my family is lucky—we have not needed to purchase truly expensive drugs. If they are very expensive you do not pay more than the co-payment. But the important point to mention is that a huge number of drugs cost less than the co-payment, in which case increasing the co-payment has no impact at all. Up to 55 per cent of all the drugs listed are actually cheaper than the non-concessional co-payment level. That means there is no effect if you increase the co-payment. It is only in those rare circumstances, where people are filling scripts for drugs worth more than $41.90, and increasingly that is a rare event. For those who are non-concession card holders, it is about two prescriptions a year. It is worth remembering that we are not dealing with people who are carrying in dozens of prescriptions and filling them every month. For those patients we do have the PBS safety net, and I concede that each year we are increasing the threshold by two prescriptions. But, for the many people that access the safety net, it is a lifesaver. Once again, it was a coalition initiative to bring that co-payment to the health system.

If I had to choose a health system I would not want to be anywhere else but in Australia. The four pillars—the PBS, the MBS, public hospitals and private health—do an incredible job. The PBS system has presented us with significant challenges. Even now, manufacturers say to us, 'In Australia, we know that if we can get listed on the PBS that represents almost instantaneous penetration of a 23 million population.' Australia remains very much a jewel in the crown of approvals. All around the world they accept that, while there may be delays, it is worth striking a price in Australia because of how efficiently our PBS serves our population. Take it from those that are supplying our PBS as much as from those who are purchasing from it.

The other great message we are hearing is: please, rapidly approve the life-saving, breakthrough drugs that are making a difference, even if we have to look again at the generic market. If Australia does have a weakness in our system, it is that we strike a very strong price with original approvals, but once we pass what we call the off-patent period, at that point we continue—because of price referencing—to probably pay more than those generic drugs either cost to produce or are worth. If you compare the generic prices in this country to those overseas, we still have a long way to go. Price referencing is playing a role, but we still have further to go. We now have international generic manufacturers moving in and putting local domestic generic manufacturers under pressure. That is hard too. In the end Australia has to say that we need to inspect the facilities that are manufacturing pharmaceuticals around the world. They need to get their TGA approval. After that it is a free market. So Australian manufacturers are responding accordingly. Increasingly we are making a smaller range of pharmaceuticals and exporting them overseas, particularly to places where people value the 'Made in Australia' stamp on a pharmaceutical, which is not insignificant given that we have had challenges even here in Australia with imported drugs that, in the end, we discovered were manufactured in less than safe and appropriate conditions.

I made very brief mention—and it does need more ventilation in this place—to the notion of companion diagnostics. This is increasingly the tailoring of pharmaceuticals to specifically treat a condition that you may have that is identified on your genome. This will mean smaller and smaller numbers of patients that benefit from a discovery, and obviously to recoup costs you will see manufacturers increasingly wanting a higher and higher price for their treatments and cures, because they know it has effectively a 100 per cent success rate. One of the great challenges and, if not, may I say a failing of current drug-funding arrangements is that historically we pay for the drug whether it works or not. We are heading to paying for an outcome. Increasingly government will be identifying the subpopulations that respond to treatment and rewarding pharmaceutical companies for that. But we are not going to be writing blank cheques or bigger cheques for treating people where a clinical outcome is not achieved.

None of us went into politics to increase a co-payment. None of us went into politics to increase any form of charge if we could possibly avoid it. But I am sensing that the Australian people are beginning to appreciate that these were decisions we were forced to make. When we woke up after the election we knew we had a momentous job. I concede that convincing people that $667 billion is a large figure is not an easy task, not at all. Nor is it easy to take even the smallest payment or entitlement away from any individual that I know or that I meet in the street. But these are modest, small, well-calculated, well-thought-through changes. And they are changes that have been made before. They are changes that have been supported by the Labor Party. For heaven's sake, the co-payment is a creature of the Labor Party. Making pensioners pay a co-payment is a creature of the Labor Party. To hear the member for Shortland with the same tired old talking points just shows a party yet to realise where they are, yet to realise that they have to be part of a national dialogue around solutions. As much as they can come up with the cheap stunts now about cuts, in the end they will have to add up their own recommendations and what they have voted for, and this will come off their own bottom line as an opposition party.

For now, we will do the hard yards. For now, we will lean against the wall of reform and make sure that we have a sustainable PBS, because we are up for it. Thank goodness the opposition are not and they are on the side of this chamber where they belong for the moment. We will make the tough decisions with the PBS and with Medicare, but we are going to make it sustainable as a result. As people look through the detail they will realise that the combination of a safety net and these small changes will keep our beloved PBS in Australia for a long, long time to come. It is a global showpiece, and I defend its sustainability tonight.

Lisa Chesters (Bendigo, Australian Labor Party) Share this | Link to this | Hansard source

I am glad the previous speaker raised the issue of price disclosure within the PBS system, because that is a reform that did deliver savings, savings that should have gone into the PBS system to ensure that it was sustainable. They are the kinds of budget savings measures that Labor introduced in government to ensure that the PBS and our health system was sustainable. It looked at the system and said: where are taxpayers not getting value for money? That is why price disclosure was introduced. Where has that billions of dollars that has been saved gone? We are calling for that funding to go into the PBS to pay for the drugs that the previous speaker, the member for Bowman, spoke about. This is how you can keep the PBS fair and sustainable.

Instead, what we have seen is that not only have the government agreed with and put forward Labor's amendments on PBS price disclosure in this term of government but also they have sought to introduce cruel measures like increasing the co-payment and the tax on medicines. This increase will hurt all Australians and in particular those on the lowest incomes and those on fixed incomes who can least afford it. In my own electorate, that is about 30 per cent of households—30 per cent of households are surviving on less than $600 a week. This increase will hit them the hardest. Who are these people? These are our self-funded retirees, who may have a health-care or concession card. These people also include our pensioners, people who are on Newstart benefits, people who are on single parent benefits, people who are on the disability pension and people who are on very, very low incomes. These reforms and this increase will hit them hard.

It is not just this increase—there are a number of increases in this very cruel budget that attack the most vulnerable in our community. We have heard that the COAG Reform Council released a report in early June that found that 8.5 per cent of people in 2012-13 were delaying or did not fill prescriptions due to cost. In disadvantaged areas, it was up to as much as 12.4 per cent. When I meet with pharmacists—depending on where they are from in my electorate—they talk about this. The pharmacists in Long Gully and Eaglehawk, which are areas of high social disadvantage, talk about people coming in with four or five prescriptions and saying to the pharmacist, 'Tell me which ones I cannot go without. Tell me which ones I must take.' Those pharmacists are in an impossible position. They are in that position because people's incomes just do not stretch far enough today.

This problem will only be compounded by the increase in this tax that this government is proposing. It is a tax that we say is unnecessary because the savings in the PBS have already been made through price disclosure. That is money that should not have gone directly back into government coffers to be spent on whatever pork-barrelling the government wish to pursue. That should have gone back into the PBS and back into the healthcare system—we should have ensured that that money was reinvested in health. If we are really serious about the sustainability of the health system, then revenue being raised from the GP co-payment and this tax, as well as others, would be going back into the PBS and back into Medicare. We have not seen that proposal yet from this government. What we have seen instead is an ideological campaign that is about breaking the universal healthcare system that this country's health system has been built on.

Labor has already, as I have said, moved the reforms in the last government to ensure that our system is sustainable. When I am at my listening post, many people argue—and rightly so—that we have already paid for our Medicare systems through our Medicare levy. That is why the suggestion of a co-payment hits people really hard in an 'Are you kidding?' kind of way. Some of the most senior doctors around Australia have already come out to condemn the co-payment and raise their concerns. In my own electorate, doctors—regardless of where I am—say that they are opposed to the co-payment because they believe it will discourage those most in need of medical help from presenting at their GP.

At Woodend's Brooke Street Medical Centre, Dr Richard Bills has raised concerns about how this will affect not only his practice but also his after-hours surgery work. They are some distance from a local hospital so therefore they provide an after-hours clinic or service, where the ambos will pop in with the patient for that first triage and assessment. They are concerned that because of the government's extra co-payment people will not go to their clinic first but will travel the hour to Melbourne for something that may not be life threatening but needs medical attention. Brooke Street Medical Centre is not alone. In Castlemaine, 21 local GPs came together to speak out publicly about their concerns with this new tax. The Medicare Local in the Loddon Mallee Murray region is also speaking out. A number of their practitioners say that they agree with the concerns of the doctors in Woodend and Castlemaine that this co-payment will stop people from seeking the help that they need.

On Friday, I got to be at the sod turning and the launch of Heathcote Health's new primary care facility. It is a project that was funded by the former Labor government through the Health and Hospitals Fund. Of course it was acknowledged that the funding came from the Commonwealth but it was not acknowledged that it was from the former Labor government—a government that invested in health care. At this particular sod turning, one of the GPs who partners with Heathcote Health said in the launch that he hopes they have patients to treat. Heathcote is one of those other low socio-economic areas where households are surviving on less than $600 a week. He was worried that, because of the government's changes to the healthcare system, people would not present to ensure that their health needs were met at the early stages of their illness. He was worried that, by not going to the primary health care part of Heathcote Health, they would then become too ill and too sick and then present at the urgent care side of their healthcare facility.

The attacks on our healthcare system do not stop at this increase in the medicines tax or the GP co-payment. The cuts in basic funding to our hospitals are also compounding the problems. Bendigo Health will suffer a $25 million cut from this government because this government has torn up the national partnership on hospital funding. That is a $25 million cut from Bendigo Health. In question time today the health minister had the audacity to stand up and talk about the cost of the carbon tax on hospitals. What about the $25 million he has cut directly from their budget? What about justifying that cut to the people of Bendigo and to the people at the Bendigo health facilities that require health support—$30 million cut directly from hospitals from across the Bendigo electorate?

This is just one regional area hit hard by this budget, yet we have the health minister, who does not talk about his cuts—whether they be direct to the hospitals, whether they be from primary healthcare services, whether they be investment in funding for building new healthcare services, whether they be GP co-payments or increases to the medicines—instead talking about the carbon tax. Well, get onboard with what is going on in your facilities, your health portfolio, and I dare you to come back to Bendigo and stand in front of Bendigo Health again and talk about the carbon tax and not talk about the funding cuts that you have made to Bendigo Health in your first budget. Labor does not support this increase in tax, particularly in conjunction with the other increases in taxes and the cuts to families in all areas, including regional areas like my own. The previous speaker also had a go at the former government about going slow on approving medicines when it comes to the PBS. Well, you are now in government.

