Tony Smith (Speaker) Share this | Link to this | Hansard source

It is my duty to draw to the attention of the House, the fact that the Senate amendments conveyed by this message include a proposed amendment which raises an important point of Constitutional principle.

Amendment (1) proposes to amend the definition of medical innovation to expand the purposes for which amounts may be paid from the Medical Research Future Fund Special Account. This account is established by clause 14 of the bill, with payments being made out of the Consolidated Revenue Fund under a standing appropriation in section 80 of the Public Governance, Performance and Accountability Act 2013.

There is doubt that the Senate may proceed in such circumstances by way of amendment because of the requirements of sections 53 and 56 of the Constitution. The matter for consideration is not so much one of the privileges and rights between the two Houses, but observance of the requirements of the Constitution concerning the appropriation of revenue. I am advised that the view has been taken, where there is an expansion of the purposes for which money may be drawn from a standing appropriation, section 56 of the Constitution requires that the proposed appropriation be recommended by a message from the Governor-General. I understand that such a message has been obtained in this case.

If the House wishes to entertain the proposal reflected in the Senate’s proposed amendment, the House may choose to proceed by alternative means.

Sussan Ley (Farrer, Liberal Party, Minister for Health) Share this | Link to this | Hansard source

I move:

That the House endorse the statement of the Speaker in relation to the constitutional questions raised by Message No. 343 transmitted by the Senate in relation to the Medical Research Future Fund Bill 2015.

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

We will support that means of progressing. But I do point out that it has been a bit of a debacle, that these matters were not considered in the original bill. With the number of amendments that the government has had to make, both here in the House and in the Senate to its own legislation, it has been pretty clear this has not been thought out as well as it could have been. But we are happy to accommodate this procedure.

Question agreed to.

Tony Smith (Speaker) Share this | Link to this | Hansard source

I understand it is the wish of the House to consider first the Senate's purported amendment No. 1, and, when that purported amendment has been disposed of, to consider amendments Nos 2 to 20.

Sussan Ley (Farrer, Liberal Party, Minister for Health) Share this | Link to this | Hansard source

I move:

That the Senate's purported amendment No. 1 be disagreed to.

Tony Smith (Speaker) Share this | Link to this | Hansard source

The question is that the Senate's purported amendment No. 1 be disagreed to.

Question agreed to.

Message from the Administrator recommending an appropriation for the purpose of an amendment of this bill announced.

Sussan Ley (Farrer, Liberal Party, Minister for Health) Share this | Link to this | Hansard source

I move that the amendment set out in the schedule circulated to honourable members be made in place of the Senate's purported amendment No. 1, which has been disagreed to:

(1) Clause 5, page 7 (lines 4 to 7), omit the definition of medical innovation, substitute:

  medical innovation includes:

  (a) the application and commercialisation of medical research for the purpose of improving the health and wellbeing of Australians; and

  (b) the translation of medical research into new or better ways of improving the health and wellbeing of Australians.

Tony Smith (Speaker) Share this | Link to this | Hansard source

The question is that the amendment set out in the schedule circulated to honourable members be made in place of the Senate's purported amendment No. 1, which has been disagreed to.

Question agreed to.

Sussan Ley (Farrer, Liberal Party, Minister for Health) Share this | Link to this | Hansard source

I move:

That Senate amendments numbers 2 to 20 be agreed to.

Adam Bandt (Melbourne, Australian Greens) Share this | Link to this | Hansard source

I just want to make a few brief remarks. Most of our remarks have been conveyed in the Senate during the course of the debate there, but I would like to speak to a number of those amendments, in particular to amendment No. 20.

The Greens are strong supporters of medical research and, in particular, any initiative to increase funding for medical research. That is for a number of reasons that have been well canvassed elsewhere. Medical research in this country is essential to our country's wellbeing. But also, as we consider the role of Australia in the 21st century we have to ask ourselves a pretty important question, which is: what is Australia going to sell to the rest of the world when the rest of the world tells us to stop digging? We will never be able to compete with China or India on wages, and nor should we try. Australia's future will be contingent on having strong export markets in areas like medical research and innovation, where we already have an advantage and where, with the proper government support, we can continue to do so.

