Rod Kemp (Victoria, Liberal Party, Minister for the Arts and Sport) Share this | Hansard source

Firstly, I would like to open my remarks by thanking senators for their support of the National Health and Medical Research Council Amendment Bill 2006sometimes grudgingly, sometimes qualified; nonetheless we always welcome support. In particular I would like to acknowledge the very valuable contribution made by the members of the Senate Community Affairs Legislation Committee for their consideration and careful scrutiny of this bill. But I have to say that I am disappointed by some of the views expressed by the Australian Democrats and the Australian Labor Party in their additional comments. I would like to take the opportunity to briefly address these comments.

Before turning to the issues raised by the ALP and the Australian Democrats, I would like to congratulate the government for the really huge boost in funding for the NHMRC. Last night, as we all know, in a very popular, successful and responsible budget, the Hon. Peter Costello announced an additional $905 million for Australian health and medical research. This is a major new investment in our future health and one that I believe we should all be very proud of. The benefits of research investment are undisputed. The changes outlined in this bill ensure that the NHMRC is well positioned to ensure that Australia harvests the benefit of this investment.

Australia, I am pleased to say, currently stands as the world leader in health and medical research. On a per capita basis, our research output is twice the OECD average. Access Economics has estimated that since 1960 the consumer benefits arising from Australia’s investment in health and medical research have been in excess of $5 trillion—and I think it is correct to say that that is $5,000 billion. I see Labor senators are nodding, so I clearly got that right. This comprises over $2.9 trillion in longevity gains of eight years, plus an estimated $2.5 trillion in gains in the quality of life and avoided costs. They are very interesting figures. I can see that they have gripped the Labor senators on the other side of the chamber.

It is not surprising that industry has also benefited from investment in health and medical research. Since 1992 it is estimated that commercialisation of health and medical research has created over 350 companies, translating into approximately 3,000 to 4,000 new knowledge-based jobs. The NHMRC has performed a pivotal role in supporting such research and fostering talented researchers in these fields. This bill and the recent current budget commitments ensure that this will continue.

The legislation introduces new governance arrangements to the National Health and Medical Research Council which will ensure that the council can focus on providing the best possible advice. These new arrangements address governance concerns identified in a number of recent reviews, primarily the investment review of health and medical research, or the so-called Grant review, the ANAO review of NHMRC’s governance arrangements and the review of the corporate governance of statutory authorities and office holders, otherwise very well known as the Uhrig review.

The existing legislative framework under which the NHMRC currently operates divides financial responsibility and operational accountability. The proposed new governance arrangements address this issue by clearly aligning accountability and responsibility. Under the new legislation, the NHMRC will remain within the Health and Ageing portfolio, with reporting and accountability frameworks that clearly separate the NHMRC’s roles and functions from those of the department. The proposed governance arrangements establish the NHMRC’s chief executive officer as directly accountable to the Minister for Health and Ageing, while keeping the secretary of the department informed on a ‘no surprises’ basis. The bill’s provisions strengthen the NHMRC’s independence, provide clear lines of responsibility for governance and financial accountability, and allow the council to focus on issues relating to health, medical research and advice.

I now turn to the size and membership of the council—an issue raised by Senator McLucas. I will make some observations about Senator McLucas’s comments. Senator Allison also suggested an amendment in relation to the size of the council. As has been noted by a number of reviews, the current membership of the council is unwieldy and not conducive to strong governance. Under the current legislation, the size of the council is 29 members, which are drawn from 17 prescribed bodies following an eight-month consultation process.

One of the purposes of this bill is to streamline the council membership while ensuring that the most appropriately qualified people can be appointed to the council based on the priorities for a particular triennium. Rather than prescribing the expertise for each and every position, as was the case in the past, the new legislation provides that certain people must be appointed, such as the chief medical officer from each state and territory. It then provides that at least six, but no more than 11, members must be selected with expertise in one of the listed areas or with other appropriate expertise. This means that if, in a particular triennium, there is a particular need for a person with expertise in environmental issues, for example, then such a person could be selected. This is a sensible change that recognises that priorities of the council change over time and that appropriately qualified and experienced people must be able to be appointed to the council. In this way we ensure that the council can respond to emerging issues and can provide expert advice on issues as they arise.

