Stephen Parry (President) Share this | Link to this | Hansard source

A letter has been received from Senator Moore:

Pursuant to standing order 75, I propose that the following matter of public importance be submitted to the Senate for discussion:

The impact of the Abbott Government’s GP tax and medicine price hike on pensioners, the poor and the chronically ill.

Is the proposal supported?

More than the number of senators required by the standing orders having risen in their places—

I understand that informal arrangements have been made to allocate specific times to each of the speakers in today’s debate. With the concurrence of the Senate, I ask the clerks to set the clock accordingly.

Carol Brown (Tasmania, Australian Labor Party, Shadow Parliamentary Secretary for Families and Payments) Share this | Link to this | Hansard source

I rise to speak in this matter of public importance debate on the impact of the Abbott government's GP tax and medicine price hike on pensioners, the poor and the chronically ill. There is no doubt that the Abbott government's GP tax and medicine price hike will have a profound effect on the lives of many vulnerable Australians. I want to first note today media reports that the Prime Minister is planning 'refinements' to his terrible $7 GP tax. According to David Crowe in The Australiannewspaper today:

THE federal government is preparing to give ground in one of the most heated fights over its budget reforms as Tony Abbott tells his colleagues to expect “refinements” to the $7 fee on visits to the doctor.

The Prime Minister has signalled the plan in private talks with Coalition MPs amid pressure from crossbench senators for drastic changes to the medical co-payment meant to generate $3.5 billion in revenue over the next four years.

No amount of refinement will fix this rotten GP tax. This plan must be abandoned. The GP tax is cruel and unfair. It is bad health policy. Taxing sick people to see the doctor will prevent them from visiting the doctor when they need to and that will lead to them suffering more serious and costly health problems.

When this tax was first announced I was inundated with emails, phone calls and letters from people voicing their anger and frustration at this tax, as I am sure many senators and members in this place would have as well. It was clear that the GP tax and increase in the cost of medicines would force many people to have to decide between paying their rent and going to the doctor. For many it would be a choice between putting food on the table and filling their prescription.

It was not just people who were already struggling who wrote to me. Even those who told me that they were well-off could not believe that people who were already disadvantaged were being singled out with the new tax that undermines our universal health system. They understood what this tax and increase in the cost of medicines would mean to pensioners, families and the chronically ill. The question they asked me and the one I repeat today is: how will pensioners and those who are chronically ill afford the government's new $7 GP tax? This new tax shows just how out of touch this government is with the health needs of Australians. When people are already struggling to make ends meet how will they pay more not only to go to the doctor but also for every prescription they have to fill? Many people who are chronically ill take several medications a day and the cost to them will quickly add up.

I note the report of the Senate Community Affairs References Committee inquiry into out-of-pocket expenses released recently clearly shows that Tasmania would be hardest hit by this terrible new GP tax. The President of the Australian Medical Association, Associate Professor Brian Owler, told the inquiry:

Tasmania has a higher burden of chronic disease and higher smoking rates, and we need to do more to encourage preventive health care and chronic disease management. That is why I think the co-payment is probably going to affect Tasmanians more than it affects people in other jurisdictions.

This $7 GP tax will make it so much harder for Tasmanians who are sick. Many will put off going to the doctor and their medical conditions may worsen. The 2013 state government health indicators report found that 16 per cent of low-income Tasmanians have difficulty accessing GPs, with cost one of the key barriers. According to the Department of Health and Human Services in Tasmania, in the period between 2009 and 2011 an estimated 13,000 Tasmanians in the lowest income range ended up having to be treated in hospital for conditions that could have been addressed at the primary care level.

The GP tax will put even more pressure on our public hospital emergency departments and elective surgery waiting lists. Despite the Prime Minister promising no cuts to health, this budget will rip $1.1 billion out of Tasmania's hospitals over the next decade. In this budget cycle alone, funding for Tasmanian hospitals has been cut by $49 million over the next four years. The Royal Hobart Hospital is already under pressure in its emergency department. It was reported in the Mercury newspaper yesterday that a three-year-old boy with severe breathing problems was stuck in an ambulance for 1½ hours while he waited for treatment. According to the newspaper reports, there were no beds available at the hospital. The report said that when the boy's breathing deteriorated the paramedics hit the alarm button to get him seen to.

Labor do not want to make it harder for people who are sick and put more pressure on hospitals that are already under pressure. We do not want pensioners and the vulnerable attacked. Even some government MPs do not support this terrible tax. The member for Braddon, Mr Brett Whiteley, acknowledged in his local paper, though very belatedly, that the GP tax should be scrapped for pensioners and people with chronic illness.

I am surprised that it took him three months to realise that this terrible tax would hurt Tasmanians and especially pensioners and people with chronic illnesses. It seems to me that his new-found concern about the tax was more about saving his own job than a genuine concern about sick people. In Mr Whiteley's own electorate youth unemployment is over 20 per cent, and I ask Mr Whiteley: why should young unemployed people have to pay this unfair new GP tax to go to the doctor? We know from research from the Brotherhood of St Lawrence released recently that underemployment of young Australians has hit its highest level in 40 years.