I would like to finish with a few words from some local people who have raised concerns about the drug Kalydeco. A Goornong family was delighted and excited on 20 December last year. They thought that Christmas had come early because of the news that Kalydeco had been approved by the Pharmaceutical Benefits Advisory Committee for listing on the PBS. After an extensive review process, the PBAC confirmed that the profound benefits of Kalydeco offered to individuals and the healthcare system were significant. Tim McCrohan, the father of Amelia—the young girl who would benefit from receiving this drug—said that this was a 'great achievement'. He said, 'We have had our Christmas present come early' and 'Now we are looking forward Amelia getting better'.

Tim has said to me. 'All we want is our little girl, Amelia, to live a normal life'. And Kalydeco will provide her with that opportunity. Yes, it is a very expensive therapy, but the benefits it delivers for those who suffer from this rare form of cystic fibrosis is beyond measure. Tim said, 'Our Christmas wishes have been granted' and that he is looking forward. He said:

We are confident that once pricing negotiations conclude, the Minister for Health, the Hon Peter Dutton, will take the PBAC’s recommendation to Cabinet and deliver a listing date for the 200 Australians waiting on Kalydeco.

That was December last year. We are now in July, and Amelia and her family are still waiting. To date, this drug has still not been listed. To date, there are still discussions saying that this drug is too expensive. Price disclosure, as I mentioned at the beginning, ensured that there was money in the system to fund drugs like Kalydeco on the PBS. Yet this young family is still waiting.

Billions have been saved already. Price disclosure, one of the reforms Labor delivered in government, is a sensible way, a fair way, of ensuring that there is money in the system to ensure a sustainable PBS. The proposal being put forward by the government is not fair. It hits the most vulnerable the hardest—those who have the least amount of disposable income to pay this increase in costs. It will result in more and more people filling fewer scripts, meaning that people will get sicker and will end up presenting at our already stretched emergency departments.

It is great to see nurses and doctors, those working in the health professions, standing up and speaking out for the health of Australians. They should not be condemned, they should not be called 'union bosses', they should not be called 'union hacks' for speaking up, wanting to ensure that the health system is there to support the health of Australians. Nurses work hard, doctors work hard. All those working in the health professions deserve our respect, not condemnation for calling the government out for creating a health emergency in this country. That is exactly what is happening because of the government's proposal. Whether it be their GP co-payment or tax of $7, the increase to the medicines that people on the lowest incomes are paying or the cuts to our hospital system, this government's agenda for health care is wrong and is creating problems, and it will create a health emergency within our country.

Here are some more words from people in my electorate about this government's approach to health. In Ian's words: 'About the only thing I can see that these changes will do is stop people from going to the doctor and filling their prescriptions. How cruel is this government? In Paul's words: 'My son has type 1 diabetes. My wife has a chronic illness and is facing major surgery. At the moment she is a member of the workforce as a tutor, but this is limited and may not be continued in the long term. I implore all sides of parliament who represent regional Australians to vote against these changes to the PBS and to Medicare to ensure that there is fairness and equity so that my family continues to receive the medical support that they need to ensure that they live healthy lives.'

Andrew Southcott (Boothby, Liberal Party) Share this | Link to this | Hansard source

I am pleased to be speaking on this bill on the co-payment for the PBS. I thought I might start my speech by drawing the attention of the House a report by the Commonwealth Fund, which was released in the middle of last year. The Commonwealth Fund puts out regular surveys of countries, looking at their health systems and how they compare. They have recently expanded the number of countries they look at to 11 countries—the UK, New Zealand, Canada, the US, the Scandinavian countries, France, Germany as well as Australia. The data is consistent with all the previous reports from the Commonwealth Fund, and Australia's health system does stack up very well. We stack up well on people enjoying healthy lives, long life expectancy and the quality of care. We are seen as having an efficient and fair system. This is despite the fact that we still have one of the lowest spends in health per capita. The 2011 figure for Australia was $3800 per capita, compared with the United States figure of $8508. In fact, of the 11 countries only the UK and New Zealand spent less.

So let's put some reality into this debate and remember that we are a healthy country with a good and efficient health system. It is in that context that we need to consider this measure. The Pharmaceutical Benefits Scheme has been one of the fastest rising areas of Commonwealth government expenditure. We have seen it increase dramatically over the last 15 years, and it is in this context that the government decided to increase patient co-payments in this budget and increase the safety-net thresholds for the Pharmaceutical Benefits Scheme. It is a savings measure; it involves savings of approximately $1.3 billion over the next four years. Those savings go towards the Medical Research Future Fund. We will still see more spent by the government on the PBS: it will go up from $9.2 billion in the last financial year to $10.2 billion by the last year of the forward estimates. This involves a one-off increase in patient co-payments.

When we talk about co-payments, there has been a co-payment for the Pharmaceutical Benefits Scheme since 1960. When it was introduced in 1960, there were very few of the advanced drugs that we see now. It was a much simpler Pharmaceutical Benefits Scheme, but all the same we had a co-payment— probably introduced when Harold Holt was Treasurer in 1960 federal budget. It was the Labor Party that introduced the co-payment for concession-card holders: Bob Hawke, Brian Howe, Jenny Macklin and the member for Canberra in another incarnation all understood the need for a patient co-payment. With this proposal, the general patient's the co-payment, which sits at $36.90, will increase by $5 in addition to movements on the CPI. On average general patients use two PBS subsidised prescriptions per year; this means that the average user, who is not a concession-card holder, will contribute an additional $10 per year. For people with concession cards, the co-payment, which is currently $6, will increase by 80 cents in addition to the CPI. People with a concession card on average use 17 scripts each year, and under the new arrangements they will pay $13.60 per year for subsidised medicines.

There are a number of medicines that are already less than the current general co-payment and they account for more than 40 per cent of PBS listings and more than 70 per cent of general patient prescriptions. What that means is that for these patients and for these scripts, the increase in the co-payment will have no effect. Take, for example, Amoxicillin, a common antibiotic currently costs $13.85 and is well below the PBS co-payment. After increases in the general co-payment, there will be no impact on the price of Amoxicillin. By the time the co-payment changes come into effect on 1 January next year, more than 55 per cent of listings will be below the general co-payment amount.

We also need to mention that the government continues to contribute the majority of the costs of many pharmaceuticals—insulin, a common treatment of diabetes, has a cost through the PBS of around $220, for which only $6.90 is paid by concession holders and $42.70 for general patients. Over the last decade we have seen the cost of the PBS increase from $5 billion to around $9 billion. It is expected to continue at around 4 to 5 per cent per year, but a decade ago it was growing at between 11 and 13 per cent each year. This is a simple measure to make the PBS sustainable.

As members of parliament we are constantly made aware of new pharmaceuticals are coming onto the market that are going through the hoops of assessment by the TGA and by the Pharmaceutical Benefits Advisory Committee and then by Pharmaceutical Benefits Pricing Authority. It is important that Australia does need to be able to bring these medicines to consumers in a sustainable way. Let us never forget the debacle of drug listing that occurred under the previous government. I will never forget going to a Medicines Australia dinner, where the industry minister said that the government would cease to list drugs on the PBS until the budget was in surplus. It is something that no federal government had ever tried before; it was not sustainable and it lasted about six months. What it did was to create massive uncertainty about the listing process.

Some of the newer drugs—some of the tyrosine kinase inhibitors used in the treatment of melanoma—can cost up to $110,000. Similarly drugs used in advanced breast cancer can cost about $38,000; drugs for prostate cancer can cost around $27,000. There is an expectation for people who have melanoma or breast cancer or prostate cancer that the government will be able to fund these and fund them in a sustainable way.

The PBS co-payment has been increased in the past. As I said, the concessional co-payment was first introduced by the Labor Party in the 1991 budget. The savings we make will go towards the Medical Research Future Fund. This is a very forward-looking fund. Within six years, Australia will have the largest capital fund in the world dedicated to medical research. When fully mature in 2022-23, it will mean a doubling of our annual investment in medical research. It will benefit all of our excellent medical research institutes and will provide an extra $1 billion in support to our world-class Australian researchers each year.

Since the Abbott government came to power, we have listed or expanded the listing of 181 new medicines on the PBS. We have not had a repeat of that unfortunate episode under the previous government where they simply stopped listing new drugs because they could not afford them. The Howard government introduced price disclosure for pharmaceuticals, which has been a very important step in putting the PBS on a path to sustainability.

When Labor were last in power, they promised stability for the PBS, but instead it was complete chaos. They deferred the listing of medicines already recommended by the Pharmaceutical Benefits Advisory Committee. Patients suffering from schizophrenia, chronic pain, lung diseases and other afflictions had their medications delayed for months under that government. Labor politicised the PBS listing process and undermined the independence of the PBAC. We have restored the independence of the listing process and the PBAC's recommendations will no longer be ignored.

As I said before, Labor in government have supported increases in the PBS co-payment. In 1986, they doubled the PBS co-payment for general patients from $5 to $10. They introduced a PBS co-payment for pensioners. In 2004, they supported a one-off increase to the PBS co-payment. That was the famous backflip by their then leader, Mark Latham. So the Labor Party have shown that they do support a PBS co-payment and do support increases in PBS co-payments where it is appropriate. What we are seeing now is the Labor Party being opportunistic. I think this is a good example of what Paul Kelly described in The Australian as politics not rising to the challenge we face. Parliament is not rising to the challenge we face in restoring the budget to surplus and in implementing sensible measures to make Commonwealth programs sustainable.

Nick Champion (Wakefield, Australian Labor Party) Share this | Link to this | Hansard source

This bill, the National Health Amendment (Pharmaceutical Benefits) Bill 2014, is just one part of the government's strategy to effectively abolish Medicare. They want to destroy this very important system of universal health care introduced by the Hawke government. But it is part of the Labor Party's DNA to protect it and to advance it. It is something that is beloved by all Australians, but we know this government is absolutely determined to destroy it. In this regard, the Abbott government is channelling earlier incarnations of John Howard.

