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

I move:

That the Senate take note of the answer given by the Assistant Minister for Health (Senator Nash) to a question without notice asked by Senator Di Natale today relating to the Fifth Community Pharmacy Agreement.

I rise to talk about the response by the minister to a question on the Auditor-General's report into the Fifth Community Pharmacy Agreement. It is almost unheard of for an officer of the Australian parliament to issue a report as damning and as critical as the report handed down by the Auditor-General into the administration of the Fifth Community Pharmacy Agreement. This is an agreement between the Minister for Health and the Pharmacy Guild. The guild effectively represents the majority of owners of retail pharmacies. The agreement runs for about five years and sets a whole lot of parameters. It talks about how to reimburse a pharmacist for providing and dispensing medications, for professional programs and for a range of other services.

In July this year the government signed the Fifth Community Pharmacy Agreement. It was worth $15.4 billion. I will say that again: it was worth $15.4 billion. The administration of those funds was effectively done between two agencies—that is, the Pharmacy Guild and the Department of Health. The Audit Office made a number of findings. They said that there was no straightforward way for the parliament to know what the expected or actual costs of any of the key components would be; we have no way of knowing whether the key components that were listed in this agreement were, in fact, delivered on. They said that the department was not well positioned to assess whether the Commonwealth was receiving value for money from the agreement. The Audit Office went on to say that a billion dollars in savings was promised over the term of the agreement but $400 million was delivered—$600 million in savings was gone. Why? Because we think we did not get the calculations right in the first place. They talked about the fact that, within the agreement, there was $2.2 billion that the government was delivering on which was effectively co-payments from patients—it was contributions from patients. It was not a cost to government at all, and yet somehow it was included as part of the agreement.

What really astounded me was that in the negotiation of this agreement—that is, a $15 billion agreement—the department failed to keep a record of their meetings with the guild. They did not take any minutes of the meetings. They did not prepare agreed notes of what was discussed. This was all done, apparently, as a handshake deal in a back room between the guild and the department. The Auditor-General's office said this was not consistent with sound practice. I say it was much worse than that: this is evidence of gross maladministration. There was no probity plan, no risk management plan, no consultation with probity advisers and no conflict-of-interest declarations. We are talking about the guild and the department and what we are finding is there was no signing of conflict-of-interest declarations between members of the negotiating team.

We saw the reallocation of funds within the agreement. We had millions of dollars of funds that were being shuffled around within this agreement that were undocumented and completely unexplained—tens of millions of dollars. There was a transfer of $277 million, which was supposed to go towards professional programs; it went as a grant to the Pharmacy Guild. We do not know how that money was spent. That was $277 million of taxpayers' money that was supposed to go to professional programs but has disappeared as a grant to the guild. We have a situation where there has been a complete failure of proper process—of record keeping and accountability—around a $15 billion agreement.

There are two things that need to happen as a matter of urgency. There must be a full public inquiry into the Fifth Community Pharmacy Agreement. We simply cannot accept that we have $15 billion being negotiated between two parties with no record of how we have arrived at that figure and, worse still, we do not know how those funds are being spent. What we are seeing within that agreement is tens of millions of dollars being shuffled around with no record of how that money has been spent. There is $277 million that was supposed to go to professional programs now being dispensed as a grant.

We are now in the middle of negotiating the Sixth Community Pharmacy Agreement. It looks like the government is set to do that. The government must immediately halt any negotiations on the Sixth Community Pharmacy Agreement until we have a full public inquiry into the current agreement to ensure these mistakes do not happen again.

Question agreed to.