It is with some concern that we note that recently there has been a drop-off in the value of the medical research industry and related products in Australia and their exports. We should be taking steps to address that, and boosting funding is one of those ways.

If we had our way, as the Greens, we would argue for greater recurrent funding to medical research through NHMRC and other bodies. The government has proposed the establishment of a fund that will invest money, and then the interest of that will be used for medical research. That is not necessarily how we would have done it, but the initiative, such as it is, is to be welcomed if it results in increased funding for medical research in this country. Certainly, that is something I have seen firsthand in my electorate of Melbourne: the significance of the discoveries from medical research for the Australian community and also for our economy, both locally and internationally.

In that respect there are three areas that the Greens have drawn attention to during this debate. The first concern is that this would ultimately not be additional money but could potentially result in cost-shifting away from the NHMRC and from other areas. Investment in medical research such as is being proposed by the government is only good if it is genuinely additional money. To that extent, I am pleased that amendment (20), which has been accepted and ultimately moved by the government, will ensure that when the review takes place it has a strong eye to looking at ensuring that there has not been cost-shifting away from the NHMRC or from the ARC or, indeed, from the money that flows through higher education grants. It is important to ensure that these funds are genuinely additional funds for medical research.

The second area that we are pleased the minister made some comments about on the record in the Senate concerns investment in tobacco. Because of the way that these funds will be managed, we wanted to ensure that they would not be funds that were invested in tobacco, the proceeds of which would then be used for medical research. That would be something which I think the Australian public would disagree with, and I am pleased that there has been an undertaking that the funds which medical research will be drawn on in this fund will not be invested in tobacco.

The last matter that the minister has put on the record in the Senate and that we were hopeful to get some more progress on—and we will continue to do so over the course of this parliament; I understand the minister has undertaken to look at it—is when this fund results in investment in a company that generates significant private return. If, as a result of this fund, we see the next cochlear implant—and there are many, many developments, particularly in Melbourne and in Australia that might lead us to think that we are on the verge of some pretty important discoveries and therefore some pretty important products to be manufactured—and if it does result in significant private benefit, there should be a mechanism to ensure that some of that private financial benefit generated by a private company finds its way back to the public purse.

Indeed, it would be ideal if the Medical Research Future Fund had a stream of revenue in an analogous way that CSIRO gets a return from the Wi-Fi patents. If this results in significant private benefit, some of that money should find its way back to the MRFF so that we can then invest in more public research. This way it will ensure that it will not just be a private good that benefits but that the public good benefits as well. This is something that we will continue to progress. In the meantime, we will be supporting these amendments because any money that comes new to medical research is to be welcomed and supported. So we will be supporting the amendments in this place.

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

I want to from the outset make a few remarks. The Labor Party will be supporting these amendments, as we did in the Senate, and we will support the passage of the bill. But let us be very clear about what has happened here. The initial bill as presented in this place had not got any input from Health at all. So we have managed through the processes here in the House and the Senate to deal the health department and the health minister in, because they were not in before. We have managed through the processes in the House and the Senate to get some better integration between this bill and the NHMRC. But Labor's view is that it is not enough. It does not meet the government's own stated budget papers as to what the purpose of this fund was to be. The budget papers state that the money was to be predominantly paid through the National Health and Medical Research Council. When the fund was envisaged—and I think it has to be acknowledged that this fund did not come out of the health department or out of health policy and that in fact it was thought up through a separate process—and when it was eventually disclosed to the public that this is what the government was planning to do, the government stated that it was going to be funded and that it was going to utilise the NHMRC processes to disburse this money. That is not what it has done.

This bill is an improvement on what we had previously, but I do want to make it very clear that a Labor government would seek to amend it, to put the purpose in place very clearly that we think that expert and peer review is the only way we can make sure that we get the best quality health and medical research in this country. The sidelining of the NHMRC will, I think, be something that will be looked upon very poorly in years to come. So we will of course be watching the decisions the government makes about the disbursements of these funds. I remind the House that in fact the former CEO of the NHMRC, Warwick Anderson, stated very clearly that when judging how to use public money for research only peer review can identify what is valuable and what is not. He went on to say: 'NHMRC's almost 80 years of effective ethical and efficient service to the Australian community means that public trust in the Medical Research Future Fund will be maintained if the NHMRC plays the major role in administering the earnings of the fund in accordance with the advisory board strategy.' That is the former CEO of the National Health and Medical Research Council, and we agree with him. We absolutely agree with him. I want to make that clear.