The last speaker, the member for Boothby, talked a bit about the history of these things. We know that John Howard in 1987 said that Medicare was 'a total disaster'. He promised, 'We will pull it right apart.' He said that they would get rid of bulk-billing. I know that the member for Mayo, who is sitting right here, was a learned member of Mr Howard's staff and helped to design Work Choices. I will not go into details here; it would be unfair to the member for Mayo to do so. I am indebted to Julia Gillard because she wrote an excellent article for the Evatt Foundation in which she recorded Mr Howard's other words about Medicare. He called it 'a miserable cruel fraud', 'a scandal', 'a total and complete failure', 'a quagmire', 'a total disaster', 'a financial monster' and 'a human nightmare'.

Mr Briggs interjecting—

For the member for Mayo's benefit, I think he also threatened to take a scalpel to Medicare. That was the early incarnation of John Howard. We know that Mr Howard's views were important, because so many on the government's side of the House regard him as an ideological leader, if not a mentor. I know the member for Mayo does. It is a great pity that none of them have the courage Mr Howard had at that time. At least Mr Howard was honest with the Australian people about his intentions towards Medicare. Later, when he recanted all those views in 1995 and 1996 in order to win an election, he basically stuck to those reformed views.

But we know that this government want to tear apart Medicare, absolutely rip it to shreds. At the same time they use this Orwellian language—that they are 'the best friend Medicare ever had'. Then you have the Minister for Health getting up here and talking about 'free' services, even though people pay a Medicare levy. They pay it every year through the tax system to pay for those services, to make the system of universal health care sustainable, to make it financially viable. Then we hear the government rolling out this language that it is 'unsustainable' and that it is 'free'—all of these sorts of things. They never pause to wonder at the irony that they are then taking the proceeds of the co-payments and putting them into a separate fund. So it is not as if this is a deficit reduction measure, and there is nothing about it going back into Medicare. It is all going off into a research fund. Research is worthwhile, but you have to question the government's intentions when they tell us the co-payments are about sustainability on one hand and then put the proceeds in a locked box on the other.

I heard the member for Bowman earlier talking about how they had been 'forced' to do it—how they had been forced into this situation. They have been forced, in this bill, to impose a tax on medicines, a $1.3 billion tax that will hurt consumers. But it is not about the sustainability of the system; it is about taking savings and putting them somewhere else. It is not about sustainability, which must be a term out of the focus groups; it is about ideology—the ideology of destroying Medicare, which is what this government intends to do. We see that in their GP tax, which I have spoken on in this House a couple of times today. It is a cascading, compounding tax: $7 every time you head into the waiting room, $7 every time you get a blood test, $7 if you have to go back to the doctor to check up on a medical condition. If you have pneumonia, it may be that you have to visit the doctor six times and it will cost $7 every time you get into that waiting room. That must be terrifying for so many families—particularly families in my electorate and across working- and middle-class Australia, who really do feel those out-of-pocket expenses.

This is coming on top of $80 billion worth of cuts to schools and hospitals—$50 billion in cuts to hospitals alone. We know the effects of $50 billion worth of cuts. It is equivalent to 4,300 hospital beds, more than 25,000 nurses or some 12,000 doctors, over seven years. These cuts are extraordinary. The New South Wales Premier called the budget a 'kick in the guts'. I know that the Premier and the Treasurer of my state, when they prepared the state budget, felt the burden of the cuts by this government. This budget is all about establishing a two-tiered healthcare system—an American system. This is the way the government have always wanted to head. They want to establish the kind of system the Americans are trying to get away from. We had Professor Stiglitz in the country wisely questioning why you would want to copy a system which does not have universality at its core, which places huge financial burdens on working- and middle-class Australians and which undermines the equity of the nation. The idea of a fair go is absolutely critical to the Australian character, particularly the modern Australian character. This is an idea that has been around since Federation. In these days when we do get such extremes in wealth, we know that we do not want to tie income to ability to access health care. However, we know that is the system that the government want to institute, with their $7 GP tax and their $1.3 billion tax on pharmaceuticals.

Of course, this policy is opposed by the AMA. The AMA said in a press release on 15 May 2014:

The Federal Government’s move to impose a co-payment for GP visits will deter people from seeking necessary medical care and could leave doctors $13 out-of-pocket if they waive the charge for their patients, the AMA has warned.

We know that doctors are desperately telling the government that this is going to hurt primary health care, which begins with the GPs in those general practices. I have already read out this letter from Dr Bruce Groves from Salisbury North, during the debate on the matter of public importance. He writes about the GP tax:

The measure is heartless, bereft of social conscience and punishes those who can least afford it.

Dr Bruce Groves is a good doctor who runs an important practice in Salisbury North. Salisbury North is a working-class suburb with a lot of people on fixed incomes, pensioners and the like, who are very confused and upset. They are fearful of what the government wants to do, not just on the PBS but on the GP tax as well. We know the devastating effect that the announcement of the GP tax had on Dr Groves's practice. He recorded a 30 per cent drop in attendance. As a patient of the GP clinic on Philip Highway in Elizabeth, though I have not been there for a while, I got a text message from the clinic saying that the $7 GP tax did not apply and it was business as usual for bulk-billing. They are sending out these texts to their customer base because they are already feeling the chilling effect of the government's determination to destroy Medicare.

As the member for Bendigo quite rightly pointed out, Labor's way has been to use price disclosure to fund the PBS—in effect, to channel the savings that a government might make back into the Pharmaceutical Benefits Scheme. That is the appropriate way to run the health system. The Liberal way is to tax, pile on the costs and pile on the burdens on working- and middle-class families, and then to shift the money sideways. It is a vicious attack on working- and middle-class families—a cruel sort of pea and thimble trick or game of three-card monte, where someone always gets ripped off. It is an attempt to place Australian families in a detrimental situation without being honest about it. As I said before, the government's language in this regard is aimed completely at giving reassurance where there should be none. The government are not being straight with the Australian people about their intentions to destroy Medicare.

We know that the Prime Minister has a great deal of form in this regard. I cast my mind back to the days when he was health minister. On Saturday, 16 April 2005 the AM program recorded a story titled 'Abbott apologises for Safety Net backflip'. It begins with Elizabeth Jackson:

The embattled Federal Health Minister Tony Abbott says he understands why there are loud calls today for his resignation, in the wake of the Government's decision to raise the Medicare Safety Net.

There is another example of the government's and the Prime Minister's commitment. Back then, he promised one thing before the election and then in 2005 had to creep out of cabinet with his tail between his legs, contemplating resignation but lacking the courage to resign. Mr Nick Grimm, in the same interview, put to him:

But you must have been either lying at the time when you referred to the cast iron guarantee, or you were hoping that the Government would go along with the blow-out.

That is what Mr Grimm put to Mr Abbott. And Mr Abbott said:

The statement—

then there is a pause, and we are used to the Prime Minister's pauses—

the statement that I made back then was the absolute truth to the best of my knowledge and belief at the time, but since the election the Government has obviously been reconsidering this matter, since the election the Government has been looking at the blow-out, not just in the short term, in the very long term, and responsible governments do not make commitments which turn out to be unsustainable.

Well, there you go. The Prime Minister has got form.

On Friday, 22 July 2011, it was put to him that his 2004 broken promise would give the Australian people some misgivings because he had given an absolutely 'rock solid, iron-clad' commitment—that is what he had said—about the Medicare safety net. In 2005 he said:

… when I made that statement, in the election campaign, I had not the slightest inkling that there would ever be any intention to change this. But obviously when circumstances change, governments do change their opinions …

He went on with a bit of verbiage about how that was then and this is now and that people should be completely trusting of him as opposition leader.

What do we get when he is Prime Minister? We get $80 billion worth of cuts which he did not talk about before the election. We get commitments to pensioners which were not fulfilled at all, and we now know how betrayed those pensioners feel. There was not one mention during the election campaign of the $7 cascading co-payment, the $7 GP tax that applies every time you waltz through a waiting room or get a blood test and the like. And we know he made commitments about Medicare Locals which he has now broken. So there are broken promises on savings, about schools and hospitals, on pensions, on the GP tax and things like the Medicare Locals. When you look at the form of the Prime Minister, both as health minister and now as Prime Minister, you have to say he has all the sincerity of a riverboat gambler. That is the terrible character of this government.

I will finish on this note. Mr Dutton in the MPI debate said the Australian people know in their hearts and minds that only a coalition government will strengthen Medicare for generations to come. There has been no greater chicanery uttered in this parliament than that by the health minister. They intend to tear Medicare limb from limb, to take a scalpel to it. It is just in their DNA. That is what they intend to do. We will be carrying the fight up to them every day until the election, along with the 67,000 Australians who have signed the petition to save Medicare—and there will be many, many more. The next election will be a referendum on Medicare. (Time expired)

Craig Kelly (Hughes, Liberal Party) Share this | Link to 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.

Shayne Neumann (Blair, Australian Labor Party, Shadow Minister for Indigenous Affairs) Share this | Link to this | Hansard source

I speak in relation to the National Health Amendment (Pharmaceutical Benefits) Bill 2014. I do not often read the second reading speeches of government ministers, but I thought I would have a bit of a look at this one from the Minister for Health and Minister for Sport. He went on and on about how the Pharmaceutical Benefits Scheme needs to be sustainable, the cost, how much it is going to be and what are we going to do. Then I went right back to the end of his speech. I thought the savings, the $1.3 billion in savings, would of course be going into making the PBS sustainable by going into consolidated revenue and into the health budget. But no. It does not. In fact the money, the savings, '…will contribute to the $20 billion capital- protected Medical Research Future Fund.' So we are making savings here—$1.3 billion, allegedly, because the Pharmaceutical Benefits Scheme in this country is not sustainable and the government will not even put the savings back into the PBS. They will stick it in some future medical research fund so that those who are sick today will pay for the sickness of the future. It is extraordinary for members of the government and in particular the backbenchers from regional, rural and marginal seats to get up and talk about the unsustainability of the PBS and not to acknowledge that the money is not actually going into the PBS. It is going into this Medical Research Future Fund. Don't come in here and give us lectures about debt and deficit when by their decisions and assumptions they added $68 billion to the debt and deficit in this country at the end of last year. In the 2013-14 financial year, under this mob opposite who are in government, the deficit is $18.8 billion worse than it was under Labor. That is the reality; look at the PEFO and look at the budget. And this year it is worse under the coalition than it would have been under a Labor government. Look at the PEFO and look at the budget. Have a look at that, and then you will see the truth. If the money was so needed to reduce debt and deficit, why is it going into a research fund? They argue that black is white and white is black in relation to this.