But it is not just taxing sick people to go to the doctor; in the budget this government also announced an increase in the cost of PBS medicines by 13 per cent on top of inflation by 1 January 2015. This is another 80c for pensioners on the cost of prescriptions for some of the most disadvantaged Australians, including people on full-rate pensions—the people who can least afford this increase. For the benefit of the Senate, people on full-rate pensions receive about $20,000 per annum. It will be an extra $5 for people who are not pensioners but who also may struggle to find the extra $7 to go to the doctors and then on top of that an extra $5 for a prescription.

Evidence to the Senate Community Affairs Committee inquiry into the National Health Amendment (Pharmaceutical Benefits) Bill 2014 made it clear that these increases to the PBS would target pensioners and low- and middle-income earners. The Consumer Health Forum provided the committee with evidence of more patients not filling their prescriptions due to cost. The Senate report into the PBS price hikes confirmed that those hardest hit by the increase in medicines will be the sick and chronically ill. The committee found that:

… very high users will pay $145.30 extra per single, couple or family per year to reach the general patient safety net.

In a damning indictment the committee reported:

Some submitters questioned whether the increases in co-payments may result in unintended consequences due to the inability of some patients to fill their prescriptions due to rising costs. Submitters expressed concern that this may result in severe health consequences for vulnerable patients and increased health expenditure in the longer term as well as consequences for the pharmaceutical sector.

The Australian Medical Association told the Senate inquiry that the international research shows that increases in co-payments lead to poor adherence to prescriptions, which would cost taxpayers and the government more in the longer term.

Pensioners and people who are on low incomes and who live with chronic illness rely on bulk-billing and they should not have to pay more for their medicines. They must be spared this harsh and unfair $7 GP tax; they must be spared an increase in the cost of their medicines. The GP tax and the hike in the cost of medicines are an outrageous attack on pensioners, poor people and those who are chronically ill. Both taxes will add to their stress and anxiety. They will compound the disadvantage they already suffer. They are an outrageous attack on our universal health system. Labor will not stand by and see Medicare dismantled. Labor will never support a two-tiered, American-style health system. (Time expired)

Zed Seselja (ACT, Liberal Party) Share this | Link to this | Hansard source

I am pleased to have the opportunity to speak to this very important issue today. I wanted to address both of the central elements raised in Senator Brown's speech, which is about GP co-payments but also about changes in PBS co-payments. Both are very important. Can I make this point at the outset: this is about making both our Medicare system—our medical benefits system—and our PBS sustainable. If you look historically there has been bipartisan recognition that we have to take measures to make these things more sustainable.

I will go into some detail on how the Labor Party saw fit in office in the Hawke-Keating years to not only introduce a co-payment for GPs but also to increase co-payments for the PBS. We have seen that recognition. That has to be fundamental to this debate. Do we in 10 or 20 years time want to see the Medicare system where people still can have access to their GP or do we want to make it increasingly hard as budgets struggle to keep up? Do we want a situation where we can continue to list the medicines that are needed and people can access subsidised medicine or, where we do not take the measures and therefore see many Australians left behind? That, in fact, is at the heart of what this issue is about. That is at the heart of this debate: in 10 years time, in 20 years time, will we still have these excellent systems that we have?

We believe that the way to make it sustainable is to ask for some contribution by individuals. That has been recognised in a bipartisan way when it comes to the PBS. It has been absolutely recognised by both sides of politics that some contribution when it comes to subsidised medicines is the sustainable way to go. We believe that that also applies when it comes to GPs. So I do want to remind the Senate about the fact of some of that bipartisanship from people like Andrew Leigh and people like Bob Hawke. I will quote from Andrew Leigh. It is worth putting in context when he said this, because it was in 2003. Since 2003 we have seen a significant increase in medical benefits payments by the Commonwealth from around $8 billion to over $18 billion. It has more than doubled since he said this. So if it were true in 2003, it is more true in 2014, given the proportion of our budget that is now being paid out in medical benefits. Dr Leigh described a Medicare co-payment as 'hardly a radical idea'. He made an important point. He said:

As health researchers have shown, costless medical care means that people go to the doctor even when they don't need to—

That was one, but secondly he said:

… driving up the cost for all of us.

That is a really important point. It drives up the cost for everyone and it undermines the sustainability. Andrew Leigh had that to say back in 2003, back when we were paying out about $8 billion under the Medicare benefits schedule. Now we are doing over $18 billion. If it was true when Andrew Leigh said it in 2003, it is even more true now, in 2014.

Of course, we know about Bob Hawke. Senator Brown, I think towards the end of her speech, suggested that this was about getting rid of Medicare; this was about undermining Medicare. It is actually the opposite. I do not think there would be a Labor senator—and I challenge a Labor senator to get up and say this—who would say that Bob Hawke was interested in destroying Medicare. Was Bob Hawke interested in destroying Medicare? No. I do not think anyone could legitimately make that claim. I think people would say that Bob Hawke was committed to Medicare. One of the ways he showed his commitment was in seeking to make it more sustainable.