The reduction in the number of people on the council in no way reduces the breadth and depth of the expertise of this eminent body. Council members themselves have acknowledged problems with the current size of the council, and it may be considered testimony to the proposed legislation that no concerns have been forwarded by any council member regarding the proposed new council structure. Senator McLucas will be interested in that. The good senator has also expressed concerns regarding the disclosure of interest provisions. The legislation in no way waters down any disclosure of interest requirements. In fact, the legislation has been strengthened in that respect.

Previously, the legislation required council members to disclose their interests within one month of being appointed. There was no express requirement for interest to be disclosed prior to appointment. Despite this, it was always a matter of practice that members disclosed their interests prior to an appointment. The new legislation expressly provides—Senator McLucas will be delighted to know—that, before starting to hold office, members of the council and of both principal committees and working groups must give the CEO a written statement of any interest the person has that may relate to any activity of the council or committee. Interests must continue to be disclosed on an ongoing basis. This means that more than 500 people—including up to 24 council members, approximately 75 principal committee members and approximately 400 working group members—will be providing the CEO with declarations of interest. It is not appropriate that the minister be responsible for overseeing all of these disclosures. This responsibility has therefore been vested in the CEO.

On the specific issue of the appointment of council members, the CEO will be advising the minister on all relevant matters in relation to all possible candidates, including any possible conflicts of interest. It has always been the case in the past, in the absence of any legislation requiring disclosures to the minister prior to appointment, and this will continue to be the situation in the future. This will also be expressly covered in the agreement between the CEO and the minister.

I will now turn to issues regarding Indigenous matters. In their additional comments, the Australian Democrats and the Australian Labor Party have indicated that they would be concerned if the proposed restructure of the NHMRC were to have the result of diminishing the council’s capacity to respond to serious problems in Indigenous health. The mere suggestion that this might occur is quite scandalous. As my colleagues in this chamber are well aware, there is absolutely nothing in this legislation which even remotely suggests that the capacity of the council to respond to Indigenous issues will be diminished. The NHMRC’s capacity will not be diminished in any respect. Some senators appear to have misunderstood one of the main functions of the amendments, which is precisely to ensure that the NHMRC as a whole is best placed to respond to important issues, including, but not limited to, Indigenous health. The whole point of the changes is to clarify the governance arrangements to ensure that the council can focus on the provision of expert advice and that the CEO can focus on the smooth, transparent and effective management of the NHMRC as a whole.

Let me now turn to the appointment of the CEO. On 27 April this year, the Minister for Health and Ageing announced the appointment of Professor Warwick Anderson AM as the new Chief Executive Officer of the NHMRC. Professor Anderson brings a wealth of experience to this position. Indeed, since 1991, Professor Anderson has contributed extensively to the work of the NHMRC, including chairing the research committee for two triennia.

As Head of the School of Biomedical Sciences at the Faculty of Medicine, Nursing and Health Sciences and Head of the Department of Physiology at Monash University, Professor Anderson’s responsibilities have included management, administration and financial accountability issues. With the responsibilities and accountabilities assigned to the CEO under these new governance arrangements, it is fortunate that the government has been able to secure a person that brings such a wealth of high-level management and scientific expertise to the position as Professor Anderson brings.

I would also like to take this opportunity, on behalf of the minister, to thank Mr Bill Lawrence for acting as the NHMRC’s CEO throughout this transitional period. I am aware, as advised by the minister, that Mr Lawrence’s sensible and calm leadership through this transition has been appreciated by all, stakeholders and staff alike, and his commendable performance has not gone unrecognised. The minister wishes Mr Lawrence every success in his future endeavours.

Finally, it gives me great pleasure and it is an honour to commend this bill to the Senate on behalf of the minister. The bill provides the NHMRC with a sound governance platform on which to build upon its successes to date and to lead Australia’s future strategic direction in health and medical research.

Question agreed to.

Bill read a second time.