Before the federal election, the then opposition leader, now Prime Minister, must have been a bit worried about people's concerns for him and about him; about what he would do if he became the Prime Minister. We saw on 2 September 2013 at the National Press Club, on 5 September in a discussion he had on ABC radio and on election eve at the Penrith football stadium his comments that there were to be no cuts to education, no changes to pensions, no cuts to the ABC or to SBS, no change to the GST and no cuts to health. He ruled them out. No changes to health—it would not cost more. No changes to hospitals and no changes to health. That is what he said before the election. You would have to speculate that the coalition's polling showed that the Australian public were concerned about him. He said that their taxes would be lower under a coalition government than it would be under Labor. He said there would be no taxation increases without an election. He said that as an absolute principle of democracy that the government should not say one thing before the election and do another thing afterwards. It all seemed too good to be true, and it was. The May budget showed clearly that it was, because there is broken promise after broken promise and betrayal after betrayal. The legislation before the chamber is yet another broken promise and betrayal. It must be seen in the context of what they are doing elsewhere; that is what they are doing in terms of health generally. We have the $7 GP tax that they want to charge people. In my electorate of Blair in south-east Queensland, there were 838,244 bulk-billed GP services last year. If the co-payment came in, it would see people in my electorate pay another $6.5 million extra in tax every year. The West Moreton Hospital and Health Service, which provides the majority of health services in my electorate—and does a great job by the way—would suffer as well. Despite a growing population, the service would soon have to make do with less.

By 2017-18 with this mob opposite—the government purports to want more funding in health and claim nine per cent, nine per cent, nine per cent; we are sick and tired of hearing it—the West Moreton Hospital and Health Service would be, on the figures that we have seen, $6.749 million worse off than if Labor had won and the national agreements in relation to health service in funding from the Commonwealth had the been gone through and committed. Even the Queensland LNP Treasurer, Tim Nicholls, said, 'Emergency patients in Queensland will be hardest hit hardest hit by these cuts'. This is what he said on Sky Newson 15 May 2014:

You would have to wait longer to get treatment at a hospital because we wouldn’t be able to have as many doctors or nurses on hand to be able to treat people, so it might mean longer waiting times for treatment when you turn up and present at a public hospital.

The bill before this chamber is part of a whole package that make it harder for people to get good health services. It seeks to raise the cost to Australians of health services. From 1 January 2015 Australians will pay more for pharmaceutical benefit medicines than they did before. The PBS co-payment for both general and concessional payments will be increased by 13 per cent. It is a massive tax hike in reality. It is a $1.3 billion slug on people who need PBS medicines.

From January 2015 general patients will pay an extra $5 for a PBS prescription, moving the cost up to $42.70. Concessional patients will pay an extra 80c up to $6.90. Not content with that, of course, we have seen that the Prime Minister and the Treasurer want to increase the PBS safety net thresholds. Australian families will pay more for their scripts, they will pay more out of their pockets, and they will get less relief from the safety net of the PBS. For concessional patients the PBS safety net threshold will increase by two prescriptions per year. For general patients the threshold will increase by 10 per cent each year above the CPI for the four years from 2015 to 2018.

The government's modelling underscores the impact this will have on people with high medicine needs. In 2015 under a Labor government a general patient would have spent $1,451 before they reached the PBS safety net. Under the coalition, general patients will need to spend $1,597.80—about $145 more—to reach the threshold before they get concessional relief. In 2016 they will pay $312.10 more. In 2017 they will pay $504.70 more. In 2018 under Labor the general PBS safety net threshold would have been $1,562. Under the coalition it will be $2,287.90. So general patients will be paying a whopping $725.30 extra each year to reach the threshold. Those opposite in government think this is all very small change. But for a family, it is not. For those people with high medicine needs, it is not. It is a great impost on them.

Concessional payment patients will be slugged, too. In 2015 under Labor concessional patients would have paid $366 or 60 scripts to reach the concessional PBS safety net. In 2015 under the coalition government it will be 62 prescriptions and an extra $61.90. In 2016, it will be 64 scripts, an extra $82.40. In 2017 it will be 66 prescriptions, an extra $97.80. In 2018 under the coalition governments concessional patients will pay for 68 scripts before they get any assistance. It will be about $114 more just to reach the PBS safety net than it would have been under Labor. This is for the weakest, the most sick and the most vulnerable people in our community. This is a broken promise which puts severe financial pressure on those who are chronically unwell, who are already often struggling to make ends meet.

The Prime Minister is no stranger to broken promises, particularly in relation to safety nets. Remember that in the 2004 federal election campaign he claimed there would be an 'absolutely rock solid, ironclad commitment' not to change the Medicare safety net and, after the election, as part of the re-elected Howard government, he did just the opposite. So they have a bit of form when it comes to this issue. On this side of the chamber we say that this $1.3 billion slug will hurt every Australian.

The COAG Reform Council does a lot of good work. It has been holding governments to account on both sides. But, once again, it is a casualty of the cuts. It did a lot of good work in relation to Closing the Gap and holding governments to account. The COAG Reform Council is a victim of deep cuts in the budget and it ceased operations on 30 June 2014. Their report, Healthcare in Australia 2012-13: five years of performance, found that in 2012-13 8.5 per cent of people delayed or did not fill a prescription given to them by their GP due to cost. If those opposite do not believe that price matters, they do not believe in markets. We know that they do not believe in markets when it comes to pricing carbon, because they want a command-economy style, Stalinist solution on climate change whereas we on this side want a market based solution. We know in their heart of hearts—and the budget papers reveal—that they do believe there is a price impact and there is elasticity in the markets in relation to this issue. Publicly they will not say that and they will not admit it, but we know that the budget papers reveal it. That report revealed in the most socioeconomically disadvantaged areas the impact on people delaying or not filling out a prescription rose to 12.4 per cent. As shadow minister for Indigenous affairs it does worry me that that report actually showed that with respect to Indigenous people it was a staggering 36.6 per cent.

I have gone around the country and spoken to many health services and I know that the government's policies will have an adverse impact on the community-controlled health sector, particularly the Indigenous community-controlled health sector. The government have been running around the countryside saying that what they have been doing is just reducing red tape and inefficiency—a bureaucratic reduction—in health. But that is not true. Have a conversation with Don MacAskill, the CEO of Awabakal Newcastle Aboriginal Co-operative Ltd, which does a great health service in the Newcastle-Hunter region; Stella Taylor-Johnson, the CEO of Kambu Health Services in the Ipswich and west Moreton region; Adrian Carson, the CEO of the Institute for Urban Indigenous Health in Brisbane; or Jill Gallagher from VACCHO. They all say the same thing: that changes like the ones in this bill before the chamber will have an adverse impact on Indigenous people and cuts in the budget to Indigenous preventative health programs, like the Tackling Smoking and Promoting Healthy Lifestyles Program—about $130 million in cuts—will mean that Aboriginal medical health services will be forced to absorb the $7 GP tax. You can see in the services these organisations render to Aboriginal and Torres Strait Islander people that the PBS implications are vast as well.

So because of this budget—and this bill is in the framework of the whole budget—we are going to see Aboriginal health services having to use block funding that would otherwise be used for effective preventative health and health education programs to absorb the huge impact of the GP tax and we are going to see Aboriginal and Torres Strait Islander people around the country delaying taking their prescription or not doing it at all. That will be because of the legislation that is before the chamber right now. It is a shame, a tragedy and a disgrace. The coalition say they want to close the gap and the Prime Minister wants to be the Prime Minister for Indigenous affairs, but the legislation before the chamber will not bring that about. It will widen the gap in terms of health outcomes between Aboriginal and non-Aboriginal Australians.

Alannah Mactiernan (Perth, Australian Labor Party) Share this | Link to this | Hansard source

Many of my colleagues have set out very well and very powerfully just what the impact of the National Health Amendment (Pharmaceutical Benefits) Bill 2014 will be on so many people. This $1.3 billion tax increase on medicines will impact differentially on the sickest and those on the lowest income levels in our society. It is a tax hike that by its very nature is regressive. We just cannot support it. My colleagues have also pointed out over and over again the fundamental hypocrisy we see here. This $1.3 billion extra impost on sick people is said to be necessary in order to keep this sustainable, yet we find that allegedly this $1.3 billion is going into a health fund and not into the sustainability of the PBS.

I agree with the government—and I think Labor can demonstrate that it absolutely grasped this while it was in government—that there is immense pressure on governments and on parliamentarians to support more and more expensive drugs being added to the PBS. I will talk later in my address about some of the lobbying efforts that go on by the pharmaceutical companies to achieve that. There is no doubt that there is significant pressure on the PBS. I note and understand—and I think I have this right—that Labor got this figure down by introducing an accelerated pricing disclosure mechanism. It was able in its last budget for the first time to claw back some of the cost of the Pharmaceutical Benefits Scheme.

I understand that is not a total answer. There is so much more that can be done to make this scheme far more efficient. This should be the line of attack. It is completely unacceptable that the percentage of genetic medicines in Australia is so much lower than that in comparable countries, such as the United Kingdom, the United States and Europe. We have within our system some I think quite profound structural flaws that are preventing us moving towards a greater reliance on generic medicines. We are actually paying a premium for no additional benefit to the consumer.

Let me go through how this works. Many members will be aware that when a patent expires the first new bioequivalent drug that is added to the PBS has to be at least 16 per cent cheaper than the originator drug and then the generic manufacturers compete for market share by offering the competitor brands to pharmacies for lower prices than the list price paid to the originator. From 2007 we had a move in the right direction when the weighted average disclosed price was introduced. Pharmacists were required to submit sales information, net of discounts, to governments that then calculated the weighted average price. Based on that information the government reduced the price paid for these medicines. I think it is very arguable that there are a number of things we can do to bring those prices down far more dramatically.

An analysis done by Professor Philip Clarke from the University of Melbourne found that Australia pays $1.8 billion a year for the 20 most expensive generic drugs, whereas if we were paying English prices that would be reduced by some $735 million. He used the example of atorvastatin, which costs the Australian government $514 million. If we could pay the same price as the English for that drug, it would cost $119 million. Just that one drug would be saving the taxpayer $429 million. If we were paying the New Zealand price, we would be saving $448 million. These are very substantial savings that can be made.