This has been an extraordinarily poor policy process from the outset. What has had to happen through the course of the debate about this bill is that Labor has had to try and force the government into a position where it considers the policy parameters under which it funds health and medical research. It was not thought through. The initial bill did not contain any advisory structures. It did not contain any expert opinion at all to try and look at what the best strategic direction was. It had no links to the National Health and Medical Research Council and very little role at all for the Minister for Health, the health department or health policy makers; this has had to be done through the process. I think it is very disappointing that the Senate did hold an inquiry. Obviously, a deal had already been done between the Greens and the government on this bill, so Labor had to try and prosecute some of this on its own. The government paid very scant attention to the many, many voices in the research community who said that this is not the way to go.

We do know there are a lot of powerful and vested interests in this space. We all get them coming into our office on a regular basis. It is why we have the National Health and Medical Research Council and peer review to determine what the best medical research is going to be. It is why politicians do not get to decide. I think the danger in this bill is that some very powerful voices have been listened to and some less powerful voices have not been. I think that that is going to be, in the longer term, to the detriment to health and medical research. I do want to put on record that we, when in government, were very strong supporters and we will continue to be so. (Extension of time granted)We will continue to be so both from opposition and from government, should we ever be fortunate enough to form government again.

Equally, it would be entirely remiss of me to not remind this place of just where the money for this fund has come from and of the extraordinary divide that this government has put on those who at the front-line of our health services every single day, providing services to people who are coming into general practice surgeries, who are seeing specialists and who are trying to get access to medicines. The money has come from funding cut from prevention, funds from the freeze on the Medicare Benefits Schedule and funds from the Pharmaceutical Benefits Scheme changes, which will make harder for people to access medicines. I have to say that those changes have not passed the Senate and are not likely to, but that money is still being counted as being within this fund. All of the cuts to health and to direct services to people are where the money for this fund has come from. It would be remiss of me not to say again to the government that: we support medical research, but at what cost have you done this—at what cost to direct service provision for people across the community who are already feeling the brunt of the MBS freeze when they go into general practices across the community?

Labor, as I said, will support these amendments. I want to again point out that it is an unusual circumstance to have a government have to move in this place some 22 amendments to its own legislation and in the other place 20 amendments to its own legislation. It stuffed it up, basically. It did not do the work. It had not actually consulted about what this policy would look like and what would the best disbursement process would be. It made absolutely no reference at all to McKeon, which is the review into medical research. The fact that there was no discussion about how you might leverage this funding off philanthropic organisations, off other business or off other capacity to build capital is a missed opportunity, and an opportunity that McKeon outlined should be pursued. Again, this is a missed opportunity to go through the recommendations of McKeon and see how this funding could leverage the actual outcomes for those recommendations. No reference by the government, in this entire Medical Research Future Fund process, has ever been made to the McKeon review.

Again I put on the record that, whilst we will support these amendments, we do not think that this is the best way that this fund could have been established. It is not the best way nor the most transparent way. Without peer review, without expert review and without a clear and transparent process for disbursements, this is not the best way that this fund could have been administered. Obviously, we are not going to pursue further amendments here in this place, but we will be watching the government very closely as it starts to make announcements in relation to this fund—particularly in an election year. We want to make sure that the reputation of health and medical research in this country is maintained. We want to make sure that it is not just the most powerful voices that get access to this fund. We want to make sure that it is not just the voices that manage to get the ear of government or the support of government that get access to this fund. Access must be on the basis of what is the best quality health and medical research and of what is going to make the most beneficial difference to this community.

Again, I say to the government that we remain happy to work with you on sensible health reforms that will improve health outcomes in this country. In our view, you have missed an opportunity with this Medical Research Future Fund. It has been an incredibly poor process, as shown by the way in which the bill has been managed through both chambers. We are pleased that we have managed to get health dealt into this bill. It is something that you should have done from the start. We are pleased that we at least managed, through the Senate inquiry, to have some of the broader voices of the medical research community heard. We will support the bill and we certainly remain very strong supporters of medical research.