Carol Brown (Tasmania, Australian Labor Party, Shadow Parliamentary Secretary for Families and Payments) Share this | Link to this | Hansard source

There isn't a GP tax.

Zed Seselja (ACT, Liberal Party) Share this | Link to this | Hansard source

I hear the interjections from Senator Brown. I would be happy if a Labor senator did want to get up and say that Bob Hawke was seeking to undermine Medicare. I do not believe that is what he was doing; I believe what he was doing was seeking to make it sustainable. Many years ago, when we were spending a lot less than even when Andrew Leigh made his comments in 2003, he said: 'It is quite clear. I understand there is a very significant blow-out in regard to the Medicare situation in terms of servicing. What needs to be done, of course, is to ensure that both on the supply side and the demand side there be some restraint imposed because you can't have a situation where you're just going to have outlays growing as in the rate they were.' That is what Bob Hawke had to say.

Carol Brown (Tasmania, Australian Labor Party, Shadow Parliamentary Secretary for Families and Payments) Share this | Link to this | Hansard source

This is about stopping people going to the doctor. That's what it's all about.

Zed Seselja (ACT, Liberal Party) Share this | Link to this | Hansard source

Senator Brown interjects. Apparently, when Bob Hawke said it, it was not wrong and it was not undermining Medicare—and I do not believe he was trying to undermine Medicare. But many years later, when we are making many more and much greater payments, it is different. Andrew Leigh recognised in 2003, when we were paying out $8 billion, that this was a good idea. He recognised it in '03; Bob Hawke recognised it well before that. We take the same approach: we want to make Medicare more sustainable. This has been recognised as the way to do that. It has been recognised by Andrew Leigh, it has been recognised by Bob Hawke and it is recognised in this year's budget.

The alternative, when it comes to both MBS and PBS, is for the system to become unsustainable and for Australians to not get the kind of medical care that they deserve. That is something, on the coalition side, that do not want to see.

We hear the criticisms about co-payments for PBS. We have seen historical changes to payments for PBS. We have seen that historically. Under both sides of politics we have seen it. In 1983 we saw $2 for concessional co-payments. In 1986, under the Labor government, we saw the co-payment for non-pensioners increasing from $2 to $2.50. For pensioners, we saw it increasing in 1990 from nothing to $2.50. And we saw it under the Howard government because there is a recognition that, if we want to have a PBS system that continues to provide life-saving drugs for Australians, asking people to make a modest contribution to that is a good way to go. It is an important way to go.

It is not something that was invented by the coalition upon coming to office; it is something that was recognised by previous Labor governments; it is something that was recognised by previous coalition governments. Under the previous Labor government—the Rudd-Gillard-Rudd governments—we saw, in fact, the listing of only eight medicines every month, when we are seeing now over 20 medicines every month being listed. We want to see medicines on the PBS. We want to see Australians having access to that. That is what we are seeking to deliver. That is what the facts show—and, in fact, we were lagging behind in the last six years. I do not want to see a situation in 10 years time or 15 years time or 20 years time where members of my family cannot get access to live-saving drugs that are not listed because the system becomes unaffordable. This is an important part of the sustainability of our healthcare system that has been recognised for a long time by both sides of politics. It has been recognised by people like Bob Hawke, by people like Andrew Leigh and by people like this coalition government.

The alternative, of course, as we see the increasing costs is to pretend that there is no problem. That seems to be the Labor Party's approach to all of these budgetary issues. We do need to get the budget under control. That means taking sensible measures—measures that in the past have been supported by the Labor Party, but in fact, now, they are being reckless in not supporting it, with no alternative plan. They have only a plan for more and more debt and deficit but, importantly, for an undermining of our healthcare system as it becomes increasingly unsustainable.

Richard Di Natale (Victoria, Australian Greens) Share this | Link to this | Hansard source

Before I go to the details of the issue of the GP co-payment, I want to refer to the matter of public importance, which is:

The impact of the Abbott Government's GP tax and medicine price hike on pensioners, the poor and the chronically ill.

I want to say something about that. The members of the coalition would be surprised to hear that I do not think this is a GP tax. I do not think it has any of the hallmarks of a tax. I think it is quite clearly a co-payment. It takes us closer to a user-pays system. In fact, I have deliberately avoided using the word 'tax'—and let me tell you why.

When this issue first came up, we considered calling this a GP tax and I resisted it. I resisted it because, every time we run around in this place and use the word 'tax' in this sort of context, we undermine those effective, fair and efficient taxes that allow us to fund universal health care, insurance, income support, education and so on. Taxation is the price you pay for a civilised society. I am, for one, someone who supports progressive taxation and who supports a taxation on resource consumption. I think taxes can be a good thing if collected wisely and spent wisely. That is why I think it is a mistake to refer to this as a GP tax. This is a co-payment that works in precisely the opposite way in which a fair health system should work.

A fair health system should be based on the principle of fair taxation—the more you earn, the more you pay—and, at the point of delivery, the point of access of the service, everybody should get access to that service. That is the way taxes should work. Senator Seselja is right: health care is not free. It is not free under the current system. If you are a high income earner, you pay more into the system. You pay more into our health care system, and you should be entitled to access it. So this is not a tax; this takes us away from that important principle and moves us closer to a user-pays system in health care, which is both expensive and unfair. You only need to look at the US to see that in action.