We have got a couple of structural problems. One of our structural problems is that we are not bringing this new pricing mechanism into the pricing disclosure cycle quickly enough. In England, for example, the pricing disclosure mechanism is undertaken every three months rather than every year. I do note that it was the Labor government that brought in an acceleration of this price disclosure to attempt to bring down the costs of these medicines. But there is also another real structural flaw that I think we have to address. In the United Kingdom, where the pharmaceutical costs are borne by the National Health Service, there is a very great incentive for the provider, the National Health Service, to prescribe the generic drugs.

There is no such incentive for private doctors in Australia to prescribe the generic drugs, because it does not impact on their budgeting in any way as it does impact on the budgeting of the National Health Service. Let me remind you, we are talking about drugs that are considered to be bioequivalents. Whilst there is an incentive for the pharmacist to try to move the generic, because the pharmacist can buy the generic at a lower price than the originator drug, the pharmacist has to persuade the consumer to accept the generic, lower-cost drug. But there is absolutely no incentive for the consumer to buy the lower priced drug. Rather than increasing the co-payment, a much smarter way of going about this would be to consider offering a discount to consumers if they were to elect to accept one of those generic medicines. Whilst that would not change the subsidy that was payable by the government immediately, you would suddenly start finding that the weighted average was very different and you would start getting a much greater percentage of generics.

Let's look at how far we are from some other jurisdictions. In 2010, a survey in the US market found that 84 per cent of the volume of the US market was filled by generic medicines, whereas in Australia only 35.4 per cent by volume were generic medicines and only 12.4 per cent by value were generic medicines. We are not exploiting the financial benefit that we can get from generic medicines in the way that has been done in the United States and the United Kingdom. We are paying far too much for our drugs and we need to add a price signal. If we were really smart about this we would reduce the co-payment for the acquisition of generic drugs, rather than charging an increase on a co-payment. This would start to see us bring that percentage down so that we could get to something that more closely resembles the situation in these other developed jurisdictions. That would then start freeing up money for us to look at funding drugs like Kalydeco for cystic fibrosis sufferers. There is a real need for us to get this in hand, but we are attacking this at the wrong end. We are providing far too much of our PBS money to people on originator drugs.

One of the things that has most profoundly stunned me since I arrived in parliament is the lobbying that is undertaken by the pharmaceutical companies and the sheer number of events that are put on by pharmaceutical companies. The PBS is designed to have a very rational assessment of new drugs that are to be brought onto the system where we look at the drug, compare the effectiveness of the drug to that of any existing drug and then make a sound, scientific cost-benefit analysis. You can look at the pharmaceutical companies and the events that they have just sponsored in the short time that I have been here. There have been sponsored events by Medicines Australia, the Generic Medicines Industry Association, Arias, Diabetes Australia, Rare Voices Australia, Lung Foundation Australia, the Pulmonary Hypertension Association, the Cure Brain Cancer Foundation and the Australian Self Medication Industry, and National Seniors are trying to get people to lobby for the introduction of vaccinations. The list goes on, and you can understand it. People who have conditions are approached by the pharmaceutical companies to lobby for a drug and presumably to pressure government to accept drugs, put drugs on or promote drugs notwithstanding the fact that we have a very clear, very scientific system in place for the fair and rational assessment to get these drugs onto the PBS.

I totally support the position that the opposition is taking here. This co-payment is unfair. We do need to contain the cost of the PBS so that we can embrace new drugs that are coming onto the market, but let us do this intelligently, let us do this by getting proper benefit out of generic drugs and not overpaying the pharmaceutical companies, which is what we are doing today.

Warren Snowdon (Lingiari, Australian Labor Party, Shadow Parliamentary Secretary for External Territories) Share this | Link to this | Hansard source

It gives me not exactly pleasure to speak to the National Health Amendment (Pharmaceutical Benefits) Bill 2014, because I think it is an affront to us all; however, I think it is good to be reminded of what this bill is actually about. Its purpose is to amend the National Health Act 1953 in order to increase the co-payment and safety net amounts for items listed under the Pharmaceutical Benefits Scheme and the Repatriation Pharmaceutical Benefits Scheme. The bill will increase the co-payment for general patients by $5 to $42.70, the co-payment for concessional cardholders by 80c to $6.90, the safety net for general patients by 10 per cent each year for four years and the safety net for concessional patients by prescriptions each year for four years.

As other opposition speakers have said following the member for Ballarat's contribution, Labor will be opposing this $1.3 billion tax increase on medicines because, like the GP tax, it will hurt every Australian, particularly the sick, the most vulnerable and the disadvantaged. As I have pointed out on a number of occasions in this place, there are far too many of those people in my own electorate. The government wants us to pay a GP tax for doctor visits as well as for pathology and medical imaging, and now in this legislation it seeks to increase our contributions for essential medicines. What I do not think is commonly understood is the massive disincentive these measures will have on people accessing medicine or, indeed, the suite of measures which the government has introduced as a disincentive so that people will not attend their doctor, their GP, not get the pathology tests, not do the preventative health things that are very important for people in order to manage their own health and also not get the medicines that they require to look after their own health or that of their families.

The Prime Minister has said in this place that this is a demand reduction exercise; this is about getting people not to go to the doctor. Indeed, ultimately this will mean less call on the Pharmaceutical Benefits Scheme. It appears that this is how the government want to get its savings while, at the same time, increase the revenue they receive from the Pharmaceutical Benefits Scheme as a result of increasing the co-contribution levels. They are doing this while, at the same time, telling us that the budget is in crisis—but then they are having this money diverted to a health research fund. They are not actually addressing the issues to do with the bottom line. I want to commend the member for Blair for his contribution earlier, where he pinpointed this very clearly. It is totally unacceptable for the government to continue this farrago of untruths about the state of the budget and the reasons why it is seeking to have every Australian pay these co-payments when the moneys are not going to be used to alleviate the budget crisis. That in itself is evidence enough of the hypocrisy involved in these proposals.

I want to concentrate for a moment on the range of measures which the government has engaged with here in the health portfolio. We know that $50 billion worth of cuts have been proposed. These will have an enormous impact on every Australian family. But if you recall the COAG Reform Council report released in early June, it found that we already have a situation where 8.5 per cent of people in 2012-13 delayed or did not fill their prescription due to cost—that is, almost 10 per cent delayed or did not fill their prescription due to cost. In disadvantaged areas, this figure is 12.4 per cent, and amongst Aboriginal and Torres Strait Islander Australians this figure is 36.4 per cent. Let us just see what this means.

We are asked to believe by this government that the Prime Minister is concerned about the state of Aboriginal and Torres Strait Islander health, that he believes in closing the gap in life expectancy and infant mortality and in generally improving the life outcomes for Aboriginal and Torres Strait Islander Australians. This very measure on its own operates to undermine that objective most directly. We know that 36.4 per cent delayed or did not fill their prescription. What does this mean? It means that people are taking decisions about things that directly affect their health, their families' health or their children's health that potentially jeopardise their health outcomes as a result of already not being able to afford the medicine that they should be taking. Yet now we have this government seeking to penalise these people further by ensuring that this percentage of 36.4 per cent will increase—nothing could be surer.

It is worth contemplating again a quote I have used previously in this place from an AIHW report released in the last couple of months. It refers to the social determinants of health and how they restrict an individual's ability to access health services. On page 332 of that report, it states:

Cost is a commonly reported barrier to accessing health services by Indigenous Australians … and low levels of income can discourage people from seeking medical care and paying for ongoing medical costs …

It is very clear. People of low income will make choices. Inevitably, that will mean that the most vulnerable in our community, those who have low-socioeconomic outcomes or little access to resources, will have their health disadvantaged as a very direct result of these measures. The government sees nothing wrong with that. It still parades its farrago of untruths about the state of the budget and it will use the resources that will accrue out of this measure not to address the health outcomes of people or to address issues to do with the bottom line—not for either of those—but for health research.

This measure is on top of other measures that directly affect Aboriginal and Torres Strait Islander Australians. At least $160 million has been cut from health programs by this government in this budget, according to its own budget papers. The government disavows that. It keeps saying that there are no cuts to health and no cuts to education. It is very clear in its own budget papers that there are. In the context of Aboriginal and Torres Strait Islander health there have been $160 million worth of cuts. At the same time that it is cutting these health programs the government is saying to Aboriginal and Torres Strait Islander Australians, who can least afford it: 'You will pay more either in co-payments at the medical practice, if you have access to one, or alternatively, once you have been to the doctor, for pathology or other services. If you need medicines there will be an increased co-payment for that.' The result is inevitable. This is not the only area in which the government is penalising the most vulnerable people in our community.

I will turn to another area which relates directly to this—mental health services. In Central Australia, Aboriginal people with mental health issues living in 10 remote Aboriginal communities and more than 50 little outstations west of Alice Springs in the western desert region of my electorate, from Docker River and Mutitjulu in the south to Kintore and Papunya in the north, have for more than six years had access to a primary mental health service which meets most of their mental health needs. This has been achieved under the Mental Health Services in Rural and Remote Areas program, known as MHSRRA. The Northern Territory Medicare Local took over provision of this program from the General Practice Network during 2012-13. The network had been operating the service since 2008. The service was subsequently contracted out to the Royal Flying Doctor Service in 2013-14, and the experienced mental health team transferred from the NT Medicare Local to the RFDS with no loss of continuity in services for these remote communities. This clinical mental health service not only has met the stated objectives of the MHSRRA funding guidelines, to provide access to mental health services for people living in remote areas, amongst other goals, it has also found a way to provide an excellent, innovative, culturally safe clinical service which each of the 10 communities reports they are happy with and want to see continue. The service to these communities in my electorate has attracted and retained a stable group of highly skilled, dedicated and experienced practitioners.

Mental healing takes time. These patients usually need to have access to the bonded therapist for at least two years. Continuity of the relationship is essential. The consequences of not doing this are dire and can lead to suicide attempts and other setbacks. Yet now the rollover funding for this program has been denied. Minister Dutton said he would roll over funding for the program. That has been denied. The Prime Minister promised before the election that he would not cut frontline health services. This is a frontline health service. Its funding has been cut. As a result of the funding cut, the RFDS has had to withdraw from providing this service. The Medicare Local is looking for another service provider to provide the service at around half the funding that was previously available. In the meantime these communities are not being serviced.