Sussan Ley (Farrer, Liberal Party, Minister for Health) Share this | Link to this | Hansard source

I would like to briefly respond to the member for Ballarat's comment on this bill, with the overarching remark that the Labor Party has no credibility when it comes to medical research. This is backed up by facts not by rhetoric.

Ms King interjecting—

The member for Ballarat, I listened to you. I listened to you attack the government for 10 minutes, and I think it is appropriate that you listen to the response. I think we need to make the point about what Labor's record tells us about medical research. We know that after the Howard government was re-elected in 2001, the spending on medical research ramped up by a multiple of four between 2001 and 2006. There was an enormous increase in the total quantum allocated to medical research in principle during the time that the now Prime Minister was health minister. If we contrast that with Labor's record, in the 2011 budget, Labor tried to take out $400 million by rephasing the way that the NHMRC, which the member for Ballarat talked about today, was paid and distributed its funding.

Ms King interjecting—

It was a pretty amazing contribution that we have just heard from the member for Ballarat suggesting that Labor's record on medical research is a good one. So that was $400 million. Another $130 million came out in the 2013 budget—right before the bell, as it happens prior to an election: look for a pot of money and take money out.

Ms King interjecting—

If the Labor Party want to be political, you will get a political response.

Ms King interjecting—

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

Order! The minister has the call. With respect to the member of Ballarat, you were heard in silence.

Sussan Ley (Farrer, Liberal Party, Minister for Health) Share this | Link to this | Hansard source

To suggest, as the member for Ballarat and as the opposition did when this bill was introduced into this place, that this is a slush fund is a disgrace. I know Labor knows a lot about slush funds, because they have had such good experience with them. You only have to think about pink batts, BER or the Early Years Quality Fund. Labor should have known perfectly well not to identify this as a slush fund. Identifying it in that way was an insult to every medical researcher in this country. In all the conversations I have had, we have heard very positive responses about what this fund will do, how it will do it and the way it will be distributed. This has been met with incredibly broad support. It has not been suggested to me by any individual anywhere that we have been going about this in the wrong way.

Yes, it is a competitive field. The overwhelming message that comes back to the government is this: 'Please, we want more money.' That is what this fund does, by building up a corpus of $20 billion and distributing $1 billion every single year. There is a secure, on going and sustainable stream of funding for medical research which there has never been before, which is world leading and world beating and which we know will produce remarkable results. There will be an independent expert panel: the advisory board, as the member describes. There was always an independent expert panel. There is, I believe, certain scope for a strategic look at the way medical research is done, with some opportunities that those experts will feed into a process led by the Chief Scientist, fitting into the Australian government's national research priorities.

To suggest that that smacks of vested interest, again, is an insult to all of those people who I know will have a strong say in that process. We very much support the curiosity driven, bottom-up research that the NHMRC produces and we know that the average $800 million a year disbursement from that will continue. We also have the support of the two organisations, with each other, for their disbursements going into the future. I am sorry that the member for Ballarat, having initially called this fund a slush fund, is here trying to smear what I know will be a positive contribution to the nation's future. Really, this should not be the least bit political.

Adam Bandt (Melbourne, Australian Greens) Share this | Link to this | Hansard source

I will respond to a couple of comments that have been made, including about the Greens. The first thing to clarify is that, although the government may seek in its budget papers to make a number of cuts to other areas of health to fund this, those proposed cuts are completely independent of this fund. They will continue to be opposed in the Senate and elsewhere, just as we helped stare down the GP fee that was intended to be one of the primary mechanisms for funding this in the first place. We have a position of supporting the fund without supporting the way in which the government proposes to fund it.

On the question of cuts, I think neither the government nor the opposition comes to that with clean hands. I recall one of the best demonstrations that I have been at. I have been at a few, but one of the best of them was to see 5,000 scientists and researchers in their lab coats turning out on the steps of the state library in Melbourne when it was suggested, proposed and leaked that the former Labor government was going to cut funding to health and medical research. The Discoveries Need Dollars campaign put health and medical research on the agenda in a way that it had not been before.