What underpins this co-payment is the notion that our health care system is unsustainable. It is simply not borne out by the evidence. We have had inquiries into out-of-pocket health care costs. We have had inquiries into the PBS co-payment. We have had inquiries into the move from private health insurers into the health space in primary care. We have heard the same story over and over again: we have a good health system, it is sustainable, and by world standards people get access to one of the best health care systems in the world.

Let us look at some of those facts. We spend about nine per cent of our GDP on health care. By OECD standards, that is below the average. It is below the OECD average. Health care spending at a Commonwealth level has been stable for more than a decade. I say that again: health care spending by the Commonwealth has been stable as a proportion of GDP for more than a decade. We are on track to have a very small increase in our health care spend over the next 10 years.

The government would have you believe that that is due to health care costs spiralling out of control. Not at all. The small increase—maybe a half to another per cent of GDP on health care over the next decade, taking us to the OECD average—is because people are getting access to new, life-saving treatment. Health care technologies continue to develop all the time and we are in the enviable situation where we are providing people with the means to live longer, healthier and more productive lives. That is not a crisis. That is something to celebrate. If the whole proposition we all believe in, which is that we should strive for economic growth and development, is not going to provide the dividend of better health care, then what the hell are we doing in its place?

When you ask people time and time and time again what they want their governments to be spending money on—

Catryna Bilyk (Tasmania, Australian Labor Party) Share this | Link to this | Hansard source

Health and education.

Richard Di Natale (Victoria, Australian Greens) Share this | Link to this | Hansard source

It is health and education. Thank you, Senator Bilyk. People say it time and time again. The whole point of economic progress is to be able to provide people with the means to spend money on the things they value, and that is health and education.

There is a notion that people visit the GP too frequently. Again, this is not borne out by any evidence. It is true that some people visit the doctor unnecessarily—that is, that if they do not visit a doctor their symptoms would resolve and they would not be any worse off because of it. But the whole point of having a trained health workforce is so that people who do not have the means to be able to distinguish between what is a serious symptom and one that is benign can get that advice and reassurance from a trained health professional.

As a former GP, I can tell you that a lot of what we did involved assessing and diagnosing, and providing people with reassurance. That is what the job involves. That is not a wasted visit. That is actually quite important, because the person sitting at home with a pain in their chest and who does not know if it is indigestion or the early signs of a heart attack, needs to have a professional assessment of those symptoms. That is what visiting a GP does. If you put a price barrier in front of a patient, you can be absolutely guaranteed that we will deter some of those necessary visits. The person sitting at home with chest pain and who is worrying, 'Could this be heart attack? No, it is probably indigestion', will be influenced by the fact that they will have to face a charge to see the GP potentially to have a blood test or an X-ray and have their script filled by a doctor—all of which will absolutely deter some of those necessary visits. As a consequence, it will cost our health system more. People will end up in emergency departments and in intensive-care units, because simple, treatable and preventable problems were missed in the first instance. That is why this is such a short-sighted policy.

There are so many things that we can do to improve the efficiency of our health system. We can invest much more in health promotion and illness prevention. We should be doing that. For example, we know from a study by Deakin and Queensland universities that the 20 best prevention strategies, based on good evidence, would cost us about $4 billion and return $11 billion in savings. We know that. Yet, at the same time that we introduce this co-payment, we are dismantling the Preventative Health Agency. It is short-sighted not just in terms of the impact it has on the lives of ordinary people, but because it will cost us money. Also, in medicine we do too many things that are not based on good evidence. We should be funding what works. A lot of what we do adds very little value. There is a big opportunity to start looking at the current Medicare list and reviewing how we fund a number of procedures that add very little value—the number of arthroscopies we do in this country, for example, many of which are unnecessary. We should also look at Vitamin D testing, and the new and complex forms of prostatic surgery. They add very little value but a lot of cost. Of course, this would mean taking on some big interests, but we need to do that if we are going to make our already effective and efficient system more efficient.

We need to make sure that we resist the temptation—the great folly—of assuming that moving towards a user-pays system, introducing a price signal, is going to make the system any more efficient. It will not. You only need to look at the international evidence—to look at those countries that base their health system on fair taxation and universal access versus those that adopt the notion of user-pays in health—to be able to see a recipe not just for a less fair system, which is obviously something I am concerned about, but also a much more expensive system. That is why the US spends double what we do on health care and gets much worse health care as a result.

This is bad policy. It is unfair, inefficient and it must be stopped.

Catryna Bilyk (Tasmania, Australian Labor Party) Share this | Link to this | Hansard source

I am really pleased that the Senate has decided today to discuss this issue as a matter of public importance, because this issue is one of utmost public importance.

While the Liberal government is pre-occupied with creating knights and dames, and looking to protect hate speech, it is the government's unfair $7 GP tax and their hike in the price of PBS medication that Australians are really concerned about. It is what the people of Australia are talking about with their friends and their families. It is one of the most loathed facets of a budget that is still being talked about four months after it was handed down in May. This government is utterly out of touch with the Australian community. They are utterly out-of-touch with Australian values.