Whose fault is that? It is not my fault. It is Minister Dutton's fault. It is Prime Minister Abbott's fault. And despite their protestations that they have not cut funding to health, here is yet another example where funding to an essential frontline service has been reduced, jeopardising the service for people who live in some of the most remote and underprivileged communities in this country. We are talking about mental health services. Those opposite talk about their concern for and understanding of the needs of these people. In fact they show that they do not care. We need to get the government to understand that this service is an essential service. We need to get it to provide sufficient funding to allow the RFDS to continue to provide the very high quality service that has been provided previously to these communities, firstly through the Medicare Local, then as a result of funding to the RFDS.

We cannot accept the proposition that, somehow or other, having fewer resources available to these mental health services will give a better mental health outcome for these people. It clearly will not. It is an absolute disgrace that the people who most need access to these services, who live in remote parts of Australia, have effectively been denied access to these services because of this reduction in funding.

There can be no excuse. I do not care what state the budget is in; this is an essential service. You would not tolerate this if it were on the North Shore of Sydney. But it is not on the North Shore. It is in small, remote, isolated Aboriginal communities where people are underprivileged and disadvantaged and have high levels of chronic disease which as a result of the GP co-payment issue are likely to go unaddressed for long periods of time and which as a result of the co-payment issue from medicines will mean that they do not buy medicines to address their chronic disease. At the same time, they will not be seeking access to doctors and other medical professionals to undertake preventive health checks, because they will not be able to pay or will not be prepared to pay the co-payment.

Whose fault is this? Again, it is not my fault; it is not the Leader of the Opposition's fault; it is the Prime Minister's fault and the fault of Minister Dutton. They will not own up to that responsibility, they will not accept that responsibility, they will obfuscate and they will tell us all sorts of porkies about what in fact is happening, but we know, on the ground, what the impact of these measures will be.

The people of Australia are not fools. They can see right through the rhetoric coming out of this government and they understand the impact these changes will have on them and their families. I say to the government: it is not too late to change your ideas. You need to fix this issue and remove this ridiculous prospect of a co-payment on medicines.

Kelvin Thomson (Wills, Australian Labor Party) Share this | Link to this | Hansard source

The Liberal Party said that it would give Australia 'calm and methodical government'. Instead we have had a stampede—a veritable running of the balls—replete with cries of, 'Emergency, emergency!' Here, the element of emergency is the cry that the system is unsustainable. This is clearly nonsense, given that there is no plan to put the money raised by this measure back into the sustainability of the system. Instead, it is to be directed towards medical research. So this is completely disingenuous.

Rather than seeking to discourage people from going to the pharmacist and getting appropriate medicines, the government would do better, if it were genuinely concerned with sustainable health going forward into the future, to look at the issue of preventative health and improving the support that we provide for people before they reach the situation where they need to go to the doctor or the pharmacist. As an alternative to the government's approach, I particularly want to draw to the attention of the House proposals that have been put forward by the Public Health Association of Australia, where they focus on obesity, which they describe as 'one of Australia's most important public health issues'. They talk about the various medical consequences of it and they say:

In only 15 years, from 1990 to 2005, the number of overweight and obese Australian adults increased by 2.8 million … If the trends continue, it is predicted that almost two thirds of the population will be overweight or obese in the next decade.

The National Preventative Health Taskforce identified that one-quarter of our children are overweight or obese, up from just five per cent of our children in the 1960s, that almost one-third of children do not meet national guidelines for physical activity and that only about one-fifth meet dietary guidelines for vegetable intake. What they call for is a national nutrition policy:

… developed through an open, engaging and transparent process and in a manner that is linked with other policies such as the National Food Plan and other key policy areas such as physical activity, women's health, indigenous health and the national curriculum.

Having a program of prevention is far superior to the proposals here, which are that ordinary consumers should carry the cost of the government's desire to increase the cost of pharmaceuticals and, frankly, discourage people from purchasing them.

I oppose the National Health Amendment (Pharmaceutical Benefits) Bill 2014. Among numerous case studies on broken promises, misleading claims and the poor priorities of this government, this bill stands out. This bill has the potential to actually make Australians less healthy. It has the potential to compound the health issues and health cost barriers that many Australians are already experiencing. It can be summed up in the words, 'Show me the money.' If you are from a low socioeconomic background, it is your own bad luck. If you are a single mother needing health care, this government says, 'Show me the money.' If you are a pensioner, the government says, 'Show me the money.' If you are a veteran or elderly citizen, it says, 'Show me the money.' If you are unemployed, a student, a concession card holder or a disability support recipient, this government's response is, 'Show me the money'—an ideological drive to introduce a two-tiered, user pays system.

If you cannot afford health care, this is a recipe for leaving you on your own, bereft. If you lose your job and you are denied Newstart allowance for six months, this government says, 'That's just too bad.' If you are a pensioner facing cuts to your pension payments, it says, 'That's just too bad.' If you are being taken off the disability support pension and at risk of going hungry or becoming homeless, the government still thinks it is just too bad. If you are a medical student having to pay record amounts towards your HECS or HELP fees, then, again, that is too bad. If you cannot afford to visit your doctor because you now have to pay more for your medicine, and you have this bill increasing the cost of prescriptions, too bad—the government says, 'Show me the money.'

This bill increases the Pharmaceutical Benefits Scheme co-payment for general payments by $5 to $42.70 and by 80c to $6.90 for concessional payments from 1 January next year. It also increases the concessional PBS safety net threshold by two prescriptions per year and the general safety net threshold by 10 per cent each year for four years from 2015 to 2018. I need to point out to the House that these increases are in addition to the usual increases of CPI and indexation. The bill is intended to raise $1.3 billion over four years from the pockets of ordinary Australians—I repeat: $1.3 billion over four years, from a government that claims to be concerned about cost-of-living issues.

I oppose this bill for a number of reasons: first, that the government must be held to account for its election promises and for misleading the Australian people, saying one thing before the election and doing another thing afterwards; second, for the negative impact that this will have on the household budgets of Australian people, particularly low-income and disadvantaged people; third, for the negative health impact that this will have on Australians—again, particularly disadvantaged and low-income Australians; and, finally, because of the opposition that has been expressed by stakeholders in the wider community to these increased health costs. The members opposite told their constituents before the election that the cost of visiting a doctor and of buying medicine and the cost of living would not rise under them. So much for their 'no surprises, no excuses' pre-election claim. So much for their elevating of the pre-election promise into a sacred trust.

This bill is an attack on Australia's universal healthcare system and its PBS system. Many key stakeholders have raised concerns over this bill, and the House needs to be mindful of them. The Pharmacy Guild of Australia has criticised the increased cost of medicines proposed under this bill for consumers and has argued that it will particularly affect elderly people, especially having regard to other social security changes that have been put in place. The guild stated that it will be tendering a submission to the community affairs committee which will focus on the practical implications of the proposed changes to the PBS co-payments and safety nets. Medicines Australia acknowledge the co-payment increases may lead to adverse health outcomes due to patients not filling in their scripts.

The Consumers Health Forum has expressed great concern over the growing out-of-pocket costs that Australians pay for healthcare and strongly opposes the increase to co-payments and the safety net. The Consumers Health Forum has argued that an increase in co-payments will lead to a fall in people filling in their prescriptions and has quoted American research that states that when co-payments are raised to $40-$50, people are four to five times more likely to not have prescriptions filled compared to when there is not a co-payment. The CEO of the Public Health Association of Australia, Michael Moore, has stated that the measures are inequitable and will affect society's most vulnerable members. He has argued that 'the people to whom this is most important are the vulnerable, such as Aboriginal and Torres Strait Islanders, people from low socioeconomic backgrounds or from non-English-speaking backgrounds and the elderly'.

The Australian Doctor reported earlier this month that while debate has raged over the government plans to get children and concession card holders to pay $7 to see their GP, there has been less discussion on the effects of increasing co-payments for PBS medicines. I have had constituents say to me that the impact of the PBS co-payments is more serious than the impact of co-payments to visit the GP. The Parliamentary Joint Committee on Human Rights, in its evaluation of this bill, noted 'the effect of the bill will be to increase the cost of medications for all consumers, including those reliant on social security payments' and that the proposed measures represent a 'limitation on the right to health and/or regressive measures which is not explicitly addressed in the statement of compatibility for the bill'.

On 23 June, I tabled a petition in this House from the Australian Pensioners Voice, who were calling on the government to increase support for pensioners, particularly in relation to health care. This bill ignores the calls of Australian Pensioners Voice, its members and the 25,000 pensioners and elderly residents who live in my electorate of Wills for more affordable and accessible health care. The people who are in my electorate—whether it is Brunswick, Coburg, Pascoe Vale, Fawkner, Glenroy or Strathmore, whether they are elderly or of working age—should not have to pay more if they are sick and need healthcare services or medicine. We should be debating positive health policy in this chamber rather than getting the policies that are coming forward in this bill and others that are making those who are doing it toughest in this community pick up the tab.

I want to turn to some of the comments made by the Prime Minister and this government in their days of opposition to see how these comments equate to what is happening in the legislation before the House. We had the now Prime Minister saying in September 2007:

What are the four big challenges facing the Australian health system … First of all, there is the challenge of affordability … Affordability is a serious issue.

And then:

Of course the government does not want people to worry about whether they can afford to visit the doctor … No-one likes to see people paying high costs, particularly for their health care. No-one likes that.

In February this year, the Prime Minister was asked at a doorstop whether he would consider a means tested co-payment to help relieve the pressure on the health budget. He said:

Obviously the Budget, generally, is under pressure and it’s very important that we do what we can to fix the Budget, as quickly as we can, but we’ve got to do it in ways which are consistent with our pre-election commitments. Don’t forget, I said we were going to be a no surprises, no excuses Government. You might also remember … that I was the Health Minister in a former government and as the Health Minister in a former government, I used to say that that government was the best friend that Medicare had ever had.

This leopard doesn’t change its spots—I want this Government to be, likewise, the best friend that Medicare has ever had.

At no stage was there the slightest suggestion that, when in government, this government would increase the PBS co-payment for general patients to $42.70 and for concessional patients to $6.90. This bill gives the lie to all the promises and mistruths that were peddled before the 2014 'show me the money' budget.