The message that came out of that very, very clearly from scientists and researchers—who would much rather spend their time doing their research and who do not want to be subject to the vicissitudes of the political cycle, because so much of this research goes on over cycles that are much longer than the three-year electoral cycle and certainly the yearly budget cycle—was that they wanted some secure funding to know that having a career in health and medical research in Australia was something that would be a good thing, that you could rely on some security and that you would not have to go, year by year every time the budget comes around, and worry about funding being cut.

Directly as a result of that pressure came a positive move from the last government, which was the McKeon review. It said: 'Let's sit down and—rather than dealing with this on a year-by-year basis, which just makes everyone feel incredibly uncertain—let's have a look at what would be a good, long-term plan to secure science and research and now the medical field in this country.' The McKeon review came up with a number of very, very good recommendations. It was not just this government who ignored it; the last government ignored it as well. They commissioned it and then it sat in a draw. They did not even go to the election promising to implement the McKeon review, whereas the Greens did. The Greens sat down, read the McKeon review and came up with a number of costed initiatives that would put health and medical research on a secure footing.

One of the things that came out of the McKeon review was that there is a gap in Australia—there is a gap. On the one hand, we have got very, very good funding and peer reviewed funding coming through the National Health and Medical Research Council. The McKeon review suggested that that be strengthen. But what it also said is that once you have finished that research and once you have done that, then is there a big gap when it comes to trying to translate it and then not only to translate it but also to potentially commercialise it as well. Unlike in the UK, for example, where there are billions of dollars set aside in various trusts and unlike the US where there is much greater investment as well, including philanthropically, there are not the places to go to in Australia to take those good discoveries that might have come through NHMRC funded research and then translate them once you have passed the proof of concept stage. There is also the second valley of death, if you like, identified in the McKeon review, which was the commercialising of them. How do you commercialise them and ensure that then the benefits stay inside Australia? It is those gaps that have been ignored up until now.

The government came along in the last budget with a proposal for a medical research future fund. I think it has to be said that it was almost certainly something that was cooked up very quickly to justify the GP co-payment—that is what it was. It was almost an afterthought for the GP co-payment. There was a suggestion that if we do this, then somehow people will swallow paying more to go to see their doctor. Well, they did not. We managed to see off the GP co-payment, although the pause in indexation is meaning that it is coming in many ways through the back door. We managed to see that off.

But out of the ashes of that, we managed to make sure in this parliament that we did not throw the baby out with the bathwater. A good idea in essence—of let's find ways of coming up with additional funds for health and medical research that meet those gaps, that do not duplicate the NHMRC and that allow for the translation and then potentially commercialisation—was able to be sustained.

Now, some of the criticisms are right. (Extension of time granted)

Out of that, I think it is fair to say that initial legislation did not pay sufficient attention to how you might fill that gap. That is why, in the course of the Senate process and in the course of the Senate inquiry, as well as in the debate, we have focused on a couple of matters. Firstly, as I said before let's make sure that this is additional money. And let's make sure that it is not duplicating what the NHMRC does but instead is working in tandem with what the NHMRC does. If it does that—if it steps into the gaps that have been identified in the McKeon review—then it will be a good thing. As I said before, our preference would have been to fund it directly rather than to have to put aside a couple of billion and then just take the interest off it to put into medical research. Why not give the money directly to medical research in the first place?

Nonetheless, this is what the government has proposed. We feel that we have been able to fix it and to make it better so that, hopefully, it means that Australia finds itself in a similar situation to the US or the UK, where there is some security and some funding that will fill the gaps.

Under the last government—and it continued under this government—we have seen spending on science and research and development fall to the lowest amount since we started keeping records in the late seventies. If this goes some way to getting us up from 2.2 per cent of GDP spent on R&D back towards three per cent, ideally, and then, hopefully, up to the four or five per cent that some of our trading partners are, it will be a good thing. We will be keeping a watchful eye on it as well, to ensure that the money goes where it is meant to go. That is why it is important that the review mechanism is built in. I think the member for Ballarat is right that it is important that there is a much greater integration with the NHMRC to ensure that there is not overlap, and to ensure that the two are dovetailing. If all of that works, it will be a very good thing.

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

The question is that the senate amendments numbers 2 to 20 be agreed to.

Sussan Ley (Farrer, Liberal Party, Minister for Health) Share this | Link to this | Hansard source

I move—

That the amendments be agreed to.

Question agreed to.