If the Liberal government had campaigned on a platform of introducing a $7 GP tax, protecting hate speech and reinstating knights and dames, the Australian people would not have let the Liberal and National parties anywhere near the government benches. Even if Mr Abbott and his Sydney, North Shore Treasurer Joe Hockey do not understand the devastating impact this will have on the health of those with chronic disease, the mentally ill, the unemployed, seniors and pensioners, the people of Australia do. And the Australian people are very concerned that this government wants to turn Australia into a place where you do not help out a sick mate, and where we turn our back on a fundamental egalitarian belief that quality health care should be available for all, based on need, not income or postcode. Australians do not want an Australia like this.

Recently the Senate Community Affairs References Committee tabled a report into out-of-pocket costs in Australian healthcare. I was pleased to participate in this inquiry and to have the opportunity to speak in this place last week on its report. Senate inquiries are an important part of the process of government, because they are a mechanism to allow expert advice to inform debate on proposed measures.

It was important to hear this expert advice to the Senate Community Affairs Committee, because Mr Abbott did not bother to consult the experts when drafting this ill-informed policy disaster. And the expert advice on the government's $7 GP tax and their $5 hike to pharmaceutical benefit scheme medications was absolutely damning. The inquiry showed that the $7 GP tax is a disastrous thought bubble, which will have a severe impact on the health of pensioners, the poor and the chronically ill.

Submitters and witnesses to this inquiry expressed concern that an increase in out-of pocket costs in the form of a co-payment for GP services would result in people delaying seeking medical treatment. In its review of health care in Australia, the COAG Reform Council found that nationally, in 2012-13, 5.8 per cent of people delayed or did not see a GP for financial reasons. That is 5.8 per cent of people—mainly pensioners, the poor and the chronically ill—who have had to choose between eating and having their health looked after. Adding an additional co-payment will only make this situation worse. It will impact disproportionately on individuals with the greatest healthcare needs, including Aboriginal and Torres Strait Islanders, elderly people, women, people on low or fixed incomes, and people with chronic illnesses. It will exacerbate their conditions and increase their suffering. Mr Abbott and the Liberal-Nationals government may not care about the health of people in these groups, or their suffering, but we on this side—the Labor Party—certainly do.

The government says that the $7 tax is to prevent unnecessary visits to the doctor. However, the Royal Australian College of General Practitioners provided the following evidence as to why the policy would not be effective in reducing healthcare costs:

… international studies demonstrate that, with the exception of the most vulnerable patients, there is limited evidence that co-payments actually reduce health service use. The economic rationale for implementing co-payments is further confounded by evidence suggesting that healthcare costs increase due to preventable conditions not being treated and poorer control of chronic disease and greater hospitalisations

Primary health care is the most efficient part of the health system. It allows for the early diagnosis, management and prevention of disease. Early diagnosis and effective management is extremely economical compared to emergency treatment or continual, ongoing treatment because an illness was not caught early.

The inquiry heard that countries with strong primary healthcare systems report the best health outcomes at the most efficient cost. The AMA told the committee:

Now is not the time to strip money out of primary health care. It is the time to invest in primary care to ensure sustainability of the healthcare system. People need access to general practitioners to know what their healthcare needs are. General practitioners need access to pathology and imaging services in order to diagnose conditions early and put treatment plans in place.

The Royal Australian College of General Practitioners also observed that there is no economic benefit in dissuading patients from seeing their GP. They said:

In fact there is good evidence to suggest that there is a negative economic impact with patients using more expensive health care through the hospital system that could be delivered by general practice at a fraction of the cost. General practice has been, and remains, the most efficient component of the healthcare system, with general practice costs per patient remaining steady over the past 20 years, while hospital costs have continued to rise.

Submitters and witnesses argued in general that co-payments may affect other parts of the health system in a number of ways—for example: by placing increased stress on the public health system, particularly emergency departments, as patients seek hospital treatment to avoid paying a GP co-payment; by shifting responsibility for primary care to community pharmacies; and by reducing the number of patients undertaking all required pathology and diagnostic testing.

This policy is a short-term approach to fix a budget emergency that does not exist. It will lead to more suffering by patients, worse management of disease and more severe and expensive treatment. It is as if this policy were designed to artificially spiral health costs out of control to destroy the viability of our healthcare system. And we all know it is the first step in the Abbott government's quest to destroy Medicare. The Liberals have abolished Medicare before, so they should not be trusted to protect it into the future.

Submitters to the inquiry also overwhelmingly rejected an increase in the PBS co-payment. An increase in the co-payment for medicines will again lead to worse health outcomes for Australians. The Consumers Health Forum of Australia provided evidence about the impact of the 2005 increase on individuals, saying:

Studies have shown that, following the January 2005 increase in PBS copayments, there was a significant decrease in dispensing volumes observed across 12 of the 17 medicine categories, including anti-epileptic medication, anti-Parkinson's treatments, combination asthma medicines, insulin and osteoporosis treatments. Importantly, we also know that the copayment increase had a particular impact at that time on medicine utilisation by concessional patients.