There are some Liberals who are willing to admit that this approach to health funding is wrong and that it will hurt patients and frontline services. I want to draw the attention of the House to some of the comments of the government's state colleagues. We had Campbell Newman on 14 May saying:

A big red cross is cutting health and education spending. It's not acceptable.

We had Tim Nicholls, the Queensland Treasurer, saying:

We think that they are an attack on the state’s delivery of health and education services and you can rest assured that we will be taking up the challenge in Canberra to revisit some of those decisions.

You had the health minister from Queensland, Lawrence Springborg, saying:

The real impact for us comes in 2017/18 … The real issue for us is the long-term aspects that come from and impacts that come from uncertainty with health funding.

Finally, he said on the GP tax:

… we fundamentally believe in a taxpayer-funded free public hospital system. And this actually in some ways goes counter to that.

It certainly does.

I appeal to members opposite to listen to their Liberal state colleagues: stop attacking the universal healthcare system and protect it. How much you earn should not determine whether you have the ability to access health care and medicines. I oppose this bill on the basis of its cost to Australian families. Just today I visited the Australian Nursing and Midwifery Federation representatives on the lawns at the front of Parliament House to support their campaign against the Liberal budget cuts. Whether you are a health sector worker, a health student or a patient, you are entitled to better treatment than you have received from this government in the form of the budget and this legislation. I urge the House to reject this bill.

Tony Zappia (Makin, Australian Labor Party, Shadow Parliamentary Secretary for Manufacturing) Share this | Link to this | Hansard source

I begin by commending the member for Wills for his contribution to this debate because I believe he summed up many of the issues very, very well. This is a bill that effectively raises $1.3 billion for the government by increasing the costs of pharmaceuticals for the people of Australia. In fact, the cost of pharmaceutical co-payments for mainstream Australia will go up by $5 to $42.70 and by 80c to $6.90 for concession holders from 1 January 2015.

If these measures were brought into the House and imposed by the government in isolation of all the other measures that the government is bringing in in respect of the costs of health care in this country then one might well be able to justify them in one way or another. But the reality is that these measures increasing the cost of pharmaceuticals to the people of Australia are in addition to a list of other cuts made by this government to health service provision in this country.

There are a couple of other matters that I want to speak about before I get to the substance of this bill. The justification being used by the government with respect to the increases in the costs of health care for Australians is that our healthcare costs are unsustainable. We heard today in question time the Minister for Health on more than one occasion go to the dispatch box and talk about how the health costs of the nation are simply unsustainable. He quoted a couple of reports that were commissioned by the previous government to support his argument. But then, on the other hand, we have the other narrative—the one referred to by the member for Wills when he was referring to the Prime Minister's comments about how we have a budget emergency and therefore need to increase the cost of health care for the Australian people to balance the budget.

There are a couple of matters which I will go to with respect to both of those arguments. The first one is that if it is a matter of balancing the budget then why are these costs not in fact going to the budget but instead going to the Medical Research Future Fund? The argument that it is about balancing the budget and that therefore we need to impose the additional costs simply does not add up. Simultaneously, if it is about health costs, the argument still does not stack up. One of the very disappointing aspects to the argument that this is all about trying to maintain and contain the health costs of the nation is that the government inevitably points the finger at older generations of Australians—people who are retired. We hear constantly the theme about how we are faced with an ageing population and how our health costs are rising. They are almost saying to the people of Australia, 'It is all because of the older people of this country.' It is a claim that is simply not true. Quite frankly, it is a claim that is insulting to the older people of this country, who have not only paid their taxes but are not necessarily the cause of all the increases in costs in health care across the country. It is also demoralising to them. Indeed, I have spoken to several of the older people in my electorate who feel the insult and have raised it with me.

On top of that, the government says, 'Because of the ageing population of this country and how people are living longer and the additional burden on society in the way of pensions and health costs, we are going to push up the age of retirement from 67 to 70.' That in itself will mean that people will be paying taxes for a much longer period of their lives. You would have thought that that alone would have been enough to justify and offset any additional cost that older people might impose on the health system—the mere fact that they are likely to be working longer and therefore paying more taxes.

I reject both those arguments. I simply highlight that in order to justify these measures the government is trying to cling to the arguments that (a) we need to balance the budget and (b) the health system is unsustainable, and it is using examples and arguments that simply do not add up.

I started off by talking about how perhaps these measures would be bearable if they were in isolation and this was the only health impact that was occurring across the country. The reality is that it is not. You can go through the budget of the Abbott government that was handed down in May and see that it is not only a budget of broken promises. If they are not broken promises, they are decisions made without telling the Australian people last September that they would be made. In other words, it is deception by simply saying nothing to the Australian people about what you really intend to do if you get elected.

I will start with the cuts to the dementia program. The behaviours supplement paid to residential care providers is going to be cut by $16 a day. The $16 a day from that supplement adds up to $5,480 a year. This is not a few dollars. This is not even a few hundred dollars. We are talking about almost $6,000 a year of cuts in respect of this one single area alone. I can tell you that it does matter. A constituent in my electorate came to my office to talk to me about how this cut is going to impact on the health care of his family. He does not believe that he can find the additional $6,000 he will have to find in order to cover the cuts that have been made. He cares for his wife, who has dementia. I am sure he is not alone. As I said, we are talking of cuts that to him are worth almost $6,000.

Then we go to private health insurance premiums. Under this government we saw a 6.2 per cent increase only recently. Again, it is higher than we had seen for the past four or five years. That is a cost that families will also have to bear and wear as a result of this government's policies. On top of that there are things like the $7 GP co-payment. The $7 GP co-payment goes hand in hand with the increase in the cost of pharmaceuticals, because inevitably if someone goes to a doctor there is a very high likelihood they will come out with a prescription. So it is not just the $7. There is then the additional cost of $5 for the prescription, so it becomes $12. In a family of four in which mum and dad and the two kids all come down with flu in the winter, as is often the case, chances are you will be looking at the cost four times over, because each one with have to go to the doctor or to the hospital.

The statistics are quite clear. People will not go to a doctor as often if they have to pay more money, or they will indeed not purchase the pharmaceuticals, the very medicines they need, if it is going to cost them more money. They will make choices about whether they think they can afford it. The problem with that is that it does not save them costs and it does not save the nation costs, because inevitably they become more sick. When their health deteriorates even further the ultimate cost adds up to a lot more. Indeed, if they end up in hospital we are then talking about thousands of dollars being imposed on the community, as opposed to perhaps the $10 or $20 they tried to save by not going to the doctor. This is why it is indeed a false saving to increase the cost of a doctor's service, or the cost of a medicine or an X-ray, because that will save the taxpayers so many dollars. It might on day one, but in the long term it will add to the cost of health care for the nation.

We are getting evidence about this, not just from this side of politics, but indeed we are hearing that theme time and time again from right across the medical profession. The people who understand best are telling us that by increasing the cost of health care we are actually driving up the health costs of the nation. Interestingly, I cannot recall once the Minister for Health quoting the medical sector in order to justify the increased costs we are seeing right across the board.

We then go to the cost to the dental health programs of this country—a cost that I understand is $634 million—which includes cuts to both direct dental care, to the training of dentists and also to the delivery of public adult dental services. My understanding is that there are $390 million of cuts to public adult dental services, $229 million dedicated to dental infrastructure will be cut, and there will also be some $15 million of cuts to training dentists.

Again, any health expert will tell you that, if because of these cuts people will not care to look after their teeth, ultimately it will lead to other medical problems. So, again, it is a false saving, where you cut a few dollars here and ultimately end up paying a lot more because people, as a result of perhaps having poor teeth, end up with other medical problems, which in turn means that the health costs escalate, and in many cases they may well end up in hospital again. It is a false saving.

I now go to the $3 million of cuts to the National Tobacco Strategy. I do not think any member of the House would disagree with the general medical view that smoking causes health problems. I would have thought that prevention is better than cure, an argument put very strongly by the member for Wills, and that if you spend $3 million on a prevention strategy it will ultimately save you a lot more than that in health costs. But, again, this government does not seem to see that, the reason being that the cuts and the savings will be short term and will enable the government to perhaps go to the next election, before the additional health costs set in, and say, 'Look what we have done. We have brought down the budget.' But in the long term they, or whoever is in government, will pay dearly for it, as will the Australian people.

We also saw $142 million in cuts to the Health Workforce Programs by the abolition of Health Workforce Australia. Again, it is a false saving. Well trained medical professionals are likely to give the best care, which in turn again means that you will save health costs in the long run.

There is simply one cut after the other, which ultimately leads me back to the point I started with—namely, that these measures simply add to the cost of health care across the country. This was confirmed by researchers at the University of Sydney. I will quote some examples they have given. A young family of four with two children aged under 16 and parents aged from 25 to 44 years would expect to pay an average of $170 in co-payments for GP visits and tests, and $14 for medications, which equals $184 more each year as a result of changes made by this government. This is only for some of the changes. As a result of these changes, a self-funded retired couple aged 65 years or more would expect to pay an average of $244 more per year in health costs, and an older couple who are pensioners and are aged over 65 years would pay about $199 a year more in health costs. I suspect that those calculations take into account only some of the changes I referred to earlier.

These changes will drive people to go to public hospitals more so than going to their local GP and paying for their own pharmaceuticals. The problem with this is that when people go to public hospitals the cost per head becomes much higher than if they had been treated at their local GP service. In my own state, where some $650 million has been cut from hospital payments, I know that it will make a difference.

I can recall the member for Boothby, on the day the state budget was handed down, talking about the cuts that had to be made by the state government as a result of this government's direct cuts to the states in health, and saying how terrible the state government was. He was not prepared to stand up for the people of his electorate and say, 'This is the result of the federal government making cuts to the states.' Every time you cut health funding to the states they have no choice but to either cut services or increase their own costs. This is nothing but another way of pushing the cost onto someone else—in this case the state government—because the state governments have to pick up the costs of people going to public hospitals.

This measure is going to hurt the people who can least afford it—pensioners, people who are unemployed and people on low incomes. This side of the House will not be supporting it. Certainly I will not be.

Julie Collins (Franklin, Australian Labor Party, Shadow Minister for Regional Development and Local Government) Share this | Link to this | Hansard source

The National Health Amendment (Pharmaceutical Benefits) Bill is one of many bills that are part of a budget that is built on broken promises, part of a budget that is targeted at some of the most vulnerable in our community: families, low-income earners, pensioners, the sick and the elderly. Shame on this government for coming in here and introducing this bill, this attack on vulnerable people in our community who can least afford it.

This government said one thing before the election and a different thing after the election. People did not know that this increase in pharmaceutical costs was coming. They were not warned of it before the election. Indeed, we had the Prime Minister stand up and say 'no cuts to health'. Then what did we see in the budget? We saw not only this measure, which is an increase in the cost of prescriptions, but $50 billion over 10 years ripped out of health in this country. The GP tax comes on top of it. All of these things will be targeted at the vulnerable, the sick, the elderly and families that can least afford it in our community.

This comes on top of a whole range of other measures that will affect families, things like the increase in the petrol tax and the pension changes. One of the worst things in this budget is the changes to Newstart, which could see people under the age of 30 on no income at all for six months of the year if they are unable to find employment. Indeed, the department admitted that that could be for up to 11 months when penalties apply. As well, changes have been announced to the disability support pension and to higher education, which will also affect low-income families. There are $30 billion worth of cuts to education. There are so many broken promises in this budget, of which this measure is just one.

Why have we got all of these broken promises? It is because of the government's confected budget emergency that they pretend exists, but of course it does not exist and it never did. Yes, there are challenges with the budget, but budgets are about making choices. This government made a choice that will hurt vulnerable families and elderly and sick Australians. That was the choice they made whilst at the same time introducing a $22 billion Paid Parental Leave scheme. I think it shows us what this government's priorities are, and they are not the sick and the elderly and they are not improving our health system.

Every state leader across the country reacted to this budget in the same way. They are very concerned about the federal government's cost-shifting onto the state health and education systems. That is what this budget measure will do. People will put off getting their prescriptions because of this increase. According to figures from the COAG Reform Council report released in early June, people are already putting off getting the medicines they need. Indeed, 8.5 per cent of people in 2012-13 delayed or did not fill their prescriptions due to the cost. They simply could not afford it at the time they needed their medication. In disadvantaged areas this figure is 12.4 per cent. As we heard from the member for Lingiari, it is 36.4 per cent when we are talking about Indigenous Australians, who have some of the worst health outcomes in this country.

This measure is going to hurt those people who can least afford it. What will they do? They will not fill their prescriptions, they will get sicker, their health outcomes will be worse and they will end up in emergency departments, in state health systems. This is going to cost the states more. On top of the $50 billion cut to health over a decade, no wonder state leaders are angry and concerned about this federal budget. But they are not the only ones who are concerned. This budget and the other measures in it hurt families. We know that a family on $55,000 with two kids will be around $6,000 worse off under this budget, and that is without the GP tax or these increased prescription costs. We know that people on low and fixed incomes will be hurt by this budget and we know that the elderly, particularly pensioners, will be hurt by this budget because of pension cuts.

This measure, together with the GP tax, particularly concerns pensioners in my electorate, many of whom have written to me. I have visited the Tasmanian Pensioners Association. They are all raising very serious concerns with me. People in the Pensioners Union have told me about the phone calls they have taken from other pensioners. They have told me how distressed pensioners are about how they are going to cope with the outcome of this budget. They are in tears. Elderly people on their own have said they will have to give up their pet—their dog—because they cannot afford to feed it anymore. This budget will make matters so much worse for them. We all know that elderly Australians who have a pet have better health outcomes. The person who was telling me this story was very distressed. The Pensioners Association have collected signatures against the measures in this budget, which have been tabled in the Senate by my colleague Senator Carol Brown. These pensioners are so distressed by these budget measures, particularly this one.

The Pharmaceutical Benefits Scheme is supposed to be about universal health care. It is supposed to be about medicines being available for Australians when they need them. In this country that has been the case for decades. We are putting about $9 billion a year into the Pharmaceutical Benefits Scheme. This measure is estimated to raise about $1.3 billion over four years. But this money is not going back into the Pharmaceutical Benefits Scheme or even into health generally; it is going into a medical research fund. Even if you believe the confected budget emergency, which is not real, this money is not going towards that. It is coming out of the pockets of the sick in Australia and it is not going back into pharmaceuticals.

We have vulnerable people in our community who are going to be paying this additional tax when they can least afford it, on top of all of these other measures, and the government says, 'That's okay. We have got this budget emergency, but we are not going to use the money for that. We are going to put it into a medical research fund.' All of this pain, all of this distress and all of this confected budget emergency is not achieving anything much in the short term at all, other than causing people distress and other than making people sicker. I am not quite sure why they are doing that.

Ed Husic (Chifley, Australian Labor Party, Shadow Parliamentary Secretary to the Shadow Treasurer) Share this | Link to this | Hansard source

It is a price signal.

Julie Collins (Franklin, Australian Labor Party, Shadow Minister for Regional Development and Local Government) Share this | Link to this | Hansard source

Yes, allegedly it is a price signal, because there are so many people out there that are getting prescriptions and having them filled when they have not got any money and when they do not need them. I know so many pensioners who are doing that—not!

Alan Tudge (Aston, Liberal Party, Parliamentary Secretary to the Prime Minister) Share this | Link to this | Hansard source

Who introduced the co-payment to start with?

Julie Collins (Franklin, Australian Labor Party, Shadow Minister for Regional Development and Local Government) Share this | Link to this | Hansard source

The co-payment was introduced by Labor, but not on top of a budget that is implementing all of these other nasty measures and coming at a time when people can least afford it. It did not come at a time when we were cutting pensions, it did not come at a time when we were cutting $80 billion out of health and education and it did not come at a time when a family on $55,000 was going to be $6,000 a year worse off because of a budget. That is why this measure is so, so bad. It comes on top of all of these other measures that people are going to be facing in this budget and it is all for no purpose. It is because the government of today is making bad choices and bad decisions that are affecting the most vulnerable people and the lowest-income earners in this country. That is what this is about.

I am proud to be standing up and opposing this bill. I am proud that I am standing up for the vulnerable people in my community and in communities right across the country. I am proud to be a member of a party that says that this measure, on top of all of the other measures in the budget, is not okay and is unfair. It is absolutely unfair to have a Prime Minister stand up before an election and say, 'no cuts to health,' and then their first budget has very significant cuts to health in it. They are very significant cuts indeed. It is not good enough to say one thing before an election, come into this place, and in your first budget then do the very thing that you said you would not do. You wonder why Australians have lost faith in this government and you wonder why Australians are so angry out there in the electorates and you wonder why the people you are talking to are so concerned about this budget!

We have heard from the other side that it is just the Labor Party that is scaring people out in the electorates. But it is not the Labor Party that is the issue; it is the budget itself that is the issue. The budget itself is scaring people. It is scaring people with a GP tax—we have doctors reporting already that people are not turning up for their appointments because they think it is already in place. We have the Pharmacy Guild and other people coming out and saying that this measure is of concern. Indeed, the Pharmacy Guild said that the recent study on the impact of the co-payment increases concluded:

… increases in patient contributions particularly impact on concessional patients’ ability to afford medicines. This is an impact that should be of concern to policy makers.

Too right it should. It should be of concern to policymakers, but it does not appear to be because they do not seem to understand what this budget is doing to people and why people are frightened of it. They do not seem to understand and they do not seem to care.

I am very pleased to be standing in this place opposing this bill and saying that this bill—together with the other measures in the budget—is unfair and that we will be opposing it in this place and in the other place because it is not fair. This measure comes on the back, as I said, of so many other measures in the budget that will be affecting people right across the country. It comes on top of the cuts to health and education, it comes in conjunction with that GP tax and it comes in conjunction with the petrol tax increases, the pension changes and the increase in the age for the pension. They are all things that the government said prior to the election it would not do but that it is now doing. On all of those things the government said to the Australian people, 'We will not do this. There will be no cuts to health, no cuts to education and no changes to pensions.' Yet all of those things are in the pipeline and are being introduced. The increase in the cost of prescriptions in this bill is one of those budget measures that Australians did not know they were going to get, that Australians do not want and that are so unfair on the sick and the vulnerable in our community.

The PBS is supposed to be sustainable and, as I said, that is why we did a talk about a co-payment and why we did look at that in government in the past. The other thing about the PBS is that when we were in government we did the right thing and made savings with the PBS. We did it by negotiating lower prices for patients. We did it and we put the money back into the PBS to ensure that other new drugs that came onto the market became available for patients, improved healthcare outcomes and were able to be listed on the PBS. That is what responsible governments should do. It is what we did and what we were doing for the last six years we were in government. We were attempting to make huge savings on the PBS but we were putting that money back into listing new medicines on the PBS, because we were concerned about health outcomes for Australians. We were not concerned, as this government is, about simply cutting funding from the budget and putting tax increases—

Ed Husic (Chifley, Australian Labor Party, Shadow Parliamentary Secretary to the Shadow Treasurer) Share this | Link to this | Hansard source

Yes, they voted against it.

Julie Collins (Franklin, Australian Labor Party, Shadow Minister for Regional Development and Local Government) Share this | Link to this | Hansard source

They did vote against it. That is right. They did vote against the changes that we wanted to make to the PBS and the changes that we did make to make medicines more affordable for Australians.

Tanya Plibersek (Sydney, Australian Labor Party, Deputy Leader of the Opposition) Share this | Link to this | Hansard source

They voted against private health insurance.

Julie Collins (Franklin, Australian Labor Party, Shadow Minister for Regional Development and Local Government) Share this | Link to this | Hansard source

They did vote against the private health insurance rebate changes that we introduced, which also were to make the health budget more sustainable into the future. Any government should be focusing on measures that improve outcomes for Australians—for patients, for the sick—rather than simply trying to raise revenue, trying to cut costs and trying to make things much, much worse for those sick, elderly and vulnerable Australians who cannot afford the increases in medication prices that are part of this budget. They are in this bill and, as I said, they do come on top of a whole range of other measures in the budget that will attack families, attack low-income earners, attack pensioners and attack the sick and the vulnerable in our community. I am very pleased to be standing here opposing the measures in this bill and opposing other measures in this budget that are so unfair on so many vulnerable young Australians who cannot afford these increases. I am very pleased that we are opposing this bill.

Debate interrupted.