By increasing the co-payment on medicines again, we will see a decrease in the number of people who are able to afford their medication to treat their chronic illnesses. I shudder to think what would happen to a young person under 30 who has no income because they are unemployed who might need medication. I do not think the other side has thought about the areas this will impact on at all. This will lead to suffering, poorer health outcomes and further increases in emergency treatment for manageable diseases.

As a member of the Senate Community Affairs References Committee, I was also particularly concerned about the evidence given that the $7 GP tax and other proposed government measures would have on my home state of Tasmania. The President of the AMA, Associate Professor Owler, has said:

Tasmania has a higher burden of chronic disease and higher smoking rates, and we need to do more to encourage preventive health care and chronic disease management. That is why I think the co-payment is probably going to affect Tasmanians more than it affects people in other jurisdictions.

I do not see those Liberal senators opposite from Tasmania standing up and saying why they support a policy which will lead to worse health outcomes and suffering for Tasmanians. I would like to see those Tasmanian Liberal senators stand up and say why they support a policy which will lead to longer delays at the Royal Hobart and Launceston General emergency departments. And I would like to see the Liberal senators from Tasmania stand up and say why they support a policy which will lead to the state of Tasmania paying more for its health system while at the same time delivering worse health outcomes.

This government need to start listening to what the Australian people want, not just what their friends in the IPA tell them. We are a generous, caring country. We care about those in our society who need a little bit of extra help. This Abbott government are out of touch and utterly indifferent to the disastrous impacts their GP tax and medicine price hikes will have on pensioners, the poor and the chronically ill.

Linda Reynolds (WA, Liberal Party) Share this | Link to this | Hansard source

I rise to address this matter of public importance that has been raised by Senator Moore on behalf of the Labor Party. As a member of the Senate Community Affairs References Committee, I am happy to speak on this MPI because it provides an opportunity to remind the Senate how, after six years of Labor's waste and inefficiency in health, the coalition is moving to repair the damage and ensure Australia's health system remains effective and sustainable into the future.

Contrary to the assertions of those opposite, this government's measures are laying the foundations for a stronger health system for all Australians. The simple but, I know, very uncomfortable truth for those opposite is that health expenditure is growing faster than the economy. This is unsustainable for Australian taxpayers. Despite assertions to the contrary by the previous speaker, central to our election campaign was dealing with the budget mess those opposite left us—$123 billion in projected deficit. It does exist, no matter how often they now try to deny it.

I believe all in this place have an obligation on behalf of all Australians to ensure that their taxpayer funds are most effectively and efficiently spent and that the expenditure matches revenue. I believe this is the most responsible approach for all of us in this place to take. The growth in health expenditure has been so rapid that the Commission of Audit saw health as the Commonwealth's single largest long-term budget challenge. To give you all an example of the exponential rise in the healthcare system, 10 years ago the government spent $8 billion on Medicare. This financial year, the government is spending $20 billion. This is projected to rise to more than $34 billion in 10 years time. Put simply, this is unsustainable growth.

Unlike the previous government, this government are putting in place a number of measures to address this unsustainability and are moving to modernise and strengthen both Medicare and the Pharmaceutical Benefits Scheme. On this side, we are ensuring the continued sustainability of Medicare and ensuring it is able to provide first-class health care to future generations of Australians. Yes, we are asking Australians to make a small contribution to the cost of their own health care, but again I remind those opposite that we were not the first to consider this. In fact, it was the Labor Party that first introduced a Medicare co-payment in 1991.

I listened very closely to the evidence presented at the recent community affairs committee hearings, and I am left wondering if I was at the same hearings as those opposite. In the recent committee inquiry, we heard evidence from a number of stakeholders on the out-of-pocket health costs in Australia. Significantly, we heard from the Australian Medical Association that:

In the decade to 2012–13, the percentage of medical services attracting out-of-pocket costs has either stayed the same or declined.

I will say that again: it has stayed the same or declined. That was the evidence from the AMA.

We also heard from the Department of Health. They advised that the proportion of total health expenditure funded by out-of-pocket payments in 2011-12 was largely unchanged from that of a decade ago. That is despite the fact that today in Australia these out-of-pocket expenses include in their definition cosmetic surgery, complementary medicines, complementary therapies and a range of vitamins and supplements. The Department of Health also noted that the largest and fastest growing area of out-of-pocket expenses or costs is in the non-prescription and over-the-counter medicines; this includes complementary medicines and vitamins. These are nearly a third of the total out-of-pocket expenses. Evidence to the community affairs committee also shows that the claim by those opposite, that health care expenditure is increasing dramatically for the average Australian, is simply not true.

I have to address one of the things the previous speaker noted. She was attributing people not going to the doctor or to fill their prescriptions to these proposed changes. The evidence to the community affairs committee hearings was that clearly, that was not the case; there are many reasons people delay filling their prescriptions or going to the doctor.

The government is also ensuring the sustainability of the Pharmaceutical Benefits Scheme. In the last decade alone, the cost of the PBS has increased by a staggering 80 per cent. It is expected to continue to increase by four to five per cent annually. A PBS co-payment is not a new measure. It has existed since the 1960s and Labor has, until now, consistently supported this policy. Again, in the community affairs committee hearings, we heard that the alarmist rhetoric of those opposite was in fact unsupported by the facts. The department advised us that for general patients, the increase amounts to $5 per script and for a concessional patient, 80c per script. The department also advised that this will amount to an average increase per year of $10 for general or non-concessional patients. I will say that again: an increase of $10 for the average, general nonconcessional patient and $13.60 for those with a concession card. That is very different from what you have heard from those on the other side of the chamber today.

Most people would agree that this is a small price to pay—I say again, $10 per year or $13.60 per year—for the long-term sustainability of the PBS. Despite what you might believe from what has been said on the other side of the chamber, in the 12 short months since coming to government the coalition has already listed 220 new medicines on the PBS. We are listing medicines twice as fast as the previous government, now averaging over 20 listings per month. This can only be good for Australians. Where previously a patient would have had to pay full price for these medicines, they can now get them through the PBS.

The simple fact is the coalition government is working to ensure the health system is sustainable for future generations of Australians. We are also working towards cleaning up the fiscal mess that was left behind by the Labor government. In opposing the government's health reform measures, Labor's irresponsibility in government continues. These reforms proposed by the government will ensure that all Australians have access to world-class health care. This government is committed to ensuring we spend precious health dollars in the most efficient way possible, ensuring every dollar of taxpayers' money is directed towards improving patient outcomes. We are committed to ending the wasteful and inefficient spending in the health portfolio incurred under the previous government and we are modernising and strengthening the health system for all Australians. The reality is that those on the other side, who created this mess, are now refusing to let us clean it up.

Helen Polley (Tasmania, Australian Labor Party, Shadow Parliamentary Secretary for Aged Care) Share this | Link to this | Hansard source

I also rise today to speak in relation to this important matter of public interest. After hearing from the other side, what is really happening in health in this country is that we are just continuing on from where Tony Abbott gutted health: when he was minister, he took a billion dollars out of health. That is exactly the road we are heading back down when it comes to this government and their policies on health.

I am speaking because I am really concerned about the impact it is going to have on my home state of Tasmania. This short-sighted tax on GP visits, and the medicine price increases, will hit pensioners, low-income families and those with chronic illnesses particularly hard. Let's just remember what Tony Abbott said to the Australian people before the election. He promised his government would be a government of no surprises and no excuses—no new taxes and no cuts to health. That is without the promises and commitments he supposedly gave to the Australian people that there would be no cuts to education and no changes in aged care. We all know what happened when it came to aged care—cutting the supplement for those people with the most chronic forms of dementia in this country. What did they do? They came into this place on 26 June and they cut that supplement without any consultation or discussion with those who provide that invaluable care for the most vulnerable in our community.

It has been proven that every single week over the very long 12 months this government has been in power, they have broken at least one promise. That list of broken promises is continuing. We know that this Prime Minister has ripped up Labor's historic health and hospitals agreement with the states, slashing more than $50 billion out of the public hospitals. He also wants to slap a $7 tax on everyone who visits a GP, everyone who has a pathology test and everyone who has to have an MRI. This equates to a $3.5 billion tax hike on health. It might be fine for those people on the other side to say, 'Well, that's on average $10 or $13 for the Australian people'—but we all know there is no such person as an average person in this country who only spends $10 extra a year on hospitals, or going to visit the GP, or having a prescription filled. The reality, if you get out into the real suburbs of Australia and listen to people, is they will have to make a choice. If they have four children at home and they are all sick—which is generally what happens, because most families are caring and sharing and when they bring something home from school they share it around—what are they going to do? Do they say, 'Okay, the two youngest can go to the doctor, but we cannot afford for the two eldest children to go'. Or, 'We can't send mum or dad along to the doctor because we can't afford it.' That is the reality of life in the real Australia. I ask those people on the other side, those people who represent the electorate of Bass, Braddon and Lyons—the three amigos who are always talking about writing in to save the world—where are they when it comes to standing up for Tasmanian families? Where are they when those people who can least afford it have to make some very tough decisions about filling their prescriptions? They will say that they already know there are people who have gone into pharmacies and said, 'Look, I cannot afford it if this government is going to continue to raise the price of medicines. I just want to know if I really need to take these tablets every day or can I just take them every second day?' That is the reality, because people are really fearful. They are really concerned about what impact this budget is going to have on their health and well-being.

Those opposite can try to trivialise it and say it is $10 a week. When you are a family struggling to make ends meet already, that $10, which we know is not a realistic figure, is very important to your weekly budget. Those on the other side of the chamber have decided this in the interests of a supposed budget crisis. It is really interesting that when the minister was in New Zealand recently, he said that the Australian economy was sound and robust. Yet when he is in this country the government wants to put a tax— (Time expired)

Anne Ruston (SA, Liberal Party) Share this | Link to this | Hansard source

I rise today to put on the record that it is interesting that we have been hearing a lot of debate from the other side about the badness of this so-called co-payment policy. Even Senator Brown, in her opening remarks, made the comment that it was bad health policy. It is tremendously interesting that it was actually the Labor Party that first introduced a Medicare co-payment, back in 1991. Their current shadow Assistant Treasurer, Andrew Leigh, has strongly advocated for a co-payment. He is quoted as saying:

As economists have shown, the ideal modelling involves a small co-payment. Not enough to put a dent in your weekly budget, but enough to make you think twice before you call the doc.

The idea is hardly radical, so I find it really quite bizarre that we are having this debate right now about the co-payment being such bad policy when it started life as Labor Party policy. In relation to the PBS, it is the same thing. We have had a co-payment on the PBS since 1960. That is 50 years for which we have had a co-payment. Right through this entire time the Labor Party has supported this co-payment measure. In 1986, the Labor government increased the general co-payment on the PBS from $5 to $10—a 100 per cent increase. In 1990, the Labor government introduced for the very first time a PBS co-payment on pensioners. In 2004, the Labor opposition, with Julia Gillard as the shadow health minister, supported a $4.90 increase in the general PBS co-payment and an 80c increase in the concessional PBS co-payment. As you can see from these comments, this is hardly a new thing. This has not been a bolt out of the blue or some radical new policy that nobody has ever heard of or ever considered. The fact remains: why is the coalition government having to introduce any of these policies in the first place? It is simply because we have a budget mess that needs to be fixed.

Everybody would like to think that we could go on in life with universal health care, with universal education and with all these wonderful things that over the last 20 years Australians have come to accept as a given. Unfortunately, the credit card is maxed out. That is exactly what has happened here. The Australian Labor Party, in the six years they were in government, maxed out Australia's credit card. There comes a time when all responsible fiscal managers—and that includes the Greens if they are going to play in this space—realise that we cannot continue to spend beyond our means. When the coalition government came to power in September last year, we realised we had a number of things we had to do. One was to get the budget situation back into some semblance of order.

Another thing we realised we needed to do for the long-term benefit of all Australians was to make sure that we have a sustainable ongoing Medicare system. To do that, we obviously had to make some changes, because the rapid growth of expenditure that was occurring in the health space was completely and utterly unsustainable. Those opposite can go on all they like about there not being a budget emergency, but in the medical benefits sphere the growth in spending had gone from $8 billion a decade ago to $20 billion today and was projected to be $34 billion in 10 years time. You do not have to be an economist, like Andrew Leigh, to work out that that is an unsustainable trajectory in terms of growth and the growth in expenditure. What we needed to do, and what we have done, is come up with a policy—it is not a radical new policy, but a policy in the past of those opposite, and one that in some instances is still a policy of those opposite—so that we can build a sustainable long-term medical system, understanding that we have to make sure that it is as affordable today as it was in the past and into the future.

To correct the record in relation to the constant carping about cuts to the health budget: we have not cut the health budget.

Kim Carr (Victoria, Australian Labor Party, Shadow Minister Assisting the Leader for Science) Share this | Link to this | Hansard source

Of course you have.

Stephen Parry (President) Share this | Link to this | Hansard source

Order on my left. Senator Carr.

Anne Ruston (SA, Liberal Party) Share this | Link to this | Hansard source

Funding to the states for hospital services has increased by nine per cent—

Kim Carr (Victoria, Australian Labor Party, Shadow Minister Assisting the Leader for Science) Share this | Link to this | Hansard source

How can you keep a straight face when you say things like that? What duplicity.

Stephen Parry (President) Share this | Link to this | Hansard source

Senator Carr—

Anne Ruston (SA, Liberal Party) Share this | Link to this | Hansard source

or $1.3 billion a year, next year. That is not a cut in health spending. In 2015-16, we see a further increase and it continues on over the forward estimates of this government's forward estimates budget. I say to Senator Bilyk, who was carrying on about how people on welfare could afford all these things, that the best form of assistance that we can give to those people that are unemployed is to give them a job.

The idea that big government and spending will get us out of this mess has proved over the last six years to be a complete and utter disaster. Big governments and governments spending their way out of an economic disaster zone are no way to correct the economy. The best way that we can help Australians to be better able to afford to pay this small, modest co-payment—

Kim Carr (Victoria, Australian Labor Party, Shadow Minister Assisting the Leader for Science) Share this | Link to this | Hansard source

Modest! On your wage, I suppose it is modest. On a senator's wage, I suppose it is modest.

Anne Ruston (SA, Liberal Party) Share this | Link to this | Hansard source

That is how, Senator Carr—through you, Mr President—it was described by one of your shadow ministers, Mr Andrew Leigh. The best way that we can make co-payments affordable for Australians is not to continue to put the burden on government but to get the economy moving again. If we can put more money in the pockets of these people, they can make their own choices. I do not believe that I am best placed to make decisions on behalf of Australians. I think that Australians are best placed to make decisions on behalf of themselves. It is the height of hypocrisy to be standing here and saying that this 'small, modest co-payment'—to quote Mr Leigh—is some terrible thing. It is absolutely hypocritical! (Time expired)